**Exhibit99.3**

 

THIS AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANYSECURITIES ORA SOLICITATION OF ANY KIND.  SUCH ANOFFER OR SOLICITATION WILL BEMADE ONLY IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS

 

**EXCHANGEAND VOTING AGREEMENT**

 

EXCHANGE AND VOTINGAGREEMENT, dated as of March 24, 2003, by and among Broadwing Inc., an Ohiocorporation (the “***Company***”),and the undersigned beneficial owners of (or investment managers or advisorsfor accounts or funds that own) the 9% Senior Subordinated Notes due 2008 (the“***Notes***”)of Broadwing Communications Inc., a Delaware corporation and a subsidiary ofthe Company (“***BCI***”)(together with their applicable transferees, successors and assigns, each a “***Noteholder***” and,collectively, the “***Noteholders***”).

 

WHEREAS, the Companyintends to offer to exchange (the “***Exchange Offer***”) any and all outstandingNotes for shares of the Company’s common stock, par value $0.01 per share (the“***Broadwing Stock***”),and concurrently with making the Exchange Offer, the Company plans to engage ina related solicitation (the “***Consent Solicitation***”) of consents of the Noteholders tocertain amendments to the Indenture (as defined below) to, among other things,eliminate all  restrictive covenantstherein all as contemplated by the Exchange Offer and Consent Solicitation;

 

WHEREAS, the Company andthe Noteholders have engaged in good faith negotiations with the objective ofconsummating the Exchange Offer and Consent Solicitation substantially on theterms set forth in the Term Sheet attached hereto as Annex A, as each may beamended in accordance with the terms hereof; and

 

WHEREAS, the Company andthe Noteholders desire that the Company conduct the Exchange Offer and theConsent Solicitation as soon as practicable all as contemplated by the ExchangeOffer and Consent Solicitation.

 

NOW, THEREFORE, inconsideration of the mutual covenants and agreements set forth in thisAgreement, and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, each of the parties signatory tothis Agreement hereby agrees as follows:

 

1.  Definitions.  Capitalized terms used and not defined inthis Agreement have the meaning ascribed to them in the Term Sheet, and thefollowing terms shall have the following meanings:

 

“***Agreement***” means thisExchange and Voting Agreement, including the Schedule and Annex hereto.

 

----

 

“***Indenture***” means theIndenture dated as of April 21, 1998, between BCI (as successor to IXCCommunications, Inc.) and IBJ Schroder Bank & Trust Company, pursuant towhich the Notes were issued, as amended and supplemented through the datehereof.

 

“***Person***” means anyindividual, partnership, corporation, limited liability company, association,trust, joint venture, unincorporated organization, governmental unit or otherentity.

 

“***Securities Act***” meansthe Securities Act of 1933, as amended.

 

“***Term Sheet***” meansthat certain Term Sheet attached hereto as Annex A which sets forth thematerial terms and conditions of the Exchange Offer and ConsentSolicitation.  The Term Sheet shall bedeemed a part of this Agreement and references to the Agreement shall be deemedto include the Term Sheet.

 

“***Transfer***” means todirectly or indirectly (i) sell (through a direct sale, constructive sale orotherwise), pledge, assign, encumber, grant a proxy, grant an option withrespect to, transfer or dispose of any participation or interest (voting orotherwise) in or (ii) enter into an agreement, voting trust, commitment orother arrangement to sell (through a direct sale, constructive sale orotherwise), pledge, assign, encumber, grant a proxy, grant an option withrespect to, transfer or dispose of any participation or interest (voting orotherwise) in, or the act thereof.  Theterm “***constructive sale***”means a short sale with respect to the subject security, entering into oracquiring an offsetting derivative contract with respect to such security,entering into or acquiring a futures or forward contract to deliver suchsecurity or entering into any other hedging or other derivative transactionthat has the effect of materially changing the economic benefits and risks ofownership.

 

2.  Agreement to Complete the Exchange Offerand Consent Solicitation.  Subjectto the terms and conditions of this Agreement, the parties to this Agreementagree to use commercially reasonable efforts to complete the Exchange Offer andConsent Solicitation.  The obligationsof the parties hereunder are several and not joint and no party hereto shall beresponsible for the failure of any other party hereto to perform itsobligations hereunder.

 

3.  Agreements of the Company.  (a) The Company agrees to use itscommercially reasonable efforts to commence the Exchange Offer and the ConsentSolicitation as promptly as practicable, to do all things reasonably necessaryand appropriate in furtherance thereof, including filing any related documentswith the Securities and Exchange Commission (the “***Commission***”).

 

(b)  Nothing in this Agreement shall be deemed toprevent the Company or BCI from taking, or failing to take, any action that itis obligated to take (or fail to take) in the performance of any fiduciary orsimilar duty which the Company or BCI owes to any other Person; it beingunderstood and agreed that if any such action (or failure to act) 

 

2

----

 

results in an alterationof the terms of the Exchange Offer and Consent Solicitation not permitted bySection 6, this Agreement and all of the obligations and undertakings of theparties set forth in this Agreement shall terminate and expire.

 

4.  Agreements of the Noteholders.  Subject to the terms and conditions of thisAgreement:

 

(a)  Each Noteholder agrees with each of theother parties to this Agreement, in connection with and conditioned upon theconsummation of the Exchange Offer and Consent Solicitation and when solicitedin accordance with applicable securities law, to:

 

(i)  tender (or cause to be tendered) all of theNotes held by such Noteholder in exchange for shares of Broadwing Stockpursuant to and in accordance with the Exchange Offer and Consent Solicitationwithin 10 business days following the commencement of the Exchange Offer;

 

(ii)vote (or cause to be voted) its Notes to grant its consent pursuant to theConsent Solicitation and agree to the amendments to the Indenture; and

 

(iii)not withdraw or revoke any (or cause not to be withdrawn or revoked) of theforegoing unless and until this Agreement is terminated in accordance with itsterms.

 

Each Noteholderacknowledges that by tendering its Notes in the Exchange Offer, it will bedeemed to have delivered the consents required in the Consent Solicitation forthe amendments to the Indenture.

 

(b)  Each Noteholder agrees, so long as thisAgreement remains in effect, not to Transfer any of the Notes held by it, inwhole or in part, unless the transferee agrees in writing to be bound by theterms of this Agreement.  In the eventthat any Noteholder Transfers any of the Notes, as a condition precedent tosuch Transfer, such Noteholder shall notify the Company prior to such transferand agrees to cause the transferee to execute and deliver an acknowledgement,in form reasonably satisfactory to the Company, whereby such transferee agreesto be bound by the terms of this Agreement for so long as this Agreement shallremain in effect.  Such acknowledgementshall be executed and delivered to the Company prior to the consummation ofsuch Transfer.  Any Transfer of theNotes in violation of the foregoing shall be deemed void.

 

(c)  Each Noteholder agrees, so long as thisAgreement remains in effect, not to commit any act that could restrict or otherwise affect its legal power,authority or right to tender or vote all of the Notes then owned of record orbeneficially by it.  So long as thisAgreement remains in effect, such Noteholder will not enter into any votingagreement with any person or entity with respect to any of such Notes, grantany person or entity any proxy (revocable or irrevocable) or power of attorneywith respect to any of such Notes, deposit any of such Notes in a voting trustor otherwise enter into any agreement or arrangement with any person or entitylimiting or affecting such Noteholder’s legal 

 

3

----

 

power, authority or rightto vote such Notes to grant its consent pursuant to the Consent Solicitationand agree to the amendments to the Indenture.

 

(d)  Each Noteholder agrees that it will permitpublic disclosure, including in a press release and in the registrationstatement for the Exchange Offer and Consent Solicitation, of the contents ofthis Agreement, including, but not limited to, the commitments contained inthis Section 4 and the Term Sheet.

 

(e)  Each Noteholder further agrees that it willnot object to, or otherwise commence or support any proceeding or materialaction to oppose, the Exchange Offer and Consent Solicitation and shall nottake any action that (x) is materially inconsistent with its representations,warranties and agreements set forth herein or (y) would unreasonably delay theconsummation of the Exchange Offer and Consent Solicitation.

 

5.  Effectiveness of this Agreement.  The effectiveness of this Agreement, and therespective obligations of the parties under this Agreement, are conditionedupon the receipt by the Company of the consent and signature hereto of each ofthe Noteholders listed on Schedule A hereto; provided that such Noteholdershold in the aggregate not less than 80% ofthe aggregate outstanding principal amount of the Notes.

 

6.  Amendments to the Exchange Offer andConsent Solicitation.  The Companyshall not alter the material terms and conditions of the Exchange Offer andConsent Solicitation in a manner adverse to the Noteholders without the priorwritten consent of the Noteholders. Notwithstanding the foregoing, the Company may extend the expirationdate of the Exchange Offer, if at the time of any such extension the conditionsto closing set forth in the Exchange Offer shall not have been satisfied orwaived as provided in this Agreement.

 

7.  Termination of Agreement.  Notwithstanding anything to the contrary setforth in this Agreement unless the Exchange Offer and Consent Solicitation havebeen consummated as provided in this Agreement, this Agreement and all of theobligations and undertakings of the parties set forth in this Agreement shallterminate and expire upon the earliest to occur of:

 

(i)  mutual written consent of the Company andeach Noteholder;

 

(ii) amaterial alteration by the Company of the terms of the Exchange Offer andConsent Solicitation not permitted under Section 6;

 

(iii)written notice from the Company to the Noteholders of the Company’s intent toterminate this Agreement upon a determination by the Board of Directors thatsuch termination is in the best interests of the Company;

 

(iv)written notice from the Company or any Noteholder to the other parties heretoafter July 15, 2003, if the closing of the Exchange Offer and ConsentSolicitation has not occurred on or before such date; and

 

4

----

 

(v)written notice from the Company to the Noteholders, if the “First StageClosing” referred to in the Agreement for the Purchase and Sale of Assets datedas of February 22, 2003 (the “***Sale Agreement***”) between certain subsidiaries of BCI, asSellers, and the Buyers party thereto shall not have been consummated by June30, 2003 in accordance with the terms currently set forth in the SaleAgreement.

 

8.  Representations and Warranties.  (a) Each of the signatories to thisAgreement represents and warrants to the other signatories to this Agreementthat:

 

(i) ifan entity, it is duly organized, validly existing and in good standing underthe laws of the jurisdiction of its organization and has all requisitecorporate, partnership or other power and authority to enter into thisAgreement and to carry out the transactions contemplated by, and perform itsrespective obligations under, this Agreement;

 

(ii)the execution, delivery and performance by it of this Agreement do not andshall not (A) violate any provision of law, order, rule or regulationapplicable to it or any of its affiliates or its certificate of incorporationor bylaws or other organizational documents or those of any of its subsidiariesor (B) conflict with, result in the breach of or constitute (with due notice orlapse of time or both) a default under any material contractual obligations towhich it or any of its affiliates is a party or under its certificate ofincorporation, bylaws or other governing instruments;

 

(iii)the execution, delivery and performance by it of this Agreement do not andshall not require any registration or filing with, the consent or approval of,notice to, or any other action with respect to, any Federal, state or othergovernmental authority or regulatory body, except for (A) the registrationunder the Securities Act of the shares of the Broadwing Stock to be issued inthe Exchange Offer and such consents, approvals, authorizations, registrationsor qualifications as may be required under the state securities or Blue Skylaws in connection with the issuance of those shares, (B) the filing with theCommission of a Statementon Schedule TO with respect to the Exchange Offer, including the exhibitsthereto and (C) such other filings as may be necessary or required bythe Commission;

 

(iv)assuming the due execution and delivery of this Agreement by each of the otherparties hereto, this Agreement is the legally valid and binding obligation ofit, enforceable against it in accordance with its terms; and

 

(v) ithas been represented by counsel in connection with this Agreement and thetransactions contemplated by this Agreement.

 

5

----

 

(b)  Each of the Noteholders further representsand warrants to the other signatories to this Agreement that:

 

(i) asof the date of this Agreement, such Noteholder (together with its affiliates)is the beneficial owner of, or the investment adviser or manager for thebeneficial owners of, the aggregate principal amount of Notes, set forthopposite such Noteholder’s name on Schedule A hereto, with the sole power andauthority to vote and dispose of such Notes, and such Notes are owned free andclear of any liens, encumbrances, equities or claims;

 

(ii)as of the date of this Agreement and for so long as this Agreement remains ineffect, such Noteholder has full legal power, authority and right to vote allof such Notes then of record or beneficially owned by it to grant its consentpursuant to the Consent Solicitation and agree to the amendments to theIndenture without the consent, approval of, or any other action on the part of,any other person or entity; and such Noteholder has not entered into votingagreement (other than this Agreement) with any person or entity with respect toany of such Notes, granted to any person or entity any of such Notes, depositedany such Notes in a voting trust or entered into any arrangement or agreementwith any person or entity limiting or affecting its legal power, authority orright to vote such Notes on any matter;

 

(iii)such Noteholder has reviewed, or has had the opportunity to review, with theassistance of professional and legal advisors of its choosing, sufficientinformation necessary for such Noteholder to decide to tender its Notes andgrant its consent pursuant to the Exchange Offer and Consent Solicitation,respectively; and

 

(iv)as of the date of this Agreement, such Noteholder is not aware of any eventthat, due to any fiduciary or similar duty to any other Person, would preventit from taking any action required of it under this Agreement.

 

9.  No Public Announcement.  Each Noteholder agrees that it shall notmake any announcement or disclosure regarding this Agreement or thetransactions contemplated herein without the prior written consent of theCompany.

 

10.  Good Faith.  Each of the signatories to this Agreement agrees to cooperate ingood faith with each other to facilitate the performance by the parties oftheir respective obligations hereunder and the purposes of this Agreement.

 

11.  Amendments and Modifications.  Except as otherwise expressly provided inthis Agreement, this Agreement shall not be amended, changed, supplemented,waived or otherwise modified or terminated except by instrument in writingsigned by each of the parties hereto.

 

6

----

 

12.  No Waiver.  Each of the signatories to this Agreement expressly acknowledgesand agrees that, except as expressly provided in this Agreement, nothing inthis Agreement is intended to, or does, in any manner waive, limit, impair orrestrict the ability of any party to this Agreement to protect and preserve allof its rights, remedies and interests, including, without limitation, withrespect to its claims against and interests in BCI.

 

13.   Stop Transfer Restriction.  In furtherance of this Agreement, each ofthe Noteholders shall, and hereby does, authorize the Company’s counsel tonotify BCI’s transfer agent that a stop transfer restriction has been imposedwith respect to all of the  Notes ownedby such Noteholder (and that this Agreement places limits on the voting andtransfer of such Notes). Notwithstanding the foregoing sentence, if such a stop transfer isimposed and this Agreement is terminated, the Noteholders shall, and do hereby,authorize the Company’s counsel to notify BCI’s transfer agent that the stoptransfer is terminated and the Company shall (and shall cause BCI to) provideany and all notices or instructions to reflect such termination.

 

14.  Further Assurances.  Each of the signatories to this Agreementhereby further covenants and agrees to execute and deliver all furtherdocuments and agreements and take all further action that may be reasonablynecessary or desirable in order to enforce and effectively implement the terms andconditions of this Agreement and the Exchange Offer and Consent Solicitation.

 

15.  Complete Agreement.  This Agreement, including the Schedule andAnnex hereto, constitutes the complete agreement between the signatories tothis Agreement with respect to the subject matter hereof and supersedes allprior and contemporaneous negotiations, agreements and understandings withrespect to the subject matter hereof. The provisions of this Agreement shall be interpreted in a reasonablemanner to effect the intent of the signatories to this Agreement.

 

16.  Notices.  All notices, requests, demands, claims and other communicationshereunder shall be in writing and shall be (a) transmitted by handdelivery,  (b) mailed by first class,registered or certified mail, postage prepaid, (c) transmitted by overnightcourier, or (d) transmitted by telecopy, and in each case, if to the Company,at the address set forth below:

 

BroadwingInc.

201East Fourth Street

Cincinnati,OH  45202

Attention:  ThomasW. Bosse, Esq.

Facsimile:   (513) 397-9557

Telephone:(513) 397-9900

 

 

7

----

 

*Witha copy to:*

 

Cravath, Swaine &Moore

825 Eighth Avenue

New York, NY  10019

Facsimile:  (212) 474-3700

Telephone:  (212) 474-1000

Attention:  William V. Fogg, Esq.

       and Robert Townsend, Esq. 

 

if to a Noteholder, tothe address set forth on the signature pages to this Agreement.

 

Notices mailed ortransmitted in accordance with the foregoing shall be deemed to have been givenupon receipt.

 

17.  Governing Law.  This Agreement shall be governed in allrespects by the laws of the State of New York.

 

18.  Jurisdiction; Waiver of Jury Trial.  By its execution and delivery of thisAgreement, each of the signatories to this Agreement irrevocably and unconditionallyagrees that any legal action, suit or proceeding against it with respect to anymatter under or arising out of or in connection with this Agreement or forrecognition or enforcement of any judgment rendered in any such action, suit orproceeding, shall be brought in a federal or state court of competentjurisdiction in the State of New York in the Borough of Manhattan.  By its execution and delivery of thisAgreement, each of the signatories to this Agreement irrevocably accepts andsubmits itself to the jurisdiction of a court of competent jurisdiction in theState of New York, as applicable under the preceding sentence, with respect toany such action, suit or proceeding.

 

Each of the signatoriesto this Agreement waives its right to trial by jury in any suit, action orproceeding with respect to this Agreement and the transactions contemplatedhereby.

 

19.  Consent to Service of Process.  Each of the signatories to this Agreementirrevocably consents to service of process by mail at the address listed withthe signature of each such party on the signature pages to this Agreement.  Each of the signatories to this Agreementagrees that its submission to jurisdiction and consent to service of process bymail is made for the express benefit of each of the other signatories to thisAgreement.

 

20.  Specific Performance.  It is understood and agreed by each of thesignatories to this Agreement that money damages would not be a sufficientremedy for any breach of this Agreement by any party and each non-breachingparty shall be entitled to specific performance, injunctive, rescissionary orother equitable relief as remedy for any such breach.

 

21.  Headings.  The headings of the sections, paragraphs and subsections of thisAgreement are inserted for convenience only and shall not affect theinterpretation hereof.

 

8

----

 

22.  Successors and Assigns.  This Agreement is intended to bind and inureto the benefit of the signatories to this Agreement and their respectivesuccessors, permitted assigns, heirs, executors, administrators andrepresentatives. The agreements, representations and obligations of theundersigned parties under this Agreement are, in all respects, several and notjoint.

 

23.  Additional Notes.  If, after the date hereof, a Noteholderacquires beneficial or record ownership of any additional Notes for itself orany account or fund managed  by suchNoteholder (any such Notes, “***Additional Notes***”), such Noteholder shall notify theCompany of such acquisition and the provisions of this Agreement shall beapplicable to such Additional Notes as if such Additional Notes had been Notesowned by such Noteholder as of the date hereof.   The provisions of the immediately preceding sentence shall beeffective with respect to Additional Notes without action by any person orentity immediately upon the acquisition by such Noteholder of beneficial orrecord ownership of such Additional Notes.

 

24.  Counterparts.  This Agreement may be executed in one ormore counterparts, each of which shall be deemed an original and all of whichshall constitute one and the same agreement. Delivery of an executed counterpart of a signature page by facsimileshall be as effective as delivery of a manually executed counterpart.

 

25.  No Third-Party Beneficiaries.  This Agreement shall be solely for thebenefit of the signatories to this Agreement, and no other Person or entityshall be a third-party beneficiary hereof.

 

26.  Severability.  Any provision of this Agreement held tobe invalid, illegal or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such invalidity, illegality orunenforceability without affecting the validity, legality and enforceability ofthe remaining provisions hereof; and the invalidity of a particular provisionin a particular jurisdiction shall not invalidate such provision in any otherjurisdiction.

 

27.  Consideration.  It is hereby acknowledged by each of thesignatories to this Agreement that no consideration (other than the obligationsof the other parties under this Agreement) has been paid or shall be due orpaid to the parties for their agreement to support the Exchange Offer andConsent Solicitation in accordance with the terms and conditions of this Agreement,other than the Company’s agreement to use commercially reasonable efforts toobtain approval of confirmation of the Exchange Offer and Consent Solicitationin accordance with the terms and conditions of this Agreement.

 

28.  Mutual Release.  (a) In consideration of the agreements setforth herein and subject to paragraph (b) below (including that the releasesprovided for in this Section 28 are effective only upon the consummation of theExchange Offer and Consent Solicitation), each of the signatories hereto herebyunconditionally releases, and forever discharges and acquits, each of the othersignatories hereto, their parents, subsidiaries and affiliates and theirrespective directors, officers, executives, employees, attorneys, advisors,representatives and shareholders (the “***Released Persons***”),  from all, and all 

 

9

----

 

manner of, actions,suits, debts, claims, duties, payment and performance of all obligations,liabilities and indebtedness of every kind, direct or indirect, determined orundetermined, at law or in equity, whether or not asserted or raised andexisting or alleged to exist or to have existed, at any time, which suchsignatory ever had or has or may have at this time against any Released Person,arising out of, relating to, or incurred in connection with, the Notes, theIndenture, this Agreement or the Exchange Offer and Consent Solicitation, orany transaction entered into hereunder or thereunder or any action taken oromitted to be taken by the Released Persons hereunder or thereunder(collectively, the “***ReleasedClaims***”).

 

(b)  Thereleases provided for by paragraph (a) above shall be effective upon theconsummation of the Exchange Offer and Consent Solicitation.  The release by a signatory hereto will notapply if and to the extent that any payment or delivery, in whole or in part,by or on behalf of another signatory hereto under or in connection with thisAgreement or the Exchange Offer and Consent Solicitation is rescinded or mustbe otherwise restored, whether as a result of any proceedings in bankruptcy,insolvency or reorganization or otherwise, all as though such payment ordelivery had not been made.  Eachsignatory hereto hereby covenants not to sue or pursue any legal or equitableaction against any other signatory hereto with respect to any Released Claim,and if any such signatory shall breach such covenant, then (i) suchnon-breaching signatory shall be entitled to collect from such breachingsignatory all reasonable out-of-pocket costs and expenses, including attorneys’fees, losses, claims and damages, incurred by such non-breaching signatory thatare directly related to the defense of such action and (ii) the release grantedto such breaching signatory by such non-breaching signatory shall be void abinitio and shall be deemed never to have been given.

 

[SIGNATURES BEGINON NEXT PAGE]

 

10

----

 

IN WITNESS WHEREOF, eachof the parties has caused this Agreement to be executed and delivered by itsduly authorized officers as of the date first written above.

 

 
|   | BROADWING INC. |
|--------|----------------|
|   |           |
|   |           |
|   | By:            |  /s/ Mark W. Peterson |   |
|   |           | Name: | Mark W. Peterson |
|   |           | Title: | Vice President &  Treasurer |
|        |                |  |  |  |

 

----

 

 
| HARCH CAPITAL  MANAGEMENT, INC. |
|---------------------------------|
|                            |
|                            |
| By:                             |  /s/ Michael E. Lewitt |   |
|                            | Name: Michael E. Lewitt |   |
|                            | Title: President |   |
|                            |   |   |
| 621 Northwest 53rd St.,         |
| 1 Park Place, Suite 620         |
| Boca Raton,  FL 33847      |

 

----

 
| MUZINICH & CO.  CREDIT |
|----------------------------|
|                       |
|                       |
| By:                        |  /s/ Daniel Naccarella |   |
|                       | Name: Daniel Naccarella |   |
|                       | Title:CFO |   |
|                       |
| 450 Park Avenue 1          |
| New York, NY 10022         |

 

----

 
| ALLIANZ INVESTMENT  MANAGEMENT |
|--------------------------------|
|                           |
|                           |
| By:                            |  /s/ Charles J. Dudley |   |
|                           | Name: Charles J. Dudley |   |
|                           | Title: Vice President |   |
| 55 Greens Farms Road           |
| Westport, CT 06881             |

 

----

 

Schedule A

To the Exchangeand Voting Agreement

 

Noteholder and PrincipalAmount of Notes Held

 
| **NAME**                        |   | **PRINCIPAL  AMOUNT** |       |
|---------------------------------|--------|-----------------------|------------|
|                            |   |                  |       |
| Harch  Capital Management, Inc. |   | $                     | xxx,xxx    |   |
| Muzinich  & Co. Credit      |   | xxx,xxx               |       |
| Allianz  Investment Management  |   | xxx,xxx               |       |
|                            |   | $                     | 40,633,000 |   |

 

----

 

Annex A

To the Exchangeand Voting Agreement

 

**BroadwingInc.**

**TermSheet For Proposed Exchange Offer and Consent Solicitation**

 

This Term Sheet setsforth the principal terms and conditions, as each may be amended in accordancewith the terms of the Exchange and Voting Agreement (the “Agreement”), by whichBroadwing Inc. (the “Company”) intends to offer to exchange (the “ExchangeOffer”) any and all outstanding 9% Senior Subordinated Notes due 2008 (the“Notes”) of Broadwing Communications Inc. (“BCI”) for shares of the Company’scommon stock, par value $0.01 per share (the “Broadwing Stock”), andconcurrently with making the Exchange Offer, the Company plans to engage in arelated solicitation (the “Consent Solicitation”) of consents of the holders ofthe Notes to certain amendments to the related indenture under which the Noteswere issued to, among other things, eliminate all restrictive covenants.  The Company also shall have the option topay a portion of the Exchange Offer consideration in cash. Capitalized termsused and not defined herein shall have the meanings assigned to them in theAgreement.

 
| EXCHANGE OFFER: |   | Each Noteholder, in  exchange for all outstanding Notes (plus accumulated and unpaid interest  thereon) owned by such Noteholder, will receive on the date of the closing of  the Exchange Offer and Consent Solicitation (the “Closing Date”) a number of  shares of Broadwing Stock determined by multiplying (i) the fraction, the  numerator of which is the aggregate principal amount of Notes owned by such  Noteholder on the Closing Date, and the denominator of which is the aggregate  principal amount of Notes  outstanding on the Closing Date, by (ii) 11,076,253.  The Company shall have the option to pay a  portion of the Exchange Offer consideration in cash, but in no event shall  such cash payment exceed 1% of the total Exchange Offer consideration. |
|-----------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |   | The consummation of the  Exchange Offer will be subject to the condition that there be validly  tendered and not withdrawn not less than 95% of the aggregate outstanding principal amount Notes (the “Minimum  Tender Condition”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

----

 
|                   |   | The Exchange Offer will  include a simultaneous   solicitation  of  consents (each, a “Consent”) to amendments  to the indenture under which the Notes were issued to, among other things,  eliminate all restrictive covenants therein and such other provisions as  shall be determined by the Company. |
|------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |   |                                                                                                                                                                                                                                                                                                                               |
|                   |   | All tendering holders  of Notes will be deemed to have delivered a Consent with respect to any Notes  tendered.                                                                                                                                                                                                                    |
|                   |   |                                                                                                                                                                                                                                                                                                                               |
| CONDITIONS TO CLOSING: |   | The Exchange Offer and  Consent Solicitation will be subject to certain conditions that may be waived  by Broadwing in its sole discretion, such conditions being substantially to  the following effect:                                                                                                                          |
|                   |   |                                                                                                                                                                                                                                                                                                                               |
|                   |   | (i) the Minimum Tender  Condition shall have been met;                                                                                                                                                                                                                                                                             |
|                   |   |                                                                                                                                                                                                                                                                                                                               |
|                   |   | (ii) the registration  statement registering the Exchange Offer and Solicitation Consent having been  declared effective by the Commission;                                                                                                                                                                                        |
|                   |   |                                                                                                                                                                                                                                                                                                                               |
|                   |   | (iii) the “First Stage  Closing” referred to in the Sale Agreement shall have been consummated on or  before June 30, 2003 in accordance with the terms currently set forth in the  Sale Agreement;                                                                                                                      |
|                   |   |                                                                                                                                                                                                                                                                                                                               |
|                   |   | (iv) the absence of any  threatened or pending litigation or other legal action relating to the  Exchange Offer or Consent Solicitation;                                                                                                                                                                                           |
|                   |   |                                                                                                                                                                                                                                                                                                                               |
|                   |   | (v) the absence of any  material adverse change in the financial markets, any disruption in the  banking system or any commencement of a war involving the United States  (excluding the current U.S. military  action in Iraq);                                                                                              |

 

2

----

 
|           |   | (vi) no merger,  acquisition or other business combination proposal for the Company shall have  been proposed; and |
|----------------|--------|--------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                               |
|           |   | (vii) no governmental  approvals are required in order to complete the Exchange Offer and Consent  Solicitation.   |
|           |   |                                                                                                               |
| GOVERNING LAW: |   | New York law.                                                                                                      |

 

3

----