**Exhibit10.4**

 

INDENTURE (this “Indenture”)dated as of March 26, 2003, by and among BROADWING INC., an Ohio corporation(the “Company”), the Guarantors (as hereinafter defined) listed on thesignature pages hereof as Guarantors; and The Bank of New York, a New Yorkbanking corporation, as trustee (the “Trustee”).

 

Each party agrees asfollows for the benefit of the other parties and for the equal and ratablebenefit of the Holders of (a) the Company’s Senior Subordinated Discount Notesdue 2009 issued on the date hereof (such notes, the “Initial Notes”) and(b) if and when issued as provided in the Exchange and Registration RightsAgreement (as defined in Appendix A hereto (the “Appendix”)) orin this Indenture, the Company’s Senior Subordinated Discount Notes due 2009issued in the Registered Exchange Offer in exchange for any Initial Notes orotherwise as provided in this Indenture (the “Exchange Notes” andtogether with the Initial Notes issued hereunder, the “Notes,” such termto include any such notes issued in exchange or replacement therefor).  Except as otherwise provided herein, theNotes shall be limited to $441,628,051.27 in aggregate principal amount atMaturity.

 

# ARTICLE 1.

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# DEFINITIONSAND ACCOUNTING TERMS

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## SECTION 1.01.              Definitions.  As used herein, the following terms shallhave the meanings specified herein unless the context otherwise requires:

##  

“AccreditedInvestor” means any Person that is an “accredited investor” within themeaning of Rule 501(a) under the Securities Act.

 

“Accreted Value” means,with respect to the Initial Notes and the Exchange Notes of the same series, asof any date (the “Specified Date”), the amount provided below for each $1,000principal amount at Maturity of such Notes:

 

(a)           if the Specified Date occurs on one of the following dates(each, an “Accrual Date”), the Accreted Value shall equal the amount setforth below under the “Accreted Value” column for such Accrual Date:

 

| **Accrual Date**                    |   | **Accreted  Value** |     |
|-------------------------------------|--------|---------------------|----------|
| June  30, 2003                      |   | $                   | 800.54   |   |
| December  31, 2003                  |   | $                   | 816.55   |   |
| June  30, 2004                      |   | $                   | 832.88   |   |
| December  31, 2004                  |   | $                   | 849.54   |   |
| June  30, 2005                      |   | $                   | 866.53   |   |
| December  31, 2005                  |   | $                   | 883.86   |   |
| June  30, 2006                      |   | $                   | 901.53   |   |
| December  31, 2006                  |   | $                   | 919.56   |   |
| June  30, 2007                      |   | $                   | 937.96   |   |
| January  20, 2008                   |   | $                   | 958.96   |   |
| Stated  Maturity (January 20, 2009) |   | $                   | 1,000.00 |   |

 

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; or

 

(b)           if the Specified Date occurs before the first AccrualDate, the Accreted Value shall equal the sum of (A) the original issue price of$792.52 per $1,000 ofprincipal amount at Maturity of the Notes and (B) an amount equal to theproduct of (1) the Accreted Value for the first Accrual Date less such originalissue price multiplied by (2) a fraction, the numerator of which is the numberof days elapsed from the Closing Date to the Specified Date, using a 360-dayyear of twelve 30-day months, and the denominator of which is the number ofdays from the Closing Date to the first Accrual Date using a 360-day year oftwelve 30-day months.  In the event theTrustee is required to take any action which requires the calculation describedin the preceding sentence, upon request by the Trustee, the Company shallcalculate such Accreted Value and set forth such amount in an Officers’Certificate; or

 

(c)           if the Specified Date occurs between two Accrual Dates,the Accreted Value shall equal the sum of (A) the Accreted Value for theAccrual Date immediately preceding such Specified Date and (B) an amount equalto the product of (1) the Accreted Value for the immediately following AccrualDate less the Accreted Value for the immediately preceding Accrual Datemultiplied by (2) a fraction, the numerator of which is the number of dayselapsed from the immediately preceding Accrual Date to the Specified Date,using a 360-day year of twelve 30-day months, and the denominator of which is180.  In the event the Trustee isrequired to take any action which requires the calculation described in thepreceding sentence, upon request by the Trustee, the Company shall calculatesuch Accreted Value and set forth such amount in an Officers’ Certificate; or

 

(d)           if the Specified Date occurs after the last Accrual Date,the Accreted Value will equal $1,000.

 

If anEvent of Default has occurred and is continuing on or prior to the SpecifiedDate, the Accreted Value on such date shall be increased (until such time as noEvent of Default is continuing) by an amount equal to the product of (A) afraction, the numerator of which is the number of days, using a 360-day year oftwelve 30-day months, since the immediately preceding Accrual Date during whichsuch Event of Default occurred and was continuing and the denominator of whichis 360, multiplied by (B) 0.0075.

 

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

 

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

 

“Affiliate”means, with respect to any specified Person, any other Person directly orindirectly controlling or controlled by or under direct or indirect commoncontrol with such specified Person.  Forpurposes of this definition, “control” (including, with correlativemeanings, the terms “controlling,” “controlled by” and “undercommon control with”), as used with respect to any specified Person, shallmean the possession, directly or indirectly, of the power to direct or causethe direction of the management or policies of such Person, whether through theownership of voting securities, by agreement or otherwise; *provided*, *however*,that, for purposes of Section 5.06 only, in the case of the Company orany of its Subsidiaries beneficial ownership of 10% or more of the Voting Stockin the Company or such Subsidiary, as the case may be, shall be deemed to becontrol.  Notwithstanding the foregoing,in no event will the Purchasers or any Holder, any lender under the Credit Agreement,any holder of Convertible Subordinated Notes or any holder of Senior Notes, orany of their respective Affiliates be deemed to be an Affiliate of the Companyor any of its Subsidiaries solely by virtue of purchasing or holding any Notesor being such a lender, or holding any Convertible Subordinated Notes or SeniorNotes.

 

“AffiliateTransaction” is defined in Section 5.06.

 

“AlternativeMezzanine Debt” is defined in Section 5(l) of the Purchase Agreement.

 

“Appendix”is defined in the recitals.

 

“ApplicableCapital Lease Amount” means $41,300,000 as of September 30, 2002, whichamount shall increase by $30,000,000 on the Closing Date and on December 31,2003 and by $15,000,000 on December 31, 2004, up to a maximum aggregate amountof $116,300,000.

 

“ApplicableLaw” means all laws, statutes, rules, regulations and orders of, andlegally binding interpretations by, any Governmental Authority and judgments,decrees, injunctions, writs, permits, orders or like governmental action of anyGovernmental Authority applicable to the Company or any of its Subsidiaries orany of their properties, assets or operations, excluding Environmental Laws.

 

“ApplicablePercentage” means for purposes of Section 5.02(C), (a) prior to theDistribution Date, 25% and (b) after the Distribution Date, 50%.

 

“AssetDisposition” means the disposition by the Company or any RestrictedSubsidiary of the Company whether by sale, issuance, lease (as lessor (otherthan under operating leases)), transfer, loss, damage, destruction, condemnationor other transaction (including any merger or consolidation) or series ofrelated transactions of any of the following: (a) any of the Capital Stock of any of the Company’s RestrictedSubsidiaries, (b) all or substantially all of the assets of the Company or anyof its Restricted Subsidiaries (it being

 

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understood and agreed that the disposition of the BCIGroup or any assets of the BCI Group does not constitute a disposition of allor substantially all of the assets of the Company or any of its RestrictedSubsidiaries) or (c) any other assets of the Company or any of its RestrictedSubsidiaries.  Notwithstanding theforegoing, Asset Dispositions shall be deemed not to include (i) atransfer of assets by (x) the Company to a Wholly Owned Restricted Subsidiaryof the Company, or by a Restricted Subsidiary of the Company to the Company orto another Wholly Owned Restricted Subsidiary of the Company or (y) the Companyor a Restricted Subsidiary to CBW, or by CBW to the Company or to anotherWholly Owned Restricted Subsidiary of the Company; provided that theaggregate amount of all such transfers to CBW, together with the amount of allPermitted Investments made pursuant to clause (i)(A)(y) of the definitionthereof, shall not exceed 5% of Consolidated Total Assets, (ii) anissuance of Capital Stock by a Subsidiary of the Company to the Company or to aRestricted Subsidiary of the Company, (iii) a Restricted Payment that ispermitted by the provisions of Section 5.02, (iv) a PermittedInvestment, (v) any conversion of Cash Equivalents into cash or any otherform of Cash Equivalents, (vi) any foreclosure on assets, (vii) sales ordispositions of past due accounts receivable or notes receivable in the OrdinaryCourse of Business, (viii) transactions permitted under Article 6hereof, (ix) grants of credits and allowances in the Ordinary Course ofBusiness, (x) operating leases or the sublease of real or personal property orlicenses of intellectual property, in each case, on commercially reasonableterms entered into in the Ordinary Course of Business, (xi) trade-ins orexchanges of equipment or other fixed assets, (xii) the sale and leaseback ofany assets within 180 days of the acquisition thereof, (xiii) sales of damaged,worn-out or obsolete equipment or assets that, in the Company’s reasonablejudgment, are no longer either used or useful in the business of the Company orits Subsidiaries, (xiv) dispositions of inventory in the Ordinary Courseof Business; (xv) the disposition of cash or investment securities in theordinary course of management of the investment portfolio of the Company andits applicable Subsidiaries; (xvi) sales of assets with a fair market value ofless than $250,000; or (xvii) sales of other assets with a fair market valuenot to exceed $10,000,000 in the aggregate in any fiscal year.

 

“AssetSale Offer” is defined in Section 4.10(a).

 

“AttributableDebt” in respect of a Sale and Leaseback Transaction means, at the time ofdetermination, the present value (discounted at the implicit rate of interestborne by the Notes including any pay-in-kind interest and amortizationdiscount) determined in accordance with GAAP of the obligation of the lesseefor net rental payments during the remaining term of the lease included in suchSale and Leaseback Transaction (including any period for which such lease hasbeen extended or may, at the option of the lessor, be extended).

 

“BankruptcyLaw” means Title 11 of the United States Code or any similar federal orstate bankruptcy, insolvency, reorganization or other law for the relief ofdebtors.

 

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

 

“BCIGroup” means BCI and its Subsidiaries.

 

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

 

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“BlockageNotice” is defined in Section 8.03.

 

“BlockagePeriod” is defined in Section 8.03.

 

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

 

“BusinessDay” means any day other than a Legal Holiday.

 

“CapitalExpenditures” means, for any period and with respect to any Person, theaggregate of all expenditures by such Person and its Subsidiaries for theacquisition or leasing of fixed or capital assets or additions to fixed orcapital assets (including replacements, capitalized repairs and improvementsduring such period) which should be capitalized under GAAP on a consolidated balancesheet of such Person and its Subsidiaries.

 

“CapitalizedLease Obligation” means, at the time any determination thereof is to bemade, an obligation that is required to be classified and accounted for as acapitalized lease for financial reporting purposes in accordance with GAAP, andthe amount of Indebtedness represented by such obligation shall be thecapitalized amount of such obligation determined in accordance with GAAP; andthe Stated Maturity thereof shall be the date of the last payment of rent orany other amount due under such lease.

 

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

 

“CashEquivalents” means (i) marketable direct obligations issued orunconditionally guaranteed by the United States Government or issued by anyagency thereof and backed by the full faith and credit of the United States, ineach 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 ofacquisition and, issued by a corporation organized under the laws of the UnitedStates that has a rating of at least A-1 from S&P or at least P-1 fromMoody’s; (iii) time deposits maturing no more than thirty (30) days from thedate of creation, certificates of deposit, money market deposits or bankers’ acceptancesmaturing within one (1) year from the date of acquisition thereof issued by, orovernight reverse repurchase agreements from, any commercial bank organizedunder the laws of the United States of America or any state thereof or theDistrict of Columbia having combined capital, surplus and undivided profits ofnot less than $250,000,000; (iv) repurchase obligations with a term of not morethan 30 days for underlying securities of the types described inclause (i) above entered into with a bank meeting the qualificationsdescribed in clause (iii) above; (v) deposits or investments in mutual orsimilar funds offered or sponsored by brokerage or other companies havingmembership in the Securities Investor Protection Corporation and having combinedcapital and surplus of not less than $250,000,000; and (vi) other money marketaccounts or mutual funds which invest primarily in the securities describedabove.

 

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

 

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“CBTAssets” means any assets of CBT (including Capital Stock of theSubsidiaries of CBT) and any of its Subsidiaries (including Capital Stock ofthe Subsidiaries of such Subsidiaries). To the extent any CBT Asset is transferred to another RestrictedSubsidiary of the Company in a transaction that does not constitute an AssetDisposition, such asset shall remain a CBT Asset for purposes of thisIndenture.

 

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

 

“CBWAssets” means any assets of CBW Co. (including Capital Stock of theSubsidiaries of CBW and Spectrum Assets) and any of its Subsidiaries (includingCapital Stock of the Subsidiaries of such Subsidiaries). To the extent any CBWAsset is transferred to another Restricted Subsidiary of the Company in atransaction that does not constitute an Asset Disposition, such asset shallremain a CBW Asset for purposes of this Indenture.

 

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

 

“CentralizedCash Management System” means the cash management system referred to inSection 5.02(f)(ix) of the Credit Agreement as in effect on the date hereof anddescribed in Schedule 5.01(r) thereof.

 

“Changeof Control” means the occurrence of any of the following:  (a) the sale, lease, transfer,conveyance or other disposition (other than by way of merger or consolidation),in one or more related transactions, of all or substantially all of theproperties and assets of the Company and its Subsidiaries, taken as a whole (itbeing understood and agreed that the disposition of the BCI Group does notconstitute a disposition of all or substantially all of the properties andassets of the Company and its Subsidiaries, taken as a whole), to any Person unless:(x) pursuant to such transaction such assets are changed into or exchanged for,in addition to any other consideration, securities of such Person thatrepresent immediately after such transaction at least a majority of theaggregate voting power of the Voting Stock of such Person and (y) no “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 thebeneficial 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, whethersuch right is exercisable immediately or only after the passage of time),directly or indirectly, of more than 35% of either the total economic value ofsuch Person or the total voting power of the Voting Stock of such Person;(b) the adoption of a plan relating to the liquidation or dissolution ofthe Company; (c) any “person” (as such term is used in Section 13(d)(3) of theExchange Act) or “group” (within the meaning of Rules 13d-3 and 13d-5 under theExchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and13d-5 under the Exchange Act, except that such person or group shall be deemedto have “beneficial ownership” of all shares that any such person or group hasthe right to acquire, whether such right is exercisable immediately or onlyafter the passage of time), directly or indirectly, of more than 35% of either thetotal economic value of the Company’s outstanding Capital Stock or the totalvoting power of the Voting Stock of the Company; (d) during any period of twoconsecutive years, individuals who at the beginning of such period constitutedthe Board of Directors of the Company (together with any new directors whoseelection by such Board of Directors of the Company or whose nomination forelection by the shareholders of the Company, was approved

 

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by a majority vote of the directors of the Companythen still in office who were either directors at the beginning of such periodor whose election or nomination for election was previously so approved) ceasefor any reason to constitute a majority of the Board of Directors of theCompany then in office; (e) the merger or consolidation of the Company with orinto another Person or the merger of another Person with or into the Company,and the securities of the Company that are outstanding immediately prior tosuch transaction and that represent 100% of the aggregate voting power of theVoting Stock of the Company are changed into or exchanged for cash, securitiesor property, unless: (x) pursuant to such transaction such securitiesare changed into or exchanged for, in addition to any other consideration,securities of the surviving Person or transferee that represent immediatelyafter such transaction, at least a majority of the aggregate voting power ofthe Voting Stock of the surviving Person or transferee and (y) no “person” (assuch term is used in Section 13(d)(3) of the Exchange Act) or “group” (withinthe meaning of Rules 13d-3 and 13d-5 under the Exchange Act) is the beneficialowner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except thatsuch person or group shall be deemed to have “beneficial ownership” of allshares that any such person or group has the right to acquire, whether suchright is exercisable immediately or only after the passage of time), directlyor indirectly, of more than 35% of either the total economic value of suchsurviving Person or transferee or the total voting power of the Voting Stock ofsuch surviving Person or transferee; or (f) any “change of control” as definedin the Convertible Subordinated Indenture to the extent not waived by holdersof the Convertible Subordinated Notes.

 

“Changeof Control Offer” is defined in Section 4.09(a).

 

“Changeof Control Payment” is defined in Section 4.09(a).

 

“Changeof Control Payment Date” is defined in Section 4.09(b)(ii).

 

“CincinnatiBell Group” means the Company and its Restricted Subsidiaries.

 

“ClosingDate” is defined in the Purchase Agreement.

 

“Code”means the Internal Revenue Code of 1986, as amended from time to time, and therules and regulations promulgated thereunder from time to time.

 

“Commission”means the Securities and Exchange Commission, as from time to time constituted,created under the Exchange Act or, if at any time after the execution of thisIndenture such Commission is not existing and performing the duties nowassigned to it under the Exchange Act, the body performing such duties at suchtime.

 

“CommonStock” of any Person means any and all shares, units, interests or otherparticipations in, and other equivalents (however designated and whether votingor non-voting) of such Person’s common stock whether outstanding on the ClosingDate or issued after the Closing Date, and includes, without limitation, allseries and classes of such common stock.

 

“Company”is defined in the preamble.

 

“Consolidated”or “consolidated” (including the correlative term “consolidating”)or on a “consolidated basis,” when used with reference to any financialterm in this Indenture

 

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(but not when used with respect to any Tax Return ortax liability), means the consolidation for two or more Persons of the amountssignified by such term for all such Persons, with inter-company itemseliminated in accordance with GAAP.

 

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

 

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

 

“Consolidated EBITDA”means for the applicable period of measurement, the Consolidated Net Income ofthe Company and its Restricted Subsidiaries on a consolidated basis, plus,without duplication, the following for the Company and its RestrictedSubsidiaries to the extent deducted in calculating such Consolidated NetIncome:  (i) Consolidated InterestExpense for such period, plus (ii)  provisions for taxes based onincome, plus (iii) total depreciation expense, plus (iv) totalamortization expense, plus (v) other non-cash items reducingConsolidated Net Income (excluding any such non-cash item to the extent that itrepresents an accrual or reserve for potential cash items in any future periodor amortization of a prepaid cash item) less other non-cash itemsincreasing Consolidated Net Income (excluding any such non-cash item to theextent it represents the reversal of an accrual or reserve for potential cashitem in any prior period), plus (vi) charges taken in accordance withSFAS 142, plus (vii) all net cash extraordinary losses less netcash extraordinary gains, plus (vii) all restructuring charges set forthon Schedule 1.1(a).

 

“Consolidated EBITDAto Consolidated Interest Ratio” means as of any date of determination theratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense, in eachcase, for the applicable four-quarter period ending on the last day of the mostrecently ended quarter for which consolidated financial statements of theCompany and its Restricted Subsidiaries are, or should have been, available inaccordance with the Transaction Documents.

 

“ConsolidatedInterest Expense” means for the applicable period of measurement of theCompany and its Restricted Subsidiaries on a consolidated basis, the aggregateinterest expense for such period determined in accordance with GAAP (includingall commissions, discounts, fees and other charges in connection with standbyletters of credit and similar instruments) for the Company and its RestrictedSubsidiaries on a consolidated basis, but excluding all amortization offinancing fees and other charges incurred by the Company and its RestrictedSubsidiaries in connection with the issuance of Indebtedness.

 

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“ConsolidatedNet Income” means for any period the net income (or loss) before provisionfor dividends on Preferred Stock of the Company and its Restricted Subsidiarieson a consolidated basis for such period determined in conformity with GAAP, butexcluding, without duplication, the following clauses (a) through (f) to theextent included in the computations thereof: (a) the income (or loss) of any Person accrued prior to the date itbecomes a Restricted Subsidiary of the Company or is merged into orconsolidated with the Company or any of its Restricted Subsidiaries or thatPerson’s assets are acquired by the Company or any of its RestrictedSubsidiaries; (b) the income (or loss) of any Person (other than the Company ora Restricted Subsidiary) in which such Person has an interest except to theextent of the amount of dividends or other distributions actually paid to theCompany or a Restricted Subsidiary (which amount shall be included inConsolidated Net Income); (c) the income of any Restricted Subsidiary of theCompany to the extent that the declaration or payment of dividends or similardistributions by that Restricted Subsidiary of that income is not at the timepermitted by operation of the terms of its charter or any agreement,instrument, judgment, decree, order, statute, rule or governmental regulationapplicable to that Restricted Subsidiary (except to the extent of the amount ofdividends or similar distributions actually lawfully paid to the Company or aRestricted Subsidiary); (d) any after tax gains or losses attributable to AssetDispositions or returned surplus assets of any pension plan; (e) (to the extentnot included in clauses (a) through (d) above) (i) any net extraordinary gainsor net extraordinary losses or (ii) any net non-recurring gains ornon-recurring losses to the extent attributable to Asset Dispositions, theexercise of options to acquire Capital Stock and the extinguishment ofIndebtedness; and (f) cumulative effect of a change in accounting principles.

 

“ConsolidatedTotal Assets” means, as at any date of determination, the aggregate amountof assets reflected on the consolidated balance sheet of the Company and itsRestricted Subsidiaries (excluding, however, for the avoidance of doubt theassets of the BCI Group) prepared in accordance with GAAP most recentlydelivered to the Holders pursuant to Section 4.02 hereof or Section 9of the Purchase Agreement.

 

“ConvertiblePreferred Stock” means the 12 1⁄2% Series B Junior Exchangeable PreferredStock Due 2009 of BCI and the 6 3⁄4% Cumulative Convertible Preferred Stock ofthe Company.

 

“ConvertibleSubordinated Notes” means those certain 6 3⁄4% Convertible Subordinated Notesdue 2009 of the Company issued pursuant to the Convertible SubordinatedIndenture with an original aggregate issue price of $400,000,000, and any suchnotes issued in exchange or replacement therefor.

 

“ConvertibleSubordinated Indenture” means the indenture relating to the ConvertibleSubordinated Notes dated as of July 21, 1999, between the Company and the Bankof New York, as Trustee.

 

“CreditAgreement” means the Amendment and Restatement of the Credit Agreement,dated as of November 9, 1999, as amended and restated as of January 12, 2000and as of the date hereof, as amended, by and among the Company, BCSI, thelenders party thereto from time to time, Bank of America, N.A., as syndicationagent, Citicorp USA, Inc., as administrative agent and certain other agents,together with the related documents thereto

 

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(including, without limitation, any guaranteeagreements and security documents), in each case as such agreement oragreements may be amended (including any amendment and restatement thereof),restated, supplemented, replaced, restructured, waived, Refinanced or otherwisemodified from time to time, including any amendment, supplement, modificationor agreement adding Subsidiaries of the Company as additional borrowers orguarantors thereunder or extending the maturity of, Refinancing, replacing orotherwise restructuring all or any portion of the Indebtedness under suchagreement or any successor or replacement agreement, and whether by the same orany other agent, lender or group of lenders or one or more agreements,contracts, indentures or otherwise; *provided*that, except as provided in the next proviso, in no event may such agreement beamended (including any amendment and restatement thereof), supplemented,replaced, restructured, Refinanced or otherwise modified to increase the amountof borrowings permitted to be Incurred pursuant to Section 5.04(b)(vii);and, *provided*, *further*, *however,*that, in addition to the Indebtedness Incurred pursuant to Section5.04(b)(vii), Other Senior Indebtedness (to the extent permitted to beIncurred pursuant to the definition thereof) may be Incurred, in whole or inpart, under the Credit Agreement.

 

“CreditDocuments” means the Credit Agreement, any Secured Hedge Agreement that issecured under (and as defined in) the Credit Agreement, and all certificates,instruments, financial and other statements and other documents and agreementsmade or delivered from time to time in connection therewith and relatedthereto.

 

“CurrencyAgreement” means any foreign exchange contract, currency swap agreement orother similar agreement or arrangement designed to protect the Company or anySubsidiary of the Company against fluctuations in currency values.

 

“Custodian”is defined in Section 7.01.

 

“DefinitiveNote” is defined in the Appendix.

 

“Default”means any event, act or condition that is, or with the giving of notice, lapseof time or both would constitute, an Event of Default.

 

“Depositary”is defined in the Appendix.

 

“DesignatedSenior Indebtedness” means (i) Indebtedness under or in respect of theCredit Agreement and (ii) any other Indebtedness constituting SeniorIndebtedness which, at the time of determination, has an aggregate principalamount of at least $25,000,000 and is specifically designated in the instrumentevidencing such Senior Indebtedness as “Designated Senior Indebtedness” by theCompany.

 

“DisqualifiedCapital 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 itis exchangeable at the option of the holder thereof), or upon the happening ofany event (other than an event which would constitute a Change of Control orAsset Disposition), matures (excluding any maturity as the result of anoptional redemption by the issuer thereof) or is mandatorily redeemable,pursuant to a sinking fund obligation or otherwise, or is redeemable at thesole option of the holder thereof (except, in each case, upon the occurrence ofa Change of Control or Asset Disposition) on or prior to the Stated Maturity.

 

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

 

“EnvironmentalLaws” means all applicable foreign, federal, state or local laws, statutes,common law duties, rules, regulations, ordinances and codes, together with alladministrative orders, requests, licenses, authorizations and permits of, andagreements with, any Governmental Authorities, in each case relating toenvironmental, health, safety and land use matters; including, withoutlimitation, the Comprehensive Environmental Response, Compensation andLiability Act of 1980, the Clean Air Act, the Federal Water Pollution ControlAct of 1972, the Solid Waste Disposal Act, the Federal Resource Conservationand Recovery Act, the Toxic Substances Control Act, and the Emergency Planningand Community Right-to-Know Act.

 

“Eventof Default” is defined in Section 7.01.

 

“ExcessProceeds” is defined in Section 5.05(b).

 

“ExchangeAct” means the Securities Exchange Act of 1934, as amended.

 

“Exchangeand Registration Rights Agreement” is defined in the Appendix.

 

“ExchangeGuarantees” means the Guarantees of the Exchange Notes issued in theRegistered Exchange Offer.

 

“ExchangeNotes” is defined in the recitals.

 

“ExistingBCSI Loan” means Indebtedness of BCSI Incurred under the Credit Agreementprior to the date of this Indenture and any Indebtedness of BCSI Incurred underthe Credit Agreement for the purpose of making interest payments on (w) theExisting BCSI Loan, (x) any Indebtedness of the BCI Group Incurred under theCredit Agreement after the date of this Indenture subject to the limitationsset forth in Section 5.11(a), (y) BCI’s 9% Senior Subordinated Notes Due2008 or (z) BCI’s 12 1⁄2% Senior Series B Notes due 2005.

 

“ExistingIndebtedness” all Indebtedness of the Company and its RestrictedSubsidiaries existing as of the Closing Date (after giving effect to theredemption, repurchase, repayment or prepayment of Indebtedness out of theproceeds of the Notes); *provided*that for purposes of Section 5.04(b), Existing Indebtedness shall notinclude Indebtedness of the type permitted to be Incurred by Section5.04(b)(iii) and (v).

 

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

 

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“fiscalyear” means a fiscal year of the Company and its Restricted Subsidiariesending on December 31 of any calendar year.

 

“GAAP”means United States generally accepted accounting principles as of the ClosingDate set forth in the opinions and pronouncements of the Accounting PrinciplesBoard of the American Institute of Certified Public Accountants and statementsand pronouncements of the Financial Accounting Standards Board or in such otherstatements by such other entity as have been approved by a significant segmentof the accounting profession.

 

“GlobalNotes Legend” is defined in the Appendix.

 

“GovernmentalAuthority” means (a) the government of the United States of America orany State or other political subdivision thereof, (b) any government orpolitical subdivision of any other jurisdiction in which the Company or any ofits Subsidiaries conducts all or any part of its business, or which properlyasserts jurisdiction over any properties of the Company or any of itsSubsidiaries 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 forcollection or deposit in the ordinary course of business), direct or indirect,in any manner (including, without limitation, letters of credit andreimbursement agreements in respect thereof), of all or any part of anyIndebtedness.

 

“GuaranteedObligations” is defined in Section 11.01(a).

 

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

 

“Holder”means a Person in whose name a Note is registered at the Registrar.

 

“Incur”is defined in Section 5.04(a).

 

“Indebtedness”means, with respect to any Person, without duplication:  (i) the principal of and premium (if any) inrespect of indebtedness of such Person for borrowed money (including, withoutlimitation, Senior Indebtedness); (ii) the principal of and premium (if any) inrespect of indebtedness of such Person evidenced by bonds, debentures, notes orother similar instruments; (iii) all Attributable Debt and all CapitalizedLease Obligations of such Person; (iv) all obligations of such Person issued orassumed as the deferred purchase price of property, all conditional saleobligations and all obligations under any title retention agreement, in eachcase to the extent the purchase price is due more than six (6) months from thedate the obligation is Incurred (but excluding trade accounts payable and otheraccrued liabilities arising in the Ordinary Course of Business); (v) allobligations for the reimbursement of any obligor on any letter of credit,banker’s acceptance or similar credit transaction; (vi) Guarantees and othercontingent obligations in respect of Indebtedness referred to in clauses (i)through (v) above and clause (viii) below; (vii) all obligations of any otherPerson of the type referred to in clauses (i) through (v) which are secured by anyLien on any property or asset of such Person, the amount of such obligationbeing deemed to be the lesser of the fair market value of such property orasset or the amount of the obligation so secured; (viii) all obligations underCurrency Agreements and

 

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all Interest Swap Obligations of such Person; and (ix)all obligations represented by a Disqualified Capital Stock of suchPerson.  The Indebtedness of any Person shall include the Indebtedness of any partnershipor 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 thepayment of such Indebtedness.

 

“Indenture”is defined in the preamble.

 

“IndependentQualified Party” means an investment banking firm, accounting firm orappraisal firm, in each case, of national standing; *provided*, *however*,that such firm is not an Affiliate of the Company; and, *provided*, *further*,that for transactions involving consideration of $100,000,000 or more, the term“Independent Qualified Party” shall be limited to an investment bankingfirm of national standing only, unless, with respect to any suchtransaction, (x) the Company delivers to the Trustee and the Required Holdersan Officers’ Certificate to the effect that no investment bank will opine oncommercially reasonable terms on such transaction and that it proposes insteadto engage an accounting firm of national standing (and stating the identity ofsuch accounting firm) and (y) within fifteen (15) days after the delivery ofsuch Officers’ Certificate the Company does not receive a written notice fromthe Required Holders reasonably objecting to the Company’s proposal set forthin the Officers’ Certificate, in which case the term “Independent QualifiedParty” for such transaction may also include such accounting firm.

 

“InitialNotes” is defined in the recitals.

 

“InstitutionalAccredited Investor” is defined in the Appendix.

 

“InterestCoverage Test” is defined in Section 5.04.

 

“InterestPayment Date” is defined in Exhibit A.

 

“InterestSwap Obligations” means the Obligations of any Person pursuant to anyarrangement with any other Person, whereby, directly or indirectly, such Personis entitled to receive from time to time periodic payments calculated byapplying either a floating or a fixed rate of interest on a stated notionalamount in exchange for periodic payments made by such other Person calculatedby applying a fixed or a floating rate of interest on the same notional amountand shall include, without limitation, any interest rate protection agreement,interest rate future agreement, interest rate option agreement, interest rateswap agreement, interest rate cap agreement, interest rate collar agreement,interest rate hedge agreement or other similar agreement or arrangement towhich such Person is party or of which it is a beneficiary.

 

“Investment”means (i) any direct or indirect purchase or other acquisition by the Companyor any of its Restricted Subsidiaries of any beneficial interest in, includingstock, partnership interest or other Capital Stock of, or ownership interestin, any other Person; and (ii) any direct or indirect loan, advance or capitalcontribution by the Company or any of its Restricted Subsidiaries to any otherPerson, including all indebtedness and accounts receivable from that otherPerson that did not arise from sales to or services provided to that otherPerson in the Ordinary Course of Business. For purposes of Section 5.02: (i) “Investment” shall includeand be valued at the fair market value of the net assets of any RestrictedSubsidiary of the

 

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Company (to the extent of the Company’s percentageownership therein) at the time that such Restricted Subsidiary is designated anUnrestricted Subsidiary of the Company and shall exclude the fair market valueof the net assets of any Unrestricted Subsidiary of the Company (to the extentof the Company’s percentage ownership therein) at the time that suchUnrestricted Subsidiary is designated a Restricted Subsidiary of the Company;and (ii) the amount of any Investment shall be the original cost of suchInvestment plus the cost of all additional Investments by the Company or any ofits Restricted Subsidiaries, without any adjustments for increases or decreasesin value, or write-ups, write-downs or write-offs with respect to suchInvestment, reduced (other than for purposes of calculations under Section5.11) by the payment of dividends or distributions in connection with suchInvestment or any other amounts received in respect of such Investment; *provided*that no such payment of dividends or distributions or receipt of any such otheramounts shall reduce the amount of any Investment if such payment of dividendsor distributions or receipt of any such amounts would be included inConsolidated Net Income.

 

“LegalHoliday” means a Saturday, a Sunday or a day on which banking institutionsin New York or Ohio or at a place of payment are authorized by law, regulationor executive order to remain closed.  Ifany payment date in respect of the Notes is a Legal Holiday at a place ofpayment, payment may be made at that place on the next succeeding day that isnot a Legal Holiday, and no interest shall accrue for the intervening period.

 

“LeverageTest” is defined in Section 5.04.

 

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

 

“MaterialAdverse Effect” means (a) a material adverse change in, or a materialadverse effect upon, the operations, business, properties, condition (financialor otherwise) or prospects of the Company and its Restricted Subsidiaries takenas a whole or (b) the material impairment of the ability of the Company or anyGuarantor that constitutes a Material Restricted Subsidiary to perform in anymaterial respect its material obligations under any Transaction Document towhich it is a party or of any Holder to enforce any Transaction Document in anymaterial respect or collect any of the Obligations thereunder.

 

“MaterialRestricted Subsidiary” means a Restricted Subsidiary that constitutes aMaterial Subsidiary.

 

“MaterialSubsidiary” means any Subsidiary that is or would be a “significantsubsidiary” of the Company within the meaning of Rule 1-02 of Regulation S-Xpromulgated by the Commission.

 

“Maturity”,when used with respect to any Note, means the date on which the principal ofsuch Note becomes due and payable as therein or herein provided, whether at theStated Maturity or by declaration of acceleration, call for redemption orotherwise (including in connection with any offer to purchase that thisIndenture requires the Company to make).

 

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

 

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“NetProceeds” means cash proceeds actually received by the Company or any ofits Restricted Subsidiaries from any Asset Disposition (including insuranceproceeds, awards of condemnation, and payments under notes or other debtsecurities received in connection with any Asset Disposition), net of (a) thecosts of such sale, issuance, lease, transfer or other disposition (includingall legal, title and recording tax expenses, commissions and other fees andexpenses incurred and all Taxes required to be paid or accrued as a liabilityunder GAAP as a consequence of such sale, lease or transfer), (b) amountsapplied to repayment of Indebtedness (other than revolving credit Indebtednessunder the Credit Agreement, without a corresponding reduction in the revolvingcredit 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 productline, any accrued liabilities of such business or product line required to bepaid or retained by the Company or any of its Restricted Subsidiaries as partof such disposition, (d) appropriate amounts to be provided by the Company or aRestricted Subsidiary, as the case may be, as a reserve, in accordance withGAAP, against any liabilities associated with an Asset Disposition and retainedby the Company or such Restricted Subsidiary, as the case may be, after suchAsset Disposition, including, without limitation, pension and benefitliabilities, liabilities related to environmental matters or liabilities underany indemnification obligations associated with such Asset Disposition and (e)all distributions and other payments required to be made to minority interestholders in Subsidiaries or joint ventures as a result of such AssetDisposition, but only to the extent required by constituent documents of suchSubsidiary or such joint venture.

 

“NoteAmounts” means principal, premium (if any), interest (including interestaccruing on or after the filing of any petition in bankruptcy or forreorganization relating to the Company whether or not a claim for post-filinginterest is allowed in such proceedings), fees and all other amounts owingunder the Notes or in respect of the Notes (whether under the Notes or underthe Indenture or the Purchase Agreement, as the case may be).

 

“NoteRegistration” shall mean the first to occur of (i) the consummation of aRegistered Exchange Offer and (ii) the effectiveness of a Shelf RegistrationStatement filed with the Commission.

 

“Notes”is defined in the recitals.

 

“NotesCustodian” is defined in the Appendix.

 

“Noticeof Default” is defined in Section 9.05.

 

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

 

“OfferAmount” is defined in Section 4.10(c).

 

“OfferPeriod” is defined in Section 4.10(a).

 

“Officers’Certificate” of the Company means a certificate signed on behalf of theCompany by two Persons, one of which shall be any of the following: theChairman of the Board, the Chief Executive Officer, the President, the ChiefOperating Officer, the Chief

 

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Financial Officer, the Chief Accounting Officer or theTreasurer (or any such other officer that performs similar duties) of theCompany, and the other one shall be any of the following: the Chairman of theBoard, the Chief Executive Officer, the President, the Chief Operating Officer,any Vice President, the Chief Financial Officer, the Chief Accounting Officer,the Treasurer, the Assistant Treasurer, Controller, the Secretary or anAssistant Secretary (or any such other officer that performs similar duties) ofthe Company.  One of the officerssigning an Officers’ Certificate given pursuant to Section 4.06shall be the principal executive, financial or accounting officer or treasurerof the Company.

 

“Opinionof Counsel” means a written opinion from legal counsel who is acceptable tothe Trustee.  The counsel may be anemployee of or counsel to the Company or Guarantor or the Trustee.

 

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

 

“OtherSenior Indebtedness” means, (a) prior to the Distribution Date, anyIndebtedness of the Company which: (i) is Incurred after the date hereof; (ii)is stated as being senior to the Notes; (iii) may be Incurred only if immediatelyafter the Incurrence of such Indebtedness, the Consolidated Adjusted Debt toAdjusted EBITDA Ratio is less than 3.5 to 1.00; and (iv) when aggregated withall Indebtedness Incurred and outstanding prior to the date such Indebtednessis Incurred under the Credit Agreement (without regard to Indebtedness Incurredpursuant to the second proviso to the definition thereof), the Senior Notes andOther Senior Indebtedness, does not exceed $1,500,000,000; and (b) after theDistribution Date, any Indebtedness of the Company Incurred after theDistribution Date that does not constitute Indebtedness of the type describedin clauses (i) through (vii), inclusive, of the second sentence of thedefinition of “Senior Indebtedness”.

 

“PayingAgent” is defined in Section 2.03.

 

“Paymentin Full” for purposes of Articles 8 and 12, (a) when usedwith respect to Senior Indebtedness under the Credit Agreement, means that suchSenior Indebtedness is paid in full in cash and (b) when used with respect toany other Senior Indebtedness, means that such Senior Indebtedness is paid infull in cash or Cash Equivalents; and the terms “Paid in Full” or Payin Full” shall have correlative meanings.

 

“Permits”means all licenses, permits, certificates of need, approvals and authorizationsfrom all Governmental Authorities required to lawfully conduct a business.

 

“PermittedAcquisition” means the purchase by the Company or a Restricted Subsidiaryof the Company of all or substantially all of the assets of a Person whoseprimary business is the same, related, ancillary or complementary to thebusiness in which the Company and its Restricted Subsidiaries were engaged onthe date of this Indenture, or any Investment by the Company or any RestrictedSubsidiary of the Company in a Person, if as a result of such Investment (i)such Person and each Subsidiary of such Person becomes (x) a Restricted

 

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Subsidiary of the Company whose primary business isthe same, related, ancillary or complementary to the business in which theCompany and its Restricted Subsidiaries were engaged on the date of thisIndenture and (y) a Guarantor hereunder or (ii) such Person is merged,consolidated or amalgamated with or into, or transfers or conveys substantiallyall of its assets to, or is liquidated into, a Restricted Subsidiary of theCompany and whose primary business is the same, related, ancillary orcomplementary to the business in which the Company and its Subsidiaries wereengaged in on the date of this Indenture; *provided*that at the time of such purchaseor Investment, (x) no Default or Event of Default exists or would be causedupon the consummation thereof and (y) in the case of Permitted Acquisitionsinvolving any consideration other than the Common Stock of the Company, aftergiving effect to such Permitted Acquisition, the Company can Incur $1.00 ofIndebtedness under Section 5.04(a).

 

“PermittedAdjustments” means, for the purpose of calculating the Leverage Test andthe Interest Coverage Test, pro forma adjustments arising out of events(including cost savings resulting from head count reduction, closure offacilities and similar restructuring charges) which are directly attributableto a specific transaction, are factually supportable and are expected to have acontinuing impact, which (a) would be permitted by Article 11 ofRegulation S-X promulgated under the Securities Act and as interpreted bythe staff of the Commission or (b) after the Distribution Date, have beenrealized or are reasonably expected to be realized within six (6) monthsfollowing any such transaction; *provided*that, in either case, such adjustments are set forth in an Officers’Certificate signed by the Company’s chief financial officer and another officerwhich states (i) the amount of such adjustment or adjustments, (ii) that suchadjustment or adjustments are based on the reasonable good faith beliefs of theofficers executing such Officers’ Certificate at the time of such execution and(iii) that any related Incurrence of Indebtedness is permitted pursuant to theIndenture.

 

“Permitted Asset Swap” means any transfer ofproperties or assets by the Company or any of its Restricted Subsidiaries inwhich the consideration received by the transferor consists of like propertiesor assets to be used in the business of the Company or its RestrictedSubsidiaries in the same or similar manner as such transferred properties orassets; *provided* that (i) thefair market value (determined in good faith by the Board of Directors of theCompany) of properties or assets received by the Company or any of itsRestricted Subsidiaries in connection with such Permitted Asset Swap is atleast equal to the fair market value (determined in good faith by the Board ofDirectors of the Company) of properties or assets transferred by the Company orsuch Restricted Subsidiary in connection with such Permitted Asset Swap and(ii) the aggregate fair market value of assets transferred by the Company inconnection with all Permitted Asset Swaps after the Closing Date does notexceed 10% of Consolidated Total Assets.

 

“PermittedInvestments” means:

 

(i)            (A) any Investment in (including,without limitation, loans and advances to) (x) the Company or a Wholly OwnedRestricted Subsidiary of the Company and whose primary business is the same,related, ancillary or complementary to the business in which the Company andits Subsidiaries were engaged in on the date of such Investment and (y) CBW; providedthat the aggregate amount of all such investments in CBW, together with theamount of all Asset Dispositions made pursuant to clause (i)(y)

 

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of the secondsentence of the definition thereof, shall not exceed 5% of Consolidated TotalAssets and (B) any acquisition by the Company or a Wholly Owned RestrictedSubsidiary of the Company of beneficial interest in a Restricted Subsidiary ofthe Company from another Restricted Subsidiary of the Company or the Company;

 

(ii)           any Investment in Cash Equivalents orthe Notes;

 

(iii)          any Investment related to or arisingout of a Permitted Acquisition;

 

(iv)          any Investment which results from thereceipt of non-cash consideration from an asset sale made pursuant to and incompliance with the provisions of Section 5.05 or from any sale or otherdisposition of assets not constituting an Asset Disposition hereunder;

 

(v)           payroll, travel and similar advancesto cover matters that are expected at the time of such advances ultimately tobe treated as expenses for accounting purposes and that are made in theOrdinary Course of Business;

 

(vi)          receivables owing to the Company orany Restricted Subsidiary if created or acquired in the Ordinary Course ofBusiness and payable or dischargeable in accordance with customary trade terms;*provided*, *however*, that such trade terms may includesuch concessionary trade terms as the Company or any such Restricted Subsidiarydeems reasonable under the circumstances;

 

(vii)         loans and advances to employees made inthe Ordinary Course of Business not to exceed $1,000,000 in the aggregate atany time outstanding; *provided*, *however*, for purposes of this definition,“advances” will not restrict advances for travel, moving or relocation expensesto employees advanced and repaid in the Ordinary Course of Business;

 

(viii)        loans and advances not to exceed$1,000,000 at any time outstanding to employees of the Company or itsSubsidiaries for the purpose of funding the purchase of Capital Stock of theCompany by such employees;

 

(ix)           any Investments received as part ofthe settlement of litigation or in satisfaction of extensions of credit to anyPerson otherwise permitted under this Indenture pursuant to the reorganization,bankruptcy or liquidation of such Person or a good faith settlement of debts bysaid Person;

 

(x)            any Investment existing on the dateof this Indenture, any Investment received as a distribution in respect of suchexisting Investment and any Investment received in exchange for such existingInvestment; *provided* that, in thecase of an exchange, the fair market value (as determined in good faith by theBoard of Directors of the Company) of the Investment being exchanged is atleast equal to the fair market value (as determined in good faith by the Boardof Directors of the Company) of the Investment for which such Investment isbeing exchanged;

 

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(xi)           Investments of a Person or any of itsSubsidiaries existing at the time such Person becomes a Restricted Subsidiaryof the Company or at the time such Person merges or consolidates with theCompany or any of its Restricted Subsidiaries, in either case in compliancewith this Indenture; provided such Investments were not made by such Person inconnection with or in anticipation or contemplation of such Person becoming aRestricted Subsidiary of the Company or such merger or consolidation;

 

(xii)          Investments made in connection withpurchase price adjustments or contingent purchase price payments paid inconnection with Investments otherwise permitted under this Indenture;

 

(xiii)         Investments in stock, obligations orsecurities received in settlement of debts created in the Ordinary Course ofBusiness or in satisfaction of judgments;

 

(xiv)        Investments by the Company or anyRestricted Subsidiary pursuant to an Interest Rate Swap Obligation or aCurrency Agreement permitted by clauses (i), (iv), (vi) or (viii) of Section 5.04(b);

 

(xv)         Investments consisting of debits andcredits between Broadwing Financial LLC and the Company, its RestrictedSubsidiaries and, subject to Section 5.11, its Unrestricted Subsidiariespursuant to the Centralized Cash Management System;

 

(xvi)        Investments consisting of loans,advances and payables due from suppliers or customers made by the Company orits Restricted Subsidiaries in the Ordinary Course of Business;

 

(xvii)       Investments that may be deemed to ariseout from the cashless exercise by employees of the Company of rights, optionsor warrants to purchase Capital Stock of the Company;

 

(xviii)      Investments permitted to be made by Section5.11;

 

(xix)         Investments the consideration paid forwhich consists solely of Capital Stock (other than Disqualified Capital Stock)of the Company;

 

(xx)          Investments (other than Investments in any member of the BCI Group) inan aggregate amount of $10,000,000 for any Investments valued as of the datesuch Investment is made, including, without limitation, joint ventures;and

 

(xxi)         Investments the consideration for whichwas paid by a Person other than the Company or any of its RestrictedSubsidiaries, without recourse to the Company or its Restricted Subsidiaries.

 

“PermittedLiens” means:

 

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(i)            Liens to secure the performance ofstatutory obligations, surety or appeal bonds, letters of credit or other obligationsof a like nature incurred in the Ordinary Course of Business;

 

(ii)           Liens for Taxes, assessments andgovernmental charges, levies or claims that are (x) not yet due and payable or(y) which are due and payable and are being contested in good faith byappropriate proceedings so long as such proceedings stay enforcement of suchLiens;

 

(iii)          any Lien arising out of a judgment oraward not constituting an Event of Default under Section 7.01;

 

(iv)          statutory Liens of landlords,carriers, warehousemen, mechanics, materialmen, workmen, repairmen and othersimilar liens imposed by law, which are incurred in the Ordinary Course ofBusiness for sums not more than thirty (30) days delinquent or which are beingcontested in good faith by appropriate proceedings so long as such conteststays enforcement of such Liens;

 

(v)           survey exceptions, easements,rights-of-way, zoning restrictions and other similar charges or encumbrances inrespect of real property not interfering in any material adverse respect withthe ordinary conduct of the business of the Company or any of its RestrictedSubsidiaries;

 

(vi)          any interest or title of a lessorunder any Capitalized Lease Obligation; *provided* that such Liens do not extend toany property or asset which is not leased property subject to such CapitalizedLease Obligation;

 

(vii)         Liens securing Capitalized LeaseObligations and purchase money Indebtedness permitted pursuant to Section5.04(b)(iii); *provided, however,* that in the case of purchase moneyIndebtedness (a) the Indebtedness shall not exceed the cost of such property orassets and shall not be secured by any property or assets of the Company or anyRestricted Subsidiary of the Company other than the property and assets soacquired, constructed, repaired, added to or improved and (b) the Lien securingsuch Indebtedness shall be created within 180 days after the date of suchacquisition or,completion of construction, repair, improvement, addition or commencement offull operation of the property subject to the Lien or, in the case of aRefinancing of any purchase money Indebtedness, within 180 days of suchRefinancing;

 

(viii)        Liens upon specific items of inventoryor other goods and proceeds of any Person securing such Person’s obligations inrespect of bankers’ acceptances issued or created for the account of suchPerson to facilitate the purchase, shipment or storage of such inventory orother goods;

 

(ix)           Liens securing reimbursementobligations with respect to commercial letters of credit which encumberdocuments and other property relating to such letters of credit and productsand proceeds thereof;

 

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(x)            Liens in favor of customs andrevenue authorities arising as a matter of law to secure payment of customsduties in connection with the importation of goods;

 

(xi)           Liens arising from filing UniformCommercial Code financing statements regarding leases;

 

(xii)          Liens in existence on the date hereof;

 

(xiii)         Liens on property or shares of CapitalStock of another Person at the time such other Person becomes a Subsidiary ofsuch Person; *provided*, *however*, that such Liens are not created,Incurred or assumed in connection with, or in contemplation of, such otherPerson becoming a Subsidiary;

 

(xiv)        leases, subleases, licenses andsublicenses of the type referred to in clause (x) in the second sentenceof the definition of “Asset Disposition” granted to third parties in theOrdinary Course of Business;

 

(xv)         banker’s liens and rights of offset ofthe holders of Indebtedness of the Company or any Restricted Subsidiary onmonies deposited by the Company or any Restricted Subsidiary with such holdersof Indebtedness in the Ordinary Course of Business of the Company or any suchRestricted Subsidiary;

 

(xvi)        Liens securing obligations underInterest Swap Obligations or Currency Agreements so long as such obligationsrelate to Indebtedness that is, and is permitted under this Indenture, to besecured by a Lien on the same property securing such obligations;

 

(xvii)       Liens to secure any Refinancing (orsuccessive Refinancings) as a whole, or in part, of any Indebtedness secured byany Lien referred to in the foregoing clauses (vii), (xii), (xiii) and(xvi); provided, however, that (i) such new Lien shall belimited to all or part of the same property that secured the original Lien(plus improvements to or on such property) and (ii) the Indebtednesssecured by such Lien at such time is not increased to any amount greater thanthe sum of (1) the outstanding principal amount or, if greater, committedamount of the Indebtedness secured by Liens described under clauses (vii),(xii), (xiii) or (xvi) at the time the original Lien became a Permitted Lienunder this Indenture and (2) an amount necessary to pay any fees andexpenses, including premiums related to such Refinancings;

 

(xviii)      pledges or deposits to secure obligationsunder workers’ compensation laws or similar legislation or to secure public orstatutory obligations;

 

(xix)         Liens on property at the time suchPerson or any of its Subsidiaries acquires the property, including anyacquisition by means of a merger or consolidation with or into such Person or aSubsidiary or such Person; *provided*,*however*, that such Liens are notcreated, Incurred or assumed in connection with, or in contemplation of, suchacquisition; *provided*, *further*, *however*,that the Liens may not extend to any other property owned by such Person or anyof its Subsidiaries; and

 

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(xx)          other Liens that do not, in the aggregate,attach to a material portion of the assets of the Company or any of itsRestricted Subsidiaries and do not secure obligations in an aggregate amount inexcess of $5,000,000.

 

“PermittedRefinancing Indebtedness” means any Indebtedness of the Company or any ofits Restricted Subsidiaries issued in exchange for, or the net proceeds ofwhich are used to Refinance, other Indebtedness of any such Persons; *provided*,*however*,that (i) the principal  amount ofsuch Permitted Refinancing Indebtedness does not exceed the principal amount(or, if issued at original issue discount, the aggregate accreted value) plusaccrued interest and premium, if any (set forth in the original instrumentrepresenting such Indebtedness), of the Indebtedness so exchanged or Refinanced(plus the amount of reasonable fees and expenses incurred in connectiontherewith); (ii) such Permitted Refinancing Indebtedness has a finalmaturity date on or later than the final maturity date of, and has a WeightedAverage Life to Maturity equal to or greater than the Weighted Average Life toMaturity of, at the time of such Refinancing, the Indebtedness being exchangedor Refinanced; (iii) if the Indebtedness being exchanged or Refinanced issubordinated in right of payment to the Notes, such Permitted RefinancingIndebtedness is subordinated in right of payment to the Notes on terms at leastas favorable to the Holders of Notes as those contained in the documentationgoverning the Indebtedness being exchanged or Refinanced; (iv) such PermittedRefinancing Indebtedness is Incurred by the Person who is the obligor on theIndebtedness being exchanged or Refinanced; and (v) in the case of PermittedRefinancing Indebtedness in respect of Convertible Subordinated Notes, suchPermitted Refinancing Indebtedness will have an effective yield thereon notexceeding 10% per annum.  “PermittedRefinancing Indebtedness” shall not include Indebtedness under the CreditAgreement which may be Refinanced in accordance with the definition thereof.

 

“Person”means any individual, corporation, partnership, joint venture, association,joint-stock company, limited liability company, trust, unincorporatedorganization or government or agency or political subdivision thereof(including any subdivision or ongoing business of any such entity orsubstantially all of the assets of any such entity, subdivision or business).

 

“PositiveCredit Event”  means the Company having a long term (a) senior implied debtrating of at least BB+ from S&P and Ba1 from Moody’s and (b) senior subordinateddebt rating of at least BB- from S&P and Ba3 from Moody’s; *provided* that if, after the occurrence ofthe Positive Credit Event, the Notes are not Widely Held and the Company’ssenior implied and senior subordinated debt ratings have been downgraded belowthe rating levels set forth in this definition of “Positive Credit Event”,the provisions of this Indenture applicable prior to the Distribution Dateshall govern beginning after such ratings downgrade as if the Distribution Datehas not occurred, until such time as the Notes become Widely Held or anotherPositive Credit Event occurs.

 

“PreferredStock” of any Person means any Capital Stock of such Person that haspreferential rights to any other Capital Stock of such Person with respect todividends or redemptions or upon liquidation, and shall include the 63⁄4%Convertible Preferred Stock of the Company.

 

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“PurchaseAgreement” means the Purchase Agreement, dated as of December 9, 2002, byand among the Company and the Purchasers.

 

“PurchaseDate” is defined in Section 4.10(c).

 

“Purchasers”is defined in the Appendix.

 

“QIB”is defined in the Appendix.

 

“RedemptionDate,” when used with respect to any Note to be redeemed, means the datefixed for such redemption by or pursuant to this Indenture and the Notes.

 

“RedemptionPrice,” when used with respect to any Note to be redeemed, means the priceat which such Note is to be redeemed pursuant to this Indenture and the Notes.

 

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

 

“RegisteredExchange Offer” is defined in the Appendix.

 

“Registrar”is defined in Section 2.03.

 

“RegistrationDefault” is defined in Exhibit A.

 

“RegularRecord Date” is defined in Exhibit A.

 

“Regulation S”is defined in the Appendix.

 

“Representative”means the trustee, agent, representative (if any), or, in the absence of any ofthe foregoing, the holders of the majority in principal amount of, any issue ofSenior Indebtedness.

 

“RequiredHolders” means Holders holding more than 50% of the then outstandingaggregate principal amount at Maturity of the Notes (exclusive of Notes thenowned directly or indirectly by the Company, or any of its Subsidiaries orAffiliates).

 

“ResponsibleOfficer” means the chief executive officer, the president, the chieffinancial officer, the principal accounting officer or the treasurer (or theequivalent of any of the foregoing) of the Company or any of its Subsidiariesor any other officer, partner or member (or person performing similarfunctions) of the Company or any of its Subsidiaries responsible for overseeingthe administration of, or reviewing compliance with, all or any portion of thisIndenture.

 

“RestrictedInvestment” means an Investment other than a Permitted Investment.

 

“RestrictedNotes Legend” is defined in the Appendix.

 

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“RestrictedPayments” is defined in Section 5.02.

 

“RestrictedSubsidiary” of any Person means any Subsidiary of such Person which at thetime of determination is not an Unrestricted Subsidiary.

 

“Rule 501”is defined in the Appendix.

 

“Rule144A” is defined in the Appendix.

 

“Saleand Leaseback Transaction” means any direct or indirect arrangement withany Person or to which any such Person is a party, providing for the leasing tothe Company or a Restricted Subsidiary of any property, whether owned by theCompany or any Restricted Subsidiary at the Closing Date or later acquired,which has been or is to be sold or transferred by the Company or suchRestricted Subsidiary to such Person or any other Person from whom funds havebeen or are to be advanced by such Person on the security of such property.

 

“SecuritiesAct” is defined in the Appendix.

 

“SeniorIndebtedness” means (a) principal, premium (if any), interest (includinginterest accruing on or after the filing of any petition in bankruptcy or forreorganization relating to the Company whether or not a claim for post-filinginterest is allowed in such proceedings), fees and all other amounts owingunder or in respect of the Credit Agreement, (b) Indebtedness under theSenior Notes and (c) the Other Senior Indebtedness.  Notwithstanding the foregoing, “SeniorIndebtedness” shall not include: (i) any obligations (other than with respect to any guaranteeObligations under the Credit Agreement) of the Company to a Subsidiary of theCompany; (ii) obligations to trade creditors and other amounts incurred inconnection with obtaining goods, materials or services; (iii) obligations representedby Disqualified Capital Stock; (iv) any liability for federal, state,local or other taxes owed or owing by the Company; (v) that portion of anyIndebtedness Incurred in violation of the provisions set forth in Section 5.04(but, as to any such obligation, no such violation shall be deemed to exist forpurposes of this clause (v) if the holder(s) of such obligation or theirrepresentative shall have received an officers’ certificate of the Company tothe effect that the Incurrence of such Indebtedness does not (or, in the caseof revolving credit indebtedness, that the Incurrence of the entire committedamount thereof at the date on which the initial borrowing thereunder is madewould not) violate such provisions of this Agreement; (vi) Indebtedness which,when Incurred and without respect to any election under Section 1111(b) ofTitle 11, United States Code, is without recourse to the Company; and(vii) any Indebtedness which is, by its express terms, subordinated inright of payment to any other Indebtedness of the Company or its Subsidiaries.

 

“SeniorNotes” means those certain 71⁄4% Senior Notes due 2023 of the Company issuedpursuant to an indenture dated as of July 1, 1993 in the aggregate principalamount of $50,000,000, and any such notes issued in exchange or replacementtherefor.

 

“SeniorSubordinated Indebtedness” means the Notes and any other Indebtedness ofthe Company permitted hereunder which expressly ranks *pari passu* to the payment and performanceof the Notes.

 

“series”means any series of Notes outstanding under this Indenture.

 

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“ShelfRegistration Statement” is defined in the Appendix.

 

“SpecialInterest” is defined in Exhibit A.

 

“SpectrumAssets” means the E-Block spectrum licenses granted by the FederalCommunications Commission or any spectrum license owned by CBW Co. for whichthe E-Block may be exchanged.

 

“S&P”means Standard & Poor’s Ratings Services, a division of McGraw-HillCompanies, Inc.

 

“StatedMaturity,” when used with respect to any Note or any installment ofinterest thereon, means the date specified in this Indenture or such Note asthe scheduled fixed date on which the Accreted Value of such Note or suchinstallment of interest is due and payable and shall not include any contingentobligation to repay, redeem or repurchase any such interest or principal priorto the date originally scheduled for payment thereof.

 

“StatedMaturity Date” is defined in Exhibit A.

 

“SubordinatedIndebtedness” means (i) the Convertible Subordinated Notes, (ii) anyIndebtedness of the Company permitted hereunder Incurred by the Company afterthe date hereof or outstanding as of the date hereof which is not SeniorIndebtedness or Senior Subordinated Indebtedness, and (iii) any Indebtedness ofthe Company permitted hereunder which is expressly subordinated to and juniorto the payment and performance of the Notes.

 

“Subsidiary”means, with respect to any Person, (i) any corporation, association or otherbusiness entity of which more than 50% of the total voting power of shares ofCapital Stock entitled (without regard to the occurrence of any contingency) tovote in the election of directors, managers or trustees thereof is at the timeowned or controlled, directly or indirectly, by such Person or one or more ofthe other Subsidiaries of that Person (or a combination thereof) and (ii) anypartnership (A) the sole general partner or the managing general partner ofwhich is such Person or a Subsidiary of such Person or (B) the only generalpartners of which are such Person or of one or more Subsidiaries of such Person(or any combination thereof).  AnyPerson becoming a Subsidiary of the Company after the date of this Indentureshall be deemed to have Incurred all of its outstanding Indebtedness on the dateit becomes a Subsidiary.

 

“SuccessorCompany” is defined in Section 6.01.

 

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

 

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“TaxReturns” means all reports and returns (including elections, declarations,disclosures, schedules, estimates and information returns) required to be filedwith respect to Taxes.

 

“TIA”means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), asamended from time to time.

 

“TransactionDocuments” is defined in the Purchase Agreement.

 

“TransferRestricted Notes” is defined in the Appendix.

 

“TriggerDate” is defined in the Exchange and Registration Rights Agreement.

 

“Trustee”is defined in the preamble.

 

“TrustOfficer” means, when used with respect to the Trustee, the president, anyvice president (whether or not designated by a number or a word or words addedbefore or after the title “vice president”), the secretary, any assistantsecretary, the treasurer, any assistant treasurer, or any other officer of theTrustee in its Corporate Trust Administration Department customarily performingfunctions similar to those performed by any of the above designated officersand also means, with respect to a particular corporate trust matter, any otherofficer to whom such matter is referred because of his or her knowledge of andfamiliarity with the particular subject.

 

“UnitedStates” shall have the meaning assigned to such term in Regulation S.

 

“U.S.Government Obligations” means direct obligations (or certificatesrepresenting an ownership interest in such obligations) of the United States ofAmerica (including any agency or instrumentality thereof) for the payment ofwhich the full faith and credit of the United States of America is pledged andthat are not callable or redeemable at the issuer’s option.

 

“UnrestrictedSubsidiary” means (i) any member of the BCI Group; *provided* that after the consummation ofthe sale of all or substantially all of the assets of BCI’s Subsidiaries or theconsummation of a confirmed plan of reorganization under Chapter 11 of theUnited States Bankruptcy Code with respect to BCI, the Company may designateBroadwing Telecommunications Inc. as a Restricted Subsidiary by written noticeto the Trustee and the Holders; (ii) any Subsidiary of a Person that at thetime of determination shall be or continue to be designated an UnrestrictedSubsidiary by the Board of Directors of such Person in the manner providedbelow; and (iii) any Subsidiary of an Unrestricted Subsidiary.

 

TheBoard of Directors of the Company may designate any Subsidiary (including anynewly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiaryunless such Subsidiary owns any Capital Stock of, or owns or holds any Lien onany property of, the Company or any other Subsidiary of the Company that is nota Subsidiary of the Subsidiary to be so designated; *provided*that subject to Section5.11:  (i) the Company certifies tothe Holders that such designation complies with Section 5.02; and(ii) each Subsidiary to be so designated and each of its Subsidiaries (otherthan any member of the BCI Group, except as provided in

 

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clause (i) of this definition) has not at the time ofdesignation, and does not thereafter, Incur any Indebtedness pursuant to whichthe lender has recourse to any of the assets of the Company or any of itsRestricted Subsidiaries.

 

TheBoard of Directors of the Company may designate any Unrestricted Subsidiary tobe a Restricted Subsidiary only if:  (i)immediately after giving effect to such designation, the Company can Incur$1.00 of Indebtedness under Section 5.04(a); and (ii) immediately beforeand immediately after giving effect to such designation, no Default or Event ofDefault shall have occurred and be continuing; *provided*that, notwithstanding the foregoing, except as provided in clause (i) of thisdefinition, the Board of Directors may not designate any member of the BCIGroup to be a Restricted Subsidiary.

 

Anysuch designation by the Board of Directors of the Company shall be evidenced tothe Holders by promptly filing with the Holders a copy of the Board Resolutiongiving effect to such designation and an officers’ certificate certifying thatsuch designation complied with the foregoing provisions.

 

“VotingStock” of a Person means all classes of Capital Stock or other interests(including partnership interests) of such Person then outstanding and normallyentitled (without regard to the occurrence of a contingency) to vote in theelection of directors, managers or trustees thereof.

 

“WarrantAgreement” is defined in the Purchase Agreement.

 

“Warrants”is defined in the Purchase Agreement.

 

“WeightedAverage Life to Maturity” means, when applied to any Indebtedness at anydate, the number of years obtained by dividing (i) the sum of the productsobtained 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 ofyears (calculated to the nearest one-twelfth) that will elapse between suchdate and the making of such payment, by (ii) the then outstanding principalamount of such Indebtedness.

 

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

 

“WidelyHeld” means, with respect to the Notes, that (a) the Purchasers no longerhold more than 50% of the then outstanding aggregate principal amount atMaturity of the Notes (exclusive of Notes then owned directly or indirectly bythe Company, or any of its Subsidiaries or Affiliates) and (b) the Company (i)reasonably believes after due inquiry the number of beneficial owners (asdefined in Rule 13d-3 under the Exchange Act) of the Notes (counting for thepurpose of this definition all Holders that are Affiliates of each other as onebeneficial owner) equals or exceeds twenty-five (25) and (ii) if requested bythe Required Holders, delivers to the Required Holders and the Trustee anOfficers’ Certificate executed by the Responsible Officer describing inreasonable details the grounds for such belief and the procedures used by theCompany to count the number of beneficial owners.  For avoidance of doubt, the Trustee’s

 

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obligations under clause (ii) of this definition shallbe limited solely to keeping such Officers’ Certificate on file with theTrustee and in no event shall the Trustee be liable for the contents of suchOfficers’ Certificate nor shall it be required to deliver such Officers’Certificate to the Holders.

 

“WhollyOwned Subsidiary” of any Person means a Subsidiary of such Person all ofthe outstanding Capital Stock or other ownership interests of which shall atthe time be owned by such Person or by one or more Wholly Owned Subsidiaries ofsuch Person or by such Person and one or more Wholly Owned Subsidiaries of suchPerson.

 

## SECTION1.02.      Incorporation by Reference of TrustIndenture Act.  This Indenture issubject to the mandatory provisions of the TIA, which are incorporated byreference in and made a part of this Indenture.  The following TIA terms have the following meanings:

##  

“indenture securities”means the Initial Notes, the Exchange Notes and the Exchange Guarantees.

 

“indenture securityholder” means a Holder.

 

“indenture to bequalified” means this Indenture.

 

“indenture trustee” or“institutional trustee” means the Trustee.

 

“obligor” on theindenture securities means the Company and any other obligor on the indenturesecurities.

 

All other TIA terms usedin this Indenture that are defined by the TIA, defined by TIA reference toanother statute or defined by Commission rule have the meanings assigned tothem by such definitions.

 

## SECTION1.03.      Rules of Construction.  Unless the context otherwise requires:

##  

(a)           a term has the meaning assigned toit;

 

(b)           an accounting term not otherwisedefined has the meaning assigned to it in accordance with GAAP;

 

(c)           “or” is not exclusive;

 

(d)           “including” means including withoutlimitation;

 

(e)           “to” and “until” each mean “to butexcluding”;

 

(f)            any definition of or reference toany agreement, instrument or other document herein shall be construed asreferring to such agreement, instrument or other document as from time to timeamended, supplemented or otherwise modified (subject to any restrictions onsuch amendments, supplements or modifications set forth herein);

 

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(g)           any reference herein to any Personshall be construed to include such Person’s successors and assigns;

 

(h)           words in the singular include theplural and words in the plural include the singular;

 

(i)            unsecured Indebtedness shall not bedeemed to be subordinate or junior to secured Indebtedness merely by virtue ofits nature as unsecured Indebtedness;

 

(j)            the principal amount of anynon-interest bearing or other discount security at any date shall be theprincipal amount thereof that would be shown on a balance sheet of the issuerdated such date prepared in accordance with GAAP; and

 

(k)           the principal amount of any PreferredStock shall be (i) the maximum liquidation value of such Preferred Stockor (ii) the maximum mandatory redemption or mandatory repurchase pricewith respect to such Preferred Stock, whichever is greater.

 

# ARTICLE 2.

#  

# THE NOTES

 

## SECTION 2.01.              Formand Dating.  Provisions relating tothe Initial Notes and the Exchange Notes to be issued in exchange for theInitial Notes or otherwise as provided in this Indenture are set forth in theAppendix, which is hereby incorporated in and expressly made a part of thisIndenture.  The Initial Notes and suchExchange Notes shall be a separate series of Notes.  The Initial Notes and the Trustee’s certificate ofauthentication shall each be substantially in the form of Exhibit Ahereto, which is hereby incorporated in and expressly made a part of thisIndenture.  The Exchange Notes to beissued in exchange for the Initial Notes or otherwise pursuant to thisIndenture and the Trustee’s certificate of authentication shall besubstantially in the form of Exhibit B hereto, which is herebyincorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends orendorsements required by law, stock exchange rule, agreements to which theCompany is subject, if any, or usage (provided that any such notation, legendor endorsement is in a form acceptable to the Company).  Each Note shall be dated the date of itsauthentication.  The Notes shall beissuable only in registered form without interest coupons and only indenominations of $1,000 (in principal amount at Maturity) and multiplesthereof.  The Initial Notes and theExchange Notes shall be treated as a single class for all purposes under thisIndenture, including, without limitation, waivers, amendments, redemptions andoffers to purchase.

##  

## SECTION 2.02.              Executionand Authentication.  One officershall sign the Notes for the Company by manual or facsimile signature.

##  

If an officer whosesignature is on a Note no longer holds that office at the time the Trusteeauthenticates the Note, the Note shall be valid neverthe­less.

 

A Note shall not be validuntil an authorized signatory of the Trustee manually signs the certificate ofauthentication on the Note.  Thesignature shall be con­clusive evidence that the Note has been authenticatedunder this Indenture.

 

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The Trustee shall, uponwritten direction of the Company, authenticate and make available for deliveryNotes as set forth in the Appendix.

 

The Trustee may appointan authenticating agent reasonably acceptable to the Company to authenticatethe Notes.  Any such appointment shallbe evidenced by an instrument signed by a Trust Officer, a copy of which shallbe furnished to the Company.  Unlesslimited by the terms of such appoint­ment, an authenticating agent may authenti­cateNotes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trusteeincludes authentication by such agent. An authenticating agent has the same rights as any Registrar, PayingAgent or agent for service of notices and demands.

 

## SECTION 2.03.              Registrarand Paying Agent.  (a) the Companyshall maintain an office or agency where Notes may be presented forregistration of transfer or for exchange (the “Registrar”) and an officeor agency where Notes may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of theNotes and of their transfer and exchange. The Company may have one or more co-registrars and one or moreadditional paying agents.  The term“Paying Agent” includes any additional paying agent, and the term “Registrar”includes any co-registrars.  The Companyinitially appoints the Trustee as (i) Registrar and Paying Agent in connectionwith the Notes and (ii) the Notes Custodian with respect to the GlobalExchange Notes (as defined in the Appendix).

##  

(b)           the Company shall enter into anappropriate agency agreement with any Registrar or Paying Agent not a party tothis Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisionsof this Indenture that relate to such agent. The Company shall notify the Trustee in writing of the name and addressof any such agent.  If the Company failsto maintain a Registrar or Paying Agent, the Trustee shall act as such andshall be entitled to appropriate compensation therefor pursuant to Section9.07.  The Company or any of itsdomestically organized Wholly Owned Restricted Subsidiaries (other than anymember of the BCI Group) may act as Paying Agent or Registrar.

 

(c)           the Company may remove any Registraror Paying Agent upon written notice to such Registrar or Paying Agent and tothe Trustee; *provided, however*, that no such removal shall becomeeffective until (i) acceptance of an appointment by a successor as evidenced byan appropriate agreement entered into by the Company and such successorRegistrar or Paying Agent, as the case may be, and delivered to the Trustee or(ii) notification to the Trustee that the Trustee shall serve as Registrar orPaying Agent until the appointment of a successor in accordance with clause (i)above.  The Registrar or Paying Agentmay resign at any time upon written notice to the Company and the Trustee; *provided,however*, that the Trustee may resign as Paying Agent or Registraronly if the Trustee also resigns as Trustee in accordance with Section 9.08.

 

## SECTION 2.04.              PayingAgent to Hold Money in Trust.  On orprior to each due date of the principal of and interest on any Note, theCompany shall deposit with, or to an account maintained by, the Paying Agent(or if the Company or a Subsidiary is acting as Paying Agent, segregate andhold in trust for the benefit of the Persons entitled thereto) a sum sufficientto pay such principal and interest when so becoming due.  The Company shall require each Paying Agent(other than the Trustee) to agree in writing that the Paying Agent shall holdin trust for the

 

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## benefitof Holders or the Trustee all money held by the Paying Agent for the payment ofprincipal of or interest on the Notes and shall promptly notify the Trustee inwriting of any default by the Company in making any such payment.  If the Company or a Subsidiary of theCompany acts as Paying Agent, it shall segregate the money held by it as PayingAgent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money heldby it to the Trustee and to account for any funds disbursed by the PayingAgent.  Upon complying with this Section 2.04,the Paying Agent shall have no further liability for the money delivered to theTrustee.

##  

## SECTION 2.05.              HolderLists.  The Trustee  shall preserve in as current a form as isreasonably practicable the most recent list available to it of the names andaddresses of Holders.  If the Trustee isnot the Registrar, the Company shall furnish, or cause the Registrar tofurnish, to the Trustee, in writing at least five Business Days before eachInterest Payment Date and at such other times as the Trustee may request inwriting, a list in such form and as of such date as the Trustee may reasonablyrequire of the names and addresses of Holders.

##  

## SECTION 2.06.              Transferand Exchange.  The Notes shall beissued in registered form and shall be transferable only upon the surrender ofa Note for registration of transfer and in compliance with the Appendix.  When a Note is presented to the Registrarwith a request to register a transfer, the Registrar shall register thetransfer as requested if its requirements therefor are met.  When Notes are presented to the Registrarwith a request to exchange them for an equal principal amount of Notes of otherdenominations, the Registrar shall make the exchange as requested if the samerequirements are met.  To permitregistration of transfers and exchanges, the Company shall execute and theTrustee shall authenticate Notes at the Registrar’s request.  The Company may require payment of a sumsufficient to pay all taxes, assessments or other governmental charges inconnection with any transfer or exchange pursuant to this Section 2.06.  The Company shall not be required to makeand the Registrar need not register transfers or exchanges of Notes selectedfor redemption (except, in the case of Notes to be redeemed in part, theportion thereof not to be redeemed) or any Notes for a period of 15 days beforea selection of Notes to be redeemed.

##  

Prior to the duepresentation for registration of transfer of any Note, the Company, theGuarantors, the Trustee, the Paying Agent and the Registrar may deem and treatthe Person in whose name a Note is registered as the absolute owner of suchNote for the purpose of receiving payment of principal of and (subject toparagraph 2 of the Notes) interest, if any, on such Note and for all otherpurposes whatsoever, whether or not such Note is overdue, and none of theCompany, the Guarantors, the Paying Agent, the Trustee or the Registrar shallbe affected by notice to the contrary.

 

Any Holder of a GlobalExchange Note shall, by acceptance of such Global Exchange Note, agree thattransfers of beneficial interest in such Global Exchange Note may be effectedonly through a book-entry system maintained by (a) the Holder of suchGlobal Exchange Note (or its agent) or (b) any Holder of a beneficialinterest in such Global Exchange Note, and that ownership of a beneficialinterest in such Global Exchange Note shall be required to be reflected in abook entry.

 

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All Notes issued upon anytransfer or exchange pursuant to the terms of this Indenture shall evidence thesame debt and shall be entitled to the same benefits under this Indenture asthe Notes surrendered upon such transfer or exchange.

 

## SECTION 2.07.              ReplacementNotes.  If a mutilated Note issurrendered to the Registrar or if the Holder of a Note claims that the Notehas been lost, destroyed or wrongfully taken, the Company shall issue and theTrustee shall authenticate a replacement Note if the requirements ofSection 8-405 of the New York Uniform Commercial Code are met, such thatthe Holder (a) satisfies the Company or the Trustee within a reasonabletime after such Holder has notice of such loss, destruction or wrongful takingand the Registrar does not register a transfer prior to receiving suchnotification, (b) makes such request to the Company or the Trustee  prior to the Note being acquired by aprotected purchaser as defined in Section 8-303 of the New York UniformCommercial Code (a “protected purchaser”) and (c) satisfies any otherreasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish anindemnity bond sufficient in the judgment of the Trustee to protect theCompany, the Trustee, the Paying Agent and the Registrar from any loss that anyof them may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their expenses inreplacing a Note.  In the event any suchmutilated, lost, destroyed or wrongfully taken Note has become or is about tobecome due and payable, the Company in its discretion may pay such Note insteadof issuing a new Note in replacement thereof.

##  

Every replacement Note isan additional obligation of the Company.

 

The provisions of this Section 2.07are exclusive and shall preclude (to the extent lawful) all other rights andremedies with respect to the replacement or payment of mutilated, lost,destroyed or wrongfully taken Notes.

 

## SECTION 2.08.              OutstandingNotes.  Notes outstanding at anytime are all Notes authenticated by the Trustee except for those canceled byit, those delivered to it for cancellation and those described in this Section 2.08as not outstanding.  Subject to Section 14.06,a Note does not cease to be outstanding because the Company or an Affiliate ofthe Company holds the Note.

##  

If a Note is replacedpursuant to Section 2.07, it ceases to be outstanding unless theTrustee and the Company receive proof satisfactory to them that the replacedNote is held by a protected purchaser.

 

If the Paying Agentsegregates and holds in trust, in accordance with this Indenture, on aRedemption Date, the Stated Maturity Date or maturity date money sufficient topay all principal and interest and Special Interest, if any, payable on thatdate with respect to the Notes (or portions thereof) to be redeemed ormaturing, as the case may be, and the Paying Agent is not prohibited frompaying such money to the Holders on that date pursuant to the terms of thisIndenture, then on and after that date such Notes (or portions thereof) ceaseto be outstanding and inter­est on them ceases to accrue.

 

## SECTION 2.09.              TemporaryNotes.  Until Definitive Notes areready for delivery, the Company may prepare and the Trustee shall authenticatetemporary Notes.  Temporary Notes

 

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## shall besubstantially in the form of Definitive Notes but may have variations that theCompany considers appropriate for temporary Notes.  Without unreasonable delay, the Company shall prepare and theTrustee shall authenticate Definitive Notes and deliver them in exchange fortemporary Notes upon surrender of such temporary Notes at the office or agencyof the Company, without charge to the Holder.

##  

## SECTION 2.10.              Cancellation.  The Company at any time may deliver Notes tothe Trustee for cancellation.  TheRegistrar and the Paying Agent shall forward to the Trustee any Notessurrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel allNotes surrendered for registration of transfer, exchange, payment orcancellation and shall dispose of canceled Notes in accordance with itscustomary procedures or deliver canceled Notes to the Company pursuant towritten direction by an officer.  TheCompany may not issue new Notes to replace Notes it has redeemed, paid ordelivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notesother than pursuant to the terms of this Indenture.

##  

## SECTION 2.11.              DefaultedInterest.  If the Company defaultsin a payment of interest or Special Interest, if any, on the Notes, the Companyshall pay the defaulted interest (plus interest on such defaulted interest tothe extent lawful) in any lawful manner. The Company may pay the defaulted interest to the Persons who areHolders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record dateand payment date to the reasonable satisfaction of the Trustee and shallpromptly mail or cause to be mailed to each Holder a notice that states thespecial record date, the payment date and the amount of defaulted interest tobe paid.

##  

## SECTION 2.12.              CUSIPNumbers.  The Company in issuing theNotes may use Committee on Uniform Securities Identification Procedures numbers(the “CUSIP numbers”) (if then generally in use) and, if so, the Trusteeshall use CUSIP numbers in notices of redemption as a convenience to Holders; *provided,however*, that any such notice may state that no representation ismade as to the correctness of such numbers either as printed on the Notes or ascontained in any notice of a redemption and that reliance may be placed only onthe other identification numbers printed on the Notes, and any such redemptionshall not be affected by any defect in or omission of such numbers.

##  

# ARTICLE 3.

#  

# REDEMPTION

#  

## SECTION 3.01.              Noticesto Trustee.  If the Company electsto redeem Notes pursuant paragraph 5 of the Notes or is obligated to purchaseNotes pursuant to Section 4.09 or Section 4.10, itshall notify the Trustee in writing of the Redemption Date and the principalamount at Maturity of Notes to be redeemed. The redemption provisions of paragraph 5 of the Notes are fullyincorporated herein.  The Trustee mayconclusively rely on an Officers’ Certificate and the calculations giventherein in making any redemption in accordance with paragraph 5 of the Notes.

 

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The Company shall giveeach notice to the Trustee provided for in this Section 3.01 at least 45days before the Redemption Date unless the Trustee consents to a shorterperiod.  Such notice shall beaccompanied by an Officers’ Certificate and an Opinion of Counsel from theCompany to the effect that such redemption will comply with the conditionsherein.  If fewer than all the Notes areto be redeemed, the record date relating to such redemption shall be selectedby the Company and given to the Trustee, which record date shall be not fewerthan 15 days after the date of notice to the Trustee.  Any such notice may be canceled at any timeprior to notice of such redemption being mailed to any Holder and shall therebybe void and of no effect.

 

## SECTION 3.02.              Selectionof Notes To Be Redeemed.  If fewerthan all the Notes are to be redeemed, the Trustee shall select the Notes to beredeemed pro rata from all of the Holders. The Trustee shall make the selection from outstanding Notes notpreviously called for redemption.  TheTrustee may select for redemption portions of the principal amount at Maturityof Notes that have denominations larger than $1,000.  Notes and portions of them the Trustee selects shall be inprincipal amounts at maturity of $1,000 or a multiple thereof.  Provisions of this Indenture that apply toNotes called for redemption also apply to portions of Notes called forredemption.  The Trustee shall notifythe Company promptly of the Notes or por­tions of Notes to be redeemed.

##  

## SECTION 3.03.              Noticeof Redemption.  (a) At least30 days but not more than 60 days before a date for redemp­tion of Notes,the Company shall mail a notice of redemption by first-class mail, to eachHolder of Notes to be redeemed at such Holder’s registered address.

##  

The notice shall identifythe Notes to be redeemed and shall state:

 

(i)            the Redemption Date;

 

(ii)           the Redemption Price and the amountof accrued interest (including amounts to be accreted to principal of theNotes) to the Redemption Date;

 

(iii)          the name and address of the PayingAgent;

 

(iv)          that Notes called for redemption mustbe surrendered to the Paying Agent to collect the Redemption Price;

 

(v)           if fewer than all the outstandingNotes are to be redeemed, the certificate numbers and principal amount at Maturityof the particular Notes to be redeemed;

 

(vi)          that, unless the Company defaults inmaking such redemption payment or the Paying Agent is prohibited from makingsuch payment pursuant to the terms of this Indenture, interest and any SpecialInterest on Notes (or portion thereof) called for redemption ceases to accrueon and after the Redemption Date;

 

(vii)         the CUSIP number, if any, printed onthe Notes being redeemed; and

 

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(viii)        that no representation is made as to thecorrectness or accuracy of the CUSIP number, if any, listed in such notice orprinted on the Notes.

 

(b)           At the Company’s written request, theTrustee shall give the notice of redemption in the Company’s name and at theCompany’s expense.  In such event, theCompany shall provide the Trustee with the information required by this Section 3.03.

 

## SECTION 3.04.              Effectof Notice of Redemption.  Oncenotice of redemption is mailed, Notes called for redemption become due andpayable on the Redemption Date and at the Redemption Price stated in thenotice.  Upon surrender to the PayingAgent, such Notes shall be paid at the Redemption Price stated in the notice,plus accrued interest and Special Interest, if any, to the Redemption Date; *provided,however*, that if the Redemption Date is after a Regular Record Dateand on or prior to the Interest Payment Date, the accrued interest and SpecialInterest, if any, shall be payable to the Holder of the redeemed Notesregistered on the relevant Regular Record Date.  Failure to give notice or any defect in the notice to any Holdershall not affect the validity of the notice to any other Holder.

##  

## SECTION 3.05.              Depositof Redemption Price.  Prior to 10:00a.m. (New York City time) on the Redemption Date, the Company shall depositwith the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent,shall segregate and hold in trust) money sufficient to pay the Redemption Priceof, and accrued interest and Special Interest, if any, on all Notes to be redeemedon that date other than Notes or portions of Notes called for redemption thathave been delivered by the Company to the Trustee for cancellation.  On or after the Redemption Date, interestshall cease to accrue on Notes or portions thereof called for redemption solong as the Company has deposited with the Paying Agent funds sufficient to paythe principal of, plus accrued and unpaid interest and Special Interest, ifany, on, the Notes to be redeemed, unless the Paying Agent is prohibited frommaking such payment pursuant to the terms of this Indenture.

##  

## SECTION 3.06.              NotesRedeemed in Part.  Upon surrender ofa Note that is redeemed in part, the Company shall execute and the Trusteeshall authenticate for the Holder (at the Company’s expense) a new Note equalin principal amount at Maturity to the unredeemed portion of the principalamount at Maturity of the Note surrendered.

##  

## SECTION 3.07.               Tenderof Notes in Exercise of Warrants. The Warrant Agreement provides that the holder of a Warrant may exercisesuch Warrant by surrendering a Note or a portion thereof then held by suchholder in payment of the exercise price for all Warrant Shares then exercisedequal to 100% of that portion of the Accreted Value of such Notes, which theHolder thereof directs the Company to accept in payment of such exerciseprice.  To the extent the Accreted Valueof such surrendered Note is greater than the aggregate amount of the exerciseprice for all Warrant Shares then paid for by surrender thereof (exclusive ofthe portion of such exercise price paid for by accrued interest, if any, onsuch Surrendered Note), the Company shall deliver a new Note to the tenderingHolder thereof, in accordance with the provisions of this Indenture, dated thedate of the original issuance of the tendered Note, in the principal amount tomaturity which bears the same proportion to the principal amount at maturity ofsuch surrendered Note immediately prior to acceptance by the Company as theremaining portion of the Accreted Value of such surrendered Note bears to theAccreted Value of such surrendered Note immediately prior to acceptance by theCompany.  On the date the Companyaccepts such

 

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## surrenderedNote in payment of the exercise price for the Warrants, the Company shall payall accrued and unpaid interest on the Accreted Value of the Notes cancelledpursuant to this Section 3.07 up to but excluding such Redemption Date.

##  

# ARTICLE 4.

#  

# AFFIRMATIVECOVENANTS

#  

## SECTION 4.01.              Paymentof Notes.

##  

(a)           The Company shall pay the principalof and interest on the Notes on or before the dates and in the manner providedin the Notes and in this Indenture. Principal of and interest on the Notes shall be considered paid on thedate due if on such date the Trustee or the Paying Agent holds in accordancewith this Indenture money sufficient to pay all principal of and interest onthe Notes then due and the Trustee or the Paying Agent, as the case may be, isnot prohibited from paying such money to the Holders on that date pursuant tothe terms of this Indenture.

 

(b)           The Company shall pay interest onoverdue principal of the Notes at the rate specified therefor in the Notes andshall pay interest on overdue installments of interest at the same rate to theextent lawful.

 

## SECTION 4.02.              CommissionReports.  Whether or not required bythe reporting requirements of Section 13 or 15(d) of the Exchange Act, so longas the Notes are outstanding, the Company shall file with the Commission, andprovide the Trustee, Holders and prospective Holders (upon request) within 15days after it files or is required to file them with the Commission, copies ofits annual report and the information, documents and other reports that arespecified in Section 13 and 15(d) of the Exchange Act.  In addition, the Company shall furnish tothe Trustee and the Holders, promptly upon their becoming available, copies ofthe annual report to shareholders and any other information provided by theCompany to its public shareholders generally. The Company also shall comply with the other provisions of TIA §314(a).  The receipt by the Trustee ofany such reports and documents pursuant to this Section shall not constitutenotice or constructive notice of any information contained in such documents ordeterminable from information contained in such documents, including theCompany’s compliance with any covenants hereunder (as to which the Trustee isentitled to rely exclusively on Officers’ Certificates).

##  

## SECTION 4.03.              Preservationof Corporate Existence.  The Companyshall do or cause to be done all things necessary to preserve and keep in fullforce and effect (a) its corporate existence, and the corporate, limitedliability company, partnership or other existence of each of its RestrictedSubsidiaries, in accordance with the respective organizational documents (asthe same may be amended from time to time) of the Company or any suchRestricted Subsidiary (it being understood that legal name change may be madebased upon reasonable discretion of the Company) and (b) the rights(charter and statutory) and licenses of the Company and its RestrictedSubsidiaries; *provided, however,* that the Company shall not be required topreserve or keep in full force and effect any such right or license, or thecorporate, limited liability company,

 

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## partnershipor other existence of any of its Restricted Subsidiaries if the loss thereofdoes not and would not reasonably be expected to result in a Material AdverseEffect.

##  

## SECTION 4.04.              Maintenanceof Properties.  The Company willcause all properties used or useful in the conduct of its business or thebusiness of any of its Restricted Subsidiaries to be maintained and kept ingood condition, repair and working order, ordinary wear and tear excepted, andwill cause to be made all necessary repairs, renewals and replacements thereof,all as in the judgment of the Company may be necessary so that the businesscarried on in connection therewith may be properly conducted; *provided,however,* that the foregoingshall not prevent the Company from discontinuing the operation or maintenanceof any of such properties if such discontinuance does not and would notreasonably be expected to result in a Material Adverse Effect.

##  

## SECTION 4.05.              Taxes

##  

(a)           Payment of Taxes and Other Claims.  The Company shall pay or discharge or causeto be paid or discharged, before the same shall become delinquent, (i) allmaterial Taxes for which the Company or any of its Restricted Subsidiaries couldbe liable and (ii) all lawful claims for labor, materials and supplieswhich, if unpaid, might by law become a Lien upon the property of the Companyor any of its Restricted Subsidiaries; *provided, however,* that the Company shallnot be required to pay or discharge or cause to be paid or discharged any suchTax or claim whose amount, applicability or validity is being contested in goodfaith by appropriate proceedings, *provided*that appropriate reservestherefor are established in the Company’s consolidated financial statements inaccordance with GAAP.

 

(b)           Tax Returns.  The Company and its Restricted Subsidiariesshall timely file or cause to be filed when due all material Tax Returns thatare required to be filed by or with respect to the Company or any of itsSubsidiaries for taxable years ending after the Closing Date and shall pay anyTaxes due in respect of such Tax Returns except as permitted under Section4.05(a).

 

(c)           Transfer Taxes.  All transfer, transfer gains, documentary,sales, use, stamp, registration and other similar Taxes and fees (includingcosts and expenses relating to such Taxes) incurred in connection with theconsummation of the transactions contemplated by this Indenture shall be borneby the Company.  The Holders shallreasonably cooperate with the Company in the preparation and filing of any suchTax Returns and other documentation.

 

## SECTION 4.06.              ComplianceCertificate.  The Company shalldeliver to the Trustee within (a) 50 days after the end of each of thefirst three fiscal quarters of the Company’s fiscal year, and (b) within 95days of the end of the fiscal year of the Company, an Officers’ Certificatemade on behalf of the Company stating that in the course of the performance bythe signers of their duties as officers of the Company they would normally haveknowledge of any Default and whether or not the signers know of any Defaultthat occurred during such period.  Ifthey do, the certificate shall describe the Default, its status and what actionthe Company is taking or proposes to take with respect thereto.  The Company also shall comply withSection 314(a)(4) of the TIA.

 

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## SECTION 4.07.              Compliancewith Law.  The Company will, andwill cause each of its Restricted Subsidiaries to, comply with all ApplicableLaws and all Environmental Laws and will obtain and maintain, and will causeeach of its Restricted Subsidiaries to obtain and maintain, all Permitsnecessary to the ownership of their respective properties or to the conduct oftheir respective businesses, except where and to the extent the failure to socomply with Applicable Laws and all Environmental Laws or to obtain andmaintain in effect any such Permits could not, individually or in theaggregate, reasonably be expected to have a Material Adverse Effect.

##  

## SECTION 4.08.              Insurance.  The Company shall cause its RestrictedSubsidiaries to maintain, with financially sound and reputable insurers,insurance with respect to their respective properties and business against suchcasualties and contingencies, of such types, on such terms and in such amounts(including deductibles, co-insurance and self-insurance, if adequate reservesare maintained with respect thereto) as is customary in the case of entitiesengaged in a similar businesses and owning similar properties in the samegeneral areas in which the Company and its Restricted Subsidiaries operate.

##  

## SECTION 4.09.              Offerto Repurchase Upon Change of Control.

##  

(a)           Upon the occurrence of a Change ofControl, the Company shall make an offer (a “Change of Control Offer”)to each Holder to repurchase all or any part (equal to $1,000 of principalamount at Maturity or a multiple thereof) of each Holder’s Notes at an offerprice in cash equal to 101% of the Accreted Value thereof, plus accrued andunpaid interest thereon, if any, as of the Change of Control Payment Date (the“Change of Control Payment”) in accordance with the terms set forthbelow; *provided*, *however*, that, notwithstanding theoccurrence of a Change of Control, the Company shall not be obligated topurchase the Notes pursuant to this Section 4.09 in the event that it hasexercised its right to redeem all the Notes under paragraph 5 of theNotes.  The Company shall comply with therequirements of Rule 14e-1 under the Exchange Act and any other securitieslaws and regulations thereunder to the extent such laws and regulations areapplicable in connection with the repurchase of the Notes as a result of aChange of Control, and the Company shall not be in violation of this Indentureby reason of any act required by such rule or other Applicable Law.

 

(b)           Within 30 days following anyChange of Control, the Company shall mail a notice to each Holder stating:

 

(i)            that the Change of Control Offer isbeing made pursuant to this Section 4.09 and that all Notestendered will be accepted for payment;

 

(ii)           the purchase price and the purchasedate, which shall be at least 10 Business Days but no more than60 days from the date on which the Company mails notice of the Change ofControl (the “Change of Control Payment Date”);

 

(iii)          that Holders electing to have anyNotes purchased pursuant to a Change of Control Offer shall be required tosurrender the Notes, with the form entitled “Option of Holder to ElectPurchase” on the reverse of the Notes completed, to the

 

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Paying Agent for such purpose, at the addressspecified in the notice prior to the close of business on the third BusinessDay preceding the Change of Control Payment Date;

 

(iv)          that Holders will be entitled towithdraw their election if the Company or its designated agent for suchpurpose, receives, not later than the close of business on the second BusinessDay preceding the Change of Control Payment Date, a facsimile transmission orletter setting forth the name of the Holder, the principal amount of Notesdelivered for purchase, and a statement that such Holder is withdrawing hiselection to have the Notes purchased; and

 

(v)           other information required to beincluded pursuant to Section 3.03.

 

(c)           On the Change of Control PaymentDate, the Company shall, to the extent lawful, (i) accept for payment all Notesor portions thereof properly tendered pursuant to the Change of Control Offerand (ii) pay to the Holders of Notes or portions thereof so tendered an amountequal to the Change of Control Payment in respect of all Notes or portionsthereof so tendered.  The Company shallpromptly mail or deliver by wire transfer to each Holder of Notes so tenderedthe Change of Control Payment for such Notes, and the Company shall promptlyexecute and mail (or cause to be transferred by book-entry) to each Holder anew Note equal in principal amount to any unpurchased portion of the Notessurrendered, if any; *provided, however,* that each such new Noteshall be in a principal amount at Maturity of $1,000 or a multiple thereof.

 

(d)           In the event that at the time of suchChange of Control the terms of any Senior Indebtedness restrict or prohibit therepurchase of Notes pursuant to this Section 4.09, then prior tothe mailing of the notice to Holders provided for in Section 4.09(b)but in any event within 30 days following any Change of Control, theCompany shall (i) repay in full all such Senior Indebtedness or offer to repayin full all such Senior Indebtedness and repay such Senior Indebtedness of eachlender or holder who has accepted such offer or (ii) obtain the requisiteconsent under such Senior Indebtedness to permit the repurchase of the Notes asprovided for in Section 4.09(c).

 

(e)           The Company shall not be required tomake a Change of Control Offer upon a Change of Control if a third party makesthe Change of Control Offer in a manner, at the times and otherwise incompliance with the requirements set forth in this Section 4.09 andsuch third party purchases all Notes validly tendered and not withdrawn undersuch Change of Control Offer.

 

## SECTION 4.10.               Offerto Purchase by Application of Excess Proceeds.

##  

### (a)           In the event that, pursuant to Section5.05, the Company shall be required to commence an offer to all Holders topurchase Notes (an “Asset Sale Offer”), it shall follow the proceduresspecified in this Section 4.10. Each Asset Sale Offer shall remain open for not less than ten (10)Business Days nor more than sixty (60) days immediately following itscommencement, except to the extent that a longer period is required byApplicable Law (the “Offer Period”).

 

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

###  

#### (i)            thatthe Asset Sale Offer is being made pursuant to this Section 4.10 and Section5.05 and the length of time the Asset Sale Offer shall remain open;

####  

#### (ii)           theOffer Amount and the Purchase Date;

####  

#### (iii)          thatHolders electing to have a Note purchased pursuant to any Asset Sale Offershall be required to surrender the Note, with the form entitled “Option ofHolder to Elect Purchase” on the reverse of the Note completed to the Companyat the address specified in the notice at least three Business Days before thePurchase Date;

####  

#### (iv)          thatHolders 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 facsimile transmission or letter setting forth the name of the Holder, theprincipal amount of the Note the Holder delivered for purchase and a statementthat such Holder is withdrawing his election to have such Note purchased; and

####  

#### (v)           otherinformation required to be included pursuant to Section 3.03.

####  

### (c)           On or before the Business Dayimmediately 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 anAccreted Value equal to the Accreted Value required to be purchased pursuant toSection 5.05 plus accrued and unpaid interest, if any, thereon to thePurchase Date (the “Offer Amount”) or, if the Accreted Value of Notestendered is less than the Offer Amount, the Company shall purchase all Notestendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interestpayments are made.  The Company shallpromptly (but in any case not later than five (5) Business Days after thePurchase Date) mail or deliver by wire transfer to each tendering Holder anamount equal to the purchase price of the Notes tendered by such Holder andaccepted by the Company for purchase, and the Company shall promptly issue anew Note and deliver it to such Holder, in a principal amount at Maturity equalto any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly mailed or delivered bythe Company to the Holder thereof.

###  

## SECTION 4.11.              OtherCovenants.  The Company herebyagrees, to the extent reasonably practicable but subject to the limitations setforth in Section 5.11:

##  

### (a)           To maintain the books and records ofthe Cincinnati Bell Group separate from the BCI Group;

###  

### (b)           Not to commingle assets of theCincinnati Bell Group with those of the BCI Group, except as permitted to beinvested to effect the Centralized Cash Management

 

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### Systempursuant to Section 5.02(f)(ix) of the Credit Agreement, as in effect onthe date of this Indenture;

###  

### (c)           To maintain separate financialstatements of the Cincinnati Bell Group from those of the BCI Group, whichfinancial statements need not (except as provided in Section 9 of thePurchase Agreement) be separately audited or reviewed by an independentaccounting firm;

###  

### (d)           To observe all material corporate,partnership or limited liability company (as applicable) formalities;

###  

### (e)           Not to pay the salaries of theCincinnati Bell Group employees with funds of the BCI Group and vice versa,except, in the case of payments of salaries of management employees of the BCIGroup with the funds of the Cincinnati Bell Group, for any such payments madein the Ordinary Course of Business;

###  

### (f)            Other than as required under theCredit Documents or pursuant to the terms of any documents governing ExistingIndebtedness, not to guarantee or become obligated for the debts of the BCIGroup or hold out its credit as being available to satisfy the obligations ofthe BCI Group;

###  

### (g)           Other than as required under theCredit Documents or pursuant to the terms of any documents governing ExistingIndebtedness, not to pledge the assets of the Cincinnati Bell Group for thebenefit of the BCI Group; and

###  

### (h)           To hold itself out as a separateentity from the BCI Group.

###  

## SECTION 4.12.              FurtherAssurances.  The Company shall, uponthe request of Holders, execute and deliver such further instruments and dosuch further acts as may be reasonably necessary or proper to carry out moreeffectively the provisions of this Indenture.

##  

## SECTION 4.13.              FutureGuarantors.  Subject to Section11.02(b), the Company shall cause each Restricted Subsidiary that is (a)acquired or formed after the Closing Date and is a Restricted Subsidiary thatis also a guarantor under the Credit Agreement or (b) an existing RestrictedSubsidiary that becomes a guarantor under the Credit Agreement to become aGuarantor, and, if applicable, to execute and deliver to the Trustee asupplemental guarantee in the form of Exhibit C pursuant to which suchRestricted Subsidiary will guarantee payment of the Notes.

##  

## SECTION 4.14.              Approvals.  The Company agrees to exercise commerciallyreasonable efforts, and shall cause its Restricted Subsidiaries to exercisecommercially reasonable efforts, to obtain any approval of the FederalCommunications Commission, any public utility or service commission or anyother Governmental Authority for any action or transaction contemplated by thisIndenture that is then required by Applicable Law, except where the failure toobtain any such approval could not, individually and in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

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# ARTICLE 5.

#  

# NEGATIVECOVENANTS APPLICABLE TO COMPANY AND ITS SUBSIDIARIES

#  

## SECTION 5.01.              Stay,Extension and Usury Laws.  TheCompany covenants (to the extent that it may lawfully do so) that it shall notat any time insist upon, plead, or in any manner whatsoever claim or take thebenefit or advantage of, any stay, extension or usury law wherever enacted, nowor at any time hereafter in force, that may affect the covenants or theperformance of its obligations under the Notes or this Indenture, and theCompany (to the extent that it may lawfully do so) hereby expressly waives allbenefit or advantage of any such law, and covenants (to the extent that it maylawfully do so) that it shall not, by resort to any such law, hinder, delay orimpede the execution of any power herein granted to the Holders, but shallsuffer and permit the execution of every such power as though no such law hasbeen enacted.

##  

## SECTION 5.02.              RestrictedPayments.  (a) The Company shallnot, and shall not permit any of its Restricted Subsidiaries to, (i) declare ormake any dividend payment or other distribution of assets, properties, cash,rights, obligations or securities on account of any shares of any class ofCapital Stock (including any payment in connection with a merger orconsolidation involving the Company or any of its Restricted Subsidiaries),except (x) dividends or distributions payable solely in its Capital Stock(other than Disqualified Capital Stock or Capital Stock convertible into orexchangeable for Disqualified Capital Stock) and (y) dividends or distributionspayable to the Company or to a Restricted Subsidiary (and, if the RestrictedSubsidiary making such dividend or distribution has equityholders other thanthe Company or another Restricted Subsidiary, to such equityholders on a prorata basis), (ii) purchase, redeem or otherwise acquire for value anyshares of Capital Stock of the Company or any of its Restricted Subsidiariesnow or hereafter outstanding held by a Person other than the Company or anotherRestricted Subsidiary, (iii) make any payment or prepayment of principal of,premium, if any, interest, redemption, exchange, purchase, retirement,defeasance, sinking fund or other payment with respect to, any SubordinatedIndebtedness prior to scheduled maturity, scheduled payment, scheduledrepayment or scheduled sinking fund payment thereof (except redemption,exchange, purchase, retirement, defeasance, sinking fund or other paymentwithin six months of the final maturity thereof; *provided* that no such redemption, exchange, purchase,retirement, defeasance, sinking fund or other payment may be made prior to thefinal maturity may be made with respect to the Convertible Subordinated Notes)or (iv) make any Restricted Investments (the items described in clauses (i),(ii), (iii), and (iv) are referred to as “RestrictedPayments”); except that the Company or any Restricted Subsidiary of theCompany may make a Restricted Payment if at the time of and after giving effectto such Restricted Payment;

##  

(A)          no Default or Event of Default shallhave occurred and be continuing or would occur as a consequence thereof; and

 

(B)           the Company could, at the time suchRestricted Payment was made and after giving pro forma effect thereto as ifsuch Restricted Payment had been made at the beginning of the applicablefour-fiscal quarter period, have been permitted to Incur at least $1.00 ofadditional Indebtedness pursuant to Section 5.04(a) hereof; and

 

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(C)           such Restricted Payment, togetherwith the aggregate of all other Restricted Payments made by the Company and itsRestricted Subsidiaries after the date of this Indenture (excluding RestrictedPayments permitted by Section 5.02(b)(i) through (v), inclusive, (viii)and (ix)), is less than the sum, without duplication, of (1) theApplicable Percentage of the Consolidated Net Income for the period (taken asone accounting period) from the beginning of (x) if the Closing Date occurs inthe first half of a fiscal quarter, such fiscal quarter or (y) if the ClosingDate occurs in the second half of a fiscal quarter, the fiscal quartercommencing after the Closing Date, in each case, to the end of the Company’smost recently ended fiscal quarter for which internal financial statements ofthe Company and its Restricted Subsidiaries are, or should have been, availablein accordance with the Transaction Documents at the time of such RestrictedPayment (or, if such Consolidated Net Income for such period is a deficit, less100% of such deficit), plus (2) to the extent that any RestrictedInvestment that was made after the date of this Indenture is sold for cash orotherwise liquidated or repaid for cash, the lesser of (x) the cash return ofcapital with respect to such Restricted Investment (less the cost ofdisposition, if any) and (y) the initial amount of such Restricted Investment, plus(3) the amount equal to the net reduction in Investments in UnrestrictedSubsidiaries resulting from the redesignation of Unrestricted Subsidiaries asRestricted Subsidiaries (valued as provided in the definition of the“Investment”), plus (4) net cash dividends or other net cashdistributions paid to the Company or any Restricted Subsidiary fromUnrestricted Subsidiaries (for the avoidance of doubt, only to the extent notincluded in clause (1) above) but only for the purpose of making (x) prior tothe Distribution Date, Restricted Investments and (y) after the DistributionDate any Restricted Payments (whether or not constituting RestrictedInvestments), plus (5) the aggregate Net Proceeds received by theCompany from the issue or sale of its Capital Stock (other than DisqualifiedCapital Stock) or other capital contributions subsequent to the date of thisIndenture (other than Net Proceeds received from an issuance or sale of suchCapital Stock to a Subsidiary of the Company or an employee stock ownershipplan, option plan or similar trust to the extent such sale to an employee stockownership plan, option plan or similar trust is financed by loans from orguaranteed by the Company or any Restricted Subsidiary), but only for thepurpose of making (x) prior to the Distribution Date, Restricted Investmentsand (y) after the Distribution Date any Restricted Payments (whether or notconstituting Restricted Investments), plus (6) aggregate net cashproceeds received by the Company from the issue or sale since the Closing Dateof debt securities that have been converted into Capital Stock (other thanDisqualified Capital Stock) of the Company, but only for the purpose of making(x) prior to the Distribution Date, Restricted Investments and (y) after theDistribution Date any Restricted Payments (whether or not constitutingRestricted Investments).

 

### (b)           The foregoing provisions shall notprohibit any of the following if no Default or Event of Default shall haveoccurred and be continuing immediately after any such transaction:

 

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#### (i)            thedefeasance, redemption or repurchase of (x) Subordinated Indebtedness with thenet cash proceeds from an Incurrence of Permitted Refinancing Indebtedness orthe substantially concurrent sale (other than to a Subsidiary of the Company)of Capital Stock of the Company or (y) Convertible Preferred Stock or other CapitalStock of the Company with the net cash proceeds from the substantiallyconcurrent sale (other than to a Subsidiary of the Company) of Capital Stock ofthe Company (other than the Disqualified Capital Stock);

####  

#### (ii)           thepro rata redemption or repurchase by any Restricted Subsidiary of the Companyof its Common Stock;

####  

#### (iii)          themaking by the Company of regularly scheduled payments in respect of anySubordinated Indebtedness permitted hereby in accordance with the terms of, andonly to the extent required by, and subject to the subordination provisionscontained in, any agreement pursuant to which such Subordinated Indebtednesswas issued; *provided* that theregularly scheduled payments in respect of Convertible Subordinated Notespermitted by this clause (iii) may not exceed an effective rate of 10% perannum;

####  

#### (iv)          themaking by the Company and its Restricted Subsidiaries of PermittedAcquisitions;

####  

#### (v)           themaking by the Company of (x) regularly scheduled dividend payments in respectof 6 3⁄4% Cumulative Convertible Preferred Stock of the Company in accordancewith the terms thereof and (y) regularly scheduled interest payments (excludingany common and non-redeemable preferred equity component thereof) in respect ofAlternative Mezzanine Debt in accordance with the terms thereof;

####  

#### (vi)          dividendspaid within 60 days after the date of declaration thereof if at such dateof declaration such dividend would have complied with Section 5.02(a);

####  

#### (vii)         therepurchase or other acquisition of shares of, or options to purchase shares of,common stock of the Company or any of its Subsidiaries from employees, formeremployees, directors or former directors of the Company or any of itsSubsidiaries (or permitted transferees of such employees, former employees,directors or former directors), pursuant to the terms of the agreements(including employment agreements) or plans (or amendments thereto) approved bythe Board of Directors of the Company under which such individuals purchase orsell or are granted the option to purchase or sell, shares of such commonstock; provided, however, that the aggregate amount of such repurchases shallnot exceed $2,000,000 in any calendar year;

####  

#### (viii)        the issuance of common stock of the Company to officers,directors and employees as part of compensation arrangements;

####  

#### (ix)           themaking by the Company and its Restricted Subsidiaries of other RestrictedPayments not to exceed $5,000,000 in the aggregate since the date of thisIndenture; and

 

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#### (x)            themaking by the Company and its Restricted Subsidiaries of Restricted Paymentspermitted to be made by Section 5.11.

####  

### (c)           The amount of all Restricted Payments(other than cash) shall be the fair market value (evidenced by a resolution ofthe Board of Directors set forth in an Officers’ Certificate delivered to theTrustee) on the date of the Restricted Payment of the asset(s) proposed to betransferred by the Company or such Subsidiary, as the case may be, pursuant tothe Restricted Payment.

###  

## SECTION 5.03.              Dividendand Other Payment Restrictions Affecting Subsidiaries.  The Company shall not, and shall not permitany of its Restricted Subsidiaries to, directly or indirectly, create orotherwise cause or suffer to exist or become effective any encumbrance orrestriction on the ability of any Restricted Subsidiary of the Company to(a)(i) pay dividends or make any other distributions to the Company withrespect to any Capital Stock of such Restricted Subsidiary or any otherinterest or participation in, or measured by, such Restricted Subsidiary’sprofits, or (ii) pay any Indebtedness owed by such Restricted Subsidiaryto the Company or any of the Company’s other Restricted Subsidiaries,(b) make loans or advances to the Company or any of the Company’s RestrictedSubsidiaries or (c) transfer any of such Restricted Subsidiary’sproperties or assets to the Company or any of the Company’s RestrictedSubsidiaries, except for such encumbrances or restrictions existing under or byreason of (i) existing Indebtedness and agreements listed on Schedule5.03, in each case, as in effect on the date of this Indenture,(ii) the Credit Documents as in effect as of the date of this Indenture,and any amendments, modifications, restatements, renewals, increases,supplements, refundings, replacements or Refinancings thereof permittedhereunder, *provided,however*, that such amendments, modifications, restatements,renewals, increases, supplements, refundings, replacements or Refinancings arenot materially more restrictive with respect to such provisions than thosecontained in the Credit Documents on the date hereof, (iii) this Indentureand the Notes, (iv) Applicable Law, (v) any encumbrance orrestriction (1) that restricts in a customary manner the subletting,assignment or transfer of any property or asset that is subject to a lease,license or similar contract or (2) contained in security agreementssecuring Indebtedness of the Company or a Restricted Subsidiary to the extentsuch encumbrance or restriction restricts the transfer of the property subjectto such security agreements, (vi) capital leases or purchase moneyobligations for property acquired in the Ordinary Course of Business thatimpose restrictions of the nature described in clause (v) above on the propertyso acquired, (vii) Permitted Refinancing Indebtedness; *provided,however,* that such restrictions contained in the agreementsgoverning such Permitted Refinancing Indebtedness are not materially morerestrictive than those contained in the agreements governing the Indebtednessbeing Refinanced, (viii) any instrument governing Indebtedness, CapitalStock or assets of a Person acquired by the Company or any of the Company’sRestricted Subsidiaries as in effect at the time of such acquisition (except tothe extent such instrument was created or such Indebtedness was Incurred inconnection with or in contemplation of such acquisition), which encumbrance orrestriction is not applicable to any Person, or the properties or assets of anyPerson, other than the Person, or the property or assets of the Person, soacquired, *provided*that, in the case of Indebtedness, such Indebtedness was permittedby the terms of this Indenture to be Incurred, (ix) secured Indebtednessotherwise permitted to be Incurred pursuant to this Indenture that limits theright of the debtor thereunder to dispose of the assets securing suchIndebtedness, (x) contracts for the sale of assets, including withoutlimitation customary restrictions with respect to a Subsidiary

 

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## pursuantto an agreement that has been entered into for the sale or disposition of allor substantially all of the Capital Stock or assets of such Subsidiary,(xi) restrictions on deposits or minimum net worth requirements imposed bycustomers under contracts entered into in the Ordinary Course of Business,(xii) customary provisions in joint venture agreements, licenses and leases andother similar agreements entered into in the Ordinary Course of Business,(xiii) any encumbrance or restriction contained in an agreement evidencingIndebtedness of a Restricted Subsidiary permitted to be Incurred subsequent tothe Closing Date pursuant to Section 5.04; *provided*, *however*,that such encumbrance or restriction applies only in the event of and duringthe continuance of a default contained in such agreement and (xiv) anyencumbrances or restrictions of the type referred to inclauses (a), (b) and (c) above imposed by any amendments, modifications,restatements, renewals, increases, supplements, refundings, replacements orrefinancings of the contracts, instruments or obligations referred to inclauses (i) through (xiii) above; *provided*that such amendments, modifications, restatements, renewals, increases,supplements, refundings, replacements or refinancings are, in the good faithjudgment of the Board of Directors of the Company, no more restrictive withrespect to such dividend and other payment restrictions than those contained inthe dividend or other payment restrictions prior to such amendment,modification, restatement, renewal, increase, supplement, refunding,replacement or refinancing.

##  

## SECTION 5.04.              Incurrenceof Indebtedness and Issuance of Preferred Stock

##  

### (a)           The Company shall not, and shall notpermit any of its Restricted Subsidiaries to, directly or indirectly, create,incur, issue, assume, Guarantee or otherwise become directly or indirectlyliable, contingently or otherwise (including by operation of law), with respectto (collectively, “Incur”) any Indebtedness (including AcquiredIndebtedness) and shall not permit any of its Restricted Subsidiaries to issueany Preferred Stock; *provided*, *however*, that the Company and theGuarantors may Incur Indebtedness (including Acquired Indebtedness), and theCompany and the Guarantors may guarantee such Indebtedness, if immediatelyafter the Incurrence of such Indebtedness, both (i) prior to the DistributionDate, the Consolidated EBITDA to Consolidated Interest Ratio for the mostrecent four full fiscal quarter period for which consolidated financialstatements of the Company and its Restricted Subsidiaries are, or should havebeen, available in accordance with the Transaction Documents is 3.0 to 1.00 orgreater (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) 4.75 to 1.00 if such Incurrence occurs on or prior to December 31, 2002,(B) 4.5 to 1.00 if such Incurrence occurs on or after January 1, 2003 and on orprior December 31, 2003, (C) 4.25 to 1.00 if such Incurrence occurs on or afterJanuary 1, 2004 and on or prior December 31, 2004 or (D) 4.00 to 1.00 if suchIncurrence occurs on or after January 1, 2005 (the test set forth insub-paragraph (ii) hereof is referred to herein as “Leverage Test”).  For the purpose of the calculation of theLeverage Test (both before and after the Distribution Date) and, prior to theDistribution Date, the Interest Coverage Test, with respect to any periodincluded in such calculation, Consolidated EBITDA, the components ofConsolidated Interest Expense, and Consolidated Adjusted Debt and CapitalExpenditures shall be calculated with respect to such period by the Company ingood faith on a pro forma basis (including and consistent with PermittedAdjustments), giving effect to any Permitted Acquisition, Asset Disposition orIncurrence or redemption or repayment of Indebtedness that has given rise tothe need for such calculation, has occurred during such period or has occurredafter such period and on or prior to the date of such calculation (each a “Subject

 

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### Transaction”), including, with regards toPermitted Acquisitions and Asset Dispositions, by using the historicalfinancial statements of any business so acquired or to be acquired or sold orto be sold and the consolidated financial statements of the Company and itsRestricted Subsidiaries which shall be reformulated as if such SubjectTransaction, and any Indebtedness Incurred or redeemed or repaid in connectiontherewith, had been consummated or Incurred or redeemed or repaid at thebeginning of such period (and assuming that such Indebtedness bears interestduring any portion of the applicable measurement period prior to the relevantacquisition at the weighted average of the interest rates applicable tooutstanding revolving loans under the Credit Agreement Incurred during suchperiod).

###  

### (b)           The foregoing provisions shall notapply to:

###  

#### (i)            theIncurrence by the Company and its Restricted Subsidiaries of the ExistingIndebtedness (including, without limitation, all pay-in-kind interest under theConvertible Subordinated Indenture; *provided*that the Company will not permit the rate of interest on the ConvertibleSubordinated Notes to exceed of 10% per annum);

####  

#### (ii)           theIncurrence by the Company and its Restricted Subsidiaries of the Indebtednessrepresented by the Notes and the Guarantees (including the Exchange Guarantees)thereof, as the case may be;

####  

#### (iii)          theIncurrence by the Company or any of its Restricted Subsidiaries of Indebtednessrepresented by (A) Capitalized Lease Obligations, mortgage financings orpurchase money Indebtedness, in each case, Incurred for the purpose offinancing 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 businessof the Company or such Subsidiary, in an aggregate principal amount, togetherwith the principal amount of all Indebtedness incurred pursuant to clause (xx)below, not to exceed (without duplication) the Applicable Capital Lease Amountat any one time outstanding and (B) other short-term purchase moneyIndebtedness the term of which does not exceed six (6) months, in an aggregateprincipal amount not to exceed (without duplication) $10,000,000 at any onetime outstanding;

####  

#### (iv)          theIncurrence by the Company or any of its Restricted Subsidiaries of PermittedRefinancing Indebtedness in exchange for, or the net proceeds of which are usedto extend, Refinance, renew, replace, defease or refund, Indebtedness that waspermitted by this Indenture to be Incurred by the Company or such RestrictedSubsidiary;

####  

#### (v)           theIncurrence by the Company or any of its Restricted Subsidiaries of intercompanyIndebtedness (A) between or among the Company and any Wholly Owned RestrictedSubsidiaries of the Company and CBW (*provided*that, in the case of Indebtedness incurred by CBW, such intercompanyIndebtedness shall not exceed $300,000,000 at any time outstanding) and (B)consisting of debits and credits among the Company and its RestrictedSubsidiaries pursuant to the Centralized Cash Management System; *provided*, *however*,that (1) any intercompany Indebtedness which is borrowed by the Company or aRestricted Subsidiary from a Restricted Subsidiary that is not a

 

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#### Guarantor shall be expressly subordinated to the Notes and(2) (x) any subsequent issuance or transfer of Capital Stock that results inany such Indebtedness being held by a Person other than the Company or a WhollyOwned Restricted Subsidiary of the Company or CBW, or (y) any sale or othertransfer of any such Indebtedness to a Person other than the Company, a WhollyOwned Restricted Subsidiary of the Company or CBW, or a lender or agent uponexercise of remedies under a pledge of such Indebtedness under the CreditDocuments, shall be deemed, in each case of the foregoing clauses (2)(x) and(y), to constitute an Incurrence of such Indebtedness by the Company or suchRestricted Subsidiary, as the case may be;

####  

#### (vi)          theIncurrence by the Company or any of its Restricted Subsidiaries of InterestSwap Obligations that are Incurred for the purpose of fixing or hedginginterest rate risk with respect to any floating rate Indebtedness that is permittedby the terms of this Indenture to be outstanding;

####  

#### (vii)         theIncurrence by the Company and its Restricted Subsidiaries of Indebtednessevidenced by the Credit Documents (and the Guarantees thereof by the Companyand the Company’s Subsidiaries) in a principal amount not exceeding$1,705,041,000 less the amount of all term loan repayments and permanentreductions of term and revolving loan commitments actually made under theCredit Agreement; *provided* that,to the extent that the loans under the Credit Agreement are repaid (andcorresponding commitments are permanently reduced) with the proceeds of the NewNotes (as defined in the Credit Agreement) other than the Notes and such NewNotes were Incurred pursuant to this clause (vii), such repayment shall notreduce the aggregate amount of Indebtedness permitted to be Incurred pursuantto this clause (vii); and, *provided*,*further*, that, notwithstandingthe limitations set forth in this clause (vii), in the event of any permanentreduction or repayment of the Credit Agreement’s revolving facility, theCompany and its Restricted Subsidiaries shall have the right to obtainadditional commitments under, and extend the maturity of, such revolvingfacility (and Incur additional revolving Indebtedness pursuant to suchadditional commitments) in an amount not exceeding the amount of such permanentreduction; *provided* that theaggregate amount of all such additional commitments obtained by the Company andits Restricted Subsidiaries since the date of this Indenture does not exceed$100,000,000;

####  

#### (viii)        the Incurrence by the Company or any of its RestrictedSubsidiaries of Indebtedness under Currency Agreements;

####  

#### (ix)           theIncurrence by the Company or any of its Restricted Subsidiaries of Indebtednessarising from the honoring by a bank or other financial institution of a check,draft or similar instrument inadvertently (except in the case of daylightoverdrafts) drawn against insufficient funds in the Ordinary Course ofBusiness;

####  

#### (x)            theIncurrence by the Company or any of its Restricted Subsidiaries of Indebtednessof the Company or any of its Restricted Subsidiaries represented by letters ofcredit for the account of the Company or such Restricted Subsidiary, as thecase may be, in order to provide security for workers’ compensation

 

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#### claims, payment obligations in connection with self-insuranceor similar requirements in the Ordinary Course of Business;

####  

#### (xi)           theIncurrence by the Company or any of its Restricted Subsidiaries of Indebtednessin respect of performance bonds, bankers’ acceptances, workers’ compensationclaims, completion guarantees, letters of credit surety or appeal bonds,payment obligations in connection with self-insurance or similar obligations Incurredin the Ordinary Course of Business;

####  

#### (xii)          theGuarantee by the Company or any of its Restricted Subsidiaries of Indebtednessof the Company or a Restricted Subsidiary of the Company that was permitted tobe Incurred by another provision of this Section 5.04;

####  

#### (xiii)         Indebtedness arising from agreements of the Company or aRestricted Subsidiary of the Company providing for indemnification, adjustmentof purchase price or similar obligations, in each case, Incurred in connectionwith an Asset Disposition permitted by this Indenture or a PermittedAcquisition or other sale or disposition of assets permitted under thisIndenture;

####  

#### (xiv)        Indebtednessarising from agreements of the Company or a Restricted Subsidiary of theCompany (including the Exchange and Registration Rights Agreement, and similarcontractual undertakings) providing for indemnification and payment of expensesrelating to the registration under the Securities Act of the sale of CapitalStock of the Company or the Notes;

####  

#### (xv)         Indebtednesspermitted to be Incurred by Section 5.11;

####  

#### (xvi)        theIncurrence of Indebtedness by the Company as a result of its indemnificationobligations permitted pursuant to Section 5.06(c) and Section 5.06(d);

####  

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

####  

#### (xviii)      Indebtedness of a Restricted Subsidiary that is not a GuarantorIncurred and outstanding on or prior to the date on which such RestrictedSubsidiary was acquired by the Company (other than Indebtedness Incurred incontemplation of, in connection with, as consideration in, or to provide all orany portion of the funds or credit support utilized to consummate, thetransaction or series of related transactions pursuant to which such RestrictedSubsidiary became a Subsidiary 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 Indebtedness (x)prior to the Distribution Date, pursuant to the definition of the “Other SeniorIndebtedness” (without regard to the dollar limit set forth therein) andpursuant to Section 5.04(a) and (y) after the Distribution Date,pursuant to Section 5.04(a), in each case, after giving effect to theIncurrence of such Indebtedness pursuant to this clause (xviii);

 

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#### (xix)         theIncurrence by the Company of unsecured short-term Indebtedness in the OrdinaryCourse of Business in the form of swing lines of credit and overdraftprotection lines of credit in an aggregate principal amount not to exceed$20,000,000; *provided* that theamount of Indebtedness permitted to be incurred pursuant to clause (vii) aboveshall be reduced by the amount of Indebtedness outstanding pursuant to thisclause (xix);

####  

#### (xx)          inthe case of CBT, the Incurrence by CBT of Indebtedness to finance CapitalExpenditures mandated by the Ohio, Indiana or Kentucky Public UtilitiesCommission; *provided* that (x) atthe time such Capital Expenditures must be made, CBT is not permitted to IncurIndebtedness under any other provision of this Section 5.04 and does nothave sufficient internally-generated funds to make such Capital Expendituresand (y) the aggregate amount of such Indebtedness at any one time outstanding,together with all Indebtedness outstanding pursuant to Section5.04(b)(iii)(A) does not exceed the Applicable Capital Lease Amount;

####  

#### (xxi)         theIncurrence of Attributable Debt with respect to Sale and Leaseback Transactionsby CBW and CBT of towers and associated equipment, cabling, antennae and otherappurtenances thereto, in each case, used in the operation of CBW’s wirelessbusiness; provided that the proceeds of such Indebtedness shall be usedto prepay Indebtedness under the Credit Agreement in accordance with Section5.05;

####  

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

####  

#### (xxiii)       the Incurrence on the Closing Date of the AlternativeMezzanine Debt.

####  

### (c)           For purposes of determiningcompliance with this Section 5.04, in the event that an item ofIndebtedness meets the criteria of more than one of the categories ofIndebtedness described in clauses (i) through (xxi) of the immediatelypreceding paragraph or is entitled to be Incurred pursuant to Section5.04(a), the Company shall, in its sole discretion, classify (or laterreclassify) such item of Indebtedness in any manner that complies with Section 5.04and will only be required to include the amount and type of such Indebtednessin one of such clauses of Section 5.04(b) or pursuant to Section5.04(a).  Accrual of interest,accretion of accreted value, amortization of original issue discount, thepayment of interest on any Indebtedness in the form of additional Indebtednesswith the same terms as the Indebtedness on which such interest is being paidand any other issuance of securities paid-in-kind shall not be deemed to be anIncurrence of Indebtedness for purposes of Section 5.04.  In addition, the Company may, at any time,change the classification of an item of Indebtedness (or any portion thereof)to any other clause of Section 5.04(b) or to Indebtedness properlyIncurred under Section 5.04(a)*provided*that the Company would bepermitted to Incur such item of Indebtedness (or portion thereof) pursuant tosuch other clause of this Section 5.04(b) or Section 5.04(a), asthe case may be, at such time of reclassification.

 

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### (d)           Notwithstanding anything herein tothe contrary, the Company shall not, and shall not permit any of its RestrictedSubsidiaries to, Incur or permit to exist any Indebtedness entered into afterthe date of this Indenture unless, subject to the proviso of clause (i) to thedefinition of the “Unrestricted Subsidiary,” the documents governingsuch Indebtedness designate each member of the BCI Group as an “unrestrictedsubsidiary” (or provide for equivalent treatment of the BCI Group ifdesignation of unrestricted subsidiaries is not customary for such type of Indebtedness)and restricts the dealings among the Company and its Restricted Subsidiaries,on the one hand, and the BCI Group, on the other hand, at least to the sameextent and with the same effect as under this Indenture and consistent withSections 5.01(t) and 5.02 (insofar as it relates to the Permitted Obligationsand Permitted BCI Transactions (each as defined in the Credit Agreement)) ofthe Credit Agreement as in effect on the date of this Indenture.

###  

## SECTION 5.05.              AssetDispositions.

##  

### (a)           The Company shall not, and shall notpermit any of its Restricted Subsidiaries to, consummate any Asset Disposition(*provided*that the sale, lease, conveyance or other disposition of all or substantiallyall of the assets of the Company and its Restricted Subsidiaries taken as awhole shall be governed by the provisions of Article 6 and not by theprovisions of this Section 5.05) unless all of the followingconditions are met:  (i)  theaggregate fair market value of assets sold or otherwise disposed of in AssetDispositions in any fiscal year of the Company does not exceed $20,000,000; *provided* that the limitation of thisclause (i) shall not apply to: (1) prior to the Distribution Date, AssetDispositions that do not involve CBT Assets or CBW Assets, the Net Proceeds ofwhich are applied substantially concurrently with the receipt thereof, inaccordance with clause (c) below; (2) after the Distribution Date, AssetDispositions that do not involve CBT Assets, the Net Proceeds of which areapplied substantially concurrently with the receipt thereof, in accordance withclause (c) below; (3) Asset Dispositions by CBW Co. of Spectrum Assets, so longas Net Proceeds of such Asset Dispositions are applied substantiallyconcurrently with the receipt thereof, in accordance with clause (c) below; (4)Asset Dispositions by CBW and CBT of towers and associated equipment, cabling,antennae and other appurtenances thereto, in each case, used in the operationsof CBW’s wireless business, so long as such Asset Dispositions are made as Saleand Leaseback Transactions and the Net Proceeds of such Asset Dispositions areapplied substantially concurrently with the receipt thereof, in accordance withclause (c) below; and (5) Permitted Asset Swaps;  (ii) the consideration received is at least equal to thefair market value of such assets (except as the result of (x) any foreclosureor sale by the lenders under the Credit Documents or (y) Net Proceeds receivedfrom an insurer or a Governmental Authority, as the case may be, in the eventof loss, damage, destruction or condemnation); (iii) in the case of AssetDispositions that are not Permitted Asset Swaps, at least 80% of theconsideration received is cash or Cash Equivalents; and (iv) prior to theDistribution Date, no Default or Event of Default then exists or shall resultfrom such Asset Disposition; *provided, however,* that the amount of(x) any liabilities (as shown on the Company’s or such RestrictedSubsidiary’s most recent balance sheet) of the Company or any RestrictedSubsidiary that are assumed by the transferee of any such assets pursuant toany arrangement releasing the Company or such Restricted Subsidiary fromfurther liability and (y) any securities, notes or other obligationsreceived by the Company or any such Restricted Subsidiary from such transfereethat are converted by the Company or such Restricted Subsidiary into cash orCash

 

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### Equivalentswithin 90 days after the Asset Disposition (to the extent of the cashreceived), 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 AssetDisposition, the Company or the Restricted Subsidiary making such AssetDisposition, as the case may be, may, at its option, apply such Net Proceeds(i) to permanently reduce Senior Indebtedness or any Indebtedness of theRestricted Subsidiaries of the Company which are not Guarantors, or to purchasethe Notes (with the consent of the Holders thereof to the extent required) orIndebtedness ranking *pari passu* with the Notes (and tocorrespondingly reduce commitments with respect thereto, to the extentapplicable) or (ii) to the acquisition of a controlling interest inanother business, the making of Capital Expenditures or the investment in oracquisition of other long-term assets, in each case, in the same or a similarline of business as the Company and its Subsidiaries engaged in at the timesuch assets were sold or in a business reasonably related, complementing orancillary thereto or a reasonable expansion thereof.  Pending the final application of any such Net Proceeds, theCompany may temporarily reduce revolving credit Indebtedness under the CreditAgreement or otherwise invest such Net Proceeds in any manner that is notprohibited by this Indenture.  Any NetProceeds from Asset Dispositions that are not applied or invested as providedin the first sentence of this paragraph shall be deemed to constitute “ExcessProceeds.”  When the aggregate amountof Excess Proceeds exceeds in any fiscal year $5,000,000, the Company shallmake an Asset Sale Offer pursuant to Section 4.10 to purchase themaximum Accreted Value of Notes that may be purchased out of the ExcessProceeds, at an offer price in cash in an amount equal to 100% of theoutstanding Accreted Value thereof, plus accrued and unpaid interest, thereonto the date of purchase, in accordance with the procedures set forth in Section 4.10;*provided*, *however*, that if the Company elects (or isrequired by the terms of any other Senior Subordinated Indebtedness), suchAsset Sale Offer may be made ratably to purchase the Notes and other SeniorSubordinated Indebtedness of the Company. Upon completion of such offer to purchase, the amount of Excess Proceedsshall be reset at zero.

###  

### (c)           Subject to clause (a)(i) above, NetProceeds from Asset Dispositions in excess of the $20,000,000 per fiscal yearlimitation set forth in Section 5.05(a)(i) shall be applied,substantially concurrently with the receipt thereof, to permanently reduceSenior Indebtedness.  Any such NetProceeds remaining after all Senior Indebtedness has been permanently repaidshall constitute the Excess Proceeds with respect to which an Asset Sale Offerpursuant to Section 4.10 shall be made as provided in the foregoingclause (b).

###  

### (d)           Notwithstanding anything herein tothe contrary, the Company shall not, and shall not permit any of its RestrictedSubsidiaries to, consummate any Asset Disposition involving any Capital Stockof CBT or any of CBT’s Restricted Subsidiaries, other than pursuant to atransaction governed by the provisions of Article 6.

 

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## SECTION 5.06.               Transactionswith Affiliates.  The Company willnot and will not permit any of its Restricted Subsidiaries directly orindirectly to enter into or permit to exist any transaction (including thepurchase, sale, lease or exchange of any property or the rendering of anymanagement, consulting, investment banking, advisory or other similar services)with any Affiliate of the Company or with any director, officer or employee ofthe Company or any Restricted Subsidiary (each of the foregoing, an “AffiliateTransaction”), except:

##  

### (a)           the performance of any of theTransaction Documents as in effect as of the date of this Indenture or theconsummation of any transaction contemplated thereby (including pursuant to anyamendment thereto so long as any such amendment is not disadvantageous to theHolders of the Notes in any material respect);

###  

### (b)           transactions (i) in the ordinarycourse of the business of the Company or any of its Restricted Subsidiaries andupon terms which are not materially less favorable to the Company or suchRestricted Subsidiary than would be obtained in a comparable arm’s lengthtransaction with a Person that is not an Affiliate of the Company and(ii) with respect to which the Company delivers to the Trustee(A) with respect to any Affiliate Transaction involving aggregateconsideration in excess of $3,000,000, a resolution of the Board of Directorsof the Company set forth in an Officers’ Certificate certifying that suchAffiliate transaction complies with clause (i) above and that suchAffiliate Transaction has been approved by a majority of the disinterested membersof the Board of Directors of the Company, and (B) with respect to anyAffiliate Transaction or series of Affiliate Transactions involving in excessof $30,000,000, an opinion as to the fairness of such Affiliate Transaction tothe Company from a financial point of view issued by an Independent QualifiedParty;

###  

### (c)           payment of customary compensation toofficers, employees, consultants and investment bankers for services actuallyrendered to the Company or such Restricted Subsidiary, including indemnity;

###  

### (d)           payment of director’s fees plusexpenses and customary indemnification of directors;

###  

### (e)           the payment of the fees, expenses andother amounts payable by the Company and its Restricted Subsidiaries inconnection with the transactions contemplated by the Transaction Documents thatwere disclosed to the Purchasers on or prior to the Closing Date;

###  

### (f)            transactions undertaken pursuant tothe agreements set forth on Schedule 5.06, copies of which shall havebeen provided to the Purchasers prior to the Closing Date;

###  

### (g)           Restricted Payments permitted by Section 5.02and Permitted Investments;

###  

### (h)           transactions (x) between or among theCompany and its Restricted Subsidiaries, (y) between and among the RestrictedSubsidiaries and (z) between or among the Company and/or its Subsidiariespursuant to the Centralized Cash Management System;

###  

### (i)            any licensing agreement or similaragreement entered into in the Ordinary Course of Business relating to the useof technology or intellectual property between any of the Company and itsSubsidiaries, on the one hand, and any company or other Person which is an

 

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### Affiliateof the Company or its subsidiaries by virtue of the fact that Person has madean Investment in or owns any Capital Stock of such company or other Personwhich are fair to the Company or its Restricted Subsidiaries, in the reasonabledetermination of the Board of Directors, or are on terms at least as favorableas might reasonably have been obtained at such time from an unaffiliated party;

###  

### (j)            the issuance of payments, awards orgrants, in cash or otherwise, pursuant to, or the funding of, employmentarrangements approved by the Board of Directors of the Company in good faithand customary loans and advances to employees of the Company, or any RestrictedSubsidiary of the Company to the extent otherwise permitted in this Indenture;

###  

### (k)           transactions with the BCI Group(other than those set forth in clause (l) below) (A) set forth on Schedule5.06 or (B) permitted by Section 5.11, in each case, so long as suchtransactions are conducted in the Ordinary Course of Business and upon termswhich are not less favorable to the Company or such Restricted Subsidiary thanwould be obtained in a comparable arm’s length transaction with a Person thatis not an Affiliate of the Company; and

###  

### (l)            sale of services by the BCI Group tothe Company and its Restricted Subsidiaries, so long as the prices for suchservices are consistent with past practices, are upon terms which are not lessfavorable to the Company or such Restricted Subsidiary than would be obtainedin a comparable arm’s length transaction with a Person that is not an Affiliateof the Company and are based on rate cards and wholesale prices approvedsemiannually by the Board of Directors.

###  

## SECTION 5.07.               Limitationon Liens.  TheCompany shall not, and shall not permit any Restricted Subsidiary to, directlyor indirectly, create, incur, assume or suffer to exist any Lien (other than(a) Liens securing the Guarantee by the Company and the Restricted Subsidiariesof Indebtedness Incurred and other Obligations under the CreditDocuments, (b) Liens securing any Senior Indebtedness (including AttributableDebt, if applicable) and (c) Permitted Liens) on any asset now owned orhereafter acquired to secure any Indebtedness of the Company or such RestrictedSubsidiary; *provided* that theCompany or any Restricted Subsidiary may create, incur or assume Lien to secureany Indebtedness or a Guarantee thereof, so long as concurrently with theincurrence or assumption of such Lien the Company or such Restricted Subsidiaryeffectively provides that the Notes shall be secured equally and ratably with(or prior and senior to, in the case of Liens with respect to SubordinatedIndebtedness) such Indebtedness, so long as such Indebtedness shall be sosecured.

##  

## SECTION 5.08.              Limitationon Issuances and Sales of Capital Stock of Subsidiaries.  The Company shall not, and shall not permitany Restricted Subsidiary to, transfer, convey, sell, issue, lease or otherwisedispose of any Capital Stock of any Restricted Subsidiary to any Person (otherthan to the Company or another Restricted Subsidiary of the Company), unless(a) prior to the Distribution Date, such transfer, conveyance, sale, lease or otherdisposition is of (x) all the Capital Stock of such Restricted Subsidiary or(y) Capital Stock of a Restricted Subsidiary that is a Guarantor and (b) suchtransfer, conveyance, sale, lease or other disposition shall be made inaccordance with the provisions of Section 5.05, including the provisionsof Section 5.05 governing the application of Net Proceeds from suchtransfer, conveyance, sale, lease or other disposition; *provided*, *however*,that (i) this Section 5.08 shall not restrict any pledge of Capital

 

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## Stock ofthe Company and its Restricted Subsidiaries securing Indebtedness under theCredit Documents or other Indebtedness permitted to be secured by Section5.07 and (ii) clause (a) above does not apply to (x) to the issuances ofCapital Stock of CBW pursuant to capital calls in accordance with theprovisions of CBW’s organizational documents in existence on the date of thisIndenture and (y) any other sales and issuances of Capital Stock of CBW so longas CBW remains a Restricted Subsidiary of the Company.

##  

## SECTION 5.09.               Prohibitionon Incurrence of Senior Subordinated Debt. The Company shall not, and shall not permit any Restricted Subsidiarythat is a Guarantor to, Incur or suffer to exist Indebtedness that is senior inright of payment to the Notes or said Guarantor’s Guarantee, as the case maybe, and subordinate in right of payment to any other Indebtedness of theCompany or such Guarantor, as the case may be.

##  

## SECTION 5.10.               Conductof Business.  The Company shall notand shall not permit any of its Subsidiaries directly or indirectly to engagein any business other than business of the type engaged in at the date hereofand any business reasonably related, complementing or ancillary thereto or areasonable expansion thereof.

##  

## SECTION 5.11.               Restrictionson Dealings with BCI Group.  (a) TheCompany hereby acknowledges and agrees that each member of the BCI Group ishereby designated as an Unrestricted Subsidiary.  Notwithstanding any provision contained in this Indenture, theCompany shall not, without the consent of the Required Holders, redesignate anymember of the BCI Group as a Restricted Subsidiary.  Furthermore, no member of the Cincinnati Bell Group may (1) makeany Restricted Payment to, (2) issue Capital Stock of any member of theCincinnati Bell Group to, (3) make any Investment in (including, withoutlimitation, by (x) becoming an obligor, whether directly or by way of Guaranteeon any Indebtedness to or for the benefit of any member of the BCI Group, (y)purchasing an asset for the BCI Group without charge or allocation to the BCIGroup or (z) making any payments in respect of operating expenses or netoperating losses of the BCI Group (including payments for direct expenses ofthe BCI Group that are made by the Cincinnati Bell Group and not charged orallocated to the BCI Group or payments made by the Cincinnati Bell Group forshared expenses that are not charged or allocated to the BCI Group)) or (4)allow any tax reimbursement for the benefit of, any member of the BCI Groupunless, immediately following such payment, Incurrence, allowance or payment:

##  

#### (i)            noDefault or Event of Default shall then have occurred or be continuing; and

####  

#### (ii)           theaggregate amount of all such Restricted Payments, Indebtedness, Investments,issuances, allowances and payments made after October 1, 2002 shall not exceedin the aggregate the sum of (A) $118,000,000, plus (B) net cashdividends or net cash distributions (including, without limitation, net cashpayments under any intercompany notes issued by the BCI Group to the Companyand its Restricted Subsidiaries) made by any member of the BCI Group to theCompany or any other member of the Cincinnati Bell Group after October 1, 2002,plus (C) the aggregate amount of Revolving Credit Borrowings (as defined underthe Credit Agreement) made under Section 5.02(e)(ix)(E) of the CreditAgreement (as in effect on the date hereof).

 

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### (b)           The foregoing restrictions shall notapply to, without duplication, (q) Permitted Obligations (as defined in theCredit Agreement on the date hereof) and any transactions set forth on Schedule5.11(b), (r) any customary non-cash transition arrangements or otherrelated services provided for the benefit of a buyer in connection with adisposition of any properties or assets of the BCI Group, (s) the accrual andcapitalization of interest on intercompany notes issued by the BCI Group to theCompany or its Restricted Subsidiaries, (t) the issuance of Capital Stock ofthe Company (other than Disqualified Capital Stock) and the related payment ofup to $1,000,000 in cash in exchange for shares of BCI’s 12 1⁄2% Series B JuniorExchangeable Preferred Stock Due 2009 or BCI’s 9% Senior Subordinated Notes due2008 (the “9% BCI Notes”) or, in the case of the 9% BCI Notes, theissuance of Capital Stock of the Company (other than Disqualified Stock) orIndebtedness Incurred in compliance with Section 5.04 the net proceedsof which are used, substantially contemporaneously with such issuance, toredeem such 9% BCI Notes, (u) guarantees by the Company and its RestrictedSubsidiaries of the Existing BCSI Loan, (v) Liens on assets of the Company andits Restricted Subsidiaries to secure the Existing BCSI Loan, (w) (1) scheduledprincipal and interest payments made or guaranteed by the Company or any of itsRestricted Subsidiaries in respect of the Existing BCSI Loan (or capitalcontributions made solely for the purpose of funding such payments), (2)scheduled interest payments with respect to the 9% BCI Notes and BCI’s12 1⁄2% Senior Series B Notes due 2005 and (3) the redemption of BCI’s12 1⁄2% Senior Series B Notes due 2005 outstanding on the date hereof at theapplicable redemption premium pursuant to the documentation governing suchnotes as in effect on the date hereof, (x) payments made by the Company or anyof its Restricted Subsidiaries under the guarantee of the Existing BCSI Loan,(y) non-cash payments made in the form of reductions in the principal amount ofany intercompany notes issued by the BCI Group to the Company or its RestrictedSubsidiaries in respect of net operating losses of the BCI Group used by theCompany and its Restricted Subsidiaries or other Investments in the form ofreduction of such intercompany notes and (z) the payment by the BCI Group ofnon-cash management fees to the Cincinnati Bell Group in an amount not toexceed $2,000,000 per quarter.

###  

## SECTION 5.12.              Saleof Assets of the BCI Group. Notwithstanding any provision contained in this Indenture, the executionand delivery of the Agreement for the Purchase and Sale of Assets dated as ofFebruary 22, 2003 (the “BCSI Purchase Agreement”) by and between BCSI,Broadwing Communications Services of Virginia, Inc., Broadwing CommunicationsReal Estate Services LLC, Broadwing Services LLC, IXC Business Services LLC,Broadwing Logistics LLC, Broadwing Telecommunications Inc., IXC InternetServices, Inc., and MSM Associates, Limited Partnership, on the one side, and CIII Communications, LLC, and C III Communications Operations, LLC, on the otherside, and the performance by the Company and its Subsidiaries of alltransactions contemplated thereby shall be permitted by, and shall notconstitute a Default or Event of Default under, this Indenture.

##  

# ARTICLE 6.

#  

# SUCCESSORCOMPANY

#  

Notwithstandinganything in this Indenture to the contrary:

 

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## SECTION 6.01.               Merger,Consolidation, or Sales of Assets of the Company.  The Company shall not consolidate or merge with or into (whetheror not the Company is the surviving corporation), or directly and/or indirectlythrough its Subsidiaries sell, assign, transfer, lease, convey or otherwisedispose of all or substantially all of the properties and assets of the Companyand its Restricted Subsidiaries taken as a whole in one or more relatedtransactions, to any other Person, unless:

##  

### (a)           the resulting, surviving ortransferee Person (the “Successor Company”) shall be a corporationorganized and existing under the laws of the United States of America, anyState thereof or the District of Columbia and the Successor Company (if not theCompany) shall expressly assume, by a supplemental indenture hereto, executedand delivered to the Trustee, in form satisfactory to the Trustee, all theObligations of the Company under the Notes and this Indenture;

###  

### (b)           immediately after giving effect tosuch transaction (and treating any Indebtedness which becomes an obligation ofthe Successor Company or any Restricted Subsidiary as a result of suchtransaction as having been Incurred by the Successor Company or such RestrictedSubsidiary at the time of such transaction), no Default shall have occurred andbe continuing under this Indenture;

###  

### (c)           immediately after giving effect to suchtransaction, the Successor Company would be able to Incur an additional $1.00of Indebtedness pursuant to Section 5.04(a) if it were deemed to be theCompany thereunder; and

###  

### (d)           the Company shall have delivered tothe Trustee an Officers’ Certificate and an Opinion of Counsel, each statingthat such consolidation, merger or transfer and such supplemental indenture (ifany) are permitted by and comply with this Indenture.

###  

### (e)           The restrictions contained in this Section6.01 shall not apply to any disposition of properties or assets of the BCIGroup.

###  

## SECTION 6.02.              SuccessorCompany Substituted.  The SuccessorCompany shall succeed to, and be substituted for, and may exercise every rightand power of, the Company under this Indenture, but the Company in the case ofa conveyance, transfer or lease of all or substantially all its assets shallnot be released from the obligation to pay the principal of and interest on theNotes.

##  

# ARTICLE 7.

#  

# EVENTSOF DEFAULT; REMEDIES

#  

## SECTION 7.01.              Eventsof Default.  An Event of Defaultshall exist upon the occurrence of any of the following specified events (eachan “Event of Default”):

##  

(a)           the Company defaults in the paymentwhen due of interest, if any, on the Notes and such default continues for aperiod of (x) ten (10) days, prior to the Distribution Date or (y) thirty (30)days after the Distribution Date;

 

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(b)           the Company defaults in the paymentwhen due of the principal amount of or premium, if any, on the Notes when thesame becomes due and payable at its Maturity, upon required redemption orotherwise;

 

(c)           the Company fails to observe orperform (i) any provision of Section 4.11, Article 5 or Article6 of this Indenture and either (x) prior to the Distribution Date, suchfailure continues for a period of twenty (20) days after the Holders of atleast 25% in principal amount at Maturity of the outstanding Notes notify theCompany and the Trustee in writing of such Default (which notice must specifythe Default, demand that it be remedied and state that such notice is a “Noticeof Default”) or (y) after the Distribution Date, such failure continues fora period of thirty (30) days after a Notice of Default, or (ii) any othercovenant or other agreement in this Indenture, the Notes or, prior to theDistribution Date, the Purchase Agreement and such failure continues for aperiod of (x) thirty (30) days prior to the Distribution Date or (y) sixty (60)days after the Distribution Date, in each case, after a Notice of Default;

 

(d)           prior to the Distribution Date, anyrepresentation, warranty, certification or statement made by the Company in thePurchase Agreement and the related documents or in any statement or certificateat any time given by or on behalf of the Company in writing pursuant to thePurchase Agreement or any other related documents shall be false in anymaterial respect (*provided* thatthe representations and warranties qualified by materiality or Material AdverseEffect shall not be false in any respect) on the date as of which made;

 

(e)           (i) prior to the Distribution Date, adefault occurs under any mortgage, indenture, agreement or instrument underwhich there may be issued or by which there may be secured or evidenced anyIndebtedness for money borrowed by the Company or any of its RestrictedSubsidiaries (or payment of which is Guaranteed by the Company or any of itsRestricted Subsidiaries), whether such Indebtedness or Guarantee now exists, oris created after the date of this Indenture, which default in the case (butonly in the case) of Senior Indebtedness (A) constitutes a failure to payat final maturity (after giving effect to any applicable grace periods and anyextensions thereof) the principal amount of such Senior Indebtedness or (B) shallhave resulted in such Senior Indebtedness being accelerated or otherwise becomeor being declared due and payable prior to its stated maturity and, in eachcase, the principal amount of any such Indebtedness, together with theprincipal amount of any other such Indebtedness (other than SeniorIndebtedness) under which there has been a default, and together with theprincipal amount of any such other Senior Indebtedness under which there hasbeen a default in payment at final maturity or the maturity of which has beenaccelerated or otherwise become or being declared due prior to its statedmaturity, aggregates $20,000,000 (or such lower amount as may be set forth in Section7.01(e) of the Credit Agreement, as such provision may be amended in thefuture, or in a similar provision) or more; or

 

(ii)           afterthe Distribution Date, a default occurs under any mortgage, indenture,agreement or instrument under which there may be issued or by which there maybe secured or evidenced any Indebtedness for money borrowed by the Company orany of its Restricted Subsidiaries (or payment of which is Guaranteed by theCompany or any of its Restricted Subsidiaries), whether such Indebtedness orGuarantee now exists, or is created after the date of this Indenture, whichdefault (A) constitutes a failure to pay at final maturity (after givingeffect to any applicable grace periods and any extensions thereof) theprincipal amount of

 

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such Indebtedness or (B) shall have resulted insuch Indebtedness being accelerated or otherwise become or being declared dueand payable prior to its stated maturity and, in each case, the principalamount of any such Indebtedness, together with the principal amount of anyother such Indebtedness under which there has been a default in payment atfinal maturity or the maturity of which has been accelerated or otherwisebecome or being declared due prior to its stated maturity, aggregates$20,000,000 (or such lower amount as may be set forth in Section 7.01(e)of the Credit Agreement, as such provision may be amended in the future, or ina similar provision) or more;

 

(f)            a final judgment or final judgmentsfor the payment of money are entered by a court or courts of competentjurisdiction against the Company or any of its Restricted Subsidiaries and suchjudgment or judgments remain unpaid and undischarged for a period (during whichexecution shall not be effectively stayed) of 60 days, and is notadequately covered by insurance or indemnities which have been cashcollateralized, provided, however, that the aggregate amount of all suchundischarged or uninsured judgments exceeds $30,000,000 (or such lower amountas may be set forth in Section 7.01(g) of the Credit Agreement, as suchprovision may be amended in the future, or in a similar provision);

 

(g)           the Company or any of its MaterialRestricted Subsidiaries, within the meaning of Bankruptcy Law:

 

(i)            commences a voluntary case orproceeding,

 

(ii)           consents to the entry of a decree ororder for relief against it in an involuntary case or proceeding or to thecommencement of any case or proceeding against it,

 

(iii)          consents to the filing of a petitionor to the appointment of or taking possession by a Custodian (as defined below)of it or for all or any substantial part of its property,

 

(iv)          makes or consents to the making of ageneral assignment for the benefit of its creditors, or

 

(v)           generally is not paying, or admits inwriting that it is not able to pay its debts as they become due, or

 

(h)           a court of competent jurisdictionenters an order or decree under any Bankruptcy Law that:

 

(i)            is for relief against the Company orany of its Material Restricted Subsidiaries in an involuntary case orproceeding;

 

(ii)           appoints a Custodian of the Companyor any of its Material Restricted Subsidiaries or for all or any substantialpart of the property of the Company or any of its Subsidiaries or approves asproperly filed a petition seeking reorganization, arrangement, adjustment orcomposition of or in respect of any of the foregoing; or

 

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(iii)          orders the winding up or liquidationof the Company or any of its Material Restricted Subsidiaries or adjudges anyof them as bankrupt or insolvent.

 

Theterm “Custodian” means any custodian, receiver, trustee, assignee,liquidator, sequestrator or similar official under any Bankruptcy Law.

 

## SECTION 7.02.              Acceleration.  If an Event of Default (other than an Eventof Default specified in Section 7.01(g) or (h) with respectto the Company) occurs and is continuing, the Trustee or the Holders of 25% ormore in principal amount at Maturity of the then outstanding Notes, may, bynotice to the Company, declare the principal of and accrued but unpaid interestand any Special Interest on all the Notes to be due and payable.  Upon such a declaration, such principal andinterest will be due and payable immediately. If an Event of Default specified in Section 7.01(g) or (h)with respect to the Company occurs, the principal of and interest on all theNotes shall ipso facto become and be immediately due and payable withoutany declaration or other act on the part of the Trustee or any Holders.  The Holders of a majority in principalamount at Maturity of the outstanding Notes by written notice to the Trusteemay rescind an acceleration and its consequences if the rescission would notconflict with any judgment or decree and if all existing Events of Default havebeen cured or waived except nonpayment of principal of or interest on Notes thathas become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair anyright consequent thereto.

##  

If an Event of Defaulthas occurred and is continuing, the Notes will accrue an additional interest at3% per annum, until such time as no Event of Default shall be continuing (tothe extent that the payment of such interest shall be legally enforceable); *provided* that 2.25% of such additionalinterest shall be payable in cash and 0.75% of such additional interest shallbe added to the principal amount of the Notes as set forth in the definition ofAccreted Value.

 

The Company shall giveprompt notice (which in any event shall be within five (5) Business Days of theevent) to the Trustee and the Holders of the occurrence of any Event of Defaultand the rescission, cure or waiver of any Event of Default.

 

## SECTION 7.03.              OtherRemedies.  Notwithstanding any otherprovision of this Indenture, if an Event of Default occurs and is continuing,the Trustee may pursue any available remedy to collect the payment of principalof or interest on the Notes or to enforce the performance of any provision ofthe Notes or this Indenture.

##  

The Trustee may maintaina proceeding in its own name and as trustee of an express trust even if it doesnot possess any of the Notes or does not produce any of them in theproceeding.  A delay or omission by theTrustee or any Holder in exercising any right or remedy accruing upon an Eventof Default shall not impair the right or remedy or constitute a waiver of oracquies­cence in the Event of Default. No remedy is exclusive of any other remedy.  All available remedies are cumulative.

 

## SECTION 7.04.              Waiverof Past Defaults.  The Holders of amajority in principal amount at Maturity of the Notes by written notice to theTrustee may waive an existing Default and its consequences except (a) aDefault in the payment of principal of or interest on a Note, (b) aDefault arising from the failure to redeem or purchase any Note when requiredpursuant to

 

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## theterms of this Indenture or (c) a Default in respect of a provision thatunder Section 13.02 cannot be amended without the consent of each Holderaffected.  When a Default is waived, itis deemed cured, but no such waiver shall extend to any subsequent or otherDefault or impair any consequent right.

##  

## SECTION 7.05.              Controlby Majority.  The Holders of amajority in principal amount at Maturity of the outstanding Notes may directthe time, method and place of conducting any proceeding for any remedyavailable to the Trustee or of exercising any trust or power conferred on theTrustee.  However, the Trustee mayrefuse to follow any direction that conflicts with law or this Indenture or,subject to Section 9.01, that the Trustee determines is undulyprejudicial to the rights of other Holders or would involve the Trustee in per­sonalliability; *provided,however*, that the Trustee may take any other action deemed proper bythe Trustee that is not inconsistent with such direction.  Prior to taking any action hereunder, theTrustee shall be entitled to indemni­fication satisfactory to it in its solediscretion against all losses and expenses caused by taking or not taking suchaction.

##  

## SECTION 7.06.              Limitationon Suits.  (a)Except to enforce the right to receive payment of principal of or interest onthe Notes when due, no Holder may pursue any remedy with respect to this Inden­tureor the Notes unless:

##  

(i)            the Holder has previously given tothe Trustee written notice stating that an Event of Default has occurred and iscontinuing;

 

(ii)           the Holders of at least 25% inprincipal amount at Maturity of the outstanding Notes make a written request tothe Trustee to pursue the remedy;

 

(iii)          such Holder or Holders offer to theTrustee reasonable security or indemnity against any loss, liability orexpense;

 

(iv)          the Trustee does not comply with therequest within 60 days after receipt of the request and the offer of securityor indemnity; and

 

(v)           the Holders of a majority inprincipal amount at Maturity of the outstanding Notes do not give the Trustee adirection inconsistent with the request during such 60 day period.

 

(b)           A Holder may not use this Indentureto prejudice the rights of another Holder or to obtain a preference or priorityover another Holder.

 

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## SECTION 7.07.              Rightsof Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of anyHolder to receive payment of principal of and any Special Interest and intereston the Notes held by such Holder, on or after the respective due datesexpressed or provided for in the Notes, or to bring suit for the enforcement ofany such payment on or after such respective dates, shall not be impaired oraffected without the consent of such Holder, it being understood that eachHolder has consented to the subordination provisions set forth in Article 8.

##  

## SECTION 7.08.              CollectionSuit by Trustee.  If an Event ofDefault speci­fied in Section 7.01(a) or (b) occurs and iscontinuing, the Trustee may recover judgment in its own name and as trustee ofan express trust against the Company or any other obligor on the Notes for thewhole amount then due and owing (together with interest on overdue portion ofthe principal amount and (to the extent lawful) on any unpaid interest at therate provided for in the Notes) and the amounts provided for in Section 9.07.

##  

## SECTION 7.09.              TrusteeMay File Proofs of Claim.  TheTrustee may file such proofs of claim and other papers or documents as may benecessary or advisable in order to have the claims of the Trustee and theHolders allowed in any judicial proceedings relative to the Company or anySubsidiary, their creditors or their property and, unless prohibited by law orapplicable regulations, may vote on behalf of the Holders in any election of atrustee in bankruptcy or other Person performing similar functions, and anyCustodian in any such judicial proceeding is hereby authorized by each Holderto make payments to the Trustee and, in the event that the Trustee shallconsent to the making of such pay­ments directly to the Holders, to pay to theTrustee any amount due it for the reasonable compensation, expenses, disburse­mentsand advances of the Trustee, its agents and its counsel, and any other amountsdue the Trustee under Section 9.07.

##  

## SECTION 7.10.              Priorities.  If the Trustee collects any money orproperty pursuant to this Article 7, it shall pay out the money orproperty in the following order:

##  

FIRST:  to the Trustee for its fees (excludingexpenses and indemnities) due under Section 9.07;

 

SECOND:  to the holders of the Senior Indebtednessif, when and to the extent required by Articles 8 and 12; 

 

THIRD:  to the Trustee for amounts (other than thoseset forth in clause FIRST) due under Section 9.07;

 

FOURTH:  to Holders for amounts due and unpaid on theNotes for principal and interest, ratably, and any Special Interest withoutpreference or priority of any kind, according to the amounts due and payable onthe Notes for principal, any Special Interest and interest, respectively; and

 

FIFTH:  to the Company.

 

TheTrustee may fix a record date and payment date for any payment to Holderspursuant to this Section 7.10. At least 15 days before such record date, the Trustee shall mail to

 

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each Holder and the Company a notice that states therecord date, the payment date and amount to be paid.

 

## SECTION 7.11.              Undertakingfor Costs.  In any suit for theenforcement of any right or remedy under this Inden­ture or in any suit againstthe Trustee for any action taken or omitted by it as Trustee, a court in itsdiscretion may require the filing by any party litigant in the suit of anundertaking to pay the costs of the suit, and the court in its discretion mayassess reasonable costs, including reasonable attorneys’ fees, against anyparty litigant in the suit, having due regard to the merits and good faith ofthe claims or defenses made by the party litigant.  This Section 7.11 does not apply to a suit by theTrustee, a suit by a Holder pursuant to Section 7.06 or a suit byHolders of more than 10% in principal amount at Maturity of the Notes.

##  

# ARTICLE 8.

#  

# SUBORDINATION

#  

## SECTION 8.01.              Agreementto Subordinate.  The Company agrees,and each Holder by accepting a Note agrees, that the Note Amounts aresubordinated in right of payment, to the extent and in the manner provided inthis Article 8, to the prior Payment in Full of all Senior Indebtednessof the Company and that the subordination is for the benefit of and enforceableby the holders of such Senior Indebtedness. The Notes shall in all respects rank *paripassu*with all other Senior Subordinated Indebtedness of the Companyand only Indebtedness of the Company that is Senior Indebtedness of the Companyshall rank senior to the Notes in accordance with the provisions set forthherein.  All provisions of this Article8 shall be subject to Section 8.12.

##  

## SECTION 8.02.              Liquidation,Dissolution, Bankruptcy.  Upon any payment or distribution of the assets of theCompany to creditors upon a liquidation or dissolution of the Company or in abankruptcy, reorganization, insolvency, receivership or similar proceedingrelating to the Company or its properties:

##  

### (a)           holders of Senior Indebtedness of theCompany shall be entitled to receive Payment in Full of such SeniorIndebtedness (including interest accruing after, or that would accrue but for,the commencement of such proceeding at the rate specified in the applicableSenior Indebtedness, whether or not such claim for such interest would beallowed) before the Holders shall be entitled to receive any payment of theNote Amounts; and

###  

### (b)           until the Senior Indebtedness of theCompany is Paid in Full, any payment or distribution to which Holders would beentitled but for this Article 8 shall be made to holders of such SeniorIndebtedness as their interests may appear, except that Holders may receive andretain payments made from the defeasance trust described under Section 10.01so long as, on the date or dates the respective amounts were paid into thedefeasance trust, such payments were made with respect to the Notes withoutviolating the subordination provisions described herein.

###  

### (c)           Nothing in this Section 8.02shall prohibit (i) the accretion of the Accreted Value of the Notes or (ii)payment or distribution of stock or securities of the Company provided for by aplan of reorganization or readjustment authorized by an order or decree of acourt of competent jurisdiction in a reorganization proceeding under anyapplicable bankruptcy law or of

 

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### anyother corporation provided for by such plan of reorganization or readjustmentwhich stock or securities are subordinated in right of payment to all thenoutstanding Senior Indebtedness to substantially the same extent as, or to agreater extent than, the Notes are so subordinated as provided in this Article 8.

###  

## SECTION 8.03.              Defaulton Designated Senior Indebtedness. The Company may not pay the Note Amounts or make any deposit pursuant toSection 10.01, and may not otherwise purchase, repurchase, redeem,retire, defease or otherwise acquire for value any Notes if:

##  

### (a)           a default in the payment of theprincipal of, premium, if any, or interest on any Designated SeniorIndebtedness of the Company occurs and is continuing or any other amount owingin respect of any Designated Senior Indebtedness of the Company is not paidwhen due, whether at the due date of any such payment or by declaration ofacceleration, prepayment, call for redemption or otherwise; or

###  

### (b)           any other default (beyond anyapplicable period of grace) on Designated Senior Indebtedness of the Companyoccurs and the maturity of such Designated Senior Indebtedness is acceleratedin accordance with its terms;

###  

until, in either case,the earliest to occur,

 

#### (i)            thedefault has been cured or waived and any such acceleration has been rescinded;or

####  

#### (ii)           suchDesignated Senior Indebtedness has been Paid in Full;

####  

*provided*,*however*, that the Company may paythe Notes without regard to the foregoing if the Company and the Trusteereceive written notice approving such payment from the Representative of theDesignated Senior Indebtedness with respect to which either of the events set forthin clause (a) or (b) above has occurred and is continuing.

 

### (c)           During the continuance of any default(other than a default described in clause (a) or (b) of the preceding sentence)with respect to any Designated Senior Indebtedness of the Company either (x)which is a default under Section 7.01(f) or 7.01(p)(i)(y) of theCredit Agreement or (y) pursuant to which the maturity thereof may beaccelerated immediately without further notice (except such notice as may berequired to effect such acceleration) or the expiration of any applicable graceperiods, the Company may not pay any of the Note Amounts or make any depositpursuant to Section 10.1 for a period (a “Blockage Period”)commencing upon the receipt by the Trustee (with a copy to the Company) ofwritten notice (a “Blockage Notice”) of such default from theRepresentative of such Designated Senior Indebtedness specifying an election toeffect a Blockage Period and ending 179 days thereafter (or earlier if suchBlockage Period is terminated (i) by written notice to the Trustee and theCompany from the Person or Persons who gave such Blockage Notice, (ii) byPayment in Full of such Designated Senior Indebtedness or (iii) because thedefault giving rise to such Blockage Notice is no longer continuing).  Notwithstanding the provisions described inthe immediately preceding sentence (but subject to the provisions contained inthe first sentence of this Section 8.03), unless the holders of such DesignatedSenior Indebtedness or the Representative of such holders shall haveaccelerated the maturity of such Designated Senior Indebtedness, the Companymay resume

 

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### paymentson the Notes after the end of such Blockage Period, including any missedpayments.  Not more than one BlockageNotice may be given in any consecutive 360-day period, irrespective of thenumber of defaults with respect to Designated Senior Indebtedness during suchperiod; *provided*, *however*, that if any Blockage Noticewithin such 360-day period is given by or on behalf of any holders ofDesignated Senior Indebtedness other than the holders of Senior Indebtednessunder the Credit Agreement, the Representative under the Credit Agreement maygive another Blockage Notice within such period; and, *provided*, *further*,that in no event may the total number of days during which any Blockage Periodor Periods is in effect exceed 179 days in the aggregate during any consecutive360 day period.  For purposes of this Section8.03, no default or event of default that existed or was continuing on thedate of the commencement of any Blockage Period with respect to the DesignatedSenior Indebtedness initiating such Blockage Period shall be, or be made, thebasis of the commencement of a subsequent Blockage Period by the Representativeof such Designated Senior Indebtedness, whether or not within a period of 360consecutive days.  Notwithstanding theforegoing, the Company may pay the Notes without regard to the foregoing if theCompany and the Trustee receive written notice approving such payment from theRepresentative of the Designated Senior Indebtedness with respect to whicheither of the events set forth in this clause (c) has occurred and iscontinuing.

###  

## SECTION 8.04.              Accelerationof Payment of Notes.  If payment ofthe Notes is accelerated because of an Event of Default, the Company or theTrustee shall promptly notify the holders of the Designated Senior Indebtednessof the Company (or their Representative) of the acceleration.  If any Designated Senior Indebtedness of theCompany is outstanding, the Company may not pay the Notes until five BusinessDays after such holders or the Representative of such Designated SeniorIndebtedness receive notice of such acceleration (which notice, for theavoidance of doubt, shall not be effective prior to the earlier to occur of (x)the expiration of such five-day period and (y) the acceleration of suchDesignated Senior Indebtedness) and, thereafter, may pay the Notes only if thisArticle 8 otherwise permits payment at that time.

##  

## SECTION 8.05.              WhenDistribution Must Be Paid Over.  Ifa payment or distribution is made to Holders that because of this Article 8should not have been made to them, the Holders who receive the distributionshall hold it in trust for holders of Senior Indebtedness of the Company andpay it over to them as their interests may appear.

##  

## SECTION 8.06.              Subrogation.  After all Senior Indebtedness of the Companyis Paid in Full and until the Notes are paid in full in cash, Holders shall besubrogated to the rights of holders of such Senior Indebtedness to receivedistributions applicable to Senior Indebtedness.  A distribution made under this Article 8 to holders ofsuch Senior Indebtedness which otherwise would have been made to Holders isnot, as between the Company and Holders, a payment by the Company on suchSenior Indebtedness.

##  

## SECTION 8.07.              RelativeRights.  This Article 8defines the relative rights of Holders and holders of Senior Indebtedness ofthe Company.  Nothing in this Indentureshall:

 

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### (a)           impair, as between the Company andHolders, the obligation of the Company, which is absolute and unconditional, topay principal of and interest on the Notes in accordance with their terms; or

###  

### (b)           prevent the Trustee or any Holderfrom exercising its available remedies upon a Default, subject to the rights ofholders of Senior Indebtedness of the Company to receive distributionsotherwise payable to Holders.

###  

## SECTION 8.08.              SubordinationMay Not Be Impaired by the Company. No right of any holder of Senior Indebtedness of the Company to enforcethe subordination of the Indebtedness evidenced by the Notes shall be impairedby any act or failure to act by the Company or by its failure to comply withthis Indenture.

##  

## SECTION 8.09.              Rightsof Trustee and Paying Agent. Notwithstanding Section 8.03, the Trustee or Paying Agent maycontinue to make payments on the Notes and shall not be charged with knowledgeof the existence of facts that would prohibit the making of any such paymentsunless, not less than two Business Days prior to the date of such payment, aTrust Officer of the Trustee receives written notice from a Responsible Officerthat payments may not be made under this Article 8.  The Company, the Registrar, the PayingAgent, a Representative or a holder of Senior Indebtedness of the Company maygive the written notice; *provided*,*however*, that, if an issue ofSenior Indebtedness of the Company has a Representative, only theRepresentative may give the written notice.

##  

The Trustee in itsindividual or any other capacity may hold Senior Indebtedness of the Companywith the same rights it would have if it were not Trustee.  The Registrar and the Paying Agent may dothe same with like rights.  The Trusteeshall be entitled to all the rights set forth in this Article 8 withrespect to any Senior Indebtedness of the Company that may at any time be heldby it, to the same extent as any other holder of such Senior Indebtedness; andnothing in Article 9 shall deprive the Trustee of any of its rights assuch holder.  Nothing in this Article8 shall apply to claims of, or payments to, the Trustee under or pursuantto Section 9.07 or any other Section of this Indenture.

 

## SECTION 8.10.              Distributionor Notice to Representative. Whenever a distribution is to be made or a notice given to holders ofSenior Indebtedness of the Company, the distribution may be made and the noticegiven to their Representative (if any).

##  

## SECTION 8.11.              Article8 Not To Prevent Events Of Default Or Limit Right To Accelerate.  The failure to make a payment pursuant tothe Notes by reason of any provision in this Article 8 shall not beconstrued as preventing the occurrence of a Default.  Nothing in this Article 8 shall have any effect on theright of the Holders or the Trustee to accelerate the maturity of the Notes.

##  

## SECTION 8.12.              TrustMonies Not Subordinated. Notwithstanding anything contained herein to the contrary, payments frommoney or the proceeds of U.S. Government Obligations held in trust under Article10 by the Trustee for the payment of principal of and interest on the Notesand Additional Amounts, if any, in respect thereof shall not be subordinated tothe prior payment of any Senior Indebtedness of the Company or subject to therestrictions set forth in this

 

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Article 8, and none of the Holdersshall be obligated to pay over any such amount to the Company or any holder ofSenior Indebtedness of the Company or any other creditor of the Company.

##  

## SECTION 8.13.              TrusteeEntitled To Rely.  Upon any paymentor distribution pursuant to this Article 8, the Trustee and the Holdersshall be entitled to rely (a) upon any order or decree of a court of competentjurisdiction in which any proceedings of the nature referred to in Section8.02 are pending, (b) upon a certificate of the liquidating trustee oragent or other Person making such payment or distribution to the Trustee or tothe Holders or (c) upon the Representatives for the holders of SeniorIndebtedness of the Company for the purpose of ascertaining the Personsentitled to participate in such payment or distribution, the holders of suchSenior Indebtedness and other Indebtedness of the Company, the amount thereofor payable thereon, the amount or amounts paid or distributed thereon and allother facts pertinent thereto or to this Article 8.  In the event that the Trustee determines, ingood faith, that evidence is required with respect to the right of any Personas a holder of Senior Indebtedness of the Company to participate in any paymentor distribution pursuant to this Article 8, the Trustee may request suchPerson to furnish evidence to the reasonable satisfaction of the Trustee as tothe amount of such Senior Indebtedness held by such Person, the extent to whichsuch Person is entitled to participate in such payment or distribution andother facts pertinent to the rights of such Person under this Article 8,and, if such evidence is not furnished, the Trustee may defer any payment to suchPerson pendent judicial determination as to the right of such Person to receivesuch payment.  The provisions of Sections9.01 and 9.02 shall be applicable to all actions or omissions ofactions by the Trustee pursuant to this Article 8.

##  

## SECTION 8.14.              TrusteeTo Effectuate Subordination.  EachHolder by accepting a Note authorizes and directs the Trustee on his behalf totake such action as may be necessary or appropriate to acknowledge oreffectuate the subordination between the Holders and the holders of SeniorIndebtedness of the Company as provided in this Article 8 and appointsthe Trustee as attorney-in-fact for any and all such purposes.

##  

## SECTION 8.15.              TrusteeNot Fiduciary for Holders of Senior Indebtedness.  Neither the Trustee nor any Holder shall be deemed to owe anyfiduciary duty to the holders of Senior Indebtedness of the Company or shall beliable to any such holders if it shall mistakenly pay over or distribute toHolders or the Company or any other Person, money or assets to which any holdersof Senior Indebtedness of the Company shall be entitled by virtue of this Article8 or otherwise.

##  

## SECTION 8.16.              Relianceby Holders of Senior Indebtedness on Subordination Provisions.  Each Holder by accepting a Note acknowledgesand agrees that the foregoing subordination provisions are, and are intended tobe, an inducement and a consideration to each holder of any Senior Indebtednessof the Company, whether such Senior Indebtedness was created or acquired beforeor after the issuance of the Notes, to acquire and continue to hold, or tocontinue to hold, such Senior Indebtedness and such holder of such SeniorIndebtedness shall be deemed conclusively to have relied on such subordinationprovisions in acquiring and continuing to hold, or in continuing to hold, suchSenior Indebtedness.

 

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## SECTION 8.17.              Trustee’sCompensation Not Prejudiced. Nothing in this Article shall apply to amounts due to the Trusteepursuant to other sections of this Indenture, including, but not limited to, Section9.07 hereof.

##  

# ARTICLE 9.

#  

# TRUSTEE

#  

## SECTION 9.01.              Dutiesof Trustee.  (a)  If anEvent of Default has occurred and is continuing, the Trustee shall exercise therights and powers vested in it by this Indenture and use the same degree ofcare and skill in their exercise as a prudent person would exercise or useunder the circumstances in the conduct of such person’s own affairs.

##  

(b)           Except during the continuance of anEvent of Default:

 

(i)            the Trustee undertakes to performsuch duties and only such duties as are specifically set forth in thisIndenture and no implied covenants or obligations shall be read into thisIndenture against the Trustee; and

 

(ii)           in the absence of bad faith on itspart, the Trustee may conclusively rely, as to the truth of the statements andthe correctness of the opinions expressed therein, upon certificates oropinions furnished to the Trustee and conforming to the require­ments of thisIndenture.  However, the Trustee shallexamine the certificates and opinions to determine whether or not they conformto the requirements of this Indenture.

 

 (c)          TheTrustee may not be relieved from liability for its own negligent action, itsown negligent failure to act or its own willful misconduct, except that:

 

(i)            this paragraph does not limit theeffect of Section 9.01(b);

 

(ii)           the Trustee shall not be liable forany error of judgment made in good faith by a Trust Officer unless it is provedthat the Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)          the Trustee shall not be liable withrespect to any action it takes or omits to take in good faith in accordancewith a direction received by it pursuant to Section 7.05.

 

(iv)          No provision of this Indenture shallrequire the Trustee to expend or risk its own funds or otherwise incurfinancial liability in the performance of any of its duties hereunder or in theexercise of any of its rights or powers.

 

 (d)          Everyprovision of this Indenture that in any way relates to the Trustee is subjectto Sections 9.01(a), 9.01(b) and 9.01(c).

 

 (e)          TheTrustee shall not be liable for interest on any money received by it except asthe Trustee may agree in writing with the Company.

 

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 (f)           Moneyheld in trust by the Trustee need not be segregated from other funds except tothe extent required by law.

 

(g)           Every provision of this Indenturerelating to the conduct or affecting the liability of or affording protectionto the Trustee shall extend to the Registrar, Notes Custodian, Paying Agent andan authenticating agent and be subject to the provisions of this Section 9.01and to the provisions of the TIA.

 

## SECTION 9.02.              Rightsof Trustee.  (a) The Trustee mayrely on any document believed by it to be genu­ine and to have been signed orpresented by the proper per­son.  TheTrustee need not investigate any fact or matter stated in the document.

##  

(b)           Before the Trustee acts or refrainsfrom acting, it may require an Officers’ Certificate or an Opinion of Counsel.  The Trustee shall not be liable for anyaction it takes or omits to take in good faith in reliance on the Officers’Certificate or Opinion of Counsel.

 

(c)           The Trustee may act through agentsand shall not be responsible for the misconduct or negligence of any agentappointed with due care.

 

(d)           The Trustee shall not be liable forany action it takes or omits to take in good faith which it believes to beauthorized or within its rights or powers; *provided, however*, that the Trustee’sconduct does not constitute willful misconduct or negligence.

 

(e)           The Trustee may consult with counsel,and the advice or opinion of counsel with respect to legal matters relating tothis Indenture and the Notes shall be full and complete authorization andprotection from liability in respect to any action taken, omitted or sufferedby it here­under in good faith and in accordance with the advice or opinion ofsuch counsel.

 

(f)            The Trustee shall not be bound tomake any investigation into the facts or matters stated in any resolution,certificate, statement, instrument, opinion, report, notice, request, consent,order, approval, bond, debenture, note or other paper or document or as towhether or not an Event of Default shall have occurred unless requested inwriting to do so by the Holders of not less than a majority in principal amountat Maturity of the Notes at the time outstanding, but the Trustee, in itsdiscretion, may make such further inquiry or investigation into such facts ormatters as it may see fit, and, if the Trustee shall determine to make suchfurther inquiry or investigation, it shall be entitled to examine the books,records and premises of the Company, personally or by agent or attorney.

 

(g)           The permissive rights of the Trusteeto do things enumerated in this Indenture shall not be construed as a dutyunless so specified herein.

 

(h)           The Trustee shall be under noobligation to exercise any of the rights or powers vested in it by thisIndenture at the request, order or direction of any of the Holders, pursuant tothe provisions of this Indenture, unless such Holders shall have offered to theTrustee reasonable security or indemnity against the costs, expenses andliabilities which might be incurred therein or thereby.

 

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## SECTION 9.03.              IndividualRights of Trustee.  The Trustee inits individual or any other capacity may become the owner or pledgee of Notesand may otherwise deal with the Company or its Affiliates with the same rightsit would have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same with likerights.  However, the Trustee mustcomply with Sections 9.10 and 9.11.

##  

## SECTION 9.04.              Trustee’sDisclaimer.  The Trustee shall notbe responsible for and makes no representation as to the validity, priority oradequacy of this Indenture, or the Notes, it shall not be account­able for theCompany’s use of the proceeds from the Notes, and it shall not be responsiblefor any statement of the Company in this Indenture or in any document issued inconnection with the sale of the Notes or in the Notes other than the Trustee’scertificate of authentication.  TheTrustee shall not be responsible for any conduct or omission by the Company or theoccurrence of any Event of Default.

##  

## SECTION 9.05.              Noticeof Defaults.  If a Default occursand is continuing and if it is actually known to the Trustee, the Trustee shallmail to each Holder notice of the Default (“Notice of Default”) within30 days after it is known to a Trust Officer or written notice of it isreceived by the Trustee.  Except in thecase of a Default in payment of principal of or interest on any Note (includingpayments pursuant to the mandatory redemption provisions of such Note, if any),the Trustee may withhold the notice if and so long as a committee of its TrustOfficers in good faith determines that withholding the notice is in theinterests of Holders.  If a Notice ofDefault has been given to the Company by the Holders, a copy of such Notice ofDefault shall be delivered by the Company to the Trustee.  Except as expressly provided herein, theTrustee shall not be bound to ascertain or inquire as to the performance orobservance of any of the terms, conditions, covenants or agreements herein, inany other Transaction Document or in any of the documents executed inconnection with the Notes, or as to the existence of a Default or Event ofDefault hereunder or thereunder, and may assume that no such Default or Eventof Default has occurred unless it has actual knowledge or received writtennotice thereof.

##  

## SECTION 9.06.              Reportsby Trustee to Holders.  As promptlyas practicable after each year beginning with the year 2002 following the dateof this Indenture, and in any event prior to February 1 in each year,the Trustee shall mail (if required by Section 313(a) of the TIA) to eachHolder a brief report dated as of the preceding year that complies withSection 313(a) of the TIA.  TheTrustee shall also comply with Section 313(b) of the TIA.

##  

Followinga Note Registration, a copy of each report at the time of its mailing toHolders shall be filed with the Commission and each stock exchange (if any) onwhich the Notes are listed.  The Companyagrees to notify promptly the Trustee whenever the Notes become listed on anystock exchange and of any delisting thereof.

 

## SECTION 9.07.              Compensationand Indemnity.  The Company shallpay to the Trustee from time to time compensation for its services as may beagreed to between the Trustee and the Company in writing.  The Trustee’s compensation shall not belimited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee uponrequest for all reasonable out-of-pocket expenses incurred or made by it,including costs of collection, in addition to the compensation for itsservices.  Such expenses shall includethe reasonable compensation and expenses, disbursements and advances of theTrustee’s agents,

 

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## counsel,accountants and experts.  The Companyshall indemnify the Trustee against any and all loss, liability or expense(including reasonable and documented attorneys’ fees) incurred by or inconnection with the administration of this trust and the performance of itsduties hereunder.  The Trustee shallnotify the Company of any claim for which it may seek indemnity promptly uponobtaining actual knowledge thereof; *provided, however,*that any failure so tonotify the Company shall not relieve the Company of its indemnity obligationshereunder.  The Company shall defend theclaim and the indemnified party shall provide reasonable cooperation at theCompany’s expense in the defense.  Suchindemnified parties may have separate counsel and the Company shall pay thefees and expenses of such counsel; *provided, however*, that the Company shallnot be required to pay such fees and expenses if it assumes such indemnifiedparties’ defense and, in such indemnified parties’ reasonable judgment, thereis no conflict of interest between the Company and such parties in connectionwith such defense; *provided*, *further*, *however*,that the selection of the Company’s counsel shall be reasonably acceptable tothe Trustee.  The Company need notreimburse any expense or indemnify against any loss, liability or expenseincurred by an indemnified party through such party’s own willful misconduct ornegligence.

##  

Tosecure the Company’s payment obligations in this Section 9.07, theTrustee shall have a lien prior to the Notes on all money or property held orcollected by the Trustee other than money or property held in trust to payprincipal of and interest and Special Interest, if any, on particular Notes.

 

TheCompany’s obligations pursuant to this Section 9.07 shall survivethe satisfaction or discharge of this Indenture, any rejection or terminationof this Indenture under any bankruptcy law or the resignation or removal of theTrustee.  Without prejudice to any otherrights available to the Trustee under applicable law, when the Trustee incursexpenses after the occurrence of a Default specified in Section 7.01(g)or (h) with respect to the Company or the Company, the expenses areintended to constitute expenses of administration under the Bankruptcy Law.

 

Allindemnifications and releases from liability granted hereunder to the Trusteeshall extend to its officers, directors, employees, agents, successors andassigns.

 

## SECTION 9.08.              Replacementof Trustee.  (a) The Trusteemay resign at any time by so notifying the Company in writing in accordancewith the provisions of Section 12.02.  Any resignation of the Trustee shall be effective immediatelyupon receipt by the Company of such notice (unless such notice shall specify alater time as the effective time of such resignation, in which case such latertime shall be the effective time), and the resignation of the Trustee shall notprejudice any rights of the Trustee to receive any compensation, anyreimbursement of any expenses or any indemnity or right to being defended andheld harmless under this Indenture.  TheHolders of a majority in principal amount at Maturity of the Notes may removethe Trustee by so notifying the Trustee and may appoint a successorTrustee.  The Company shall remove theTrustee if:

##  

#### (i)            theTrustee fails to comply with Section 9.10;

####  

#### (ii)           theTrustee is adjudged bankrupt or insolvent;

 

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#### (iii)          areceiver or other public officer takes charge of the Trustee or its property;or

####  

#### (iv)          theTrustee otherwise becomes incapable of acting.

####  

### (b)           If the Trustee resigns, is removed bythe Company or by the Holders of a majority in principal amount at Maturity ofthe Notes and such Holders do not reasonably promptly appoint a successorTrustee, or if a vacancy exists in the office of Trustee for any reason (theTrustee in such event being referred to herein as the retiring Trustee), theCompany shall promptly appoint a successor Trustee.

###  

### (c)           A successor Trustee shall deliver awritten acceptance of its appointment to the retiring Trustee and to theCompany.  Thereupon the resignation orremoval of the retiring Trustee shall become effective, and the succes­sorTrustee shall have all the rights, powers and duties of the Trustee under thisIndenture.  The successor Trustee shallmail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it asTrustee to the successor Trustee, subject to the lien provided for in Section9.07.

###  

### (d)           If a successor Trustee does not takeoffice within 60 days after the retiring Trustee resigns or is removed, theretiring Trustee or the Holders of 10% in principal amount at Maturity of theNotes may petition any court of competent jurisdiction for the appointment of asuccessor Trustee.

###  

### (e)           If the Trustee fails to comply with Section9.10, unless the Trustee’s duty to resign is stayed as provided in TIA §310(b), any Holder who has been a bona fide Holder of a Note for at least sixmonths may petition any court of competent jurisdiction for the removal of theTrustee and the appoint­ment of a successor Trustee.

###  

### (f)            Notwithstanding the replacement ofthe Trustee pursuant to this Section 9.08, the Company’sobligations under Section 9.07 shall continue for the benefit ofthe retiring Trustee.

###  

## SECTION 9.09.              SuccessorTrustee by Merger.  If the Trusteeconsolidates with, merges or converts into, or transfers or sells all orsubstantially all its corporate trust business or assets to, anothercorporation or banking associa­tion, the resulting, surviving or transfereecorporation without any further act shall be the successor Trustee.

##  

Incase at the time such successor or successors by merger, conversion, sale orconsolidation to the Trustee shall succeed to the trusts created by thisIndenture any of the Notes shall have been authenticated but not delivered, anysuch successor to the Trustee may adopt the certificate of authentication ofany predecessor trustee, and deliver such Notes so authenticated; and in caseat that time any of the Notes shall not have been authenticated, any successorto the Trustee may authenticate such Notes either in the name of anypredecessor hereunder or in the name of the successor to the Trustee; and inall such cases such certificates shall have the full force which it is anywherein the Notes or in this Indenture provided that the certificate of the Trusteeshall have.

 

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## SECTION 9.10.              Eligibility;Disqualification.  The Trustee shallat all times satisfy the require­ments of TIA § 310(a).  The Trustee shall have, or in the case of acorporation included in a bank holding company system, the related bank holdingcompany shall have, a combined capital and surplus of at least $100.0 millionas set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA§ 310(b), subject to its right to apply for a stay of its duty to resignunder the penultimate paragraph of TIA § 310(b); *provided, however*, thatthere shall be excluded from the operation of TIA § 310(b)(1) anyindenture or indentures under which other securities or certificates ofinterest or participation in other securities of the Company are out­standingif the requirements for such exclusion set forth in TIA § 310(b)(1)are met.

##  

## SECTION 9.11.              PreferentialCollection of Claims Against the Company.  The Trustee shall comply with TIA § 311(a), excluding anycreditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject toTIA § 311(a) to the extent indicated.

##  

SECTION 9.12.              Appointmentof Co-Trustee.  It is the purpose ofthis Indenture that there shall be no violation of any law of any jurisdiction(including the law of the State of New York) denying or restricting the rightof banking corporations or associations to transact business as trustee in suchjurisdiction.  It is recognized that, incase of litigation under this Indenture, and in particular in the case of theenforcement thereof on default, or in the case the Trustee deems that by reasonof any present or future law of any jurisdiction it may not exercise any of thepowers, rights or remedies herein granted to the Trustee or hold title to theproperties, in trust, as herein granted, or take any action which may bedesirable or necessary in connection therewith, it may be necessary that anadditional individual or institution act as a separate or Co-Trustee.

 

In theevent that the Trustee shall appoint an additional individual or institution asa separate or Co-Trustee, each and every remedy, power, right, claim, demand,cause of action, immunity, estate, title, interest and lien expressed orintended by this Indenture to be exercised by or vested in or conveyed to theTrustee with respect thereto shall be exercisable by and vest in such separateor Co-Trustee, but only to the extent necessary to enable any separate or suchseparate or Co-Trustee to exercise such powers, rights and remedies, and everycovenant and obligation necessary to the exercise thereof by any separate orsuch separate or Co-Trustee shall run to and be enforceable by either of them.

 

Shouldany instrument in writing from the Company be required by the separate orCo-Trustee so appointed by the Trustee for more fully and certainly vesting inand confirming to it such estates, property, rights, powers, trusts, duties,and obligations, any and all such instruments in writing shall, on request, beexecuted, acknowledged and delivered by the Company.  In case the Co-Trustee or a successor to either shall die orbecome incapable of acting, resign, or be removed, all the estates, properties,rights, powers, trusts, duties and obligations of any separate or such separateor Co-Trustee, so far as permitted by law, shall vest in and be exercised bythe Trustee until the appointment by the Trustee of a successor to any separateor such separate or Co-Trustee or a new separate or Co-Trustee.  Any separate or Co-Trustee appointed by theTrustee pursuant to this section  may beremoved by the Trustee , in

 

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which case all powers, rights and remedies vested inthe separate or Co-Trustee shall again vest in the Trustee as if no suchappointment as a separate or Co-Trustee had been made.

 

# ARTICLE 10.

#  

# DISCHARGEOF INDENTURE; DEFEASANCE

#  

## SECTION 10.01.            Dischargeof Liability on Notes; Defeasance. (a)  When (i) all outstanding Notes (other than Notesreplaced or paid pursuant to Section 2.07) have been canceled ordelivered to the Trustee for cancellation or (ii) all outstanding Noteshave become due and payable, whether at maturity or as a result of the mailingof a notice of redemption pursuant to Article 3 hereof, and theCompany irrevocably deposits with the Trustee funds in an amount sufficient, orU.S. Government Obligations, the principal of and interest on which will besufficient, or a combination thereof sufficient, in the written opinion of anationally recognized firm of independent public accountants delivered to theTrustee (which delivery shall only be required if U.S. Government Obligationshave been so deposited), to pay the principal amount of and interest on theoutstanding Notes when due at maturity or upon redemption of all outstandingNotes, including interest thereon to maturity or such Redemption Date (otherthan Notes replaced or paid pursuant to Section 2.07), and SpecialInterest, if any, and if in either case the Company pays all other sums payablehereunder by the Company, then this Indenture shall, subject to Section 10.01(c),cease to be of further effect.  TheTrustee shall acknowledge satisfaction and dis­charge of this Indenture ondemand of the Company accompanied by an Officers’ Certificate and an Opinion ofCounsel and at the cost and expense of the Company.

##  

(b)           Subject to Sections 10.01(c)and 10.02, the Company at any time may terminate (i) all of its obliga­tionsunder the Notes and this Indenture (“legal defeasance option”) or(ii) its obligations under Article 4, Sections 5.02, 5.03,5.04, 5.05, 5.06, 5.07, 5.08, 5.09,5.10,5.11 and 6.01, and the operation of 7.01(c), 7.01(d),7.01(e), 7.01(f) , 7.01(g) and 7.01(h) (“covenantdefeasance option”).  The Companymay exercise its legal defeasance option not­with­standing its prior exerciseof its covenant defeasance option.

 

In theevent that the Company terminates all of its obligations under the Notes andthis Indenture by exercising its legal defeasance option, the obligations underthe Guarantees shall each be terminated simultaneously with the termination ofsuch obligations.

 

If theCompany exercises its legal defeasance option, payment of the Notes may not beaccelerated because of an Event of Default. If the Company exer­cises its covenant defeasance option, payment of theNotes may not be accelerated because of an Event of Default specified in Section 7.01(c),7.01(d), 7.01(e), 7.01(f), 7.01(g) or 7.01(h).

 

Uponsatisfaction of the conditions set forth herein and upon request of theCompany, the Trustee shall acknowledge in writing the discharge of those obliga­tionsthat the Company terminates.

 

(c)           Notwithstanding clauses (a) and(b) above, the Company’s obligations in Sections 2.03, 2.04, 2.05,2.06, 2.07, 2.08, 9.07, 9.08 and in this Article 10shall survive until the

 

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Notes have been paid in full.  Thereafter, the Company’s obligations in Sections9.07, 10.05 and 10.06 shall survive.

 

## SECTION 10.02.            Conditionsto Defeasance.

##  

(a)           the Company may exercise its legaldefeasance option or its covenant defeasance option only if:

 

(i)            the Company irrevocably deposits intrust with the Trustee money in an amount sufficient, or U.S. GovernmentObligations the principal of and interest on which will be sufficient, or acombination thereof sufficient, to pay the principal of and interest on theNotes when due at maturity or redemption, as the case may be, includinginterest thereon to maturity or such Redemption Date and Special Interest, ifany;

 

(ii)           the Company delivers to the Trustee acer­tificate from a nationally recognized firm of indepen­dent accountantsexpressing their opinion that the payments of principal and interest when dueand without reinvestment on the deposited U.S. Government Obliga­tionsplus any deposited money without investment will provide cash at such times andin such amounts as will be sufficient to pay principal and interest when due onall the Notes to maturity or redemption, as the case may be;

 

(iii)          123 days pass after the deposit ismade and during the 123-day period no Default specified in Section 6.01(g) and(h) with respect to the Company occurs which is continuing at the end of theperiod;

 

(iv)          the Company delivers to the Trustee anOpinion of Counsel to the effect that the trust resulting from the deposit doesnot constitute, or is quali­fied as, a regulated investment company under theInvestment the Company Act of 1940;

 

(v)           in the case of the legal defeasanceoption, the Company shall have delivered to the Trustee an Opinion of Counselstating that (1) the Company has received from, or there has beenpublished by, the Internal Revenue Service a ruling, or (2) since the dateof this Indenture there has been a change in the applicable Federal income taxlaw, in either case to the effect that, and based thereon such Opinion ofCounsel shall confirm that, the Holders will not recognize income, gain or lossfor Federal income tax purposes as a result of such defeasance and will besubject to Federal income tax on the same amounts, in the same manner and atthe same times as would have been the case if such defeasance had not occurred;

 

(vi)          in the case of the covenant defeasanceoption, the Company shall have delivered to the Trustee an Opinion of Counselto the effect that the Holders will not recognize income, gain or loss forFederal income tax purposes as a result of such cove­nant defeasance and willbe subject to Federal income tax on the same amounts, in the same manner and atthe same times as would have been the case if such covenant defeasance had notoccurred; and

 

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(vii)         the Company delivers to the Trustee anOffi­cers’ Certificate and an Opinion of Counsel, each stating that allconditions precedent to the defeasance and discharge of the Notes ascontemplated by this Article 10 have been complied with.

 

(b)           Before or after a deposit, theCompany may make arrangements satisfactory to the Trustee for the redemption ofNotes at a future date in accordance with Article 3.

 

## SECTION 10.03.            Applicationof Trust Money.  The Trustee shallhold in trust money or U.S. Government Obligations deposited with itpursuant to this Article 10. It shall apply the deposited money and the money from U.S.Government Obligations through the Paying Agent and in accordance with thisIndenture to the payment of principal of and interest on the Notes.  The Trustee shall be under no liability forinterest on any money and U.S. Government Obligations received by it in respectof the outstanding Notes except as the Trustee may, at its sole option,otherwise agree with the Company.

##  

## SECTION 10.04.            Repaymentto the Company.  The Trustee and thePaying Agent shall promptly turn over to the Company upon request any money orU.S. Government Obligations held by it as provided in this Article 10which, in the written opinion of a nationally recognized firm of independentpublic accountants delivered to the Trustee (which delivery shall only berequired if U.S. Government Obligations have been so deposited), are in excessof the amount thereof which would then be required to be deposited to effect anequivalent discharge or defeasance in accordance with this Article 10.

##  

Ifmoney for the payment of principal of or interest on the Notes has beendeposited with the Trustee or Paying Agent and remains unclaimed for two yearsafter such amount is due and payable, the Trustee or Paying Agent shall pay themoney back to the Company at its written request unless an abandoned propertylaw designates another Person.  Afterany such payment, the Trustee and the Paying Agent shall have no furtherliability for such funds and Holders entitled to the money must look only tothe recipient and not to the Trustee for payment.

 

## SECTION 10.05.            Indemnityfor Government Obligations.  TheCompany shall pay and shall indemnify the Trustee against any tax, fee or othercharge imposed on or assessed against deposited U.S. GovernmentObligations or the princi­pal and interest received on such U.S.Government Obliga­tions.

##  

## SECTION 10.06.            Reinstatement.  If the Trustee or Paying Agent is unable toapply any money or U.S. Government Obligations in accordance with this Article10 by reason of any legal proceeding or by reason of any order or judgmentof any court or Governmental Authority enjoining, restraining or otherwiseprohibiting such application, the Company’s obligations under this Indentureand the Notes shall be revived and reinstated as though no deposit had occurredpursuant to this Article 10 until such time as the Trustee or PayingAgent is permitted to apply all such money or U.S. Government Obligationsin accordance with this Article 10; *provided, however*, that, ifthe Company has made any payment of interest on principal of any Notes becauseof the reinstatement of its Obligations, the Company shall be subrogated to the

 

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## rightsof the Holders of such Notes to receive such payment from the money or U.S.Government Obligations held by the Trustee or Paying Agent.

##  

# ARTICLE 11.

#  

# Guarantees

#  

## SECTION 11.01.            Guarantees.  (a) Each Guarantor hereby jointly andseverally, irrevocably and unconditionally guarantees, as a primary obligor andnot merely as a surety, to each Holder and to the Trustee and its successorsand assigns (i) the full and punctual payment when due, whether at StatedMaturity, by acceleration, by redemption or otherwise, of all obligations ofthe Company under this Indenture (including obligations to the Trustee) and theNotes, whether for payment of principal of, or interest on the Notes and allother monetary obligations of the Company under this Indenture and the Notesand (ii) the full and punctual performance within applicable grace periods ofall other obligations of the Company whether for fees, expenses,indemnification or otherwise under this Indenture and the Notes (all theforegoing being hereinafter collectively called the “Guaranteed Obligations”). Each Guarantor further agrees that theGuaranteed Obligations may be extended or renewed, in whole or in part, withoutnotice or further assent from each such Guarantor, and that each such Guarantorshall remain bound under this Article 11 notwithstanding any extensionor renewal of any Guaranteed Obligation.

##  

### (b)           Each Guarantor waives presentationto, demand of, payment from and protest to the Company of any of the GuaranteedObligations and also waives notice of protest for nonpayment.  Each Guarantor waives notice of any defaultunder the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i)the failure of any Holder or the Trustee to assert any claim or demand or toenforce any right or remedy against the Company or any other Person under thisIndenture, the Notes or any other agreement or otherwise; (ii) any extension orrenewal of any thereof; (iii) any rescission, waiver, amendment or modificationof any of the terms or provisions of this Indenture, the Notes or any otheragreement; (iv) the release of any security held by any Holder or the Trusteefor the Guaranteed Obligations or any of them; (v) the failure of any Holder orTrustee to exercise any right or remedy against any other guarantor of theGuaranteed Obligations; or (vi) any change in the ownership of such Guarantor,except as provided in Section 11.02(b).

###  

### (c)           Each Guarantor hereby waives anyright to which it may be entitled to have its obligations hereunder dividedamong the Guarantors, such that such Guarantor’s obligations would be less thanthe full amount claimed.  Each Guarantorhereby waives any right to which it may be entitled to have the assets of theCompany first be used and depleted as payment of the Company’s or such Guarantor’sobligations hereunder prior to any amounts being claimed from or paid by suchGuarantor hereunder.  Each Guarantorhereby waives any right to which it may be entitled to require that the Companybe sued prior to an action being initiated against such Guarantor.

###  

### (d)           Each Guarantor further agrees thatits Guarantee herein constitutes a guarantee of payment, performance andcompliance when due (and not a guarantee of collection)

 

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### andwaives any right to require that any resort be had by any Holder or the Trusteeto any security held for payment of the Guaranteed Obligations.

###  

### (e)           The Guarantee of each Guarantor andall amounts payable thereunder is, to the extent and in the manner set forth inArticle 12, subordinated and subject in right of payment to the priorPayment in Full of all Senior Indebtedness of the relevant Guarantor and ismade subject to such provisions of this Indenture.

###  

### (f)            Except as expressly set forth in Sections10.01 and 11.02, the obligations of each Guarantor hereunder shallnot be subject to any reduction, limitation, impairment or termination for anyreason, including any claim of waiver, release, surrender, alteration orcompromise, and shall not be subject to any defense of setoff, counterclaim,recoupment or termination whatsoever or by reason of the invalidity, illegalityor unenforceability of the Guaranteed Obligations or otherwise.  Without limiting the generality of theforegoing, the obligations of each Guarantor herein shall not be discharged orimpaired or otherwise affected by the failure of any Holder or the Trustee toassert any claim or demand or to enforce any remedy under this Indenture, theNotes or any other agreement, by any waiver or modification of any thereof, byany default, failure or delay, wilful or otherwise, in the performance of theobligations, or by any other act or thing or omission or delay to do any otheract or thing which may or might in any manner or to any extent vary the risk ofany Guarantor or would otherwise operate as a discharge of any Guarantor as amatter of law or equity.

###  

### (g)           Except as expressly set forth in Sections10.01 and 11.02, each Guarantor agrees that its Guarantee shallremain in full force and effect until payment in full of all the GuaranteedObligations.  Each Guarantor furtheragrees that its Guarantee herein shall continue to be effective or bereinstated, as the case may be, if at any time payment, or any part thereof, ofprincipal of or interest on any Guaranteed Obligation is rescinded or mustotherwise be restored by any Holder or the Trustee upon the bankruptcy orreorganization of the Company or otherwise.

###  

### (h)           In furtherance of the foregoing andnot in limitation of any other right which any Holder or the Trustee has at lawor in equity against any Guarantor by virtue hereof, upon the failure of theCompany to pay the principal of or interest on any Guaranteed Obligation whenand as the same shall become due, whether at maturity, by acceleration, byredemption or otherwise, or to perform or comply with any other GuaranteedObligation, each Guarantor hereby promises to and shall, upon receipt ofwritten demand by the Trustee, forthwith pay, or cause to be paid, in cash, tothe Holders or the Trustee an amount equal to the sum of (i) the unpaidprincipal amount of such Guaranteed Obligations, (ii) accrued and unpaidinterest on such Guaranteed Obligations (but only to the extent not prohibitedby law) and (iii) all other monetary obligations of the Company to the Holdersand the Trustee.

###  

### (i)            Each Guarantor agrees that it shallnot be entitled to any right of subrogation in relation to the Holders inrespect of any Guaranteed Obligations guaranteed hereby until payment in fullof all Guaranteed Obligations and all obligations to which the GuaranteedObligations are subordinated as provided in Article 12.  Each Guarantor further agrees that, asbetween it, on the one hand, and the Holders and the Trustee, on the otherhand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may beaccelerated as provided

 

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### in Article7 for the purposes of any Guarantee herein, notwithstanding any stay,injunction or other prohibition preventing such acceleration in respect of theGuaranteed Obligations guaranteed hereby, and (ii) in the event of anydeclaration of acceleration of such Guaranteed Obligations as provided in Article7, such Guaranteed Obligations (whether or not due and payable) shallforthwith become due and payable by such Guarantor for the purposes of this Section11.01.

###  

### (j)            Each Guarantor also agrees to payany and all costs and expenses (including reasonable attorneys’ fees andexpenses) incurred by the Trustee or any Holder in enforcing any rights under thisSection 11.01.

###  

### (k)           Upon request of the Trustee, eachGuarantor shall execute and deliver such further instruments and do suchfurther acts as may be reasonably necessary or proper to carry out moreeffectively the purpose of this Indenture.

###  

## SECTION 11.02.            Limitationon Liability.  (a) Any term orprovision of this Indenture to the contrary notwithstanding, the maximumaggregate amount of the Guaranteed Obligations guaranteed hereunder by anyGuarantor shall not exceed the maximum amount that can be hereby guaranteedwithout rendering the Guarantee, as it relates to such Guarantor, voidableunder applicable law relating to fraudulent conveyance or fraudulent transferor similar laws affecting the rights of creditors generally.

##  

### (b)           Any Guarantee of any SubsidiaryGuarantor shall terminate and be of no further force or effect and suchSubsidiary Guarantor shall be deemed to be released from all obligations underthis Article 11 upon (i) the sale or other disposition (includingthrough merger or consolidation) of the Capital Stock, or all or substantiallyall the assets, of the applicable Guarantor if such sale or other dispositionis made in compliance with Section 5.08; (ii) the designation by theCompany of any Restricted Subsidiary as an Unrestricted Subsidiary inaccordance with the provisions of this Indenture; or (iii) the applicableGuarantor ceasing to be a Subsidiary of the Company as a result of anyforeclosure of any pledge or security interest securing Senior Indebtedness orother exercise of remedies in respect thereof if such Guarantor is releasedfrom its guarantees of, and all pledges and security interests granted inconnection with, such Senior Indebtedness.

###  

In the event that theconditions specified in this Section 11.02(b) are satisfied and theCompany delivers to the Trustee an Opinion of Counsel and an Officers’Certificate to that effect, the Trustee shall execute and deliver anappropriate instrument evidencing such release.

 

## SECTION 11.03.             Successorsand Assigns.  This Article 11shall be binding upon each Guarantor and its successors and assigns and shallinure to the benefit of the successors and assigns of the Trustee and theHolders and, in the event of any transfer or assignment of rights by any Holderor the Trustee, the rights and privileges conferred upon that party in thisIndenture and in the Notes shall automatically extend to and be vested in suchtransferee or assignee, all subject to the terms and conditions of thisIndenture.

##  

## SECTION 11.04.             Executionof Supplemental Indenture for Future Guarantors.  Each Subsidiary which is required to become a Guarantor pursuantto Section 4.13 shall promptly

 

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## executeand deliver to the Trustee a supplemental indenture in the form of Exhibit Chereto pursuant to which such Subsidiary shall become a Guarantor under this Article11 and shall guarantee the Guaranteed Obligations.  Concurrently with the execution and deliveryof such supplemental indenture to this Indenture, the Company shall deliver tothe Trustee an Opinion of Counsel and an Officers’ Certificate to the effectthat such supplemental indenture has been duly authorized, executed anddelivered by such Subsidiary and that, subject to the application ofbankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and othersimilar laws relating to creditors’ rights generally and to the principles ofequity, whether considered in a proceeding at law or in equity, the Guaranteeof such Guarantor is a legal, valid and binding obligation of such Guarantor,enforceable against such Guarantor in accordance with its terms and or to suchother matters as the Trustee may reasonably request.

##  

## SECTION 11.05.            Non-Impairment.  The failure to endorse a Guarantee on anyNote shall not affect or impair the validity thereof.

##  

## SECTION 11.06.            Endorsementof Guarantees.  To evidence itsGuarantee set forth in this Article 11, each Guarantor herebyagrees that a notation of such Guarantee substantially in the form of ExhibitD to this Indenture shall be endorsed by an officer of such Guarantor oneach Definitive Note and each Global Exchange Note authenticated and deliveredby the Company; *provided* that theGuarantee set forth in this Article 11 shall remain in full forceand effect notwithstanding any failure of a Guarantor to endorse on each Note anotation of Guarantee.

##  

# ARTICLE 12.SUBORDINATION OF THE GUARANTEES

#  

## SECTION 12.01.            AgreementTo Subordinate.  Each Guarantoragrees, and each Holder by accepting a Note agrees, that the obligations of aGuarantor hereunder are subordinated in right of payment, to the extent and inthe manner provided in this Article 12, to the prior Payment in Full ofall Senior Indebtedness of such Guarantor and that the subordination is for thebenefit of and enforceable by the holders of such Senior Indebtedness of suchGuarantor.  The obligations hereunderwith respect to a Guarantor shall in all respects rank *pari passu* with all other SeniorSubordinated Indebtedness of such Guarantor and shall rank senior to allexisting and future Subordinated Obligations of such Guarantor; and onlyIndebtedness of such Guarantor that is Senior Indebtedness of such Guarantorshall rank senior to the obligations of such Guarantor in accordance with theprovisions set forth herein.

##  

## SECTION 12.02.            Liquidation,Dissolution, Bankruptcy.  Upon any payment or distribution of the assets of aGuarantor to creditors upon a liquidation or dissolution of such Guarantor orin a bankruptcy, reorganization, insolvency, receivership or similar proceedingrelating to such Guarantor or its properties:

##  

### (a)           holders of Senior Indebtedness ofsuch Guarantor shall be entitled to receive Payment in Full of such SeniorIndebtedness (including interest accruing after, or that would accrue but for,the commencement of such proceeding at the rate specified in the applicableSenior Indebtedness, whether or not such claim for such interest would beallowed)

 

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### beforethe Holders shall be entitled to receive any payment pursuant to any GuaranteedObligations from such Subsidiary Guarantor; and

###  

### (b)           until the Senior Indebtedness of suchGuarantor is Paid in Full, any payment or distribution to which Holders wouldbe entitled but for this Article 12 shall be made to holders of suchSenior Indebtedness as their respective interests may appear, except thatHolders may receive and retain payments made from the defeasance trustdescribed under Section 10.01 so long as, on the date or dates therespective amounts were paid into the defeasance trust, such payments were madewith respect to the Notes without violating the subordination provisionsdescribed herein.

###  

### (c)           Nothing in this Section 12.02shall prohibit (i) the accretion of the Accreted Value of the Notes or (ii)payment or distribution of stock or securities of the Company provided for by aplan of reorganization or readjustment authorized by an order or decree of acourt of competent jurisdiction in a reorganization proceeding under anyapplicable bankruptcy law or of any other corporation provided for by such planof reorganization or readjustment which stock or securities are subordinated inright of payment to all then outstanding Senior Indebtedness to substantiallythe same extent as, or to a greater extent than, the Notes are so subordinatedas provided in this Article 8.

###  

## SECTION 12.03.            Defaulton Designated Senior Indebtedness of a Guarantor.  A Guarantor may not make any payment pursuant to any of theGuaranteed Obligations or repurchase, redeem or otherwise acquire for value anyNotes if:

##  

### (a)           a default in the payment of theprincipal of, premium, if any, or interest on any Designated SeniorIndebtedness of such Guarantor occurs and is continuing or any other amountowing in respect of any Designated Senior Indebtedness of such Guarantor is notpaid when due, whether at the due date of any such payment or by declaration ofacceleration, prepayment, call for redemption or otherwise; or

###  

### (b)           any other default (beyond anyapplicable period of grace) on Designated Senior Indebtedness of such Guarantoroccurs and the maturity of such Designated Senior Indebtedness is acceleratedin accordance with its terms;

###  

until, in either case,the earlier to occur

 

#### (i)            thedefault has been cured or waived and any such acceleration has been rescinded;or

####  

#### (ii)           suchDesignated Senior Indebtedness has been Paid in Full;

####  

*provided*,*however*, that such Guarantor maypay its Guarantee without regard to the foregoing if such Guarantor and theTrustee receive written notice approving such payment from the Representativeof the holders of the Designated Senior Indebtedness of such Guarantor withrespect to which either of the events in clause (a) or (b) above has occurredand is continuing.

 

### (c)           During the continuance of any default(other than a default described in clause (a) or (b) of the precedingsentence) with respect to any Designated Senior Indebtedness

 

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### of aGuarantor either (x) which is a default under Section 7.01(f) or 7.01(p)(i)(y)of the Credit Agreement or (y) pursuant to which the maturity thereof may beaccelerated immediately without further notice (except such notice as may berequired to effect such acceleration) or the expiration of any applicable graceperiods, such Guarantor may not pay its Guarantee for a period (a “GuaranteePayment Blockage Period”) commencing upon the receipt by the Trustee (witha copy to such Guarantor and the Company) of written notice (a “GuaranteeBlockage Notice”) of such default from the Representative of the holders ofthe Designated Senior Indebtedness of such Guarantor specifying an election toeffect a Guarantee Payment Blockage Period and ending 179 days thereafter(or earlier if such Guarantee Payment Blockage Period is terminated (i) bywritten notice to the Trustee (with a copy to such Guarantor and the Company)from the Person or Persons who gave such Guarantee Blockage Notice,(ii) because such Designated Senior Indebtedness has been Paid in Full or(iii) because the default giving rise to such Guarantee Blockage Notice isno longer continuing).  Notwithstandingthe provisions described in the immediately preceding sentence (but subject tothe provisions contained in the first sentence of this Section 12.03),unless the holders of such Designated Senior Indebtedness or the Representativeof such holders shall have accelerated the maturity of such Designated SeniorIndebtedness, such Guarantor may resume to paying its Guarantee after suchGuarantee Payment Blockage Period, including any missed payments.  Not more than one Guarantee Blockage Noticemay be given with respect to a Guarantor in any consecutive 360-day period,irrespective of the number of defaults with respect to Designated SeniorIndebtedness of such Guarantor during such period; *provided*, *however*,that if any Blockage Notice within such 360-day period is given by or on behalfof any holders of Designated Senior Indebtedness other than the holders ofSenior Indebtedness under the Credit Agreement, the Representative under theCredit Agreement may give another Blockage Notice within such period; and, *provided*, *further*,that in no event may the total number of days during which any GuaranteePayment Blockage Period or Periods is in effect exceed 179 days in theaggregate during any consecutive 360 day period.  For purposes of this Section 12.03, no default orevent of default that existed or was continuing on the date of the commencementof any Guarantee Payment Blockage Period with respect to the Designated SeniorIndebtedness initiating such Guarantee Payment Blockage Period shall be, or bemade, the basis of the commencement of a subsequent Guarantee Payment BlockagePeriod by the Representative of such Designated Senior Indebtedness, whether ornot within a period of 360 consecutive days. Notwithstanding the foregoing, such Guarantor may pay its Guaranteewithout regard to the foregoing if such Guarantor and the Trustee receivewritten notice approving such payment from the Representative of the holders ofthe Designated Senior Indebtedness of such Guarantor with respect to whicheither of the events in this clause (c) has occurred and is continuing.

###  

## SECTION 12.04.            Demandfor Payment.  If payment of theNotes is accelerated because of an Event of Default and a demand for payment ismade on a Guarantor pursuant to Article 11, the Trustee shall promptlynotify the holders of the Designated Senior Indebtedness of such Guarantor (orthe Representative of such holders) of such demand.  If any Designated Senior Indebtedness of such Guarantor isoutstanding, such Guarantor may not pay its Guarantee until five Business Daysafter such holders or the Representative of the holders of the DesignatedSenior Indebtedness of such Guarantor receive notice of such demand (which notice,for the avoidance of doubt, shall not be effective prior to the earlier tooccur of (x) the expiration of such five-day period and (y) the acceleration ofsuch Designated Senior Indebtedness) and, thereafter, may pay its Guaranteeonly if this Article 12 otherwise permits payment at that time.

 

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## SECTION 12.05.            WhenDistribution Must Be Paid Over.  Ifa payment or distribution is made to Holders that because of this Article 12should not have been made to them, the Holders who receive the payment ordistribution shall hold such payment or distribution in trust for holders ofthe Senior Indebtedness of the relevant Guarantor and pay it over to them astheir respective interests may appear.

##  

## SECTION 12.06.            Subrogation.  After all Senior Indebtedness of a Guarantoris Paid in Full and until the Notes are paid in full in cash, Holders shall besubrogated to the rights of holders of Senior Indebtedness of such Guarantor toreceive distributions applicable to Designated Senior Indebtedness of suchGuarantor.  A distribution made underthis Article 12 to holders of Senior Indebtedness of such Guarantorwhich otherwise would have been made to Holders is not, as between suchGuarantor and Holders, a payment by such Guarantor on Senior Indebtedness ofsuch Guarantor.

##  

## SECTION 12.07.            RelativeRights.  This Article 12defines the relative rights of Holders and holders of Senior Indebtedness of aGuarantor.  Nothing in this Indentureshall:

##  

### (a)           impair, as between a Guarantor andHolders, the obligation of a Guarantor which is absolute and unconditional, tomake payments with respect to the Guaranteed Obligations to the extent setforth in Article 11; or

###  

### (b)           prevent the Trustee or any Holderfrom exercising its available remedies upon a default by a Guarantor under itsobligations with respect to the Guaranteed Obligations, subject to the rightsof holders of Senior Indebtedness of such Guarantor to receive distributionsotherwise payable to Holders.

###  

## SECTION 12.08.            SubordinationMay Not Be Impaired by a Guarantor. No right of any holder of Senior Indebtedness of a Guarantor to enforcethe subordination of the obligations of such Guarantor hereunder shall beimpaired by any act or failure to act by such Guarantor or by its failure tocomply with this Indenture.

##  

## SECTION 12.09.            Rightsof Trustee and Paying Agent. Notwithstanding Section 12.03, the Trustee or the Paying Agentmay continue to make payments on the Notes and shall not be charged withknowledge of the existence of facts that would prohibit the making of any suchpayments unless, not less than two Business Days prior to the date of suchpayment, a Trust Officer of the Trustee receives written notice from aResponsible Officer that payments may not be made under this Article 12.  A Guarantor, the Registrar or co-registrar,the Paying Agent, a Representative or a holder of Senior Indebtedness of aGuarantor may give the written notice; provided, however, that ifan issue of Senior Indebtedness of a Guarantor has a Representative, only theRepresentative may give the written notice.

##  

The Trustee in itsindividual or any other capacity may hold Senior Indebtedness of a Guarantorwith the same rights it would have if it were not Trustee.  The Registrar and co-registrar and thePaying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article12 with respect to any Senior Indebtedness of a Guarantor which may at anytime be held by it, to the same extent as any other holder of SeniorIndebtedness of such Guarantor; and nothing in Article 9 shall deprivethe Trustee of any of its

 

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rights as suchholder.  Nothing in this Article 12shall apply to claims of, or payments to, the Trustee under or pursuant to Section9.07 or any other Section of this Indenture.

 

## SECTION 12.10.            Distributionor Notice to Representative. Whenever a distribution is to be made or a notice given to holders ofSenior Indebtedness of a Guarantor, the distribution may be made and the noticegiven to their Representative (if any).

##  

## SECTION 12.11.            Article12 Not To Prevent Events of Default or Limit Right To Demand Payment.  The failure of a Guarantor to make a paymenton any of its obligations by reason of any provision in this Article 12shall not be construed as preventing the occurrence of a default by suchGuarantor under such obligations. Nothing in this Article 12 shall have any effect on the right ofthe Holders or the Trustee to make a demand for payment on a Guarantor pursuantto Article 11.

##  

## SECTION 12.12.            TrusteeEntitled To Rely.  Upon any paymentor distribution pursuant to this Article 12, the Trustee and the Holdersshall be entitled to rely (a) upon any order or decree of a court of competentjurisdiction in which any proceedings of the nature referred to in Section12.02 are pending, (b) upon a certificate of the liquidating trustee oragent or other Person making such payment or distribution to the Trustee or tothe Holders or (c) upon the Representatives for the holders of SeniorIndebtedness of a Guarantor for the purpose of ascertaining the Personsentitled to participate in such payment or distribution, the holders of theSenior Indebtedness of a Guarantor and other Indebtedness of a Guarantor, theamount thereof or payable thereon, the amount or amounts paid or distributedthereon and all other facts pertinent thereto or to this Article 12.  In the event that the Trustee determines, ingood faith, that evidence is required with respect to the right of any Personas a holder of Senior Indebtedness of a Guarantor to participate in any paymentor distribution pursuant to this Article 12, the Trustee may requestsuch Person to furnish evidence to the reasonable satisfaction of the Trusteeas to the amount of Senior Indebtedness of such Guarantor held by such Person,the extent to which such Person is entitled to participate in such payment ordistribution and other facts pertinent to the rights of such Person under this Article12, and, if such evidence is not furnished, the Trustee may defer anypayment to such Person pending judicial determination as to the right of suchPerson to receive such payment.  Theprovisions of Sections 9.01 and 9.02 shall be applicable to allactions or omissions of actions by the Trustee pursuant to this Article 12.

##  

## SECTION 12.13.            TrusteeTo Effectuate Subordination.  EachHolder by accepting a Note authorizes and directs the Trustee on his or herbehalf to take such action as may be necessary or appropriate to acknowledge oreffectuate the subordination between the Holders and the holders of SeniorIndebtedness of each of the Guarantors as provided in this Article 12and appoints the Trustee as attorney-in-fact for any and all such purposes.

##  

## SECTION 12.14.            TrusteeNot Fiduciary for Holders of Senior Indebtedness of a Guarantor.  Neither the Trustee nor the Holder shall bedeemed to owe any fiduciary duty to the holders of Senior Indebtedness of aGuarantor or shall be liable to any such holders if it shall mistakenly payover or distribute to Holders or the relevant Guarantor or any other Person,money or assets to which any holders of Senior Indebtedness of such Guarantorshall be entitled by virtue of this Article 12 or otherwise.

 

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## SECTION 12.15.            Relianceby Holders of Senior Indebtedness of a Guarantor on Subordination Provisions.  Each Holder by accepting a Note acknowledgesand agrees that the foregoing subordination provisions are, and are intended tobe, an inducement and a consideration to each holder of any Senior Indebtednessof a Guarantor, whether such Senior Indebtedness was created or acquired beforeor after the issuance of the Notes, to acquire and continue to hold, or tocontinue to hold, such Senior Indebtedness and such holder of SeniorIndebtedness shall be deemed conclusively to have relied on such subordinationprovisions in acquiring and continuing to hold, or in continuing to hold, suchSenior Indebtedness.

##  

## SECTION 12.16.            Defeasance. Notwithstanding anything contained inthis Article 12, payments from money or the proceeds of U.S. GovernmentObligations held in trust under Article 10 by the Trustee for thepayment of principal of and interest on the Notes shall not be subordinated to theprior payment of any Senior Indebtedness of any Guarantor or subject to therestrictions set forth in this Article 12, and none of the Holdersshall be obligated to pay over any such amount to a Guarantor or any holder ofSenior Indebtedness of the Guarantor or any other creditor of a Guarantor.

##  

# ARTICLE 13.AMENDMENTS

#  

## SECTION 13.01.            WithoutConsent of Holders.

##  

(a)           The Company, the Guarantors and theTrustee may amend this Indenture or the Notes without notice to or consent ofany Holder:

 

(i)            to cure any ambiguity, omission,defect or inconsistency;

 

(ii)           to comply with Article 6;

 

(iii)          to provide for uncertificated Notes inaddition to or in place of certificated Notes; *provided, however*, that theuncertificated Notes are issued in registered form for purposes ofSection 163(f) of the Code or in a manner such that the uncertificatedNotes are described in Section 163(f)(2)(B) of the Code;

 

(iv)          to add Guarantees of the Notes;

 

(v)           to secure the Notes;

 

(vi)          to add to the covenants of the Companyfor the benefit of the Holders or to surrender any right or power hereinconferred upon the Company;

 

(vii)         to make any change in Article 8or Article 12 that would limit or terminate the benefits availableto any holder of Senior Indebtedness of the Company or a Guarantor (orRepresentative thereof) under Article 8 or Article 12,respectively;

 

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(viii)        subject to the final sentence of Section13.02(a),to comply with any requirement of the Commission in connectionwith qualifying, or maintaining the qualification of, this Indenture under theTIA;

 

(ix)           to make any change that does notadversely affect the rights of any Holder;

 

(x)            to provide for the issuance of theExchange Notes, which shall have terms substantially identical in all materialrespects to the Initial Notes (except that the transfer restrictions containedin the Initial Notes shall be modified or eliminated, as appropriate), andwhich shall be treated, together with any Initial Notes or the Exchange Notesthat remain outstanding, as a single issue of securities; or

 

(xi)           to change the name or title of theNotes, and any conforming changes related thereto.

 

(b)           An amendment under this Section 13.01may not make any change that adversely affects the rights under Article 8or Article 12 of any holder of Senior Indebtedness of the Companyof a Guarantor then outstanding unless the holders of such Senior Indebtedness(or any group of Representatives thereof authorized to give a consent) consentto such change.

 

(c)           After an amendment under this Section 13.01becomes effective, the Company shall mail to Holders a notice brieflydescribing such amendment.  The failureto give such notice to all Holders, or any defect therein, shall not impair oraffect the validity of an amendment under this Section 13.01.

 

## SECTION 13.02.            WithConsent of Holders.  (a) TheCompany, the Guarantors and the Trustee may amend this Indenture or the Noteswithout notice to any Holder but with the written consent of the Required Holders(including consents obtained in connection with a tender offer or exchange forthe Notes).  However, without theconsent of each Holder affected, an amendment may not:

##  

(i)            reduce the principal amount orpercentage of Notes whose Holders must consent to an amendment, supplement,waiver or modification;

 

(ii)           reduce the rate of or extend the timefor payment of interest or any Special Interest on any Note;

 

(iii)          reduce the principal amount of orextend the Stated Maturity of any Note;

 

(iv)          reduce the premium payable upon theredemption of any Note or change the time at which any Note may be redeemed inaccordance with Article 3;

 

(v)           make any Note payable in money otherthan that stated in the Note;

 

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(vi)          impair the right of any holder toreceive payment of principal of and interest or any Special Interest on suchHolder’s Notes on or after the due dates therefor or to institute suit for theenforcement of any payment on or with respect to such Holder’s Notes; or

 

(vii)         make any change in Section 7.04or 7.07 or the second sentence of this Section 13.02.

 

Itshall not be necessary for the consent of the Holders under this Section 13.02to approve the particular form of any proposed amendment, but it shall besufficient if such consent approves the substance thereof.

 

Anamendment under this Section 13.02 may not make any change thatadversely affects the rights under Article 8 or Article 12of any holder of Senior Indebtedness then outstanding unless the holders ofsuch Senior Indebtedness (or any group or Representative thereof authorized togive a consent) consent to such change.

 

(b)           After an amendment under this Section 13.02becomes effective, the Company shall mail to Holders a notice briefly describingsuch amendment.  The failure to givesuch notice to all Holders, or any defect therein, shall not impair or affectthe validity of an amendment under this Section 13.02.

 

## SECTION 13.03.            Compliancewith Trust Indenture Act.  Everyamendment to this Indenture or the Notes shall comply with the TIA as then ineffect.

##  

## SECTION 13.04.            Revocationand Effect of Consents and Waivers. (a) A consent to an amendment or a waiver by a Holder of a Note shallbind the Holder and every subsequent Holder of that Note or portion of the Notethat evidences the same debt as the consenting Holder’s Note, even if notationof the consent or waiver is not made on the Note.  However, any such Holder or subse­quent Holder may revoke theconsent or waiver as to such Holder’s Note or portion of the Note if theTrustee receives the notice of revocation before the date on which the Trusteereceives an Officers’ Certificate from the Company certifying that therequisite number of consents have been received.  After an amendment or waiver becomes effective, it shall bindevery Holder.  An amendment or waiverbecomes effective upon the (i) receipt by the Company or the Trustee ofthe requisite number of consents, (ii) satisfaction of conditions toeffectiveness as set forth in this Indenture and any indenture supplementalhereto containing such amendment or waiver and (iii) execution of suchamendment or waiver (or supplemental indenture) by the Company and the Trustee.

##  

(b)           the Company may, but shall not beobligated to, fix a record date for the purpose of determining the Holdersentitled to give their consent or take any other action described above orrequired or permitted to be taken pursuant to this Indenture.  If a record date is fixed, thennotwithstanding the immediately preceding paragraph, those Persons who wereHolders at such record date (or their duly designated proxies), and only thosePersons, shall be entitled to give such consent or to revoke any consentpreviously given or to take any such action, whether or not such Personscontinue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days aftersuch record date.

 

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## SECTION 13.05.            Notationon or Exchange of Notes.  If anamendment changes the terms of a Note, the Trustee may require the Holder ofthe Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding thechanged terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Companyin exchange for the Note shall issue and the Trustee shall authenticate a newNote that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shallnot affect the validity of such amendment.

##  

## SECTION 13.06.            Trusteeto Sign Amendments.  The Trusteeshall sign any amendment authorized pursuant to this Article 13 if theamendment does not adversely affect the rights, duties, liabilities orimmunities of the Trustee.  If it does,the Trustee may but need not sign it. In sign­ing such amendment the Trustee shall be entitled to receiveindemnity reasonably satisfactory to it and to receive, and (subject to Section 9.01)shall be fully protected in relying upon, an Officers’ Certificate and anOpinion of Counsel stating that such amendment is authorized or permitted bythis Indenture and that such amendment is the legal, valid and bindingobligation of the Company and the Guarantors enforceable against them inaccordance with its terms, subject to customary exceptions, and complies withthe provisions hereof (including Section 13.03).

##  

# ARTICLE 14.MISCELLANEOUS

#  

## SECTION 14.01.            TrustIndenture Act Controls.  If and tothe extent that any provision of this Indenture limits, qualifies or con­flictswith the duties imposed by, or with another provision (an “incorporatedprovision”) included in this Indenture by operation of TIA §§ 310 to 318,inclusive, such imposed duties or incorporated provi­sion shall control.

##  

## SECTION 14.02.            Notices.  Any notice or communication shall be inwriting and delivered in person, mailed by first-class mail addressed asfollows or transmitted via telecopy (or other facsimile device) with receiptconfirmed as set forth below:

##  

if to the Company:

 

Broadwing Inc.

201 West Fourth Street

Cincinnati, Ohio

Attention:  Mark Peterson

(facsimile no.:  (513) 397-4177)

 

with copies to:

 

Cravath, Swaine &Moore825 Eighth AvenueNew York, NY  10019

Attention:  William V. Fogg, Esq.

(facsimile no.:  (212) 474-3700)

 

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if to the Trustee:

 

The Bank of New York

101 Barclay Street – 8W

New York, New York  10286

Attention:  Corporate Trust Administration

(facsimile no.:  (212) 815-5704/5707)

 

TheCompany or the Trustee by notice to the other may designate additional ordifferent addresses for subsequent notices or communications.

 

Anynotice or communication mailed to a Holder shall be mailed first class mail, tothe Holder at the Holder’s address as it appears on the registration books ofthe Registrar and shall be sufficiently given if so mailed within the timeprescribed.

 

Failureto mail a notice or communication to a Holder or any defect in it shall notaffect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the manner providedabove, it is duly given, whether or not the addressee receives it.

 

## SECTION 14.03.            Communicationby Holders with Other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders withrespect to their rights under this Indenture or the Notes.  The Company, the Trustee, the Registrar andanyone else shall have the protection of TIA § 312(c).

##  

## SECTION 14.04.            Certificateand Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take orrefrain from taking any action under this Indenture, the Company shall furnishto the Trustee:

##  

(a)           an Officers’ Certificate in formreasonably satisfactory to the Trustee stating that, in the opinion of thesigners, all conditions precedent, if any, provided for in this Indenturerelating to the proposed action have been complied with; and

 

(b)           an Opinion of Counsel in formreasonably satisfactory to the Trustee stating that, in the opinion of suchcounsel, all such conditions precedent have been complied with.

 

## SECTION 14.05.            StatementsRequired in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenantor condition provided for in this Indenture (other than pursuant to Section 4.06)shall include:

##  

### (a)           a statement that the individualmaking such certificate or opinion has read such covenant or condi­tion;

###  

### (b)           a brief statement as to the natureand scope of the examination or investigation upon which the statements oropinions contained in such certificate or opinion are based;

 

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### (c)           a statement that, in the opinion ofsuch individual, he has made such examination or investigation as is necessaryto enable him to express an informed opin­ion as to whether or not suchcovenant or condition has been complied with; and

###  

### (d)           a statement as to whether or not, inthe opin­ion of such individual, such covenant or condition has been compliedwith.

###  

## SECTION 14.06.             WhenNotes Disregarded.  In determiningwhether the Holders of the required principal amount at Maturity of Notes haveconcurred in any direction, waiver or consent hereunder, under the Notes, thePurchase Agreement or the Exchange and Registration Rights Agreement, Notesowned by (x) the Company, any Subsidiary or by any Person directly orindirectly controlling or controlled by or under direct or indirect commoncontrol with the Company or any Subsidiary or (y) except in the case of anydetermination pursuant to Section13.02(a)(i) through (vii),the holder of any Subordinated Indebtedness or by any Person directly orindirectly controlling or controlled by or under direct or indirect commoncontrol with such holder of Subordinated Indebtedness shall in each case bedisregarded and deemed not to be outstanding, except that, for the purpose ofdetermining whether the Trustee shall be protected in relying on any suchdirection, waiver or consent, only Notes which the officer of the Trusteeactually knows are so owned shall be so disregarded.  Subject to the foregoing, only Notes outstanding at the timeshall be considered in any such determination.

##  

## SECTION 14.07.            Rulesby Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting ofHolders.  The Registrar and the PayingAgent may make reasonable rules for their functions.

##  

## SECTION 14.08.            LegalHolidays.  If a payment date is aLegal Holiday, payment shall be made on the next succeeding day that is not aLegal Holiday, and no interest shall accrue for the intervening period.  If a Regular Record Date is a Legal Holiday,the record date shall not be affected.

##  

## SECTION 14.09.            **GOVERNINGLAW.  THIS INDENTURE AND THENOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATEOF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OFCONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHERJURISDICTION WOULD BE REQUIRED THEREBY.**

##  

## SECTION 14.10.            NoRecourse Against Others.  Adirector, officer, employee, stockholder or member, as such, of the Company orany of the Subsidiaries shall not have any liability for any obligations of theCompany or any of the Subsidiaries under the Notes or this Indenture or for anyclaim based on, in respect of or by reason of such obligations or theircreation.  By accepting a Note, eachHolder shall waive and release all such lia­bility.  The waiver and release shall be part of the consi­deration forthe issue of the Notes.

##  

## SECTION 14.11.            Successors.  All agreements of the Company and eachSubsidiary in this Indenture and the Notes shall bind its successors.  All agreements of the Trustee in thisIndenture shall bind its successors.

 

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## SECTION 14.12.            MultipleOriginals; Counterparts.  Theparties may sign any number of counterparts of this Indenture.  Each signed copy shall be an original, butall of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

##  

## SECTION 14.13.            Tableof Contents; Headings.  The table ofcontents, cross-reference sheet and headings of the Articles and Sections ofthis Indenture have been inserted for convenience of reference only, are notintended to be considered a part hereof and shall not modify or restrict any ofthe terms or provisions hereof.

##  

## SECTION 14.14.            Incorporation.  All Exhibits and Schedules attached heretoare incorporated as part of this Indenture as if fully set forth herein.

##  

## SECTION 14.15.            Intentto Limit Interest to Maximum.  In noevent shall the interest rate payable on the Notes under this Indenture, plusany other amounts paid by the Company to the Holders in connection therewith,exceed the highest rate permissible under law that a court of competentjurisdiction shall, in the final determination, deem applicable.  The Company and the Trustee, in executingand delivering this Indenture, intend legally to agree upon the rate or ratesof interest and the manner of payment stated within it; *provided, however,*that,anything contained herein to the contrary notwithstanding, if said rate orrates of interest or manner of payment exceed the maximum allowable underapplicable law, then, ipsofacto as of the date of thisIndenture, the Company is and shall be liable only for the payment of suchmaximum as allowed by law, and payment received from the Company in excess ofsuch legal maximum, whenever received, shall be applied to reduce the principalbalance of any Notes then outstanding to the extent of such excess, or, if suchexcess exceeds the then outstanding principal, such excess shall be firstset-off against any other amounts then due and owing by the Company andrefunded to the Company.

 

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INWITNESS WHEREOF, the parties have caused this Indenture to be duly executed asof the date first written above.

 

 
| COMPANY:    |                                              |                                   |
|-------------|---------------------------------------------------|----------------------------------------|
|        |                                              |                                   |
|        | BROADWING INC.                                    |
|        |                                              |                                   |
|        | By:                                               | /s/ Mark W. Peterson                   |
|        |                                              | Name: Mark W. Peterson                 |
|        |                                              | Title: Vice President  & Treasurer |
|        |                                              |                                   |
|        |                                              |                                   |
| GUARANTORS: |                                              |                                   |
|        |                                              |                                   |
|        | CINCINNATI BELL PUBLIC  COMMUNICATIONS INC.       |
|        |                                              |                                   |
|        | By:                                               | /s/ Mark W. Peterson                   |
|        |                                              | Name:                                  |
|        |                                              | Title:                                 |
|        |                                              |                                   |
|        | ZOOMTOWN.COM INC.                                 |
|        |                                              |                                   |
|        | By:                                               | /s/ Mark W. Peterson                   |
|        |                                              | Name:                                  |
|        |                                              | Title:                                 |
|        |                                              |                                   |
|        | CINCINNATI BELL ANY  DISTANCE, INC.               |
|        |                                              |                                   |
|        | By:                                               | /s/ Mark W. Peterson                   |
|        |                                              | Name:                                  |
|        |                                              | Title:                                 |
|        |                                              |                                   |
|        | CINCINNATI BELL  TELECOMMUNICATIONS SERVICES INC. |
|        |                                              |                                   |
|        | By:                                               | /s/ Mark W. Peterson                   |
|        |                                              | Name:                                  |
|        |                                              | Title:                                 |

 

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|   | BROADWING FINANCIAL LLC           |
|--------|-----------------------------------|
|   |                              |   |
|   | By:                               |  /s/ Mark W. Peterson |
|   |                              | Name: |
|   |                              | Title: |
|   |                              |   |
|   | CINCINNATI BELL  WIRELESS COMPANY |
|   |                              |   |
|   | By:                               |  /s/ Mark W. Peterson |
|   |                              | Name: |
|   |                              | Title: |
|   |                              |   |
|   | CINCINNATI BELL  WIRELESS         |
|   | HOLDINGS LLC                      |
|   |                              |   |
|   | By:                               |  /s/ Mark W. Peterson |
|   |                              | Name: |
|   |                              | Title: |
|   |                              |   |
|   | BROADWING HOLDINGS INC.           |
|   |                              |   |
|   | By:                               |  /s/ Mark W. Peterson |
|   |                              | Name: |
|   |                              | Title: |

 

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| TRUSTEE: |                 |
|----------|----------------------|
|     |                 |   |
|     | THE BANK OF NEW YORK |
|     |                 |   |
|     | By:                  |  /s/ Paul Schmalzel |
|     |                 | Name: Paul Schmalzel |
|     |                 | Title: Vice President |

 

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**APPENDIX A**

** **

PROVISIONSRELATING TO 

INITIAL NOTES 

AND EXCHANGE NOTES

 

1.             Definitions

 

1.1           Definitions

 

For the purposes of thisAppendix A, except where the context otherwise requires, the following termsshall have the meanings indicated below:

 

“Exchange andRegistration Rights Agreement” means the Exchange and Registration RightsAgreement, dated as of the date of this Indenture, by and among the Company andthe Purchasers.

 

“Definitive Note”means a certificated Initial Note or Exchange Note (bearing the RestrictedNotes Legend if the transfer of such Note is restricted by applicable law) thatdoes not include the Global Notes Legend.

 

“Depositary” meansThe Depository Trust the Company, its nominees and their respective successors.

 

“Global Notes Legend”means the legend set forth under that caption in Exhibit B to thisIndenture.

 

“InstitutionalAccredited Investor” means an institutional “accredited investor” asdescribed in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“Notes” under the Indenture include the Initial Notesand any Exchange Notes issued in exchange for Initial Notes.

 

“Notes Custodian,”who shall initially be the Trustee, means the custodian with respect to aGlobal Exchange Note (as appointed by the Depositary) or any successor personthereto.

 

“Purchase Agreement”means the Purchase Agreement, dated as of December 9, 2002, by and among theCompany and the Purchasers.

 

“Purchasers” meansGS Mezzanine Partners II, L.P., a Delaware limited partnership (“GSMezzanine”), GS Mezzanine Partners II Offshore, L.P. (“GS Offshore”),an exempted limited partnership organized under the laws of the Cayman Islands,and any other affiliate of GS Mezzanine who purchases the Offered Securities(as defined in the Purchase Agreement) being issued under the PurchaseAgreement at the Closing (as defined in the Purchase Agreement) (together withGS Mezzanine, GS Offshore and one or more partnerships, corporations, trusts orother organizations specified as a Purchaser in Schedule 1 to the Purchase

 

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Agreement (as defined inthe Purchase Agreement) which controls, is controlled by, or is under commoncontrol with, GS Mezzanine or GS Offshore), and any other person specified as aPurchaser in Schedule 1 to the Purchase Agreement.

 

“QIB” means a“qualified institutional buyer” as defined in Rule 144A.

 

“Registered ExchangeOffer” means the offer by the Company, pursuant to the Exchange andRegistration Rights Agreement, to certain Holders of Initial Notes, to issueand deliver to such Holders, in exchange for their Initial Notes, a likeaggregate principal amount at Maturity of Exchange Notes registered under theSecurities Act.

 

“Regulation S”means Regulation S under the Securities Act.

 

“Restricted NotesLegend” means the legend set forth in Paragraph 2.3(d)(i) herein.

 

“Rule 501”means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“Rule 144A” meansRule 144A under the Securities Act.

 

“Securities Act”means the Securities Act of 1933, as amended.

 

“Shelf RegistrationStatement” means a registration statement filed by the Company inconnection with the offer and sale of Initial Notes pursuant to the Exchangeand Registration Rights Agreement.

 

“Transfer RestrictedNotes” means Definitive Notes and any other Notes that bear or are requiredto bear the Restricted Notes Legend.

 

1.2           Other Definitions

 

| **Term:**                             |   | **Defined in  Section:** |   |
|---------------------------------------|--------|--------------------------|--------|
|                                  |   |                     |   |
| “Agent  Members”            |   | 2.1(c)                   |   |
| “Initial  Definitive Notes” |   | 2.1(b)                   |   |
| “Global  Exchange Note”     |   | 2.1(b)                   |   |

 

2.                                       TheNotes

 

2.1           Form and Dating

 

(a)   The Initial Notes issued on the date hereofwill be sold by the Company pursuant to the Purchase Agreement to thePurchasers.  All such Initial Notes maythereafter be transferred to, among others, QIBs, purchasers in reliance onRegulation S and, except as set forth below, Accredited Investors in accordancewith Rule 501.  A pledge by anyHolder of an Initial Note shall not constitute a transfer unless and until suchpledge shall be realized upon.

 

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(b)           The Initial Notes shall be issued inthe form of Definitive Notes, in fully registered form (the “InitialDefinitive Notes”) bearing the Restricted Notes Legend and shall be issuedto and registered in the name of the applicable Purchaser and duly executed bythe Company and authenticated by the Trustee as provided in this Indenture.

 

Initial Notes will beexchanged for Exchange Notes in the Registered Exchange Offer pursuant to theExchange and Registration Rights Agreement. Exchange Notes will also be issued upon the sale of Initial Notes (i) undera Shelf Registration Statement or (ii) at any time that the Initial Notesbeing sold are not Transfer Restricted Notes. Exchange Notes shall, except as provided in Sections 2.3 and2.4, be issued in global form bearing the Global Notes Legend (the “GlobalExchange Notes”).  The aggregateprincipal amount at Maturity of the Global Exchange Notes may from time to timebe increased or decreased by adjustments made on the records of the Trustee andthe Depositary or its nominee and on the schedules thereto as hereinafterprovided.

 

(c)           Book-Entry Provisions.  This Paragraph 2.1(c) shall applyonly to a Global Exchange Note deposited with or on behalf of the Depositary.

 

The Company shall executeand the Trustee shall, in accordance with this Paragraph 2.1(c) and Paragraph2.2 and pursuant to an order of the Company signed by one officer,authenticate and deliver one Global Exchange Note that (i) shall beregistered in the name of the Depositary for such Global Exchange Note or thenominee of such Depositary and (ii) shall be delivered by the Trustee tosuch Depositary or pursuant to such Depositary’s instruc­tions or held by theTrustee as Notes Custodian.

 

Members of, orparticipants in, the Depositary (“Agent Members”) shall have no rightsunder this Indenture with respect to any Global Exchange Note held on theirbehalf by the Depositary or by the Trustee as Notes Custodian or under suchGlobal Exchange Note, and the Depositary may be treated by the Company, theTrustee and any agent of the Company or the Trustee as the absolute owner ofsuch Global Exchange Note for all purposes whatsoever.  Notwithstanding the foregoing, nothingherein shall prevent the Company, the Trustee or any agent of the Company orthe Trustee from giving effect to any written certification, proxy or otherauthorization furnished by the Depositary or impair, as between the Depositaryand its Agent Members, the operation of customary practices of such Depositarygoverning the exercise of the rights of a holder of a beneficial interest inany Global Exchange Note.

 

(d)           Definitive Notes.  Except as provided in Paragraph 2.3or 2.4, owners of beneficial interests in Global Exchange Notes will notbe entitled to receive physical delivery of certificated Notes.

 

2.2           Authentication.  The Trustee shall authenticate and makeavailable for delivery upon a written order of the Company signed by oneofficer (a) Initial Definitive Notes that are Initial Notes for originalissue on the date hereof in an aggregate principal amount at Maturity of $441,628,051.27,(b) subject to the terms of this Indenture, Exchange Notes in the form ofGlobal Exchange Notes for issue in a Registered Exchange Offer pursuant to theExchange and Registration Rights Agreement in a like principal amount atMaturity of the Initial Definitive Notes exchanged pursuant thereto,(c) subject to the terms of this Indenture, Exchange Notes in 

 

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the form of GlobalExchange Notes in lieu of Initial Definitive Notes upon the sale of suchInitial Definitive Notes (i) under a Shelf Registration Statement or(ii) at any time that such Initial Notes being sold are not TransferRestricted Notes and (d) subject to the terms of this Indenture,Definitive Notes upon presentation to the Trustee of Initial Notes that are notrequired to bear the Restricted Notes Legend. Such order shall specify the amount of the Notes to be authenticated,the date on which the original issue of Notes is to be authenticated andwhether the Notes are to be Initial Notes or Exchange Notes.  The aggregate principal amount at Maturityof the Initial Notes and the Exchange Notes outstanding at any time may notexceed $441,628,051.27, except as provided in Sections 2.07 and 2.08of the Indenture.

 

2.3           Transfer and Exchange.

 

(a)           Transfer and Exchange ofDefinitive Notes.  When DefinitiveNotes are presented to the Registrar with a request:

 

(i)            to register the transfer of suchDefinitive Notes; or

 

(ii)           to exchange such Definitive Notes foran equal principal amount at Maturity of Definitive Notes of other authorizeddenominations,

 

the Registrar shallregister the transfer or make the exchange as requested if its reasonablerequire­ments for such transaction are met; *provided, however*, that the DefinitiveNotes surrendered for transfer or exchange:

 

(1)           shall be duly endorsed or accompaniedby a written instrument of transfer in form reason­ably satisfactory to theCompany and the Registrar, duly executed by the Holder thereof or his attorneyduly authorized in writing; and

 

(2)           in the case of Transfer RestrictedNotes are accompanied by the following additional information and documents, asapplicable:

 

(A)          if such Definitive Notes are beingdelivered to the Registrar by a Holder for registration in the name of suchHolder, with­out transfer, a certification from such Holder to that effect (inthe form set forth on the reverse side of the Initial Note); or

 

(B)           if such Definitive Notes are beingtransferred to the Company, a certification to that effect (in the form set forthon the reverse side of the Initial Note); or

 

(C)           if such Definitive Notes are beingtransferred pursuant to an exemption from registration in accordance withRule 144 under the Securities Act or in reliance upon another exemptionfrom the registration requirements of the Securities Act, (x) acertification to that effect (in the form set forth on the reverse side of theInitial Note) and (y) if the Company, the Registrar or the Trustee sorequests, an opinion of

 

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counsel or other evidencereasonably satisfactory to it as to the compliance with the restrictions setforth in the legend set forth in Paragraph 2.3(d)(i).

 

(b)           Restrictions on Transfer of aDefinitive Note for a Beneficial Interest in a Global Exchange Note.  A Definitive Note may not be exchanged for abeneficial interest in a Global Exchange Note except (i) as part of aRegistered Exchange Offer, (ii) upon sale of the Definitive Note under theShelf Registration Statement, (iii) upon sale of the Definitive Note atthe time such Definitive Note is not a Transfer Restricted Note or(iv) upon presentation to the Trustee of Definitive Notes that are notTransfer Restricted Notes.  Upon receiptby the Trustee of a Definitive Note, duly endorsed or accom­panied by a writteninstrument of transfer in form reasonably satisfactory to the Company and theRegistrar, together with written instructions directing the Trustee to make, orto direct the Notes Custodian to make, an adjustment on its books and recordswith respect to such Global Exchange Note to reflect an increase in theaggregate principal amount at Maturity of the Notes represented by the GlobalExchange Note, such instructions to contain information regarding theDepositary account to be credited with such increase, then the Trustee shallcancel such Definitive Note and cause, or direct the Notes Custodian to cause,in accordance with the standing instructions and procedures existing betweenthe Depositary and the Notes Cus­todian, the aggregate principal amount atMaturity of Notes represented by the Global Exchange Note to be increased bythe aggregate principal amount at Maturity of the Definitive Note to beexchanged and shall credit or cause to be credited to the account of the Personspecified in such instructions a beneficial interest in the Global ExchangeNote equal to the principal amount at Maturity of the Definitive Note socanceled.  If no Global Exchange Notesare then outstanding and the Global Exchange Note has not been previouslyexchanged for certificated Notes pursuant to Paragraph 2.4, the Companyshall issue and the Trustee shall authenticate, upon written order of theCompany in the form of an Officers’ Certificate, a new Global Exchange Note inthe appropriate principal amount at Maturity.

 

(c)           Transfer and Exchange of GlobalExchange Notes.  (i)  Thetransfer of the Global Exchange Note or beneficial interests therein shall beeffected through the Depositary, in accordance with this Indenture (includingapplicable restrictions on transfer set forth herein, if any) and theprocedures of the Depositary therefor. A transferor of a beneficial interest in a Global Exchange Note shalldeliver a written order given in accordance with the Depositary’s procedurescontaining information regarding the participant account of the Depositary tobe credited with a beneficial interest in such Global Exchange Note and suchaccount shall be credited in accordance with such order with a beneficialinterest in the applicable Global Exchange Note and the account of the Personmaking the transfer shall be debited by an amount equal to the beneficialinterest in the Global Exchange Note being transferred.

 

(ii)           Notwithstanding any other provisionsof this Appendix (other than the provisions set forth in Paragraph 2.4),a Global Exchange Note may not be transferred as a whole except by theDepositary to a nominee of the Depositary or by a nominee of the Depositary tothe Depositary or another nominee of the Depositary or by the Depositary or anysuch nominee to a successor Depositary or a nominee of such successorDepositary.

 

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(d)           Legend.

 

(i)            Except as permitted by the followingclauses (ii), (iii) or (iv), each Definitive Note (and all Notes issued inexchange therefor or in substitution thereof) shall bear a legend insubstantially the following form (each defined term in the legend being definedas such for purposes of the legend only):

 

“THIS NOTE HAS NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  NEITHER THIS NOTE NOR ANY INTEREST ORPARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION ORUNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

 

THEHOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISETRANSFER SUCH NOTE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATIONDATE”) WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOFAND THE LAST DATE ON WHICH COMPANY OR ANY AFFILIATE OF COMPANY WAS THE OWNER OFTHIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO COMPANY, (B) PURSUANTTO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THESECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANTTO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON ITREASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED INRULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIEDINSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE INRELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THEUNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITEDINVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH ANINSTITUTIONAL ACCREDITED INVESTOR OR TO AN “ACCREDITED INVESTOR” WITHINTHE MEANING OF RULE 501(a)(5) OR (6) ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, INEACH CASE IN A MINIMUM PRINCIPAL AMOUNT AT MATURITY OF THE NOTES OF $250,000,FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE INCONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F)PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OFTHE SECURITIES ACT, SUBJECT TO COMPANY’S

 

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AND THE TRUSTEE’S RIGHTPRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TOREQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHERINFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THERESALE RESTRICTION TERMINATION DATE.”

 

Each Definitive Noteshall bear the following additional legend:

 

“IN CONNECTION WITH ANYTRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCHCERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLYREQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

(ii)           Upon any sale or transfer of aTransfer Restricted Note that is a Definitive Note, the Registrar shall permitthe Holder thereof to exchange such Transfer Restricted Note for a DefinitiveNote that does not bear the legends set forth above and rescind any restrictionon the transfer of such Transfer Restricted Note if the Holder certifies inwriting to the Registrar that its request for such exchange was made inreliance on Rule 144 (such certification to be in the form set forth onthe reverse of the Initial Note).

 

(iii)          After a transfer of any Initial Notesduring the period of the effectiveness and pursuant to a Shelf RegistrationStatement with respect to such Initial Notes, all requirements pertaining tothe Restricted Notes Legend on such Initial Notes shall cease to apply and therequirements that any such Initial Notes be issued in global form shall becomeapplicable.

 

(iv)          Upon the consummation of a RegisteredExchange Offer with respect to the Initial Notes pursuant to which Holders ofsuch Initial Notes are offered Exchange Notes in exchange for their InitialNotes, Exchange Notes in global form without the Restricted Notes Legend shallbe available to Holders that exchange such Initial Notes in such RegisteredExchange Offer.

 

(e)           Cancellation or Adjustment of GlobalExchange Note.  At such time as allbeneficial interests in a Global Exchange Note have either been exchanged forDefinitive Notes, transferred, redeemed, repurchased or canceled, such GlobalExchange Note shall be returned by the Depositary to the Trustee forcancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficialinterest in a Global Exchange Note is exchanged for Definitive Notes,transferred in exchange for an interest in another Global Exchange Note,redeemed, repurchased or canceled, the principal amount at Maturity of Notesrepresented by such Global Exchange Note shall be reduced and an adjustmentshall be made on the books and records of the Trustee (if it is then the NotesCustodian for such Global Exchange Note) with respect to such Global ExchangeNote, by the Trustee or the Notes Custodian, to reflect such reduction.

 

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(f)            Obligations with Respect toTransfers and Exchanges of Notes.

 

(i)            To permit registrations of transfersand exchanges, the Company shall execute and the Trustee shall authenticate,Definitive Notes and Global Exchange Notes at the Registrar’s request.

 

(ii)           No service charge shall be made forany registration of transfer or exchange, but the Company or the Trustee mayrequire payment of a sum sufficient to cover any transfer tax, assessments, orsimilar governmental charge payable in connection therewith (other than anysuch transfer taxes, assessments or similar governmental charge payable uponexchanges pursuant to Sections 2.06, 3.06, 4.09,4.10 and 10.05 of the Indenture).

 

(iii)          Prior to the due presentation forregistration of transfer of any Note, the Company, the Trustee, the PayingAgent or the Registrar may deem and treat the person in whose name a Note isregistered as the absolute owner of such Note for the purpose of receivingpayment of principal of and interest on and Special Interest, if any, withrespect to such Note and for all other purposes whatsoever, whether or not suchNote is overdue, and none of the Company, the Trustee, the Paying Agent or theRegistrar shall be affected by notice to the con­trary.

 

(iv)          All Notes issued upon any transfer orexchange pursuant to the terms of this Indenture shall evidence the same debtand shall be entitled to the same benefits under this Indenture as the Notessurrendered upon such transfer or exchange.

 

(g)           No Obligation of the Trustee.

 

(i)            The Trustee shall have noresponsibility or obligation to any beneficial owner of a Global Exchange Note,a member of, or a participant in the Depositary or any other Person withrespect to the accuracy of the records of the Depositary or its nominee or ofany participant or member thereof, with respect to any ownership interest inthe Notes or with respect to the delivery to any participant, member,beneficial owner or other Person (other than the Depositary) of any notice(including any notice of redemption or repurchase) or the payment of anyamount, under or with respect to such Notes. All notices and communica­tions to be given to the Holders and allpayments to be made to Holders under the Notes shall be given or made only tothe registered Holders (which shall be the Depositary or its nominee in thecase of a Global Exchange Note).  Therights of beneficial owners in any Global Exchange Note shall be exercised onlythrough the Depositary subject to the applicable rules and pro­cedures of theDepositary.  The Trustee may rely andshall be fully protected in relying upon information furnished by theDepositary with respect to its mem­bers, participants and any beneficialowners.

 

(ii)           The Trustee shall have no obligationor duty to monitor, determine or inquire as to compliance with any restrictionson transfer imposed under this Inden­ture or under applicable law with respectto any trans­fer of any interest in any Note (including any trans­fers betweenor among Depositary participants, members or beneficial owners in any GlobalExchange Note) other than to require delivery of such certificates and otherdocumentation or evidence as are expressly required by, and to do so if andwhen

 

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expressly required by, the terms of this Indenture,and to examine the same to determine substantial compliance as to form with theexpress requirements hereof.

 

2.4  DefinitiveNotes

 

(a)           A Global Exchange Note deposited withthe Depositary or with the Trustee as Notes Custodian pursuant to Paragraph 2.1or issued in connection with a Registered Exchange Offer shall be transferredto the beneficial owners thereof in the form of Definitive Notes in anaggregate principal amount at Maturity equal to the principal amount atMaturity of such Global Exchange Note, in exchange for such Global ExchangeNote, only if such transfer complies with Paragraph 2.3 and(i) the Depositary notifies the Company that it is unwilling or unable tocontinue as a Depositary for such Global Exchange Note or if at any time theDepositary ceases to be a “clearing agency” registered under the Exchange Act,and a successor depositary is not appointed by the Company within 90 daysof such notice or after the Company becomes aware of such cessation, or(ii) an Event of Default has occurred and is continuing or (iii) the Company,in its sole discretion, notifies the Trustee in writing that it elects to causethe issuance of certificated Notes under this Indenture.

 

(b)           Any Global Exchange Note that istransferable to the beneficial owners thereof pursuant to this Paragraph 2.4shall be surrendered by the Depositary to the Trustee, to be so transferred, inwhole or from time to time in part, without charge, and the Trustee shallauthenticate and deliver, upon such transfer of each portion of such GlobalExchange Note, an equal aggregate principal amount at Maturity of DefinitiveNotes of authorized denominations.  Anyportion of a Global Exchange Note transferred pursuant to this paragraph shallbe executed, authenticated and delivered only in denominations of $1,000 (inprincipal amount at Maturity) and any multiple thereof and registered in suchnames as the Depositary shall direct. Any certificated Initial Note in the form of a Definitive Note deliveredin exchange for an interest in the Global Exchange Note shall, except asotherwise provided by Paragraph 2.3(d), bear the Restricted NotesLegend.

 

(c)           Subject to the provisions of Paragraph 2.4(b),the registered Holder of a Global Exchange Note may grant proxies and otherwiseauthorize any Person, including Agent Members and Persons that may holdinterests through Agent Members, to take any action which a Holder is entitledto take under this Indenture or the Notes.

 

(d)           In the event of the occurrence of anyof the events specified in Paragraph 2.4(a)(i), (ii) or(iii), the Company will promptly make available to the Trustee areasonable supply of Definitive Notes in fully registered form without interestcoupons.

 

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**EXHIBIT A**

 

FORM OF FACE OF INITIAL NOTE

 

THIS NOTE HAS NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  NEITHER THIS NOTE NOR ANY INTEREST ORPARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION ORUNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

 

THE HOLDER OF THIS NOTEBY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE,PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH ISTWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATEON WHICH COMPANY OR ANY AFFILIATE OF COMPANY WAS THE OWNER OF THIS NOTE (OR ANYPREDECESSOR OF SUCH NOTE), ONLY (A) TO COMPANY, (B) PURSUANT TO A REGISTRATIONSTATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SOLONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THESECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIEDINSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE ISGIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TOOFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OFREGULATION S UNDER THE SECURITIES ACT, (E) TO AN “ACCREDITED INVESTOR”WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACTTHAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR OR TOAN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(5) OR (6)ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, IN EACH CASE IN A MINIMUM PRINCIPALAMOUNT AT MATURITY OF THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOTWITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION INVIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTIONFROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO COMPANY’SAND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TOCLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  THIS LEGEND WILL BE REMOVED UPON THE REQUESTOF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

IN CONNECTION WITH ANYTRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATESAND OTHER

 

 

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INFORMATION AS SUCHTRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIESWITH THE FOREGOING RESTRICTIONS.

 

The following information is provided pursuant to Treas. Reg. Section1.1275-3:

 

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 holder(s)of this debt instrument the following information:  issue price, amount of original issue discount, issue date andyield to maturity.

 

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| No.  [                 ] |   | $ |
|---------------------------------------------------------------------------------------------------------------|--------|---|

 

Senior Subordinated Discount Note due 2009

 

BROADWING INC., an Ohiocorporation, promises to payto                  or registered assigns, the principal amount at Maturity of[                 ]Dollars on January 20, 2009 (the “Stated Maturity Date”).

 

| **Interest Payment Date** |   | **Record Date**   |   |
|---------------------------|--------|-------------------|--------|
| June 30, 2003             |   | June 15, 2003     |   |
| December 31, 2003         |   | December 15, 2003 |   |
| June 30, 2004             |   | June 15, 2004     |   |
| December 31, 2004         |   | December 15, 2004 |   |
| June 30, 2005             |   | June 15, 2005     |   |
| December 31, 2005         |   | December 15, 2005 |   |
| June 30, 2006             |   | June 15, 2006     |   |
| December 31, 2006         |   | December 15, 2006 |   |
| June 30, 2007             |   | June 15, 2007     |   |
| January 20, 2008          |   | January 5, 2008   |   |
| January 20, 2009          |   | January 5, 2009   |   |

 

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Additional provisions ofthis Note are set forth on the other side of this Note.

 

 

IN WITNESS WHEREOF, theparties have caused this instrument to be duly executed.

 
|   | BROADWING INC. |
|--------|----------------|
|   |           |
|   |           |
|   | By:            |   |   |
|   |           | Name: |
|   |           | Title: |

 

 

TRUSTEE’SCERTIFICATE OF AUTHENTICATION

 

The Bank of New York,Trustee, certifies that this is one of the Notes referred to in the Indenture.

 

 
|   | By:    |                 |   |
|--------|--------|----------------------|--------|
|   |   | Authorized Signatory |
|   |   |
| Dated: |   |

 

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FORM OF REVERSESIDE OF INITIAL NOTE

SeniorSubordinated Discount Note due 2009

 

1.                                       Interest

 

(a)           BROADWING INC., an Ohio corporation(such corporation, and its successors and assigns under the Indenturehereinafter referred to, being herein called the “Company”), promises topay cash interest on the Accreted Value at such date, in arrears, on each ofJune 30 and December 31 of 2003 through 2006, commencing on June 30, 2003, andthen on each of June 30, 2007, January 20, 2008 and on the Stated Maturity Date(each, an “Interest Payment Date”), at the rate of 12% per annum,compounded semi-annually, until the principal hereof is paid.  Such interest on the Notes shall accrue fromthe most recent date to which interest has been paid or duly provided for or,if no such interest has been paid or duly provided for, from March 26, 2003until the principal hereof is due. Principal of the Notes will accrete as set forth in the Indenture.  Interest shall be paid in cash.  Any principal of, or premium or installmentof interest or Special Interest (as hereinafter defined) on this Note which isoverdue shall bear interest at the rate equal to 2.25% per annum above the cashinterest rate from the date such amounts are due until they are paid (to theextent that the payment of such interest shall be legally enforceable), andsuch excess interest shall be payable in cash on demand.  In addition, the accretion of principal onthe Notes will increase as set forth in the Indenture.  Interest shall be computed on the basis of a360-day year of twelve 30-day months.

 

(b)           Special Interest.  The holder of this Note is entitled to thebenefits of the Exchange and Registration Rights Agreement, dated as of thedate hereof, by and among the Company and the Purchasers named therein.  Capitalized terms used in thisparagraph (b) but not defined herein have the meanings assigned to them inthe Exchange and Registration Rights Agreement.  If (i) the Exchange Offer Registration Statement is not filedwith the Commission within 90 days following the Trigger Date, (ii) the ShelfRegistration Statement is not filed within 30 days after, or is not declaredeffective within 150 days after, filing is required or requested pursuant tothe Exchange and Registration Rights Agreement, (iii) the Exchange OfferRegistration Statement is not declared effective on or prior to 150 days afterthe Trigger Date, (iv) the Registered Exchange Offer is not consummated on orprior to 180 days after the Trigger Date, or (v) the Shelf RegistrationStatement is filed and declared effective but shall thereafter cease to beeffective prior to the end of the Shelf Registration Period (other than duringa Suspension Period permitted under the Exchange and Registration RightsAgreement) (at any time that the Company and the Guarantors are obligated tomaintain the effectiveness thereof) (each such event referred to in clauses (i)through (v), a “Registration Default”), the Company and the Guarantorswill be jointly and severally obligated to pay Special Interest to each holderof Transfer Restricted Notes, during the period of one or more suchRegistration Defaults, at the rate equal to $0.05 per week per $1,000 ofprincipal amount at Maturity for the first 90 days during the period of one ormore such Registration Defaults, which amount shall increase by $0.05 per weekper $1,000 of principal amount at Maturity for each subsequent 90-day periodduring the continuance of one or more Registration Default, until such time asno Registration Default is in effect (such amount equal to the “SpecialInterest”), up to a maximum amount of Special Interest for all RegistrationDefaults of $0.192 per week per $1,000 of principal amount at Maturity.  All accrued Special Interest shall be paidto Holders in the same manner as interest

 

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payments on the Notes on semi-annual payment dateswhich correspond to interest payments for the Notes.  Following the cure of all Registration Defaults, the accrual ofSpecial Interest shall cease.  TheTrustee shall have no responsibility with respect to the determination of theamount of any such Special Interest.

 

(c)           RecordDates, etc.  Upon theissuance of an Exchange Note in exchange for this Note, any accrued and unpaidinterest (including Special Interest) on this Note shall cease to be payable tothe Holder hereof but such accrued and unpaid interest (including SpecialInterest) shall be payable on the next Interest Payment Date for such ExchangeNote to the Holder thereof on the related Regular Record Date. The interest sopayable, and punctually paid or duly provided for, on any Interest Payment Datewill, as provided in the Agreement, be paid to the Person in whose name thisNote is registered at the close of business on the Regular Record Date (the “RegularRecord Date”) for such interest which shall be the fifteenth (or, in thecase of a Regular Record Date for the Stated Maturity Date and the InterestPayment Date immediately preceding the Stated Maturity Date, the fifth)calendar day (whether or not a Business Day) of the calendar month in whichsuch Interest Payment Date occurs.

 

2.                                       Methodof Payment

 

TheCompany shall pay interest on the Notes (except defaulted interest) to thePersons who are registered holders of Notes at the close of business on theJune 15 or December 15 next preceding the Interest Payment Date (or, in thecase of the Stated Maturity Date and the Interest Payment Date immediatelypreceding the Stated Maturity Date, January 5) even if Notes are canceledafter the record date and on or before the Interest Payment Date.  Holders must surrender Notes to a PayingAgent to collect principal payments. The Company shall pay principal, Special Interest, if any, and interestin money of the United States of America that at the time of payment islegal tender for payment of public and private debts.  The Company will make all money payments in respect of a certificatedNote (including principal and interest), at the office of the Paying Agent or,at the option of the Company, by mailing a check to the registered address ofeach Holder thereof; *provided, however*, that money payments onthe Notes shall be made, in the case of a Holder of at least $1,000,000 aggregateprincipal amount at Maturity of Notes, by wire transfer to a U.S. dollaraccount maintained by the payee with a bank in the United States if suchHolder elects payment by wire transfer by giving written notice to the Trusteeor the Paying Agent to such effect designating such account no later than30 days immediately preceding the relevant due date for payment (or suchother date as the Trustee may accept in its discretion).

 

3.                                       PayingAgent and Registrar

 

Initially,The Bank of New York, a banking corporation organized under the laws of theState of New York (the “Trustee”), will act as Paying Agent andRegistrar.  The Company may appoint andchange any Paying Agent, Registrar or co-registrar without notice.  The Company or any of its domestically incorporatedWholly Owned Subsidiaries (other than any member of the BCI Group) may act asPaying Agent, Registrar or co-registrar.

 

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4.                                       Indenture

 

TheCompany issued the Notes under an Indenture, dated as of  March 26, 2003 (the “Indenture”), byand between the Company and the Trustee. The terms of the Notes include those stated in the Indenture and thosemade part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and used butnot defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all terms andprovisions of the Indenture, and Holders (as defined in the Indenture) arereferred to the Indenture and the TIA for a statement of such terms andprovisions.

 

TheNotes are senior subordinated unsecured discount obligations of the Companylimited to $441,628,051.27 aggregate principal amount at Maturity at any onetime outstanding (subject to Section 2.07 of the Indenture).  This Note is one of the series of theInitial Notes that are referred to in the Indenture issued in an aggregateoriginal principal amount at Maturity of $441,628,051.27.  The Notes include the Initial Notes and anyExchange Notes issued in exchange for Initial Notes.  The Initial Notes and the Exchange Notes are treated as a singleclass of Notes under the Indenture.  TheInitial Notes of each series and the Exchange Notes of the corresponding seriesare treated as a single series of Notes under the Indenture.  The Indenture imposes certain limitations onthe ability of the Company and its Restricted Subsidiaries to, among otherthings, make certain Investments and other Restricted Payments, pay dividendsand other distributions, incur Indebtedness, enter into consensual restrictionsupon the payment of certain dividends and distributions by such RestrictedSubsidiaries, issue or sell shares of Capital Stock of such Restricted Subsidiaries,enter into or permit certain transactions with Affiliates and make assetsales.  The Indenture also imposeslimitations on the ability of the Company to consolidate or merge with or intoany other Person or convey, transfer or lease all or substantially all of theproperty of the Company.

 

TheNotes are guaranteed, on a senior subordinated basis, by all existing andfuture Restricted Subsidiaries that are or shall become Guarantors inaccordance with the terms of the Indenture.

 

5.                                       OptionalRedemption

 

Exceptas set forth in the last paragraph of this Section 5, the Notes shall not beredeemable at the option of the Company prior to March 26, 2006.  Thereafter, the Notes are subject to redemption, at the electionof the Company, in whole or in part (in the principal amount at Maturity of notless than $5,000,000 and integral multiples thereof), upon not less than thirty(30) nor more than sixty (60) days’ notice by mail at the prices listedbelow (expressed as a percentage of the Accreted Value of the Notes beingprepaid as of the Redemption Date) plus accrued interest to the Redemption Date(each prepayment to be in an aggregate Accreted Value of Notes of not less than$5 million):

 

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| **Redemption Date**                     |   | **Redemption  Price** |   |
|-----------------------------------------|--------|-----------------------|--------|
|                                    |   |                  |   |
| March  26, 2006 - March 25, 2007        |   | 108                   | %      |
|                                    |   |                  |   |
| March  26, 2007 - March 25, 2008        |   | 106                   | %      |
|                                    |   |                  |   |
| March  26, 2008 - January 19, 2009 |   | 104                   | %      |

 

On any Interest PaymentDate occurring on or prior to March 26, 2006, the Company may redeem all or anypart (in the principal amount at Maturity of not less than $5,000,000 andintegral multiples thereof) of the then outstanding Accreted Value of Notesupon not less than thirty (30) nor more than sixty (60) days’ notice by mail ata price equal to the sum of (x) 100% of the Accreted Value of such Notes beingredeemed as of the applicable Interest Payment Date plus (y) a Make WholePremium.  As used herein, the “MakeWhole Premium” means, as at any date, (a) an amount equal to thepresent value of the remaining payments of interest on the Notes and theRedemption Price of the Notes, assuming that on March 26, 2006 the entireAccreted Value of the Notes then outstanding will be redeemed at 108% of theAccreted Value thereof, together with accrued interest, and using an annualdiscount factor (applied semi-annually) equal to the Treasury Rate plus 0.50%, less(b) the Accreted Value of the Notes outstanding as at the day ofdetermination; *provided*, *however*, that in no case shall the MakeWhole Premium be less than zero.  Forpurposes of this definition, the “Treasury Rate” shall mean a rate equalto the then current yield to maturity on the most actively traded U.S. Treasurysecurity having a maturity on March 26, 2006. In the event there are not actively traded U.S. Treasury securities witha maturity on March 26, 2006, then the yield to maturity shall be determined bylinear interpolation using the closest, but shorter, maturity for activelytraded U.S. Treasury securities and the closest, but longer, maturity foractively traded U.S. Treasury maturities.

 

6.                                       SinkingFund

 

TheNotes are not subject to any sinking fund.

 

7.                                       Noticeof Redemption

 

Noticeof redemption will be mailed by first-class mail at least 30 days but notmore than 60 days before the Redemption Date to each Holder of Notes to beredeemed at such Holder’s registered address. Notes in denominations larger than $1,000 (in principal amount atMaturity) may be redeemed in part but only in multiples of $1,000 (in principalamount at Maturity).  If moneysufficient to pay the redemption price of and accrued and unpaid interest andSpecial Interest, if any, on all Notes (or portions thereof) to be redeemed onthe Redemption Date is deposited with the Paying Agent on or before theRedemption Date and certain other conditions are satisfied, on and after suchdate, cash interest and Special Interest, if any, ceases to accrue on suchNotes (or such portions thereof) called for redemption.

 

8

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8.                                       Repurchaseof Notes at the Option of Holders upon Change of Control and Sale of Assets

 

Uponthe occurrence of a Change of Control, each Holder of Notes shall have theright, subject to certain conditions specified in the Indenture, to require theCompany to repurchase all or any part of the Notes of such Holder at a purchaseprice in cash equal to 101% of the Accreted Value of the Notes to berepurchased, plus accrued and unpaid interest thereon and Special Interest, ifany, in respect thereof to the date of repurchase (subject to the right ofHolders of record on the relevant record date to receive interest due andSpecial Interest, if any, on the relevant Interest Payment Date) as providedin, and subject to the terms of, the Indenture.

 

Inaccordance with Section 4.10 of the Indenture, the Company will berequired to offer to purchase Notes upon the occurrence of certain sales ofassets.

 

9.                                       Subordination.

 

TheNotes are subordinated to Senior Indebtedness, as defined in theIndenture.  To the limited extent providedin the Indenture, Senior Indebtedness must be paid before the Notes may bepaid.  Each of the Company and theGuarantors agrees, and each Holder by accepting a Note agrees, to thesubordination provisions contained in the Indenture and authorizes the Trusteeto give them effect and appoints the Trustee as attorney-in-fact for suchpurpose.

 

10.                                 Denominations;Transfer; Exchange

 

TheNotes are in registered form without coupons in denominations of $1,000 (inprincipal amount at Maturity) and multiples thereof.  A Holder may transfer or exchange Initial Notes in accordancewith the Indenture.  Upon any transferor exchange, the Registrar and the Trustee may require a Holder, among otherthings, to furnish appropriate endorse­ments or transfer documents and to payany taxes required by law or permitted by the Indenture.  The Company shall not be required to makeand the Regis­trar need not register transfers or exchanges of Notes selectedfor redemption (except, in the case of a Note to be redeemed in part, theportion of the Note not to be redeemed) or any Notes for a period of15 days prior to a selection of Notes to be redeemed.

 

11.                                 PersonsDeemed Owners

 

Exceptas provided in paragraph 2 hereof, the registered Holder of this Noteshall be treated as the owner of it for all purposes.

 

12.                                 UnclaimedMoney

 

Ifmoney for the payment of principal of or interest on the Notes has beendeposited with the Trustee or Paying Agent and remains unclaimed for two yearsafter such amount is due and payable, the Trustee or Paying Agent shall pay themoney back to the Company at its written request unless an abandoned propertylaw designates another Person.  Afterany such payment, the Trustee and the Paying Agent shall have no furtherliability for such funds and Holders entitled to the money must look only tothe recipient and not to the Trustee for payment.

 

9

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13.           Discharge andDefeasance

 

Subjectto certain conditions, the Company at any time may terminate some of or all itsobligations under the Notes and the Indenture if the Company deposits with theTrustee money or U.S. Government Obligations for the payment of principal ofand interest on the Notes to redemption or maturity, as the case may be.

 

14.                                 Amendment,Waiver

 

Subjectto certain exceptions set forth in the Indenture, (a) the Indenture or theNotes may be amended without prior notice to any Holder but with the writtenconsent of the Holders of at least a majority in aggregate principal amount atMaturity of the Notes then outstanding (including consents obtained inconnection with a tender offer or exchange for the Notes) and (b) anydefault may be waived with the written consent of the Holders of at least amajority in principal amount at Maturity of the outstanding Notes.  Subject to certain exceptions set forth inthe Indenture, without the consent of any Holder of Notes, the Company and theTrustee may amend the Indenture or the Notes (a) to cure any ambiguity, omission,defect or inconsistency; (b) to comply with Article 6 of the Indenture;(c) to provide for uncertificated Notes in addition to or in place ofcertificated Notes (*provided, however*, that the uncertificatedNotes are issued in registered form for purposes of Section 163(f) of the Code,or in a manner such that the uncertificated Notes are described in Section163(f)(2)(B) of the Code); (d) to add Guarantees of the Notes or to secureNotes; (e) to add to the covenants of the Company for the benefit of theHolders or to surrender any right or power conferred on the Company in theIndenture; (f) to comply with any requirement of the Commission inconnection with qualifying, or maintaining the qualification of, the Indentureunder the TIA;  (g) to make anychange that does not adversely affect the rights of any Holder; (h) toprovide for the issuance of the Exchange Notes which shall have termssubstantially identical in all material respects to the Initial Notes (exceptthat the transfer restrictions contained in the Initial Notes shall be modifiedor eliminated, as appropriate), and which shall be treated, together with anyoutstanding Initial Notes or the Exchange Notes, as a single issue ofsecurities; or (i) to change the name or title of the Notes.

 

15.                                 Defaults,Remedies and Acceleration

 

If an Eventof Default (other than an Event of Default relating to certain events ofbankruptcy, insolvency or reorganization of the Company) occurs and iscontinuing, the Trustee or the Holders of 25% or more in principal amount atMaturity of the outstanding Notes may declare the principal of and accrued butunpaid interest on all the Notes to be due and payable.  Upon such a declaration, such principal andinterest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy,insolvency or reorganization of the Company occurs, the principal of andinterest on all the Notes shall become and be immediately due and payablewithout any declaration or other act on the part of the Trustee or any Holders.  Under certain circumstances, the Holders ofa majority in principal amount at Maturity of the Notes may rescind any suchacceleration with respect to the Notes and its consequences.  If an Event of Default has occurred and iscontinuing, the Notes will accrue an additional interest at 3% per annum, untilsuch time as no Event of Default shall be continuing (to the extent that thepayment of such interest shall be legally enforceable); *provided* that 2.25% of such additional

 

10

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interest shall be payable in cash and 0.75% of suchadditional interest shall be added to the principal amount of the Notes as setforth in the definition of Accreted Value.

 

Subjectto the provisions of the Indenture relating to the duties of the Trustee, incase an Event of Default occurs and is continuing, the Trustee will be under noobligation to exercise any rights or powers under the Indenture at the requestor direction of any of the Holders, unless such Holders have offered to theTrustee reasonable indemnity or security against any loss, liability orexpense.  Except to enforce the right toreceive payment of principal or interest when due, no Holder may pursue anyremedy with respect to the Indenture or the Notes unless (i) such Holderhas previously given to the Trustee written notice stating that an Event ofDefault is continuing, (ii) Holders of at least 25% in principal amount atMaturity of the outstanding Notes have requested the Trustee in writing topursue the remedy, (iii) such Holder or Holders have offered to theTrustee reasonable security or indemnity against any loss, liability orexpense, (iv) the Trustee has not complied with such request within60 days after receipt of the request and the offer of security orindemnity and (v) the Holders of a majority in principal amount atMaturity of the outstanding Notes have not given the Trustee a directioninconsistent with such request during such 60-day period.  Subject to certain restrictions, the Holdersof a majority in principal amount at Maturity of the out­standing Notes aregiven the right to direct the time, method and place of conducting any proceed­ingfor any remedy available to the Trustee or of exercising any trust or powerconferred on the Trustee.  The Trustee,how­ever, may refuse to follow any direction that conflicts with law or theIndenture or, subject to certain exceptions in the Indenture, that the Trusteedetermines is unduly prejudicial to the rights of other Holders or wouldinvolve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall beentitled to indemnification satisfactory to it in its sole discretion againstall losses and expenses caused by taking or not taking such action.

 

16.                                 TrusteeDealings with the Company

 

Subjectto certain limitations imposed by the TIA, the Trustee under the Indenture, inits individual or any other capacity, may become the owner or pledgee of Notesand may otherwise deal with and collect obliga­tions owed to it by the Companyor its Affiliates and may other­wise deal with the Company or its Affiliateswith the same rights it would have if it were not Trustee.

 

17.                                 NoRecourse Against Others

 

Adirector, officer, employee or stockholder, as such, of the Company or any ofthe Subsidiaries shall not have any liability for any obligations of theCompany or any of the Subsidiaries under the Notes or the Indenture or for anyclaim based on, in respect of or by reason of such obligations or their crea­tion.  By accepting a Note, each Holder waives andreleases all such liability.  The waiverand release are part of the considera­tion for the issue of the Notes.

 

11

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18.                                 Authentication

 

ThisNote shall not be valid until an author­ized signatory of the Trustee (or anauthenticating agent) manually signs the certificate of authentication on theother side of this Note.

 

19.                                 Abbreviations

 

Customaryabbreviations may be used in the name of a Holder or an assignee, such as TENCOM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=jointtenants with rights of survivorship and not as tenants in common), CUST(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

20.                                 GoverningLaw

 

**THIS NOTE SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUTWITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THEEXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BEREQUIRED THEREBY.**

 

21.                                 RegistrationRights

 

Pursuantto the Exchange and Registration Rights Agreement, the Company will beobligated upon the occurrence of certain events to consummate an exchange offerpursuant to which the Holder of this Note shall have the right to exchange thisNote for an Exchange Note, which has been registered under the Securities Act,in like original principal amount at Maturity and having terms identical in allmaterial respects to this Note, other than that there shall be no provision forSpecial Interest.

 

**The Company will furnish to anyHolder of Notes upon written request and without charge to the Holder a copy ofthe Indenture which has in it the text of this Note.**

 

12

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ASSIGNMENT FORM

 

To assign thisNote, fill in the form below:

 

I or we assign andtransfer this Note to

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

 

 

and irrevocablyappoint                           agentto transfer this Note on the books of the Company.  The agent may substitute another to act for him.

 

 
|                                                               |   |
|--------------------------------------------------------------------|--------|
| Date:                                                              |   | Your Signature: |   |   |
|                                                               |
|                                                               |
|                                                               |   |
| Sign exactly as your  name appears on the other side of this Note. |
|                                                                    |        |  |  |  |  |

 

13

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CERTIFICATE TO BEDELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED NOTES

 

This certificate relatesto$               principalamount at Maturity of Notes held in definitive form by the undersigned.

 

The undersigned hasrequested the Trustee by written order to exchange or register the transfer ofa Note or Notes.

 

In connection with anytransfer of any of the Notes evidenced by this certificate occurring prior tothe expiration of the period referred to in Rule 144(k) under theSecurities Act, the undersigned confirms that such Notes are being transferredin accordance with its terms:

 

CHECK ONE BOX BELOW

 
|   | o      | (1)    |   | to the Company; or                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | o      | (2)    |   | to the Registrar for  registration in the name of the Holder, without transfer; or                                                                                                                                                                                                                                                                                                                                                 |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | o      | (3)    |   | pursuant to an  effective registration statement under the Securities Act of 1933; or                                                                                                                                                                                                                                                                                                                                              |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | o      | (4)    |   | inside the  United States to a “qualified institutional buyer” (as defined in  Rule 144A under the Securities Act of 1933) that purchases for its own  account or for the account of a qualified institutional buyer to whom notice  is given that such transfer is being made in reliance on Rule 144A, in each  case pursuant to and in compliance with Rule 144A under the Securities  Act of 1933; or |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | o      | (5)    |   | outside the  United States in an offshore transaction within the meaning of  Regulation S under the Securities Act in compliance with Rule 904 under  the Securities Act of 1933; or                                                                                                                                                                                                                                     |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | o      | (6)    |   | to an institutional  “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under  the Securities Act of 1933) that has furnished to the Trustee a signed letter  containing certain representations and agreements; or                                                                                                                                                                                    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | o      | (7)    |   | pursuant to another  available exemption from registration provided by Rule 144 under the  Securities Act of 1933.                                                                                                                                                                                                                                                                                                                 |

 

14

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Unless one of the boxesis checked, the Trustee will refuse to register any of the Notes evidenced bythis certificate in the name of any Person other than the registered holderthereof; *provided,however*, that if box (5), (6) or (7) is checked, the Trusteemay require, prior to registering any such transfer of the Notes, such legalopinions, certifications and other information as the Company has reasonablyrequested to confirm that such transfer is being made pursuant to an exemptionfrom, or in a transaction not subject to, the registration requirements of theSecurities Act of 1933.

 
|                            |                   |   |
|---------------------------------|------------------------|--------|
|                            | Your Signature         |   |
|                            |                   |   |
| Signature Guarantee:            |                   |   |
|                            |                   |   |
| Date:                           |                   |   |   |   |
| Signature must be  guaranteed   | Signature of Signature |   |
| by a participant in a           | Guarantee              |   |
| recognized signature  guaranty  |                   |   |
| medallion program or  other     |                   |   |
| signature guarantor  acceptable |                   |   |
| to the Trustee                  |                   |   |
|                                 |                        |        |  |  |

 

 

TO BE COMPLETED BYPURCHASER IF (4) ABOVE IS CHECKED.

 

The undersignedrepresents and warrants that it is purchasing this Note for its own account oran account with respect to which it exercises sole investment discretion andthat it and any such account is a “qualified institutional buyer” within themeaning of Rule 144A under the Securities Act of 1933, and is aware thatthe sale to it is being made in reliance on Rule 144A and acknowledgesthat it has received such information regarding the Company as the undersignedhas requested pursuant to Rule 144A or has determined not to request suchinformation and that it is aware that the transferor is relying upon theundersigned’s foregoing representations in order to claim the exemption fromregistration provided by Rule 144A.

 
| Dated: |                            |   |
|--------|---------------------------------|--------|
|   |
|   | NOTICE:  To be executed by |
|   | an  executive officer           |
|        |                                 |        |  |

 

15

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**OPTION OF HOLDER TO ELECT PURCHASE**

 

**If you want to elect to have thisNote purchased by the Company pursuant to Section  4.09 (Change ofControl) or Section 4.10 (Application of Excess Proceeds from Sale ofAssets) of the Indenture, check the box:**

 
| o                                                       |   | o                     |
|---------------------------------------------------------|--------|-----------------------|
|                                                    |   |                  |
| **Limitation on Sales of Assets and  Subsidiary Stock** |   | **Change of Control** |

 

**If you want to elect to have onlypart of this Note purchased by the Company pursuant to Section 4.09or 4.10 of the Indenture, state the principal amount at Maturity ($1,000or 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** |
|                                                                        |  |  |  |  |  |  |  |

 

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**EXHIBIT B**

 

FORM OF FACE OFEXCHANGE NOTE

[Global NotesLegend]

 

 

UNLESS THIS CERTIFICATEIS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO HOLDINGS OR ITS AGENT FORREGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED ISREGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS IS REQUESTED BYAN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.,OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OFDTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TOANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL EXCHANGE NOTE SHALL BE LIMITED TOTRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO ASUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THISGLOBAL EXCHANGE NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THERESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

The followinginformation is provided pursuant to Treas. Reg. Section 1.1275-3:

 

This debtinstrument is issued with original issue discount.

 

Treasurer (513-397-9900),as a representative of the issuer, will make available on request to holder(s)of this debt instrument the following information:  issue price, amount of original issue discount, issue date andyield to maturity.

 

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| No.  [                   ] |   | $ |
|---------------------------------------------------------------------------------------------------------------------------|--------|---|

 

SeniorSubordinated Discount Note due 2009

 

[CUSIP No.            ]

 

BROADWING INC., an Ohiocorporation, promises to payto                                    ,or registered assigns, the principal amount at Maturity of[                 ]Dollars on January 20, 2009 (the “Stated Maturity Date”).

 

| **Interest Payment Date** |   | **Record  Date**  |
|---------------------------|--------|-------------------|
| June 30, 2003             |   | June 15, 2003     |
| December 31, 2003         |   | December 15, 2003 |
| June 30, 2004             |   | June 15, 2004     |
| December 31, 2004         |   | December 15, 2004 |
| June 30, 2005             |   | June 15, 2005     |
| December 31, 2005         |   | December 15, 2005 |
| June 30, 2006             |   | June 15, 2006     |
| December 31, 2006         |   | December 15, 2006 |
| June 30, 2007             |   | June 15, 2007     |
| January 20, 2008          |   | January 5, 2008   |
| January 20, 2009          |   | January 5, 2009   |

 

18

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Additional provisions ofthis Note are set forth on the other side of this Note.

 

IN WITNESS WHEREOF, theparties have caused this instrument to be duly executed.

 

 
|   | BROADWING INC. |
|--------|----------------|
|   |           |
|   |           |
|   | By:            |   |   |
|   |           | Name: |
|   |           | Title: |

 

 

TRUSTEE’SCERTIFICATE OF AUTHENTICATION

 

The Bank of New York,Trustee, certifies that this is one of the Notes referred to in the Indenture.

 

 
|   | By:    |                 |   |
|--------|--------|----------------------|--------|
|   |   | Authorized Signatory |
| Dated: |   |
|        |        |                      |        |  |

 

 

*/If the Note is to be issued in global form, add the Global Notes Legend and theattachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL EXCHANGENOTES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL EXCHANGE NOTE”.

 

19

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FORM OF REVERSESIDE OF EXCHANGE NOTE

SeniorSubordinated Discount Note due 2009

 

1.                                       Interest

 

BROADWINGINC., an Ohio corporation (such corporation, and its successors and assignsunder the Indenture hereinafter referred to, being herein called the “Company”),promises to pay cash interest at the Accreted Value at such date, in arrears,on each of June 30 and December 31 of 2003 through 2006, commencing on June 30,2003, and then on each of June 30, 2007, January 20, 2008 and on the StatedMaturity Date (each, an “Interest Payment Date”), at the rate of 12% perannum, compounded semi-annually, until the principal hereof is paid.  Such interest on the Notes shall accrue fromthe most recent date to which interest has been paid or duly provided for or,if no such interest has been paid or duly provided for, from March 26, 2003until the principal hereof is due. Principal of the Notes will accrete as set forth in the Indenture.  Interest shall be paid in cash.  Any principal of, or premium or installmentof interest on this Note which is overdue shall bear interest at the rate equalto 2.25% per annum above the cash interest rate from the date such amounts aredue until they are paid (to the extent that the payment of such interest shallbe legally enforceable), and such excess interest shall be payable ondemand.  In addition, the accretion ofprincipal on the Notes will increase as set forth in the Indenture.  Interest shall be computed on the basis of a360-day year of twelve 30-day months. The interest so payable, and punctuallypaid or duly provided for, on any Interest Payment Date will, as provided inthe Agreement, be paid to the Person in whose name this Note is registered atthe close of business on the Regular Record Date.  “Regular Record Date” for such interest shall be thefifteenth (or, in the case of a Regular Record Date for the Stated MaturityDate and the Interest Payment Date immediately preceding the Stated MaturityDate, the fifth) calendar day (whether or not a Business Day) immediatelypreceding such Interest Payment Date.

 

2.                                       Methodof Payment

 

TheCompany shall pay interest on the Notes (except defaulted interest) to thePersons who are registered holders of Notes at the close of business on theJune 15 or December 15 next preceding the Interest Payment Date (or, in thecase of the Stated Maturity Date and the Interest Payment Date immediatelypreceding the Stated Maturity Date, January 5) even if Notes are canceledafter the record date and on or before the Interest Payment Date.  Holders must surrender Notes to a PayingAgent to collect principal payments. The Company shall pay principal and interest in money of theUnited States of America that at the time of payment is legal tender forpayment of public and private debts. The Company will make all money payments in respect of a certificatedNote (including principal and interest), of the Paying Agent or, at the optionof the Company, by mailing a check to the registered address of each Holderthereof; *provided,however*, that money payments on the Notes shall be made, in the caseof a Holder of at least $1,000,000 aggregate principal amount at Maturity ofNotes, by wire transfer to a U.S. dollar account maintained by the payee with abank in the United States if such Holder elects pay­ment by wire transferby giving written notice to the Trustee or the Paying Agent to such effectdesignating such account no later than 30 days immediately preceding therelevant due date for payment (or such other date as the Trustee may accept inits discretion).

 

20

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3.                                       PayingAgent and Registrar

 

Initially,The Bank of New York, a banking corporation organized under the laws of theState of New York (the “Trustee”), will act as Paying Agent andRegistrar.  The Company may appoint andchange any Paying Agent, Registrar or co-registrar without notice.  The Company or any of its domesticallyincorporated Wholly Owned Subsidiaries (other than any member of the BCI Group)may act as Paying Agent, Registrar or co-registrar.

 

4.                                       Indenture

 

TheCompany issued the Notes under an Indenture, dated as of March 26, 2003 (the “Indenture”),by and between the Company and the Trustee. The terms of the Notes include those stated in the Indenture and thosemade part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and used butnot defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all terms andprovisions of the Indenture, and Holders (as defined in the Indenture) arereferred to the Indenture and the TIA for a statement of such terms andprovisions.

 

TheNotes are senior subordinated unsecured discount obligations of the Companylimited to $441,628,051.27 aggregate principal amount at Maturity at any onetime outstanding (subject to Section 2.07 of the Indenture).  This Note is one of the Exchange Notesreferred to in the Indenture issued in an aggregate principal amount atMaturity of $441,628,051.27.  The Notesinclude the Exchange Notes issued in exchange for Initial Notes.  The Initial Notes and the Exchange Notes aretreated as a single class of Notes under the Indenture.  The Initial Notes of each series and theExchange Notes of the corresponding series are treated as a single series ofNotes under the Indenture.  The Indentureimposes certain limitations on the ability of the Company and its Restricted Subsidiariesto, among other things, make certain Investments and other Restricted Payments,pay dividends and other distributions, incur Indebtedness, enter intoconsensual restrictions upon the payment of certain dividends and distributionsby such Restricted Subsidiaries, issue or sell shares of Capital Stock of suchRestricted Subsidiaries, enter into or permit certain transactions withAffiliates and make asset sales.  TheIndenture also imposes limitations on the ability of the Company to consolidateor merge with or into any other Person or convey, transfer or lease all orsubstantially all of the property of the Company.

 

TheNotes are guaranteed, on a senior subordinated basis, by all existing andfuture Restricted Subsidiaries that are or shall become Guarantors inaccordance with the terms of the Indenture.

 

5.                                       OptionalRedemption

 

Exceptas set forth in the last paragraph of this Section 5, the Notes shall not beredeemable at the option of the Company prior to March 26, 2006.  Thereafter, the Notes are subject toredemption, at the election of the Company, in whole or in part (in theprincipal amount at Maturity of not less than $5,000,000 and integral multiplesthereof), upon not less than ten (30) nor more than sixty (60) days’notice by mail at the prices listed below (expressed as a

 

21

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percentage of the Accreted Value of the Notes beingprepaid as of the Redemption Date) plus accrued interest to the Redemption Date(each prepayment to be in an aggregate Accreted Value of Notes of not less than$5 million):

 

| **Redemption Date**                     |   | **Redemption Price** |   |
|-----------------------------------------|--------|----------------------|--------|
| March  26, 2006 - March 25, 2007        |   | 108                  | %      |
| March  26, 2007 - March 25, 2008        |   | 106                  | %      |
| March  26, 2008 - January 19, 2009 |   | 104                  | %      |

 

On any Interest PaymentDate occurring on or prior to March 26, 2006, the Company may redeem all or anypart (in the principal amount at Maturity of not less than $5,000,000 andintegral multiples thereof) of the then outstanding Accreted Value of Notesupon not less than thirty (30) nor more than sixty (60) days’ notice by mail ata price equal to the sum of (x) 100% of the Accreted Value of such Notes beingredeemed as of the applicable Interest Payment Date plus (y) a Make WholePremium.  As used herein, the “MakeWhole Premium” means, as at any date, (a) an amount equal to thepresent value of the remaining payments of interest on the Notes and theRedemption Price of the Notes, assuming that on March 26, 2006 the entireAccreted Value of the Notes then outstanding will be redeemed at 108% of theAccreted Value thereof, together with accrued interest, and using an annualdiscount factor (applied semi-annually) equal to the Treasury Rate plus 0.50%, less(b) the Accreted Value of the Notes outstanding as at the day ofdetermination; *provided*, *however*, that in no case shall the MakeWhole Premium be less than zero.  Forpurposes of this definition, the “Treasury Rate” shall mean a rate equalto the then current yield to maturity on the most actively traded U.S. Treasurysecurity having a maturity on March 26, 2006. In the event there are not actively traded U.S. Treasury securities witha maturity on March 26, 2006, then the yield to maturity shall be determined bylinear interpolation using the closest, but shorter, maturity for actively tradedU.S. Treasury securities and the closest, but longer, maturity for activelytraded U.S. Treasury maturities.

 

6.                                       SinkingFund

 

TheNotes are not subject to any sinking fund.

 

7.                                       Noticeof Redemption

 

Noticeof redemption will be mailed by first-class mail at least 30 days but notmore than 60 days before the Redemption Date to each Holder of Notes to beredeemed at such Holder’s registered address. Notes in denominations larger than $1,000 (in principal amount atMaturity) may be redeemed in part but only in multiples of $1,000 (in principalamount at Maturity).  If moneysufficient to pay the redemption price of and accrued and unpaid interest onall Notes (or portions thereof) to be redeemed on the Redemption Date isdeposited with the Paying Agent on or before the Redemption Date and certainother conditions are satisfied, on and

 

22

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aftersuch date, cash interest ceases to accrue on such Notes (or such portionsthereof) called for redemption.

 

8.                                       Repurchaseof Notes at the Option of Holders upon Change of Control and Sale of Assets

 

Uponthe occurrence of a Change of Control, each Holder of Notes shall have theright, subject to certain conditions specified in the Indenture, to require theCompany to repurchase all or any part of the Notes of such Holder at a purchaseprice in cash equal to 101% of the Accreted Value of the Notes to berepurchased, plus accrued and unpaid interest thereon and Special Interest, ifany, in respect thereof to the date of repurchase (subject to the right ofHolders of record on the relevant record date to receive interest due andSpecial Interest, if any, on the relevant Interest Payment Date) as providedin, and subject to the terms of, the Indenture.

 

Inaccordance with Section 4.10 of the Indenture, the Company will berequired to offer to purchase Notes upon the occurrence of certain sales ofassets.

 

9.                                       Subordination

 

TheNotes subordinated to Senior Indebtedness, as defined in the Indenture.  To the limited extent provided in theIndenture, Senior Indebtedness must be paid before the Notes may be paid.  Each of the Company and the Guarantorsagrees, and each Holder by accepting a Note agrees, to the subordinationprovisions contained in the Indenture and authorizes the Trustee to give themeffect and appoints the Trustee as attorney-in-fact for such purpose.

 

10.                                 Denominations;Transfer; Exchange

 

TheNotes are in registered form without coupons in denominations of $1,000 (inprincipal amount at Maturity) and multiples thereof.  A Holder may transfer or exchange Initial Notes in accordancewith the Indenture.  Upon any transferor exchange, the Registrar and the Trustee may require a Holder, among otherthings, to furnish appropriate endorse­ments or transfer documents and to payany taxes required by law or permitted by the Indenture.  The Company shall not be required to makeand the Registrar need not register transfers or exchanges of Notes selectedfor redemption (except, in the case of a Note to be redeemed in part, theportion of the Note not to be redeemed) or any Notes for a period of15 days prior to a selection of Notes to be redeemed.

 

11.                                 PersonsDeemed Owners

 

Exceptas provided in paragraph 2 hereof, the registered Holder of this Noteshall be treated as the owner of it for all purposes.

 

12.                                 UnclaimedMoney

 

Ifmoney for the payment of principal of or interest on the Notes has beendeposited with the Trustee or Paying Agent and remains unclaimed for two yearsafter such amount is due and payable, the Trustee or Paying Agent shall pay themoney back to the Company at its written request unless an abandoned propertylaw designates another Person.  Afterany such payment, the Trustee and the Paying Agent shall have no furtherliability for such

 

23

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fundsand Holders entitled to the money must look only to the recipient and not tothe Trustee for payment.

 

13.                                 Dischargeand Defeasance

 

Subjectto certain conditions, the Company at any time may terminate some of or all itsobligations under the Notes and the Indenture if the Company deposits with theTrustee money or U.S. Government Obligations for the payment of principal ofand interest on the Notes to redemption or maturity, as the case may be.

 

14.                                 Amendment,Waiver

 

Subjectto certain exceptions set forth in the Indenture, (a) the Indenture or theNotes may be amended without prior notice to any Holder but with the writtenconsent of the Holders of at least a majority in aggregate principal amount atMaturity of the Notes then outstanding (including consents obtained inconnection with a tender offer or exchange for the Notes) and (b) anydefault may be waived with the written consent of the Holders of at least amajority in principal amount at Maturity of the outstanding Notes.  Subject to certain exceptions set forth inthe Indenture, without the consent of any Holder of Notes, the Company and theTrustee may amend the Indenture or the Notes (a) to cure any ambiguity,omission, defect or inconsistency; (b) to comply with Article 6 of theIndenture; (c) to provide for uncertificated Notes in addition to or inplace of certificated Notes (*provided, however*, that the uncertificatedNotes are issued in registered form for purposes of Section 163(f) of the Code,or in a manner such that the uncertificated Notes are described in Section163(f)(2)(B) of the Code); (d) to add Guarantees of the Notes or to secureNotes; (e) to add to the covenants of the Company for the benefit of theHolders or to surrender any right or power conferred on the Company in theIndenture; (f) to comply with any requirement of the Commission inconnection with qualifying, or maintaining the qualification of, the Indentureunder the TIA; (g) to make any change that does not adversely affect the rightsof any Holder; (h) to provide for the issuance of the Exchange Notes whichshall have terms substantially identical in all material respects to theInitial Notes (except that the transfer restrictions contained in the InitialNotes shall be modified or eliminated, as appropriate), and which shall betreated, together with any outstanding Initial Notes or the Exchange Notes, asa single issue of securities; or (i) to change the name or title of theNotes.

 

15.                                 Defaults,Remedies and Acceleration

 

If anEvent of Default (other than an Event of Default relating to certain events ofbankruptcy, insolvency or reorganization of the Company) occurs and iscontinuing, the Trustee or the Holders of 25% or more in principal amount atMaturity of the outstanding Notes may declare the principal of and accrued butunpaid interest on all the Notes to be due and payable.  Upon such a declaration, such principal andinterest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy,insolvency or reorganization of the Company occurs, the principal of andinterest on all the Notes shall become and be immediately due and payablewithout any declaration or other act on the part of the Trustee or any Holders.  Under certain circumstances, the Holders ofa majority in principal amount at Maturity of the Notes may rescind any suchacceleration with respect to the Notes and its consequences.  If an

 

24

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Eventof Default has occurred and is continuing, the Notes will accrue an additionalinterest at 3% per annum, until such time as no Event of Default shall becontinuing (to the extent that the payment of such interest shall be legallyenforceable); *provided* that 2.25%of such additional interest shall be payable in cash and 0.75% of suchadditional interest shall be added to the principal amount of the Notes as setforth in the definition of Accreted Value.

 

Subjectto the provisions of the Indenture relating to the duties of the Trustee, incase an Event of Default occurs and is continuing, the Trustee will be under noobligation to exercise any rights or powers under the Indenture at the requestor direction of any of the Holders, unless such Holders have offered to theTrustee reasonable indemnity or security against any loss, liability orexpense.  Except to enforce the right toreceive payment of principal or interest when due, no Holder may pursue anyremedy with respect to the Indenture or the Notes unless (i) such Holderhas previously given to the Trustee written notice stating that an Event ofDefault is continuing, (ii) Holders of at least 25% in principal amount atMaturity of the out­standing Notes have requested the Trustee in writing topursue the remedy, (iii) such Holder or Holders have offered to theTrustee reasonable security or indemnity against any loss, liability orexpense, (iv) the Trustee has not complied with such request within60 days after receipt of the request and the offer of security orindemnity and (v) the Holders of a majority in principal amount atMaturity of the outstanding Notes have not given the Trustee a directioninconsistent with such request during such 60-day period.  Subject to certain restrictions, the Holdersof a majority in principal amount at Maturity of the out­standing Notes aregiven the right to direct the time, method and place of conducting any proceed­ingfor any remedy available to the Trustee or of exercising any trust or powerconferred on the Trustee.  The Trustee,how­ever, may refuse to follow any direction that conflicts with law or theIndenture or, subject to certain exceptions in the Indenture, that the Trusteedetermines is unduly prejudicial to the rights of other Holders or wouldinvolve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall beentitled to indemnification satisfactory to it in its sole discretion againstall losses and expenses caused by taking or not taking such action.

 

16.                                 TrusteeDealings with the Company

 

Subjectto certain limitations imposed by the TIA, the Trustee under the Indenture, inits individual or any other capacity, may become the owner or pledgee of Notesand may otherwise deal with and collect obliga­tions owed to it by the Companyor its Affiliates and may other­wise deal with the Company or its Affiliateswith the same rights it would have if it were not Trustee.

 

17.                                 NoRecourse Against Others

 

Adirector, officer, employee or stockholder, as such, of the Company or any ofthe Subsidiaries shall not have any liability for any obligations of theCompany or any of the Subsidiaries under the Notes or the Indenture or for anyclaim based on, in respect of or by reason of such obligations or their crea­tion.  By accepting a Note, each Holder waives andreleases all such liability.  The waiverand release are part of the considera­tion for the issue of the Notes.

 

25

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18.                                 Authentication

 

ThisNote shall not be valid until an author­ized signatory of the Trustee (or anauthenticating agent) manually signs the certificate of authentication on theother side of this Note.

 

19.                                 Abbreviations

 

Customaryabbreviations may be used in the name of a Holder or an assignee, such as TENCOM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=jointtenants with rights of survivorship and not as tenants in common), CUST(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

20.                                 GoverningLaw

 

**THIS NOTE SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUTWITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THEEXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BEREQUIRED THEREBY.**

 

21.                                 CUSIPNumbers

 

theCompany has caused CUSIP numbers to be printed on the Notes and has directedthe Trustee to use CUSIP numbers in notices of redemption as a convenience toHolders.  No representation is made asto the accuracy of such numbers either as printed on the Notes or as contained inany notice of redemption and reliance may be placed only on the otheridentification numbers placed thereon.

 

**The Company will furnish to anyHolder of Notes upon written request and without charge to the Holder a copy ofthe Indenture which has in it the text of this Note.**

 

26

----

 

ASSIGNMENT FORM

 

To assign thisNote, fill in the form below:

 

I or we assign andtransfer this Note to

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocablyappoint                           agentto transfer this Note on the books of the Company.  The agent may substitute another to act for him.

 

 
|                                                               |   |
|--------------------------------------------------------------------|--------|
|                                                               |   |
| Date:                                                              |   | Your Signature: |   |   |
|                                                               |
|                                                               |
|                                                               |   |
| Sign exactly as your  name appears on the other side of this Note. |
|                                                                    |        |  |  |  |  |

 

27

----

 

**OPTION OF HOLDER TO ELECT PURCHASE**

 

**If you want to elect to have thisNote purchased by the Company pursuant to Section  4.09 (Change ofControl) or Section 4.10 (Application of Excess Proceeds from Sale ofAssets) of the Indenture, check the box:**

 
| **o**                                                  |   |   | **o**                 |
|--------------------------------------------------------|--------|--------|-----------------------|
|                                                   |   |   |                  |
| **Limitation on Sales of Assets and Subsidiary Stock** |   |   | **Change of Control** |

 

**If you want to elect to have onlypart of this Note purchased by the Company pursuant to Section 4.09**or 4.10 of the Indenture, statethe principal amount at Maturity ($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** |
|                                                                        |                                                                                                                                                                 |        |                     |        |        |  |

 

28

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**Executioncopy**

 

BROADWING INC.

 

SeniorSubordinated Discount Notes due 2009

 

 

INDENTURE

 

 

Dated as of March26, 2003

 

 

THE BANK OF NEWYORK,

 

Trustee

 

----

 

TABLE OF CONTENTS

 
| **ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS**                    |
|--------------------------------------------------------------------|
|                                                               |
| SECTION  1.01.DEFINITIONS                                          |
| SECTION 1.02.INCORPORATION BY REFERENCE OF  TRUST INDENTURE ACT    |
| SECTION 1.03.RULES OF CONSTRUCTION                                 |
|                                                               |
| **ARTICLE 2. THE NOTES**                                           |
|                                                               |
| SECTION 2.01.FORM AND DATING                                       |
| SECTION 2.02.EXECUTION AND AUTHENTICATION                          |
| SECTION 2.03.REGISTRAR AND PAYING AGENT                            |
| SECTION 2.04.PAYING AGENT TO HOLD MONEY IN  TRUST                  |
| SECTION 2.05.HOLDER LISTS                                          |
| SECTION 2.06.TRANSFER AND EXCHANGE                                 |
| SECTION  2.07.REPLACEMENT NOTES                                    |
| SECTION  2.08.OUTSTANDING NOTES                                    |
| SECTION 2.09.TEMPORARY NOTES                                       |
| SECTION 2.10.CANCELLATION                                          |
| SECTION 2.11.DEFAULTED INTEREST                                    |
| SECTION 2.12.CUSIP NUMBERS                                         |
|                                                               |
| **ARTICLE 3. REDEMPTION**                                          |
|                                                               |
| SECTION 3.01.NOTICES TO TRUSTEE                                    |
| SECTION 3.02.SELECTION OF NOTES TO BE  REDEEMED                    |
| SECTION 3.03.NOTICE OF REDEMPTION                                  |
| SECTION 3.04.EFFECT OF NOTICE OF REDEMPTION                        |
| SECTION 3.05.DEPOSIT OF REDEMPTION PRICE                           |
| SECTION 3.06.NOTES REDEEMED IN PART                                |
| SECTION 3.07.TENDER OF NOTES IN EXERCISE OF  WARRANTS              |
|                                                               |
| **ARTICLE 4. AFFIRMATIVE COVENANTS**                               |
|                                                               |
| SECTION 4.01.PAYMENT OF NOTES.                                     |
| SECTION 4.02.COMMISSION REPORTS                                    |
| SECTION 4.03.PRESERVATION OF CORPORATE  EXISTENCE                  |
| SECTION 4.04.MAINTENANCE OF PROPERTIES                             |
| SECTION 4.05.TAXES                                                 |
| SECTION 4.06.COMPLIANCE CERTIFICATE                                |
| SECTION 4.07.COMPLIANCE WITH LAW                                   |
| SECTION  4.08.INSURANCE                                            |
| SECTION  4.09.OFFER TO REPURCHASE UPON CHANGE OF CONTROL.          |
| SECTION 4.10.OFFER TO PURCHASE BY  APPLICATION OF EXCESS PROCEEDS. |
| SECTION 4.11.OTHER COVENANTS                                       |
| SECTION 4.12.FURTHER ASSURANCES                                    |
| SECTION 4.13.FUTURE GUARANTORS                                     |
| SECTION 4.14.APPROVALS                                             |

 

i

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| **ARTICLE 5. NEGATIVE COVENANTS APPLICABLE TO COMPANY AND ITS  SUBSIDIARIES**         |
|---------------------------------------------------------------------------------------|
|                                                                                  |
| SECTION 5.01.STAY, EXTENSION AND USURY LAWS                                           |
| SECTION 5.02.RESTRICTED PAYMENTS                                                      |
| SECTION 5.03.DIVIDEND AND OTHER PAYMENT  RESTRICTIONS AFFECTING SUBSIDIARIES          |
| SECTION 5.04.INCURRENCE OF INDEBTEDNESS AND  ISSUANCE OF PREFERRED STOCK              |
| SECTION  5.05.ASSET DISPOSITIONS.                                                     |
| SECTION 5.06.TRANSACTIONS WITH AFFILIATES                                             |
| SECTION  5.07.LIMITATION ON LIENS                                                     |
| SECTION 5.08.LIMITATION ON ISSUANCES AND  SALES OF CAPITAL STOCK OF SUBSIDIARIES      |
| SECTION 5.09.PROHIBITION ON INCURRENCE OF  SENIOR SUBORDINATED DEBT                   |
| SECTION 5.10.CONDUCT OF BUSINESS                                                      |
| SECTION 5.11.RESTRICTIONS ON DEALINGS WITH  BCI GROUP                                 |
| SECTION 5.12.SALE OF ASSETS OF THE BCI  GROUP                                         |
|                                                                                  |
| **ARTICLE 6. SUCCESSOR COMPANY**                                                      |
|                                                                                  |
| SECTION 6.01.MERGER, CONSOLIDATION, OR  SALES OF ASSETS OF THE COMPANY                |
| SECTION 6.02.SUCCESSOR COMPANY SUBSTITUTED                                            |
|                                                                                  |
| **ARTICLE 7. EVENTS OF DEFAULT; REMEDIES**                                            |
|                                                                                  |
| SECTION 7.01.EVENTS OF DEFAULT                                                        |
| SECTION  7.02.ACCELERATION                                                            |
| SECTION  7.03.OTHER REMEDIES                                                          |
| SECTION 7.04.WAIVER OF PAST DEFAULTS                                                  |
| SECTION 7.05.CONTROL BY MAJORITY                                                      |
| SECTION  7.06.LIMITATION ON SUITS                                                     |
| SECTION 7.07.RIGHTS OF HOLDERS TO RECEIVE  PAYMENT                                    |
| SECTION 7.08.COLLECTION SUIT BY TRUSTEE                                               |
| SECTION 7.09.TRUSTEE MAY FILE PROOFS OF  CLAIM                                        |
| SECTION 7.10.PRIORITIES                                                               |
| SECTION 7.11.UNDERTAKING FOR COSTS                                                    |
|                                                                                  |
| **ARTICLE 8. SUBORDINATION**                                                          |
|                                                                                  |
| SECTION  8.01.AGREEMENT TO SUBORDINATE                                                |
| SECTION  8.02.LIQUIDATION, DISSOLUTION, BANKRUPTCY                                    |
| SECTION 8.03.DEFAULT ON DESIGNATED SENIOR  INDEBTEDNESS                               |
| SECTION 8.04.ACCELERATION OF PAYMENT OF  NOTES                                        |
| SECTION 8.05.WHEN DISTRIBUTION MUST BE PAID  OVER                                     |
| SECTION  8.06.SUBROGATION                                                             |
| SECTION  8.07.RELATIVE RIGHTS                                                         |
| SECTION 8.08.SUBORDINATION MAY NOT BE  IMPAIRED BY THE COMPANY                        |
| SECTION 8.09.RIGHTS OF TRUSTEE AND PAYING  AGENT                                      |
| SECTION 8.10.DISTRIBUTION OR NOTICE TO  REPRESENTATIVE                                |
| SECTION 8.11.ARTICLE 8 NOT TO PREVENT  EVENTS OF DEFAULT OR LIMIT RIGHT TO ACCELERATE |
| SECTION 8.12.TRUST MONIES NOT SUBORDINATED                                            |

 

ii

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| SECTION 8.13.TRUSTEE ENTITLED TO RELY                                                |
|--------------------------------------------------------------------------------------|
| SECTION 8.14.TRUSTEE TO EFFECTUATE  SUBORDINATION                                    |
| SECTION 8.15.TRUSTEE NOT FIDUCIARY FOR  HOLDERS OF SENIOR INDEBTEDNESS               |
| SECTION 8.16.RELIANCE BY HOLDERS OF SENIOR  INDEBTEDNESS ON SUBORDINATION PROVISIONS |
| SECTION 8.17.TRUSTEE’S COMPENSATION NOT  PREJUDICED                             |
|                                                                                 |
| **ARTICLE 9. TRUSTEE**                                                               |
|                                                                                 |
| SECTION 9.01.DUTIES OF TRUSTEE                                                       |
| SECTION 9.02.RIGHTS OF TRUSTEE                                                       |
| SECTION 9.03.INDIVIDUAL RIGHTS OF TRUSTEE                                            |
| SECTION 9.04.TRUSTEE’S DISCLAIMER                                               |
| SECTION 9.05.NOTICE OF DEFAULTS                                                      |
| SECTION 9.06.REPORTS BY TRUSTEE TO HOLDERS                                           |
| SECTION 9.07.COMPENSATION AND INDEMNITY                                              |
| SECTION 9.08.REPLACEMENT OF TRUSTEE                                                  |
| SECTION 9.09.SUCCESSOR TRUSTEE BY MERGER                                             |
| SECTION 9.10.ELIGIBILITY; DISQUALIFICATION                                           |
| SECTION 9.11.PREFERENTIAL COLLECTION OF  CLAIMS AGAINST THE COMPANY             |
| SECTION 9.12.APPOINTMENT OF CO-TRUSTEE.                                              |
|                                                                                 |
| **ARTICLE 10. DISCHARGE OF INDENTURE; DEFEASANCE**                                   |
|                                                                                 |
| SECTION  10.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE                     |
| SECTION  10.02. CONDITIONS TO DEFEASANCE.                                            |
| SECTION  10.03. APPLICATION OF TRUST MONEY                                           |
| SECTION  10.04. REPAYMENT TO THE COMPANY                                             |
| SECTION  10.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS                                 |
| SECTION  10.06. REINSTATEMENT                                                        |
|                                                                                 |
| **ARTICLE  11. GUARANTEES**                                                          |
|                                                                                 |
| SECTION  11.01. GUARANTEES                                                           |
| SECTION  11.02. LIMITATION ON LIABILITY                                              |
| SECTION  11.03. SUCCESSORS AND ASSIGNS                                               |
| SECTION  11.04. EXECUTION OF SUPPLEMENTAL INDENTURE FOR FUTURE GUARANTORS            |
| SECTION  11.05. NON-IMPAIRMENT                                                       |
| SECTION  11.06. ENDORSEMENT OF GUARANTEES                                            |
|                                                                                 |
| **ARTICLE 12. SUBORDINATION OF THE GUARANTEES**                                      |
|                                                                                 |
| SECTION  12.01. AGREEMENT TO SUBORDINATE                                             |
| SECTION  12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY                                 |
| SECTION  12.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS OF A GUARANTOR             |
| SECTION  12.04. DEMAND FOR PAYMENT                                                   |
| SECTION  12.05. WHEN DISTRIBUTION MUST BE PAID OVER                                  |
| SECTION  12.06. SUBROGATION                                                          |
| SECTION  12.07. RELATIVE RIGHTS                                                      |
| SECTION  12.08. SUBORDINATION MAY NOT BE IMPAIRED BY A GUARANTOR                     |
| SECTION  12.09. RIGHTS OF TRUSTEE AND PAYING AGENT                                   |

 

iii

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| SECTION  12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE                                               |
|--------------------------------------------------------------------------------------------------------|
| SECTION  12.11. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO DEMAND  PAYMENT          |
| SECTION  12.12. TRUSTEE ENTITLED TO RELY                                                               |
| SECTION  12.13. TRUSTEE TO EFFECTUATE SUBORDINATION                                                    |
| SECTION  12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS OF A  GUARANTOR               |
| SECTION  12.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF A GUARANTOR ON  SUBORDINATION PROVISIONS |
| SECTION  12.16. DEFEASANCE                                                                             |
|                                                                                                   |
| **ARTICLE  13. AMENDMENTS**                                                                            |
|                                                                                                   |
| SECTION  13.01. WITHOUT CONSENT OF HOLDERS.                                                            |
| SECTION  13.02. WITH CONSENT OF HOLDERS                                                                |
| SECTION  13.03. COMPLIANCE WITH TRUST INDENTURE ACT                                                    |
| SECTION  13.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS                                          |
| SECTION  13.05. NOTATION ON OR EXCHANGE OF NOTES                                                       |
| SECTION  13.06. TRUSTEE TO SIGN AMENDMENTS                                                             |
|                                                                                                   |
| **ARTICLE 14. MISCELLANEOUS**                                                                          |
|                                                                                                   |
| SECTION  14.01. TRUST INDENTURE ACT CONTROLS                                                           |
| SECTION  14.02. NOTICES                                                                                |
| SECTION  14.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS                                            |
| SECTION  14.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT                                     |
| SECTION  14.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION                                          |
| SECTION  14.06. WHEN NOTES DISREGARDED                                                                 |
| SECTION  14.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR                                           |
| SECTION  14.08. LEGAL HOLIDAYS                                                                         |
| SECTION  14.09. GOVERNING LAW                                                                          |
| SECTION  14.10. NO RECOURSE AGAINST OTHERS                                                             |
| SECTION  14.11. SUCCESSORS                                                                             |
| SECTION  14.12. MULTIPLE ORIGINALS; COUNTERPARTS                                                       |
| SECTION  14.13. TABLE OF CONTENTS; HEADINGS                                                            |
| SECTION  14.14. INCORPORATION                                                                          |
| SECTION  14.15. INTENT TO LIMIT INTEREST TO MAXIMUM                                                    |

 

Appendix A   Provisions Relating to the Initial Notesand the Exchange Notes

EXHIBITS:

 
| Exhibit A       | –                                                 | Form of Initial Note           |
|-----------------|--------------------------------------------------------|--------------------------------|
|            |                                                   |                           |
| Exhibit B       | –                                                 | Form of Exchange Note          |
|            |                                                   |                           |
| Exhibit C       | –                                                 | Form of Supplemental Guarantee |
|            |                                                   |                           |
| Exhibit D       | –                                                 | Form of Notation of Guarantee  |
|            |                                                   |                           |
| SCHEDULES:      |                                                   |
|            |                                                   |
| Schedule 1.1(a) | Restructuring Charges included in  Consolidated EBITDA |
| Schedule 5.03   | Agreements containing dividend  restrictions           |

 

iv

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| Schedule 5.06 – | Affiliate Transactions                            |
|----------------------|---------------------------------------------------|
| Schedule 5.11(b)     | Existing Contractual Arrangements with  BCI Group |

 

v

----

 

**EXHIBITC**

 

 

FORM OFSUPPLEMENTAL GUARANTEE

 

SUPPLEMENTALGUARANTEE (this “SupplementalGuarantee”), dated as of                      ,between                                     ,(the “New Guarantor”), a direct or indirect Broadwing Inc. (or itssuccessor), an Ohio corporation (the “Company”), and The Bank of NewYork, as trustee (the “Trustee”).

 

W I T N E S S E TH

 

WHEREAS, theCompany and the Domestic Subsidiaries listed on the signature pages thereofhave each heretofore executed and delivered to the Trustee an Indenture (the “Indenture”),dated as of March 26, 2003, providing for the issuance by the Company of itsSenior Subordinated Discount Notes due 2009 (the “Notes”); and

 

WHEREAS, Section 11.05of the Indenture provides that under certain circumstances the Company isrequired to cause the Guarantor to execute and deliver to the Trustee for thebenefit of the Holders a supplemental agreement pursuant to which the Guarantorshall unconditionally guarantee all of the Company’s obligations under theNotes pursuant to a Guarantee on the terms and conditions set forth herein;

 

WHEREAS, pursuantto Section 13.01 of the Indenture, the Trustee, the Company and theGuarantors are authorized to execute and deliver this Supplemental Indenture;

 

NOW THEREFORE, inconsideration of the foregoing and for other good and valuable consideration,the receipt of which is hereby acknowledged, the New Guarantor covenants andagrees for the equal and ratable benefit of the Holders of the Notes asfollows:

 

1.             CAPITALIZED TERMS.  Capitalized terms used herein without definitionshall have the meanings assigned to them in the Indenture.

 

2.             AGREEMENT TO GUARANTEE; EXCHANGEAND REGISTRATION RIGHTS AGREEMENT.  TheNew Guarantor hereby agrees, jointly and severally with all other Guarantors,to unconditionally guarantee the Company’s obligations under the Notes on theterms and subject to the conditions set forth in Article 11 and Article12 of the Indenture and to be bound by all other applicable provisions ofthe Indenture.  The Guarantor furtheragrees to become a party to the Exchange and Registration Rights Agreement andto be bound by all provisions thereof.

 

3.             RATIFICATION OF SUPPLEMENTALGUARANTEE; SUPPLEMENTAL GUARANTEES PART OF INDENTURE.  Except as expressly amended hereby, the Indenture is in allrespects ratified and confirmed and all the terms, conditions and provisionsthereof shall remain in full force and effect. This Supplemental Guarantee shall form a part of the Indenture for allpurposes, and every holder of Notes heretofore or hereafter authenticated anddelivered shall be bound hereby.

 

C-1

----

 

 

4.             NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporatoror stockholder of the New Guarantor, as such, shall have any liability for anyobligations of the Company or any Guarantor under the Notes, any Guarantee, theIndenture or this Supplemental Guarantee or for any claim based on, in respectof, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note waivesand releases all such liability.  Thewaiver and release are part of the consideration for issuance of theNotes.  Such waiver may not be effectiveto waive liabilities under the federal securities laws and it is the view ofthe Securities and Exchange Commission that such a waiver is against publicpolicy.

 

5.             EFFECTIVENESS.  This Supplemental Guarantee shall beeffective upon execution by the parties hereto.

 

6.             RECITALS.  The recitals contained herein shall be taken as the statements ofthe Company and the Guarantors assume no responsibility for their correctness.

 

7.             NEW YORK LAW TO GOVERN.  THE INTERNAL LAWS OF THE STATE OF NEW YORKSHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE.

 

8.             TRUSTEE MAKES NOREPRESENTATION.  The Trustee makes norepresentation as to the validity or sufficiency of this SupplementalGuarantee.

 

9.             COUNTERPARTS.  The parties may sign any number of copies ofthis Supplemental Guarantee.  Eachsigned copy shall be an original, but all of them together represent the sameagreement.

 

10.           EFFECT OF HEADINGS.  The Section headings herein are forconvenience only and shall not affect the construction hereof.

 
|   | [New Guarantor] |
|--------|-----------------|
|   |            |
|   |            |
|   | By:             |   |   |
|   |            | Name: |   |
|   |            | Title: |   |

 

C-2

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**EXHIBITD**

 

FORM OF NOTATIONOF GUARANTEE

 

The undersignedhave guaranteed this Note on a subordinated basis as provided in the Indenture.

 

 
|   | [GUARANTOR] |
|--------|-------------|
|   |        |
|   |        |
|   | By:         |   |
|   |        | Name: |   |
|   |        | Title: |   |

 

D-1

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**Schedule1.1(a)**

 

 

**RestructuringCharges Included in**

**ConsolidatedEBITDA**

 
| December 2001  |   | $      | 10,000,000 |   |
|----------------|--------|--------|------------|--------|
|           |   |   |       |
| September 2002 |   | $      | 4,100,000  |   |
|           |   |   |       |
| December 2002  |   | $      | 1,800,000  |   |

 

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**Schedule 5.03**

** **

**Restrictions on Transferability andDividend Payments as of 12-09-02**

 

1.                                       The Operating Agreement dated December 31,1998 between Cincinnati Bell Wireless Company and AT&T Wireless PCS Inc.,together with the Related Agreements thereto contain limitations on thetransferability of the member interests and assets of Cincinnati Bell WirelessLLC, and the payment of dividends.

 

2.                                       The Operating Agreement of Cincinnati BellWireless Holdings LLC (“CBWH”) dated June 2, 2002 contains restrictions on theability of CBWH to transfer and obtain assets, and restrictions on affiliatetransactions.

 

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**Schedule 5.06**

** **

**AffiliateTransactions and Relationships with the BCI Group as of 12-09-02**

 

1.                                       PENSION

 

The Companyand its Subsidiaries participate in the defined benefit pension plan (the“Plan”) of the Company.  Each Subsidiaryis charged an expense related to its portion of the Plan, on a month-to-monthbasis, based on the “all participants” allocation method, pursuant to which theallocation of expenses of the Plan are calculated by independent actuaries.

 

2.                                       MANAGEMENTFEE ARRANGEMENT

 

Corporate expenses of theCompany incurred on behalf of all of the Company’s Subsidiaries are allocated,on a month-to-month basis, to the Subsidiaries based on the MassachusettsFormula, a common method of expense allocation.   Services received by the Subsidiaries from the Company pursuantto this arrangement include, but are not limited to treasury, tax, accounting,finance, cash management, communications, legal and information technology.

 

3.             INTERCOMPANY PROMISSORY NOTE

 

BCI is a party to anIntercompany Promissory Note dated as of June 26, 2001 (the “Note”), payable tothe Company and evidencing funds provided by the Company to BCI for itsoperating, investing and financing needs. The Note bears interest at the rate applicable to borrowings by the Companyunder the Credit Agreement, which rate is adjusted monthly.

 

4.                                       PAYROLLAND ACCOUNTS PAYABLE PROCESSING

 

Cincinnati Bell Telephone(“CBT”), a wholly-owned subsidiary of the Company, provides payroll andaccounts-payable processing services, on a month-to-month basis, for theCompany and its Subsidiaries.  The ratepayable for these services is based on a “per check” fee commensurate withcommercially available third party processing rates.

 

5.             PROVISION OFSERVICES TO CINCINNATI BELL TELEPHONE

 

Broadwing TechnologyServices provides subcontracting services to CBT for certain of CBT’s customerswho have contracted for managed internet and hardware services.  The subcontracting services are provided toCBT on an arms-length basis.

 

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**Schedule 5.11(b)**

 

**ExistingContractual Arrangements with BCI Group**

 

1.             Allexisting arrangements currently between Broadwing Inc. and its subsidiaries onthe one hand and BCI and its Subsidiaries on the other hand that become BRWSale Arrangements (as defined in the Credit Agreement on the date hereof) uponeffectiveness of the BCI Sale Agreement.

 

2.             Provisionby Broadwing Technology Solutions Inc. of subcontracting services for CBThosting/collocation customers provided on an arm’s length basis.

 

3.             Provisionby Broadwing Technology Solutions Inc. of helpdesk support services toBroadwing Inc. and its subsidiaries provided on an arm’s length basis.

 

4.             Provisionby CBT of local access equipment and services for BCI subsidiaries provided onan arm’s length basis.

 

5.             Sharedintercompany resources and supplies such as copiers, telephones, computers,etc. the cost of which is fairly allocated between the users based on theirrespective levels of utilization.

 

6.             Leaseof CBT data center space by Broadwing Technology Solutions Inc. for fair marketrent and separately identified as space of the lessee.

 

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