Exhibit 4(c)(iv)(1)


 


EXECUTION COPY


 












 


BROADWING INC.


 


As Issuer


 












 


63⁄4% Convertible Subordinated Notes due 2009


 












 


FIRST SUPPLEMENTAL INDENTURE


 


Dated as of March 26, 2003


 












 


Supplementing the Indenture dated as of July 21, 1999, between
Broadwing Inc. (f/k/a Cincinnati Bell Inc.),

as Issuer, and The Bank of New York, as Trustee


 












 


THE BANK OF NEW YORK


 


As Trustee


 












 

















 


FIRST SUPPLEMENTAL INDENTURE dated as of March 26, 2003, among
Broadwing Inc. (f/k/a Cincinnati Bell Inc.), an Ohio corporation (the
“Company”), The Bank of New York (the “Trustee”), as Trustee under the
Indenture referred to herein, and the Holders of the Notes listed on the
signature pages hereto.


 


WHEREAS the
Company and the Trustee heretofore executed and delivered an Indenture dated as
of July 21, 1999 (the “Indenture”), in respect of the Company’s $400
million aggregate original issue price of 63⁄4% Convertible Subordinated Notes
due 2009 (the “Notes”);


 


WHEREAS the
Company and Oak Hill Capital Partners, L.P., OHCP Ocean I, LLC, OHCP Ocean III,
LLC, OHCP Ocean IV, LLC, OHCP Ocean V, LLC, Oak Hill Securities Fund, L.P., Oak
Hill Securities Fund II, L.P. and OHCP AIV I, L.P. (collectively, the “Oak Hill
Purchasers”) heretofore executed and delivered an Investment Agreement dated as
of July 21, 1999 (the “Investment Agreement”);


 


WHEREAS
Section 9.2 of the Indenture provides that the Company and the Trustee may
amend the Indenture with the consent of the Holders of not less than 51% in
aggregate Accreted Value (as defined in the Indenture) of the Notes then
outstanding;


 


WHEREAS
Section 15.5 of the Investment Agreement provides that the Company may amend
the Investment Agreement with the consent of the Holders of at least 51% of the
aggregate Accreted Value of the Notes then outstanding;


 


WHEREAS the
Company desires to amend certain provisions of the Indenture and the
corresponding provisions in the Investment Agreement, as set forth in Article I
hereof;


 


WHEREAS the
Holders of not less than 51% in aggregate Accreted Value of the Notes outstanding
have consented to the amendments effected by this Supplemental Indenture; and


 


WHEREAS this
Supplemental Indenture has been duly authorized by all necessary corporate
action on the part of the Company.


 


NOW,
THEREFORE, the Company and the Trustee agree as follows for the equal and
ratable benefit of the Holders of the Securities:


 


ARTICLE I


 


Amendments


 


SECTION 1.1. 
Amendments to Indenture effective to amend
corresponding provisions of Investment Agreement.  The amendments to the Indenture set


 

















 


forth in this Article I shall
be effective to amend the corresponding provisions contained in the Investment
Agreement.


 


SECTION 1.2. 
Amendments to Section 1.1.  (a)  Amendment
to definition of “Accreted Value.” 
Clause (i) of the definition of “Accreted Value” is hereby deleted in
its entirety and replaced with the following:


 


“(i)  If
the specified date occurs on one or more of the following dates (each a “Semi-Annual
Accrual Date”), the Accreted Value will equal the amount set forth below
for such Semi-Annual Accrual Date:


 




	
  Semi-Annual Accrual Date

  	
   

  	
  Accreted
  Value

  	
   

  
	
  January 21, 2000

  	
   

  	
  $

  	
  1,033.75

  	
   

  
	
  July 21, 2000

  	
   

  	
  1,068.64

  	
   

  
	
  January 21, 2001

  	
   

  	
  1,104.71

  	
   

  
	
  July 21, 2001

  	
   

  	
  1,141.99

  	
   

  
	
  January 21, 2002

  	
   

  	
  1,180.53

  	
   

  
	
  July 21, 2002

  	
   

  	
  1,220.37

  	
   

  
	
  January 21, 2003

  	
   

  	
  1,261.56

  	
   

  
	
  July 21, 2003

  	
   

  	
  1,313.29

  	
   

  
	
  January 21, 2004

  	
   

  	
  1,372.38

  	
   

  
	
  July 21, 2004

  	
   

  	
  1,434.14

  	
   

  
	
  January 21, 2005

  	
   

  	
  1,450.28

  	
   

  
	
  July 21, 2005

  	
   

  	
  1,466.59

  	
   

  
	
  January 21, 2006

  	
   

  	
  1,483.09

  	
   

  
	
  July 21, 2006

  	
   

  	
  1,499.77

  	
   

  
	
  January 21, 2007

  	
   

  	
  1,516.65

  	
   

  
	
  July 21, 2007

  	
   

  	
  1,533.71

  	
   

  
	
  January 21, 2008

  	
   

  	
  1,550.96

  	
   

  
	
  July 21, 2008

  	
   

  	
  1,568.41

  	
   

  
	
  January 21, 2009

  	
   

  	
  1,586.06

  	
   

  
	
  July 21, 2009

  	
   

  	
  1,603.90

  	
   

  
					






 


Notwithstanding the foregoing,
if the Company, pursuant to Section 2.6, elects the Cash Interest Option,
the Accreted Value of the Notes on that Semi-Annual Accrual Date and all
subsequent Semi-Annual Accrual Dates shall be reduced by the amount of any such
Optional Cash Pay Interest payments.”


 


(b)  Amendment to definition of “Change of
Control”.  (i)    Clause (iii) of the definition of the
“Change of Control” is hereby amended by inserting the following at the end of
such clause (iii):


 


“provided
that neither the sale of the operating assets of certain Subsidiaries of BCI
(the “BCI Sale”) pursuant to the Agreement for the Purchase and Sale of
Assets dated as of February 22, 2003, by and between Broadwing Communications
Services Inc.,


 


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Broadwing
Communications Services of Virginia, Broadwing Communications Real Estate
Services LLC, Broadwing Services LLC, IXC Business Services LLC, Broadwing
Logistics LLC, Broadwing Telecommunications, Inc., IXC Internet Services, Inc.
and MSM Associates, Limited Partnership, on the one side, and C III
Communications, LLC and C III Communications Operations, LLC (the “BCI
Purchasers”), on the other side, nor any other sale of the operating assets
of BCI and/or its Subs as they are constituted on the 16% Notes Closing Date
shall constitute a sale of substantially all of the Company’s assets;”


 


(ii)  Clause (iv) of the definition of “Change of
Control” is hereby deleted in its entirety and replaced with the following:


 


“(iv) any
“person” (as such term is used in Section 13(d)(3) of the Exchange Act) or
“group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange
Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that such person or group shall be deemed
to have “beneficial ownership” of all shares that any such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 45% of either
the total economic value of the Company’s outstanding Capital Stock or the
total voting power of the Voting Securities of the Company;”


 


(c)  Amendment to
definition of “Full Accretion Date.”  The definition of “Full Accretion Date” is hereby deleted in its
entirety and replaced with:  “Full
Accretion Date” means July 21, 2009.”


 


(d)  Insertion of
new definitions.  The
following new definitions are hereby inserted into Section 1.1 in
appropriate alphabetical order:


 


“ “Acquired
Debt” means, with respect to any specified Person, (i) Debt of any
other Person existing at the time such other Person is merged with or into or
became a Restricted Subsidiary of such specified Person, including, without
limitation, Debt Incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person, and (ii) Debt secured by a Lien encumbering any asset
acquired by such specified Person at the time such asset is acquired by such
specified Person.


 


“Adjusted
EBITDA” means for the applicable period of measurement of the Company and
its Restricted Subsidiaries, (i) Consolidated EBITDA for such period minus (ii)
Capital Expenditures of the Company and its Restricted Subsidiaries for such
period, on a consolidated basis.


 


“Alternative
Mezzanine Debt” is defined in Section 5(1) of the 16% Notes Purchase Agreement.


 


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“Amended
Credit Agreement” means the Amendment and Restatment of the Credit
Agreement, dated as of November 9, 1999, as amended and restated as of January
12, 2000 and as of the date hereof, as amended, by and among the Company, BCSI,
the lenders party thereto from time to time, Bank of America, N.A., as
syndication agent, Citicorp USA, Inc., as administrative agent and certain
other agents, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreement or agreements may be amended (including any amendment and
restatement thereof), restated, supplemented, replaced, restructured, waived,
Refinanced or otherwise modified from time to time, including any amendment,
supplement, modification or agreement adding Subs of the Company as additional
borrowers or guarantors thereunder or extending the maturity of, Refinancing,
replacing or otherwise restructuring all or any portion of the Debt under such
agreement or any successor or replacement agreement, and whether by the same or
any other agent, lender or group of lenders or one or more agreements,
contracts, indentures or otherwise; provided that, in no event may such
agreement be amended (including any amendment and restatement thereof),
supplemented, replaced, restructured, Refinanced or otherwise modified to
increase the amount of borrowings permitted to be Incurred pursuant to
Section 4.17(b)(vii).


 


“Applicable
Capital Lease Amount” means $41,300,000 as of September 30, 2002,
which amount shall increase by $30,000,000 on the 16% Notes Closing Date and on
December 31, 2003 and by $15,000,000 on December 31, 2004, up to a maximum
aggregate amount of $116,300,000.


 


“Asset
Disposition” means the disposition by the Company or any Restricted
Subsidiary of the Company whether by sale, issuance, lease (as lessor (other
than under operating leases)), transfer, loss, damage, destruction,
condemnation or other transaction (including any merger or consolidation) or
series of related transactions of any of the following: (a) any of the Capital
Stock of any of the Company’s Restricted Subsidiaries, (b) all or substantially
all of the assets of the Company or any of its Restricted Subsidiaries (it
being understood and agreed that the disposition of the BCI Group or any assets
of the BCI Group does not constitute a disposition of all or substantially
all of the assets of the Company or any of its Restricted Subsidiaries) or (c) any
other assets of the Company or any of its Restricted Subsidiaries.
Notwithstanding the foregoing, Asset Dispositions shall be deemed not to
include (i) a transfer of assets by (x) the Company to a Wholly Owned
Restricted Subsidiary of the Company, or by a Restricted Subsidiary of the
Company to the Company or to another Wholly Owned Restricted Subsidiary of the
Company or (y) the Company or a Restricted Subsidiary to CBW; provided that the
aggregate amount of all such transfers to CBW shall not exceed 5% of
Consolidated Total Assets, (ii) an issuance of Capital Stock by a Sub of the
Company to the Company or to a Restricted Subsidiary of the Company, (iii) a
Restricted Payment that is permitted by the provisions of Section 5.02
of the 16% Notes Indenture as in effect on the 16% Notes Closing Date, (iv) a
Permitted Investment (as defined in the 16% Notes Indenture as in effect on the
16% Notes Closing Date), (v) any conversion of Cash Equivalents into cash or
any other form of Cash Equivalents, (vi) any foreclosure on assets, (vii) sales
or dispositions of past due accounts receivable or notes


 


4

















 


receivable in the Ordinary
Course of Business, (viii) transactions permitted under Article 10
hereof, (ix) grants of credits and allowances in the Ordinary Course of
Business, (x) operating leases or the sublease of real or personal property or
licenses of intellectual property, in each case, on commercially reasonable
terms entered into in the Ordinary Course of Business, (xi) trade-ins or
exchanges of equipment or other fixed assets, (xii) the sale and leaseback of
any assets within 180 days of the acquisition thereof, (xiii) sales of damaged,
worn-out or obsolete equipment or assets that, in the Company’s reasonable
judgment, are no longer either used or useful in the business of the Company or
its Subs, (xiv) dispositions of inventory in the Ordinary Course of Business;
(xv) the disposition of cash or investment securities in the ordinary course of
management of the investment portfolio of the Company and its applicable Subs;
(xvi) any sale of CBW Assets; (xvii) sales of assets with a fair
market value of less than $250,000; or (xviii) sales of other assets with a
fair market value not to exceed $10,000,000 in the aggregate in any fiscal
year.


 


“Asset Sale
Offer” has the meaning assigned to that term in Section 4.19(a).


 


“Attributable
Debt” in respect of a Sale and Leaseback Transaction means, at the time of
determination, the present value (discounted at the implicit rate of interest
borne by the 16% Notes including any pay-in-kind interest and amortization
discount) determined in accordance with GAAP of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
Sale and Leaseback Transaction (including any period for which such lease has
been extended or may, at the option of the lessor, be extended).


 


“BCI”
means Broadwing Communications Inc., a Delaware corporation.


 


“BCI Group”
means BCI and its Subs.


 


“BCI Purchasers”
has the meaning assigned to that term in the definition of “Change of Control.”


 


“BCI Sale”
has the meaning assigned to that term in the definition of “Change of Control.”


 


“BCSI”
means Broadwing Communications Services Inc., a Sub of BCI.


 


“Board”
means, as to any Person, the board of directors, the board of advisors (or
similar governing body) of such Person.


 


“Capital
Expenditures” means, for any period and with respect to any Person, the
aggregate of all expenditures by such Person and its Subs for the acquisition
or leasing of fixed or capital assets or additions to fixed or capital assets
(including replacements, capitalized repairs and improvements during such
period) which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subs.


 


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“Capitalized
Lease Obligation” means, at the time any determination thereof is to be
made, an obligation that is required to be classified and accounted for as a
capitalized lease for financial reporting purposes in accordance with GAAP, and
the amount of Debt represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with GAAP; and the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease.


 


“Capital
Stock” of any Person means any and all shares, interests, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such Person, including any Preferred Stock but excluding
any debt securities including those convertible into such equity.


 


“Cash
Equivalents” means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year from the date of acquisition thereof;
(ii) commercial paper maturing no more than one (1) year from the date of
acquisition and, issued by a corporation organized under the laws of the United
States that has a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (iii) time deposits maturing no more than thirty (30) days from the
date of creation, certificates of deposit, money market deposits or bankers’
acceptances maturing within one (1) year from the date of acquisition thereof
issued by, or overnight reverse repurchase agreements from, any commercial bank
organized under the laws of the United States of America or any state thereof
or the District of Columbia having combined capital, surplus and undivided
profits of not less than $250,000,000; (iv) repurchase obligations with a term
of not more than 30 days for underlying securities of the types described in
clause (1) above entered into with a bank meeting the qualifications described
in clause (iii) above; (v) deposits or investments in mutual or similar funds
offered or sponsored by brokerage or other companies having membership in the
Securities Investor Protection Corporation and having combined capital and
surplus of not less than $250,000,000; and (vi) other money market accounts or
mutual funds which invest primarily in the securities described above.


 


“Cash
Interest Option” has the meaning assigned to that term in Section 2.6.


 


“Cash
Interest Option Date” has the meaning assigned to that term in Section 2.6.


 


“Cash Pay
Interest” has the meaning assigned to that term in Section 2.6.


 


“CBT”
means Cincinnati Bell Telephone Company, an Ohio corporation.


 


“CBT Assets”
means any assets of CBT (including Capital Stock of the Subs of CBT) and any of
its Subs (including Capital Stock of the Subs of such Subs). To the extent any
CBT Asset is transferred to another Restricted Subsidiary of the Company in a
transaction that does not constitute an Asset Disposition, such asset shall
remain a CBT Asset for purposes of this Indenture.


 


6

















 


“CBW”
means Cincinnati Bell Wireless LLC, an Ohio limited liability company.


 


“CBW Assets”
means any assets of CBW Co. (including Capital Stock of the Subs of CBW and
Spectrum Assets) and any of its Subs (including Capital Stock of the Subs of
such Subs) but, for the avoidance of doubt, excluding all CBT Assets. To the
extent any CBW Asset is transferred to another Restricted Subsidiary of the
Company in a transaction that does not constitute an Asset Disposition, such
asset shall remain a CBW Asset for purposes of this Indenture.


 


“CBW Co.”
means Cincinnati Bell Wireless Company, an Ohio corporation.


 


“Centralized
Cash Management System” means the cash management system referred to in
Section 5.02(f)(ix) of the Amended Credit Agreement as in effect on the 16%
Notes Closing Date and described on Schedule 5.01(r) thereof.


 


“Consolidated”
or “consolidated” (including the correlative term “consolidating”)
or on a “consolidated basis,” when used with reference to any financial term in
this Indenture (but not when used with respect to any Tax Return or tax
liability), means the consolidation for two or more Persons of the amounts
signified by such term for all such Persons, with intercompany items eliminated
in accordance with GAAP.


 


“Consolidated
Adjusted Debt” means the sum of (a) Debt of the Company and its Restricted
Subsidiaries (exclusive of Debt under the Notes and Debt referred to in clauses
(iv) (unless such Debt is required to be recorded as liability on the
consolidated balance sheet of the Company and its Restricted Subsidiaries in
accordance with GAAP) and (viii) of the definition thereof) determined on a
consolidated basis in accordance with GAAP, plus (b) the amount of reserves of
the Company and its Restricted Subsidiaries then outstanding in excess of
$35,000,000 against any income tax liabilities.


 


“Consolidated
Adjusted Debt to Adjusted EBITDA Ratio” means, as of any date of
determination, the ratio of (a) Consolidated Adjusted Debt as of such date to
(b) Adjusted EBITDA for the applicable four-quarter period ending on the last
day of the most recently ended quarter for which consolidated financial
statements of the Company and its Restricted Subsidiaries are, or should have
been, available in accordance with the Transaction Documents.


 


“Consolidated
EBITDA” means for the applicable period of measurement, the Consolidated
Net Income of the Company and its Restricted Subsidiaries on a consolidated
basis, plus, without duplication, the following for the Company and its
Restricted Subsidiaries to the extent deducted in calculating such Consolidated
Net Income: (i) Consolidated Interest Expense for such period, plus (ii)
provisions for taxes based on income, plus (iii) total depreciation expense,
plus (iv) total amortization expense, plus (v) other non-cash items reducing
Consolidated Net Income (excluding any such non-cash item to the extent that it
represents an accrual or reserve for potential cash items in any future period
or amortization of a prepaid cash item) less other non-cash


 


7

















 


items increasing Consolidated
Net Income (excluding any such noncash item to the extent it represents the
reversal of an accrual or reserve for potential cash item in any prior period),
plus (vi) charges taken in accordance with SFAS 142, plus (vii) all net cash
extraordinary losses less net cash extraordinary gains, plus (vii) all restructuring
charges set forth on Schedule 1.1 (a) to the 16% Notes Indenture on the
16% Notes Closing Date.


 


“Consolidated
EBITDA to Consolidated Interest Ratio” means as of any date of
determination the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest
Expense, in each case, for the applicable four-quarter period ending on the
last day of the most recently ended quarter for which consolidated financial
statements of the Company and its Restricted Subsidiaries are, or should have
been, available in accordance with the Transaction Documents.


 


“Consolidated
Interest Expense” means for the applicable period of measurement of the
Company and its Restricted Subsidiaries on a consolidated basis, the aggregate
interest expense for such period determined in accordance with GAAP (including
all commissions, discounts, fees and other charges in connection with standby
letters of credit and similar instruments) for the Company and its Restricted
Subsidiaries on a consolidated basis, but excluding all amortization of
financing fees and other charges incurred by the Company and its Restricted
Subsidiaries in connection with the issuance of Debt.


 


“Consolidated
Net Income” means for any period the net income (or loss) before provision
for dividends on Preferred Stock of the Company and its Restricted Subsidiaries
on a consolidated basis for such period determined in conformity with GAAP, but
excluding, without duplication, the following clauses (a) through (f) to the
extent included in the computations thereof: (a) the income (or loss) of any
Person accrued prior to the date it becomes a Restricted Subsidiary of the
Company or is merged into or consolidated with the Company or any of its
Restricted Subsidiaries or that Person’s assets are acquired by the Company or
any of its Restricted Subsidiaries; (b) the income (or loss) of any Person
(other than the Company or a Restricted Subsidiary) in which such Person has an
interest except to the extent of the amount of dividends or other distributions
actually paid to the Company or a Restricted Subsidiary (which amount shall be
included in Consolidated Net Income); (c) the income of any Restricted
Subsidiary of the Company to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary (except to the extent of
the amount of dividends or similar distributions actually lawfully paid to the
Company or a Restricted Subsidiary); (d) any after tax gains or losses
attributable to Asset Dispositions or returned surplus assets of any pension
plan; (e) (to the extent not included in clauses (a) through (d) above) (i) any
net extraordinary gains or net extraordinary losses or (ii) any net
non-recurring gains or non-recurring losses to the extent attributable to Asset
Dispositions, the exercise of options to acquire Capital Stock and the
extinguishment of Debt; and (f) cumulative effect of a change in accounting
principles.


 


8

















 


“Consolidated
Total Assets” means, as at any date of determination, the aggregate amount
of assets reflected on the consolidated balance sheet of the Company and its
Restricted Subsidiaries (excluding, however, for the avoidance of doubt the
assets of the BCI Group) prepared in accordance with GAAP most recently
delivered to the holders of 16% Notes pursuant to Section 4.02 of the
16% Notes Indenture or Section 9 of the 16% Notes Purchase Agreement.


 


 “Credit Documents” means the Amended
Credit Agreement, any Secured Hedge Agreement that is secured under (and as
defined in) the Amended Credit Agreement, and all certificates, instruments,
financial and other statements and other documents and agreements made or
delivered from time to time in connection therewith and related thereto.


 


“Currency
Agreement” means any foreign exchange contract, currency swap agreement or
other similar agreement or arrangement designed to protect the Company or any
Sub of the Company against fluctuations in currency values.


 


“Debt”
means, with respect to any Person, without duplication: (1) the principal of
and premium (if any) in respect of indebtedness of such Person for borrowed
money (including, without limitation, Senior Debt); (ii) the principal of and
premium (if any) in respect of indebtedness of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all Attributable Debt and
all Capitalized Lease Obligations of such Person; (iv) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations under any title retention
agreement, in each case to the extent the purchase price is due more than six
(6) months from the date the obligation is Incurred (but excluding trade
accounts payable and other accrued liabilities arising in the Ordinary Course
of Business); (v) all obligations for the reimbursement of any obligor on any
letter of credit, banker’s acceptance or similar credit transaction; (vi)
Guarantees and other contingent obligations in respect of Debt referred to in
clauses (i) through (v) above and clause (viii) below; (vii) all obligations of
any other Person of the type referred to in clauses (i) through (v) which are
secured by any Lien on any property or asset of such Person, the amount of such
obligation being deemed to be the lesser of the fair market value of such
property or asset or the amount of the obligation so secured; (viii) all
obligations under Currency Agreements and all Interest Swap Obligations of such
Person; and (ix) all obligations represented by a Disqualified Capital Stock of
such Person. The Debt of any Person shall include the Debt of any partnership
or joint venture in which such Person is a general partner or joint venturer,
but only to the extent to which there is recourse to such Person for the
payment of such Debt.


 


“Disqualified
Capital Stock” means that portion of any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it
is exchangeable at the option of the holder thereof), or upon the happening of
any event (other than an event which would constitute a Change of Control or
Asset Disposition), matures (excluding any maturity as the result of an
optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
sole option of the holder thereof (except, in each case,


 


9

















 


upon the occurrence of a Change
of Control or Asset Disposition) on or prior to the Stated Maturity of the
Notes.


 


“Distribution
Date” means the date on which (a) the Notes become Widely Held or (b)
a Positive Credit Event occurs.


 


“Excess
Proceeds” has the meaning assigned to that term in Section 4.18(b).


 


“Exchange
and Registration Rights Agreement” means the Exchange and Registration
Rights Agreement dated the date of the 16% Notes Indenture by and among the
Company and the 16% Notes Purchasers.


 


“Exchange
Guarantees” means the Guarantees of the 16% Exchange Notes issued in the
16% Notes Registered Exchange Offer.


 


“Existing
Debt” all Debt of the Company and its Restricted Subsidiaries existing as
of the 16% Notes Closing Date (after giving effect to the redemption,
repurchase, repayment or prepayment of Debt out of the proceeds of the 16%
Notes); provided that for purposes of Section 4.17(b), Existing Debt
shall not include Debt of the type permitted to be Incurred by Section
4.17(b)(iii) and (v).


 


“fair
market value” means, with respect to any asset or property, the price which
could be negotiated in an arm’s-length transaction between a willing seller and
a willing and able buyer. Unless otherwise expressly required elsewhere in this
Indenture, fair market value will be determined in good faith (i) for
transactions involving an aggregate consideration equal to or less than $30,000,000,
by a Responsible Officer of the Company, as evidenced, in the case of any such
transaction involving consideration greater than $3,000,000, by an Officers’
Certificate and (ii) for transactions involving an aggregate consideration in
excess of $30,000,000, by the Board of the Company, as evidenced by a
resolution of the Board, and in the case of both clause (i) and (ii), such
determination shall be conclusive absent a manifest error.


 


“Governmental
Authority” means (a) the government of the United States of America or any
State or other political subdivision thereof, (b) any government or political
subdivision of any other jurisdiction in which the Company or any of its Subs
conducts all or any part of its business, or which properly asserts jurisdiction
over any properties of the Company or any of its Subs or (c) any entity
properly exercising executive, legislative, judicial, regulatory or
administrative functions of any such government.


 


“Guarantee”
means a guarantee (other than by endorsement of negotiable instruments for
collection or deposit in the ordinary course of business), direct or indirect,
in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any Debt.


 


10

















 


“Guarantor”
means any Restricted Subsidiary of the Company that has provided a guarantee of
the Obligations with respect to the 16% Notes.


 


“Incur”
has the meaning assigned to that term in Section 4.17(a).


 


“Interest
Coverage Test” has the meaning assigned to that term in Section 4.17(a).


 


“Interest
Swap Obligations” means the Obligations of any Person pursuant to any
arrangement with any other Person, whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated
by applying a fixed or a floating rate of interest on the same notional amount
and shall include, without limitation, 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 or other similar agreement or arrangement to
which such Person is party or of which it is a beneficiary.


 


“Leverage
Test” has the meaning assigned to that term in Section 4.17(a).


 


“Lien”
means any lien, mortgage, pledge, security interest, charge, encumbrance or
governmental levy or assessment of any kind, whether voluntary or involuntary
(including any conditional sale or other title retention agreement and any
lease in the nature thereof).


 


“Maturity”,
when used with respect to any 16% Note, means the date on which the principal
of such 16% Note becomes due and payable as provided therein or in the 16%
Notes Indenture, whether at the 16% Notes Stated Maturity or by declaration of
acceleration, call for redemption or otherwise (including in connection with
any offer to purchase that the 16% Notes Indenture requires the Company to
make).


 


“Moody’s”
means Moody’s Investors Service, Inc.


 


“Net
Proceeds” means cash proceeds actually received by the Company or any of its
Restricted Subsidiaries from any Asset Disposition (including insurance
proceeds, awards of condemnation, and payments under notes or other debt
securities received in connection with any Asset Disposition), net of (a) the
costs of such sale, issuance, lease, transfer or other disposition (including
all legal, title and recording tax expenses, commissions and other fees and
expenses incurred and all Taxes required to be paid or accrued as a liability
under GAAP as a consequence of such sale, lease or transfer), (b) amounts
applied to repayment of Debt (other than revolving credit Debt under the
Amended Credit Agreement, without a corresponding reduction in the revolving
credit commitment) secured by a Lien on the asset or property disposed of, (c)
if such Asset Disposition involves the sale of a discrete business or product
line, any accrued liabilities of such business or product line required to be
paid or retained by the Company or any of its Restricted Subsidiaries as part
of such disposition, (d) appropriate


 


11

















 


amounts to be provided by the
Company or a Restricted Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with an Asset
Disposition and retained by the Company or such Restricted Subsidiary, as the
case may be, after such Asset Disposition, including, without limitation,
pension and benefit liabilities, liabilities related to environmental matters
or liabilities under any indemnification obligations associated with such Asset
Disposition and (e) all distributions and other payments required to be made to
minority interest holders in Subs or joint ventures as a result of such Asset
Disposition, but only to the extent required by constituent documents of such
Sub or such joint venture.


 


“Obligations”
means all obligations for principal, premium (if any), interest, penalties,
fees, indemnification, reimbursements, damages and other liabilities payable
under the documentation governing any Debt.


 


“Offer
Amount” has the meaning assigned to that term in Section 4.19(c).


 


“Offer
Period” has the meaning assigned to that term in Section 4.19(a).


 


“Optional
Cash Pay Interest” has the meaning assigned to that term in
Section 2.6.


 


“Ordinary
Course of Business” means, in respect of any transaction involving the
Company or any Restricted Subsidiary of the Company, the ordinary course of
such Person’s business, as conducted by any such Person in accordance with past
practice and undertaken by such Person in good faith.


 


“Partial
Accretion Date” has the meaning assigned to that term in Section 2.6.


 


“Permitted
Adjustments” means, for the purpose of calculating the Leverage Test and
the Interest Coverage Test, pro forma adjustments arising out of events
(including cost savings resulting from head count reduction, closure of
facilities and similar restructuring charges) which are directly attributable
to a specific transaction, are factually supportable and are expected to have a
continuing impact, which (a) would be permitted by Article 11 of Regulation S-X
promulgated under the Securities Act and as interpreted by the staff of the SEC
or (b) after the Distribution Date, have been realized or are reasonably
expected to be realized within six (6) months following any such transaction;
provided that, in either case, such adjustments are set forth in an Officer’s
Certificate signed by the Company’s chief financial officer and another officer
which states (i) the amount of such adjustment or adjustments, (ii) that such adjustment
or adjustments are based on the reasonable good faith beliefs of the officers
executing such Officer’s Certificate at the time of such execution and (iii)
that any related Incurrence of Debt is permitted pursuant to the Indenture.


 


“Permitted
Asset Swap” means any transfer of properties or assets by the Company or
any of its Restricted Subsidiaries in which the consideration received by the
transferor consists of like properties or assets to be used in the business of
the Company


 


12

















 


or its Restricted Subsidiaries
in the same or similar manner as such transferred properties or assets;
provided that (i) the fair market value (determined in good faith by the Board
of the Company) of properties or assets received by the Company or any of its
Restricted Subsidiaries in connection with such Permitted Asset Swap is at
least equal to the fair market value (determined in good faith by the Board of
the Company) of properties or assets transferred by the Company or such
Restricted Subsidiary in connection with such Permitted Asset Swap and (ii) the
aggregate fair market value of assets transferred by the Company in connection
with all Permitted Asset Swaps after the 16% Notes Closing Date does not exceed
10% of Consolidated Total Assets.


 


“Permitted
Refinancing Debt” means any Debt of the Company or any of its Restricted
Subsidiaries issued in exchange for, or the net proceeds of which are used to
Refinance, other Debt of any such Persons; provided, however, that (i) the
principal amount of such Permitted Refinancing Debt does not exceed the
principal amount (or, if issued at original issue discount, the aggregate
accreted value) plus accrued interest and premium, if any (set forth in the
original instrument representing such Debt), of the Debt so exchanged or
Refinanced (plus the amount of reasonable fees and expenses incurred in
connection therewith); (ii) such Permitted Refinancing Debt has a final
maturity date on or later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, at the time of such Refinancing, the Debt being exchanged or
Refinanced; (iii) if the Debt being exchanged or Refinanced is subordinated in
right of payment to the Notes, such Permitted Refinancing Debt is subordinated
in right of payment to the Notes on terms at least as favorable to the holders
of Notes as those contained in the documentation governing the Debt being
exchanged or Refinanced; (iv) such Permitted Refinancing Debt is Incurred by
the Person who is the obligor on the Debt being exchanged or Refinanced; and
(v) in the case of Permitted Refinancing Debt in respect of the Notes, such
Permitted Refinancing Debt will have an effective yield thereon not exceeding
10% per annum. “Permitted Refinancing Debt” shall not include Debt under
the Amended Credit Agreement which may be Refinanced in accordance with the
definition thereof.


 


“Positive
Credit Event” means the Company having a long-term (a) senior implied debt
rating of at least BB+ from S&P and Bal from Moody’s and
(b) subordinated debt rating of at least BB- from S&P and Ba3 from
Moody’s; provided that if, after the occurrence of the Positive Credit Event,
the Notes are not Widely Held and the Company’s senior implied and subordinated
debt ratings have been downgraded below the rating levels set forth in this
definition of “Positive Credit Event”, the provisions of this Indenture
applicable prior to the Distribution Date shall govern beginning after such
ratings downgrade as if the Distribution Date has not occurred, until such time
as the Notes become Widely Held or another Positive Credit Event occurs.


 


“Preferred
Stock” of any Person means any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect to
dividends or redemptions or upon liquidation, and shall include the 6-3/4%
Convertible Preferred Stock of the Company.


 


“Purchase
Date” has the meaning assigned to that term in Section 4.19(c).


 


13

















 


“Purchasers”
means GS Mezzanine Partners II, L.P., GS Mezzanine Partners II Offshore, L.P.,
and any other affiliate of GS Mezzanine Partners II, L.P. who purchases the 16%
Notes being issued under the 16% Notes Purchase Agreement on the 16% Notes
Closing Date and any other person specified as a Purchaser in Schedule 1
to the 16% Notes Purchase Agreement.


 


“Refinance”
means, in respect of any security or Debt, to refinance, extend, renew, refund,
repay, prepay, redeem, defease or retire, or to issue a security or Debt in
exchange or replacement for, such security or Debt in whole or in part. “Refinanced”
and “Refinancing” shall have correlative meanings.


 


“Responsible
Company Officer” means the chief executive officer, the president, the
chief financial officer, the principal accounting officer or the treasurer (or
the equivalent of any of the foregoing) of the Company or any of its Subs or
any other officer, partner or member (or person performing similar functions)
of the Company or any of its Subs responsible for overseeing the administration
of, or reviewing compliance with, all or any portion of the Indenture and 16%
Notes Indenture.


 


“Restricted
Subsidiary” of any Person means any Sub of such Person which at the time of
determination is not an Unrestricted Subsidiary.


 


“Sale and
Leaseback Transaction” means any direct or indirect arrangement with any
Person or to which any such Person is a party, providing for the leasing to the
Company or a Restricted Subsidiary of any property, whether owned by the
Company or any Restricted Subsidiary at the 16% Notes Closing Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or any other Person from whom funds have
been or are to be advanced by such Person on the security of such property.


 


“Senior
Notes” means those certain 7-1/4% Senior Notes due 2023 of the Company
issued pursuant to an indenture dated as of July 1, 1993 in the aggregate
principal amount of $50,000,000, and any such notes issued in exchange or
replacement therefor.


 


“16% Notes
Closing Date” means the date on which the 16% Notes are issued by the
Company.


 


“16%
Exchange Notes” means any 16% Notes issued pursuant to the 16% Notes
Registered Exchange Offer.


 


“16% Notes
Indenture” means the Indenture dated March 26, 2003 between the
Company and The Bank of New York, as trustee.


 


“16% Notes”
means the Company’s Senior Subordinated Discount Notes due 2009 issued pursuant
to the 16% Notes Indenture.


 


14

















 


“16% Notes
Purchase Agreement” means the Purchase Agreement, dated as of
December 9, 2002, by and among the Company, GS Mezzanine Partners II, L.P.
and GS Mezzanine Partners II Offshore, L.P.


 


“16% Notes
Registered Exchange Offer” means the Offer by the Company to holders of the
16% Notes to issue and deliver to such holders, in exchange for their 16%
Notes, a like aggregate principal amount at Maturity of 16% Exchange Notes registered
under the Securities Act.


 


“16% Notes
Stated Maturity” when used with respect to any 16% Note or any installment
of interest thereon, means the date specified in the 16% Notes Indenture or
such 16% Note as the scheduled fixed date on which the accreted value of such
16% Note or such installment of interest is due and payable and shall not
include any contingent obligation to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for payment
thereof.


 


“Spectrum
Assets” means the E-Block spectrum licenses granted by the Federal
Communications Commission or any spectrum license owned by CBW Co. or its
successor for which the E-Block may be exchanged.


 


“S&P”
means Standard & Poor’s Ratings Service, a division of McGraw-Hill
Companies, Inc.


 


“Sub”
means, with respect to any Person, (i) any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subs of that Person (or a combination thereof) and (ii) any
partnership (A) the sole general partner or the managing general partner of
which is such Person or a Sub of such Person or (B) the only general partners
of which are such Person or of one or more Subs of such Person (or any
combination thereof). Any Person becoming a Sub of the Company after the date
of this Supplemental Indenture shall be deemed to have Incurred all of its
outstanding Debt on the date it becomes a Sub.


 


“Subject
Transaction” has the meaning assigned to that term in Section 4.17(a).


 


“Taxes”
means all federal, state, local or foreign income, gross receipts, windfall
profits, severance, property, production, sales, use, license, excise,
franchise, employment, withholding or other taxes, duties or assessments of any
kind whatsoever imposed on any Person, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties and includes any liability for Taxes of another Person by contract,
as a transferee or successor, under Treasury regulation Section 1.1502-6 or
analogous state, local or foreign law provision or otherwise.


 


15

















 


“Tax
Returns” means all reports and returns (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be filed
with respect to Taxes.


 


“Transaction
Documents” means the documents listed as Exhibits A through D to the
16% Notes Purchase Agreement.


 


“Unrestricted
Subsidiary” means (i) any member of the BCI Group; provided that after
the consummation of the sale of all or substantially all of the assets of BCI’s
Subs or the consummation of a confirmed plan of reorganization under
Chapter 11 of the Federal Bankruptcy Code with respect to BCI, the Company
may designate Broadwing Telecommunications Inc. as a Restricted Subsidiary by
written notice to the Trustee and the Holders; (ii) any Sub of a Person that at
the time of determination shall be or continue to be designated an Unrestricted
Subsidiary by the Board of such Person in the manner provided in, and for the
purposes of, the 16% Notes Indenture; provided that the Company shall
provide written notice to the Trustee and the Holders of any such designation;
and (iii) any Sub of an Unrestricted Subsidiary.


 


“Weighted
Average Life to Maturity” means, when applied to any Debt at any date, the
number of years obtained by dividing (i) the sum of the products obtained by
multiplying (A) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (B) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (ii) the then outstanding principal amount of such Debt.


 


“Wholly
Owned Restricted Subsidiary” of any Person means any Wholly Owned
Subsidiary of such Person which at the time of determination is a Restricted
Subsidiary of such Person.


 


“Wholly
Owned Subsidiary” of any Person means a Sub of such Person all of the
outstanding Capital Stock or other ownership interests of which shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.


 


“Widely
Held” means, with respect to the Notes, that (a) the Oak Hill Purchasers no
longer hold more than 50% of the then outstanding aggregate Accreted Value of
the Notes (exclusive of Notes then owned directly or indirectly by the Company,
or any of its Subs or Affiliates) and (b) the Company (i) reasonably believes
after due inquiry the number of beneficial owners (as defined in Rule 13d-3
under the Exchange act) of the Notes (counting for the purpose of this
definition all holders that are Affiliates of each other as one beneficial
owner) equals or exceeds twenty-five (25) and (ii) if requested by the Holders
of more than 50% of the then outstanding aggregate Accreted Value of the Notes
(exclusive of Notes then owned directly or indirectly by the Company, or any of
its Subs or Affiliates), delivers to the requesting Holders and the Trustee an
Officer’s Certificate executed by the Responsible Company Officer describing in
reasonable details the grounds for such belief and the procedures used by the
Company


 


16

















 


to count the number of
beneficial owners.  For the avoidance of
doubt, the Trustee’s obligations under clause (ii) of this definition
shall be limited solely to keeping such Officers’ Certificate on file with the
Trustee and in no event shall the Trustee be liable for the contents of such
Officers’ Certificate nor shall it be required to deliver such Officers’
Certificate to the Holders.”


 


SECTION 1.3.  Amendment to Section 2.6 (Title and Terms).  The first paragraph of Section 2.6 (Title and Terms) of the Indenture is
hereby deleted in its entirety and replaced with the following:


 


“The Notes
shall be known and designated as the 6.75% Convertible Subordinated Notes
Due 2009 of the Company.  The Company shall
pay cash interest on the Notes at the rate and in the manner specified
below.  Prior to July 21, 2004 (the
“Partial Accretion Date”), cash interest will not accrue or be payable
on the Notes, but the Notes will accrete on a daily basis, compounded semi-annually
on January 21 and July 21 of each year, at the rate of 6.75% per
annum of the Accreted Value on the Notes from July 21, 1999 through
March 26, 2003, at the rate of 9.00% per annum of the Accreted Value on
the Notes from March 27, 2003 through the Partial Accretion Date and at
the rate of 2.25% per annum of the Accreted Value on the Notes from the Partial
Accretion Date through the Full Accretion Date.  On the Partial Accretion Date, the Accreted Value of each $1,000
of original issue price of the Notes will be equal to $1,434.14.  On the Full Accretion Date, the Accreted
Value of each $1,000 of original issue price of the Notes will be equal to
$1,603.90, as adjusted as described in the definition of the term “Accreted
Value” if the Company elects the Cash Interest Option (the “Full Accreted
Value”).  From the Partial Accretion
Date, interest on the Notes will accrue on $1,393.65 for each $1,000 of
original issue price of Notes at the rate of 6.75% per annum (the “Cash Pay
Interest”) from the most recent Interest Payment Date to which interest has
been paid or, if no interest has been paid, from the Partial Accretion
Date.  Beginning on the Partial
Accretion Date, the Company, at its option, may elect (the “Cash Interest
Option”), on any date following the Partial Accretion Date (the “Cash
Interest Option Date”), to pay cash interest (the “Optional Cash Pay
Interest”) in lieu of all or any accretion on the Notes since the Partial
Accretion Date, in which case the Accreted Value of the Notes shall be adjusted
as described in the definition of the term “Accreted Value.”  The Company will pay, in cash, such Cash Pay
Interest or Optional Cash Pay Interest, as the case may be, semi-annually, in
the case of Cash Pay Interest in arrears, on January 21 and July 21
of each year (each an “Interest Payment Date”), commencing on (x)
January 21, 2005, in the case of Cash Pay Interest, or (y) on the Interest
Payment Date next succeeding the Cash Interest Option Date, in the case of
Optional Cash Pay Interest, or if any such day is not a Business Day on the
next succeeding Business Day, to Holders of record at the close of business on
the January 6 or July 6 immediately preceding the Interest Payment
Date (a “Regular Record Date”), except that interest not so punctually
paid or duly provided for, if any, will be paid to the person in whose name
each Note is registered as of the close of business on a special record date to
be fixed by the Company (a “Special Record Date” and each Regular Record
Date and Special Record Date, a “Record Date”), notwithstanding the
subsequent cancellation of this Note prior to such Interest Payment Date.  Upon any conversion of


 


17

















 


the Notes or any portion
thereof into Common Stock following the Partial Accretion Date, only if such
conversion occurs (x) following notice by the Company of its option to redeem
each Note under Section 13.1, (y) in connection with a Change of Control
or (z) on or after a Record Date and prior to the applicable Interest Payment
Date, the Company will pay, in cash, any accrued and unpaid interest on each
Note (or the portion being converted). 
All accretions and interest payable with respect to the Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.”


 


SECTION 1.4. 
Amendments to Article 4.  (a)  Insertion of new
Section 4.17 (Incurrence of Debt and Issuance of Preferred Stock).  A new Section 4.17 (Incurrence of Debt and Issuance of
Preferred Stock) is hereby inserted immediately following
Section 4.16 (Forbearance from Restrictions on 
Rights of Holders of Notes) as follows:


 


“SECTION 4.17.  Incurrence of Debt and Issuance of
Preferred Stock.


 


(a)           The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, Guarantee or otherwise become
directly or indirectly liable, contingently or otherwise (including by
operation of law), with respect to (collectively, “Incur”) any Debt
(including Acquired Debt) and shall not permit any of its Restricted
Subsidiaries to issue any Preferred Stock; provided,
however, that the Company and the
Guarantors may Incur Debt (including Acquired Debt), and the Company and the
Guarantors may guarantee such Debt, if immediately after the Incurrence of such
Debt, both (i) prior to the Distribution Date, the Consolidated EBITDA to
Consolidated Interest Ratio for the most recent four full fiscal quarter period
for which consolidated financial statements of the Company and its Restricted
Subsidiaries are, or should have been, available in accordance with the
Transaction Documents is 2.00 to 1.00 or greater (this test is referred to
herein as the “Interest Coverage Test”), and (ii) the Consolidated
Adjusted Debt to Adjusted EBITDA Ratio is less than (A) 5.00 to 1.00 if
such Incurrence occurs on or prior to December 31, 2005 or (B) 4.50
to 1.00 if such Incurrence occurs on or after January 1, 2006 (the test
set forth in sub-paragraph (ii) hereof is referred to herein as “Leverage
Test”).  For the purpose of the
calculation of the Leverage Test (both before and after the Distribution Date)
and, prior to the Distribution Date, the Interest Coverage Test, with respect
to any period included in such calculation, Consolidated EBITDA, the components
of Consolidated Interest Expense, and Consolidated Adjusted Debt and Capital
Expenditures shall be calculated with respect to such period by the Company in
good faith on a pro forma basis (including and consistent with Permitted
Adjustments), giving effect to any acquisition, Asset Disposition or Incurrence
or redemption or repayment of Debt that has given rise to the need for such
calculation, has occurred during such period or has occurred after such period
and on or prior to the date of such calculation (each a “Subject Transaction”),
including, with regards to acquisitions and Asset Dispositions, by using the
historical financial statements of any business so acquired or to be acquired
or sold or to be sold and the consolidated financial statements of the Company
and its Restricted Subsidiaries which shall be reformulated as if such Subject
Transaction, and any Debt Incurred or redeemed or repaid in connection
therewith, had been consummated or Incurred or


 


18

















 


redeemed or repaid at the
beginning of such period (and assuming that such Debt bears interest during any
portion of the applicable measurement period prior to the relevant acquisition
at the weighted average of the interest rates applicable to outstanding
revolving loans under the Amended Credit Agreement Incurred during such
period).


 


(b)           The foregoing
provisions shall not apply to:


 


(i) the Incurrence by the Company 
and its Restricted Subsidiaries of the Existing Debt (including, without
limitation, all pay-in-kind interest under this Indenture);


 


(ii) the Incurrence by the Company and its Restricted Subsidiaries of
the Debt represented by the 16% Notes and the Guarantees (including the
Exchange Guarantees) thereof, as the case may be;


 


(iii) the Incurrence by the Company or any of its Restricted
Subsidiaries of Debt represented by (A) Capitalized Lease Obligations, mortgage
financings or purchase money Debt, in each case, Incurred for the purpose of
financing all or any part of the purchase price or cost of construction,
repair, addition to or improvement of property, plant or equipment used in the
business of the Company or such Sub, in an aggregate principal amount, together
with the principal amount of all Debt incurred pursuant to clause (xx) below,
not to exceed (without duplication) the Applicable Capital Lease Amount at any
one time outstanding and (B) other short-term purchase money Debt the term of
which does not exceed six (6) months, in an aggregate principal amount not to
exceed (without duplication) $10,000,000 at any one time outstanding;


 


(iv) the Incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net proceeds
of which are used to extend, Refinance, renew, replace, defease or refund, Debt
that was permitted by this Indenture to be Incurred by the Company or such
Restricted Subsidiary;


 


(v) the Incurrence by the Company or any of its Restricted Subsidiaries
of intercompany Debt (A) between or among the Company and any Wholly Owned
Restricted Subsidiaries of the Company and CBW (provided that, in the case of
Debt incurred by CBW, such intercompany Debt shall not exceed $300,000,000 at
any time outstanding) and (B) consisting of debits and credits among the
Company and its Restricted Subsidiaries pursuant to the Centralized Cash
Management System; provided, however, that (1) any intercompany Debt which is
borrowed by the Company or a Restricted Subsidiary from a Restricted Subsidiary
that is not a Guarantor shall be expressly subordinated to the 16% Notes and
(2) (x) any subsequent issuance or transfer of Capital Stock that results in
any such Debt being held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company or CBW, or (y) any sale or other transfer
of any such Debt to a Person other than the Company, a Wholly Owned Restricted
Subsidiary of the Company or CBW, or a lender or agent upon exercise


 


19

















 


of remedies
under a pledge of such Debt under the Credit Documents, shall be deemed, in
each case of the foregoing clauses (2)(x) and (y), to constitute an Incurrence
of such Debt by the Company or such Restricted Subsidiary, as the case may be;


 


(vi) the Incurrence by the Company or any of its Restricted
Subsidiaries of Interest Swap Obligations that are Incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate Debt
that is permitted by the terms of this Indenture to be outstanding;


 


(vii) the Incurrence by the Company and its Restricted Subsidiaries of
Debt evidenced by the Credit Documents (and the Guarantees thereof by the
Company and the Company’s Subs) in a principal amount not exceeding
$1,705,041,000 less the amount of all term loan repayments and permanent
reductions of term and revolving loan commitments actually made under the
Amended Credit Agreement; provided that, to the extent that the loans under the
Amended Credit Agreement are repaid (and corresponding commitments are
permanently reduced) with the proceeds of the New Notes (as defined in the
Amended Credit Agreement) other than the 16% Notes and such New Notes were
Incurred pursuant to this clause (vii), such repayment shall not reduce
the aggregate amount of Debt permitted to be Incurred pursuant to this clause
(vii); and, provided, further, that, notwithstanding the
limitations set forth in this clause (vii), in the event of any permanent
reduction or repayment of the Amended Credit Agreement’s revolving facility,
the Company and its Restricted Subsidiaries shall have the right to obtain
additional commitments under, and extend the maturity of, such revolving
facility (and Incur additional revolving Debt pursuant to such additional
commitments) in an amount not exceeding the amount of such permanent reduction;
provided that the aggregate amount of all such additional commitments obtained
by the Company and its Restricted Subsidiaries since the date of the 16% Notes
Indenture does not exceed $100,000,000;


 


(viii) the Incurrence by the Company or any of its Restricted
Subsidiaries of Debt under Currency Agreements;


 


(ix) the Incurrence by the Company or any of its Restricted
Subsidiaries of Debt arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in
the case of daylight overdrafts) drawn against insufficient funds in the
Ordinary Course of Business;


 


(x) the Incurrence by the Company or any of its Restricted Subsidiaries
of Debt of the Company or any of its Restricted Subsidiaries represented by
letters of credit for the account of the Company or such Restricted Subsidiary,
as the case may be, in order to provide security for workers’ compensation
claims, payment obligations in connection with self-insurance or similar requirements
in the Ordinary Course of Business;


 


20

















 


(xi) the Incurrence by the Company or any of its Restricted
Subsidiaries of Debt in respect of performance bonds, bankers’ acceptances,
workers’ compensation claims, completion guarantees, letters of credit surety
or appeal bonds, payment obligations in connection with self-insurance or
similar obligations Incurred in the Ordinary Course of Business;


 


(xii) the Guarantee by the Company or any of its Restricted
Subsidiaries of Debt of the Company or a Restricted Subsidiary of the Company
that was permitted to be Incurred by another provision of this Section 4.17;


 


(xiii) Debt arising from agreements of the Company or a Restricted
Subsidiary of the Company providing for indemnification, adjustment of purchase
price or similar obligations, in each case, Incurred in connection with an
Asset Disposition permitted by this Indenture or an acquisition or other sale
or disposition of assets permitted under the 16% Notes Indenture;


 


(xiv) Debt arising from agreements of the Company or a Restricted
Subsidiary of the Company (including the Exchange and Registration Rights
Agreement, and similar contractual undertakings) providing for indemnification
and payment of expenses relating to the registration under the Securities Act
of the sale of Capital Stock of the Company or the 16% Notes;


 


(xv) Debt permitted to be Incurred by Section 5.11 of the 16%
Notes Indenture;


 


(xvi) the Incurrence of Debt by the Company as a result of its
indemnification obligations permitted pursuant to Sections 5.06(c) and 5.06(d)
of the 16% Notes Indenture;


 


(xvii) endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business;


 


(xviii) Debt of a Restricted Subsidiary that is not a Guarantor
Incurred and outstanding on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Debt Incurred in
contemplation of, in connection with, as consideration in, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Sub of or was otherwise acquired by the Company); provided,
however, that on the date that such Restricted Subsidiary is acquired by the
Company, the Company would have been able to Incur $1.00 of additional Debt
pursuant to Section  4.17(a) after giving effect to the Incurrence
of such Debt pursuant to this clause (xviii);


 


(xix) the Incurrence by the Company of unsecured short-term Debt in the
Ordinary Course of Business in the form of swing lines of credit and overdraft
protection lines of credit in an aggregate principal amount not to exceed


 


21

















 


$20,000,000;
provided that the amount of Debt permitted to be incurred pursuant to clause
(vii) above shall be reduced by the amount of Debt outstanding pursuant to this
clause (xix);


 


(xx) in the case of CBT, the Incurrence by CBT of Debt to finance
Capital Expenditures mandated by the Ohio, Indiana or Kentucky Public Utilities
Commission; provided that (x) at the time such Capital Expenditures must be
made, CBT is not permitted to Incur Debt under any other provision of this Section
4.17 and does not have sufficient internally-generated funds to make such
Capital Expenditures and (y) the aggregate amount of such Debt at any one time
outstanding, together with all Debt outstanding pursuant to Section
4.17(b)(iii)(A) does not exceed the Applicable Capital Lease Amount;


 


(xxi) the Incurrence of Attributable Debt with respect to Sale and
Leaseback Transactions by CBW and CBT of towers and associated equipment,
cabling, antennae and other appurtenances thereto, in each case, used in the
operation of CBW’s wireless business; provided that the proceeds of such Debt
shall be used to prepay Debt under the Amended Credit Agreement in accordance
with Section 4.18;


 


(xxii) in the case of CBW Co., the incurrence of Debt secured by, and
recourse only to, the Spectrum Assets not to exceed $60,000,000 in aggregate
principal amount at any time outstanding; provided that the proceeds of such
Debt shall be used to prepay Debt under the Amended Credit Agreement;


 


(xxiii) the Incurrence on the 16% Notes Closing Date of the Alternative
Mezzanine Debt in an aggregate original issue price together with the 16% Notes
not to exceed $350,000,000;


 


(xxiv) the Incurrence by the Company and its Restricted Subsidiaries of
Debt in an aggregate principal amount not to exceed $50 million at any one
time; and


 


(xxv) the Incurrence by the Company and its Restricted Subsidiaries of
Debt in an aggregate principal amount not to exceed $100 million at any
one time outstanding; provided that the aggregate principal amount of Debt
incurred and outstanding pursuant to this clause (xxv) shall not exceed
the net proceeds received by the Company or its Restricted Subsidiaries since
March 26, 2003, from the sale of Capital Stock (other than Disqualified
Capital Stock or cash pay Preferred Stock having a dividend rate materially in
excess of market rates for similar securities issued by similarly situated
companies).


 


(c)           For purposes of
determining compliance with this Section 4.17, in the event that an item
of Debt meets the criteria of more than one of the categories of Debt described
in clauses (i) through (xxv) of the immediately preceding paragraph or is
entitled to be Incurred pursuant to Section 4.17(a), the Company shall,
in its sole discretion, classify (or later reclassify) such item of Debt in any
manner that complies


 


22

















 


with Section 4.17 and
will only be required to include the amount and type of such Debt in one of
such clauses of Section 4.17(b) or pursuant to Section 4.17(a).
Accrual of interest, accretion of accreted value, amortization of original
issue discount, the payment of interest on any Debt in the form of additional
Debt with the same terms as the Debt on which such interest is being paid and
any other issuance of securities paid-in-kind shall not be deemed to be an
Incurrence of Debt for purposes of Section 4.17. In addition, the
Company may, at any time, change the classification of an item of Debt (or any
portion thereof) to any other clause of Section 4.17(b) or to Debt
properly Incurred under Section 4.17(a) provided that the Company
would be permitted to Incur such item of Debt (or portion thereof) pursuant to
such other clause of Section 4.17(b) or Section 4.17(a), as
the case may be, at such time of reclassification.


 


(d)           Notwithstanding
paragraphs (a) and (b) above, for so long as any 16% Notes remain outstanding,
the Company shall not, and shall not permit any of its Restricted Subsidiaries
to, Incur or permit to exist any Debt that is subordinate or junior in ranking
in any respect to the 16% Notes, unless such Debt specifically provides that
such Debt is to rank pari passu with the Notes in right of
payment or is expressly subordinated in right of payment to the Notes; provided
that the foregoing provisions of this clause (d) shall not apply to Debt
Incurred pursuant to Sections 4.17(b) (xxiv) or (xxv).”


 


(b)  Insertion of
new Section 4.18 (Asset Dispositions).  A new Section 4.18 (Asset Dispositions) is hereby inserted
immediately following Section 4.17 (Incurrence of Debt and Issuance of Preferred Stock)
as follows:


 


“SECTION 4.18.  Asset
Dispositions.


 


(a)           The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, consummate any
Asset Disposition (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole shall be governed by the provisions of
Article 10 and not by the provisions of this Section 4.18) unless
all of the following conditions are met: (i) the aggregate fair market value of
assets sold or otherwise disposed of in Asset Dispositions in any fiscal year
of the Company does not exceed $50,000,000; provided that the limitation of
this clause (i) shall not apply to: (1) Asset Dispositions that do not
involve CBT Assets, the Net Proceeds of which are applied substantially
concurrently with the receipt thereof, in accordance with clause (c)
below; (2) Asset Dispositions by CBT of towers and associated equipment,
cabling, antennae and other appurtenances thereto, in each case, used in the
operations of CBW’s wireless business, so long as the Net Proceeds of such
Asset Dispositions are applied substantially concurrently with the receipt
thereof, in accordance with clause (c) below; and (3) Permitted Asset
Swaps; (ii) the consideration received is at least equal to the fair market
value of such assets (except as the result of (x) any foreclosure or sale by
the lenders under the Credit Documents or (y) Net Proceeds received from an
insurer or a Governmental Authority, as the case may be, in the event of loss,
damage, destruction or condemnation); (iii) in the case of Asset Dispositions
that are not Permitted Asset Swaps, at least 80% of the consideration received
is cash or Cash Equivalents; and (iv) prior to


 


23

















 


the Distribution Date, no
Default or Event of Default then exists or shall result from such Asset
Disposition; provided, however, that the amount of (x) any liabilities (as
shown on the Company’s or such Restricted Subsidiary’s most recent balance
sheet) of the Company or any Restricted Subsidiary that are assumed by the
transferee of any such assets pursuant to any arrangement releasing the Company
or such Restricted Subsidiary from further liability and (y) any securities,
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents within 90 days after the
Asset Disposition (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision.


 


(b)           Subject to clause
(a)(i) above, within 365 days after the receipt of any Net Proceeds from an
Asset Disposition, the Company or the Restricted Subsidiary making such Asset
Disposition, as the case may be, may, at its option, apply such Net Proceeds
(i) to permanently reduce Senior Debt or any Debt of the Restricted
Subsidiaries of the Company, or to purchase the Notes (with the consent of the
Holders thereof to the extent required) or Debt ranking pari passu with the Notes
(and to correspondingly reduce commitments with respect thereto, to the extent
applicable) or (ii) to the acquisition of a controlling interest in
another business, the making of Capital Expenditures or the investment in or
acquisition of other long-term assets, in each case, in the same or a similar
line of business as the Company and its Subs engaged in at the time such assets
were sold or in a business reasonably related, complementing or ancillary
thereto or a reasonable expansion thereof. Pending the final application of any
such Net Proceeds, the Company may temporarily reduce revolving credit Debt
under the Amended Credit Agreement or otherwise invest such Net Proceeds in any
manner that is not prohibited by the 16% Notes Indenture. Any Net Proceeds from
Asset Dispositions that are not applied or invested as provided in the first
sentence of this paragraph shall be deemed to constitute “Excess Proceeds.”
When the aggregate amount of Excess Proceeds exceeds in any fiscal year
$5,000,000, the Company shall make an Asset Sale Offer pursuant to Section
4.19 to purchase the maximum Accreted Value of Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to
100% of the outstanding Accreted Value thereof, plus accrued and unpaid
interest, thereon to the date of purchase, in accordance with the procedures
set forth in Section 4.19; provided, however, that if the Company
elects (or is required by the terms of any other pari passu Debt), such Asset
Sale Offer may be made ratably to purchase the Notes and other pari passu
Debt of the Company. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.


 


(c)           Subject to clause
(a)(i) above, Net Proceeds from Asset Dispositions in excess of the $50,000,000
per fiscal year limitation set forth in Section 4.18(a)(i) shall be
applied, substantially concurrently with the receipt thereof, to permanently
reduce Senior Debt. Any such Net Proceeds remaining after all Senior Debt has
been permanently repaid shall constitute the Excess Proceeds with respect to
which an Asset Sale Offer pursuant to Section 4.19 shall be made as
provided in the foregoing clause (b).


 


24

















 


(d)           Notwithstanding
anything herein to the contrary, the Company shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate any Asset Disposition
involving any Capital Stock of CBT or any of CBT’s Restricted Subsidiaries,
other than pursuant to a transaction governed by the provisions of Article 10.”


 


(c)  Insertion
of  a new Section 4.19 (Offer to Purchase by Application of Excess
Proceeds).  A new
Section 4.19 (Offer to Purchase by
Application of Excess Proceeds) is hereby inserted
immediately following Section 4.18 (Asset
Dispositions) as follows:


 


“SECTION
4.19.  Offer to Purchase by
Application of Excess Proceeds.


 


(a)           In the event that,
pursuant to Section 4.18, the Company shall be required to commence an
offer to all Holders to purchase Notes (an “Asset Sale Offer”), it shall
follow the procedures specified in this Section 4.19.  Each Asset Sale Offer shall remain open for
not less than ten (10) Business Days nor more than sixty (60) days immediately
following its commencement, except to the extent that a longer period is
required by applicable law (the “Offer Period”).


 


(b)           Upon the
commencement of an Asset Sale Offer, the Company shall send, by first class
mail, a notice to each of the Holders which shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer.  The Asset Sale Offer
shall be made to all Holders.  The
notice, which shall govern the terms of the Asset Sale Offer, shall state:


 


(i) that the Asset Sale Offer is being made pursuant to this Section 4.19
and Section 4.18 and the length of time the Asset Sale Offer shall
remain open,


 


(ii) the Offer Amount and the Purchase Date;


 


(iii) that Holders electing to have a Note purchased pursuant to any
Asset Sale offer shall be required to surrender the Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed to the Company at the address specified in the notice at least three
Business Days before the Purchase Date;


 


(iv) that Holders shall be entitled to withdraw their election if the
Company receives, not later than the second Business Day prior to the
expiration of the Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; and


 


(v) other information required to be included pursuant to this
Indenture.


 


25

















 


(c)           On or before the
Business Day immediately after the termination of the Offer Period (the “Purchase
Date”), the Company shall, to the extent lawful, accept for payment, on a pro rata basis
to the extent necessary, Notes or portions thereof tendered pursuant to the
Asset Sale Offer with an Accreted Value equal to the Accreted Value required to
be purchased pursuant to Section 4.18 plus accrued and unpaid interest,
if any, thereon to the Purchase Date (the “Offer Amount”) or, if the
Accreted Value of Notes tendered is less than the Offer Amount, the Company
shall purchase all Notes tendered in response to the Asset Sale Offer.  Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.  The Company shall promptly (but in any case
not later than five (5) Business Days after the Purchase Date) mail or deliver
by wire transfer to each tendering Holder an amount equal to the purchase price
of the Notes tendered by such Holder and accepted by the Company for purchase,
and the Company shall promptly issue a new Note and deliver it to such Holder,
in a principal amount equal to any unpurchased portion of the Note
surrendered.  Any Note not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof.”


 


SECTION 1.5. 
Amendment to Section 6.1 (Events of
Default Defined).  (a)  Clause (d) of Section 6.1 (Events of
Default Defined) is hereby deleted in its entirety and replaced with
the following:


 


“(d) prior
to the Distribution Date, any representation, warranty, certification or
statement made by the Company herein or in any statement or certificate at any
time given by or on behalf of the Company in writing pursuant to this Indenture
shall be false in any material respect (provided that the representations and
warranties qualified by materiality or Material Adverse Effect shall not be
false in any respect) on the date as of which made; or”


 


(b)  Clause (f)
of Section 6.1 (Events of Default Defined) is hereby
amended by inserting the following immediately before the word “or” at the end
thereof:


 


“provided that
for purposes of this Section 6.1(f), none of Broadwing Communications Inc. or
any of its Subsidiaries shall be deemed to be Significant Subsidiaries;”


 


(c)  Clause (g)
of Section 6.1 (Events of Default Defined) is hereby
amended by inserting the following immediately before the word “or” at the end
thereof:


 


“provided that
for purposes of this Section 6.1(g), none of Broadwing Communications Inc. or
any of its Subsidiaries shall be deemed to be Significant Subsidiaries;”


 


SECTION 1.6. 
Amendment to Section 10.1 (Consolidation and Merger
of the Company and Sale or Conveyance Permitted).  (a)  Clause (a) of Section 10.1


 


26

















 


(Consolidation and Merger of the Company and
Sale or Conveyance Permitted) is hereby deleted in its
entirety and replaced with the following:


 


“(a)  the resulting, surviving or transferee
Person (the “Successor Company”) shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and the Successor Company (if not the Company) shall
expressly assume, by a supplemental indenture thereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all the Obligations of the
Company under the Notes and this Indenture;”


 


(b)  Clause (b) of Section 10.1 (Consolidation
and Merger of the Company and Sale or Conveyance Permitted) is
hereby deleted in its entirety and replaced with the following:


 


“(b)  immediately after giving effect to such
transaction (and treating any Debt which becomes an obligation of the Successor
Company or any Restricted  Subsidiary as
a result of such transaction as having been Incurred by the Successor Company
or such Restricted Subsidiary at the time of such transaction), no Event of
Default shall have occurred and be continuing under this Indenture; and”


 


(c)  A new clause (c) of Section 10.1 (Consolidation
and Merger of the Company and Sale or Conveyance Permitted) is
hereby inserted immediately following clause (b) of Section 10.1 (Consolidation
and Merger of the Company and Sale or Conveyance Permitted) as follows:


 


“(c)  immediately after giving effect to such
transaction, the Successor Company would be able to Incur an additional $1.00
of Debt pursuant to Section 4.17(a) if it were deemed to be the Company
thereunder.”


 


(d)  Section
10.1 (Consolidation
and Merger of the Company and Sale or Conveyance Permitted) is
hereby amended by inserting the following sentence at the end thereof:


 


“Neither the
consummation of the BCI Sale nor any other sale of the operating assets of
BCI and/or its Subs shall constitute a sale or conveyance of the property of
the Company as an entirety or substantially as an entirety for purposes of this
Section 10.1. “


 


SECTION 1.7. 
Amendment to Section 13.1 (Optional
Redemption).  Clause (a)
of Section 13.1 (Optional Redemption) is deleted in its entirety and replaced
with the following:


 


“(a) The
Company may redeem (the “Optional Redemption”) all of the Notes, or any
portion of the Notes in minimum multiples of $100,000,000 of original issue
price, at any time on or after July 21, 2005, at the following redemption
prices (each, an “Optional Redemption Price”) expressed in percentages
of the Accreted Value of the Note on the redemption date, plus accrued and
unpaid interest to the date of


 


27

















 


redemption, subject to the
right of the Holder of the Note of record on the relevant record date to
receive interest on the relevant Interest Payment Date:


 




	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
  From July 21, 2005 through July 20, 2006

  	
   

  	
  104.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  From July 21, 2006 through July 20, 2007

  	
   

  	
  102.250

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  From July 21, 2007 through July 20, 2008

  	
   

  	
  101.125

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  From July 21, 2008 and thereafter

  	
   

  	
  100.000

  	
  %”

  






 


SECTION 1.8. 
Trustee’s Acceptance.  The Trustee hereby accepts this Supplemental
Indenture and agrees to perform the same under the terms and conditions set
forth in the Indenture.


 


ARTICLE II


 


Exchange of Notes


 


SECTION 2.1. 
Exchange of Notes for New Notes.  Upon the effectiveness of this Supplemental
Indenture, the Trustee will exchange (the “Exchange”) any Notes held by
it in global form as depositary for a like aggregate original issue price of
new Notes in global form in the form of Appendix  A hereto (the “New Notes”).  Any Holder that holds Notes in certificated form may participate
in the Exchange and receive a like aggregate original issue price of New Notes
in certificated form by surrendering such Notes at the office or agency
maintained by the Company as provided in Section 4.2 of the Indenture and
otherwise complying with the procedures set forth in Section 2.8 of the
Indenture.


 


ARTICLE III


 


Representations and Warranties of the Company


 


Except as
expressly disclosed in the Company SEC Documents (as defined in the Investment
Agreement) filed since January 1, 2001 and publicly available prior to the
date of this Supplemental Indenture, the Company represents and warrants to
each Oak Hill Purchaser and the Trustee as follows:


 


28

















 


SECTION 3.1. 
Organization, Standing And Corporate Power.
Each of the Company and its Subsidiaries is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate or other
power, as the case may be, and authority to carry on its business as now being
conducted. Each of the Company and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except for those
jurisdictions in which the failure to be so qualified or licensed or to be in
good standing individually or in the aggregate is not reasonably likely to have
a Material Adverse Effect (as defined in the Indenture) on the Company.


 


SECTION 3.2. 
Authority; Noncontravention. The Company
has the requisite corporate power and authority to enter into this Supplemental
Indenture and to consummate the transactions contemplated by this Supplemental
Indenture. The execution and delivery of this Supplemental Indenture by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company. This Supplemental Indenture has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by each of the other parties hereto, constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
The execution and delivery of this Supplemental Indenture does not, and the
consummation of the transactions contemplated by this Supplemental Indenture
and compliance with the provisions hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries under, (i) the Amended Articles of Incorporation or Amended
Regulations of the Company or the comparable organizational documents of any of
its Subsidiaries, (ii) assuming the consummation of an amendment to the Credit
Agreement that permits the consummation of this Supplemental Indenture, any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license or similar
authorization applicable to the Company or any of its Subsidiaries or their
respective properties or assets or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company
or any of its Subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses or Liens that individually or in the aggregate are not
reasonably likely to (x) have a Material Adverse Effect (as defined in the
Indenture) on the Company, (y) impair the ability of the Company to perform its
obligations under this Supplemental Indenture, or (z) prevent or materially
delay the consummation of the transactions contemplated by this Supplemental
Indenture. No consent, approval, order or authorization of, action by or in
respect of, or registration,


 


29

















 


declaration or filing with, any
Governmental Entity is required by or with respect to the Company or any of its
Subsidiaries in connection with the execution and delivery of this Supplemental
Indenture by the Company or the consummation by the Company of the transactions
contemplated hereby, except for (1) such filings under the Exchange Act as may
be required in connection with this Supplemental Indenture and the transactions
contemplated hereby and except for such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or in
the aggregate is not reasonably likely to (x) have a Material Adverse Effect
(as defined in the Investment Agreement) on the Company, (y) impair the ability
of the Company to perform its obligations under this Supplemental Indenture or
(z) prevent or materially delay the consummation of the transactions
contemplated hereby.


 


SECTION 3.3. 
Compliance with Applicable Laws.  The Company and its Subsidiaries hold all
material permits, licenses, variances, exemptions, orders, registrations and
approvals of all Governmental Entities (the “Company Permits”) which are
required for them to own, lease or operate their assets and to carry on their
businesses.  The Company and its
Subsidiaries are in compliance in all material respects with the terms of the
Company Permits and all applicable statutes, laws, ordinances, rules and
regulations.  No action, demand,
requirement or investigation by any Governmental Entities and no suit, action
or proceeding by any person, in each case with respect to the Company or any of
its Subsidiaries or any of their respective properties, is pending or, to the
Knowledge (as defined in the Investment Agreement) of the Company, threatened.


 


SECTION 3.4. 
Brokers. No broker, investment banker,
financial advisor or other person, other than Banc of America Securities LLC,
the fees, commissions and expenses of which will be paid by the Company, is
entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission, or the reimbursement of expenses, in connection with the
transactions contemplated by this Supplemental Indenture, based upon
arrangements made by or on behalf of the Company.


 


SECTION 3.5. 
Transaction Documents.  The copies of the Transaction Documents delivered to
the Trustee and the Oak Hill Purchasers by the Company were true, correct and
complete copies of such documents when delivered and any amended or
supplemented copies of Transaction Documents delivered to the Trustee and the
Oak Hill Purchasers by the Company will be true, correct and complete copies of
such documents when delivered.


 


ARTICLE IV


 


Representations and Warranties of the Oak Hill Purchasers


 


Each of the
Oak Hill Purchasers, severally but not jointly, represents and warrants to the
Company and the Trustee as follows:


 


30

















 


SECTION 4.1. 
Organization, Standing And Corporate Power.  Each such Oak Hill Purchaser is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized.


 


SECTION 4.2. 
Authority; Noncontravention.  Each such Oak Hill Purchaser has the
requisite corporate or other power and authority to enter into this
Supplemental Indenture and to consummate the transactions contemplated hereby
(including the Exchange by such Oak Hill Purchaser of the Notes for New
Notes).  The execution and delivery of
this Supplemental Indenture by the Company and the consummation by such Oak Hill
Purchaser of the transactions contemplated by this Supplemental Indenture
(including the Exchange by such Oak Hill Purchaser of the Notes for New Notes)
have been duly authorized by all necessary corporate or other action on the
part of such Oak Hill Purchaser.  This
Supplemental Indenture has been duly executed and delivered by such Oak Hill
Purchaser and, assuming the due authorization, execution and delivery by each
of the other parties hereto, constitutes the legal, valid and binding
obligation of such Oak Hill Purchaser, enforceable against such Oak Hill
Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equity
principles.  No consent, approval, order
or authorization of, action  by or in
respect of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to such Oak Hill Purchaser in connection
with the execution and delivery of this Supplemental Indenture by the Oak Hill
Purchaser or the consummation by the Oak Hill Purchaser of the transactions
contemplated by this Supplemental Indenture (including the Exchange by such Oak
Hill Purchaser of the Notes for New Notes), except for (i) filings under the
Exchange Act and (ii) such consents, approvals, orders or authorizations the
failure of which to be made or obtained individually or in the aggregate is not
reasonably likely to (x) have a Material Adverse Effect (as defined in the Investment
Agreement) on the Oak Hill Purchaser, (y) impair the ability of the Oak Hill
Purchaser to perform its obligations under this Supplemental Indenture
(including the Exchange by such Oak Hill Purchaser of the Notes for New Notes)
or the or (z) prevent or materially delay the consummation of the transactions
contemplated by this Supplemental Indenture 
(including the Exchange by such Oak Hill Purchaser of the Notes for New
Notes).


 


SECTION 4.3. 
Brokers. 
No broker, investment banker, financial advisor or other person, the
fees, commissions and expenses of which will be paid by such Oak Hill
Purchaser, is entitled to any broker’s, finder’s, financial advisor’s or other
similar fee or commission, or the reimbursement of expenses, in connection with
the transactions contemplated by this Supplemental Indenture, based upon
arrangements made by or on behalf of the Oak Hill Purchaser.


 


SECTION 4.4. 
Securities Act Representation.  Such Oak Hill Purchaser is an “accredited
investor” as defined in Rule 501 promulgated under Regulation D under the
Securities Act.  Such Oak Hill Purchaser
will acquire the New Notes to be issued pursuant to the Exchange and all the
Conversion Shares that may be issued upon conversion thereof for its own
account for the purpose of investment and not with a view


 


31

















 


to a distribution or resale of
any such securities in violation of any applicable Federal or state securities
laws.  Such Oak Hill Purchaser will not
offer to sell, sell or otherwise dispose of any New Notes or Conversion Shares
in violation of applicable Federal or state securities laws.


 


SECTION 4.5. 
Present Ownership.  (a) 
Other than the New Notes to be issued pursuant to the Exchange and the
Conversion Shares issuable upon the conversion thereof and the warrants to
purchase shares of the Company’s Common Stock purchased by such Oak Hill
Purchaser pursuant to the 16% Notes Purchase Agreement and the shares of
Company Common Stock issuable upon the exercise thereof, such Oak Hill
Purchaser does not beneficially own (within the meaning of Rule 13d-3 under the
Exchange Act, such term to have such meaning throughout this Agreement) any
Voting Securities.


 


(b)  Each
Oak Hill Purchaser beneficially owns currently outstanding Notes with an
aggregate original issue price set forth next to such Oak Hill Purchaser’s name
on Schedule 4.5 hereto.


 


ARTICLE V


 


Miscellaneous


 


SECTION 5.1. 
Interpretation.  Upon execution and delivery of this Supplemental Indenture, the
Indenture shall be modified and amended in accordance with this Supplemental
Indenture, and all the terms and conditions of both shall be read together as
though they constitute one instrument, except that, in case of conflict, the
provisions of this Supplemental Indenture will control.  The Indenture, as modified and amended by
this Supplemental Indenture, is hereby ratified and confirmed in all respects
and shall bind every Holder of Notes. 
In case of conflict between the terms and conditions contained in the
Notes and those contained in the Indenture, as modified and amended by this
Supplemental Indenture, the provisions of the Indenture, as modified and
amended by this Supplemental Indenture, shall control.


 


SECTION 5.2. 
Conflict with Trust Indenture Act.  If any provision of this Supplemental
Indenture limits, qualifies or conflicts with any provision of the TIA that is
required under the TIA to be part of and govern any provision of this
Supplemental Indenture, the provision of the TIA shall control.  If any provision of this Supplemental
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the provision of the TIA shall be deemed to apply to the Indenture
as so modified or to be excluded by this Supplemental Indenture, as the case may
be.


 


SECTION 5.3. 
Severability.  In case any provision in this Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.


 


32

















 


SECTION 5.4. 
Terms Defined in the Indenture.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Indenture.


 


SECTION 5.5. 
Headings. 
The Article and Section headings of this Supplemental Indenture have
been inserted for convenience of reference only, are not to be considered a
part of this Supplemental Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.


 


SECTION 5.6.  Benefits of Supplemental Indenture, etc.  Nothing in this Supplemental Indenture or
the Notes, express or implied, shall give to any Person, other than the parties
hereto and thereto and their successors hereunder and thereunder and the
Holders of the Notes, any benefit of any legal or equitable right, remedy or
claim under the Indenture, this Supplemental Indenture or the Notes.


 


SECTION 5.7. 
 Successors.  All agreements of the Company in this
Supplemental Indenture shall bind its successors.  All agreements of the Trustee in this Supplemental Indenture
shall bind its successors.


 


SECTION 5.8. 
Trustee Not Responsible for Recitals.  The recitals contained herein shall be taken
as the statements of the Company and the Trustee assumes no responsibility for their
correctness.  The Trustee makes no
representations as to the validity or sufficiency of this Supplemental
Indenture or of the Notes.


 


SECTION 5.9. 
Certain Duties and Responsibilities of the Trustee.  In entering into this Supplemental
Indenture, the Trustee shall be entitled to the benefit of every provision of
the Indenture relating to the conduct or affecting the liability or affording
protection to the Trustee, whether or not elsewhere herein so provided.


 


SECTION 5.10.  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 5.11.  Counterpart Originals.  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.


 


33

















 


IN WITNESS
WHEREOF, each party hereto has caused this Supplemental Indenture to be signed
by its officer thereunto duly authorized as of the date first written above.


 


	
   

  	
   

  	
  BROADWING
  INC.,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Mark W.
  Peterson

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Mark W.
  Peterson

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President & Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF
  NEW YORK, as Trustee,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Paul
  Schmalzel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Paul
  Schmalzel

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
								



 


	
  Accepted and agreed as of

  
	
  the date first written above:

  
	
   

  
	
   

  
	
  OAK HILL CAPITAL PARTNERS, L.P.

  
	
   

  
	
  By:  

  	
  OHCP GenPar, L.P.,

  
	
   

  	
  its general partner

  
	
   

  
	
  By:  

  	
  OHCP MGP, LLC,

  
	
   

  	
  its general partner

  
	
   

  
	
  By:  

  	
  /s/ J. Taylor Crandall

  	
   

  
	
   

  	
  Name:

  	
  J. Taylor Crandall

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  OHCP OCEAN I, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP AIV I (Cayman), Ltd.,

  	
   

  
	
   

  	
  its member

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/ J. Taylor Crandall

  	
   

  
	
   

  	
  Name:

  	
  J. Taylor Crandall

  
	
   

  	
  Title:

  	
   

  
								



 


34

















 


	
  OHCP OCEAN III, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  Oak Hill Capital Partners, L.P.,

  	
   

  
	
   

  	
  its member

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP GenPar, L.P.,

  	
   

  
	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP MGP, LLC,

  	
   

  
	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/ J. Taylor Crandall

  	
   

  
	
   

  	
  Name:

  	
  J. Taylor Crandall

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  OHC OCEAN IV, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  Oak Hill Capital Management Partners, L.P.,

  
	
   

  	
  its member

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP GenPar, L.P.,

  	
   

  
	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP MGP, LLC,

  	
   

  
	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ J. Taylor Crandall

  	
   

  
	
   

  	
  Name:

  	
  J. Taylor Crandall

  
	
   

  	
  Title:

  	
   

  
						



 


35

















 


	
  OHCP OCEAN
  V, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP Ocean
  II, LLC,

  	
   

  
	
   

  	
  its member

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   OHCP GenPar, L.P.,

  	
   

  
	
   

  	
  its managing
  member

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   OHCP MGP, LLC,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/ J.
  Taylor Crandall

  	
   

  
	
   

  	
  Name:

  	
  J. Taylor
  Crandall

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  OAK HILL
  SECURITIES FUND, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  Oak Hill
  Securities GenPar, L.P.,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  Oak Hill
  Securities MGP, Inc.,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  OAK HILL
  SECURITIES FUND II, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  Oak Hill
  Securities GenPar II, L.P.,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  Oak Hill
  Securities MGP II, Inc.,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
							



 


36

















 


	
  OHCP AIV I,
  L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP GenPar,
  L.P.,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  OHCP MGP,
  LLC,

  	
   

  
	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/ J.
  Taylor Crandall

  	
   

  
	
   

  	
  Name:

  	
  J. Taylor
  Crandall

  
	
   

  	
  Title:

  	
   

  
					



 


37

















 


APPENDIX A


 


[FORM OF NOTE]


[FACE]


 


[DTC Legend]


 


THE FOLLOWING INFORMATION IS
PROVIDED PURSUANT TO TREAS. REG. § 1.1275-3:


 


THIS DEBT INSTRUMENT IS ISSUED
WITH ORIGINAL ISSUE DISCOUNT.


 


TREASURER (513-397-9900), AS A
REPRESENTATIVE OF THE ISSUER, WILL MAKE AVAILABLE ON REQUEST TO HOLDERS OF THIS
DEBT INSTRUMENT THE FOLLOWING INFORMATION:  ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND
YIELD TO MATURITY.


 


	
  NO.

  	
   

  	
  $

  



BROADWING INC.


(f/k/a Cincinnati Bell Inc.)


 


 


 


CUSIP NO.
               


 


6.75% CONVERTIBLE SUBORDINATED NOTE


DUE 2009


 


 


 


BROADWING INC.
(f/k/a Cincinnati Bell Inc.), an Ohio corporation (herein referred to as the
“Company”), for value received, hereby promises to pay to [  ], or registered assigns, at the office or
agency of the Company in the City of Cincinnati, State of Ohio, or at the
option of the registered holder, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, State of New York, the Full
Accreted Value (as defined herein) of this Note on July 21, 2009 in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay or accrete
interest, at the rate set forth on the reverse hereof, until payment of said
principal sum has been made or duly provided for; provided however, that payment
of interest may be made at the option of the Company by check mailed to the
address of the person entitled thereto at such address as it shall appear on
the Note Register.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.


 


Reference is
hereby made to the further provisions of this Note set forth on the reverse
hereof and such further provisions shall for all purposes have the same effect
as though fully set forth at this place.


 

















 


This Note
shall not be valid or become obligatory for any purpose until the appropriate
certificate or authentication hereon shall have been executed by or on behalf
of the Trustee under the Indenture referred to on the reverse hereof.


 


IN WITNESS
WHEREOF, Broadwing Inc., has caused this Instrument to be signed by its duly
authorized officers, by a facsimile of each of their signatures.


 


	
   

  	
  BROADWING
  INC.,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2

















 


[FORM OF CERTIFICATE OF AUTHENTICATION]


 


This is one of
the Notes of the issue designated herein and referred to in the
within-mentioned Indenture.


 


	
   

  	
  THE BANK OF NEW YORK,

  AS TRUSTEE,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  	 

	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
							



 

















 


[FORM OF NOTE]


 


[REVERSE]


 


BROADWING INC.


(f/k/a Cincinnati Bell Inc.)


 


6.75% CONVERTIBLE SUBORDINATED NOTE


 


DUE 2009


 


This Note is
one of a duly authorized issue of Notes of the Company designated as set forth
on the face (herein referred to as the “Notes”), limited to the aggregate
original issue amount of $400,000,000, all issued or to be issued under and
pursuant to an indenture dated as of July 21, 1999, as amended or supplemented
(herein referred to as the “Indenture”), duly executed and delivered by the
Company and The Bank of New York, as Trustee (herein referred to as the
“Trustee”), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders (the words “holders” or “holder” meaning the registered
holders or registered holder) of the Notes.


 


Capitalized
terms not otherwise defined in this Note shall have the meanings ascribed to
them in the Indenture.


 


In case of an
Event of Default, as defined in the Indenture, shall have occurred and be continuing,
the Accreted Value hereof may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.


 


The Indenture
permits, subject to the exceptions therein provided, that the Company and the
Trustee, with the consent of the holders of not less than 51% in aggregate
Accreted Value of the Notes at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Notes.  It is also
provided in the Indenture that the majority in aggregate principal amount of
the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default under the Indenture and its consequences.  Any such consent or waiver by the holder of
any Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of such Note
and of any Note issued upon the transfer thereof or in exchange or substitution
therefor, irrespective of whether or not any notation of such consent or waiver
is made upon such Note or such other Note.


 


No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal or Accreted Value of (and premium, if any)
and


 

















 


interest on this Note at the
places, at the respective times, at the rate and in the coin or currency herein
prescribed.


 


The Notes are
issuable as registered Notes without coupons in denominations of $1,000 in
original price and any integral multiple of $1,000.  At either of the offices or agencies of the Company referred to
on the face hereof and in the manner and subject to the limitations provided in
the Indenture, Notes may be exchanged without a service charge for a like
aggregate principal amount of Notes of other authorized denominations.


 


The Company
promises to pay cash interest on this Note at the rate and in the manner
specified below.  Prior to July 21, 2004
(the “Partial Accretion Date”), cash interest will not accrue or be payable on
this Note, but this Note will accrete on a daily basis, compounded
semi-annually on January 21 and July 21 of each year, at the rate of 6.75% per
annum of the Accreted Value of this Note from the date of issuance of this Note
through March 26, 2003, at the rate of 9.00% per annum of the Accreted
Value of this Note of the Accreted Value of this Note from March 27, 2003
through the Partial Accretion Date and at the rate of 2.25% per annum of
the Accreted Value of this Note from the Partial Accretion Date through the
Full Accretion Date.  On the Partial
Accretion Date, the Accreted Value of each $1,000 of original issue amount of
this Note will be equal to $1,434.14. 
On the Full Accretion Date, the Accreted Value of each $1,000 of
original issue amount of this Note will be equal to $1,603.90, as adjusted as
described in the definition of the term “Accreted Value” if the Company elects
the Cash Interest Option (the “Full Accreted Value”).  From the Partial Accretion Date, interest on this Note will
accrue on $1,393.65 for each $1,000 of original issue price of this Note at the
rate of 6.75% per annum (the “Cash Pay Interest”) from the most recent Interest
Payment Date to which interest has been paid or, if no interest has been paid,
from the Partial Accretion Date. 
Beginning on the Partial Accretion Date, the Company, at its option, may
elect (the “Cash Interest Option”), on any date following the Partial Accretion
Date (the “Cash Interest Option Date”), to pay cash interest (the “Optional
Cash Pay Interest”) in lieu of all or any accretion on the Notes since the
Partial Accretion Date, in which case the Accreted Value of the Notes shall be
adjusted as described in the definition of the term “Accreted Value.”  The Company will pay, in cash, such Cash Pay
Interest or Optional Cash Pay Interest, as the case may be, semiannually, in
the case of Cash Pay Interest in arrears, on January 21 and July 21 of each
year (each an “Interest Payment Date”), commencing on (x) January 21, 2005, in
the case of Cash Pay Interest, or (y) on the Interest Payment Date next
succeeding the Cash Interest Option Date, in the case of Optional Cash Pay
Interest, or if any such day is not a Business Day on the next succeeding
Business Day, to the holders of record at the close of business on the January
6 or July 6 immediately preceding the Interest Payment Date (a “Regular Record
Date”), except that interest not so punctually paid or duly provided for, if
any, will be paid to the person in whose name this Note is registered as of the
close of business on a special record date to be fixed by the Company (a
“Special Record Date”), notwithstanding the subsequent cancellation of this
Note prior to such Interest Payment Date. 
Upon any conversion of this Note or any portion thereof into Common
Stock following the Partial Accretion Date, only if such conversion occurs (x)
following any notice by the Company of its option to redeem this Note under
Section 13.1 of the Indenture, (y) in connection


2

















 


with a Change of Control or (z)
on or after the Record Date and prior to the applicable Interest Payment Date,
the Company will pay, in cash, any accrued and unpaid interest on this Note (or
the portion being converted). 
Accretions and interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.


 


The Notes may
be represented by one or more global Notes deposited with the Depository Trust
Company (“DTC”) and registered in the name of the nominee of DTC, with certain
limited exceptions.  So long as DTC or
any successor depository or its nominee is the registered Holder of a global
Note, DTC, such depository or such nominee, as the case may be, will be
considered to be the sole Holder of the Notes for all purposes of the
Indenture.  Except as provided below, an
owner of a beneficial interest in a global Note will not be entitled to have
Notes represented by such global Note registered in such owner’s name, will not
receive or be entitled to receive physical delivery of the Notes in certificated
form and will not be considered the owner or Holder thereof under the
Indenture.  Each person owning a
beneficial interest in a global Note must rely on DTC’s procedures and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a Holder under the
Indenture.  If the Company requests any
action of Holders or if an owner of a beneficial interest in a global Note
desires to take any action that a Holder is entitled to take under the
Indenture, DTC will authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants will otherwise act
upon the instructions of beneficial owners holding through them.


 


If at any time
DTC notifies the Company that it is unwilling or unable to continue as
depository for the global Note or Notes or if at any time DTC ceases to be a
clearing agency registered under the Security Exchange Act of 1934, as amended,
if so required by applicable law or regulation, the Company shall appoint a
successor depository with respect to such global Note or Notes.  If a successor depository for such global
Note or Notes is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such unwillingness, inability or
ineligibility or the Company, in its sole discretion, determines at any time
that all Outstanding Notes (but not less than all) issued or issuable in the
form of one or more global Notes shall no longer be represented by such global
Notes, then the Company shall execute, and the Trustee shall authenticate and
deliver, definitive Notes of like series, rank, tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of such
global Note or Notes.  If any beneficial
owner of an interest in a permanent global Note is otherwise entitled to
exchange such interest for Notes of such series and of like tenor and principal
amount of another authorized form and denomination, as contemplated by the
Indenture and provided that any applicable notice provided in the permanent
global Note shall have been given then the Company shall execute, and the
Trustee shall authenticate and deliver, definitive Notes in aggregate principal
amount equal to the principal amount of such beneficial owner’s interest in
such permanent global Note.


 


Upon the
exchange of a Note in global form for Notes in certificated form, such Note in
global form shall be canceled by the Trustee. 
Notes in certificated form issued in exchanged for a Note in global form
shall be registered in such names and in


3

















 


such authorized denominations
as the Depositary for such Note in global form, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the
Trustee.  The Trustee shall deliver such
Notes to the Persons in whose names such Notes are so registered.


 


This Note
shall be subject to the provisions regarding redemption and repurchase set
forth in Article Thirteen of the Indenture.


 


This Note
shall be convertible into shares of Common Stock in accordance with Article
Fourteen of the Indenture.


 


This Note is
subordinated to all Senior Debt.  To the
extent provided in Article Eleven of the Indenture, Senior Debt must be paid
before principal or Accreted Value, premium, if any, or interest on, this Note
may be paid.  The Company and the Holder
of this Note, by accepting this Note, agree to the subordination provisions
contained in Article Eleven of the Indenture.


 


None of the
Company, the Trustee, any Paying Agent or the Note Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in this Note in
global form or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests. 
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee, or any agent of the Company or the Trustee, from giving effect to
any written certification, proxy or other authorization furnished by any
depository, as a Holder, with respect to this Note in global form or impair, as
between such depository and owners of beneficial interests in such global Note,
the operation of customary practices governing the exercise of the rights of
such depository (or its nominee) as Holder of such global Note.


 


No recourse
shall be had for the payment of the principal of (or premium, if any) or the
interest on this Note or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer, director
or employee, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.


 


This Note
shall be deemed a contract made under the laws of the State of New York and for
all purposes shall be governed by and construed in accordance with the laws of
said State.


 


4

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to
elect to have this Note purchased by the Company pursuant to Section 4.19
(Application of Excess Proceeds from Sale of Assets) of the Indenture, check
the box:


 


o


 


If you want to
elect to have only part of this Note purchased by the Company pursuant to
Section 4.19 of the Indenture, state the aggregate Accreted Value ($1,000 or a
multiple thereof):


 


	
  $

  
	
   

  
	
  Date: 

  	
   

  	
  Your
  Signature: 

  	
   

  	
   

  
	
  (Sign
  exactly as your name appears on the other side of the Note)

  
	
   

  
	
  Signature 

  
	
   

  	
  Guarantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature
  must be guaranteed by a participant in a recognized signature guaranty
  medallion program or other signature guarantor acceptable to the Trustee

  
									



 


 


[END OF FORM OF NOTE]


 

















 


SCHEDULE 4.5


 


OAK HILL PURCHASERS
OWNERSHIP OF THE NOTES


 


	
  Oak Hill Purchaser

  	
   

  	
  Aggregate
  Original Issue Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OHCP Ocean I, LLC

  	
   

  	
  $

  	
  40,441,375

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OHCP Ocean III, LLC

  	
   

  	
  $

  	
  234,200,255

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OHCP Ocean IV, LLC

  	
   

  	
  $

  	
  9,100,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OHCP Ocean V, LLC

  	
   

  	
  $

  	
  41,258,370

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Oak Hill Securities Fund, L.P.

  	
   

  	
  $

  	
  37,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Oak Hill Securities Fund II, L.P.

  	
   

  	
  $

  	
  37,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  400,000,000