Exhibit 10.4


    
      

    


    RCN
      CORPORATION,

     

    as
      Issuer

     

    and

     

    HSBC
      BANK USA, NATIONAL ASSOCIATION, 

     

    as
      Trustee

     

    FIRST
      SUPPLEMENTAL INDENTURE

     

    Dated
      as of May 30, 2006

     

    7.375%
      Convertible Second Lien Notes due 2012

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    THIS
      FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”), dated as of
      May 30, 2006, by and among RCN Corporation, a Delaware corporation (the
“Company”), and HSBC Bank USA, National Association, a national banking
      association, as trustee (the “Trustee”), pursuant to the Indenture by and among
      the Company and the Trustee dated as of December 21, 2004 (the
“Indenture”).

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      Section 11.2 of the Indenture provides, among other things, that subject to
      certain restrictions, the Company, when authorized by a Board Resolution, may
      amend or supplement the Notes, the Security Documents or the Indenture with
      the
      consent (evidenced as provided in Article IX of the Indenture) of the holders
      of
      not less than a majority in aggregate principal amount of the Notes at the
      time
      outstanding;

     

    WHEREAS,
      the holders of not less than a majority in aggregate principal amount of the
      Notes outstanding have duly consented to the proposed amendments to the
      Indenture set forth in this First Supplemental Indenture, in accordance with
      the
      provisions of Article IX and Section 11.2 of the Indenture;

     

    WHEREAS,
      the Company has paid a consent fee to all Holders in an amount of 225 basis
      points;

     

    WHEREAS,
      in accordance with Section 11.5 of the Indenture, the Company has heretofore
      delivered or is delivering contemporaneously herewith to the Trustee an
      Officers' Certificate and an Opinion of Counsel, with respect to the execution
      and delivery by the Trustee of this First Supplemental Indenture;
      and

     

    WHEREAS,
      all conditions necessary to authorize the execution and delivery of this First
      Supplemental Indenture and to make this First Supplemental Indenture valid
      and
      binding have been complied with or have been done or performed;

     

    NOW,
      THEREFORE, in consideration of the foregoing, the parties hereto, intending
      to
      be legally bound hereby, agree as follows:.

     

    ARTICLE
      I

    DEFINITIONS

     

    Section
      1.1  Definitions.
      All
      terms used herein and not otherwise defined herein shall have the respective
      meanings assigned to them in the Indenture.

     

    ARTICLE
      II

    AMENDMENTS

     

    Section
      2.1  Amendments
      to Definitions.
      

     

    (a)  Consolidated
      EBITDA.
      The
      definition of “Consolidated EBITDA” set forth in Section 1.1 of the Indenture is
      hereby amended by restating clause (vii) in its entirety as set forth
      below:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “(vii)
      (A) any non-cash, non-recurring charges and any non-cash charges associated
      with
      stock-based compensation and (B) any non-cash impairment, non-cash exit costs
      (i.e., costs for exiting a facility) and non-cash restructuring
      charges;”

     

    (b)  Excess
      Cash Flow.
      Section
      1.1 of the Indenture is hereby amended to include the definition of “Excess Cash
      Flow” set forth below:

     

    “Excess
      Cash Flow” shall have the meaning set forth in the First Lien Credit
      Agreement.

     

    (c)  First-Lien
      Credit Agreement.
      The
      definition of “First-Lien Credit Agreement” set forth in Section 1.1 of the
      Indenture is hereby amended by adding a second sentence as set forth
      below:

     

    This
      definition shall specifically include the First Lien Credit Agreement dated
      as
      of May 30, 2006 among the Company, the lenders party thereto from time to time
      and Deutsche Bank Trust Company Americas, as administrative agent, and any
      Refinancing thereof.

     

    (d)  First-Lien
      Obligations.
      The
      definition of “First-Lien Obligations” set forth in Section 1.1 of the Indenture
      is hereby amended by adding a second sentence as set forth below:

     

    This
      definition shall specifically include any Incremental Term Loans (as defined
      in
      the First-Lien Credit Agreement) under the First-Lien Credit Agreement so long
      as all Indebtedness under the First-Lien Credit Agreement does not exceed the
      Maximum First-Lien Credit Documents Principal Amount. 

    


    (e)  Permitted
      Indebtedness.
      The
      definition of “Permitted Indebtedness” set forth in Section 1.1 of the Indenture
      is hereby amended by:

     

    (i)  replacing
      clause (i) in its entirety as set forth below:

     

    (i)
      Indebtedness of the Company and/or any Restricted Subsidiary to the extent
      it
      represents a Refinancing of outstanding Indebtedness of the Company and/or
      any
      Restricted Subsidiary incurred or outstanding pursuant to clause (a), or (b),
      of
      this definition or the proviso of Section 5.11 hereof, provided that (1)
      Indebtedness of the Company may not be Refinanced to such extent under this
      clause (i) with Indebtedness of any Restricted Subsidiary, and (2) any such
      Refinancing shall only be permitted under this clause (i) to the extent that
      (x)
      it does not result in a lower Average Life to Stated Maturity of such
      Indebtedness as compared with the Indebtedness being Refinanced and (y) it
      does
      not exceed the sum of the principal amount (or, if such Indebtedness provides
      for a lesser amount to be due and payable upon a declaration of acceleration
      thereof, an amount no greater than such lesser amount) of the Indebtedness
      being
      Refinanced plus the amount of accrued interest thereon and the amount of any
      reasonably determined prepayment premium necessary to accomplish such
      Refinancing and such reasonable fees and expenses incurred in connection
      therewith;

     

    (ii)  replacing
      clause (l) in its entirety as set forth below:

     

    
      
        
        

      

      
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    (l)
      Subordinated Indebtedness of the Company (which Indebtedness may in no event
      be
      guaranteed by, or secured by the assets of, any Subsidiary of the Company)
      in an
      aggregate original principal amount not to exceed $100,000,000 plus any increase
      in the principal amount thereof resulting from the payment-in-kind or
      capitalization of interest accruing thereon as contemplated by the terms
      thereof;

     

    (iii)  inserting
      a new clause (m) in its entirety as set forth below:

     

    (m)
      Indebtedness incurred pursuant to an accounts receivable securitization facility
      in an aggregate principal amount not to exceed $50,000,000; and

     

    ;
      and

     

    (iv)  inserting
      a new clause (n) in its entirety as set forth below:

     

    (n)
      in
      addition to the items referred to in clauses (a) through (m) above, Indebtedness
      of the Company and/or the Restricted Subsidiaries having an aggregate principal
      amount not to exceed $25,000,000 at any time outstanding.

     

    (f)  Refinancing.
      The
      definition of “Refinancing” set forth in Section 1.1 of the Indenture is hereby
      amended and restated in its entirety as set forth below:

     

    “Refinancing”
      means, in respect of any Indebtedness, the refinancing, extension, renewal,
      defeasance, amendment, modification, supplementation, restructuring,
      replacement, refund or repayment, or issuance of other Indebtedness, in exchange
      or replacement for, such Indebtedness. “Refinance” and “Refinanced” shall have
      correlative meanings.

     

    (g)  Restricted
      Payment.
      The
      definition of “Restricted Payment” set forth in Section 1.1 of the Indenture is
      hereby amended by restating clause (iii) in its entirety as set forth
      below:

     

    (iii)
      the
      purchase, redemption, defeasance or other acquisition or retirement for value
      prior to any scheduled repayment, sinking fund or maturity of any Subordinated
      Indebtedness (other than (x) any Third-Lien Obligation held by any Person,
      or
      (y) any Subordinated Indebtedness held by the Company or a Wholly Owned
      Restricted Subsidiary);

     

    Section
      2.2  Amendments
      to Covenants.
      

     

    (a)  Limitation
      on Restricted Payments.
      Section
      5.13 of the Indenture is hereby amended as set forth below:

     

    (i)  amending
      and restating clause (iii) in its entirety as follows:

     

    (iii) immediately
      after giving effect to such Restricted Payment, the aggregate amount of all
      Restricted Payments declared or made on or after May 30, 2006 and all
      Designation Amounts does not exceed an amount equal to the lesser of (a) 50%
      of
      the cumulative Excess Cash Flow accrued on a cumulative basis during the period
      beginning on January 1, 2006 and ending on the last day of the fiscal quarter
      of
      the Company immediately preceding the date of such proposed Restricted Payment,
      and (b) $100,000,000. 

     

    
      
        
        

      

      
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    (ii)  in
      clause
      (d), replacing “$10,000,000” with “$30,000,000”;

     

    (iii)  deleting
      the word “or” at the end of clause (e);

     

    (iv)  inserting
      the word “or” at the end of clause (f); and

     

    (v)  inserting
      a new clause (g) in its entirety as set forth below:

     

    (g)
      in
      addition to the items referred to in clauses (a) through (f) above, so long
      as
      no Default shall have occurred and be continuing, Restricted Payments in an
      aggregate amount not to exceed $15,000,000.

     

    (b)  Limitation
      on Certain Guarantees and Indebtedness of Restricted Subsidiaries; Domestic
      Restricted Subsidiaries to Become Guarantors and Provide
      Collateral.
      Section
      5.18(d) of the Indenture is hereby amended as set forth below:

     

    (i)  amending
      and restating the first clause of Section 5.18(d) in its entirety as
      follows:

     

    (d)
      The
      Company will, and will cause each Domestic Restricted Subsidiary to, grant
      to
      the Collateral Agent for the benefit of the Noteholders security interests
      and
      Mortgages in such assets, properties and owned real properties of the Company
      and the Domestic Restricted Subsidiaries having a fair market value (certified
      and identified by the Company in an Officers’ Certificate) in excess of
      $5,000,000 as may be reasonably requested pursuant to the terms of the
      First-Lien Documents and, after the date of Discharge of First-Lien Obligations,
      by the Trustee (collectively, the “Additional Security Documents”);

     

    (ii)  adding
      the following sentence at the end of Section 5.18(d):

     

    Promptly
      after May 30, 2006, the Trustee acting at the direction of the Company shall
      instruct the Collateral Agent to release existing Mortgages in such assets,
      properties and owned real properties of the Company and the Domestic Restricted
      Subsidiaries having a fair market value (certified and identified by the Company
      in an Officers’ Certificate) less than $5,000,000 at the Company’s
      expense.

     

    Section
      2.3  Amendments
      to Miscellaneous Provisions.

     

    (a)  Addresses
      for Notices, Etc.
      The
      notice information for the Company or any Guarantor included in Section 16.3
      of
      the Indenture is hereby amended and restated as set forth below:

     

    If
      to the
      Company or any Guarantor:

    


    RCN
      Corporation

    196
      Van
      Buren Street, Suite 300

    Herndon,
      VA 20170

    Telephone:
      (703) 434-8484

    Facsimile:
      (703) 434-8461

    Attention:
      General Counsel

     

    
      
        
        

      

      
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    ARTICLE
      III

    MISCELLANEOUS

     

    Section
      3.1  Except
      as
      amended hereby, all of the terms of the Indenture shall remain and continue
      in
      full force and effect and are hereby confirmed in all respects.

     

    Section
      3.2  This
      First Supplemental Indenture and each and every provision hereof shall be deemed
      to be a contract made under the laws of the State of New York and for all
      purposes shall be construed in accordance with the laws of such
      State.

     

    Section
      3.3  This
      First Supplemental Indenture may be executed in any number of counterparts,
      each
      of which shall be an original; but such counterparts shall constitute but one
      and the same instrument.

     

    Section
      3.4  In
      entering into this First Supplemental Indenture, the Trustee shall be entitled
      to the benefit of every provision of the Indenture relating to the conduct
      or
      affecting the liability of or affording protection to the Trustee, whether
      or
      not elsewhere herein so provided.

     

    Section
      3.5  Promptly
      after the effective date of this First Supplemental Indenture, (1) all existing
      deposit account control agreements to which the Collateral Agent is a party
      with
      the Company or any of its Subsidiaries shall be terminated and the Trustee
      (at
      the written direction of the First Lien Collateral Agent and the Company) shall
      direct the Collateral Agent to execute such documents as the First Lien
      Collateral Agent may request to evidence such termination, all at the sole
      cost
      and expense of the Company and (2) Trustee (at the written direction of the
      First Lien Collateral Agent and the Company) shall direct the Collateral Agent
      to enter into new deposit account control agreements in order to perfect the
      security interests of the First-Lien Administrative Agent under the Credit
      Agreement dated as of May 30, 2006, among the Company, the lenders party thereto
      from time to time and Deutsche Bank Trust Company Americas, as Administrative
      Agent for such lenders, and the Collateral Agent in bank accounts of the Company
      and its Subsidiaries.

     

    Section
      3.6  The
      recitals contained herein shall be taken as the statement 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 First Supplemental
      Indenture.

     

    [Signature
      page follows]

     

    
      
        
        

      

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

    

      
        	 	 	 	
                RCN
                  CORPORATION

              
	 	 	 	 
	 	 	 	 
	 	 	 	
                By:
                  

              	
                /s/
                  Michael T. Sicoli

              
	 	 	 	
                Name:  
                  

              	
                Michael
                  T. Sicoli

              
	 	 	 	
                Title:
                  

              	
                Executive
                  Vice President and

              
	 	 	 	
                 

              	
                Chief
                  Financial Officer

              
	
                Attest:

              	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                By:

              	
                 /s/
                  Benjamin R. Preston

              	 	 	 
	
                Name:   
                  

              	
                Benjamin
                  R. Preston

              	 	 	 
	
                Title:

              	
                Secretary

              	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                HSBC
                  BANK USA, NATIONAL ASSOCIATION, as Trustee

                 

              
	 	 	 	 	 
	 	 	 	
                By:
                  

              	
                /s/
                  Anthony A. Bocchino, Jr.

              
	 	 	 	
                Name:

              	
                Anthony
                  A. Bocchino, Jr. 

              
	 	 	 	
                Title:

              	
                Vice
                  President

              


      

    

     

     

    

      [SIGNATURE
        PAGE TO FIRST SUPPLEMENTAL INDENTURE]