Document:

Exhibit
4(c)(x)

 

Execution Copy

 

PURCHASE AGREEMENT

 

BROADWING INC.

 

Senior
Subordinated Discount Notes due 2009

of

Broadwing Inc.,

and

Warrants to
Purchase shares of Common Stock

of

Broadwing Inc.

 

 

TABLE OF CONTENTS

 

 

	
  1.

  	
  R epresentations, Warranties and
  Agreements of the Company

  
	
   

  	
   

  
	
  2.

  	
  Original Specified Amount; Delivery of
  Additional Commitment Letter and Cutback Notice; Purchase of the Offered
  Securities

  
	
   

  	
   

  
	
  3.

  	
  Delivery of and Payment for the Offered
  Securities at Closing

  
	
   

  	
   

  
	
  4.

  	
  Certain Rights of the Purchasers

  
	
   

  	
   

  
	
  5.

  	
  Further
  Agreements of the Company

  
	
   

  	
   

  
	
  6.

  	
  Conditions to
  Purchasers’ Obligations at Closing

  
	
   

  	
   

  
	
  7.

  	
  Termination; Payments Upon Termination

  
	
   

  	
   

  
	
  8.

  	
  Several Obligations of the Purchasers

  
	
   

  	
   

  
	
  9.

  	
  Covenants to Provide Information.

  
	
   

  	
   

  
	
  10.

  	
  Other Affirmative Covenants.

  
	
   

  	
   

  
	
  11.

  	
  Provisions Relating to Resales of Notes.

  
	
   

  	
   

  
	
  12.

  	
  Persons Entitled to Benefit of Agreement

  
	
   

  	
   

  
	
  13.

  	
  Indemnification

  
	
   

  	
   

  
	
  14.

  	
  Expenses

  
	
   

  	
   

  
	
  15.

  	
  Survival

  
	
   

  	
   

  
	
  16.

  	
  Notices, etc

  
	
   

  	
   

  
	
  17.

  	
  Confidentiality

  
	
   

  	
   

  
	
  18.

  	
  Definition of Terms

  
	
   

  	
   

  
	
  19.

  	
  GOVERNING LAW

  
	
   

  	
   

  
	
  20.

  	
  Submission to Jurisdiction; Waiver of
  Service and Venue

  
	
   

  	
   

  
	
  21.

  	
  WAIVER OF RIGHT TO TRIAL BY JURY

  
	
   

  	
   

  
	
  22.

  	
  Counterparts

  
	
   

  	
   

  
	
  23.

  	
  Entire
  Agreement and Amendments

  

 

i

 

	
  24.

  	
  Headings

  

 

 

ii

 

	
  SCHEDULES: 

  	
   

  	 

	
   

  	
   

  	 

	
  Schedule
  1

  	
  Purchasers

  	 

	
  Schedule 1(c)

  	
  Subsidiaries and Other Investments

  	 

	
  Schedule 1(d)

  	
  Primary and Fully Diluted Ownership of Capital Stock

  	 

	
  Schedule 1(e)

  	
  Power and Authority

  	 

	
  Schedule 1(m)

  	
  Conflicts

  	 

	
  Schedule 1(o)

  	
  Schedule 1(o) Indebtedness

  	 

	
  Schedule 1(p)

  	
  Pending Proceedings

  	 

	
  Schedule 1(q)

  	
  Actions and Proceedings by Governmental Authorities

  	 

	
  Schedule 1(t)

  	
  Taxes

  	 

	
  Schedule 1(y)

  	
  Labor Matters; Accelerated Benefits

  	 

	
  Schedule 1(aa)

  	
  Environmental Matters

  	 

	
  Schedule 1(bb)

  	
  Affiliate Transactions

  	 

	
  Schedule 1(dd)

  	
  Options

  	 

	
  Schedule 1(ff)

  	
  Contracts

  	 

	
   

  	
   

  	 

	
  EXHIBITS:

  	
   

  	 

	
   

  	
   

  	 

	
  Exhibit
  A

  	
  Form of Indenture

  
	
  Exhibit
  B

  	
  Form of Warrant Agreement

  
	
  Exhibit
  C

  	
  Form of Exchange and Registration Rights Agreement

  
	
  Exhibit
  D

  	
  Form of Warrant Registration Rights Agreement

  
	
  Exhibit
  E

  	
  Form of Officer’s Certificate

  
	
  Exhibit
  F

  	
  Form of Secretary’s Certificate

  
	
  Exhibit G-1

  	
  Form of Opinion of Special Counsel for the Company

  
	
  Exhibit G-2

  	
  Form of Opinion of Internal Counsel for the Company

  

 

iii

 

PURCHASE AGREEMENT

 

December 9, 2002

 

GS Mezzanine Partners II,
L.P.

GS Mezzanine Partners II
Offshore, L.P.

85 Broad Street

New York, New York  10004

 

Ladies and Gentlemen:

 

Broadwing Inc., an Ohio corporation (the “Company”),
proposes to issue and sell to the Purchasers that principal amount at maturity
of the Company’s Senior Subordinated Discount Notes due 2009 (the “Notes”)
determined as provided in Section 2(a) below and the Prorated Portion
(as defined below) of  17,500,000
warrants (the “Warrants”) to purchase shares of the Company’s common
stock, par value $0.01 per share (the “Common Stock”), at an exercise
price per share of $3.00, with each Warrant representing on the Closing Date
(as defined below), the right to purchase one share of Common Stock (as such
number and such exercise price shall be adjusted as if such Warrants were
issued on the date hereof and the anti-dilution provisions set forth in Section
11 of the Warrant Agreement (as defined below) were in effect as of the
date hereof).   “Prorated Portion”
means a fraction, the numerator of which is equal to the aggregate purchase
price paid by the Purchasers for the Notes purchased at the Closing (as defined
below) and the denominator of which is equal to $350,000,000.

 

The Notes will be issued pursuant to an Indenture,
substantially in the form attached hereto as Exhibit A (the “Indenture”),
by and between the Company and a trustee reasonably satisfactory to the Company
and the Purchasers (the “Trustee”). 
The Warrants will be issued pursuant to a Warrant Agreement,
substantially in the form attached hereto as Exhibit B (the “Warrant
Agreement”), between the Company and the Purchasers (as defined
below).  The Notes and the Warrants
issued hereunder are collectively referred to as the “Offered Securities”.

 

The Company hereby confirms its agreement, subject to the
terms and conditions set forth herein, with GS Mezzanine Partners II, L.P., a
Delaware limited partnership (“GS Mezzanine”), 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 purchase the Offered Securities being issued hereunder at the
Closing (as defined below) (together with GS Mezzanine, GS Offshore and one or
more partnerships, corporations, trusts or other organizations specified as a
Purchaser in Schedule 1 hereto which controls, is controlled by, or is
under common control with, GS Mezzanine or GS Offshore, the “GS Purchasers”),
and any other person specified as a Purchaser in Schedule 1 hereto,
provided such person executes a counterpart of this Agreement (“Other
Purchasers”, and together with the GS Purchasers, the “Purchasers”),
concerning the purchase of the Offered Securities from the Company by the
Purchasers.

 

Holders of the Notes will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Exhibit C (the “Exchange and

 

1

 

Registration Rights Agreement”), pursuant
to which, among other things, (a) the Company will, under the
circumstances described therein, exchange such Notes for certain exchange notes
of the Company (the “Exchange Notes”), which are identical in all
material respects to the Notes (except that the Exchange Notes will not contain
terms with respect to transfer restrictions), which will be registered pursuant
to a registration statement under the Securities Act (the “Exchange Offer
Registration Statement”) filed with the Securities and Exchange Commission
(the “Commission”) and (b) the Company will, under certain
circumstances described therein, file with the Commission shelf registration
statements pursuant to Rule 415 under the Securities Act (“Shelf
Registration Statements”) covering the resale of the Notes issued thereon.

 

Holders of the Warrants will be entitled to the benefits of
an Equity Registration Rights Agreement, substantially in the form attached
hereto as Exhibit D (the “Warrant Registration Rights Agreement”),
pursuant to which, among other things, the Company will, under certain
circumstances described therein, file with the Commission Shelf Registration
Statements covering the resale of the Common Stock issuable upon the exercise
of the Warrants.

 

The Offered Securities will be offered and sold to the
Purchasers without being registered under the Securities Act of 1933, as
amended (the “Securities Act”), in reliance upon an exemption therefrom.

 

Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture. 
Also, “subsidiaries,” as used herein, shall have the meaning ascribed to
the term “Subsidiaries” in the Indenture.

 

1.                                       Representations, Warranties and Agreements of the Company. 
Except as set forth in the SEC Filings (as defined below) (except for
purposes of Schedule 1(o), the disclosure in which shall not be
qualified by reference to the SEC Filings) filed prior to the date of this
Agreement, the Company represents and warrants to, and agrees with, the
Purchasers on and as of the date hereof and as of the Closing Date, that:

 

(a)          The Company
has filed all reports required to be filed with the Commission in compliance
with Section 13 or 15(d) of the Exchange Act since December 31,
2001.  All reports filed with the
Commission in compliance with Section 13 or 15(d) of the Exchange Act
(the “SEC Reports,” and, together with all filings incorporated by
reference therein collectively, the “SEC Filings”) complied when filed
in all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and, except to the extent that information
contained in any SEC Filing has been revised or superseded by a later SEC
Filing, none of the SEC Filings (including all financial statements included
therein and all exhibits and schedules thereto and documents incorporated by
reference therein) contain any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

 

(b)         Assuming the
accuracy of the representations and warranties of the Purchasers contained in Section 2
and their compliance with the agreements set forth therein, it is not
necessary, in connection with the issuance and sale of the Offered Securities
to the Purchasers in the manner contemplated by this Agreement, to register the
Offered Securities under the

 

2

 

Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the “Trust Indenture Act”).

 

(c)          The Company
and each of its Significant Subsidiaries (as defined below) (i) is either
a corporation, a limited liability company or a partnership duly organized,
validly existing and in good standing (if applicable) under the laws of its
jurisdiction of organization and (ii) has full corporate, limited
liability company or partnership, as the case may be, power and authority to
enter into and perform its obligations under each of the Transaction Documents
(as defined below) to which it is a party. 
The Company and each of its subsidiaries (i) has full corporate, limited
liability company or partnership, as the case may be, power and authority to
own, lease and operate its properties and to conduct the businesses in which
they are engaged and (ii) is duly qualified as a foreign corporation, a
foreign limited liability company or a foreign partnership, as the case may be,
to transact business and is in good standing (if applicable) in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties make such qualification necessary, except where the failure to
so qualify or to have such power and authority could not, individually or in
aggregate, reasonably be expected to have a Material Adverse Effect.  Schedule 1(c) hereto sets forth (x) a
list of all direct and indirect subsidiaries of the Company showing all equity
ownership thereof of the Company and its subsidiaries and (y) the other equity
investments of the Company and its subsidiaries in Persons that are not
subsidiaries.

 

(d)         As of
September 30, 2002, (i) 218,792,775 shares of Common Stock were issued and
outstanding, and 155,250 shares of voting preferred shares as represented by
3,105,000 depositary shares of 6 3⁄4% Cumulative Convertible Preferred Stock (the
“Preferred Stock”) bearing a par value of $0.01 per share were issued
and outstanding and (ii) $494.5 million in accreted value of the
Convertible Subordinated Notes (as defined below) were issued and outstanding,
and sufficient shares of Common Stock are available for issuance upon the
conversion of the Convertible Subordinated Notes.  On the date hereof, (i) the authorized capital stock of the
Company consists of 480,000,000 shares of Common Stock, 1,357,299 shares of
voting preferred stock and 1,000,000 shares of non-voting preferred stock; (ii)
218,792,775 preferred purchase rights (the “Preferred Purchase Rights”)
are issued and outstanding, and 400,000 shares of Series A Preferred Stock are
reserved for issuance as voting preferred stock, upon the exercise of such
preferred purchase rights; and (iii) 31,901,435 shares of Common Stock are
reserved for issuance upon exercise of options issued to directors, officers
and employees of the Company under the Company’s stock option plans that are in
effect on the date hereof, true and correct copies of which are attached as Schedule
1(d).  On the Closing Date, all of
the outstanding shares of capital stock of the Company are duly and validly
authorized and issued, fully paid and non-assessable.  When the Offered Securities are delivered and
paid for pursuant to this Agreement on the Closing Date, the Warrants will be
exercisable for shares of Common Stock (the “Warrant Shares”) in
accordance with their terms and the Warrant Shares initially issuable upon
exercise of such Warrants will have been duly and validly authorized and
reserved for issuance upon such exercise and, when issued and paid for in
accordance with the terms of the Warrant Agreement and the Warrants, will be
validly issued, fully paid and non-assessable. 
Immediately after the Closing Date, a sufficient number of Warrant
Shares will have been reserved by the Company for issuance upon exercise of the
Warrants.  Except as set forth in Schedule
1(d), all of the outstanding equity interests of each subsidiary of the
Company is owned by the Company or a direct or indirect subsidiary of the
Company free and clear of any lien or

 

3

 

restriction
upon voting or transfer, except for the pledge of the equity interests of
subsidiaries owned by the Company or a direct or indirect subsidiary of the
Company as security for the obligations of the holder thereof under the Credit
Agreement (as defined below) and the 7 1⁄4% Senior Notes due 2023 of the Company
(the “Senior Notes”).  Except as
set forth on Schedule 1(d), (i) there are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
shares of Common Stock, Preferred Stock, or other capital stock of the Company,
(ii) there are no voting trusts or other agreements or understandings to
which the Company or any of its subsidiaries is a party with respect to the
holding, voting or disposing of Common Stock, Preferred Stock or other capital
stock of the Company, and (iii) the Company has no outstanding bonds,
debentures, notes or other obligations or other securities (other than the
Common Stock, the Warrants, the Preferred Purchase Rights, the Preferred Stock
and the 6 3⁄4% Convertible Subordinated Notes due July 21, 2009 (the “Convertible
Subordinated Notes”) issued pursuant to the Indenture, dated as of July 21,
1999, between the Company and the Bank of New York and sold pursuant to the
Investment Agreement, dated as of July 21, 1999, among the Company and certain
holders of the Convertible Subordinated Notes) that entitle the holders thereof
to vote with the stockholders of the Company on any matter or which are
convertible into or exercisable for securities having such a right to vote.

 

(e)          Except as
set forth on Schedule 1(e), each of the Company and its subsidiaries, to
the extent parties thereto, has full right, power and authority to execute and
deliver this Agreement, the Indenture, the Exchange and Registration Rights
Agreement, the Notes, the Warrants, the Warrant Agreement and the Warrant
Registration Rights Agreement (collectively, all of the foregoing and all other
agreements or documents specifically described in this Agreement and executed
or delivered pursuant hereto, the “Transaction Documents”), and to
perform its respective obligations hereunder and thereunder; and, except as set
forth on Schedule 1(e), all corporate, limited liability or partnership,
as applicable, action required to be taken for the due and proper performance
of each of the Transaction Documents and the consummation of the transactions
contemplated by the Transaction Documents will have been duly and validly
taken.

 

(f)            This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights generally and by
general equitable principles (whether considered in a proceeding in equity or
at law).

 

(g)         The
Indenture has been duly authorized by the Company and its subsidiaries parties
thereto and, when duly executed and delivered by the Company, its subsidiaries
parties thereto and the Trustee in accordance with its terms, will constitute a
valid and legally binding agreement of the Company and such subsidiaries
enforceable against the Company and such subsidiaries in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).  The Indenture will conform in all material
respects to the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder.

 

4

 

(h)         The Notes
have been duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for
as provided herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance
with their terms, except as may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).

 

(i)             The Exchange
and Registration Rights Agreement has been duly authorized, by the Company and
its subsidiaries parties thereto and, when duly executed and delivered by all
the parties thereto in accordance with its terms, will constitute a valid and
legally binding agreement of the Company and such subsidiaries enforceable
against the Company and such subsidiaries in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and except to the extent that the
indemnification or contribution provisions contained therein may be
unenforceable.

 

(j)             The Warrant
Agreement has been duly authorized by the Company, and, when duly executed and
delivered by all the parties thereto in accordance with its terms, will
constitute a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights generally and by
general equitable principles (whether considered in a proceeding in equity or
at law).

 

(k)          The Warrants
have been duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Warrant Agreement and
paid for as provided herein and therein, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Warrant Agreement and enforceable
against the Company in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights generally and by
general equitable principles (whether considered in a proceeding in equity or
at law) and except to the extent that the indemnification or contribution
provisions contained therein may be unenforceable.

 

(l)             The Warrant
Registration Rights Agreement has been duly authorized by the Company and, when
duly executed and delivered by all the parties thereto in accordance with its
terms, will constitute a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law) and except to the extent that the indemnification or
contribution provisions contained therein may be unenforceable.

 

5

 

(m)        Except as
described in Schedule 1(m), the execution, delivery and performance by
each of the Company and its subsidiaries of the Transaction Documents to which
it is a party, the issuance, authentication, sale and delivery of the Notes and
the Warrants and compliance by each of the Company and its subsidiaries with
the terms of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated by the Transaction Documents will
not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in the
violation of any provisions of the charter or by-laws (or similar
organizational documents) of the Company or any of its subsidiaries that are
either Material Subsidiaries or Guarantors (each such subsidiary, a “Significant
Subsidiary”) or (iii) result in the violation of, or in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any Applicable Law or any
judgment, order or decree of any Governmental Authority having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets, except in the case of clauses (i) and (iii) above, as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and no consent, approval, authorization or order of, or filing
or registration with, any such Governmental Authority under any such Applicable
Law, judgment, order or decree is required for the execution, delivery and
performance by the Company and  each of
its subsidiaries of each of the Transaction Documents to which each is a party,
the issuance, authentication, sale and delivery of the Offered Securities and
compliance by the Company and its subsidiaries with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents,
except for such consents, approvals, authorizations, filings, orders,
registrations or qualifications (A) which shall have been obtained or made
on or prior to the Closing Date, (B) as may be required to be obtained or
made under the Securities Act and applicable state securities laws in
connection with the Warrant Registration Rights Agreement and the Exchange and
Registration Rights Agreement and (C) the failure of which to be obtained or
made could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

(n)         The
historical financial statements, including the related notes (collectively, the
“Financial Statements”) contained in the SEC Filings have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the periods covered thereby and fairly present in all
material respects the financial position of the entities purported to be
covered thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, subject,
in the case of any unaudited interim financial statements, to normal year-end
adjustments, in each case in accordance with GAAP, except as noted in the
Financial Statements.

 

(o)         Schedule
1(o) sets forth a complete and correct list of all Indebtedness
of the Company and its subsidiaries that is in existence on the date hereof
(the “Schedule 1(o) Indebtedness”). 
Neither the Company nor any subsidiary of the Company is in default, and
no waiver of default, is currently in effect, in the payment of the principal
of or interest on any Schedule 1(o) Indebtedness of the Company or such
subsidiary and no event or condition exists

 

6

 

with
respect to any Schedule 1(o) Indebtedness of the Company or any subsidiary of
the Company that would permit (or that with notice, lapse of time or both,
would permit) any person to cause such Schedule 1(o) Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled dates
of payment.

 

(p)         Except as
disclosed in Schedule 1(p) hereto, there are no legal or administrative
proceedings pending by or before any Person to which the Company or any of its
subsidiaries is a party or of which any business, property or assets of the
Company or any of its subsidiaries is the subject, or, to the knowledge of the
Company, by which any business, property or assets of the Company or any of its
subsidiaries would reasonably be expected to be affected, which,
(i) singularly or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect or (ii) would
reasonably be expected to question the validity or enforceability of any of the
Transaction Documents or any action taken or to be taken pursuant thereto; and
to the knowledge of the Company, no such proceedings are threatened or
contemplated.

 

(q)         No action
has been taken and no Applicable Law or order has been enacted, adopted or
issued by any Governmental Authority which prevents the issuance of the Offered
Securities or suspends the sale of the Offered Securities in any jurisdiction;
no injunction, restraining order or order of any nature by any court or
governmental agency or body of competent jurisdiction has been issued with
respect to the Company or any of its subsidiaries which would prevent or
suspend the issuance or sale of the Offered Securities; except as disclosed in Schedule
1(q) hereto, no action, suit or proceeding is pending against or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries by or before any Governmental Authority which could reasonably
be expected to interfere with or materially adversely affect the issuance of
the Offered Securities or in any manner draw into question the validity or
enforceability of any of the Transaction Documents or any action taken or to be
taken pursuant thereto.

 

(r)            Neither the
Company nor any of its subsidiaries is (i) in the case of the Company or
any Significant Subsidiary, in violation of its charter or by-laws (or similar
organizational documents), (ii) in default in any respect, and no event
has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (iii) in violation in
any respect of any Applicable Law or order or decree of any Governmental
Authority to which it or its property or assets are subject; except for any
violation under clauses (ii) and (iii) that could not, individually or in the
aggregate, reasonably be expected to (x) have a Material Adverse Effect or (y)
result in an Event of Default.

 

(s)          Except as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, the Company and each of its subsidiaries possess all
licenses, authorizations and permits issued by, and have made all declarations
and filings with, all appropriate Governmental Authorities which are necessary
for the ownership of their respective properties or the conduct of their
respective businesses as described in SEC Filings, and, neither

 

7

 

the
Company nor any of its subsidiaries has received notification of any revocation
or modification of any such material license, authorization or permit.

 

(t)            Except as
disclosed on Schedule 1(t):

 

(i)                                     all material
Tax Returns that are required to be filed by or with respect to the Company or
any of its subsidiaries have been timely filed, and all such Tax Returns are
true and complete in all material respects;

 

(ii)                                  all Taxes
shown to be due on the Tax Returns referred to in clause (i) or which are
otherwise due and payable have been timely paid in full;

 

(iii)                               all Taxes
required to be withheld and paid over by or with respect to the Company or any
of its subsidiaries to any relevant taxing authority in connection with
payments to employees, independent contractors, creditors, stockholders or to
third parties have been so withheld and paid over;

 

(iv)                              the accruals
and reserves for Taxes (other than deferred Taxes) established in the books and
records of the Company and its subsidiaries are complete and adequate in all
material respects to cover any liabilities for Taxes that are not yet due and
payable;

 

(v)                                 all material
deficiencies asserted or assessments made by the Internal Revenue Service or
any state, local or foreign taxing authority have been paid in full or reserved
for in the books and records, or are being contested in good faith;

 

(vi)                              no audits or
examinations with respect to Taxes of the Company or any of its subsidiaries
are ongoing, pending or, to the knowledge of the Company or any subsidiaries,
threatened or proposed by the Internal Revenue Service or any state, local or
foreign taxing authority;

 

(vii)                           there are no
liens for material Taxes on any of the assets of the Company or any of its
subsidiaries other than liens for Taxes not yet due;

 

(viii)                        neither the
Company nor any of its subsidiaries has been a member of an affiliated,
combined, consolidated or unitary Tax group for purposes of filing any Tax
Return other than such a group for which the Company is the common parent;

 

(ix)                                no closing
agreements, private letter rulings, technical advice memoranda or similar
agreement or rulings have been entered into or issued by any taxing authority
with respect to the Company or any of its subsidiaries;

 

(x)                                   to the
knowledge of the Company or any of its subsidiaries, no taxing authority in a
jurisdiction where the Company or any of its subsidiaries does not file Tax
Returns has made a claim, assertion or threat that the Company or any of its subsidiaries
is or may be subject to Tax in such jurisdiction; and

 

8

 

(xi)                                neither the
Company nor any of its subsidiaries is, nor has ever been, a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time (the “Code”).

 

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

 

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

 

(u)         Neither the
Company nor any of its subsidiaries is (i) an “investment company” or a
company “controlled by” an investment company within the meaning of the
Investment Company Act of 1940, as amended (the “Investment Company Act”),
and the rules and regulations of the Commission thereunder or (ii) a
“holding company” or a “subsidiary company” of a holding company or an
“affiliate” thereof within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

 

(v)         Except as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, the Company and each of its subsidiaries have
insurance or adequate reserves covering their respective properties,
operations, personnel and businesses, which insurance or adequate reserves are
in amounts as are, in the reasonable judgment of the Company, adequate to
protect the Company and its subsidiaries and their respective businesses.

 

(w)       Except as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect: (i) the Company and each of its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective
businesses; and (ii) the conduct of the Company’s or any of its subsidiaries’
respective businesses do not conflict in any respect with, and the Company and
its subsidiaries have not received any notice of any claim of conflict with,
any such rights of others.

 

(x)           The Company
and each of its subsidiaries have good and marketable title in fee simple to,
or have valid rights to lease or otherwise use, all items of real and personal
property which are material to the business of the Company and its
subsidiaries, in the case of the Company free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as
(i)  arise under or are permitted under the Senior Notes or under the
Amended and Restated Credit Agreement, dated November 9, 1999, as amended and
restated on January 12, 2000, as amended (the “Credit Agreement”), among
the Company, Broadwing

 

9

 

Communications
Services Inc., Citicorp USA, Inc. as Administrative Agent, certain other agents
and certain lenders thereto, (ii) are Permitted Liens under the Indenture, or
(iii) could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

(y)         Except as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, there is no (i) unfair labor practice, labor
dispute (other than routine individual grievances), litigation relating to
labor matters involving any employee or labor arbitration proceeding pending
or, to the knowledge of the Company, threatened against the Company or its
subsidiaries, (ii) lockout, strike, slowdown, work stoppage or threat
thereof by or with respect to any such employees, or (iii) material
dispute, grievance or litigation relating to the employment of or involving any
employee (other that routine individual grievances).  The Company and its subsidiaries each is in compliance with all
Applicable Laws (as defined in the Indenture) regarding employment, employment
practices, terms and conditions of employment and wages, except for such
noncompliance which individually or in the aggregate do not and could not
reasonably be expected to have a Material Adverse Effect.  Other than as set forth on Schedule 1(y),
no employee of the Company will receive, accrue or be entitled to receive or
accrue any additional benefits, service or accelerated rights to payments of
benefits, or any severance or termination payments as a result of the
consummation of the transactions contemplated hereby.

 

(z)           No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability is reasonably expected to
occur, could reasonably be expected to result in a Material Adverse
Effect.  There is no material pending,
or to the knowledge of the Company threatened, litigation relating to the Company’s
employee benefit plans within the meaning of Section 3(3) of ERISA.  Neither the Company nor any ERISA Affiliate
has any contingent liability with respect to any post-retirement benefit under
a welfare plan within the meaning of Section 3(1) of ERISA, other than
liability for continuation coverage described in Part 6 of Title I of ERISA and
except such liability as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  There has been no failure by any Plan or
Multiemployer Plan to comply with the applicable requirements of ERISA and the
Code other than any such failures that, individually or in the aggregate, have
not had and could not reasonably be expected to have a Material Adverse Effect.  As used herein:

 

“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether
or not incorporated) that, together with the Company, is treated as a single
employer under Section 414(b), (c) or (m) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event,” as
defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than an event for which the thirty-day notice period
is waived); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the
Code or Section 

 

10

 

303(d) of ERISA of an application for
a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Company or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan; (e) the
incurrence by the Company or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (f) the incurrence by the Company or any of its ERISA Affiliates of
any tax or penalty imposed by either Section 4975 of the Code or Section 502(i)
of ERISA, or liabilities pursuant to Section 401(a)(29) of the Code.

 

“Multiemployer Plan” means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

 

“Plan” means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Section 302 or Title IV
of ERISA or Section 412 of the Code, and in respect of which the Company or any
ERISA Affiliate is (or, if such Plan was terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

(aa)    Except as
disclosed on Schedule 1(aa) and except as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect: (i)
there is not and has not been any presence, storage, generation,
transportation, handling, treatment, disposal, discharge, emission or other
release of any kind of Hazardous Materials by the Company or any of its
subsidiaries, or any other entity (including any predecessor) for whose acts or
omissions the Company or any of its subsidiaries is or may be liable from, in,
on, at, under, about or upon any property now or, during the period of
ownership, lease or operation by the Company or any of its subsidiaries,
previously owned, leased or used by the Company or any of its subsidiaries, or
upon any other property, in violation of any Environmental Law or which would,
under any Environmental Law, give rise to any liability of the Company or any
of its subsidiaries; and (ii) there is not and has not been any presence,
disposal, discharge, emission or other release of any kind onto such property
of any Hazardous Material with respect to which the Company has knowledge.  As used herein:

 

“Environmental Laws”
means all applicable foreign, federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, Environmental Permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters; including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Clean Air
Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal
Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances
Control Act, and the Emergency Planning and Community Right-to-Know Act.

 

“Environmental Permits”
means all permits, licenses, registrations, consents and other authorizations
of any Governmental Authority which are required with respect to any of the facilities
of the Company or any of its subsidiaries or operations under any applicable
Environmental Law.

 

“Hazardous Materials”
means (i) any petroleum or petroleum products, radio­active materials, asbestos
in any form that is friable, urea formaldehyde foam insulation,

 

11

 

polychlorinated biphenyls
and radon gas; (ii) any chemicals, materials or substances defined as or
included in the definition of “hazardous substances,” “hazardous waste,”
“hazardous materials,” “extremely hazardous substances,” “restricted hazardous
waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or
“pollutants,” or words of similar meaning and effect, under any applicable
Environmental Law; and (iii) any other chemical, material or substance, the
Release of which is prohibited, limited or regulated by any Environmental Law.

 

(bb)  Except as
set forth in Schedule 1(bb), (a) there is no Indebtedness between
the Company or any of its subsidiaries, on the one hand, and any officer,
stockholder, director or affiliate (as defined in Rule 501(b) of Regulation D
under the Securities Act) (other than the Company or any of its subsidiaries)
of the Company, on the other, (b) no such officer (other than in his or
her capacity as an officer), stockholder, director (other than in his or her
capacity as a director) or affiliate (as defined in Rule 501(b) of Regulation D
under the Securities Act) provides or causes to be provided any assets,
services or facilities to the Company or any of its subsidiaries,
(c) neither the Company nor any of its subsidiaries provides or causes to
be provided any assets, services, or facilities to any such officer,
stockholder, director or affiliate (as defined in Rule 501(b) of Regulation D
under the Securities Act) which, individually or in the aggregate, are material
to the business, assets, condition (financial or otherwise), results of
operations or prospects of the Company and its subsidiaries taken as a whole,
and (d) neither the Company nor any subsidiary beneficially owns, directly
or indirectly, any investment in or issued by any such officer, director or
affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act),
which in the case of each of the clauses (a) through (d) above, individually or
in the aggregate, are material to the business, assets, condition (financial or
otherwise), results of operations or prospects of the Company and its
subsidiaries taken as a whole.  Neither
the Company nor any of its subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries has (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any unlawful
payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment; except
in the case of clauses (i) through (iv) above, as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect or
result in criminal liability of the Company or any of its subsidiaries.

 

(cc)    On and
immediately after the Closing Date, the Company and its subsidiaries on a
consolidated basis (after giving effect to the consummation of the transactions
contemplated by the Transaction Documents) will be Solvent.  As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (i) the fair
value and present fair saleable value of the assets of the Company and its
subsidiaries exceeds the amount required to pay the liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of the
Company and its subsidiaries; (ii) the Company and its subsidiaries have
the ability to pay its debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) as they become absolute
and matured in the normal course of business; and (iii) the Company does
not have an unreasonably small amount of capital with which to conduct its business
after giving due consideration to the prevailing practice in the industry in
which the Company is engaged.  In
computing the amount of such contingent liabilities at any

 

12

 

time, it
is intended that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.

 

(dd)  Except as
described in Schedule 1(dd) hereto, or as contemplated by this
Agreement, there are no outstanding subscriptions, rights, warrants, calls or
options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of, any
shares of capital stock of or other equity or other ownership interest in the
Company or any of its subsidiaries.

 

(ee)    The Company
will apply the proceeds from the sale of the Offered Securities solely to repay
Indebtedness under the Credit Documents and to pay fees and expenses in
connection with the transactions contemplated herein; provided that, to the extent the proceeds
from the sale of Offered Securities exceed $300 million, the Company may use
such excess proceeds for general corporate purposes in a manner to be mutually
agreed in writing by the parties hereto. 
None of the proceeds of the sale of the Offered Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any security that currently is a
margin security or for any other purpose which might cause any of the Offered
Securities to be considered a “purpose credit” within the meanings of
Regulation T, U or X of the Board of Governors of the Federal
Reserve Board.

 

(ff)   Except as set forth in Schedule 1(ff),
neither the Company nor any of its subsidiaries is a party to any contract,
agreement or understanding other than this Agreement with any person that would
give rise to a valid claim against the Company or its subsidiaries or the
Purchasers for a brokerage commission, finder’s fee or like payment in
connection with the sale of the Offered Securities, except as contemplated by
this Agreement.

 

(gg)  The Offered
Securities satisfy the eligibility requirements of Rule 144A(d)(3) under
the Securities Act (assuming that the Warrants are eligible for resale under
Rule 144A pursuant to Rule 144A(d)(3)(i)).

 

(hh)  None of the
Company, any of its subsidiaries or any of their respective affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act)  has, directly or through any agent, made any
offer or sale, solicited offers to buy or otherwise negotiated in respect of any
of the Offered Securities or any securities of the same or similar class as the
Offered Securities, the result of which would cause the sale of the Offered
Securities to fail to be entitled to the exemption from registration afforded
by Section 4(2) of the Securities Act. 
As used herein, the terms “offer” and “sale” have the meanings specified
in Section 2(3) of the Securities Act.

 

(ii)          None of the
Company, any of its subsidiaries or any other person acting on its or their
behalf has engaged, in connection with the sale of the Offered Securities, in
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D under the Securities Act (“Regulation D”).

 

 

13

 

(jj)          No
forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.

 

(kk)    Since
December 31, 2001, (i) there has been no material adverse change in the
condition (financial or otherwise), operations, performance, properties or
prospects of the Company and its Restricted Subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business and (ii) the
Company and its Restricted Subsidiaries have not incurred any material
liability or obligation, direct or contingent, other than (x) in the
ordinary course of business consistent with past practice or (y) in
connection with the transactions contemplated by the Transaction Documents.

 

(ll)          The
Guarantors (as defined in the Indenture) listed on the signature pages to the
Indenture as of the Closing Date will be the only Restricted Subsidiaries (as
defined in the Indenture) that guarantee the Credit Agreement on the Closing
Date.

 

2.                                       Original Specified Amount;
Delivery of Additional Commitment Letter and Cutback Notice; Purchase of the
Offered Securities.  (a)  On the date hereof, the Purchasers agree,
pursuant to the terms and conditions of this Agreement, to purchase from the
Company at the Closing, in accordance with Section 2(b), the
principal amount at maturity of Notes and the number of Warrants set forth
opposite the name of such Purchaser on Schedule 1 hereto for an
aggregate purchase price at the Closing of $200,000,000 (the “Original
Specified Amount,” and together with any Additional Specified Amount
(defined below), the “Specified Amount”).  At any time on or prior to December 24, 2002 (as such date may be
extended to January 7, 2003 with the consent of the Company (such consent not
to be unreasonably withheld), the “Additional Commitment Delivery Date”),
GS Mezzanine, on behalf of the Purchasers, shall have the right (but shall not
be obligated), in its sole discretion, to deliver to the Company a letter (the
“Additional Commitment Letter”), notifying the Company that the
Purchasers agree, pursuant to the terms and conditions of this Agreement, to
purchase from the Company at the Closing, in accordance with Section 2(b),
additional Notes and additional Warrants for an aggregate purchase price at the
Closing of not more than $150,000,000 (such notified amount, subject to the
proviso to this sentence, the “Additional Specified Amount”), and an
amended Schedule 1 specifying the identity of the Purchasers and the
principal amount at maturity of Notes and the number of Warrants that each
Purchaser has agreed to purchase; provided,
however, that if the Additional
Specified Amount on the Additional Commitment Delivery Date is less than
$150,000,000 and (x) this Agreement has not been terminated by the Company
pursuant to Section 7(b) and (y) the Company has not delivered to the
Purchasers a Cutback Notice (as defined below), GS Mezzanine, on behalf of the
Purchasers, shall have the right (but not the obligation), at any time prior to
the earliest of the Closing Date, the date on which this Agreement is
terminated pursuant to Section 7, or the date on which a Cutback Notice
has been delivered to the Company, to deliver to the Company one or more
amendments to the  Additional Commitment
Letter increasing the Additional Specified Amount to not more than
$150,000,000.  Following the Company’s
receipt of the Additional Commitment Letter, the Company may, at any time prior
to the Amendment Date (as defined below), deliver to the Purchasers a written
notice (the “Cutback Notice”) specifying the aggregate principal amount
at maturity of Notes and the number of Warrants that the Company will issue and
sell to the Purchasers at the Closing;

 

14

 

provided, however,
that the aggregate purchase price for the Notes may either be (x) zero or (y)
not less than the Original Specified Amount nor more than the Specified
Amount.  Upon delivery of any Cutback
Notice, the principal amount at maturity of Notes and the number of Warrants
the Purchasers are required to purchase at the Closing shall be reduced (and as
so reduced, may not thereafter be increased), if applicable, and allocated
among the Purchasers in a manner determined by the GS Purchasers in their sole
discretion, to the amount set forth in the Cutback Notice, and Schedule 1
shall be amended accordingly; provided,
further, that, notwithstanding anything herein to the contrary, no
Cutback Notice may be delivered to the Purchasers unless and until the Company
has delivered a similar cutback notice to the prospective purchasers of the
Alternative Mezzanine Debt, if any, reducing their commitments to zero, which
commitments, as so reduced, may not thereafter be increased.  For the avoidance of doubt, if the Company
delivers to the Purchasers a Cutback Notice reducing to zero the aggregate
principal amount at maturity of Notes and the number of Warrants that the Company
will issue and sell to the Purchasers at the Closing, the Purchasers shall have
no further obligations to purchase Offered Securities on the Closing Date; provided that all other provisions of the
Purchase Agreement shall otherwise remain in full force and effect.

 

(b)         On the basis
of the representations, warranties and agreements contained herein, and subject
to the terms and conditions set forth herein, the Company will issue and sell
to each of the Purchasers, severally and not jointly (except that the GS
Purchasers shall be jointly and severally liable with respect to the
obligations of all of the Purchasers under Section 2(a) up to an
amount equal to the Original Specified Amount), and each of the Purchasers,
severally and not jointly (except that the GS Purchasers shall be jointly and
severally liable with respect to the obligations of all of the Purchasers under
Section 2(a) up to an amount equal to the Original Specified Amount),
agrees to purchase from the Company at the Closing the principal amount at
maturity of the Notes and the number of the Warrants (equal to the Prorated
Portion of 17,500,000) set forth opposite the name of such Purchaser on Schedule
1 hereto (as in effect on the Closing Date) at the purchase price set forth
opposite such Purchaser’s name on Schedule 1, for an aggregate purchase
price at the Closing equal to the Specified Amount, as reduced pursuant to any
Cutback Notice.

 

(c)          Each
Purchaser represents to the Company that (i) it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, (ii) it has full right, power and authority to enter into and
perform its obligations under each of the Transaction Documents to which it is
a party, and that all corporate, limited liability company or partnership, as
applicable, action required to be taken for the due and proper authorization,
execution and delivery of such Transaction Documents and the transactions
contemplated thereby has been validly taken, (iii) each of the Transaction Documents
to which it is a party has been duly executed and delivered by such Purchaser
and constitutes a valid and legally binding agreement of such Purchaser
enforceable against such Purchaser in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law), (iv) it is either (A) an “accredited
investor,” within the meaning of Rule 501 promulgated by the Commission under
the Securities Act or (B) a Qualified Institutional Buyer (“QIB”)
as defined in Rule 144A under the Securities Act (“Rule 144A”),
(v) it is acquiring the Offered Securities to be purchased by it hereunder
for its own account, for investment, and not with a view to or for sale in
connection

 

15

 

with any
distribution thereof in violation of the registration provisions of the
Securities Act or the rules and regulations promulgated thereunder,
(vi) it is aware that it must bear the economic risk of such investment
for an indefinite period of time since the statutory basis for exemption from
registration under the Securities Act would not be present if such
representation meant merely that the present intention of such Purchaser is to
hold these securities for a deferred sale or for any fixed period in the
future, (vii) it can afford to bear such economic risk and can afford to
suffer the complete loss of its investment hereunder and (viii) it has not
taken any action which would subject the issuance or sale of the Offered
Securities to the provisions of Section 5 of the Securities Act.  Each Purchaser acknowledges that the Offered
Securities are “restricted securities” under the U.S. federal securities laws,
have not been registered under the Securities Act or any state securities or
blue sky laws and may not be sold except pursuant to an effective registration
statement thereunder or any exemption from registration under the Securities
Act and applicable state securities laws. 
Each Purchaser further acknowledges that each Offered Security shall
include the restrictive legends set forth in the Indenture in the case of the Initial
Notes and the Warrant Agreement in the case of the Warrants.

 

Each Purchaser further acknowledges
that each Note and Warrant will bear the restrictive legend set forth below:

 

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

 

(d)         At the
Closing Date, the parties to this Agreement will (i) agree for purposes of
Treasury Regulation Section 1.1273-2(h) and for all other federal, state, local
and foreign tax purposes as to the aggregate fair market value and the
aggregate purchase price (after giving effect to the making by the Company of
the Closing Payment referred to in Section 3(c)) of the Notes and the Warrants,
and (ii) execute an addendum to this Agreement setting forth such aggregate
fair market value and the aggregate purchase price, which addendum will be
incorporated herein and will be made part hereof as if originally set forth
herein.  The parties agree to report the
sale and purchase of the Notes and Warrants purchased pursuant to this
Agreement for all federal, state, local and foreign tax purposes in a manner
consistent with the aforementioned addenda and agree to take no position
inconsistent with the foregoing (unless otherwise required by a final
determination by the appropriate taxing authority).

 

3.                                       Delivery of and Payment for the Offered Securities at Closing.  (a)  Delivery of and payment for the Offered Securities shall be made
at the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York
Plaza, New York, New York 10004, or at such other place as shall be agreed upon
by the Purchasers and the Company, at 10:00 a.m., New York time,at a

 

16

 

closing (the “Closing”) on the date that is 30
days after the amendment to the Credit Agreement referred to in Section 6(g)
has been executed by the parties thereto (the date on which such amendment has
been executed, the “Amendment Date”) (provided
that all other conditions set forth in Section 6 have been satisfied or
waived by the Purchasers prior to such date), or at such other time or date, as
shall be agreed upon by the Purchasers and the Company (such date and time of
payment and delivery being referred to herein as the “Closing Date”), provided, however,
that if any Other Purchaser fails to fund on the Closing Date as provided
herein, the GS Purchasers will have the right to postpone the Closing Date for
an additional 30 days.  On the Closing
Date, the Company will deliver to the Purchasers, against payment of the
purchase price set forth in Schedule 1, certificates evidencing an
aggregate principal amount at maturity of the Notes that may be purchased for
such purchase price pursuant to the Indenture duly executed by the Company and
authenticated by the Trustee pursuant to the Indenture, and the Warrants, duly
executed by the Company and registered in the names of the Purchasers and in
the amounts set forth in Schedule 1 (and in such denominations requested
by each such Purchaser not later than two business days prior to the Closing
Date).

 

(b)         On the
Closing Date, payment of the purchase price for the Offered Securities (net of
any amounts payable by the Company to the Purchasers pursuant to Section 3(c)
of this Agreement) shall be made to the Company by wire or book-entry transfer
of same-day funds to such account or accounts as the Company shall specify
prior to the Closing Date or by such other means as the parties hereto shall
agree prior to the Closing Date against delivery to the Purchasers of the
certificates evidencing the Offered Securities issued and sold pursuant to this
Agreement.  Time shall be of the
essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of the Purchasers
hereunder.

 

(c)          On the
Closing Date, the Company shall pay by wire transfer of immediately available
funds (or, if consented to by a Purchaser, as a pro rata reduction in the
purchase price of the Offered Securities purchased by such Purchaser) to the
Appropriate Parties (as defined below) a closing payment (the “Closing
Payment”) equal to the sum of (x) xx% of the Specified Amount (excluding
for purposes of this clause (x) any portion of the purchase price not funded as
of the Closing due to the breach by any Purchaser of its obligations hereunder)
and (y) xx% of the aggregate purchase price paid by the Purchasers for the
Notes purchased by them on the Closing Date, without regard to the penultimate
sentence of this Section 3(c). 
In addition, to the extent requested to be paid on the Closing Date, the
Company shall pay to each Purchaser or its designee all reasonable and
documented fees and disbursements of such Purchaser conte mplated by, and
subject to the limitations of, Section 14.  Any obligation owed to the Company by the Purchasers pursuant to Section
3(b) of this Agreement shall be reduced by the amount of the obligation of
the Company to the Purchasers pursuant to this Section 3(c).  As used herein, the “Appropriate Parties”
shall mean: (i) with respect to any payment based on the amount of the
aggregate purchase price payable by the GS Purchasers for the Notes which they
have committed to purchase on or prior to the Closing Date, the GS Purchasers
or their designees, in proportion to their respective commitments, and (ii)
with respect to any payment based on the amount of the aggregate purchase price
payable by the Other Purchasers for the Notes which they have committed to
purchase on the Closing Date, Goldman, Sachs & Co. or its designees.

 

4.                                       Certain Rights of the Purchasers.  If the terms of any Alternative Mezzanine Debt (as defined
below), in the sole judgment of the GS Purchasers, contains terms that are more

 

17

 

favorable to the holders
thereof than the terms of the Offered Securities, the Purchasers shall have the
right, in the GS Purchasers’ sole and absolute discretion, to (a) benefit from
such more favorable terms by incorporating them in the appropriate Transaction
Documents and/or (b) treat their commitment hereunder and under the Additional
Commitment Letter as a commitment to purchase such Alternative Mezzanine Debt
for an aggregate purchase price not to exceed the Specified Amount (and the
Company shall then be obligated to issue and sell to the Purchasers such
Alternative Mezzanine Debt) on the terms and conditions thereof.

 

5.                                       Further Agreements of the Company.  The Company
agrees with each of the Purchasers:

 

(a)          At all times
prior to the Closing Date, to advise the Purchasers promptly and, if reasonably
requested, confirm such advice in writing, of the happening of any event which
makes any statement of a fact in the SEC Filings or any representation or
warranty contained in Section 1 of this Agreement untrue or incorrect in
any material respect or which requires the making of any additions to or
changes in the SEC Filings or Section 1 of this Agreement in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, untrue or incorrect in all material respects.

 

(b)         For so long
as the Offered Securities are outstanding and are “restricted securities”
within the meaning of Rule 144(a)(3) under the Securities Act, to furnish
to holders of the Offered Securities and prospective purchasers of the Offered
Securities designated by such holders, upon the written request of such holders
or such prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act, unless the Company
is then subject to and in compliance with Section 13 or 15(d) of the
Exchange Act (the foregoing agreement being for the benefit of the holders from
time to time of the Offered Securities and prospective purchasers of the
Offered Securities designated by such holders).

 

(c)          Except
following a Note Registration, not to, and to cause its subsidiaries not to,
and to use its reasonable efforts to cause its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act) not to, and to use its
commercially reasonable efforts to cause any person acting on their behalf
(other than the Purchasers, as to which no covenant is given) not to, solicit
any offer to buy or offer to sell the Offered Securities by means of engaging
in any form of general solicitation or general advertising within the meaning
of Rule 502 (c) of Regulation D under the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, or negotiate in respect
of, directly or indirectly, any securities of the same or similar class as the
Offered Securities under circumstances where such offer, sale, contract,
negotiation or disposition could be integrated with the sale of the Offered
Securities in a manner which would cause the exemption afforded by
Section 4(2) of the Securities Act to cease to be applicable to the sale
of the Offered Securities as contemplated by this Agreement.

 

(d)         During the
period from the Closing Date until two years after the Closing Date, not to,
and not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Offered Securities that have been
reacquired by them, except for Offered Securities purchased by the Company or
any of its affiliates and resold in a transaction registered under the
Securities Act or unless the Offered Securities bear a legend specifying the
date of such resale.

 

18

 

(e)          To, from and
after such time as the Company has securities registered pursuant to Section 12
of the Exchange Act, or has securities registered pursuant to the Securities
Act, make timely filing of such reports as are required to be filed by it with
the Commission so that Rule 144 under the Securities Act or any successor
provision thereto will be available to the security holders of the Company who
are otherwise able to take advantages of the provisions of such rule.

 

(f)            Not to, for
so long as the  Offered Securities are outstanding, be or become, or be or
become controlled by, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act, and to not be or become, or be or
become owned by, a closed-end investment company required to be registered
under the Investment Company Act, but not registered thereunder.

 

(g)         To use its
commercially reasonable efforts to do and perform all things required to be
done and performed by it under this Agreement that are within its control prior
to or after the Closing Date.

 

(h)         Not to take
any action from and after the date hereof, and prior to the execution and
delivery of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture as if the
Indenture was in effect in the form attached hereto and dated as of the date
hereof.

 

(i)             To apply the
net proceeds from the sale of the Offered Securities as set forth in Section
1(ee).

 

(j)             After the
Note Registration, provide to the Purchasers the same assistance in conducting
offerings of the Notes as the Company is obligated to provide in connection
with Private Offerings pursuant to Section 11(b) as if such Section
11(b) applied to offerings of publicly traded securities.

 

(k)          At any time
prior to the Additional Commitment Delivery Date, the Company shall cooperate
with the GS Purchasers, and if requested by the GS Purchasers, shall use its
best efforts to:

 

(i)  direct contact between the Company’s senior
management and advisors and prospective Purchasers to enable them to conduct
their due diligence investigation;

 

(ii)
respond to reasonable inquiries of, and provide answers to, each prospective
Purchaser who so inquires about the Company and its subsidiaries;

 

(iii)
host meetings of prospective Purchasers;

 

(iv)
promptly prepare and provide to each prospective Purchaser all information with
respect to the Company, including projections, as each prospective Purchaser
may reasonably request.  Any such
projections made available to a prospective Purchaser by the Company or any of
its representatives will be prepared in good faith

 

19

 

based
upon assumptions believed in good faith to be reasonable; provided, however,
that in no event shall the Company be required to give any representations or
warranties with respect to such projections; and

 

(v)
provide to any prospective Purchaser any other information regarding the
Company that such prospective Purchaser may reasonably request;

 

provided, however, that the
Company’s obligations hereunder shall be subject to prospective Purchasers
expressly agreeing to be bound by the confidentiality provisions set forth in Section 17.

 

(l)             For the
period from the date hereof and ending on the earlier of the Closing Date or
the date on which this Agreement is terminated pursuant to Section 7, to
deal with the Purchasers on an exclusive basis with respect to the issuance of
the Offered Securities and not to, and to cause its agents, representatives,
and any other person acting on its behalf not to, directly or indirectly,
solicit, participate in any negotiations or discussions with or provide or
afford any information to third parties with respect to, or otherwise
facilitate, encourage, accept, or enter into any Alternative Transaction (as
defined below); provided, however, that if the Specified Amount is
less than $350 million, the Company shall have the right, notwithstanding this Section
5(l), after the Additional Commitment Delivery Date and prior to the
delivery of any Cutback Notice to the Purchasers, to solicit third parties to
either (x) participate in the purchase of Notes and Warrants with an aggregate
purchase price not to exceed the difference (the “Shortfall Amount”)
between $350 million and the Specified Amount, which third parties who decide
to participate in such purchase shall be deemed to be Purchasers hereunder for
all purposes (including, for the avoidance of doubt, for purposes of receiving
any Cutback Notice and for any reductions in the Purchasers’ commitments
pursuant thereto) or (y) subject to the second proviso to the last sentence of Section
2(a), to commit to purchase Alternative Mezzanine Debt for a purchase price
not to exceed the Shortfall Amount.  As
used herein, “Alternative Mezzanine Debt” means a mezzanine financing of
the Company consisting of subordinated indebtedness, preferred equity or common
equity of the Company, or any combination of the foregoing, in each case which
would otherwise constitute an Alternative Transaction (as defined below),
satisfying the following conditions: 
(i) the aggregate purchase price for such Alternative Mezzanine Debt
shall not exceed the Shortfall Amount; (ii) the ranking of the most senior
instrument included in such Alternative Mezzanine Debt shall be pari passu in
right of payment to the Notes or junior in right of payment to the Notes to the
same extent as the Notes are junior to Senior Indebtedness (as defined in the
Indenture) and (iii) the maturity, mandatory redemption or similar final
payment (including any call rights of the holders thereof) of each instrument
included in such Alternative Mezzanine Debt shall not occur prior to the date
that is 6 months after the Stated Maturity Date.

 

6.                                       Conditions to Purchasers’ Obligations at Closing.  Each Purchaser’s obligation to purchase and pay for the Offered
Securities to be purchased by it at the Closing is subject to the satisfaction
or waiver by it prior to or at the Closing of each of the conditions specified
below in this Section 6:

 

(a)          Each of the
representations and warranties of the Company in this Agreement and in each of
the other Transaction Documents shall be true and correct in all material
respects

 

20

 

(provided that the representations and
warranties already qualified by materiality or Material Adverse Effect shall be
true and correct in all respects) when made and on or as of the Closing Date,
as if made on and as of such date (unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date).

 

(b)         The Company
and its subsidiaries, to the extent parties hereto or thereto, shall have
performed and complied in all material respects with all agreements and
conditions contained in this Agreement and each of the other Transaction
Documents required to be performed or complied with by them prior to the
Closing, and, after giving effect to the issue and sale of the Offered
Securities and the consummation of the other transactions contemplated by the
Transaction Documents, no default or event of default shall have occurred and
be continuing under any of the Transaction Documents.

 

(c)          The Company
shall have delivered to each Purchaser a certificate of the Chief Executive
Officer and the Chief Financial Officer of the Company, dated the Closing Date,
in the form of Exhibit E hereto, certifying that to their knowledge the
conditions specified in clauses (a), (b), (k), (l) and (m) of this Section 6
have been fulfilled, except as to matters which require the approval or
satisfaction of the Purchasers.

 

(d)         Each of the
Company and each of its subsidiaries which constitutes a Company Guarantor (as
defined in the Indenture) shall have delivered to each Purchaser a certificate
in the form of Exhibit F certifying as to the Company’s or such
subsidiaries’ organizational documents and resolutions attached thereto, the
incumbency and signatures of certain officers of the Company or such
subsidiary, and other proceedings of the Company or such subsidiary, relating
to the authorization, execution and delivery of the Offered Securities, this
Agreement and the other Transaction Documents to which the Company or such
subsidiary is a party.

 

(e)          Each
Purchaser shall have received opinions dated the date of the Closing from (i)
Cravath, Swaine & Moore, counsel for the Company, to the effect set forth
in Exhibit G-1, (ii) Frost, Brown & Todd, local counsel to the
Company, in form and substance reasonably satisfactory to the Purchasers and
their counsel, (iii) the Company’s internal counsel, to the effect set forth in
Exhibit G-2, and (iv) a regulatory counsel for the Company reasonably
acceptable to the Purchasers and their counsel, to the effect that no consent,
approval or authorization by any Governmental Authority is required in
connection with the execution, delivery and performance by the Company and
its subsidiaries of the Transaction Documents and the execution,
delivery and performance by the Company and its subsidiaries of
the Transaction Documents does not violate any applicable provision
of any statutes, rules or policies enforced or issued by any Governmental
Authority.

 

(f)            There shall
not have occurred any material disruption or material adverse change in or affecting
the U.S. financial, banking or capital market conditions generally from those
in effect on the date of this Agreement.

 

(g)         The Company
shall have made such amendments to the Credit Agreement and documents related
thereto in form and substance satisfactory to the Purchasers, and the
Purchasers shall have received all such counterpart originals as it or they may
reasonably

 

21

 

request.  After giving effect to such amendments, at
the Closing the Credit Agreement shall be in full force and effect, and no
event of default shall have occurred and be continuing thereunder.

 

(h)         Each
Purchaser’s purchase of the Offered Securities shall (a) be permitted by
the laws and regulations of each jurisdiction to which it is subject,
(b) not violate any Applicable Law (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any material tax, penalty or
liability under or pursuant to any Applicable Law, which Applicable Law was not
in effect on the date hereof.

 

(i)             The
Purchasers shall have received true and correct copies of all Transaction
Documents and such documents (i) shall have been duly executed,
authenticated (in the case of Notes) and will be delivered by the parties
thereto, (ii) upon delivery thereof, shall be in form and substance
reasonably satisfactory to the Purchasers and their special counsel and (iii)
shall be valid and binding obligations of the parties thereto, enforceable
against each of them in accordance with its respective terms.

 

(j)             The
Purchasers shall not have become aware of any information after the date hereof
with regards to the Company and its subsidiaries or the transactions
contemplated hereby which is inconsistent in a material and adverse manner with
the information disclosed by or on behalf of the Company to the Purchasers on
or prior to the date hereof, taken as a whole.

 

(k)          There shall
be no inquiry, injunction, restraining order, action, suit or proceeding
pending or entered or any statute or rule proposed, enacted or promulgated by
any Governmental Authority or any other Person which, in the reasonable opinion
of the Purchasers, (i) individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect or which seeks to enjoin the
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents or seeks damages against any of the Purchasers as a
result of the transactions contemplated by the Transaction Documents or the
issuance of the Offered Securities, (ii) alleges liability on the part of
any Purchaser in connection with this Agreement, any other Transaction
Documents or the transactions contemplated hereby or thereby or (iii) would
bar the issuance of the Offered Securities or the use of the proceeds thereof
in accordance with the terms of this Agreement.

 

(l)             As of the
Closing Date, the Consolidated EBITDA (as defined in the Indenture) after
giving effect to the transactions contemplated by this Agreement for the
Company and its subsidiaries (excluding BCI and its subsidiaries) for the
twelve-month period most recently ending at least 15 (but no more than 30) days
prior to the Closing Date shall not be less than $495 million plus the amount
of any cash restructuring charges as set forth in Schedule 1.1(a) to the
Indenture (excluding the December 2002 restructuring charge of $2 million, to
the extent recorded) to the extent applicable to the relevant measurement
period.

 

(m)       As of the
Closing Date, the Consolidated Adjusted Debt to Adjusted EBITDA Ratio (as
defined in the Indenture) after giving effect to the transactions contemplated
by this Agreement for the twelve-month period most recently ending at least 15
(but no more than 30) days prior to the Closing Date shall not be greater than
5.5 to 1.0.

 

22

 

7.                                       Termination; Payments Upon Termination. 
(a) This Agreement may be terminated by the Purchasers, in their
absolute discretion, by notice given to and received by the Company prior to
delivery of and payment for the Offered Securities (i) if, prior to that time,
any of the events described in Section 6(k) shall have occurred and be
continuing, (ii) at any time after the date hereof, if the Company has breached
Section 5(l) (other than an inadvertent breach which is promptly cured)
or (iii) at any time after March 31, 2003 (as such date may be extended by the
mutual agreement of the Purchasers and the Company or as set forth in the proviso
to this sentence, the “Drop-Dead Date”); provided, however,
that if the Amendment Date is on or after March 2, 2003 and prior to March 31,
2003, the Drop Dead Date shall be automatically extended by 30 days from the
Amendment Date.  This Agreement may be
terminated by the Company, in its absolute discretion, by notice given to and
received by the Purchasers prior to delivery of and payment for the Offered
Securities, at any time after the Drop Dead Date (as may be extended as set
forth above).  In the event of a
termination of this Agreement as provided for in this Section 7(a), all
further obligations of the parties under this Agreement will terminate without
further liability of any party to another; provided that the obligations of the
parties contained in Section 7, Section 13, Section 14, Section
17, Section 19, Section 20 and Section 21 of this
Agreement will survive any such termination.

 

(b)           In addition to the termination rights of the Company
set forth in Section 7(a), this Agreement may be terminated by the
Company, by notice given to and received by the Purchasers within 3 business
days after the Additional Commitment Delivery Date, if the Additional Specified
Amount as set forth in the Additional Commitment Letter on such date is less
than $150,000,000.  In the event of a
termination of this Agreement as provided for in this Section 7(b), all
further obligations of the parties under this Agreement will terminate without
further liability of any party to another; provided that the obligations of the
parties contained in Section 7(c), Section 13, Section 14,
Section 17, Section 19, Section 20 and Section 21
of this Agreement will survive any such termination.

 

(c)            If this Agreement is terminated as set forth in the
foregoing clauses (a) or (b), the Company shall promptly pay to
the Appropriate Parties a payment (the “Section 7 Payment”) equal to 2%
of the Specified Amount; provided,
however, that if the Closing does
not occur as a result of the condition to the Purchasers’ obligations under
this Agreement set forth in Section 6(f) not being satisfied, the
Purchasers shall not be entitled to such Section 7 Payment.  The Company also shall pay to each Purchaser
or its designee all reasonable and documented out-of-pocket fees and
disbursements of such Purchaser contemplated by Section 14.

 

(d)           In addition to the Section 7 Payment and payment of
expenses referred to in the foregoing clause (c), if (i) this Agreement
is terminated as set forth in clause (a) above and (ii) after the date
hereof and on or prior to June 30, 2003 (the “3% Period”), the Company
or any subsidiary of the Company (excluding BCI and its subsidiaries) enters
into (and, with respect to any such transaction entered into prior to the
expiration of the 3% Period, consummates such transaction after the expiration
of the 3% Period) or consummates a transaction or a series of related or
unrelated transactions for the provision of any alternative debt or equity
financing (any such transaction, an “Alternative Transaction”) (provided that, for purposes of this Section
7 and Section 5(l), neither (1) the issuance of common stock, (2)
the cashless exchange (without regard to any cash payments for fractional
shares) of common stock or preferred equity (other than Disqualified Capital
Stock) of the Company for preferred equity or debt securities of BCI

 

23

 

(whether by
exchange offer, merger or otherwise), (3) the consummation of a senior secured
facility with an effective yield not in excess of LIBOR plus 400 basis points
nor (4) the issuance of preferred equity (other than Disqualified Capital
Stock) of the Company shall be deemed to be an Alternative Transaction) then
the Company shall (i) provide the Purchasers the opportunity to participate in such
Alternative Transaction by providing up to 50% of the aggregate proceeds to the
Company and its affiliates from such Alternative Transaction on the same terms
as the providers of the remaining proceeds in such Alternative Transaction and
(ii) if the Purchasers decline such opportunity, promptly pay to the
Appropriate Parties a fee equal to xx% of the Specified Amount.

 

(e)            If the Purchasers have not received, and are not
entitled to receive, the payment described in the foregoing clause (d) and
in addition to the Section 7 Payment and payment of expenses referred to in the
foregoing clause (c), if (i) this Agreement is terminated as set forth
in clause (a) above and (ii) after June 30, 2003 and on or prior to
December 31, 2003 (the “1.5% Period”), the Company or any subsidiary of
the Company (excluding BCI and its subsidiaries) enters into (and, with respect
to any such transaction entered into prior to the expiration of the 1.5%
Period, consummates such transaction after the expiration of the 1.5% Period)
or consummates an Alternative Transaction with or involving (whether as
manager, agent, underwriter, sponsor or otherwise) any current or former lender
in the Credit Agreement syndicate as of March 31, 2003, or Lehman Brothers Inc.
or any of their respective affiliates, then the Company shall (i) provide the
Purchasers the opportunity to participate in such Alternative Transaction by
providing up to 50% of the aggregate proceeds to the Company and its affiliates
from such Alternative Transaction on the same terms as the providers of the
remaining proceeds in such Alternative Transaction and (ii) if the Purchasers
decline such opportunity, promptly pay to the Appropriate Parties a fee equal
to xx% of the Specified Amount.

 

(f)              If this Agreement is terminated by the Purchasers
pursuant to clause (ii) of Section 7(a), the Company shall promptly pay
to the Appropriate Parties, as liquidated damages and in addition to the
payment of expenses referred to in clause (b), an amount equal to (x)
$xxx, if such termination occurs prior to the delivery of the Additional
Commitment Letter as provided in Section 2(a), or (y) 6% of the
Specified Amount, if such termination occurs on or after the Additional
Commitment Delivery Date (such amount, the “Liquidated Damages Amount”);
provided, however, that any amounts owed to the
Appropriate Parties pursuant to Section 7(c), Section 7(d) or Section
7(e) shall be reduced by the Liquidated Damages Amount actually received by
the Appropriate Parties.

 

8.                                       Several Obligations of the Purchasers.  The
obligations of the Purchasers hereunder shall be several (except that the GS
Purchasers shall be jointly and severally liable with respect to the
obligations of all of the Purchasers under Section 2(a) up to an amount
equal to the Original Specified Amount).

 

9.                                       Covenants to Provide Information.

 

Notwithstanding
anything in the Indenture to the contrary, in addition to the information
required to be delivered pursuant to Section 4.02 of the Indenture, the Company
shall deliver the following information described in clauses (i) through (vii)
of this Section 9:

 

24

 

(a) to each Purchaser, so long
as such Purchaser or any of its Affiliates is a Holder of any of the Offered
Securities, and (b) prior to the date on which the Notes become Widely Held, to
the purchasers of Notes from any of the Purchasers (each a “Subsequent
Purchaser”) that are Institutional Accredited Investors; provided,
however, in no event shall the Company be obligated to provide such
information to Subsequent Purchasers of Notes who beneficially own less than
$5,000,000 of the principal amount at maturity of the Notes; and, provided,
further,
that (1) any Subsequent Purchaser who beneficially owns at least $5,000,000 of
the principal amount at maturity of the Notes shall be entitled to receive
information described in clauses (i), (ii) and (vi) of this Section 9,
and (2) any Subsequent Purchaser that is a “venture capital operating company”
(within the meaning of Department of Labor regulations under ERISA) who
beneficially owns at least $20,000,000 of the outstanding principal amount at
maturity of the Notes shall be entitled to receive information pursuant to this
Section 9 that, in the opinion of such Subsequent Purchaser’s counsel,
is necessary for the investment of such Subsequent Purchaser in the Notes to
qualify as a “venture capital investment” for purposes of the Department of
Labor Regulation §2510.3-101 (or any successor provision), regardless of
whether such Subsequent Purchaser has acquired the Notes prior to or after the
Notes becoming Widely Held:

 

(i)                                     Quarterly
Statements.  As soon as
available, but in any event within fifty (50) days after the end of each
quarter, a copy of:

 

(x)                                   a
consolidated balance sheet of (a) the Company and its subsidiaries and (b) the
Company and its Restricted Subsidiaries, in each case as at the end of such
quarter, together with consolidating balance sheets for each of the Company’s
primary business segments, including, without limitation, Broadwing
Communications Inc., Cincinnati Bell Telephone and Cincinnati Bell Wireless
(all such business segments, collectively, the “Primary Business Segments”),
and

 

(y)                                 consolidated
statements of income, stockholders’ equity and cash flows of (a) the Company
and its subsidiaries and (b) the Company and its Restricted Subsidiaries, in
each case for such quarter and for the portion of the fiscal year ending with
such quarter, together with consolidating information for each of the Company’s
Primary Business Segments,

 

in each case setting forth in comparative form the
figures for the corresponding periods in the prior fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable to periodic
financial statements generally, and fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from normal
year-end adjustments (it being understood that quarterly statements will not be
required to contain footnote disclosures) and the absence of footnotes and
accompanied by a certificate signed on behalf of the Company by the chief
executive officer, chief financial officer or chief accounting officer to the
foregoing effect; provided, however, that if the Company is then subject to
the reporting requirements under Section 13 or Section 15(d) of the
Exchange Act, the delivery by the Company to such Purchaser or such Subsequent
Purchaser of a Quarterly Report on Form 10-Q or any successor form within

 

25

 

the time periods above described shall satisfy the
requirements of this Section 9(i) with respect to financial
statements for the Company and its subsidiaries.

 

(ii)                                  Annual
Statements.  As soon as
available, but in any event within ninety-five (95) days after the end of each
fiscal year of the Company, a copy of:

 

(x)                                   an audited consolidated balance sheet of
(a) the Company and its subsidiaries and (b) the Company and its Restricted
Subsidiaries, in each case as at the end of such year, together with
consolidating balance sheets for each of the Company’s Primary Business
Segments, and

 

(y)                                 consolidated statements of income or
operations, stockholders’ equity and cash flows of (a) the Company and its
subsidiaries and (b) the Company and its Restricted Subsidiaries, in each case
for such year, together with consolidating information for each of the
Company’s Primary Business Segments,

 

in each case
setting forth in comparative form the figures for the prior fiscal year, all in
reasonable detail, prepared in accordance with GAAP, fairly presenting, in all
material respects, the financial position of the companies being reported on
and their results of operations and cash flows, subject to changes resulting
from normal year-end adjustments, and accompanied by:

 

(A)                              an opinion thereon of independent
certified public accountants of recognized national standing, which opinion
shall state that such consolidated financial statements present fairly, in all
material respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared in
conformity with GAAP, except for the omission of the Unrestricted Subsidiaries,
and that the examination of such accountants in connection with such financial
statements (other than consolidating statements) has been made in accordance
with generally accepted auditing standards in the United States, and that such
audit provides a reasonable basis for such opinion in the circumstances,

 

(B)                                a written statement by the independent
certified public accountants giving the report thereon stating whether, in
connection with their audit examination, any condition or event that
constitutes a Default or Event of Default with respect to the covenants
contained in Section 5.02 and Section 5.04 of the Indenture has come to their
attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such Default or Event of Default that would not be disclosed in the course
of their audit examination, and

 

(C)                                a certificate of the chief financial
officer or chief executive officer on behalf of the Company stating that such
financial statements have been prepared in accordance with GAAP applicable to
periodic financial statements

 

26

 

generally and fairly present, in all material
respects, the financial position of the companies being reported on and their
results of operations and income, retained earnings and stockholders’ equity,
and cash flows;

 

provided, however,
that if the Company is then subject to the reporting requirements under Section
13 or 15(d) of the Exchange Act, the delivery by the Company to such Purchaser
or such Subsequent Purchaser of an Annual Report on Form 10-K or any
successor form within the time periods above described shall satisfy the requirements
of this Section 9(ii) with respect to financial statements for the
Company and its subsidiaries; provided
that the documents referred to in clauses (A) and (C) of this Section 9(ii)
shall nonetheless be provided.

 

(iii)                               Concurrently
with the delivery of the quarterly and annual financial statements referred to
in Sections 9(i) and (ii), a certificate on behalf of the
Company by a Responsible Officer (1) stating that the signer reviewed this
Agreement and has made a review in reasonable detail of the transactions and
condition of the Company and its subsidiaries during the fiscal quarter or
year, as the case may be, and that the signer does not have knowledge of the
existence and continuance as at the date of such certificate of any condition
or event which constitutes a Default or an Event of Default, or, if such
condition or event exists, specifying the nature and period of existence
thereof and what action the Company has taken or is taking or proposes to take
with respect thereto, (2) setting forth the amount of the Restricted Payments
made and/or Indebtedness incurred during such period and demonstrating (with
reasonably detailed calculations in support thereof) pursuant to which
provisions of the Indenture such Restricted Payments were made and/or such
Indebtedness was incurred, (3) setting forth the aggregate amount of Restricted
Payments, Indebtedness, Investments, allowances or payments made pursuant to Section
5.11 of the Indenture for the relevant quarter and since October 1,
2002,  and (4) if not specified in the
quarterly and annual financial statements referred to above, the aggregate
amount of interest paid or accrued by each of the Company and its subsidiaries,
and the aggregate amount of depreciation and amortization charged on the books of
the Company during such accounting period.

 

(iv)                              Promptly
upon receipt thereof, copies of all final reports submitted to the Company or
to any of its subsidiaries by independent certified public accountants in
connection with each annual, interim or special audit of the books of the
Company or any of its subsidiaries made by such accountants, including, without
limitation, any final comment letter submitted by such accountants to
management in connection with their annual audit.

 

(v)                                 (1) If the
Company is no longer subject to the reporting requirements of Section 12 or
Section 15 of the Exchange Act, promptly upon their becoming available, copies
of all financial statements, reports, notices and proxy statements sent
generally to its security holders by the Company or any of its subsidiaries and
all regular and periodic reports and all registration statements and final
prospectuses, if any, filed by the Company or any of its subsidiaries with any
securities exchange or with the Commission or any Governmental Authority
succeeding to any of its functions

 

27

 

and
(2) promptly upon request, such additional financial and other information as
any Purchasers or Subsequent Purchasers may from time to time reasonably
request.

 

(vi)                              Promptly,
but in any event within five (5) Business Days, after a Responsible Officer of
the Company becomes aware of the existence of any Default or Event of Default
under the Indenture or that any Person has given any notice or taken any other
action with respect to a claimed Default or Event of Default under the
Indenture, a written notice thereof specifying the nature and existence thereof
and what action the Company is taking or proposes to take with respect thereto.

 

(vii)                           Simultaneously
with the furnishing of such information to any other holder of Indebtedness of
the Company or any of its subsidiaries to the extent required thereby, (i)
copies of all other financial statements, reports or projections with respect
to the Company or its subsidiaries which are broader in scope or on a more
frequent basis than the Company is required to provide under this Agreement and
(ii) copies of all studies, reviews, reports or assessments relating to
environmental matters that reveal material circumstances, events or other
matters.

 

10.                                 Other
Affirmative Covenants.

 

(a)          The Company
and its subsidiaries each will keep complete and accurate books and records of
their transactions in accordance with good accounting practices on the basis of
GAAP applied on a consistent basis (including the establishment and maintenance
of appropriate reserves).  So long as a
Purchaser is a Holder, the Company and its subsidiaries will provide reasonable
opportunities to each such Purchaser to routinely consult with and advise
management of the Company and its subsidiaries on all matters relating to the
operation of the Company and its subsidiaries, including management’s proposed
annual operating plans.  The Company
agrees to and shall cause its subsidiaries to give due consideration to the
advice given and any proposals made by such Purchaser.  Upon reasonable notice and, at any time, at
the reasonable request of any of the Purchasers so long as any such Purchaser
is a Holder, the Company shall, and shall cause its subsidiaries to, subject to
compliance with Applicable Laws and confidentiality obligations to third
parties, give each Purchaser and their authorized representatives reasonable
access during normal business hours to all contracts, books, records,
personnel, offices and other facilities and properties of the Company and its
subsidiaries, their legal advisors and accountants, and, to the extent
available to the Company after the Company uses reasonable efforts to obtain
them, the accountants’ work papers, and to permit such Purchaser (and any sales
or placement agent or any underwriter), to make such copies and inspections
thereof as such Purchaser may reasonably request and discuss the affairs,
finances and accounts with the officers thereof.  Any such visit will be at the expense of such Purchaser (or sales
or placement agent or underwriter), as the case may be, unless there is an
occurrence and continuance of an Event of Default under the Indenture (in which
case at the expense of the Company). 
For purposes of this Section 10(a), the term “Purchaser” shall
include any Subsequent Purchaser that is a “venture capital operating company”
(within the meaning of Department of Labor regulations under ERISA) who
beneficially owns at least $20,000,000 of the outstanding principal amount at
maturity of the Notes.

 

28

 

(b)         So long as
the GS Purchasers and their Affiliates (but not any assignee) own 25% of
 the aggregate principal amount at maturity of the Notes originally acquired
by them, taken as a whole, GS Mezzanine shall be entitled to designate a
non-voting observer (the “GS Observer”) to attend and participate in
(but not vote at) all meetings of the Board of Directors of the Company, and
the executive committee (and/or any other committee that is vested with the
duties customarily attributable to executive committees of similar companies)
of the Board of Directors of the Company. 
In the event of a vacancy caused by the disqualification, removal,
resignation or other cessation of service of the GS Observer from the Board of
Directors of the Company, the Company shall cause the appointment of a new GS
Observer nominated by GS Mezzanine at least seven days prior to the date of the
next regular or special meeting of the Board of Directors of the Company.  The GS Observer shall be permitted to attend
meetings of the Board of Directors of the Company and the executive committee
(and/or any other committee that is vested with the duties customarily
attributable to executive committees of similar companies) of the Board of
Directors in person or telephonically. 
The GS Observer shall be entitled to be present at all meetings of the
Board of Directors of the Company and the executive committee (and/or any other
committee that is vested with the duties customarily attributable to executive
committees of similar companies) of the Board of Directors of the Company and
such GS Observer shall be notified of any meeting of the Board of Directors or
such committee, including such meeting’s time and place, in the same manner as
Directors of the Company and shall have the same access to information
(including any copies of all materials distributed to members of such Board of
Directors or such committee) concerning the business and operations of the
Company and at the same time as Directors of the Company and shall be entitled
to participate in discussions and consult with, and make proposals and furnish
advice to, the Board of Directors or such committee.

 

(c)          The Company
shall indemnify and hold harmless, to the fullest extent permitted under
Applicable Law, the GS Observer to the same extent as all other Directors of
the Company and on terms no less favorable than the terms of the Company’s
certificate of incorporation and bylaws in existence on the date hereof.  In addition, the Company shall reimburse the
GS Observer for all reasonable out-of-pocket expenses incurred by the GS
Observer in connection with the performance of the duties of a non-voting observer
to the same extent as all other Directors of the Company.

 

(d)         Any GS
Observer shall be reasonably acceptable to the Company; provided that any managing director or
vice president of Goldman Sachs & Co. shall be deemed to be acceptable to
the Company.

 

11.                                 Provisions Relating to Resales of Notes.

 

(a)   Private Offerings.  The Company, on the one hand, and the
Purchasers, on the other hand, agree that the following provisions will apply
to any offering by any of the Purchasers of some or all of the Notes, the
Warrants and the Warrant Shares (collectively, the “Covered Securities”), owned
from time to time by the Purchasers, without registration under the Securities
Act:

 

(i)                                     Offers and
Sales only to Accredited Investors or QIBs.  Offers and sales of the Offered Securities
will be made only by the Purchasers or any of its affiliates

 

29

 

who
are qualified to do so in the jurisdictions in which such offers or sales are
made.  Each such offer or sale shall
only be made (i) to persons who are QIBs, (ii) to other Accredited
Investors (as defined in the Indenture) that the offeror or seller reasonably
believes to be and, with respect to sales and deliveries, that are Accredited
Investors who are not QIBs or (iii) non-U.S. persons outside the United
States to whom offers and sales of the Securities may be made in reliance upon
Regulation S under the Securities Act. 
A pledge by any Holder of a Note shall not constitute a sale unless and
until such pledge shall be realized upon.

 

(ii)                                  No General
Solicitation.  The Covered
Securities will be offered by approaching prospective Subsequent Purchasers on
an individual basis.  No general
solicitation or general advertising (within the meaning of Rule 502(c)
under the Securities Act) will be used in the United States and no directed
selling efforts (as defined in Regulation S) will be made outside the
United States in connection with the offering of the Securities.

 

(iii)                               Purchases by
Non-Bank Fiduciaries. 
In the case of a non-bank Subsequent Purchaser acting as a fiduciary for
one or more third parties, in connection with an offer and sale to such
purchaser pursuant to this Section 11, such third parties shall be an
Institutional Accredited Investor or a QIB or a non-U.S. person outside the
United States.

 

(iv)                              Restrictions
on Transfer.  Upon
original issuance by the Company and until such time as the same is no longer
required under the applicable requirements of the Securities Act, the Notes
(and all securities issued in exchange therefor or in substitution thereof,
other than the Exchange Notes) shall bear such legend as is required under
Appendix A to the Indenture and the Warrants and the Warrant Shares shall bear
such legend as is required under Section 6 of the Warrant Agreement.

 

(v)                                 No Future
Liability.  Following
the sale of the Covered Securities by the Purchasers to any Subsequent
Purchaser pursuant to the terms hereof, the Purchasers shall not be liable or
responsible to the Company for any losses, damages or liabilities suffered or
incurred by the Company, including any losses, damages or liabilities under the
Securities Act, arising from or relating to any resale or transfer of any
Security previously sold by the Purchaser in compliance with this Section 11.

 

(b)   Syndication Assistance.  Subject to Section 11(a), at any time after
the 90th day following the Closing, so long as the Purchasers and their
Affiliates hold Notes:

 

(i)                                     The Company
will, if reasonably requested by the Purchasers holding at least 25% of the
then outstanding principal amount at maturity of Notes, assist the Purchasers
in completing any private resale (a “Private Offering”) of Notes, but in
no event shall the Company be required to assist in more than two Private
Offerings and in no event more than once in any six-month period, by the
Purchasers of the Notes in accordance with the Purchasers’ intended method of
distribution provided that the Purchasers shall comply with all restrictions
applicable to the transfer of the Notes under the Indenture and under
applicable federal and state securities laws. 
If any Purchasers

 

30

 

request
assistance to complete a Private Offering, the Company will notify the other
Purchasers of the Private Offering and the other Purchasers shall be entitled to
receive the same assistance received by the initially requesting Purchasers
from the Company in the Private Offering. 
Such assistance by the Company may, in any such case, include the
following:

 

(A)                                   using
commercially reasonable efforts to the end that the distribution efforts
benefit from the Company’s existing lending relationships;

 

(B)                                     using
commercially reasonable efforts to direct contact between the Company’s senior
management and advisors and prospective purchasers to enable them to conduct
their due diligence investigation;

 

(C)                                     responding
to reasonable inquiries of, and providing answers to, each prospective
purchaser who so inquires about the Company and its subsidiaries (to the extent
such information is available or can be acquired and made available to
prospective purchasers without commercially unreasonable effort or expense and
to the extent the provision thereof is not prohibited by Applicable Law or
applicable confidentiality restrictions or would require simultaneous public
disclosure under Regulation FD promulgated under the Exchange Act) and the
terms and conditions of the applicable distribution;

 

(D)                                    using
commercially reasonable efforts to host meetings of prospective purchasers,
appropriate in number for the size and nature of proposed offerings;

 

(E)                                      using
commercially reasonable efforts to promptly prepare and provide to the
Purchasers (or any sales or placement agent therefor and any initial purchaser
thereof) all information with respect to the Company, including projections, as
the Purchasers (or any sales or placement agent therefor and any underwriter
thereof) may reasonably request.  Any
such projections made available to the Purchasers (or each placement or sales
agent, if any, therefor and each underwriter, if any, thereof) by the Company
or any of its representatives will be prepared in good faith based upon
assumptions believed in good faith to be reasonable; provided, however, that in
no event shall the Company be required to give any representations or
warranties with respect to such projections; and

 

(F)                                      if requested
by the Purchasers, take actions reasonably necessary to enable Standard &
Poor’s Rating Services, Inc. and Moody’s Investors Service, Inc. to provide
their respective credit ratings of the Notes; provided, that nothing contained
in this Section 11(b)(i) shall require the Company or any of its
subsidiaries to take any actions that would (i) unreasonably interfere
with or disrupt their businesses or operations; (ii) interfere with or
disrupt  any securities offering by the
Company;

 

31

 

(iii) require the Company and its subsidiaries to incur
any significant expense; or (iv) require the Company or any of its
subsidiaries to provide any non-public information to any third party unless
such third party shall have entered into a confidentiality agreement on terms
reasonably acceptable to the Company; or (v) be required to take any
actions that would result in any Private Offering being deemed a public
offering under the Securities Act.

 

(ii)                                  The Company
will allow the Purchasers (or any sales or placement agent therefor or, in the
case of an underwritten offering, the lead manager and co-managers thereof, in
each case, as may be selected by the Purchasers and is reasonably acceptable to
the Company), in consultation with the Company, to manage all aspects of the
distribution of the Notes, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitment will be accepted, which institutions will participate, the
allocations of the commitments among the prospective purchasers and the amount
and distribution of fees from the sellers among the prospective purchasers.

 

(iii)                               At the
request of the Purchasers, in order to facilitate the consummation of a Private
Offering, the Company will prepare and deliver to each Purchaser copies of an
offering memorandum (“Offering Memorandum”) describing the terms of the
Notes proposed to be sold and of the Private Offering contemplated by such
resales and containing such other information customarily included in offering
memoranda for similar transactions.  The
Offering Memorandum for any Private Offering will not, as of its date and as of
the closing of such Private Offering, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided,
however, that the foregoing shall not apply to statements in or
omissions from the Offering Memorandum made in reliance upon and in conformity
with information furnished to the Company in writing by any Purchaser or any of
its agents or representatives expressly for use in the Offering Memorandum.  Without limiting the foregoing, the Offering
Memorandum for any Offering will contain all the information specified in, and
meeting the requirements of, subsection (d)(4) of Rule 144A.  Prior to distributing, amending or
supplementing the Offering Memorandum in connection with any Private Offering,
the Company shall furnish to the Purchasers a copy of each such proposed
Offering Memorandum, or amendment or supplement thereto, and, allowing for a
reasonable period of review by the Purchasers, the Company shall not
distribute, use or file the Offering Memorandum or any such proposed amendment
or supplement to which any Purchaser selling Notes pursuant to such Offering
Memorandum may reasonably object.

 

(iv)                              If, prior to
the completion of the sale of the Notes by the Purchasers in any Private
Offering, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the related Offering Memorandum in order to
make the statements therein not contain a misstatement of a material fact or an
omission of a material fact required to make the statements therein, in the
light of the circumstances when the Offering Memorandum is delivered to a
prospective purchaser

 

32

 

and
at the closing of the sale of the Notes covered thereby, not misleading or if,
in the reasonable opinion of the Purchasers or counsel for the Purchasers, it
is otherwise necessary to amend or supplement the Offering Memorandum to comply
with Applicable Law, then the Company agrees to promptly prepare, and furnish
at its own expense to the Purchasers, amendments or supplements to the Offering
Memorandum so that the statements in the Offering Memorandum as so amended or
supplemented will not contain a misstatement of a material fact or an omission
of a material fact required to make the statements therein, in the light of the
circumstances when the Offering Memorandum is delivered to a prospective
purchaser and at the closing of the sale of such Notes, not misleading or so
that the Offering Memorandum, as amended or supplemented, will comply with
Applicable Law. Notwithstanding the foregoing, upon the occurrence or existence
of any pending corporate development or any other event that, in the reasonable
judgment of the Company, makes it appropriate to suspend the availability of
the Offering Memorandum, the Company shall give notice (without notice of the
nature of details of such events) to the Purchasers that the availability of
the Offering Memorandum is suspended and, each Purchaser agrees not to sell any
Notes pursuant to the Offering Memorandum until such Purchaser’s receipt of
copies of a supplemented or amended Offering Memorandum provided for in this
clause (iv) or until it is advised in writing by the Company that the Offering
Memorandum may be used; provided
that such suspension period shall not exceed 45 days in any three-month
period or 90 days in any 12-month period.

 

12.                                 Persons Entitled to Benefit of Agreement.  This
Agreement shall inure to the benefit of and be binding upon the Purchasers, the
Company and, except for Sections 5(a), 9 (which shall inure to
the benefit of Subsequent Purchasers, as set forth therein), 10 (which,
in the case of Section 10(a), shall inure to the benefit of Subsequent
Purchasers, as set forth therein) and 11(b), their respective successors
and their assigns, except to the extent prohibited by this Agreement.  This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in Section 13
with respect to affiliates, officers, directors, stockholders, trustees,
employees, representatives, agents and controlling persons of the
Purchasers.  Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.

 

13.                                 Indemnification.  (a)  The Company shall indemnify and hold harmless
each Purchaser, its affiliates, officers, directors, stockholders, trustees,
employees, and representatives, and each person, if any, who controls any such
person within the meaning of the Securities Act or the Exchange Act  (collectively referred to herein as the “Indemnitees”),
from and against any and all liabilities, obligations, losses, damages, actual
or prospective claims, litigation, investigations or proceedings, whether based
on contract, tort or other theory and regardless of whether any Indemnitee is a
party thereto, and the related costs and expenses, including, without
limitation, all reasonable and documented legal fees and other expenses
incurred in the investigation, defense, appeal and settlement of claims,
actions, suits and proceedings (collectively referred to herein as the “Indemnified
Liabilities”), incurred by the Indemnitees as a result of, or arising out
of or relating to the transactions contemplated by the Transaction Documents,
including, without limitation:

 

33

 

(i)                                     any
nonfulfillment or breach of any covenant or agreement on the part of the
Company or any of its subsidiaries under this Agreement or any other
Transaction Document;

 

(ii)                                  any
statements or omissions made in any disclosure or other information or
materials used in connection with the transactions contemplated by the
Transaction Documents; or

 

(iii)                               the
execution, delivery, performance or enforcement of this Agreement, the other
Transaction Documents or any other instrument or document contemplated hereby
or thereby or any act, event or transaction related or attendant thereto or
contemplated hereby or thereby, or any action or inaction by any Indemnitee
under or in connection herewith or therewith;

 

provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that (x) such Indemnified
Liabilities are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) such Indemnified Liabilities of a
Purchaser result from disputes among such Purchaser and one or more
Purchasers.  If and to the extent that
the foregoing undertaking may be unenforceable for any reason, the Company
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under Applicable Law.

 

(b)         The
obligations of the Company under this Section 13 shall be in addition to
any liability that the Company may otherwise have and shall survive the payment
or prepayment in full or transfer of any Note or Warrant and the enforcement of
any provision hereof or thereof.

 

(c)          Any
indemnification payment pursuant to this Agreement shall be treated for
federal, state, local and foreign tax purposes as an adjustment to the purchase
price of the Notes and the Warrants.

 

14.                                 Expenses.  The Company agrees, whether or not the sale
of the Offered Securities hereunder or any other transactions contemplated
hereby shall be consummated, to pay and hold the Purchasers harmless against
any and all liability for the payment of all reasonable out-of-pocket and
documented costs and expenses arising in connection with the preparation,
negotiation, execution, delivery and performance of this Agreement, the Offered
Securities, the Exchange Notes and any other Transaction Documents, any other
agreements, instruments or documents executed pursuant thereto or in connection
therewith, and the transactions contemplated by the Transaction Documents,
including, without limitation, (a) the fees and expenses of the Trustee or
any paying agent (including reasonable and documented fees and expenses of
counselor to such parties), and (b) the reasonable and documented fees and
disbursements of Fried, Frank, Harris, Shriver & Jacobson, counsel to the
Purchasers, Hogan & Hartson LLP, regulatory counsel to the Purchasers, and
all other tax, legal, regulatory, consulting and accounting fees and expenses; provided, however,
that the Company’s obligation to pay such costs and expenses shall not exceed
$3,150,000.  Notwithstanding the
foregoing, the Company agrees to pay all expenses incurred by the Purchasers
(including reasonable and documented counsel fees and disbursements) in
connection with (a) any amendment, waiver or consent

 

34

 

requested by the Company under or with respect to this
Agreement, the Indenture, the Offered Securities or the Exchange Notes, whether
or not the same shall become effective; (b) enforcing, defending or declaring
any rights or remedies under the Transaction Documents or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with the Transaction Documents or by reason of being a holder of any
of the Offered Securities or the Exchange Notes; and (c) the insolvency or
bankruptcy of the Company or any subsidiary of the Company or in connection
with any work-out or restructuring of the transactions contemplated by the
Transaction Documents.  The obligations
of the Company under this Section 14 shall survive the payment for
or transfer of any Note or Warrant, the enforcement of any provision hereof or
thereof, any such amendments and waivers or consents.  The Purchasers shall not be responsible for any fees or
disbursements of the accountants or any other costs and expenses incident to
the performance of the obligations of the Company under this Agreement which
are not otherwise specifically provided for in this Section 14.

 

15.                                 Survival.  The respective indemnities,
rights of contribution, representations, warranties and agreements of the
Company and the Purchasers contained in this Agreement or made by or on behalf
of the Company or the Purchasers, and all fees and expenses payable by the
Company, pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Offered Securities,
and shall remain in full force and effect, regardless of any investigation made
by or on behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.

 

16.                                 Notices, etc.  All
statements, requests, notices and agreements hereunder shall be in writing and
delivered in person or overnight courier service, mailed by first-class mail
addressed as follows or delivered via facsimile transmission:

 

(a)  if to the Purchasers:

 

GS Mezzanine Partners II,
L.P.

GS Mezzanine Partners II
Offshore, L.P.

c/o Goldman, Sachs & Co.

85 Broad Street, 10th
Floor

New York, New York  10004

(facsimile no.:  (212) 902-3000)

Attention:  Kaca Enquist

 

with copies to:

 

Fried, Frank, Harris, Shriver & Jacobson

One New York Plaza

New York, New York  10004

(facsimile no.:  (212) 859-4000)

Attention:  F. William Reindel, Esq.

 

 

35

 

(b)
if to the Company:

 

Broadwing Inc.

201 East Fourth Street

Cincinnati, OH  45202

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

Attention:  Mark Peterson

 

with copies to:

 

Cravath, Swaine & Moore

825 Eighth Avenue

New York, NY  10019

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

Attention:  William V. Fogg, Esq.

 

The Company or the Purchasers, by notice to the other party,
may designate additional or different addresses for subsequent notices or
communications.

 

17.                                 Confidentiality.  (a)  Subject to the
provisions of clause (b) of this Section 17, each Purchaser agrees that
it will not disclose without the prior consent of the Company (other than to
its employees, auditors, creditors, advisors or counsel or to another Purchaser
if the Purchaser or such Purchaser’s holding or parent company in its sole
discretion determines that any such party should have access to such
information; provided such Persons shall expressly agree to be subject to
the provisions of this Section 17 to the same extent as such Purchaser)
any nonpublic information which is now or in the future furnished pursuant to
this Agreement or any other Transaction Document; provided that any Purchaser
may disclose any such information (i) as has become generally available to the
public other than by virtue of a breach of this Section 17(a) by such
Purchaser or any other Person to whom such Purchaser has provided such
information as permitted by this Section 17, (ii) as may be required in
any report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Purchaser or
to the Commission or similar organizations (whether in the United States of
America or elsewhere) or their successors, (iii) as may be required or
appropriate in respect of any summons or subpoena or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Purchaser and (v) to any prospective or actual Subsequent
Purchaser in connection with any contemplated transfer of any of the Offered
Securities by such Purchaser; provided that such prospective Subsequent
Purchaser expressly agrees to be bound by the confidentiality provisions
contained in this Section 17.

 

(b)         The Company
hereby acknowledges and agrees that each Purchaser may share with any of its
affiliates, and such affiliates may share with such Purchaser, any information
related to the Company or any of its subsidiaries (including, without
limitation, any nonpublic information regarding the creditworthiness of the
Company and its subsidiaries); provided such Persons shall be subject to
the provisions of this Section 17 to the same extent as such Purchaser.

 

18.                                 Definition of Terms.  For purposes of this
Agreement, (a) capitalized terms used herein without definition shall have
the meanings ascribed to them in the Indenture (b) the term “business day”
means any day on which the New York Stock Exchange, Inc. is open for trading

 

36

 

and, (b) except where otherwise expressly
provided, the term “affiliate” has the meaning set forth in Rule 405 under
the Securities Act.

 

19.                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

20.                                 Submission to Jurisdiction; Waiver of Service and Venue. 
(a)  Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the U.S. District Court of the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement, the Offered Securities or any other document,
instrument or agreement executed or delivered in connection herewith or therewith,
or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such federal
court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
Nothing in this Agreement, the Offered Securities or any other document,
instrument or agreement executed or delivered in connection herewith or
therewith shall affect any right that any of the parties hereto may otherwise
have to bring any action or proceeding relating to this Agreement, the Offered
Securities or any other document, instrument or agreement executed or delivered
in connection herewith or therewith against the Company or their properties in
the courts of any jurisdiction.

 

(b)         Each of the
parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
here­after have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement, the Offered Securities or any
other document, instrument or agreement executed or delivered in connection
herewith or therewith in any court referred to in Section 19.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

(c)          Each party
to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 16.  Nothing in this Agreement, the Offered Securities or any other
document, instrument or agreement executed or delivered in connection herewith
or therewith will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

 

21.                                 WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OFFERED SECURITIES OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH WHETHER NOW
EXISTING OR

 

37

 

HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHER THEORY.  EACH PARTY HERETO
(a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREE­MENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

22.                                 Counterparts.  This Agreement may be executed
in one or more counterparts (which may include counterparts delivered by
telecopier) and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument.

 

23.                                 Entire Agreement and Amendments.  (a)  This Agreement represents the entire agreement of the parties
hereto and supersedes all prior agreements and understandings, oral or written,
if any, relating to the transactions contemplated in this Agreement; and
(b) no amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective
unless the same shall be in writing and signed by the parties hereto.

 

24.                                 Headings.  The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.

 

If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon
this instrument will become a binding agreement between the Company and the
several Purchasers in accordance with its terms.

 

38

 

[Signature
page to Senior Subordinated Discount Notes Purchase Agreement]

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BROADWING INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas L. Schilling

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas L. Schilling

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  

 

Agreed to and accepted
by:

 

	
  GS MEZZANINE PARTNERS
  II, L.P.

  
	
   

  	
   

  
	
  By:

  	
  GS Mezzanine Advisors
  II, L.L.C.,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Muneer Satter

  	
   

  
	
   

  	
  Name:

  	
  Muneer Satter

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  GS MEZZANINE PARTNERS
  II OFFSHORE, L.P.

  
	
   

  	
   

  
	
  By:

  	
  GS Mezzanine Advisors
  II, L.L.C.

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/  Muneer
  Satter

  	
   

  
	
   

  	
  Name:

  	
  Muneer Satter

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

39Exhibit
4.(c)(x)(2)

 

BROADWING
INC.

201 EAST FOURTH STREET

CINCINNATI, OHIO  45202

 

March 26, 2003

 

Goldman Sachs Direct
Investment Fund 2000, L.P.                        Dover
Capital Management 2 LLC

Goldman, Sachs & Co.                                                                                        c/o Falcon Investment Group

c/o Goldman, Sachs & Co.                                                                  1180 Ave of Americas 

85 Broad Street,                                                                                    Suite
1400

New York, New York 10004                                                                                New
York, NY 10036

 

TCW/Crescent Mezzanine Partners III, L.P.                                    C-Squared CDO Ltd.

TCW/Crescent
Mezzanine Trust III                                                  c/o TCW/Crescent Mezzanine LLC

TCW/Crescent Mezzanine Partners III
Netherlands, L.P.                             200 Park Avenue, 22nd Floor

c/o TCW/Crescent Mezzanine LLC                                                  New
York, New York 10166

200 Crescent Court, Suite 1600

Dallas, Texas  75201

 

Western and Southern Life Insurance Company                                           GS Mezzanine Partners II,
L.P.

c/o Fort Washington
Investment Advisers                                    GS
Mezzanine Partners II Offshore, L.P.

420 East 4th Street                                                                                               85
Broad Street

Cincinnati, Ohio  45202                                                                                       New
York, New York 10004

 

Re:  Amendments
to the Purchase Agreement

 

Gentlemen:

Reference is made to the Purchase Agreement (the “Purchase
Agreement”), dated as of December 9, 2002, among Broadwing Inc., an Ohio
corporation (the “Company”), GS Mezzanine Partners II, L.P., a Delaware
limited partnership (“GS Mezzanine”), GS Mezzanine Partners II Offshore,
L.P., an exempted limited partnership organized under the laws of the Cayman
Islands (“GS Offshore”), and any other affiliate of GS Mezzanine who
purchases the Offered Securities (as defined in the Purchase Agreement) being
issued under the Purchase Agreement at the Closing (as defined in the Purchase
Agreement) (together with GS Mezzanine, GS Offshore and one or more
partnerships, corporations, trusts or other organizations specified as a
Purchaser in Schedule 1 to the Purchase Agreement which controls, is controlled
by, or is under common control with, GS Mezzanine or GS Offshore, the “GS
Purchasers”), and any other person specified as a Purchaser in Schedule 1
to the Purchase Agreement (together with the GS Purchasers, the “Purchasers”),
regarding the purchase of Senior Subordinated Notes and warrants to purchase
common stock of the Company. 
Capitalized terms used herein but not defined herein have the meanings
ascribed thereto in the Purchase Agreement.

1.             The Purchase Agreement shall be
amended as follows:

 

1.1                                 The dollar figure “$495 million” in Section 6(l) of the
Purchase Agreement shall be replaced with “$507.5
million;”

 

1.2                                 Schedule 1 to the Purchase Agreement shall be
deleted in its entirety and replaced with Schedule
1 attached to this letter amendment;

 

1.3                                 Schedule 1(o) to the Purchase Agreement shall be
deleted in its entirety and replaced with Schedule
1(o) attached to this letter amendment and 

 

 

 

1.4                                 Exhibit A to the Purchase Agreement shall be
deleted in its entirety and replaced with Exhibit
A attached to this letter amendment.

2.             In accordance with Section 2(d) of the Purchase
Agreement, the parties hereto agree that, for purposes of Treasury Regulation
Section 1.1273-2(h) and for all other federal, state, local and foreign tax
purposes, the aggregate fair market value and the aggregate purchase price
(after giving effect to the making by the Company of the Closing Payment
referred to in Section 3(c) of the Purchase Agreement) of the Notes is
$300,125,000 and the Warrants is $39,375,000.  The parties agree to report the sale and purchase of the Notes and
Warrants purchased pursuant to this Agreement for all federal, state, local and
foreign tax purposes in a manner consistent herewith and agree to take no
position inconsistent with the foregoing (unless otherwise required by a final
determination by the appropriate taxing authority).

Except as
specifically set forth herein, the provisions of the Purchase Agreement and the
Exhibits and Schedules attached thereto remain in full force and effect.  This letter amendment shall not constitute
an amendment or waiver of any provision of the Purchase Agreement and shall not
be construed as a waiver or consent to any further or future action on the part
of the Company, except to the extent expressly set forth herein.

 

 

This letter
amendment shall be governed by the internal laws of the State of New York,
without regard to the conflict-of-law principles thereof which would require
the application of laws of any other state.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BROADWING INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name:

  	
  Mark W. Peterson

  
	
   

  	
   

  	
  Title:

  	
  Vice President &
  Treasurer

  

 

Agreed to and accepted
by:

 

GS MEZZANINE PARTNERS II,
L.P.

	
  By:

  	
  GS Mezzanine Advisors II, L.L.C.,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Katherine B. Enquist

  
	
   

  	
  Name:

  	
  Katherine B. Enquist

  
	
   

  	
  Title:

  	
  Vice President

  

 

GS MEZZANINE PARTNERS II
OFFSHORE, L.P.

	
  By:

  	
  GS Mezzanine Advisors II, L.L.C.

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Katherine B. Enquist

  
	
   

  	
  Name:

  	
  Katherine B. Enquist

  
	
   

  	
  Title:

  	
  Vice President

  

 

Agreed to and accepted by:

 

GOLDMAN SACHS DIRECT INVESTMENT
FUND 2000, L.P.

 

	
  By:

  	
  GS Employee Funds 2000 GP, L.L.C.,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Katherine B. Enquist

  	
   

  
	
   

  	
  Name:

  	
  Katherine B. Enquist

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

 

Agreed to and accepted by:

 

GOLDMAN, SACHS & Co.

 

 

 

 

	
  By:

  	
  /s/ Richard Katz

  	 

	
   

  	
  Name:

  	
  Richard Katz

  
	
   

  	
  Title:

  	
  Managing
  Director

  
				

 

Agreed
to and accepted by:

 

TCW/CRESCENT MEZZANINE
PARTNERS III, L.P.

TCW/CRESCENT MEZZANINE
TRUST III

TCW/CRESCENT MEZZANINE
PARTNERS III NETHERLANDS, L.P.

 

 

	
  By:

  	
  TCW/Crescent Mezzanine
  Management III, L.L.C.,

  
	
   

  	
  its Investment Manager

  
	
   

  	
   

  
	
  By:

  	
  TCW Asset Management
  Company,

  
	
   

  	
  its Sub-Advisor

  
	
   

  	
   

  
	
  By:

  	
  /s/ Timothy P. Costello

  	
   

  
	
   

  	
  Name:

  	
  Timothy P. Costello

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

 

 

Agreed
to and accepted by:

 

C-SQUARED CDO LTD.

 

	
  By:

  	
  TCW Advisors, Inc.,

  
	
   

  	
  as its Portfolio
  Manager

  
	
   

  	
   

  
	
  By:

  	
  /s/ Timothy P. Costello

  	
   

  
	
   

  	
  Name:

  	
  Timothy P. Costello

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

Agreed to and accepted
by:

 

WESTERN AND SOUTHERN LIFE
INSURANCE COMPANY

 

 

	
  By:

  	
  /s/ W. F. Ledwin

  	
   

  
	
   

  	
  Name:

  	
  W. F. Ledwin

  
	
   

  	
  Title:

  	
  Sr. Vice President

  
				

 

Agreed to and accepted by:

 

DOVER CAPITAL MANAGEMENT 2 LLC

 

 

	
  By:

  	
  /s/ Richard Merage

  	
   

  
	
   

  	
  Name:

  	
  Richard Merage

  
	
   

  	
  Title:

  	
  Manager

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