10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ý ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

or

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                  .

Commission File Number 1-15307

BROADWING COMMUNICATIONS INC.

(Exact name of registrant as specified in its charter)

Delaware	74-2644120
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1122 Capital of Texas Highway South, Austin, Texas  78746-6426

(Registrant’s telephone number, including area code):  (512) 328-1112

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
12 1/2% Series B Junior Exchangeable Preferred Stock Due 2009 (par value $0.01 per share)	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes  ý  No o

All outstanding shares of the Registrant’s common stock are owned by Broadwing Inc.

The aggregate market value of the Preferred Stock of the Registrant held by non-affiliates of the Registrant on February 28, 2003 based on the closing price of the Preferred Stock on the New York Stock Exchange on such date, was $23,712,600.

The number of shares of Preferred Stock outstanding was 395,210 on February 28, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Information Statement to be filed with the Securities and Exchange Commission within 120 days of December 31, 2002.

BROADWING COMMUNICATIONS INC.

FORM 10-K

For the Fiscal Year Ended December 31, 2002

TABLE OF CONTENTS

PART I
Item 1.	Business
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters
Item 6.	Selected Financial Data
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk
Item 8.	Financial Statements and Supplementary Schedules
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
Item 10.	Directors and Executive Officers of the Registrant
Item 11.	Executive Compensation
Item 12.	Security Ownership of Certain Beneficial Owners and Management
Item 13.	Certain Relationships and Related Transactions
Item 14.	Internal Controls and Procedures
PART IV
Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Signatures
Certifications

This report contains trademarks, service marks and registered trademarks and registered marks of the Company and its subsidiaries, as indicated.

Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement

This Form 10-K contains “forward-looking” statements, as defined in federal securities laws including the Private Securities Litigation Reform Act of 1995, which are based on Broadwing Communications Inc (“the Company”) current expectations, estimates and projections.  Statements that are not historical facts, including statements about the beliefs, expectations and future plans and strategies of the Company, are forward-looking statements.  These include any statements regarding:

•future revenue, profit percentages, income tax refunds, realization of deferred tax assets, earnings per share or other results of operations;

•the continuation of historical trends;

•the sufficiency of cash balances and cash generated from operating and financing activities for future liquidity and capital resource needs;

•the effect of legal and regulatory developments; and

•the economy in general or the future of the communications services industries.

Actual results may differ materially from those expressed or implied in forward-looking statements.  These statements involve potential risks and uncertainties, which include, but are not limited to:

•changing market conditions and growth rates within the telecommunications industry or generally within the overall economy;

•world and national events that may affect the Company’s ability to provide services or the market for telecommunication services;

•changes in competition in markets in which the Company operates;

•pressures on the pricing of the Company’s products and services;

•advances in telecommunications technology;

•the ability to generate sufficient cash flow to fund the Company’s business plan and maintain its networks;

•the ability to refinance the Company’s indebtedness when required on commercially reasonable terms;

•changes in the demand for the services and products of the Company;

•the demand for particular products and services within the overall mix of products sold, as the Company’s products and services have varying profit margins;

•the Company’s ability to procure key network components from key vendors;

•the Company’s ability to rely on portions of other company’s networks under operating leases and indefeasible- right-of-use (“IRU”) agreements;

•the Company’s ability to introduce new service and product offerings in a timely and cost effective basis;

•the Company’s ability to attract and retain highly qualified employees; and

•the Company’s ability to access capital markets and the successful execution of restructuring initiatives.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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ITEM 1.  BUSINESS

Overview and Recent Events

Broadwing Communications Inc. (“BCI” or “the Company”) is an Austin, Texas based provider of data and voice communications services.  These services are provided over approximately 18,700 route miles of fiber-optic transmission facilities.  The Company’s revenue is generated by broadband transport through private line and IRU agreements, Internet services utilizing technology based on Internet protocol (“IP”), and switched voice services provided to both wholesale and retail customers.  The Company also offers data collocation, information technology consulting, network construction and other services.

The Company is a wholly owned subsidiary of Broadwing Inc. (“Broadwing” or “the Parent Company”).  On November 9, 1999 the Company was merged with a wholly owned subsidiary of Broadwing (“the Merger”).  The Merger was accounted for as a purchase business combination and, accordingly, the purchase accounting adjustments, including goodwill, have been pushed down and are reflected in these financial statements in all periods subsequent to November 9, 1999.

As of January 1, 2002, the web hosting operations of the Parent Company’s ZoomTown subsidiary were merged with the operations of BCI and are reflected in the data and Internet product line.

On February 22, 2003, certain subsidiaries of the Parent Company entered into a definitive agreement to sell substantially all of the assets of the Company, excluding the information technology consulting assets, to C III Communications (“C III”), for up to $129 million in cash and the assumption of certain long-term operating contractual commitments.  The sale is subject to certain closing conditions, including approval by the Federal Communications Commission (“FCC”) and relevant state public utility commissions.  The Parent Company expects to close the sale in 2003.  The Company will retain a 3% minority interest in the new company.  The carrying value of the current and long-lived assets to be sold totaled $103 million and $41 million, respectively, as of December 31, 2002.  The carrying value of the current and long-term liabilities to be assumed totaled $180 million and $293 million, respectively, as of December 31, 2002.

In addition, the Parent Company’s local communications subsidiary, Cincinnati Bell Telephone (“CBT”), entered into agreements with C III whereby CBT will continue to market BCI’s broadband products to business customers and purchase capacity on its network in order to sell long distance services, under the Cincinnati Bell Any Distance (“CBAD”) brand, to residential and business customers in the Greater Cincinnati area market after the closing of the sale.

On March 26, 2003, the Parent Company issued $350 million of mezzanine financing through Senior Subordinated Discount Notes Due 2009 (the “Mezzanine Financing”). The Mezzanine Financing was provided by Goldman Sachs, together with certain other institutions and contains financial and non-financial covenants including restrictions on the Parent Company’s ability to fund the operations of the Company.  Proceeds from the Mezzanine Financing, net of fees, were used to pay down borrowings under the Parent Company’s credit facility.

In conjunction with the Mezzanine Financing, the Parent Company’s credit facility was also amended and restated ("Amended and Restated Credit Agreement") to, among other things, extend the revolving commitment, revise the financial covenants and allow for the sale of substantially all of the assets of the broadband business. As a result of the  terms of the amendment the total borrowing capacity will decrease from $1.825 billion to approximately $1.343 billion through 2003 and the maturities of the revolving portion of the credit

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facility were extended to 2005 and 2006. The amendment was required by the term of the Mezzanine Financing and was necessary to meet the Parent Company’s 2003 liquidity requirements.

The terms of the Mezzanine Financing and Amended and Restated Credit Agreement limit the Parent Company’s ability to make investments in or fund the operations of the Company. Specifically, the Parent Company and its other subsidiaries may not make investments in or fund the operations of the Company beyond an aggregate amount of $118 million after October 1, 2002.  This restriction does not apply to guarantees by Broadwing of the Company’s borrowings under the credit facilities, liens on assets of Broadwing securing Company borrowings under the credit facilities, scheduled interest payments made or guaranteed by Broadwing in respect to Company borrowings under the credit facilities, and certain other items.  As of February 28, 2003, the Parent Company had the ability to invest an additional $58 million in the Company based on these provisions. The uncertainty of the Company's available liquidity resulting from these funding constraints, has prompted the Company’s independent accountants to include a going concern explanatory paragraph in their audit report.  The going concern explanatory paragraph means that, in the opinion of the Company’s independent accountants, there is substantial doubt about the Company’s ability to continue to operate as going concern.  If the Company is unable to finance its operations through the closing of the asset sale and meet its remaining obligations, or if a sale is not consummated, it may be forced to seek protection from its creditors through bankruptcy proceedings.

In addition, in March 2003, the Parent Company reached an agreement with holders of more than two-thirds of the Company’s 12½ percent preferred stock and 9 percent senior subordinated notes to exchange these instruments for common stock of the Parent Company.

The Parent Company was initially incorporated under the laws of Ohio in 1873 and remains incorporated under the laws of Ohio.  It has its principal executive offices at 201 East Fourth Street, Cincinnati, Ohio 45202 (telephone number (513) 397-9900 and website address http://www.broadwing.com).  The Parent Company makes available on its website its and the Company’s reports on form 10-K, 10-Q, and 8-K (as well as all amendments to these reports) as soon as practicable after they have been filed.

The Company files annual, quarterly and special reports, proxy statements and other information with the Securities Exchange Commission (“the SEC”) under the Exchange Act.  These reports and other information filed by the Company may be read and copied at the Public Reference Room of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549.  This information may be obtained on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC also maintains an Internet site that contains reports, proxy statements and other information about issuers, like the Company, which file electronically with the SEC.  The address of this site is http://www.sec.gov.

Business

Broadband transport services consist of long-haul transmission of data, voice and Internet traffic over dedicated circuits.  Revenue from the broadband transport category is mainly generated by private line monthly recurring revenue.  However, approximately 44%, 29% and 14% of the broadband transport revenue in 2002, 2001 and 2000, respectively, was provided by IRU agreements, which cover a fixed period of time and represent the lease of capacity or network fibers.  The buyer of IRU services typically pays cash upon execution of the contract.  The Company’s policy and practice is to amortize these payments into revenue over the life of the contract.  In the event the buyer of an IRU terminates a contract prior to the contract expiration and releases the Company from the obligation to provide

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future services, the remaining unamortized unearned revenue is recognized in the period in which the contract is terminated.  In 2002, the Company recognized non-cash, non-recurring revenue and operating income related to IRU terminations with bankrupt customers to whom the Company was no longer obligated to provide services, totaling $59 million.  Broadband transport services produced 43% of the Company’s total revenue in 2002 and 39% of the Company’s total revenue in 2001 and 2000.

Switched voice services consist of billed minutes of use, primarily for the transmission of voice long distance services on behalf of both wholesale and retail customers.  Switched voice service revenue has been decreasing as a percentage of total revenue due to declining rates as a result of intense competition.  As the Company focused its efforts on retaining higher margin revenue, the Company minimized sales to less creditworthy customers, tightened credit to wholesale customers in the wake of increasing bankruptcies in the telecommunications industry and exited its telemarketing operations to its low-end customer base.  Additionally, in the fourth quarter of 2002, the Company announced its plan to exit the low margin international wholesale voice business.  As a result, the Company expects switched voice service revenue to continue to decline going-forward.  Switched voice services provided 31%, 32% and 41% of total revenue in 2002, 2001 and 2000, respectively.  The international wholesale voice business provided 7%, 8% and 5% of total revenue in 2002, 2001 and 2000, respectively.

Data and Internet services consist of the sale of high-speed data transport services utilizing technology based on Internet protocol (“IP”), ATM/frame relay, data collocation and web hosting.  These services continued to grow as a percentage of total revenue, increasing from 7% in 2000 to 10% in 2001 to 12% in 2002.  Data collocation services generated revenue of $8 million, $15 million, and $6 million in 2002, 2001 and 2000, respectively.  The decrease in data collocation revenue in 2002 was primarily due to the Company closing eight of its eleven data centers as part of its November 2001 restructuring plan discussed in Note 3 of the Consolidated Financial Statements.

IT consulting consists of information technology consulting services and related hardware sales.  These services are provided by Broadwing Technology Solutions (“BTS”), a wholly owned subsidiary of BCI.  Information technology consulting revenue was $144 million in 2002, or $3 million higher than in 2001 and $78 million higher than in 2000.

Network construction and other services consist of large, joint-use network construction projects and the receipt of warrants in 2000 related to a field trial of optical equipment.  The Company typically gains access to rights-of-way or additional fiber routes through its network construction activities.  In November 2001, the Company announced its intention to exit the network construction business upon completion of one remaining contract as discussed in Note 3 of the Notes to Consolidated Financial Statements.  That contract to build a 1,550 mile fiber route system is in dispute as discussed in Note 14 of the Notes to Consolidated Financial Statements.  In 2002, network construction projects provided no revenue, compared to $87 million and $68 million in 2001 and 2000, respectively.

The Company’s network includes an Internet backbone and incorporates optical switching technology.  In order to maintain its network, the Company relies on supplies from certain key external vendors and a variety of other sources.

As revenue from the Company is primarily generated by usage-based and monthly service fees, the operations follow no particular seasonal pattern.  However, the Company received approximately 57%, 64% and 67% of its revenue in 2002, 2001 and 2000, respectively, from interexchange carriers that have or are capable of constructing their own network facilities but utilize the Company’s broadband transport, switched voice and network construction services to augment their own networks.  Cincinnati Bell Any Distance (“CBAD”), a subsidiary of the Parent Company, contributed

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interexchange carrier revenue, included in the amounts above, of 4% to total Company revenue in 2002 and 3% in 2001 and 2000.  Remaining revenue is generated by business enterprise customers through the purchase of broadband transport, data and Internet, switched voice and IT consulting services.

Prices and rates for the Company’s service offerings are primarily established through contractual agreements.  Accordingly, the Company is influenced by competitive conditions such as the number of competitors, availability of comparable service offerings and the amount of fiber network capacity available from these competitors.

The Company faces significant competition from other fiber-based telecommunications companies such as AT&T Corp., WorldCom, Inc., Sprint Corporation, Level 3 Communications, Inc., Qwest Communications International Inc., and several emerging and recapitalized competitors.  These competitors attempt to compete on the basis of price, quality, service and product breadth.  BTS, a business unit of BCI, competes with Intranet hardware vendors, wiring vendors, and other information technology consulting businesses.  The web hosting operations of BTS face competition from nationally known web hosting providers.

Employees

At December 31, 2002, the Company employed 1,500 people, of whom 400 provided operational and technical services, 500 engaged in sales services, 400 provided information technology consulting services at BTS and the balance engaged in administration and marketing.  These employees are not represented by labor unions, and the Company considers employee relations to be good.

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Risk Factors

The Parent Company is highly leveraged

The Parent Company is highly leveraged and has significant debt service obligations.  As of December 31, 2002, the Parent Company had outstanding indebtedness of $2,558 million, minority interest of $444 million (which represents the Company’s 12.5% preferred stock security) and total shareowners’ deficit of $2,548 million.  As of December 31, 2002 the Parent Company had the ability to borrow an additional $164 million under its revolving credit facility, subject to compliance with certain conditions.  In March 2003, the Parent Company completed an amendment to its credit facility, which included the extension of revolving credit maturity to 2005 and 2006, and the acceleration of a portion of the maturities of term loans from banking institutions from 2004 into 2003.

The Parent Company’s substantial debt could have important consequences to the shareowners, including the following:

•the Parent Company will be required to use a substantial portion of its cash flow from operations to pay principal and interest on its debt, thereby reducing the availability of cash flow to fund working capital, capital expenditures, strategic acquisitions, investments and alliances and other general corporate requirements;

•the Parent Company’s interest expense could increase if interest rates in general increase because a substantial portion of its debt bears interest at floating rates;

•the Parent Company’s substantial leverage could increase its vulnerability to general economic downturns and adverse competitive and industry conditions and could place the Company at a competitive disadvantage compared to those of its competitors that are less leveraged;

•the Parent Company’s debt service obligations could limit its flexibility to plan for, or react to, changes in its business and the industries in which it operates;

•the Parent Company’s level of debt may restrict it from raising additional financing on satisfactory terms to fund working capital, capital expenditures, strategic acquisitions, investments and joint ventures and other general corporate requirements; and

•a potential failure to comply with the financial and other restrictive covenants in the Parent Company’s debt instruments, which, among other things, require it to maintain specified financial ratios could, if not cured or waived, have a material adverse effect on the Parent Company’s ability to fulfill its obligations and on its business or prospects generally.

The Company is highly leveraged

The Company is highly leveraged and has significant debt service obligations.  As of December 31, 2002, the Company had aggregate outstanding indebtedness of $1,738 million and a total shareowner’s deficit of $2,562 million.  Of the Company’s total debt outstanding, $1,498 million is debt owed to the Parent Company.

The Company’s substantial debt could have important consequences, including the following:

•it will be required to use a substantial portion of its cash flow from operations to pay principal and interest on its debt, thereby reducing the availability of its cash flow to pay dividends on the Company’s preferred stock, fund working capital, capital expenditures, strategic acquisitions, investments and alliances and other general corporate requirements;

•its substantial leverage could increase its vulnerability to general economic downturns and adverse competitive and industry conditions and could place it at a competitive

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disadvantage compared to those of its competitors that are less leveraged;

•its debt service obligations could limit its flexibility to plan for, or react to, changes in its business and the industry in which it operates; and

•its level of debt may restrict it from raising additional financing on satisfactory terms to fund working capital, capital expenditures, strategic acquisitions, investments and joint ventures and other general corporate requirements.

The Company depends on the receipt of dividends or other intercompany transfers from its subsidiaries

The Company conducts substantially all of its operations through its subsidiaries and substantially all of its operating assets are held directly by its subsidiaries.  The Company will therefore be dependent upon dividends or other intercompany transfers of funds from these subsidiaries in order to pay any dividends on or redeem the Company’s preferred stock, and to meet its other obligations.

Accordingly, in the event of the dissolution, bankruptcy, liquidation or reorganization of the Company, amounts may not be available for payments on the Company’s preferred stock until after the payment in full of the claims of its creditors.

Servicing indebtedness requires a significant amount of cash, and the Parent Company’s ability to generate cash depends on many factors beyond its control

The Parent Company expects to obtain the cash to make payments on its credit facility and other indebtedness and to fund working capital, capital expenditures and other general corporate requirements from operations, additional sources of debt financing and borrowings under its credit facility.  The Parent Company’s ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Parent Company’s control.  The Company cannot be assured that its business will generate sufficient cash flow from operations, additional sources of debt financing will be available to it or that future borrowings will be available to it under the credit facilities, in each case, in amounts sufficient to enable it to service its indebtedness or to fund its other liquidity needs.  If the Parent Company cannot service its indebtedness, it will have to take actions such as reducing or delaying capital expenditures, strategic acquisitions, investments and joint ventures, selling assets, restructuring or refinancing indebtedness or seeking additional equity capital, which may adversely affect its customers and affect their willingness to remain customers.  There can be no assurances that any of these remedies could, if necessary, be effected on commercially reasonable terms, or at all.  In addition, the terms of existing or future debt instruments may restrict the Parent Company from adopting any of these alternatives.

There can be no assurances that the  Company’s subsidiaries will be successful in their efforts to complete the sale of the broadband business

On February 22, 2003, certain subsidiaries of the Parent Company entered into a definitive agreement to sell substantially all of the Company's assets, excluding the information technology consulting assets, to C III for up to $129 million in cash and the assumption of certain long-term operating and contractual commitments.  The sale is subject to certain closing conditions, including approval by the FCC and relevant state public utility commissions.  Broadwing expects that the sale will close in 2003, however, there can be no assurances that the sale will be completed.  If the Company’s subsidiaries are unable to complete this sale, the Company could face material adverse impacts, including bankruptcy.

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If the sale to CIII is completed, substantially all of the operating assets of certain of the Company’s subsidiaries will have been sold and the Company will have retained considerable long-term operating contractual commitments

BCI conducts substantially all of its operations through its subsidiaries and is dependent upon dividends or other intercompany transfers of funds from its subsidiaries in order to meet its obligations.  After the completion of the sale of the broadband business, the only remaining BCI subsidiary with operating assets will be Broadwing Technology Solutions, an information technology consulting subsidiary.  In 2002, Broadwing Technology Solutions generated $164 million in revenue, or 15% of BCI’s total revenue.  Furthermore, upon the completion of the sale of the broadband business, BCI will retain certain long-term operating contractual commitments.

There can be no assurances that BCI will be able to generate sufficient cash from its remaining operations or that additional sources of financing will be available to it to enable it to service the long-term operating contractual commitments remaining after the sale of the broadband business or to fund its other liquidity needs.

Servicing indebtedness requires a significant amount of cash, and the Company’s ability to generate cash depends on many factors beyond its control; if the Company is unable to finance its operations, the Company may be forced to seek protection from its creditors by filing for bankruptcy

The Company expects to obtain needed cash from operations and, to the limited extent still allowed under various credit documents, from third party borrowings and intercompany loans from the Parent Company.  The Company’s ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control.  The Company cannot be assured that its business will generate sufficient cash flow from operations, additional sources of funding will be available to it or that future borrowings will be available to it in amounts sufficient to enable it to service its indebtedness or to fund its other liquidity needs.

The terms of the Mezzanine Financing and Amended and Restated Credit Agreement contain certain financial and non-financial covenants including restrictions on the Company’s ability to make investments in the Company.  Specifically, Broadwing and its other subsidiaries may not make investments in or fund the operations of the Company beyond an aggregate amount of $118 million after October 1, 2002.  As of February 28, 2003, the remaining available investment was $58 million.  If the Company requires funds in excess of the amounts described above in order to finance its operations, there can be no assurances that the required lenders will consent to Broadwing investing additional funds to allow the Company to meet its obligations.

If the Parent Company is unable to fund the Company through closing of the sale to C III and meet its remaining obligations going forward after the sale or is unable to close the sale, the Company may explore alternative transactions or sources of financing, including borrowing money or raising equity.  There can be no assurances that any such transactions could be consummated on acceptable terms, or at all.  The uncertainty of the Company's available liquidity combined with the funding constraints discussed above, has prompted the Company’s independent accountants to issue a going concern explanatory paragraph in their audit report.  The going concern explanatory paragraph means that, in the opinion of the Company’s independent accountants, there is substantial doubt about the Company’s ability to continue to operate as a going concern.  If the Company is unable to finance its operations through the closing of the sale and meet its remaining obligations, or if a sale is not consummated, it may be forced to seek protection from its creditors under the United States Bankruptcy Code.

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In addition, the Company’s subsidiary, Broadwing Communications Services Inc., has directly borrowed $193 million under the Parent Company’s credit facilities.  However, the amended terms of the Parent Company’s credit facilities prohibit any additional borrowings by the Company or its subsidiaries.  Because the Company has relied on the Parent Company’s credit facilities in the past to fund its operations, the restrictions on future borrowings might adversely affect its ability to access sufficient cash to meet its obligations.

The Parent Company depends on its bank credit facility to provide liquidity

The Parent Company depends on its bank credit facility to provide for financing requirements in excess of amounts generated by operations.

In November 1999, the Parent Company obtained a credit facility of $1.8 billion from a group of lending institutions.  The credit facility was increased to $2.1 billion in January 2000 and again to $2.3 billion in June 2001.  Total availability under the credit facility decreased to $1.825 billion as of December 31, 2002 following a $335 million prepayment of the outstanding term debt facilities in the first quarter of 2002 (with proceeds from the sale of substantially all of the assets of CBD), $5 million in scheduled repayments of the term debt facilities and $135 million in scheduled amortization of the revolving credit facility.

In March 2003, the Parent Company completed an amendment to the credit facility, which included the extension of revolving credit maturity to 2005 and 2006, and the acceleration of a portion of the maturities of term loans from banking institutions from 2004 into 2003. As of March 26, 2003, the credit facilities consisted of $644 million in revolving credit maturing on March 1, 2006, $516 million in term loans from banking institutions, maturing in various amounts during 2003 and 2004, and $444 million in term loans from non-banking institutions, maturing in various amounts between 2003 and 2007.

However, the ability to borrow from the credit facility is predicated on the Parent Company’s and its subsidiaries’ compliance with covenants that have been negotiated with the lenders.  As a result of the significant capital the Parent Company has invested in the Company as well as the effect the weak U.S. economy and telecommunications industry has had on the Parent Company's and its subsidiaries’ businesses, the Parent Company is highly leveraged and it is uncertain whether the Parent Company will be able to remain in compliance with these covenants.  Failure to satisfy these covenants could severely constrain the Parent Company’s ability to borrow under the credit facility.  As of December 31, 2003, Broadwing was in compliance with all of the covenants of the credit facility.

The Parent Company’s credit facility and other indebtedness impose significant restrictions on the Parent Company

The Parent Company’s debt instruments impose, and the terms of any future debt may impose, operating and other restrictions on the Parent Company.  These restrictions will affect, and in many respects will limit or prohibit, among other things, the Parent Company's and its subsidiaries’ ability to:

•incur additional indebtedness;

•create liens;

•make investments;

•enter into transactions with affiliates;

•sell assets;

•guarantee indebtedness;

•declare or pay dividends or other distributions to shareholders;

•repurchase equity interests;

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•redeem debt that is junior in right of payment to such indebtedness;

•enter into agreements that restrict dividends or other payments from subsidiaries;

•issue or sell capital stock of certain of its subsidiaries; and

•consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries on a consolidated basis.

In addition, the Parent Company’s credit facility includes other and more restrictive covenants and prohibit the Parent Company from prepaying other debt and preferred stock while debt under the credit facility is outstanding.  The agreements governing the credit facility also require the Parent Company to achieve specified financial and operating results and maintain compliance with specified financial ratios.  The Parent Company is highly leveraged and it is uncertain whether it will continue to remain in compliance with these agreements.

The restrictions contained in the terms of the credit facility and its other debt instruments could:

•limit the Parent Company’s ability to plan for or react to market conditions or meet capital needs or otherwise restrict the Company’s activities or business plans; and

•adversely affect the Parent Company’s ability to finance BCI’s operations, strategic acquisitions, investments or alliances or other capital needs or to engage in other business activities that would be in BCI’s interest.

A breach of any of these restrictive covenants or the inability to comply with the required financial ratios could result in a default under the credit facility.

Increased Competition Could Affect Profitability and Cash Flow

There is substantial competition in the telecommunications industry.  Competition may intensify due to the efforts of existing competitors to address difficult market conditions through reduced pricing, bundled offerings or otherwise, as well as a result of the entrance of new competitors and the development of new technologies, products and services.  Price competition has been intense and may further intensify.  If the Company cannot offer reliable, value-added services on a price competitive basis in any of its markets, it could be adversely impacted by competitive forces.  In addition, if the Company does not keep pace with technological advances or fails to respond timely to changes in competitive factors in the industry, it could lose market share or experience a decline in its revenue and profit margins.

The Company faces significant competition from companies such as AT&T Corp., WorldCom, Inc., Sprint Corporation, Level 3 Communications, Inc., Qwest Communications International Inc., and several emerging and recapitalized competitors.  The significant capacity of these competitors could result in decreasing prices even if the demand for higher-bandwidth services increases.  In addition, some competitors are experiencing financial difficulties or are in bankruptcy reorganization.  Competitors in financial distress or competitors emerging from bankruptcy with lower cost capital structures and substantial excess fiber capacity in most markets, and forecasted demand for broadband services not being realized as a result of the state of the economic and financial difficulties experienced by many telecommunications carriers’ could exacerbate downward pricing pressure in the telecommunications industry.

The effect of the foregoing competition could have a material adverse impact on the Company’s businesses, financial condition and results of operations.  This could result in increased reliance on borrowed funds and could adversely impact the Company’s ability to maintain its optical network.

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Network Utilization is Dependent on Maintaining Rights-of-Way and Permits

The utilization of the Company’s network depends on maintaining rights-of-way and required permits from railroads, utilities, governmental authorities and third-party landlords on satisfactory terms and conditions. The Company cannot guarantee that it will be able to maintain all of the existing rights and permits. Although the Company expects to maintain and renew its existing agreements, the loss of a substantial number of existing rights and permits could have a material adverse impact on the Company’s business, financial condition and results of operations. For portions of the Company’s network that it leases or purchases use rights from third parties, the Company must rely on such third parties’ maintenance of all necessary rights-of-way and permits.  Some agreements that the Company may rely on to use portions of other companies’ networks could be terminated if associated rights-of-way were terminated.

Significant Capital Expenditures Will be Required to Maintain the Network

Capital expenditures of $600 million in 2000 decreased to $472 million in 2001 and decreased again in 2002 to $65 million.  The Company could incur significant additional capital expenditures as a result of unanticipated expenses, regulatory changes and other events that impact the business.  If the Company fails to adequately maintain its networks to meet customer needs there could be a material adverse impact on the Company’s business, financial condition and results of operations.

Regulatory Initiatives May Impact the Company’s Profitability

The Company is subject to regulatory oversight of varying degrees at the state and federal levels.  Regulatory initiatives that would put the Company at a competitive disadvantage or mandate lower rates for its services could result in lower profitability and cash flow.  This could compromise the Company’s ability to maintain its national optical network, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

The Company’s Restructuring Initiative is Critical to Its Success

In October 2002, the Company initiated a restructuring that is intended to reduce annual expenses by approximately $200 million compared to 2002 and enable the Company to become cash flow positive.  The plan includes initiatives to reduce the workforce by approximately 500 positions; reduce line costs by approximately 25% through network grooming, optimization, and rate negotiations; and exit the international wholesale voice business.  The Company recorded a cash restructuring charge of approximately $13 million during the fourth quarter of 2002 related to employee severance benefits and contract terminations.  There can be no assurances that any of the actions under the restructuring plans will be successful.  If the Company fails to successfully implement these restructuring initiatives, the Company’s business, financial condition and results of operations could be adversely affected.

The Company Relies, in part, on Portions of Competitors’ Networks

The Company uses network resources owned by other companies for portions of its network.  The Company obtains the right to use such network portions through operating leases and IRU agreements in which the Company pays for the right to use such other companies’ fiber assets and through agreements in which the Company exchanges the use of portions of its network for the use of portions of such other companies’ networks.  In several of those agreements, the counter party is responsible for network maintenance and repair.  In the event a counter party to a lease, IRU or an exchange suffers financial distress or bankruptcy, the Company may not be able to enforce its rights to use such

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network assets or, even if the Company could continue to use such network assets, the Company could incur material expenses related to their maintenance and repair.  The Company also could incur material expenses if it were required to locate alternative network assets.  The Company cannot give assurance that it would be successful in obtaining reasonable alternative network assets if needed.  Failure to obtain usage of alternative network assets, if necessary, could have a material adverse impact on the Company’s business, financial condition and results of operations.

Attracting and Retaining Highly Qualified Employees is Necessary for Competitive Advantage

The Company seeks to achieve competitive advantage by hiring and retaining highly skilled personnel.  The Company believes this is of particular importance in an industry that depends on innovation and execution in order to attract and retain customers.  If the Company fails to attract or retain these skilled personnel, the Company’s financial condition and results of operations could be materially impacted.

The Company’s Success Depends on the Introduction of New Products and Services

The Company’s success depends on being able to anticipate the needs of current and future enterprise and carrier customers.  The Company seeks to meet these needs through new product introductions, service quality and technological superiority.  Failure of the Company to anticipate the needs of these customers and to introduce the new products and services necessary to attract or retain these customers could have a material adverse impact on the Company’s business, financial condition and results of operations.

Continuing Softness in the Economy is Having a Disproportionate Effect in the Telecommunications Industry

Beginning in 2001, the business environment for the telecommunications industry deteriorated significantly and rapidly and remains weak.  This was primarily due to: the general weakness in the U.S. economy, which was exacerbated by the events of September 11, 2001, and concerns regarding terrorism; pressure on prices for broadband services due to substantial excess fiber capacity in most markets; and forecasted demand for broadband services not being realized as a result of the state of the economy, the bankruptcy or liquidation of a substantial number of Internet companies and financial difficulties experienced by many telecommunications customers.  The Company expects these trends to continue, including reduced business from financially troubled customers and downward pressure on prices due to reduced demand and overcapacity.  If these trends  continue, there could be a material adverse impact on the Company’s business, financial condition and results of operations.

A Significant Portion of the Company’s Revenue Is Derived From Telecommunications Carriers

Eight of the Company’s top ten customers, which as a group, accounted for approximately 38% of total revenue, are large telecommunications carriers.  Several customers have been impacted by negative industry trends.  Four of the Company’s largest customers, who accounted for approximately 14% of revenue in 2002, were in Chapter 11 bankruptcy proceedings.  Non-IRU revenue from these customers approximated 7% of total revenue in 2002.  The remaining revenue from these customers, approximating 7% of total revenue, was generated by the amortization of IRU agreements and the early termination of two IRUs, for which consideration had been previously received.  In addition, interexchange carriers generated approximately 57% of total revenue in 2002.  Most of the Company’s arrangements with large customers do not provide the Company with guarantees that customer usage will be maintained at current levels.  Industry pressures have caused telecommunications carriers to look aggressively for ways to cut costs which has resulted in reduced demand and reduced prices.  In addition, construction of their own facilities by certain of the Company’s customers, construction of additional facilities by competitors or further consolidation in the telecommunications industry

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involving the Company’s customers could lead such customers to reduce or cease their use of the Company’s network. To the extent these large customers cease to employ the Company’s network to deliver their services, or cannot pay outstanding accounts receivable balances, the Company could experience a material adverse impact on its business, financial condition and results of operations.

Terrorist Attacks and Other Acts of Violence or War May Affect the Financial Markets and the Company’s Business, Financial Condition and Results of Operations

As a result of the September 11, 2001 terrorist attacks and subsequent events, there has been considerable uncertainty in world financial markets.  The full effect of these events, as well as concerns about future terrorist attacks, could adversely affect the Company’s ability to obtain financing on terms acceptable to it, or at all, to finance the Company’s operations and capital expenditures.

Terrorist attacks or war may negatively affect the Company’s operations and financial condition.  There can be no assurance that there will not be further terrorist attacks against the United States of America or U.S. businesses or armed conflict involving the United States of America.  These attacks or armed conflicts may directly impact the Company’s physical facilities or those of its customers and vendors.  These events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and world financial markets and economy.  Any of these occurrences could have a material adverse impact on the Company’s business, financial condition and results of operations.

The Company is Dependent on Limited Sources of Supply for Certain Key Network Components

Where possible and practical, the Company utilizes commercially available technologies and products from a variety of vendors.  However, the Company relies on one supplier, Corvis, for its advanced optical switching and transport equipment on the core of its long-haul network.  There can be no assurance that the Company will be able to obtain such equipment from Corvis in the future.  If the Company cannot obtain adequate replacement equipment or service from Corvis, or an acceptable alternate vendor, the Company could experience a material adverse impact on its business, financial condition and results of operations.  Corvis is also the majority owner of C III, the entity that has entered into a agreement to purchase substantially all of the assets Company’s Broadband segment.

Network Failure and Transmission Delays and Errors Could Expose the Company to Potential Liability

The Company’s network utilizes a variety of communication equipment, software, operating protocols and components of others’ networks for the high-speed transmission of data and voice traffic among various locations.  Such equipment, software and physical locations could malfunction, suffer physical damage or otherwise become impaired.  The Company is held to high quality and delivery standards in its customer contracts.  Network failures or delays in data delivery could cause service interruptions resulting in losses to the Company’s customers.  Failures or delays could expose the Company to claims by its customers that could have a material impact on the financial condition and operating results of the Company’s business.

Capital Additions

The Company’s capital additions have historically been for its national optical network and have totaled $65 million, $472 million and $600 million in 2002, 2001 and 2000, respectively.

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ITEM 2.  PROPERTIES

The Company owns or maintains communications facilities in 39 states.  Principal office locations are in Austin, TX; Cincinnati, OH, Reston, VA; and Indianapolis, IN.

The gross investment in property, plant and equipment,  at December 31, 2002 and 2001 is comprised of the following ($in millions):

	2002		2001
Land and rights of way	$	0.6	$	153.7
Buildings and leasehold improvements	7.2		209.1
Transmission facilities	30.8		2,057.7
Furniture, fixtures, vehicles and other	0.6		49.6
Fiber usage rights	8.2		51.4
Construction in process	7.3		214.1
Total	$	54.7	$	2,735.6

The gross investment in property, plant, and equipment includes $18.7 million and $19.1 million of assets accounted for as capital leases in 2002 and 2001, respectively.  These assets are included in ‘Transmission facilities.’

The Company recorded a non-cash asset impairment charge of $2.2 billion to state both tangible and intangible assets at estimated fair value as of December 31, 2002.  The impairment charge related to tangible property, plant and equipment totaled $1,902 million.

ITEM 3. LEGAL PROCEEDINGS

The information required by this item is included in Note 14 of the Notes to Consolidated Financial Statements that are contained in Item 8 of this Report on Form 10-K, “Financial Statements and Supplementary Data.”

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company’s security holders during the quarter ended December 31, 2002.

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PART II

ITEM 5.MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

At December 31, 2002, all of the Company’s common stock was held by Broadwing Inc.  As such, there is no established public trading market for this common stock.

Dividend Policy

The Company does not pay dividends on its common stock.  Dividends on the Company’s 12½% Junior Exchangeable Preferred Stock (the “Preferred Stock”) are payable quarterly at the annual rate of 12½% of the aggregate liquidation preference (which amounted to $426.1 million at December 31, 2002 including accrued dividends of $30.9 million).  Historically, the Company paid dividends in additional shares of the Preferred Stock.  Effective November 16, 1999, the Company elected to switch to a cash payment option for the Preferred Stock rather than issue additional shares of the Preferred Stock, and made its first cash payment on February 15, 2000.  In 2002, the Company’s board of directors voted to defer the third and fourth quarter 2002 cash payment of the quarterly dividend on the Preferred Stock , in accordance with the terms of the security.  The Company continued to accrue the dividend in accordance with the terms of the security.  The status of future quarterly dividend payments on the Preferred Stock security will be determined quarterly by the board of directors, but the Company does not expect to pay dividends in the foreseeable future.

Equity Compensation Plans

The Company’s employees are eligible to participate in the Parent Company’s stock-based compensation plans.  Detailed disclosures regarding the stock-based compensation plans can be found in the Parent Company’s annual report.

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ITEM 6.  SELECTED FINANCIAL DATA

The Selected Financial Data should be read in conjunction with, Item 1, “Business;” Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and the Company’s Consolidated Financial Statements, related notes thereto and other financial information included in this document.

	Company												Predeccessor
	Year Ended December 31,												Year Ended December 31,
($ in millions)	2002			2001			2000			Period from Nov 10 to Dec 31 1999			Period from Jan 1 to Nov 9 1999				1998
Operating Data (1):
Revenue	$	1,068.1		$	1,197.6		$	1,004.6		$	99.0		$	568.2			$	668.6
Operating loss	(2,437.6		)	(502.1		)	(225.7		)	(46.5		)	(214.1		)		(30.8		)
Loss (gain) on investments	(0.2		)	(11.6		)	394.5			—			23.8				—
Loss before cumulative effect of change in accounting principle	(2,533.7		)	(382.2		)	(463.3		)	(38.9		)	(281.0		)		(95.5		)
Cumulative effect of change in accounting principle (2)	2,008.7			—			—			—			—				—
Extraodinary loss	—			—			—			6.6							(67.0		)
Net loss	(4,542.4		)	(388.4		)	(464.6		)	(45.5		)	(281.0		)		(162.5		)
	Company												Predeccessor
	December 31,															December 31,
	2002			2001			2000			1999						1998
Financial Position (1):
Property, plant and equipment, net (3)	$	54.7		$	2,182.0		$	2,103.9		$	1,726.4					$		983.7
Total assets	239.1			4,977.8			4,994.2			5,147.2						1,748.2
Total debt and capital lease obligations (4)	1,737.9			1,563.5			1,057.1			1,046.2						693.0
Redeemable preferred stock (5)	414.4			417.8			421.0			418.2						447.9
Shareowner’s equity (deficit) (6)	(2,561.8		)	2,024.6			2,394.0			2,463.6						(72.5			)
Other Financial Data (1):
Cash flow from continuing operatons	(94.9		)	(111.4		)	(32.7		)	87.8			71.5			202.3
Capital Expenditures	64.9			472.0			599.9			165.0			479.1			476.4

(1)On November 9, 1999 (the “Merger Date”), the Company completed a merger with a wholly owned subsidiary of Broadwing.  This Merger was accounted for as a purchase business combination and, accordingly, purchase accounting adjustments, including goodwill, have been pushed down and are reflected in the Company’s financial statements subsequent to the Merger Date.  The financial statements for periods before the Merger Date were prepared using the Company’s historical basis of accounting and are designated as “Predecessor.”  The financial statements for periods after the Merger are designated as “Company.”  The comparability of operating results for the Predecessor and Company periods are affected by the purchase accounting adjustments.  The 2001 and 2000 results presented include the results of BTS as the Parent Company contributed the capital stock of the information technology consulting business to the Company during 2000.  The 2001 and 2000 results also reflect an agreement with the former CBLD to service its customers outside of the Cincinnati, Ohio area.  All revenue and expenses associated with the former CBLD’s customers outside the Cincinnati area were assigned to Broadwing Communications.

(2)See Note 1 and Note 2 of the Notes to Consolidated Financial Statements.

(3)See Note 1 of the Notes to Consolidated Financial Statements.

(4)See Note 5 of the Notes to Consolidated Financial Statements.

(5)See Note 7 of the Notes to Consolidated Financial Statements.

(6)See Note 9 of the Notes to Consolidated Financial Statements.

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ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” which follows should be read in conjunction with the “Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement”, “Risk Factors,” Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements.

Broadwing Communications (“BCI”) provides data and voice communications services nationwide.  These services are generally provided over the Company’s national optical network, which comprised approximately 18,700 route miles of fiber-optic transmission facilities.  The Company’s revenue is generated by broadband transport (which includes revenue from indefeasible- right-of-use (“IRU”) agreements), switched voice services, data and Internet services (including web hosting), information technology consulting and network construction and other services.  As of January 1, 2002, as part of the Company’s November 2001 restructuring plan (refer to Note 3 of the Notes to Consolidated Financial Statements), the web hosting operations of the Parent Company’s ZoomTown subsidiary were merged with the operations of BCI and are reflected in the data and Internet product line in all periods presented.  The Company recorded a non-cash impairment charge of approximately $2.2 billion in the fourth quarter of 2002 to write down its tangible and intangible assets to estimated fair market value.  In February 2003, the Parent Company announced certain of its subsidiaries had entered into a definitive agreement to sell substantially all of the assets of the Company, excluding the information technology consulting assets (refer to Note 18 of the Notes to Consolidated Financial Statements).

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses.  The Company continually evaluates its estimates, including but not limited to those related to revenue recognition, bad debts, investments, intangible assets, income taxes, fixed assets, access line costs, restructuring,  pensions, other postretirement benefits, contingencies and litigation.  The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the facts and circumstances.  Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies impact its more significant judgments and estimates used in the preparation of its consolidated financial statements.  For a more detailed discussion of the application of these and other accounting policies, refer to Note 1 of the Notes to Consolidated Financial Statements.

Revenue Recognition - The Company  recognizes revenue as services are provided.  Both switched voice and data and Internet product revenue are billed monthly in arrears, while the revenue is recognized as the services are provided.  While customers are billed in advance for month-to-month broadband transport services, revenue is recognized as the services are provided.  Revenue from product sales is generally recognized upon performance of contractual obligations, such as shipment, delivery, installation or customer acceptance.  Indefeasible right-of-use agreements, or IRUs, represent the lease of network capacity or dark fiber and are recorded as unearned revenue at the earlier of the acceptance of the applicable portion of the network by the customer or the receipt of cash and accounted for approximately 44%, 29% and 14% of broadband transport revenue in 2002, 2001 and 2000, respectively.  The buyer of IRU services typically pays cash upon execution of the contract, and the associated IRU revenue is then recognized over the life of the agreement as services are provided,

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beginning on the date of customer acceptance.  In the event the buyer of an IRU terminates a contract prior to the contract expiration and releases the Company from the obligation to provide future services, the remaining unamortized unearned revenue is recognized in the period in which the contract is terminated.

For long-term construction contracts, the Company recognizes revenue and the associated cost of that revenue using the percentage of completion method of accounting.  This method of accounting relies on estimates of total expected contract revenue and costs.  The method is used as the Company can make reasonably dependable estimates of revenue and costs applicable to various stages of a contract.  As the financial reporting of these contracts depends on estimates that are continually assessed throughout the terms of the contracts, revenue recognized is subject to revision as the contract nears completion.  Revisions in estimates are reflected in the period in which the facts that give rise to the revision become known.  Revisions have the potential to impact both revenue and cost of services and products.  Construction projects are considered substantially complete upon customer acceptance.

Since its merger with IXC Communications Inc. (“IXC”) in November 1999 (“the Merger”), the Company has not entered into any significant revenue generating fiber exchange agreements.  For certain preacquisition fiber exchange agreements with other carriers, the Company recognizes the fair value of revenue earned and the related expense in offsetting amounts over the life of the agreement.  In no instances has the Company recognized revenue upon consummation of any such fiber exchange agreements or capitalized any expenses associated therewith.

Deferred Tax Asset - The Company’s tax provision is based upon the modified separate return method under which an income tax benefit is recorded for losses based upon the potential to be realized by the Company, as well as any affiliated members of the federal income tax consolidated group of the Parent Company.  As of December 31, 2002, the Company had approximately $801 million of federal operating loss tax carryforwards with a related tax benefit of $280 million.  In addition, the Company had approximately $125 million in deferred tax assets related to state and local operating loss tax carrryforwards.  The Company evaluates all positive and negative evidence available in determining whether there is reasonable assurance that its deferred tax assets will be realized.  In performing this evaluation, the Company considers future taxable income projections, expirations of loss carry forwards and ongoing prudent and feasible tax planning strategies.  Based on this evaluation as of December 31, 2002, which included the uncertainty regarding the future operations of the Company, the Company determined that realization of certain deferred tax assets (including federal and state operating loss carryforwards) was not considered to be more likely than not, and therefore provided a valuation allowance, which amounted to $1,170 million as of December 31, 2002.  The valuation allowance was recorded as a component of income tax expense in the fourth quarter of 2002.  The Company is pursuing several alternatives and the resolution of uncertainties related to the Company that may result in the realization of these reserved tax assets.

Allowances for Doubtful Accounts – The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.  The Company determines the estimate of the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of customers, and historical experience.  If the financial condition of the Company’s customers were to deteriorate or other circumstances occur that result in an impairment of customers’ ability to make payments, additional allowances may be required.

Depreciation – The Company uses the straight line method to depreciate its property, plant, and equipment.  Due to rapid changes in technology, significant judgment is required in determining the estimated useful life of telecommunications plant and equipment.

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Goodwill and Indefinite-Lived Intangible Assets – Goodwill represents the excess of the purchase price consideration over the fair value of assets acquired recorded in connection with the merger with IXC in November 1999.  Upon the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) on January 1, 2002, the Company recorded a goodwill impairment charge of $2,008.7 million, net of tax, as discussed in Note 2 of the Notes to the Consolidated Financial Statements.

Pursuant to SFAS 142, goodwill and intangible assets not subject to amortization are tested for impairment annually, or when events or changes in circumstances indicate that the asset might be impaired.  For goodwill, a two-step impairment test is performed.  The first step compares the fair value of a reporting unit with its carrying amount, including goodwill.  If the carrying value of a reporting unit exceeds its fair value, then the second step of the impairment test is performed to measure the amount of impairment loss.  The second step compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.  The implied fair value is determined by allocating the fair value of a reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination.  The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  If the carrying amount of the reporting unit goodwill is in excess of the implied fair value of that goodwill, then an impairment loss is recognized equal to that excess.  For indefinite-lived intangible assets, the impairment test consists of a comparison of the fair value of the intangible asset with its carry value.  If the carrying value of an indefinite-lived asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

In 2001 and 2000, goodwill was amortized on a straight-line basis over estimated useful lives of 30 years.

Impairment of Long-lived Assets, Other than Goodwill and Indefinite lived Intangibles - As of December 31, 2002, the Company had fixed assets with a net carrying value of $55 million.  The Company reviews the carrying value of long-lived assets, other than goodwill and indefinite lived assets discussed above, when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  An impairment loss is recognized when the estimated future undiscounted cash flows expected to result from the use of an asset (or group of assets) and its eventual disposition are less than its carrying amount.  An impairment loss is measured as the amount by which the asset’s carrying value exceeds its estimated fair value.

During the fourth quarter of 2002, the Company performed an impairment assessment of its long-lived assets.  This assessment considered all of the contemplated strategic alternatives for the Company, including a potential sale of assets, using a probability-weighted approach.  Based on the analysis, it was determined that the Company’s assets were impaired and, accordingly, the Company recorded a $2.2 billion non-cash impairment charge to reduce the carrying value of these assets.  Of the total charge, $1,902 million related to tangible fixed assets and $298 million related to finite-lived intangible assets.

Restructuring – During 2002 and 2001, the Company recorded restructuring charges representing direct costs of exiting certain product lines, including certain contractual lease commitments, and involuntary employee terminations. These charges were recorded in accordance with EITF 94-3 “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring)” and represent the Company’s best estimate of undiscounted liabilities at the date the charges were taken.  Adjustments for changes in assumptions are recorded in the period such changes become known.  Changes in assumptions, especially as they

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relate to contractual lease commitments, could have a material effect on the restructuring liabilities and results of operations.

Fiber Sales and IRUs

The Company has entered into various agreements to sell fiber and capacity usage rights, which include the design and maintenance of these rights.  Sales of these rights are recorded as unearned revenue and are included in other current and other noncurrent liabilities in the accompanying consolidated balance sheets when the fiber or capacity is accepted by the customer or cash is received.  The buyer of IRU services typically pays cash upon execution of the contract.  The Company’s policy and practice is to amortize these payments into revenue over the life of the contract.  The Company received approximately $10 million, $61 million and $23 million in cash in 2002, 2001 and 2000, respectively, from these sales and recognized revenue from the amortization of previously recorded unearned revenue of $205 million, $134 million and $53 million, respectively.

Consolidated Overview

In accordance with Statement of Financial Accounting Standard No. 131, “Disclosures About Segments of an Enterprise and Related Information,” the operations of the Company comprise a single segment and are reported as such to the Chief Executive Officer of the Parent Company, who functions in the role of chief operating decision maker for the Company.  A tabular presentation of the Company’s financial results can be found in Item 6, “Selected Financial Data” on page 16 and in the Consolidated Statements of Operations and Comprehensive Income (Loss) on page 37 of this Report on Form 10-K.

The table below presents revenue for groups of similar products and services ($ in millions):

	Year Ended December 31
	2002		2001		2000
Broadband transport	$	461.6	$	466.5	$	393.2
Switched voice services	328.6		380.5		408.6
Data and Internet	132.9		121.9		69.7
IT consulting	143.7		141.3		65.8
Network construction and other services	1.3		87.4		67.3
Total revenue	$	1,068.1	$	1,197.6	$	1,004.6

2002 Compared to 2001

Revenue

Broadband transport revenue decreased $5 million in 2002, or 1%, to $462 million compared to 2001.  The decrease was due to lower dedicated optical and digital circuit revenue as demand from both established and emerging carriers continued to decline.  This decrease was substantially offset by $59 million in non-recurring, non-cash revenue from the termination of IRU contracts with two of the Company’s customers who filed for Chapter 11 bankruptcy protection.  The Company expects the revenue deterioration to continue as carriers groom their networks in an attempt to synchronize their supply with the demand in the marketplace.  Broadband products sold in the franchise area of Cincinnati Bell Telephone (“CBT”), a subsidiary of the Parent Company, contributed revenue to the Company of $28 million in 2002 and $12 million in 2001.  The Company’s largest IRU contract,

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which contributed $104 million to broadband transport revenue and operating income in 2002, will expire in May 2003 and contribute $43 million in revenue and operating income in 2003.

Switched voice services revenue decreased 14% in 2002 compared to 2001, from $381 million to $329 million.      The decrease in revenue was the result of the Company’s continued focus on higher margin business and declining rates and volume due to intense competition, partially offset by a reduction in uncollectible revenue due to tightened credit policies.  Cincinnati Bell Any Distance (“CBAD”), a subsidiary of the Parent Company, resells voice long distance in its local franchise area and contributed switched voice revenue of $44 million in 2002 and $41 million in 2001.  The Company initiated a restructuring plan in the fourth quarter of 2002, which included exiting the international switched wholesale voice business.  Based on this plan, the Company expects switched voice service revenue to decline going-forward.  The international switched wholesale voice business accounted for $75 million and $94 million of revenue during 2002 and 2001, respectively.

Data and Internet revenue increased $11 million, or 9%, over 2001 on the strength of demand for dedicated IP and ATM/frame relay services.  These increases were partially offset in both periods by a decrease in equipment sales, a decrease in revenue related to the exit of the bundled Internet access product (refer to Note 14 of the Notes to the Consolidated Financial Statements), and a decrease in data collocation revenue, as the Company closed eight of its eleven data centers as part of its November 2001 restructuring.

IT consulting revenue grew $2 million, or 2%, during 2002 compared to 2001.  The growth was attributable to increased sales of hardware and consulting services.  Revenue from services and hardware sales comprised 21% and 79%, respectively, of total IT consulting revenue during both 2002 and 2001.

Network construction and other services revenue decreased $86 million, or 99%, during 2002 compared to 2001.  As further discussed in Note 3 of the Notes to Consolidated Financial Statements, the Company’s November 2001 restructuring plan included plans to exit the network construction business upon completion of a large project.  The contract for that project is in dispute as discussed in Note 14 of the Notes to Consolidated Financial Statements.

Costs and Expenses

Cost of services and products primarily reflects access charges paid to local exchange carriers and other providers, transmission lease payments to other carriers, costs incurred for network construction projects and personnel and hardware costs for IT consulting.  In 2002, cost of services and products amounted to $656 million, a 14% decrease compared to the $760 million incurred during 2001.  The decrease was driven primarily by lower switched voice services and network construction activity, and cost reductions implemented as part of the November 2001 restructuring plan.  The decreases were partially offset by an increase in local access charges associated with the Company’s continued penetration of enterprise customer accounts and a non-recurring charge of $13 million for estimated costs associated with the termination of the Company’s uncompleted network construction contract currently under dispute.  Refer to Note 14 of the Notes to Consolidated Financial Statements for a detailed discussion of this contract.

SG&A expenses decreased 9% to $301 million in 2002 compared to 2001.  The decrease was due primarily to a decrease in employee costs, as headcount was approximately 660 lower at December 31, 2002 than at December 31, 2001, and lower marketing expenses.  These decreases were offset by a decrease in capitalized overhead costs associated with the completion of the Company’s national optical network.

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Depreciation expense of $291 million increased $18 million, or 6% in 2002 compared to 2001 as a result of placing assets related to the optical network overbuild into service.  The Company recorded a non-cash impairment charge of $2.2 billion in the fourth quarter of 2002 related to the Company’s tangible and intangible assets (refer to Note 1 of the Notes to Consolidated Financial Statements).  As such, the Company expects depreciation expense to decrease by approximately $290 million in 2003.

Amortization expense, which in 2001 primarily related to the amortization of goodwill as a result of the Merger, decreased 78% to $25 million in 2002 from $111 million in 2001.  Upon adoption of SFAS 142 as required on January 1, 2002, the Company stopped amortizing goodwill.  In addition, the Company recorded an asset impairment charge as described in Note 1 of the Notes to Consolidated Financial Statements of approximately $298 million related to intangible assets in the fourth quarter of 2002.  Therefore, the Company expects no amortization expense in 2003.

During the first quarter of 2002, the Company recorded restructuring charges of $16 million resulting from employee separation benefits and costs to terminate contractual obligations, which were actions contemplated in the November 2001 restructuring plan for which an amount could not be reasonably estimated at that time.  During the fourth quarter of 2002, a $1 million reversal was made to the restructuring liability due to a change in estimate related to the termination of contractual obligations.  In total, the Company expects the November 2001 restructuring plan to result in cash outlays of $88 million and non-cash items of $149 million.  The Company completed the plan as of December 31, 2002, except for certain lease obligations, which are expected to continue through December 31, 2005.  Refer to Note 3 of the Notes to Consolidated Financial Statements.

During the third quarter of 2002, the Company recorded restructuring charges of $5 million.  The restructuring charges related to contractual terminations associated with the Company’s exit of a product line. Refer to Note 14 of the Notes to Consolidated Financial Statements.

In October 2002, the Company initiated a restructuring that is intended to reduce annual expenses by approximately $200 million compared to 2002 and enable the Company to become cash flow positive.  The plan includes initiatives to reduce the workforce by approximately 500 positions; reduce line costs by approximately 25% through network grooming, optimization, and rate negotiations; and exit the international wholesale voice business.  The Company recorded a cash restructuring charge of approximately $13 million during the fourth quarter of 2002 for employee severance and contract termination costs.  The Company expects to complete the plan by June 30, 2003.

Based on certain indicators, including a potential asset sale,  the Company performed an impairment analysis of its assets in the fourth quarter of 2002.  The impairment analysis indicated that the carrying value of the assets was not recoverable.  Accordingly, the Company wrote down the assets to estimated fair market value, resulting in a non-cash impairment charge of $2.2 billion.

The operating loss of $2,438 million recorded in 2002 represents a $1,936 million increase over the $502 million operating loss in 2001.  The increase in the operating loss is due to the asset impairment charge of approximately $2.2 billion, offset slightly by the decrease in amortization and restructuring charges noted above.

Interest expense, primarily consisting of interest paid to the Parent Company, increased approximately 5% in 2002 to $72 million from $68 million in 2001.  The increase was the result of higher outstanding debt, partially offset by a decrease in interest rates, as the London Interbank Offering Rate (“LIBOR”) decreased, and a decrease in the amount of interest capitalized due to the completion of the optical network.

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The Company recorded less than a $1 million in net gain on investments compared to $12 million during 2001.  The net gain in 2001 is comprised of a $17 million gain from the sale of the Company’s investment in PSINet, partially offset by mark-to-market adjustments and losses on the sale of the Applied Theory investment.  See Note 4 of the Notes to Consolidated Financial Statements for a detailed discussion of investments.

The Company had income tax expense of $26 million in 2002 versus the ($174) million benefit recorded in 2001, due substantially to the establishment of a valuation allowance against certain federal and state deferred tax assets (including net operating loss carryforwards), offset partially by the tax effect of the $2.2 billion asset impairment.

Effective January 1, 2002, the Company recorded a $2,009 million expense as a cumulative effect of a change in accounting principle, net of taxes, related to the adoption of SFAS 142.  The write down of goodwill, finalized in the second quarter of 2002, was related to the fair value of goodwill associated with the Merger.  See Note 2 of the Notes to Consolidated Financial Statements for a detailed discussion of the adoption of SFAS 142.

As a result of the above, the Company reported a net loss of $4,542 million for the year ended December 31, 2002, representing an increase of $4,154 million compared to the loss in 2001 of $388 million.

2001 Compared to 2000

Revenue

Broadband transport revenue increased $73 million in 2001, growing 19% to $466 million compared to 2000.  Approximately two-thirds of the increase was driven by the renegotiation of IRU contracts with one of the Company’s customers.  In order for these contracts to survive the customer’s bankruptcy, the contracts were adjusted to reduce the services provided, update the operations and maintenance fees to a current market rate and shorten the lives of the agreements.  Revenue also increased due to sales to new and existing customers, but the increases were partially offset by circuit disconnections during the second half of the year.  CBT resells the broadband products in its local franchise area, which contributed revenue of $12 million in 2001 and less than a million in 2000.

Switched voice services revenue decreased 7% in 2001 compared to 2000, from $409 million to $381 million. This was the result of a continued focus on data services and a de-emphasis of sales of voice services to lower margin customers.  At the same time, the Company made an effort to minimize sales to less creditworthy customers in the wake of increasing bankruptcies in the wholesale segment of this market.  CBAD resells voice long distance in CBT’s local franchise area, which contributed switched voice revenue of $41 million in 2001 and $33 million in 2000.

Data and Internet revenue increased $52 million, or 75%, in 2001 compared to 2000 as revenue continued to increase on the strength of demand for dedicated IP and ATM/frame relay services.  These increases were further supplemented by additional collocation and web hosting revenue.  Despite the growth in collocation revenue, the Company’s November 2001 restructuring plan included the closure of eight of the Company’s eleven data centers due to actual growth failing to meet expectations.

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IT consulting revenue grew $76 million, or 115%, during 2001 compared to 2000.  Of this growth, approximately $60 million was attributable to increased sales of hardware, while the remaining growth was the result of increased sales of consulting services.

Network construction and other services revenue increased $20 million, or 30%, during 2001 compared to 2000 as a result of a large, joint-use construction project.  The increase was partially offset by the nonrecurring receipt of warrants associated with a field trial of optical equipment in 2000.  In November 2001, the Company announced its intention to exit the construction business upon completion of one remaining contract as discussed in Note 3 of the Notes to Consolidated Financial Statements.  That contract is in dispute as discussed in Note 14.

Costs and Expenses

Cost of services and products primarily reflects access charges paid to local exchange carriers and other providers, transmission lease payments to other carriers, costs incurred for network construction projects and personnel and hardware costs for IT consulting.  In 2001, cost of services and products amounted to $760 million, a 27% increase over the $600 million incurred during 2000.  These increases were driven primarily by incremental costs needed to support the revenue growth, as described above, in broadband transport, data and Internet, information technology consulting services and network construction.

SG&A expenses increased 2% to $330 million in 2001 compared to 2000.  Increased employee expenses attributable to higher headcount during the first half of the year were almost entirely offset by lower advertising expenses and efforts to decrease consulting and contracted labor services.

Depreciation expense of $273 million increased $76 million, or 39% in 2001 compared to 2000 as a result of placing assets related to the optical network into service.  Amortization expense, which primarily related to the amortization of goodwill as a result of the Merger, increased 1% to $111 million in 2001 from $110 million in 2000.

In November 2001, the Company approved restructuring plans which included initiatives to close eight of the Company’s eleven data centers, reduce the expense structure, exit the network construction business and other non-strategic operations; and consolidate web hosting operations of the Parent Company into the Company.  The Company recorded restructuring and other costs of $222 million in 2001 related to these initiatives.  The $222 million consisted of restructuring liabilities in the amount of $74 million and related non-cash asset impairments in the amount of $148 million.  The restructuring-related liabilities of $74 million were comprised of $11 million related to involuntary employee separation benefits (including severance, medical insurance and other benefits) for 760 employees and approximately $63 million related to lease and other contractual terminations.  In total, the Company expects this restructuring plan to result in cash outlays of $74 million and non-cash items of $148 million.  Through December 31, 2001, the Company had utilized $4 million of the $73 million reserve, nearly all of which was cash expended.  The Company expects to realize approximately $77 million in annual expense and capital expenditure savings from this restructuring plan relative to expenses incurred in 2001.  Refer to Note 3 of the Notes to Consolidated Financial Statements.

The operating loss of $502 million recorded in 2001 represents a $276 million increase over the $226 million operating loss in 2000.  The higher loss is due to the increase in depreciation associated with the optical network assets placed in service and to the November 2001 restructuring charges, offset slightly by an improvement in gross profit.

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The Company recorded a $4 million equity-share loss on its Applied Theory investment during 2001 versus $16 million in 2000.  The decline in the loss is due to the Company’s discontinued use of equity method accounting during the second quarter of 2001 because its ownership percentage in Applied Theory had dropped below 20% and it no longer held a seat on Applied Theory’s board of directors.  As a result, the Company no longer had significant influence over the operations of Applied Theory.

Interest expense, primarily consisting of interest paid to the Parent Company, decreased approximately 3% in 2001 to $68 million from $70 million in 2000.  Although total borrowings increased during 2001, a decrease of nearly 4% in the average interest rate charged on the borrowings offset the volume increase.  Interest expense related to $42 million borrowed directly from the Parent Company’s credit facility was insignificant as the funds were borrowed late in the fourth quarter of 2001.

The Company realized a $12 million net gain on investments during 2001, reflecting a $407 million improvement from a loss of $395 million in 2000.  The net gain in 2001 is comprised of a $17 million gain from the sale of the Company’s investment in PSINet, partially offset by mark-to-market adjustments and losses on the sale of the Applied Theory investment.  The $395 million loss in 2000 resulted from recognized losses on the PSINet and Applied Theory investments.  See Note 5 of the Notes to Consolidated Financial Statements for a detailed discussion of investments.

The income tax benefit of $174 million decreased $67 million from the benefit of $241 million in 2000.  This was primarily the result of the $143 million decrease in pretax losses from continuing operations.

As a result of the above, the Company reported a net loss of $388 million for the year ended December 31, 2001, representing decreased losses of $76 million, or 16%, as compared to the loss in 2000 of $465 million.

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Capital Investment, Resources and Liquidity

The Company is dependent on financing from the Parent Company to fund its operations.  The Parent Company's bank credit facility and senior subordinated discount notes restrict the amount of financing available to the Company form the Parent Company.  The uncertainty of the Company's available liquidity resulting from these funding constraints has prompted the Company's independent accountants to include a going concern explanatory paragraph in their audit report.  The going concern explanatory paragraph means that, in the opinion of the Company's independent accountants, there is substantial doubt about the Company's ability to continue to operate as going concern.

On February 22, 2003, certain subsidiaries of the Company entered into a definitive agreement to sell substantially all of the assets of the Company, excluding the information technology consulting business, for up to $129 million in cash and the assumption of certain long term operating contractual commitments.  The sale is subject to certain closing conditions, including approval by the Federal Communications Commission ("FCC") and relevant state public utility commissions.  In addition, in March 2003, the Parent Company reached an agreement with holders of more than two-thirds of the Company's 12½ percent preferred stock security and 9 percent senior subordinated notes to exchange these instruments for common stock of the Parent Company.  If the Company is unable to finance its operations through the closing of the asset sale and meet its remaining obligations, or if a sale is not consummated, it may be forced to seek protection from its creditors through bankruptcy proceedings.

The Company has invested significant capital in order to expand the reach of its national broadband network.  Since the Company has completed the optical overbuild of its national network, capital spending will be focused on maintenance, and revenue-generating initiatives, which occur as customers are added to the Company’s networks.

Since the Merger, the Company has relied on a $1.825 billion credit facility with a group of lending institutions, secured by the Parent Company, in order to support the Company’s operations.  The credit facility consists of $765 million in revolving credit, maturing in various amounts during 2003 and 2004, $569 million in term loans from banking institutions, maturing in various amounts during 2003 and 2004, and $491 million in term loans from nonbanking institutions, maturing in various amounts between 2003 and 2007.

At December 31, 2002, the Parent Company had drawn approximately $1.648 billion from the credit facility, of which, $193 million had been drawn directly by the Company, and had outstanding letters of credit totaling $13 million, leaving $164 million in additional borrowing availability under its revolving credit facility.  The credit facility borrowings have been used by the Parent Company to refinance its debt and debt assumed as part of the Merger, to fund its capital expenditure program and other working capital needs in addition to funding operating losses of the Company.  The amount refinanced included approximately $404 million borrowed in order to redeem the majority of the outstanding 9% Senior Subordinated Notes of IXC (the “9% Notes”) assumed during the Merger as part of a tender offer and $391 million in outstanding bank debt of IXC assumed as part of the Merger.  The tender offer for the 9% Notes was required under the terms of the bond indenture by the change in control provision contained in the indenture governing the 9% Notes.  As further discussed below, in March 2003, the Parent Company completed an amendment to the credit facility, which included the extension of revolving credit maturity to 2005 and 2006, and the acceleration of a portion of the maturities of term loans from banking institutions from 2004 into 2003.

In December 2001, the Company began borrowing directly from the Parent Company’s credit facility.  Of the $1.648 billion which had been borrowed under the credit facility by the Parent Company as of December 31, 2002, $193 million had been borrowed directly by the Company.  Prior to obtaining the credit facility amendment in March 2003, the Parent Company’s credit facility capacity was scheduled to decrease throughout 2003 from $1.825 billion to approximately $1.476 billion due to $124 million of scheduled amortization of the term debt facilities and $225 million of scheduled amortization of the revolving credit facility.  As of December 31, 2002, the Parent Company’s debt maturities totaled $195 million in 2003 and $995 million in 2004.

On March 26, 2003, the Parent Company issued $350 million of mezzanine financing through Senior Subordinated Discount Notes Due 2009 (the “Mezzanine Financing”).  Proceeds from the Mezzanine Financing, net of fees, were used to pay down borrowings under the Parent Company’s credit facility.  Interest on the Mezzanine Financing will be payable semi-annually on June 30 and December 31, whereby 12% is paid in cash and 4% is accreted on the aggregate principal amount.  In addition, purchasers of the Mezzanine Financing received 17.5 million common stock warrants, each to purchase one share of Broadwing Common Stock.

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In conjunction with the Mezzanine Financing, the Parent Company’s credit facility was also amended and restated ("Amended and Restated Credit Agreement") to, among other things, extend the revolving commitment, revise the financial covenants and allow for the sale of substantially all of the assets of the broadband business. As a result of the  terms of the amendment, the total borrowing capacity will decrease from $1.825 billion as of December 31, 2002.  The borrowing capacity will decrease to approximately $1.343 billion as of December 31, 2003 due to $262 million of scheduled repayments of the term debt facilities and a $220 million prepayment of the outstanding term debt and revolving credit facility from the Mezzanine Financing proceeds. After the credit facility amendment, the Parent Company’s debt maturities total $285 million in 2003 and $287 million in 2004.

The Mezzanine Financing and amended and restated credit agreement contain certain financial and non-financial covenants, including restrictions on Broadwing’s ability to make investments in the Company.  Specifically, Broadwing and its other subsidiaries may not make investments in or fund the operations of the Company beyond an aggregate amount of $118 million after October 1, 2002.  This restriction does not apply to guarantees by Broadwing of the Company borrowings under the credit facilities, liens on assets of Broadwing securing Company borrowings under the credit facilities, scheduled interest payments made or guaranteed by Broadwing in respect of Company borrowings under the credit facilities, and certain other items.  As of February 28, 2003, the Parent Company had the ability to invest an additional $58 million in the Company to fund operations and extinguish remaining obligations based on these provisions.

As of December 31, 2002, the interest rates to be charged on borrowings from the credit facility can range from 150 to 350 basis points above the LIBOR, and as of December 31, 2002 were between 275 and 325 basis points above LIBOR, or 4.13% and 4.63%, respectively, as a result of the Parent Company’s credit rating.  The Parent Company incurs banking fees in association with this credit facility that range from 37.5 basis points to 75 basis points, applied to the unused amount of borrowings under the revolving credit facility.  Upon completion of the credit facility amendment in March 2003, interest rates charged on borrowings from the credit facility increased to 425 basis points above LIBOR on revolving credit borrowings and 375 basis points above LIBOR for term debt borrowings.  The banking fees applied to the unused amount of borrowings increased to 62.5 basis points.

The Parent Company is subject to financial covenants in association with the credit facility.  These financial covenants require that the Parent Company maintain certain debt to EBITDA (as defined in the Amended and Restated Credit Agreement), debt to capitalization, senior secured debt to EBITDA and interest coverage ratios.  This facility also contains certain covenants which, among other things, may restrict the Parent Company’s ability to incur additional debt or liens; pay dividends; repurchase Broadwing common stock; sell, transfer, lease, or dispose of assets; make investments or merge with another company.  The Parent Company was in compliance with all covenants set forth in its credit facility and the indentures governing its other debt as of December 31, 2002.  The March 2003 Amended and Restated Credit Agreement subjects the Parent Company to an additional covenant related to annual capital expenditures and eliminated the debt to capitalization financial covenant.  If the Parent Company were to violate any of its covenants and was unable to obtain a waiver, it would be considered a default.  If the Parent Company were in default on its credit facility, no additional borrowings under the credit facility would be available until the default was waived or cured.

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In December 2001, the Parent Company obtained an amendment to its credit facility to exclude the charges associated with the November 2001 Restructuring Plan from the covenant calculations and to amend certain defined terms.  In March 2002, the Parent Company obtained an amendment for certain financial calculations and consent to its credit facility to allow for the sale of substantially all of the assets of Cincinnati Bell Directory (a subsidiary of the Parent Company), exclude charges related to SFAS 142 (refer to Notes 1 and 2 of the Notes to Consolidated Financial Statements), increase its ability to incur additional indebtedness and amend certain defined terms.  In December 2002, the Parent Company obtained a waiver to exclude charges related to Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”) from its covenant calculations through March 30, 2003.  In March 2003, as discussed above, the Parent Company amended its credit facility to, among other things, exclude charges related to SFAS 144 going forward.

In February 2002, the Parent Company’s corporate credit rating was downgraded by Moody’s Investors Service to Ba3 from its previous level of Ba1.  In March 2002, the Parent Company’s corporate credit rating was downgraded by Standard and Poor’s and Fitch Rating Service to BB from its previous level of BB+.  In December 2002, Standard and Poor’s downgraded the Parent Company’s corporate credit rating to B- from BB.  In January 2003, Moody’s downgraded the Parent Company’s corporate credit rating to B1 from Ba3.  In the past, the credit facility was secured only by a pledge of the stock certificates of certain subsidiaries of the Parent Company.  Upon the initial downgrades, the Parent Company became obligated to provide certain subsidiary guarantees and liens on the assets of the Parent Company and certain subsidiaries in addition to the pledge of the stock certificates of the subsidiaries.

Intercompany advances payable to the Parent Company totaled $1,493 million and $1,469 million as of December 31, 2002 and December 31, 2001, respectively. As of December 31, 2002, the intercompany note to the Parent Company was payable upon demand and was therefore classified as a current liability.

In May 2002, the Parent Company obtained an amendment to its credit facility to exclude certain subsidiaries from the obligation to secure the credit facility with subsidiary guarantees and asset liens, extend the time to provide required collateral and obtain the ability to issue senior unsecured indebtedness and equity under specified terms and conditions.  The amendment also placed additional restrictions on the Parent Company under the covenants related to indebtedness and investments, required the Parent Company to transfer its cash management system to a wholly-owned subsidiary and further increased the interest rates on the total credit facility by 50 basis points.

The Parent Company does not have any downgrade triggers that would accelerate the maturity dates of its debt.  However, further downgrades of the Parent Company’s credit rating could adversely impact the cost of future debt facilities.  Due to the Parent Company’s credit rating, which is below Baa3 and  BBB- as rated by Moody’s and Standard & Poor’s, respectively, the Parent Company is obligated by its credit facility covenants to use 75% of any annual excess cash flows, as defined in its March 2003 amended and restated credit facility agreement, to reduce its outstanding borrowings.  If the Parent Company is unable to meet the covenants of its various debt agreements, the payment of the underlying debt could be accelerated.  Additionally, the Parent Company is currently obligated by its

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credit facility to use the net cash proceeds received from certain asset sales or issuances of debt by the Parent Company or any of its subsidiaries to reduce its outstanding borrowings.

The following table summarizes the Company’s contractual obligations as of December 31, 2002:

Contractual Obligations ($ in millions)	Payments Due by Period
	Total		<1 Year		1-3 Years		4-5 Years		Thereafter
Debt, including Intercompany Payable to Parent Company	$	1,735.1	$	1,495.3	$	193.8	$	—	$	46.0
Capital Leases, excluding interest	2.9		2.2		0.5		0.2		—
Non-cancelable Operating Lease Obligations	373.2		100.9		150.8		65.6		55.9
Total	$	2,111.2	$	1,598.4	$	345.1	$	65.8	$	101.9

As part of the November 2001 Restructuring Plan, the Company announced its intention to exit several data centers, reduce network costs and consolidate office space.  To the extent the Company can sublease or negotiate lease terminations, contractual obligations could decrease.  During 2002, the Company negotiated contract terminations, which reduced future commitments by approximately $90 million.  The buyer of substantially all of the assets of the broadband business has agreed to assume approximately $3 million in capital lease commitments and approximately $316 million in operating lease obligations.  Refer to Note 18 of the Notes to the Consolidated Financial Statements.

In July 2002, the Company announced that it would defer the August 15, 2002 cash dividend payment on its 12½% preferred stock, in accordance with the terms of the security, conserving $12 million in cash during the third quarter of 2002.  In October 2002, the November dividend was also deferred, conserving an additional $12 million in cash during the fourth quarter of 2002.  The Company continued to accrue the dividend.  The status of future quarterly dividend payments on the 12½% preferred stock will be determined quarterly by the board of directors, but the Company does expect to pay dividends in the foreseeable future.

In addition, in March 2003, the Parent Company reached an agreement with holders of more than two-thirds of the Company’s 12½ percent preferred stock security and 9 percent senior subordinated notes to exchange these instruments for common stock of the Parent Company.  In order to consummate the exchange offers, the Parent Company expects to issue approximately 26 million new shares of Broadwing Inc. common stock assuming 100% redemption of the outstanding instruments, which represents an increase of 11 percent in the number of shares outstanding.

Balance Sheet

The following comparisons are relative to December 31, 2001.

The decrease in accounts receivable was primarily the result of an increase in allowance for doubtful accounts and a decrease in revenue due to carrier customer bankruptcies.  The decrease of $2,008 million in goodwill was due to the write-down of goodwill associated with the adoption of SFAS 142 and further described in Note 2 of the Notes to Consolidated Financial Statements.  The decrease in net property plant, and equipment and other intangibles was due to the $2.2 billion asset impairment charge as further discussed in Note 1 of the Notes to the Consolidated Financial Statements.  Additionally, the decrease in net property, plant and equipment was due to the depreciation of assets of $291 million exceeding capital additions of $65 million.

Deferred income tax assets decreased by $233 million due primarily to the net effect of an increase of approximately $878 million related to the $2.2 billion asset impairment, more than offset by the

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establishment of a valuation allowance of $1,108 million against certain federal and state deferred tax assets, including net operating loss carryforwards.

The intercompany note payable increased to $1,498 million, which is due on demand and is therefore presented as a current liability as of December 31, 2002.  Accounts payable decreased $52 million, or 45%, primarily due to decreases in capital spending.  The decrease in current unearned revenue is primarily due to amortization of an IRU contract that will expire in May 2003, which generated revenue of $104 million in 2002.  The decrease in noncurrent unearned revenue of $123 million was due to scheduled amortization of outstanding IRU agreements, and $59 million due to non-recurring decreases related to two IRU contract terminations in 2002 as a result of customers’ bankruptcies, offset partially by consideration received for an additional contract entered into during 2002.  The buyer of IRU services typically pays cash upon execution of the contract.  The Company’s policy and practice is to amortize these amounts into revenue over the life of the contract.

Cash Flow

In 2002, cash used in operating activities totaled $95 million compared to $111 million in 2001, as the Company focused on reducing its cash burn through reducing expenses.

The Company’s capital investing activities for 2002 were $65 million, 86% lower than the $472 million in 2001.  The reduction in capital expenditures is due substantially to the completion of the optical overbuild of the national network.  In 2001, the Company sold its investment in PSINet and portions of its investment in Applied Theory, generating proceeds of $30 million.  There were no investments sold in 2002.

Cash provided by financing activities decreased to $151 million from $534 million, as the Company relied less on the Parent Company and external financing to fund its operations and significantly reduced its capital program.  Additionally, approximately $25 million in cash was conserved in 2002 as the Company deferred two quarterly dividend payments on the 12½% Junior Exchangeable Preferred Stock.

As of December 31, 2002, the Company held approximately $3 million in cash and cash equivalents.  In addition to cash on hand, the primary sources of cash will be cash generated by operations, borrowings from the Parent Company and borrowings from the Parent Company’s credit facility.  The primary uses of cash will be for funding the maintenance of the network, working capital and operating losses.

Contingencies

In the normal course of business, the Company is subject to various regulatory proceedings, lawsuits, claims and other matters.  Such matters are subject to many uncertainties and outcomes that are not predictable with assurance.

In 2002, several purported class action lawsuits were filed in the United States District Court for the Southern District of Ohio on behalf of purchasers of the securities of the Parent Company between January 17, 2001 and May 20, 2002, inclusive (the “Class Period”).  The complaints alleged that the Parent Company, its former Chief Executive Officer  (“CEO”), its current CEO, and several board

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members violated federal securities laws arising out of allegedly issuing material misrepresentations during the Class Period which resulted in artificially inflating the market price of the Parent Company’s securities.  The Parent Company intends to defend these claims vigorously.

In June 2000, the Company entered into a long-term construction contract to build a 1,550-mile fiber route system for a customer.  During the second quarter of 2002, the customer alleged a breach of contract and requested the Company to cease all construction activities, requested a refund of $62 million in progress payments previously paid to the Company, and requested conveyance of title to all routes constructed under the contract.  Subsequently, the Company notified the customer that such purported termination was improper and constituted a material breach under the terms of the contract, causing the Company to terminate the contract.  As a result of the contract termination during the second quarter of 2002, the Company expensed $13 million in both costs incurred under the contract and estimated shutdown costs, which have been reflected in cost of services and products in the Consolidated Statements of Operations and Comprehensive Income (Loss).  In addition, the Company’s balance sheet included $51 million in unbilled accounts receivable (including both signed change orders and claims) at December 31, 2002 related to this contract.  Based on information available as of December 31, 2002, the Company believes it is due significant amounts outstanding under the contract, including unbilled accounts receivable.  The Company expects this matter to be resolved through arbitration during 2003.  The timing and outcome of these issues are not currently predictable.  An unfavorable outcome could have a material adverse effect on the financial condition and results of operations of the Company.

Commitments

The Company leases certain facilities and equipment used in its operation.  Total rental expenses (excluding access circuit leases) were approximately $29 million, $28 million and $24 million in 2002, 2001 and 2000.

In 2000, the Company entered into a purchase commitment with Corvis Corporation, a Columbia, Maryland-based manufacturer of optical network equipment.  The agreement specified that the Company would purchase $200 million in optical network equipment from Corvis Corporation over a two-year period beginning in July 2000.  As of December 31, 2002 and 2001, the Company’s remaining purchase commitment was zero and $20 million, respectively.  In 2000, the Company also entered into a separate agreement giving it the right to purchase Series H preferred stock at $80.53 per share, which had a fair value $30 million, and $5 million of the common stock of Corvis at the initial public offering price.  The Company subsequently exercised these rights during the second and third quarters of 2000.  The established prices for these Corvis equity purchases reflect the contemporaneous fair value of the equity, as evidenced by independent third party investor purchases of this equity in the same timeframe.

In 2001, the Company entered into an agreement with Teleglobe Inc. (“Teleglobe”), a Reston, Virginia-based telecommunications company which stated that the Company would purchase $90 million of services and equipment from Teleglobe over four years.  In September 2002, in response to Teleglobe’s bankruptcy filing, the Company terminated the agreement for a payment of $4 million to Teleglobe, which released the Company from $63 million of future commitments (refer to Note 1 of the Notes to the Consolidated Financial Statements).

In 2001 and 2000, the Company entered into agreements with two vendors to provide bundled Internet access to the Company’s customers based on a monthly maintenance fee.  In March 2002, the Company terminated its contract with one of the vendors as part of its fourth quarter 2001 restructuring (refer to Note 3 to the Consolidated Financial Statements).  This contract termination

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reduced the Company’s future commitments by approximately $60 million.  In September 2002, the Company terminated its remaining contract (refer to Note 3 to the Consolidated Financial Statements), which eliminated the remaining $13 million of future commitments related to bundled Internet access.

The Company has certain contractual obligations to utilize network facilities, including access lines, from various interexchange and local exchange carriers.  These contracts are based on a fixed monthly rate with terms on certain agreements extending through 2021.  As of December 31, 2002, the Company had committed to approximately $230 million in operating leases related to network utilization.  In addition the buyer of substantially all of the assets has agreed to assume approximately $3 million in capital lease commitments and approximately $316 million in certain operating lease obligations including the network related commitments.

Recently Issued Accounting Standards

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”).  This statement deals with the costs of closing facilities and removing assets.  SFAS 143 requires entities to record the fair value of a legal liability for an asset retirement obligation in the period it is incurred.  This cost is initially capitalized and amortized over the remaining life of the underlying asset.  Once the obligation is ultimately settled, any difference between the final cost and the recorded liability is recognized as a gain or loss on disposition.  SFAS 143 is effective for fiscal years beginning after June 15, 2002.  The Company is currently evaluating the impact, if any, that SFAS 143 will have on its future consolidated financial statements.

In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, “Accounting for Exit or Disposal Activities” (“SFAS 146”).  SFAS 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including costs related to terminating contracts that are not capital leases and termination benefits that involuntarily terminated employees receive in certain instances.  SFAS 146 supersedes Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)” (“EITF 94-3”) and requires liabilities associated with exit and disposal activities to be expensed as incurred.  SFAS 146 is effective for exit or disposal activities that are initiated after December 31, 2002.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard No. 148 “Accounting for Stock-Based Compensation-Transition and Disclosure” (“SFAS 148”).  SFAS 148 amends FASB Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) to provide for alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation and requires disclosure of the impact in interim financial information.  In addition, it amends the disclosure provisions of SFAS 123 to require prominent disclosure about the effects on reported net income of an entity’s accounting policy decisions with respect to stock-based employee compensation.  The Company adopted the disclosure provisions of SFAS 148 in December 2002, but currently does not intend to adopt SFAS 123 and therefore, has not selected a transition approach.

In November 2002, the FASB issued Financial Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”).  FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued.  It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN 45 does not prescribe a specific approach for subsequently measuring the guarantor’s recognized liability over the term of the related guarantee.

32

FIN 45 is effective for all guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year.  The Company is currently evaluating the impact, if any, that FIN 45 will have on its future consolidated financial statements, but could be required to record a liability for indemnifications related to the sale of substantially all of its assets discussed further in Note 18 of the Notes to Consolidated Financial Statements.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”).  This interpretation of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (“ARB 51”), addresses consolidation by business enterprises of variable interest entities.  ARB 51 requires that an enterprise’s consolidated financial statements include subsidiaries in which the enterprise has a controlling financial interest.  This Interpretation requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved.  FIN 46 is effective in the first fiscal year or interim period beginning after June 15, 2003, for variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003.  As the Company does not have any variable interest entities, FIN 46 is expected to have no impact on the Company’s consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Substantially all of the Company’s revenue is derived from domestic operations, so risk related to foreign currency exchange rates is considered minimal.

In December 2001, the Company began borrowing funds directly from the Parent Company’s credit facility.  As such, the Company is exposed to the impact of interest rate fluctuations.  To manage its exposure to interest rate fluctuations, the Parent Company uses a combination of variable rate short-term and fixed rate long-term financial instruments.  The Parent Company employs derivative financial instruments to manage the Company’s exposure to fluctuations in interest rates.  The Company and the Parent Company do not hold or issue derivative financial instruments for trading purposes or enter into interest rate transactions for speculative purposes.  For a more detailed discussion of the Company’s use of financial instruments, see Note 6 of the Notes to Consolidated Financial Statements.

33

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Consolidated Financial Statements:

Financial Statement Schedule:

For each of the three years in the period ended December 31, 2002:

Financial statements and financial statement schedules other than that listed above have been omitted because the required information is contained in the financial statements and notes thereto, or because such schedules are not required or applicable.

34

Report of Management Broadwing Communications Inc.

The management of Broadwing Communications Inc. is responsible for the information and representations contained in this report. Management believes that the financial statements have been prepared in accordance with generally accepted accounting principles and that the other information in this report is consistent with those statements. In preparing the financial statements, management is required to include amounts based on estimates and judgments that it believes are reasonable under the circumstances.

In meeting its responsibility for the reliability of the financial statements, management maintains a system of internal accounting controls, which is continually reviewed and evaluated. Our internal auditors monitor compliance with the system of internal controls in connection with their program of internal audits. However, there are inherent limitations that should be recognized in considering the assurances provided by any system of internal accounting controls. Management believes that its system provides reasonable assurance that assets are safeguarded and that transactions are properly recorded and executed in accordance with management’s authorization, that the recorded accountability for assets is compared with the existing assets at reasonable intervals, and that appropriate action is taken with respect to any differences. Management also seeks to assure the objectivity and integrity of its financial data by the careful selection of its managers, by organization arrangements that provide an appropriate division of responsibility, and by communications programs aimed at assuring that its policies, standards and managerial authorities are understood throughout the organization.

The financial statements have been audited by PricewaterhouseCoopers LLP, independent accountants. Their audit was conducted in accordance with auditing standards generally accepted in the United States of America. The Audit and Finance Committee of the Board of Directors of the Parent Company, which is composed of five directors who are not employees, meets periodically with management, the internal auditors and PricewaterhouseCoopers LLP to review their performance and responsibilities and to discuss auditing, internal accounting controls and financial reporting matters. Both the internal auditors and the independent accountants periodically meet alone with the Audit and Finance Committee and have access to the Audit and Finance Committee at any time.

/s/ Kevin W. Mooney

Kevin W. Mooney

Chief Executive Officer

/s/ Thomas L. Schilling

Thomas L. Schilling

Chief Financial Officer

35

Report of Independent Accountants

To the Board of Directors and the

Shareowners of Broadwing Communications, Inc.

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Broadwing Communications Inc. and its subsidiaries (“the Company”) at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.  In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.  These financial statements and financial statement schedule are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company is dependent on financing from its parent to fund its operations.  The parent’s ability to continue to fund the Company is restricted by its bank credit facility and certain other debt instruments, which raises substantial doubt about the ability of the Company to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 2 to the consolidated financial statements, on January 1, 2002, the Company changed the manner in which it accounts for goodwill and other intangible assets upon adoption of the accounting guidance of Statement of Financial Accounting Standards No. 142.

/s/ PricewaterhouseCoopers LLP

Austin, Texas

March 27, 2003

36

BROADWING COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Dollars in millions)

	Year Ended December 31,
	2002			2001			2000
Revenue
Service revenue	$	950.6		$	1,070.7		$	939.0
Product revenue	117.5			126.9			65.6
Total revenue	1,068.1			1,197.6			1,004.6
Costs and expenses
Cost of services (excluding depreciation of $231.2, $200.0, and $128.4 included below)	552.2			659.0			545.0
Cost of products	103.4			101.1			54.8
Selling, general and administrative	301.0			329.6			323.5
Depreciation	291.1			273.4			197.1
Amortization	24.8			110.7			109.9
Restructuring	32.6			73.9			—
Asset impairments and other	2,200.6			152.0			—
Total costs and expenses	3,505.7			1,699.7			1,230.3
Operating loss	(2,437.6		)	(502.1		)	(225.7		)
Equity loss in unconsolidated entities	—			4.0			15.5
Interest expense	71.6			68.1			68.3
Loss (gain) on investments	(0.2		)	(11.6		)	394.5
Other expense (income), net	(1.6		)	—			1.9
Loss from operations before income taxes and cumulative effect of change in accounting principle	(2,507.4		)	(562.6		)	(705.9		)
Income tax expense (benefit)	26.3			(174.2		)	(241.3		)
Loss from operations before cumulative effect of change in accounting principle	(2,533.7		)	(388.4		)	(464.6		)
Cumulative effect of change in accounting principle, net of taxes of $5.8	2,008.7			—			—
Net loss	(4,542.4		)	(388.4		)	(464.6		)
Other comprehensive loss, net of tax
Reclassification adjustment - investments	—			—			(84.5		)
Total other comprehensive loss	—			—			(84.5		)
Comprehensive loss	$	(4,542.4	)	$	(388.4	)	$	(549.1	)

The accompanying notes are an integral part of the financial statements.

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BROADWING COMMUNICATIONS INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

	December 31, 2002			December 31, 2001
Assets
Current Assets
Cash and cash equivalents	$	2.9		$	11.6
Receivables, less allowances of $32.8 and $22.6, respectively	162.0			175.6
Prepaid expenses and other current assets	12.5			18.2
Total current assets	177.4			205.4
Property, plant and equipment, net of accumulated depreciation of $0.0 and $553.6	54.7			2,182.0
Goodwill	—			2,007.7
Other intangibles, net	—			347.2
Deferred income tax benefits	—			233.2
Other noncurrent assets	7.0			2.3
Total Assets	$	239.1		$	4,977.8
Liabilities and Shareowner’s Equity (Deficit)
Current Liabilities
Current portion of long-term debt	$	4.8		$	3.2
Intercompany payable to Parent Company, net		1,492.7			—
Accounts payable	62.8			115.2
Accrued service cost	32.7			58.2
Accrued taxes	52.0			66.3
Accrued restructuring	39.9			70.4
Current portion of unearned revenue and customer deposits	77.8			150.5
Other current liabilities	59.6			39.3
Total current liabilities	1,822.3			503.1
Long-term debt, less current portion	240.5			91.5
Intercompany payable to Parent Company, net		—			1,468.8
Unearned revenue, less current portion	290.7			414.0
Other noncurrent liabilities	33.0			58.0
Total liabilities	2,386.5			2,535.4
12½% Junior Exchangeable Preferred Stock; $.01 par value; authorized - 3,000,000 shares of all classes of preferred stock; 395,210 shares issued and outstanding and aggregate liquidation preference of $426.1 and $401.4, respectivley	414.4			417.8
Commitments and contingencies	—			—
Shareowner’s Equity (Deficit)
Common stock, $0.01 par value; 100,000,000 shares authorized; 500,000 shares issued and outstanding at December 31, 2002 and 2001	—			—
Additional paid-in capital	2,879.1			2,923.1
Accumulated deficit	(5,440.9		)	(898.5		)
Total shareowner’s equity (deficit)	(2,561.8		)	2,024.6
Total Liabilities and Shareowner’s Equity (Deficit)	$	239.1		$	4,977.8

The accompanying notes are an integral part of the financial statements.

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 BROADWING COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF SHAREOWNER’S EQUITY (DEFICIT)

(Shares in thousands, dollars in millions)

				Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income			Total Shareowner’s Equity (Deficit)
	Common Stock
	Shares	Amount
Balance at January 1, 2000	500	$	—	$	2,424.6		$	(45.5	)	$	84.5		$	2,463.6
Preferred dividends accrued	—	—		(41.0		)	—			—			(41.0		)
Contributed capital from Parent Company	—	—		520.5			—			—			520.5
Reclassification adjustment - investments	—	—		—			—			(84.5		)	(84.5		)
Net loss	—	—		—			(464.6		)	—			(464.6		)
Balance at December 31, 2000	500	—		2,904.1			(510.1		)	—			2,394.0
Preferred dividends accrued	—	—		(46.3		)	—			—			(46.3		)
Contributed capital from Parent Company	—	—		65.3			—			—			65.3
Net loss	—	—		—			(388.4		)	—			(388.4		)
Balance at December 31, 2001	500	—		2,923.1			(898.5		)	—			2,024.6
Preferred dividends accrued	—	—		(45.9		)	—			—			(45.9		)
Contributed capital from Parent Company	—	—		1.9			—			—			1.9
Net loss	—	—		—			(4,542.4		)	—			(4,542.4		)
Balance at December 31, 2002	500	$	—	$	2,879.1		$	(5,440.9	)	$	—		$	(2,561.8	)

The accompanying notes are an integral part of the financial statements.

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BROADWING COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

	Year Ended December 31,
	2002			2001			2000
Cash Flows from Operating Activities
Net loss	$	(4,542.4	)	$	(388.4	)	$	(464.6	)
Adjustments to reconcile net loss to cash used in operating activities:
Cumulative effect of change in accounting principle, net of tax	2,008.7			—
Depreciation	291.1			273.4			197.1
Amortization	24.8			110.7			109.9
Asset impairments	2,200.6			152.0			—
Tax valuation allowance	1,108.5			13.2			31.6
Deferred income tax expense (benefit)	(877.6		)	(94.3		)	(214.2		)
Intercompany credit in lieu of taxes	(204.6		)	(93.1		)	(58.7		)
Provision for loss on receivables	33.0			77.0			52.0
Equity loss in unconsolidated entities	—			4.0			15.5
(Gain) loss on investments, net	(0.2		)	(11.6		)	394.5
Other, net	(0.1		)	(3.8		)	(6.3		)
Changes in operating assets and liabilities:
Increase in receivables	(19.9		)	(78.3		)	(143.4		)
(Increase) decrease in other current assets	6.0			(17.8		)	(8.6		)
(Decrease) increase in accounts payable	(52.8		)	(65.0		)	80.1
Increase (decrease) in accrued and other current liabilities	132.8			132.5			(21.5		)
Decrease in unearned revenue	(202.1		)	(85.8		)	(25.1		)
Increase in other assets and liabilities, net	(0.7		)	(36.1		)	29.0
Net cash used in operating activities	(94.9		)	(111.4		)	(32.7		)
Cash Flows from Investing Activities
Capital expenditures	(64.9		)	(472.0		)	(599.9		)
Proceeds from sale of investments	—			30.4			—
Purchases of investments	—			—			(0.5		)
Other, net	—			—			10.4
Net cash used in investing activities	(64.9		)	(441.6		)	(590.0		)
Cash Flows from Financing Activities
Capital contribution from Parent Company	1.9			65.3			520.5
Proceeds from Parent Company intercompany loan, net	23.3			479.5			532.7
Issuance of long-term debt	151.0			42.0			—
Repayment of long-term debt	(0.4		)	(3.2		)	(404.0		)
Preferred stock dividends paid	(24.7		)	(49.4		)	(49.4		)
Other, net	—			—			(2.9		)
Net cash provided by financing activities	151.1			534.2			596.9
Net decrease in cash and cash equivalents	(8.7		)	(18.8		)	(25.8		)
Cash and cash equivalents at beginning of period	11.6			30.4			56.2
Cash and cash equivalents at end of period	$	2.9		$	11.6		$	30.4
Supplemental Disclosure of Cash Flow Information
Cash paid (received) for:
Income taxes, net of refunds	$	1.1		$	0.5		$	0.2
Interest, net of amount capitalized	$	75.5		$	60.6		$	52.6
Non-cash investing and financing activities:
Accretion of preferred stock	$	3.5		$	3.2		$	4.1
Capitalized interest	$	8.1		$	22.9		$	22.4

 The accompanying notes are an integral part of the financial statements.

40

BROADWING COMMUNICATIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Description of Business, Liquidity, and Accounting Policies

Description of Business - Broadwing Communications Inc. (“the Company”) is an Austin, Texas based provider of communications services. The Company utilizes its advanced optical network consisting of approximately 18,700 route miles to provide broadband transport through private line and indefeasible right of use (“IRU”) agreements, Internet services utilizing ATM and frame relay technology, and long-distance services to both wholesale and retail markets. The Company also offers data collocation, information technology consulting, network construction and other services.  The Company is wholly owned subsidiary of Broadwing Inc. ("Broadwing" or "the Parent Company").  On November 9, 1999 the Company was merged with a wholly owned subsidiary of Broadwing ("the Merger").

Basis of Presentation - - On January 1, 2002, the web hosting operations of a subsidiary of the Parent Company were transferred to the Company and are reported in all periods presented.  Accordingly, the historical results of operations, balance sheets, shareowner’s equity and cash flows have been recast to reflect this transfer of operations.  The impact of this transfer was not material to the financial statements.

Basis of Consolidation - The accompanying consolidated financial statements include accounts of the Company and its wholly owned and its majority owned subsidiaries over which it exercises control (“the Company”).  Investments in which the Company has the ability to exercise significant influence, but which it does not control, are accounted for using the equity method.  For equity method investments, the Company’s share of income is calculated according to the Company’s equity ownership.  Any differences between the carrying amount of an investment and the amount of the underlying equity in the net assets of the equity investee are amortized over the expected life of the asset.

Liquidity and Financial Resources — The Company is dependent on financing from its Parent Company to fund its operations.  Under the terms of the Parent Company's amended bank credit facility and recently issued discount notes, the Parent Company's ability to make future investments in or fund the operations of the Company was limited to $58 million as of February 28, 2003.  As discussed in Note 18, on February 22, 2003 certain subsidiaries of the Parent Company entered into a definitive agreement to sell substantially all of the assets of the broadband business, excluding the information technology consulting assets, to C III Communications ("C III"), for up to $129 million in cash and the assumption of certain long-term operating contractual commitments.  In addition, in March 2003, the Parent Company reached an agreement with holders of more than two-thirds of the Company's 12½ percent preferred stock and 9 percent senior subordinated notes to exchange these instruments for common stock of the Parent Company.  If the Company is unable to finance its operations through closing of the asset sale and meet its remaining obligations, or if a sale is not consummated, it may be forced to seek protection from its creditors through bankruptcy proceedings.

41

Use of Estimates - Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported.  Actual results could differ from those estimates.

Cash Equivalents - Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less.

Notes Receivable - From time to time, the Company accepts interest-bearing notes from customers and other debtors when payments are expected to be received over extended periods.  Amounts due on notes classified as current are expected to be received within one year.

Unbilled Receivables - Unbilled receivables arise from network construction revenue that is recognized under the percentage-of-completion method and from broadband, switched, data and internet and consulting services rendered but not yet billed.  Network construction receivables are billable upon achievement of contractual milestones or upon completion of contracts.  As of December 31, 2002 and 2001, unbilled receivables totaled $71 million and $69 million, respectively.  Unbilled receivables of $51 million and $45 million at December 31, 2002 and 2001, respectively, include both claims and signed change orders related to a construction contract that was terminated during the second quarter of 2002.  The Company believes such amounts are valid and collectible receivables.  Refer to Note 14 for a detailed discussion of this construction contract.

Allowance for Uncollectible Accounts Receivable – The Company establishes provisions for uncollectible accounts receivable using both percentages of aged accounts receivable balances to reflect the historical average of credit losses and specific provisions for certain large, potentially uncollectible balances.  The Company believes that its allowance for potential losses is adequate based on the methods above.  However, if one or more of the Company’s larger customers were to default on its accounts receivable obligations or general economic conditions in the United States of America deteriorated, the Company could be exposed to potentially significant losses in excess of the provisions established.

Materials and Supplies - The Company’s inventory is carried at the lower of average cost or market.

Property, Plant and Equipment - Property, plant and equipment is recorded at cost (subject to fair market value adjustments made as part of purchase accounting at the date of the Merger).  Depreciation is provided for using the straight-line method over the estimated useful life.  Repairs and maintenance are charged to expense as incurred.  Property, plant and equipment recorded under capital leases are included with the Company’s owned assets.  Costs associated with uncompleted portions of the network are classified as construction in progress in the accompanying consolidated balance sheets.

Interest is capitalized as part of the cost of constructing the Company’s optical network.  Interest capitalized during construction periods is computed by determining the average accumulated expenditures for each interim capitalization period and applying an average interest rate. Total interest capitalized during the years ended December 31, 2002, 2001 and 2000, was $8 million, $23 million and $22 million, respectively.

Goodwill and Indefinite-Lived Intangible Assets - Goodwill represents the excess of the purchase price consideration over the fair value of assets acquired recorded in connection with purchase business combinations, primarily the merger with IXC, in November 1999.  Upon the adoption of Statement of

42

Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) on January 1, 2002, the Company recorded a goodwill impairment charge of $2,008.7 million, net of tax, as discussed in Note 2.

Pursuant to SFAS 142, goodwill and intangible assets not subject to amortization are tested for impairment annually, or when events or changes in circumstances indicate that the asset might be impaired.  For goodwill, a two-step impairment test is performed.  The first step compares the fair value of a reporting unit with its carrying amount, including goodwill.  If the carrying value of a reporting unit exceeds its fair value, then the second step of the impairment test is performed to measure the amount of impairment loss.  The second step compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.  The implied fair value is determined by allocating the fair value of a reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination.  The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  If the carrying amount of the reporting unit goodwill is in excess of the implied fair value of that goodwill, then an impairment loss is recognized equal to that excess.  For indefinite-lived intangible assets, the impairment test consists of a comparison of the fair value of the intangible asset with its carrying value.  If the carrying value of an indefinite-lived asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

In 2001 and 2000, goodwill was amortized on a straight-line basis over estimated useful lives of 30 years.

Other Intangible Assets — Intangible assets subject to amortization expense consist primarily of acquired customer relationships.  These intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from 2 to 20 years.  As of December 31, 2002 the carrying value of other intangible assets was zero due to the asset impairment discussed below.

Impairment of Long-lived Assets, Other than Goodwill and Indefinite lived Intangibles — The Company reviews the carrying value of long-lived assets, other than goodwill and indefinite lived assets discussed above, when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  An impairment loss is recognized when the estimated future undiscounted cash flows expected to result from the use of an asset (or group of assets) and its eventual disposition are less than its carrying amount.  An impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value.

The Company performed an impairment assessment of its assets during the fourth quarter of 2002.  This assessment considered all of the contemplated strategic alternatives, including a potential sale of assets, using a probability-weighted approach.  Based on this assessment, it was determined that the long-lived assets of the Company were impaired and, accordingly, the Company recorded a $2.2 billion non-cash impairment charge to reduce the carrying value of these assets.  Of the total charge, $1,901.7 million related to tangible fixed assets and $298.3 million related to finite-lived intangible assets.

Investments – Investments in publicly traded companies over which the Company does not exercise significant influence are reported at fair value in accordance with Statement of Financial Accounting Standard No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”).  The Company reviews its investments for impairment whenever the fair value of the individual investment is less than its cost basis.  An impairment loss is recognized if the decline in fair value is

43

deemed to be “other than temporary.”  The Company uses the average cost basis to determine the gain or loss on an investment transaction.

Revenue Recognition - Broadband transport service revenue is billed monthly, in advance, with revenue being recognized when earned.  Both switched voice and data and Internet product revenue are billed a monthly in arrears, while the revenue is recognized as the services are provided.  Revenue from product sales and certain services is generally recognized upon performance of contractual obligations, such as shipment, delivery, installation or customer acceptance.  The Company modified its revenue recognition policies on January 1, 2000, to be in conformity with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB 101”).  Accordingly, service activation revenue is deferred and recognized over the appropriate service life for the associated service.

Indefeasible right-of-use agreements (“IRU”) represent the lease of network capacity or dark fiber and are recorded as unearned revenue at the earlier of the acceptance of the applicable portion of the network by the customer or the receipt of cash.  The buyer of IRU services typically pays cash upon execution of the contract, and the associated IRU revenue is then recognized over the life of the agreement as services are provided, beginning on the date of customer acceptance. In the event the buyer of an IRU terminates a contract prior to the contract expiration and releases the Company from the obligation to provide future services, the remaining unamortized unearned revenue is recognized in the period in which the contract is terminated.  In 2002, the Company recognized non-cash, non-recurring revenue and operating income related to IRU terminations with bankrupt customers to whom the Company was no longer obligated to provide services, totaling $58.7 million (net of a $4.25 million termination payment discussed in Note 14).  IRU and related maintenance revenue are included in the broadband transport category.

Construction revenue and estimated profits are recognized according to the percentage of completion method on a cost incurred to total costs estimated at completion basis.  The method is used because the Company can make reasonably dependable estimates of revenue and costs applicable to various stages of a contract.  As the financial reporting of these contracts depends on estimates that are continually assessed throughout the terms of the contracts, revenue recognized is subject to revision as the contracts near completion.  Revisions in estimates are reflected in the period in which the facts that give rise to the revision become known and could impact revenue and costs of services and products.  Construction projects are considered substantially complete upon customer acceptance.  In November 2001, the Company announced its intention to exit the construction business upon completion of one remaining contract as discussed in Note 3.  That contract was terminated in 2002 and is currently in dispute as discussed in Note 14.

Advertising - Costs related to advertising are expensed as incurred and amounted to $2 million, $14 million, and $27 million in 2002, 2001 and 2000, respectively.

Fiber Exchange Agreements - In connection with the development of its optical network, the Company entered into various agreements to exchange fiber usage rights.  The Company accounts for agreements with other carriers to exchange fiber asset service contracts either for capacity or services by recognizing the fair value of the revenue earned and expense incurred.  Exchange agreements accounted for non-cash revenue and expense, in equal amounts, of $8 million, $12 million and $19 million in 2002, 2001 and 2000, respectively, with no impact on operating or net income (loss).

Income Taxes - The Company’s tax provision is based upon the modified separate return method under which an income tax benefit is recorded for losses based upon the potential to be realized by the Company, as well as any affiliated members of the federal income tax consolidated group of the

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Parent Company.  The income-producing members of the consolidated group compensate the Company for losses as they are realized in the consolidated tax return.  The income tax provision consists of an amount for taxes currently payable and an expense (or benefit) for tax consequences deferred to future periods.  In evaluating the carrying value of its deferred tax assets, the Company considers prior operating results, future taxable income projections of the Parent Company’s consolidated group, expiration of tax loss carryforwards, ongoing prudent and feasible tax planning strategies, and other factors.

Stock-Based Compensation - Employees are eligible to participate in the stock-based compensation plans of the Parent Company.  The Company accounts for stock-based compensation plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related interpretations.  Compensation cost is measured under the intrinsic value method (refer to Note 9).  Stock-based employee compensation cost is not reflected in net loss, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant.  The following table illustrates the effect on net loss if the company had applied the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), to stock-based employee compensation in all periods presented.

	Year ended December 31
($ in millions except per share amounts)	2002			2001			2000
Net loss applicable to common shareowners:
As reported	$	(4,542.4	)	$	(388.4	)	$	(464.6	)
Pro forma compensation expense, net of tax benefits	(18.3		)	(19.5		)	(22.9		)
Total pro forma net loss	$	(4,560.7	)	$	(407.9	)	$	(487.5	)

The weighted average fair values at the date of grant for the Company options granted to employees were $2.66, $7.66 and $12.75 during 2002, 2001 and 2000, respectively.  The fair value disclosures assume that the fair value of option grants was calculated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	2002		2001		2000
Expected dividend yield	—		—		—
Expected volatility	120.4	%	67.9	%	48.9	%
Risk-free interest rate	3.1	%	4.1	%	5.1	%
Expected holding period - years	3		3		4

Pension and Postretirement Benefits – The Parent Company calculates net periodic pension and postretirement expenses and liabilities on an actuarial basis under the provisions of Statement of Financial Accounting Standards No. 87, “Employers’ Accounting for Pensions” (“SFAS 87”) and Statement of Financial Accounting Standards No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions” (“SFAS 106”).  The actuarial assumptions attempt to anticipate future events and are used in calculating the expense and liability related to these plans.  Key actuarial assumptions are presented in the Parent Company’s financial statements.  The impact on the Company’s financial statements is discussed in Note 10.

Reclassifications - Certain prior years amounts have been reclassified to conform to the current year presentation with no effect on financial results.

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Recently Issued Accounting Standards  In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”).  This statement deals with the costs of closing facilities and removing assets.  SFAS 143 requires entities to record the fair value of a legal liability for an asset retirement obligation in the period it is incurred.  This cost is initially capitalized and amortized over the remaining life of the underlying asset.  Once the obligation is ultimately settled, any difference between the final cost and the recorded liability is recognized as a gain or loss on disposition.  SFAS 143 is effective for fiscal years beginning after June 15, 2002.  The Company is currently evaluating the impact, if any, that SFAS 143 will have on its future consolidated financial statements.

In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, “Accounting for Exit or Disposal Activities” (“SFAS 146”).  SFAS 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including costs related to terminating contracts that are not capital leases and termination benefits that involuntarily terminated employees receive in certain instances.  SFAS 146 supersedes Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)” (“EITF 94-3”) and requires liabilities associated with exit and disposal activities to be expensed as incurred.  SFAS 146 is effective for exit or disposal activities of the Company that are initiated after December 31, 2002.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard No. 148 “Accounting for Stock-Based Compensation-Transition and Disclosure” (“SFAS 148”).  SFAS 148 amends FASB Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) to provide for alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation and requires disclosure of the impact in interim financial information.  In addition, it amends the disclosure provisions of SFAS 123 to require prominent disclosure about the effects on reported net income of an entity’s accounting policy decisions with respect to stock-based employee compensation.  The Company adopted the disclosure provisions of SFAS 148 in December 2002, but currently does not intend to adopt SFAS 123 and therefore, has not selected a transition approach.

In November 2002, the FASB issued Financial Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”).  FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued.  It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.  FIN 45 does not prescribe a specific approach for subsequently measuring the guarantor’s recognized liability over the term of the related guarantee.  FIN 45 is effective for all guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year.  The Company is currently evaluating the impact, if any, that FIN 45 will have on its future consolidated financial statements, but could be required to record a liability for indemnifications related to the sale of substantially all of its assets discussed further in Note 18.

In December 2002, FASB issued Financial Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”).  This interpretation of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (“ARB 51”), addresses consolidation by business enterprises of variable interest entities.  ARB 51 requires that an enterprise’s consolidated financial statements include subsidiaries in which the enterprise has a controlling financial interest.  FIN 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved.  FIN 46 is effective in the first fiscal year or interim period beginning after June 15, 2003, for variable interest entities in which an enterprise holds a

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variable interest that it acquired before February 1, 2003.  As the Company does not have any variable interest entities, FIN 46 is expected to have no impact on the Company’s consolidated financial statements.

2.Goodwill and Intangible Assets

On June 29, 2001 the FASB issued SFAS 142, which required cessation of the amortization of goodwill and indefinite-lived intangible assets and annual impairment testing of those assets.  Intangible assets that have finite useful lives continue to be amortized.  The Company adopted SFAS 142 on January 1, 2002, as required.  The Company completed the initial impairment test during the first quarter of 2002, which indicated that goodwill was impaired as of January 1, 2002.  In the second quarter of 2002, the Company recorded an impairment charge of $2,008.7 million, net of taxes, effective as of January 1, 2002.  The impairment charge is reflected as a cumulative effect of change in accounting principle, net of taxes, in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table reconciles the Company’s 2002, 2001 and 2000 net loss, adjusted to exclude amortization of goodwill and indefinite lived intangible assets pursuant to SFAS 142, to the 2002 reported amounts:

	For the Year Ended December 31,
($ in millions):	2002			2001			2000
				(as adjusted)			(as adjusted)
Loss before cumulative effect of change in accounting principle	$	(2,533.7	)	$	(388.4	)	$	(464.6	)
Add back: Goodwill amortization	—			72.5			76.9
Add back: Assembled workforce amortization, net of taxes	—			5.2			5.9
Adjusted loss before cumulative effect of change cumulative effect of change in accounting principle	$	(2,533.7	)	$	(310.7	)	$	(381.8	)
Net loss	$	(4,542.4	)	$	(388.4	)	$	(464.6	)
Add back: Goodwill amortization	—			72.5			76.9
Add back: Assembled workforce amortization, net of taxes	—			5.2			5.9
Adjusted net loss	$	(4,542.4	)	$	(310.7	)	$	(381.8	)

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The following table details the components of the carrying amount of intangible assets.  Intangible assets subject to amortization expense primarily relate to acquired customer relationships.  The Company adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), on January 1, 2002 as required.  In the fourth quarter of 2002, the Company recorded a non-cash intangible asset impairment charge of $298.3 million (refer to Note 1):

($ in millions):	December 31, 2002			December 31, 2001
Intangible assets subject to amortization:
Gross carrying amount	$	409.0		$	426.2
Reclassification of assembled workforce	(24.0		)	—
Asset impairment	(298.3		)	—
Accumulated amortization	(86.7		)	(79.0		)
Total intangible assets, net	$	—		$	347.2

	For the Year Ended
($ in millions)	2002		2001		2000
Amortization expense of finite-lived other intangible assets	$	24.8	$	38.2	$	32.9

The estimated intangible asset amortization expense for each of the fiscal years 2003 through 2007 is zero. 

The following table presents a rollforward of the activity related to goodwill:

($ in millions):	Year Ended December 31, 2002			Year Ended December 31, 2001
Goodwill, beginning of year	$	2,007.7		$	2,007.7
Reclassification of Assembled Workforce, net  of accumulated amortization	4.1			—
Impairment charge	(2,011.8		)	—
Goodwill, end of year	$	—		$	2,007.7

3.Restructuring and Other Charges

October 2002 Restructuring Charge

In October 2002, the Company initiated a restructuring that is intended to reduce annual expenses by approximately $200 million compared to 2002 and enable the business to become cash flow positive.  The plan includes initiatives to reduce the workforce by approximately 500 positions; reduce line costs by approximately 25% through network grooming, optimization, and rate negotiations; and exit the

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international wholesale voice business.  The Company recorded restructuring charges of $12.8 million, consisting of $7.5 million related to employee separation benefits and $5.3 million related to contractual terminations.  As of December 31, 2002, 428 employee separations had been completed which utilized reserves of $5.0 million, all of which was cash.  The Company expects to complete the plan by June 30, 2003.

The following table illustrates the activity in this reserve since its inception:

Type of costs ($ in millions)	Initial Charge		Utilizations			Balance December 31, 2002
Employee separations	$	7.5	$	(5.0	)	$	2.5
Terminate contractual obligations	5.3		—			5.3
Total	$	12.8	$	(5.0	)	$	7.8

September 2002 Restructuring Charge

During the third quarter of 2002, the Company recorded restructuring charges of $5.5 million.  The restructuring charge comprised $0.5 million related to employee separation benefits and $5 million related to contractual terminations associated with the Company’s exit of a product line (for a further discussion of the contractual termination refer to Note 14).  The restructuring costs include the cost of employee separation benefits, including severance, medical and other benefits, related to two employees of the Company.  Total cash expenditures during 2002 amounted to $5.5 million.  This restructuring is completed and closed.

The following table illustrates the activity in this reserve since its inception:

Type of costs ($ in millions)	Initial Charge		Utilizations			Balance December 31, 2002
Employee separations	$	0.5	$	(0.5	)	$	—
Terminate contractual obligations	5.0		(5.0		)	—
Total	$	5.5	$	(5.5	)	$	—

November 2001 Restructuring Plan

In November 2001, the Company’s management approved restructuring plans which included initiatives to close eight of the Company’s eleven data centers; reduce the Company’s expense structure; and exit the network construction line of business and other non-strategic operations.  In addition, the web hosting operations of a subsidiary of the Parent Company were transferred into a subsidiary of the Company effective January 1, 2002.  Total restructuring and impairment costs of $222.0 million were recorded in 2001 related to these initiatives.  The $222.0 million consisted of restructuring liabilities in the amount of $73.9 million and related noncash asset impairments in the amount of $148.1 million.  The restructuring charge was comprised of $11.2 million related to involuntary employee separation benefits, $62.4 million related to lease and other contractual terminations and $0.3 million relating to other restructuring charges.

During the first quarter of 2002, the Company recorded additional restructuring charges of $15.9 million resulting from employee separation benefits and costs to terminate contractual obligations,

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which were actions contemplated in the original plan for which an amount could not be reasonably estimated at that time.  During fourth quarter of 2002, a $1 million reversal was made to the restructuring reserve due to a change in estimate related to the termination of contractual obligations.  In total, the Company expects this restructuring plan to result in cash outlays of $88.1 million and noncash items of $148.8 million.  The Company expects to complete the plan by December 31, 2002, except for certain lease obligations, which are expected to continue through December 31, 2005.

The restructuring costs include the cost of involuntary employee separation benefits, including severance, medical and other benefits related to 720 employees across all areas of the Company.  As of December 31, 2002, all employee separations had been completed which utilized reserves of $11.7 million, $11.0 million of which was cash.  Total cash expenditures in 2002 amounted to $50.6 million.

In connection with the restructuring plan, the Company performed a review of its long-lived assets to identify any potential impairments in accordance with Statement of Financial Accounting Standard No. 121, “Accounting for the Impairment of Long-Lived Assets to be Disposed of” (“SFAS 121”).  The Company recorded a $148.1 million charge as an expense of operations according to SFAS 121, resulting from the write-off of certain assets related to the closing of data centers, consolidation of office space and curtailment of other Company operations.

The following table illustrates the activity in this reserve since the initial charge in November of 2001: 

Type of costs ($ in millions):	Intial Charge		Utilizations			Balance December 31, 2001		Utilizations			Adjustments		Balance December 31, 2002
Employee separations	$	11.2	$	(3.1	)	$	8.1	$	(8.6	)	$	0.5	$	—
Terminate contractual obligations	62.4		(2.3		)	60.1		(42.4		)	14.4		32.1
Other exit costs	0.3		—			0.3		(0.4		)	0.1		—
Total	$	73.9	$	(5.4	)	$	68.5	$	(51.4	)	$	15.0	$	32.1

1999 Restructuring Plan

Included in the allocation of the cost to acquire the Company in the fourth quarter of 1999 were restructuring costs associated with initiatives to more closely integrate operations of the Company with those of other subsidiaries of the Parent Company.  The total restructuring costs recorded in 1999 of $7.7 million included the costs of involuntary employee separation benefits related to 263 employees of the Company, costs associated with the closure of a variety of technical and customer support facilities, the decommissioning of certain switching equipment, and the termination of contracts with vendors.  As of December 31, 2000, all of the employee separations had been completed.  Total cash expenditures during the first nine months of 2002 amounted to $0.8 million.  These restructuring activities were completed in the third quarter of 2002, and the remaining balance of $0.5 million related to facility closure costs was reversed.

The following table illustrates the activity in this reserve since December 31, 1999:

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Type of costs ($ in millions):	Balance December 31, 1999		Utilizations			Adjustments			Balance December 31, 2000		Utilizations			Adjustments			Balance December 31, 2001		Utilizations			Adjustments			Balance December 31, 2002
Employee separations	$	2.0	$	(2.5	)	$	0.5		$	—	$	—		$	—		$	—	$	—		$	—		—
Facility closure cost	2.1		(0.3		)	—			1.8		(0.5		)	—			1.3		(0.8		)	(0.5		)	—
Relocation	0.2		—			(0.1		)	0.1		—			(0.1		)	—		—			—			—
Other exit cost	3.2		(1.9		)	0.2			1.5		(1.5		)	—			—		—			—			—
Total	$	7.5	$	(4.7	)	$	0.6		$	3.4	$	(2.0	)	$	(0.1	)	$	1.3	$	(0.8	)	$	(0.5	)	$	—

1999 Predecessor Restructuring Plan

In the third quarter of 1999, the predecessor company recorded a charge of approximately $8.3 million relating to the restructuring of the organization and to exit certain foreign operations.  The workforce reduction of 15 employees included management, administrative and foreign sales personnel.  The employees were notified of this program during July and August of 1999.  During 2000, the severance reserve was increased by $1.9 million due to higher than expected outplacement costs and higher than expected benefits for certain employees.  The reduction of $0.4 million for exiting facilities is due to lower than expected costs upon completion of those activities.  These restructuring activities were completed in the fourth quarter of 2002, and the remaining balance of $0.2 million related to employee severance was reversed.

A summary of the initial charges for the 1999 predecessor restructuring and activity in those reserves in 1999 and 2000, is as follows: 

Type of costs ($ in millions):	Initial Charge		Utilizations			Adjustments		Balance December 31, 1999		Utilizations			Adjustments			Balance December 31, 2000
Employee separations	$	7.5	$	(4.6	)	$	—	$	2.9	$	(2.8	)	$	1.9		$	2.0
Terminate contractual obligations and exit facilities	0.8		(0.3		)	—		0.5		(0.1		)	(0.4		)	—
Total	$	8.3	$	(4.9	)	$	—	$	3.4	$	(2.9	)	$	1.5		$	2.0

A summary of the 2001 and 2002 activity in the accrued restructuring liabilities associated with the 1999 predecessor restructuring is as follows: 

Type of costs ($ in millions):	Balance December 31, 2000		Utilizations			Adjustments			Balance December 31, 2001		Utilizations			Adjustments			Balance December 31, 2002
Employee separations	$	2.0	$	(1.3	)	$	(0.1	)	$	0.6	$	(0.4	)	$	(0.2	)	$	—
Terminate contractual obligations and exit facilities	—		—			—			—		—			—			—
Total	$	2.0	$	(1.3	)	$	(0.1	)	$	0.6	$	(0.4	)	$	(0.2	)	$	—

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4.     Investments in Other Entities

Investments in Equity Method Securities

As of December 31, 2000, the market value of the Company’s investment in Applied Theory Communications Inc. (a New York-based Internet service provider) was approximately $11.7 million, following the recording of an impairment charge on this security at the end of 2000.  This impairment charge was recorded because the Company believed that the decrease in value of Applied Theory shares was “other than temporary.”

The Company recorded a $4.0 million decrease in the value of the Applied Theory investment in 2001 as a result of the Company’s use of the equity method of accounting.  During 2001, the Company sold its shares of this investment and discontinued equity method accounting in May 2001 due to a decrease in its ownership percentage to less than 20%, the resignation of the Company’s seat on Applied Theory’s board of directors and the Company’s belief that it no longer exerted significant influence over the operations of Applied Theory.

In accordance with SFAS 115, the Company reclassified this investment to a trading security in 2001.  As such, fluctuations in the market value of Applied Theory were reflected in the Consolidated Statements of Operations and Comprehensive Income (Loss) under the caption “Loss (gain) on investments.”  Accordingly, the Company recognized pretax losses of $5.9 million, representing the difference between the market value and the Company’s recorded basis of the investment.  This investment was completely liquidated during 2001, generating proceeds of $1.8 million.

Investments in Marketable Securities

The Company’s investment in PSINet totaled $15 million as of December 31, 2000 and zero as of December 31, 2001 as the Company liquidated its entire investment through settlement of a forward sale (refer to Note 6) and sale of shares in the open market.  The Company received proceeds of $28 million and recorded a realized pretax gain of $17 million in 2001 related to these transactions.  The cost basis was calculated based on the related cost.  There was no unrealized gain or loss related to the investment included in “Other Comprehensive Income” as of December 31, 2000 or 2001.  During 1999, the Company recorded a pretax unrealized holding gain of $85 million, which was completely reversed during 2000 as the value of the investment declined.  During 2000, the Company determined that its investment had been impaired and that the impairment was “other than temporary.”  Accordingly, the Company recorded a realized pretax loss totaling $342 million.

Marca-Tel – The Company held an indirect investment equal to 28.8% of Grupo Marca-Tel S.A. de C.V. (“Marca-Tel”) as a result of its ownership of 65.4% of Progress International, LLC (“Progress”) which, in turn, owned 44.0% of Marca-Tel.  The remaining 56.0% of Marca-Tel is owned by a Mexican individual, Marca Beep, S.A. de C.V. and Siemens.  The other owner of Progress is Westel International, Inc.  Although the Company had previously written this investment down to zero, the Company sold its ownership in Marca-Tel in 2001 and recorded a gain on investment of $0.4 million.

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5.     Debt

The Company’s debt consists of the following: 

($ in millions)	December 31, 2002		December 31, 2001
Short-term debt:
Intercompany payable to Parent Company, net	$	1,492.7	$	—
Short-term notes	2.6		—
Capital lease obligations, current portion	2.2		3.2
Total short-term debt	$	1,497.5	$	3.2
Long-term debt:
Bank notes	$	193.0	$	42.0
Intercompany payable to Parent Company, net		—		1,468.8
9% Senior subordinated notes	46.0		46.0
Capital lease obligations, less current portion	0.7		2.7
12½% Senior notes	0.8		0.8
Total long-term debt	$	240.5	$	1,560.3

Bank Notes

The Parent Company’s credit facility, which also provides for direct borrowings from the facility by the Company’s subsidiary Broadwing Communications Services Inc. (“BCS”), was obtained in November 1999 with total availability of $1.8 billion from a group of lending institutions.  The credit facility was increased to $2.1 billion in January 2000 and increased again to $2.3 billion in June 2001.  The total credit facility availability decreased to $1.825 billion as of December 31, 2002 following a $335 million prepayment of the outstanding term debt facilities in the first quarter of 2002 (resulting from the sale of substantially all of the assets of a subsidiary of the Parent Company), $5 million in scheduled repayments of the term debt facilities and $135 million in scheduled amortization of the revolving credit facility.  As of December 31, 2002, the credit facility availability consisted of $765 million in revolving credit, maturing in various amounts during 2003 and 2004, $569 million in term loans from banking institutions, maturing in various amounts during 2003 and 2004, and $491 million in term loans from nonbanking institutions, maturing in various amounts between 2003 and 2007.

At December 31, 2002, BCS and the Parent Company had drawn approximately $1.648 billion from the credit facility capacity of $1.825 billion, and had outstanding letters of credit totaling $13.1 million, leaving $163.9 million in additional borrowing capacity under the facility.  Credit facility borrowings have been used by the Parent Company to refinance its debt and debt assumed as part of the merger with the Company in November 1999 and to fund both the Company’s and Parent Company’s capital expenditure program and other working capital needs.  The amount refinanced included approximately $404 million borrowed in order to redeem a large portion of the outstanding 9% Senior Subordinated Notes assumed during the Merger as part of a tender offer and $391 million in outstanding debt of IXC assumed during the Merger.  The tender offer was required under the change in control provision of the indenture governing the 9% Senior Subordinated Notes.

The credit facility’s financial covenants require that the Parent Company maintain certain debt to EBITDA (as defined in the credit facility agreement), senior secured debt to EBITDA, debt to capitalization, and interest coverage ratios.  The facility also contains covenants, which, among other

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things, restrict the ability to incur additional debt or liens; pay dividends; repurchase Parent Company common stock; sell, lease, transfer or dispose of assets; make investments; and merge with another company.  As of December 31, 2002, the Parent Company was in compliance with all of the covenants of the credit facility.

Prior to December 2001, the Company relied solely on advances from the Parent Company for funding of its operations and capital program in excess of cash provided by its own operations.  In December 2001, the Company’s BCS subsidiary began borrowing funds directly from the Parent Company’s credit facility.  At December 31, 2002 2001, the Company’s subsidiary BCS had drawn $193 million and $42 million, respectively, directly from the credit facility.  At December 31, 2002, the Company and the Parent Company had $163.9 million in additional borrowing capacity under this facility.

In December 2001, the Parent Company obtained an amendment to the credit facility to exclude substantially all of the charges associated with the November 2001 restructuring plan (refer to Note 3) from the covenant calculations.  In March 2002, the Parent Company obtained an additional amendment to allow for the sale of substantially all of the assets of a subsidiary of the Parent Company, exclude charges related to SFAS 142 (refer to Note 2), increase its ability to incur additional indebtedness and amend certain defined terms.

Historically, the credit facility was secured only by a pledge of stock certificates of certain subsidiaries of the Parent Company.  Upon downgrades of the Parent Company’s corporate credit rating in the first quarter of 2002, the Parent Company became obligated to provide certain subsidiary guarantees and liens on the assets of the Parent Company and certain subsidiaries in addition to the pledge of the stock certificates of the subsidiaries.  In May 2002, the Parent Company obtained an amendment to the credit facility to exclude certain subsidiaries from the obligation to secure the credit facility with subsidiary guarantees and asset liens, extend the time to provide required collateral and obtain the ability to issue senior unsecured indebtedness and equity under specified terms and conditions.  The amendment also placed additional restrictions on the Parent Company under the covenants related to indebtedness and investments, required the Parent Company to transfer its cash management system to a wholly-owned subsidiary and increased the interest rates on the total credit facility by 50 basis points.  In December 2002, the Parent Company obtained a waiver to exclude charges related to SFAS 144 from its pertinent covenant calculations through March 30, 2003.  In March 2003, as discussed in Note 18, the Parent Company amended and restated its credit facility to, among other things, exclude charges related to SFAS 144 going forward.

In February 2002, the Parent Company’s corporate credit rating was downgraded by Moody’s Investors Service to Ba3 from its previous level of Ba1.  In March 2002, the Parent Company’s corporate credit rating was downgraded by Standard and Poor’s and Fitch Rating Service to BB from its previous level of BB+.  In December 2002, the Parent Company’s corporate credit rating was downgraded again by Standard and Poor’s to B- from its previous level of BB.  In January 2003, Moody’s downgraded the Company’s corporate credit rating to B1 from Ba3.  Prior to the downgrades, the Parent Company’s credit facility was secured only by a pledge of the stock certificates of certain subsidiaries, including Broadwing Communications Inc.  Upon the downgrades, the Parent Company also became obligated to provide certain guarantees and liens on the assets of both the Parent Company and the Company.

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The interest rates that could be charged on borrowings from the credit facility as of December 31, 2002 ranged from 150 to 350 basis points above the London Interbank Offering Rate (“LIBOR”) and were at 275 to 325 basis points above LIBOR, or 4.13% and 4.63%, respectively, based on the Parent Company’s credit rating.  The Parent Company incurs banking fees in association with this credit facility that range from 37.5 basis points to 75 basis points, applied to the unused amount of borrowings under the revolving credit facility.

Intercompany Payable to Parent Company

Intercompany advances payable to the Parent Company totaled $1,492.7 million and $1,468.8 million as of December 31, 2002 and December 31, 2001, respectively.  As of December 31, 2002, the intercompany note to the Parent Company was payable upon demand and was therefore classified as a current liability.

9% Senior Subordinated Notes

In 1998, the predecessor company issued $450 million of 9% senior subordinated notes due 2008 (“the 9% notes”).  In January 2000, $404 million of the 9% senior subordinated notes were redeemed through a tender offer due to the change of control provision of the related indenture.  Accordingly, $46 million of the 9% notes remain outstanding at December 31, 2002. 

The 9% notes are general unsecured obligations and are subordinate in right of payment to all existing and future senior indebtedness of the Company’s subsidiaries. The 9% notes indenture includes a limitation on the amount of indebtedness that the Company can incur based upon the maintenance of either debt to operating cash flow or debt to capital ratios.  The 9% indenture also provides that if the Company incurs any additional indebtedness secured by liens on its property or assets that are subordinate to or equal in right of payment with the 9% notes, then the Company must secure the outstanding 9% notes equally and ratably with such indebtedness.  As of December 31, 2002, the Company had the ability to incur additional debt.

Capital Lease Obligations

The Company leases facilities and equipment used in its operations, some of which are required to be capitalized in accordance with Statement of Financial Accounting Standard No. 13, “Accounting for Leases” (“SFAS 13”).  SFAS 13 requires the capitalization of leases meeting certain criteria, with the related asset being recorded in property, plant and equipment and an offsetting amount recorded as a liability.  The Company had $2.9 million in total indebtedness relating to capitalized leases as of December 31, 2002, $0.7 million of which was considered long-term.

12½% Senior Notes

As of December 31, 2002, the Company had outstanding $0.8 million of 12½% senior notes maturing in 2005.

Other Short-Term Debt

The Company maintains a short-term revolving vendor financing arrangement for its BTS subsidiary, which had an outstanding balance of $2.6 million as of December 31, 2002.  The Company has the ability to borrow up to $6.0 million under this arrangement, which is secured by an irrevocable $2.0 million letter of credit against  the Parent’s revolving credit facility.  The interest rate charged on the borrowings is variable based on the prime rate and was 6.0% as of December 31, 2002.  The agreement expires on June 21, 2003.

The following table summarizes the Company’s maturities of long-term debt and minimum payments under capital leases, excluding interest, for the five years subsequent to December 31, 2002 ($ in millions):

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at December 31 Year of Maturity	Debt			Capital Leases			Total
2003	1,495.3			2.2			1,497.5
2004	193.0			0.5			193.5
2005	0.8			0.2			1.0
2006	—			—			—
2007	—			—			—
Thereafter	46.0			—			46.0
	1,735.1			2.9			1,738.0
Less current portion	(1,495.3		)	(2.2		)	(1,497.5		)
Long-term debt	$	239.8		$	0.7		$	240.5

6.     Financial Instruments

The Company adopted Statement of Financial Accounting Standard SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) on January 1, 2001.  SFAS 133 requires that all derivative instruments be recognized on the balance sheet at fair value.  Fair values are determined based on quoted market prices of comparable instruments, if available, or on pricing models using current assumptions.  On the date the financial instrument is entered into, the Company designates it as either a fair value or cash flow hedge.

Upon adoption of SFAS 133 on January 1, 2001, offsetting transition adjustments related to the PSINet forward sale and the underlying six million shares of PSINet (further described below) were reclassified from other comprehensive income (loss) to net loss.  Accordingly, there was no net cumulative effect adjustment to either net loss or other comprehensive income (loss) related to these items.  As of December 31, 2002 and 2001, the Company was not a party to any derivative instruments.

Marketable Equity Forward Contracts - From time to time the Company enters into forward contracts on the sale of marketable equity securities held in the Company’s investment portfolio.  It is the Company’s intent to manage its exposure to fluctuations in U.S. equity markets related to these investments.  Forward contracts are contractual agreements between two parties for the sale of borrowed shares to be settled by delivery of the equivalent number of shares owned by the Company at an agreed upon future date. 

PSINet - In June and July 1999, the Company received approximately $111.8 million representing amounts from a financial institution in connection with two prepaid forward sale contracts on six million shares of PSINet common stock.  This amount was accounted for as notes payable and was collateralized by six million shares of PSINet common stock owned by the Company.  Given the significant decline in the value of PSINet common stock during 2000, the Company adjusted the carrying value of this liability to approximately $3 million during the fourth quarter of 2000.  This adjustment resulted in an unrealized gain on the liability that substantially offset the unrealized loss recorded in “Other comprehensive income (loss)” on the underlying six million shares of PSINet being hedged.

In 2001, the Company designated this arrangement as a fair value hedge with both the underlying shares reclassified to trading securities under SFAS 115 and related forward sale liability subject to mark-to-market adjustments through the income statement each period.  During the first quarter of

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2001, the Company settled the forward sale liability for approximately 5.8 million shares of PSINet common stock.  The difference between the six million shares collateralized and the 5.8 million shares required to settle the liability were sold in the open market, generating a pretax gain of $0.5 million.

7.     Redeemable Preferred Stock

In 1997, the Company issued 300,000 shares of 12½% Junior Exchangeable Preferred Stock (“12½% Preferreds”).  The 12½% Preferreds are mandatorily redeemable on August 15, 2009 at a price equal to their liquidation preference of $1,000 a share, plus accrued and unpaid dividends.  Through November 15, 1999, dividends on the 12½% Preferreds were being effected through additional shares of the 12½% Preferreds.  On November 16, 1999, the Company converted to a cash pay option for these dividends, and subsequently made its first cash payment on February 15, 2000.  At December 31, 2002, 395,210 shares of the redeemable preferred stock issue were outstanding with a carrying value of $414.4 million.  This preferred stock is not included in shareowners equity because it is mandatorily redeemable.

The Company announced that it would defer the August 15, 2002 and November 15, 2002 cash dividend payments on its 12½% Preferreds , in accordance with the terms of the security, conserving $24.7 million in cash during the second half of 2002.  The dividends were accrued in the third and fourth quarter of 2002. The status of future quarterly dividend payments on the 12½% Preferreds  will be determined quarterly by the Company’s board of directors.  In November 2002, the 12½% Preferreds rating  was downgraded by Standard and Poor’s to D from its previous level of B.

8.     Concentrations of Credit Risk and Major Customers

The Company may be subject to credit risk due to concentrations of receivables from companies that are communications providers, internet service providers and cable television companies.  The Company performs ongoing credit evaluations of customers’ financial condition and typically does not require significant collateral.

Revenue from the Company’s ten largest customers accounted for approximately 38%, 40%, and 35% of total revenue in 2002, 2001 and 2000, respectively.  Four of the Company’s ten largest customers were in Chapter 11 bankruptcy proceedings as of December 31, 2002.  Total revenue from these customers approximated 14% of consolidated revenue during 2002.  Revenue from these bankrupt customers generated by the amortization of IRU agreements and the early termination of two IRUs as discussed in Note 1, approximated 7% of total revenue in 2002.  In addition, a significant portion of the Company’s revenue is derived from telecommunications carriers.  Revenue from telecommunications carriers accounted for 57%, 64%, and 67% of total revenue in 2002, 2001 and 2000, respectively.

As discussed in Note 1 and Note 14, the Company had an unbilled account receivable of $50.5 million as of December 31, 2002 from a single customer that was in dispute.

9.     Shareowner’s Equity

Common Stock

The Company’s common shares that were outstanding at the date of the Merger were retired on the Merger Date and were replaced by 500,000 shares of the Company’s common stock that are entirely owned by the Parent Company.

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Additional Paid-In Capital and Accumulated Deficit

The Company’s pre-Merger additional paid-in capital and accumulated deficit were eliminated at the Merger Date.  At December 31, 2002 and 2001, the additional paid-in capital balance includes approximately $2.4 billion representing consideration paid by the Parent Company for Broadwing Communications in the Merger.  Additional amounts of approximately $580 million at December 31, 2002 relate to the retirement of $404 million of the Company’s 9% Notes and additional Parent Company capital contributions.  Offsetting these amounts are approximately $139.8 million in preferred stock dividends on the 12½% Junior Exchangeable Preferred Stock.  The accumulated deficit balance of approximately $5.4 billion at December 31, 2002 reflects the activities of the Company subsequent to the November 9, 1999 Merger Date.

Stock-Based Compensation

Prior to the Merger, the Company maintained incentive plans for selected employees.  The Company’s plans included incentive stock options and non-qualified stock options issued at prices equal to the fair market value of the Company’s common stock at the date of grant which expire upon the earlier of 10 years from the date of grant or termination of employment, death, or disability.  Effective with the Merger, options outstanding under the Company’s plans were converted into options to acquire Broadwing common stock, with the number of shares and exercise price being adjusted in accordance with the exchange ratio of 2.0976 established in the Merger Agreement.  All outstanding options under the Company’s plans became exercisable and fully vested upon the change in control except for those options issued under the 1998 plan.  The majority of options issued under the 1998 plan maintained the original vesting schedule.  A few selected option grants to executives became exercisable and fully vested according to their agreements.

Presented below is a summary of the status of outstanding Company stock options issued to employees, options issued in the Merger and related transactions (shares in thousands):

	Year Ended December 31,
	2002					2001					2000
	Options (millions)			Weighted Average Excerise Price		Options (millions)			Weighted Average Excerise Price		Options (millions)			Weighted Average Excerise Price
Outstanding at beginning of period	14.2			$	19.10	11.1			$	20.90	14.4			$	18.00
Granted	2.9			$	3.83	7.7			$	16.71	3.1			$	30.20
Exercised	—			$	—	(0.9		)	$	12.76	(3.7		)	$	33.03
Forfeited	(4.4		)	$	17.87	(3.7		)	$	24.11	(2.7		)	$	23.36
Outstanding at end of period	12.7			$	15.99	14.2			$	19.10	11.1			$	20.90
Weighted average fair value of options granted during the period	$	2.66				$	7.66				$	12.75

The following table summarizes outstanding options at December 31, 2002 by price range:

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	Outstanding				Exercisable
Range of Exercise Prices	Options (millions)	Weighted Average Excerise Price		Weighted Average Contractual Life	Options (millions)	Weighted Average Excerise Price
$1.44 to $9.65	5.3	$	9.50	9.24	0.7	$	9.09
$9.90 to $16.78	1.2	$	13.18	6.32	1.0	$	12.66
$17.50 to $24.94	3.7	$	21.01	7.16	2.7	$	20.77
$24.97 to $38.19	2.5	$	29.88	7.15	1.5	$	29.80
Total	12.7	$	15.99	7.95	5.9	$	20.31

10.  Employee Benefit Plans

Pension and Postretirement Plans

Effective January 1, 2001, the Company’s employees were covered by the Parent Company’s employee benefit plans including the defined benefit pension plan, the defined contribution plan and the health care and group life insurance benefit plans.

The pension plan is sponsored and managed by the Parent Company and includes employees from all subsidiaries of the Parent Company. The Company’s proportionate pension benefit expense is allocated through an intercompany expense allocation.  The pension benefit formula for the defined benefit plan is determined by a combination of compensation based credits and annual guaranteed interest credits.  Funding for this plan is achieved through contributions to an irrevocable trust fund.  Detailed disclosures regarding the pension plan can be found in the Parent Company’s annual report.

The health care and group life benefit plans are funded through Voluntary Employee Benefit Association (“VEBA”) trusts managed by the Parent Company.  The Parent Company funds amounts as deemed appropriate from time to time.  Total expenses for the Company related to the pension, health care and life benefit plans during 2002, 2001 and 2000 were $9.8 million, $13.7 million, and $10.2 million, respectively.

Savings Plans

Contributions by the Company to the defined contribution plan are based on matching a portion of the employee contributions or on a percentage of employee earnings.  Total contributions by the Company to the defined contribution plan for 2002, 2001 and 2000 were $4.6 million, $5.3 million and $2.6 million, respectively.

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11.  Income Taxes

Income tax provision (benefit) consists of the following: 

	Year Ended December 31,
($ in millions)	2002			2001			2000
Intercompany credit in lieu of taxes	$	(204.6	)	$	(93.1	)	$	(58.7	)
Deferred:
Federal	(688.3		)	(75.9		)	(151.7		)
State and local	(189.3		)	(18.4		)	(62.5		)
Total deferred	(877.6		)	(94.3		)	(214.2		)
Valuation allowance	1,108.5			13.2			31.6
Total	$	26.3		$	(174.2	)	$	(241.3	)

The following is a reconciliation of the income tax benefit at the U.S. federal statutory tax rate to the income tax provision (benefit) computed using the Company’s effective tax rate for each respective period ($ in millions):

	December 31,
	2002			2001			2000
Tax benefit at federal statutory rate	$	(877.6	)	$	(196.9	)	$	(246.6	)
State and local income taxes, net of federal benefit	(123.9		)	(11.3		)	(28.8		)
Change in valuation allowance	1,039.8			8.6			8.8
Amortization of nondeductible intangible assets	—			25.2			24.3
Other differences, net	(12.0		)	0.2			1.0
Provision (benefit) for income taxes	$	26.3		$	(174.2	)	$	(241.3	)

The income tax provision (benefit) relating to other comprehensive income (loss) components was $0 in 2002 and 2001, and ($56.3) million in 2000.

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Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows ($ in millions):

	2002			2001
Deferred tax assets:
Net operating loss carryforwards	$	405.1		$	275.5
Depreciation and amortization	627.3			—
Investments	10.6			51.4
Unearned revenue	86.4			159.0
Restructuring related items	22.6			104.4
Other	33.2			35.1
Total deferred tax assets	1,185.2			625.4
Valuation allowance	(1,169.8		)	(61.3		)
Net deferred income tax assets	$	15.4		$	564.1
Deferred tax liabilities:
Depreciation and amortization	$	—		$	324.6
Other	15.4			6.3
Total deferred tax liabilities	15.4			330.9
Net deferred tax asset	$	—		$	233.2

As of December 31, 2002, the Company had approximately $800.6 million of federal operating loss tax carryforwards, with a deferred tax asset value of $280.2 million, and $124.9 million in deferred tax assets related to state and local operating loss tax carryforwards.  Tax loss carryforwards will generally expire between 2010 and 2021.  U.S. tax laws limit the annual utilization of tax loss carryforwards of acquired entities.  These limitations should not materially impact the utilization of the tax carryforwards. 

The Company had a valuation allowance of $1,169.8 million and $61.3 million for the years ended December 31, 2002 and 2001, respectively.  The valuation allowance is necessary due to the uncertainty of the ultimate realization of such future benefits.

In evaluating the amount of valuation allowance required, the Company considered prior operating results, future taxable income projections, expiration dates of net operating loss carryforwards and ongoing prudent and feasible tax planning strategies.Based upon this evaluation, which included the uncertainty surrounding the Company’s future operations, the Company determined that the realization of certain deferred tax assets (including federal and state tax loss carryforwards) were not considered to be more likely than not, and therefore provided a valuation allowance.  In the event that the Company determines that it is more likely than not that the deferred assets will be realized, an adjustment to the deferred tax asset would be recorded, which would positively impact net income in the period such determination was made.  The Company is pursuing several alternatives and the resolution of uncertainties related to the Company that may result in the realization of these reserved tax assets.

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12.  Related Party Transactions

In the ordinary course of business, the Company provides services to and receives services from other wholly owned subsidiaries of the Parent Company.  The Company provides long-distance services over its national optical network to customers of the Parent Company’s Cincinnati Bell Any Distance (“CBAD”) subsidiary.  Transactions with CBAD generated $43.5 million, $41.2 million and $33.0 million in revenue for the Company in 2002, 2001 and 2000, respectively.  In addition, the Parent Company’s Cincinnati Bell Telephone (“CBT”) subsidiary markets the Company’s broadband services in its Greater Cincinnati, Ohio franchise area.  The Company records revenue from customers in Greater Cincinnati, net of commissions due to CBT equal to 20% of total revenue.  Such commissions, which reduced revenue, totaled $7.1 million, $2.7 million and $0.2 million in 2002, 2001 and 2000, respectively.

The Parent Company provides financial and treasury services, planning and financial analysis, corporate communications, human resources support and legal support.  The Parent Company bills the Company for services performed on its behalf.These noncash service fees amounted to $8 million, $5 million, and zero in 2002, 2001 and 2000, respectively.

The Parent Company’s CBT subsidiary provides accounts payable processing, payroll processing and benefit related services on behalf of the Company.  Total fees charged to the Company for these services during 2002, 2001 and 2000 were $0.3 million, $0.9 million, and $0.7 million, respectively.

The Company participates in the Parent Company’s centralized cash management system to finance operations.  Cash deposits from the Company and its subsidiaries are transferred to a subsidiary of the Parent Company on a daily basis, and the Parent Company funds the Company’s disbursement accounts as required.  All related party transactions, including receivables and payables, are cleared through an intercompany account, which is ultimately settled at the Parent Company level.

The Company relies on advances from the Parent Company for the funding of operating and investing activities in excess of cash generated by its own operations.  Advances from the Parent Company bear interest at market rates, with the related interest expense being included in “Interest expense” in the Consolidated Statements of Operations and Comprehensive Income (Loss).  The average interest rate on these advances during 2002 was approximately 4.47%.  The amounts due to the Parent Company upon demand of $1,492.7 million at December 31, 2002 and $1,468.8 million at December 31, 2001 are presented net of the amounts due to or from other subsidiaries of the Parent Company.  As of December 31, 2002, the intercompany note from the Parent Company was payable upon demand and is therefore classified as a current maturity of long-term debt.  In 2002, 2001 and 2000, the Parent Company contributed additional capital to the Company, which was accounted for as a reduction in the intercompany note payable, of $1.9 million, $65.3 million and $520.5 million, respectively.

The Company’s  tax provision is based upon the modified separate return method under which an income tax benefit is recorded for losses based upon the potential to be realized by the Company, as well as any affiliated members of the federal income tax consolidated group of the Parent Company.  The income-producing members of the consolidated group compensate the Company for losses as they are realized in the consolidated tax return, which amounted to $204.6 million, $93.1 million and $58.7 million in 2002, 2001 and 2000, respectively.

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The following table summarizes the Company’s intercompany revenue, corporate allocations and shared services allocations ($ in millions):

	Year Ended December 31,
	2002			2001			2000
Statements of Operations Data:
Intercompany revenue
Cincinnati Bell Any Distance	$	43.5		$	41.2		$	33.0
Other	0.1			0.2			0.5
Total intercompany revenue	$	43.6		$	41.4		$	33.5
Commissions paid to CBT, netted against revenue	$	7.1		$	2.7		$	0.2
Intercompany cost of services	11.2			10.0			7.5
Intercompany selling, general and administrative expenses
Corporate allocations	8.0			5.0			—
Shared service allocations	0.3			0.9			0.7
Intercompany interest expense, net of capitalized interest of $8.1, $22.9 and $22.4, respectively	59.7			63.5			58.6
Intercompany credit in lieu of taxes	(204.6		)	(93.1		)	(58.7		)
Total intercompany expenses (benefit)	$	(118.3	)	$	(11.0	)	$	8.3
	December 31,
	2002			2001
Balance Sheet Data:
Intercompany payable to Parent Company	$	1,492.7		$	1,468.8

The revenue and expenses allocated to the Company for the transactions and services provided are not necessarily indicative of the revenue and expenses that would have been incurred if BCI had been a separate, stand-alone entity.

13.  Fair Value of Financial Instruments

The following methods and assumptions were used to estimate, where practicable, the fair value of each class of financial instruments:

Cash and cash equivalents, and short-term debt — The carrying amount approximates fair value because of the short-term maturity of these instruments.

Accounts receivable and accounts payable — The carrying amounts approximate fair value.

Marketable securities — The fair values of marketable securities are based on quoted market prices.

Long-term debt — The fair value is estimated based on year-end closing market prices of the Company’s debt and of similar liabilities. The carrying amounts at December 31, 2002 and 2001, including the intercompany payable to the Parent Company, were $1,731.0 million and $1,557.1 million, respectively.  The estimated fair values at December 31, 2002 and 2001, including the intercompany payable to the Parent Company at carrying value, were $1,507.3 million and $1,510.1 million, respectively. 

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Convertible preferred stock — The fair value of the 12½% Exchangeable Preferred Stock was $27.7 million and $245.0 million, and was based on the trading value of this instrument at December 31, 2002 and 2001, respectively.

14.  Commitments and Contingencies

Lease Commitments

The Company leases certain circuits, facilities and equipment used in its operations.  Total operating lease rental expenses (excluding circuit leases) was approximately $28.7 million, $28.2 million, and $23.5 million for the years ending December 31, 2002, 2001, and 2000, respectively.

At December 31, 2002, the total minimum annual rental commitments under noncancelable leases, excluding interest, are as follows:

($ in millions)	Operating Leases		Capital Leases		Total
2003	$	100.9	$	2.2	$	103.1
2004	87.6		0.5		88.1
2005	63.2		0.2		63.4
2006	44.2		—		44.2
2007	21.4		—		21.4
Thereafter	55.9		—		55.9
Total	$	373.2	$	2.9	$	376.1

Commitments

In 2000, the Company entered into a purchase commitment with Corvis Corporation, a Columbia, Maryland-based manufacturer of optical network equipment.  The agreement specifies that the Company will purchase $200 million in optical network equipment from Corvis Corporation over a two-year period beginning in July 2000.  As of December 31, 2002 and 2001, the Company’s remaining purchase commitment was zero and $20 million, respectively.  In 2000, the Company also entered into a separate agreement giving it the right to purchase Series H preferred stock at $80.53 per share, which had a fair value $30 million, and $5 million of the common stock of Corvis at the initial public offering price.  The Company subsequently exercised these rights during the second and third quarters of 2000. The established prices for these Corvis equity purchases reflect the contemporaneous fair value of the equity, as evidenced by independent third party investor purchases of this equity in the same timeframe.

In 2001, the Company entered into an agreement with Teleglobe Inc. (“Teleglobe”), a Reston, Virginia-based telecommunications company which stated that the Company would purchase $90 million of services and equipment from Teleglobe over four years.  In September 2002, the Company terminated the agreement for a payment of $4.25 million to Teleglobe, which released the Company from $63.0 million of future commitments (refer to Note 1).

In 2001 and 2000, the Company entered into agreements with two vendors to provide bundled Internet access to the Company’s customers based on a monthly maintenance fee.  These services were previously purchased from other vendors on a usage basis.  In March 2002, the Company terminated its contract with one of the vendors as part of its fourth quarter 2001 restructuring (refer to Note 3).

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This contract termination reduced the Company’s future commitments by approximately $60 million.  In September 2002, the Company terminated its remaining contract as part of its third quarter restructuring (refer to Note 3), which eliminated the remaining $13 million of future commitments related to bundled Internet access.

The Company has certain contractual obligations to utilize network facilities, including access lines, from various interexchange and local exchange carriers.  These contracts are based on a fixed monthly rate with terms on certain agreements extending through 2021.  As of December 31, 2002, the Company had committed to approximately $230 million in operating leases related to network utilization.  The buyer of substantially all of the assets of the broadband business, as discussed in Note 18, has agreed to assume approximately $3 million in capital lease commitments and approximately $316 million in operating lease obligations including the obligations associated with network utilization.

Contingencies

In the normal course of business, the Company is subject to various regulatory proceedings, lawsuits, claims and other matters.  Such matters are subject to many uncertainties and outcomes are not predictable with assurance.

During 2002, several purported class action lawsuits were filed in the United States District Court for the Southern District of Ohio on behalf of purchasers of the securities of the Parent Company between January 17, 2001 and May 20, 2002, inclusive (the “Class Period”).  The complaints alleged that the Parent Company, its former Chief Executive Officer  (“CEO”), its current CEO, and several board members violated federal securities laws arising out of allegedly issuing material misrepresentations during the Class Period which resulted in artificially inflating the market price of the Parent Company’s securities.  The Parent Company intends to defend these claims vigorously.

In June 2000, the Company entered into a long-term construction contract to build a 1,550-mile fiber route system.  During the second quarter of 2002, the customer alleged a breach of contract and requested the Company to cease all construction activities, requested a refund of $62 million in progress payments previously paid to the Company, and requested conveyance of title to all routes constructed under the contract.  Subsequently, the Company notified the customer that such purported termination was improper and constituted a material breach under the terms of the contract, causing the Company to terminate the contract.  As a result of the contract termination, the Company expensed $13 million in both costs incurred under the contract and estimated shutdown costs during 2002, which have been reflected in cost of services in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).  In addition, the Company’s balance sheet included $51 million in unbilled accounts receivable (including both signed change orders and claims) at December 31, 2002 related to this contract.  Based on information available as of December 31, 2002, the Company believes it is due significant amounts outstanding under the contract, including unbilled accounts receivable.  The Company expects this matter to be resolved through arbitration.  The timing and outcome of these issues are not currently predictable.  An unfavorable outcome could have a material effect on the financial condition and results of operations of the Company.

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15.  Quarterly Results (Unaudited)

	2002 Quarter Ended													2001 Quarter Ended
	Mar 31			Jun 30			Sep 30			Dec 31			Mar 31				Jun 30			Sep 30			Dec 31
Statement of Operations Data ($ in millions):
Revenue	$	269.0		$	278.2		$	296.2		$	224.7		$		298.5		$	320.6		$	306.1		$	272.4
Operating expenses:
Cost of services and products	172.2			177.2			162.7			143.5			181.2				195.2			194.9			188.8
Selling, general and administrative	77.3			77.3			76.6			69.8			86.1				89.9			78.2			75.4
Depreciation and amortization	77.9			78.0			80.0			80.0			87.8				92.4			100.0			103.9
Restructuring	15.9			—			5.0			11.7			—				—			—			73.9
Asset impairments and other charges	—			—			—			2,200.6			—				—			3.9			148.1
Operating loss	(74.3		)	(54.3		)	(28.1		)	(2,280.9		)	(56.6			)	(56.9		)	(70.9		)	(317.7		)
Cumulative effect of change in accounting principle	2,008.7			—			—			—			—				—			—			—
Net loss	$	(2,066.1	)	$	(46.9	)	$	(29.3	)	$	(2,400.0	)	$		(47.7	)	$	(55.7	)	$	(63.9	)	$	(221.1	)

In the fourth quarter of 2001, the Company incurred  pre-tax charges of $73.9 million related to restructuring activities and $148.1 million related to asset impairments (refer to Note 3).

In the first quarter of 2002, the Company incurred a charge of $2,008.7 million, net of taxes, associated with the adoption of SFAS 142 (refer to Note 2).  The impairment charge is reflected as a cumulative effect of change in accounting principle, net of taxes, in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

In the second quarter of 2002, the Company incurred a non-recurring charge of $13.3 million for costs associated with the termination of the Company’s uncompleted network construction contract further discussed in Note 14.

In the second and third quarter of 2002, the Company terminated IRU contracts with two customers (refer to Note 1), which contributed $18 million and $41 million of revenue and operating income.

In the fourth quarter of 2002, the Company recorded a $2.2 billion non-cash pretax impairment charge to reduce the carrying value of its assets to estimated fair market value.

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16.  Segment Reporting

In accordance with Statement of Financial Accounting Standard No. 131, “Disclosures About Segments of an Enterprise and Related Information,” the operations of the Company comprise a single segment and are reported as such to the Chief Executive Officer of the Parent Company, who functions in the role of chief operating decision maker for the Company.

The table below presents revenue for groups of similar products and services ($ in millions): 

	Year Ended December 31,
	2002		2001		2000
Broadband transport	$	461.6	$	466.5	$	393.2
Switched voice services	328.6		380.5		408.6
Data and internet	132.9		121.9		69.7
IT consulting	143.7		141.3		65.8
Network construction and other services	1.3		87.4		67.3
Total revenue	$	1,068.1	$	1,197.6	$	1,004.6

17.  Additional Financial Information 

Balance Sheet

($ in millions)	Year ended December 31	2002		2001			Depreciable Lives (Years)
Property Plant and Equipment:
Land and rights of way		$	0.6	$	153.7		20 - Indefinite
Buildings and leasehold improvements		7.2		209.1			2 - 40
Transmission facilities		30.8		2,057.7			3 - 20
Furniture, fixtures, vehicles, and other		0.6		49.6			2 - 15
Fiber usage rights		8.2		51.4			5 - 20
Construction in process		7.3		214.1			—
Subtotal		54.7		2,735.6
Less:  Accumulated depreciation		—		(553.6		)
Property plant and equipment, net*		$	54.7	$	2,182.0

*Includes $3.0 and $5.9, respectively, of assets accounted for as capital leases, net of accumulated depreciation of $15.7 and $13.2, respectively, included in Transmission facilities.

($ in millions)	Year ended December 31	2002		2001			Amortization Lives (Years)
Other intangibles:
Assembled workforce		—		24.0			2 - 4
Installed customer base		—		399.0			2 - 20
Other intangibles		—		3.2			2 - 20
Subtotal		—		426.2
Less:  Accumulated amortization		—		(79.0		)
Other intangibles, net		$	—	$	347.2

The Company recorded a non-cash impairment charge of $2.2 billion to state both tangible and intangible assets at estimated fair value as of December 31, 2002.  Of the total charge, $1,901.7 million related to tangible property, plant and equipment and $298.3 million related to finite-lived intangible assets.

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18.  Subsequent Events

On February 22, 2003, certain subsidiaries of the Parent Company entered into a definitive agreement to sell substantially all of the assets of the broadband business, excluding the information technology consulting assets, to C III Communications (“C III”), for up to $129 million in cash and the assumption of certain long-term operating contractual commitments.  The contractual commitments to be assumed include approximately $3 million in capital lease commitments and approximately $316 million in operating lease obligations. The sale is subject to certain closing conditions, including approval by the Federal Communications Commission (“FCC”) and relevant state public utility commissions.  The Parent Company expects to close the sale in 2003.  The Company will retain a 3% minority interest in the new company.  The carrying value of the current and long-lived assets to be purchased totaled $102.7 million and $40.8 million, respectively as of December 31, 2002.  The carrying value of the current and long-term liabilities to be assumed totaled $179.7 million and $293.2 million, respectively, as of December 31, 2002.

On March 26, 2003, the Parent Company issued $350 million of mezzanine financing through Senior Subordinated Discount Notes Due 2009 (the “Mezzanine Financing”).  Proceeds from the Mezzanine Financing, net of fees, were used to pay down borrowings under the Company’s credit facility.  Interest on the Mezzanine Financing will be payable semi-annually on June 30 and December 31, whereby 12% is paid in cash and 4% is accreted on the aggregate principal amount.  In addition, purchasers of the Mezzanine Financing will receive 17.5 million common stock warrants, each to purchase one share of Broadwing Common Stock. 

The Mezzanine Financing contains certain financial and non-financial covenants including restrictions on the Parent Company’s ability to make investments in the Company.  Specifically, Broadwing and its other subsidiaries may not make investments in or fund the operations of the Company beyond an aggregate amount of $118 million after October 1, 2002.  This restriction does not apply to guarantees by Broadwing of Company borrowings under the credit facilities, liens on assets of Broadwing securing Company borrowings under the credit facilities, scheduled interest payments made or guaranteed by Broadwing in respect of Company borrowings under the credit facilities, and certain other items.  As of February 28, 2003, the Company had the ability to invest an additional $58 million in the Company to fund operations based on these provisions.

In conjunction with the Mezzanine Financing, the Parent Company’s credit facility was also amended and restated to, among other things, extend the revolving commitment, revise the financial covenants and allow for the sale of substantially all of the assets of the broadband business. As a result of the  terms of the amendment, the total borrowing capacity will decrease from $1.825 billion as of December 31, 2002 to approximately $1.343 billion as of December 31, 2003 due to $262 million of scheduled repayments of the term debt facilities and a $220 million prepayment of the outstanding term debt and revolving credit facility from the Mezzanine Financing proceeds. After the credit facility amendment, the Parent Company’s debt maturities total $285.1 million in 2003 and $287.1 million in 2004.

In March 2003, the Parent Company entered into a supplemental indenture to its 6¾% Convertible Subordinated Notes Due 2009. The supplemental indenture allows for the sale of substantially all of the assets of the Company, provides that a bankruptcy of the Company would not constitute an event of default, amends the definition of change in control by increasing the ownership threshold deemed to be a change in control from 20% of outstanding shares to 45% of outstanding shares of the Parent Company and includes certain covenants restricting the ability of the Company to incur debt and consummate certain asset dispositions.  The supplemental indenture also increases the paid-in-kind interest by 2¼% from March 2003 through redemption in July 2009, resulting in a per annum interest rate of 9%.  Interest expense will be paid in cash semi-annually on January 21 and July 21 of each year at a rate of 6¾% per annum, commencing on January 21, 2005.

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The additional 2¼% will accrete, or be added to the principal balance, through the redemption date in July 2009.

In addition, in March 2003, the Parent Company reached an agreement with holders of more than two-thirds of the Company’s 12½ percent preferred stock and 9 percent senior subordinated notes to exchange these instruments for common stock of the Parent Company.  In order to consummate the exchange offers, the Parent Company expects to issue approximately 26 million new shares of Broadwing Inc. common stock assuming 100% redemption of the outstanding instruments, which represents an increase of 11 percent in the number of shares.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has had no disagreements with its accountants on any accounting or financial disclosure, auditing scope or procedure during the periods covered by this report.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth in the table below are the names, ages (as of December 31, 2002) and current offices held by all executive officers and the sole director of the Company.

NAME	AGE	POSITION WITH COMPANY	EXECUTIVE OFFICER SINCE
Kevin W. Mooney	44	Chief Executive Officer	1999
John F. Cassidy	48	Chief Operating Officer	2002
Thomas L. Schilling	39	Chief Financial Officer and Director	2002
Robert Shingler	45	President	2002
Mary E. McCann	40	Senior Vice President, Internal Controls	2001
Jeffrey C. Smith	51	Chief Human Resources Officer, General Counsel and Corporate Secretary	1997
David A. Torline	53	Chief Information Officer	1999
Michael R. Jones	48	Chief Technology Officer	2001

Executive officers of the Company are elected by and serve at the discretion of the Board.  None of the executive officers has any family relationship to any nominee for director or to any other executive officer of the Company.  Set forth below is a brief description of the business experience for the previous five years of all executive officers.

KEVIN W. MOONEY, Chief Executive Officer of the Company since September 2002, Chief Operating Officer of the Company from November 2001 to September 2002; Executive Vice President and Chief Financial Officer of the Company from September 1998 to November 2001; Senior Vice President and Chief Financial Officer of Cincinnati Bell Telephone from January 1998 to September 1998; Vice President and Controller of the Company, 1996-1998; Vice President of Financial Planning and Analysis of the Company, 1994-1996; Director of Financial Planning and Analysis of the Company, 1990-1994.

JOHN F. CASSIDY, Chief Operating Officer and Director of the Company and President of Cincinnati Bell since September 2002, President and Chief Operating Officer of Cincinnati Bell since May 2000; President of Cincinnati Bell Enterprises since August, 1999; President of Cincinnati Bell Wireless since 1996; Senior Vice President, National Sales & Distribution of Rogers Cantel in Canada from 1992-1996; Vice President, Sales and Marketing, Ericsson Mobile Communications from 1990-1992; Vice President, Sales and Marketing, General Electric Company from 1988-1990.

THOMAS L. SCHILLING, Chief Financial Officer and Director of the Company since July 2002; Senior Vice President and Chief Financial Officer of the Company from 1999-2002; Chief Financial Officer of AutoTrader.com from 1998-1999; Managing Director of MCI Systemhouse from 1997-1998; Director of Finance of MCI Communications from 1995-1997.

ROBERT SHINGLER, President of the Company since October 2002; President of Voice Operations of the Company from April 2002 to October 2002.  Prior to April 2002, Chairman /CEO of Albion Connect, a telecommunications software provider, and employed for 20 years at Bell South Corporation and its subsidiaries in a variety of leadership positions.

MARY E. McCANN, Senior Vice President, Internal Controls of the Company since July 2002; Senior Vice President, Corporate Finance of the Company from December 2001 to July 2002; Vice President, Controller of the Company from February 1999 to December 2001; Director of Financial

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Planning of Cincinnati Bell Telephone from April 1998 to February 1999; Manager of Financial Reporting and Analysis of Cincinnati Bell Telephone from August 1996 to April 1998; Senior Financial Analyst from May 1995 to August 1996.

JEFFREY C. SMITH, Chief Human Resources Officer of the Company since November 2001; General Counsel and Corporate Secretary of the Company since February 2001; Chief Legal/Administrative Officer of the Company since November 1999; Senior Vice President of IXC Communications, Inc. from September 1997 until November 1999; Vice President, General Counsel and Secretary of IXC Communications, Inc. from January 1997 until September 1997; Vice President Planning and Development for Times Mirror Training, a subsidiary of Times Mirror, from August 1994 to December 1996.  Served in a variety of legal capacities, including five years as General Counsel to the Baltimore Sun newspaper and Associate General Counsel and Assistant Secretary at Times Mirror from 1985 through August 1994.  Prior to 1985, employed for seven years in private law practice as a trial and business attorney.

DAVID A. TORLINE, Chief Information Officer of Broadwing Communications and Broadwing Inc. since November 1999; Vice President, Information Technology of Cincinnati Bell Telephone from January 1995 to November 1999; President, Cincinnati Bell Supply, a subsidiary of Broadwing Inc., from October 1992 to January 1995; Director, Corporate Development of Cincinnati Bell Inc., from October 1989 to October 1992.

MICHAEL R. JONES, Chief Technology Officer of the Company since October 2001; Senior Vice President, Network Engineering and Operations of the Company from February 2000 to October 2001; Vice President, Network Facilities and Construction of the Company from November 1999 to February 2000; Vice President, Network Facilities and Construction of IXC Communications Inc. from July 1997 to November 1999; Vice President, Network Business Development of Diamondback International Inc. from 1996 to July 1997.

ITEM 11.  EXECUTIVE COMPENSATION

The information required by this item will be contained in the Company’s Information Statement to be filed with the Commission within 120 days after December 31, 2002, and is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item will be contained in the Company’s Information Statement to be filed with the Commission within 120 days after December 31, 2002, and is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item will be contained in the Company’s Information Statement to be filed with the Commission within 120 days after December 31, 2002, and is incorporated herein by reference.

ITEM 14.  INTERNAL CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief

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Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.  The Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic Securities and Exchange Commission filings.  No significant deficiencies or material weaknesses were identified in the evaluation and therefore, no corrective actions were taken.  There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  Exhibits

Exhibits identified in parenthesis below, on file with the Securities and Exchange Commission (“Commission”) are incorporated herein by reference as exhibits hereto:

EXHIBIT NUMBER	DESCRIPTION
2.1	Agreement and Plan of Merger dated as of July 20, 1999, among Cincinnati Bell Inc., IXC Communications, Inc. and Ivory Merger Inc. (incorporated by reference to Exhibit 2.1 of Cincinnati Bell Inc.’s Form 8-K dated July 22, 1999 and filed with the Commission on July 23, 1999).
2.2	Amendment No. 1 dated as of October 13, 1999, among Cincinnati Bell Inc., IXC Communications, Inc. and Ivory Merger Inc. (incorporated by reference to Exhibit 2.1 of Form 8-K dated October 14, 1999 and filed with the Commission on October 14, 1999).
3.1	Restated Certificate of Incorporation of Broadwing Communications Inc., as amended.
3.2	Bylaws of Broadwing Communications Inc., as amended (incorporated by reference to Exhibit 3.2 of Form 10-Q for the quarter ended September 30, 1999 and filed on January 7, 2000, file number 1-5367).
4.1	Indenture dated as of October 5, 1995, by and among IXC Communications, Inc., on its behalf and as successor-in-interest to I-Link Holdings, Inc. and IXC Carrier Group, Inc., each of IXC Carrier, Inc., on its behalf and as successor-in-interest to I-Link, Inc., CTI Investments, Inc., Texas Microwave Inc. and WTM Microwave Inc., Atlantic States Microwave Transmission Company, Central States Microwave Transmission Company, Telecom Engineering, Inc., on its behalf and as successor-in-interest to SWTT Company and Microwave Network, Inc., Tower Communication Systems Corp., West Texas Microwave Company, Western States Microwave Transmission Company, Rio Grande Transmission, Inc., IXC Long Distance, Inc., Link Net International, Inc. (collectively, the “Guarantors”), and IBJ Schroder Bank & Trust Company, as Trustee (the “Trustee”), with respect to the 12 ½% Series A and Series B Senior Notes due 2005 (incorporated by reference to Exhibit 4.1 of IXC Communications, Inc.’s and each of the Guarantor’s Registration Statement on Form S-4 filed with the Commission on April 1, 1996 (File No. 333-2936) (the “S-4”)).

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4.2	Form of 12½% Series A Senior Notes due 2005 (incorporated by reference to Exhibit 4.6 of the S.4)
4.3	Form of 12½% Series B Senior Notes due 2005 and Subsidiary Guarantee (incorporated by reference to Exhibit 4.8 of IXC Communications, Inc.’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Commission on June 13, 1996 (File No. 333-4061) (the “S-1 Amendment”).
4.4	Amendment No. 1 to Indenture and Subsidiary Guarantee dated as of June 4, 1996, by and among IXC Communications, Inc., the Guarantors and the Trustee (incorporated by reference to Exhibit 4.11 of the S-1 Amendment).
4.5	Indenture dated as of August 15, 1997, between IXC Communications, Inc. and The Bank of New York (incorporated by reference to Exhibit 4.2 of IXC Communications, Inc.’s Current Report on Form 8-K dated August 20, 1997, and filed with the Commission on August 28, 1997 (the “8-K”).
4.6	First Supplemental Indenture dated as of October 23, 1997, among IXC Communications,  Inc., the Guarantors, IXC International, Inc. and IBJ Shroder Bank & Trust Company (incorporated by reference to Exhibit 4.13 of IXC Communications, Inc.’s Annual Report on Form 10-K for the year ended December 31, 1997, and filed with the Commission on March 16, 1998 (the “1997 10-K”).
4.7	Second Supplemental Indenture dated as of December 22, 1997, among IXC Communications, Inc., the Guarantors, IXC Internet Services, Inc., IXC International, Inc. and IBJ Schroder Bank & Trust Company (incorporated by reference to Exhibit 4.14 of the 1997 10-K).
4.8	Third Supplemental Indenture dated as of January 6, 1998, among IXC Communications, Inc., the Guarantors, IXC Internet Services, Inc., IXC International, Inc. and IBJ Schroder Bank & Trust Company (incorporated by reference to Exhibit 4.15 of the 1997 10-K).
4.9	Fourth Supplemental Indenture dated as of April 3, 1998, among IXC Communications, Inc., the Guarantors, IXC Internet Services, Inc., IXC International, Inc., and IBJ Schroder Bank & Trust Company (incorporated by reference to Exhibit 4.15 of IXC Communications, Inc.’s Registration Statement on Form S-3 filed with the Commission on May 12, 1998 (File No. 333-52433).
4.10	Indenture dated as of April 21, 1998, between IXC Communications, Inc. and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to Exhibit 4.3 of the April 22, 1998 8-K).
10.1+	Credit Agreement dates as of November 9, 1999, amended and restated as of March 26, 2003, among Broadwing Inc. (f/k/a Cincinnati Bell) and Broadwing Communications Services Inc. (f/k/a IXC Communications Services, Inc.) as Borrowers, the Initial Lenders, Initial Issuing Banks and Swing Line Banks named therein, Bank of America, N.A. as Syndication Agent, Citicorp USA, Inc. as Administrative Agent, Credit Suisse First Boston and The Bank of New York, as Co-Documentation Agents, PNC Bank, N.A., as Agent and Salomon Smith Barney Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Book Managers.

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	N.A., as Agent and Salomon Smith Barney Inc. and Banc of America Securities LLC, as Joint Lead Arrangers (incorporated by reference to Exhibit 10.1 of Cincinnati Bell Inc.’s Form 8-K dated November 9, 1999 and filed with the Commission on November 12, 1999).
10.2	IRU Agreement dated as of November 1995 between WorldCom, Inc. and IXC Carrier, Inc. (incorporated by reference to Exhibit 10.11 of Amendment No. 1 to the S-4).
10.3	Asset Purchase Agreement among Broadwing Communications Services Inc. and CIII Communications dated as of February 22, 2003.  (Exhibit (99)(i) to Form 8-K, date of report February 28, 2003, File No. 1-15307)
10.4+	Indenture dated as of March 26, 2003, by and among Broadwing Inc., as Issuer, Cincinnati Bell Public Communications, Inc., ZoomTown.com Inc, Cincinnati Bell Any Distance Inc., Cincinnati Bell Telecommunications Services Inc., Broadwing Financial LLC, Cincinnati Bell Wireless Company, Cincinnati Bell Wireless Holdings LLC and Broadwing Holdings Inc. as Guarantors, and The Bank of New York, as trustee, in connection with $350,000,000 of Broadwing Inc. Senior Subordinated Discount Notes Due 2009.
99.1+	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2+	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.3+	Exchange and Voting Agreement, dated as of March 24, 2003, by and among Broadwing Inc., and the beneficial owners of (or investment managers or advisors for accounts or funds that own) the 9% Senior Subordinated Notes due 2008 of Broadwing Communications Inc., a subsidiary of the Company.
99.4+	Exchange and Voting Agreement, dated as of March 24, 2003, by and among Broadwing Inc., and the beneficial owners of (or investment managers or advisors for accounts or funds that own) the 12½% Series B Junior Exchangable Preferred Stock due 2009 of Broadwing Communications Inc., a subsidiary of the Company.
12.1+	Ratio of Earnings to Fixed Charges
21.1+	Subsidiaries of Broadwing Communications Inc.

+ Filed herewith.

* Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.

The Company’s reports on Form 10-K, 10-Q, and 8-K are available free of charge at the following website:  http://www.broadwing.com/.  Upon request, the Company will furnish a copy of the Proxy Statement to its security holders without charge, portions of which are incorporated herein by reference.  The Company will furnish any other exhibit at cost.

(b)  Reports on Form 8-K.

Form 8-K, date of report October 29, 2002, reporting that Robert Shingler was appointed President of Broadwing Communications Inc. and announced that the Company has deferred cash payment of the quarterly dividend, due November 15, 2002, on its 12½% preferred shares, in accordance with the terms of the security.

Form 8-K, date of report February 25, 2003, reporting the Company issued a Press Release announcing that it has reached an agreement to sell substantially all the assets of its Broadband business, Broadwing Communications Services Inc., including the Broadwing name, to privately held C III Communications, LLC, for up to $129 million in cash.

Form 8-K, date of report February 28, 2003, reporting the Agreement for Purchase and Sale of Assets reached between the Company and C III Communications LLC.

Form 8-K, date of report March 28, 2003, reporting the Parent Company issued a press release announcing a comprehensive recapitalization that includes the successful completion of an amendment to its bank credit facility for, among other things, the extension of its scheduled maturities, providing the company with sufficient liquidity to meet its obligations until 2006.

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Schedule II

BROADWING COMMUNICATIONS INC.

VALUATION AND QUALIFYING ACCOUNTS

($ in millions)

	Balance at Beginning of Period		Charged to Expenses		Charged to Other Accounts		Deductions		Balance At End of Period
Allowance for Doubtful Accounts
Year 2002	$	22.6	$	33.0	$	—	$	22.8	$	32.8
Year 2001	$	32.2	$	77.0	$	—	$	86.6	$	22.6
Year 2000	$	36.3	$	52.0	$	—	$	56.1	$	32.2
Deferred Tax Valuation Allowance
Year 2002	$	61.3	$	1,108.5	$	—	$	—	$	1,169.8
Year 2001	$	48.1	$	13.2	$	—	$	—	$	61.3
Year 2000	$	16.5	$	31.6	$	—	$	—	$	48.1

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BROADWING COMMUNICATIONS INC.
March 31, 2002		By	/s/ Thomas L. Schilling
			Thomas L. Schilling
			Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Signature	Title	Date
	Principal Executive Officer;	March 31, 2003
/s/ Kevin W. Mooney	Chief Executive
Kevin W. Mooney	Officer and Director
	Principal Financial and	March 31, 2003
/s/ Thomas L. Schilling	Accounting Officer;
Thomas L. Schilling	Chief Financial Officer

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Certifications

I, Kevin W. Mooney, Chief Executive Officer, certify that:

1.I have reviewed this annual report on Form 10-K of Broadwing Communications Inc;

2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, not misleading with respect to the period covered by this annual report;

3.Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a.designed  such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this annual report is being prepared

b.evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c.presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

b.all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

c.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 31, 2003	/s/ Kevin W. Mooney
	Kevin W. Mooney
	Chief Executive Officer

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Certifications

I, Thomas L. Schilling, Chief Financial Officer, certify that:

1.I have reviewed this annual report on Form 10-K of Broadwing Communications Inc;

2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, not misleading with respect to the period covered by this annual report;

3.Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a.designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this annual report is being prepared

b.evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c.presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a.all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 31, 2003	/s/ Thomas L. Schilling
	Thomas L. Schilling
	Chief Financial Officer

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EX-10.1

Exhibit 10.1

SECOND AMENDMENT AND RESTATEMENT

OF THE

CREDIT AGREEMENT

SECOND AMENDMENT AND RESTATEMENT OF THE CREDIT AGREEMENT dated as of March 26, 2003, among BROADWING INC. (f/k/a Cincinnati Bell Inc.), an Ohio corporation (“BRW”), and BROADWING COMMUNICATIONS SERVICES INC.  (f/k/a IXC Communications Services, Inc.), a Delaware corporation (“BCSI”, and together with BRW, each a “Borrower” and collectively the “Borrowers”), the banks, financial institutions and other institutional lenders that are party to the Existing Credit Agreement (as hereinafter defined) on the date hereof as the Initial Lenders (the “Initial Lenders”), the banks listed on the signature pages hereof as the Initial Issuing Banks (the “Initial Issuing Banks” and, together with the Initial Lenders, the “Initial Lender Parties”) and the Swing Line Banks (as hereinafter defined), BANK OF AMERICA, N.A. (“Bank of America”), as syndication agent (together with any successor syndication agent appointed pursuant to Article VII, the “Syndication Agent”), CITICORP USA, INC. (“CUSA”), as administrative agent (together with any successor administrative agent appointed pursuant to Article VII, the “Administrative Agent”, together with the Syndication Agent, the “Agents”), Credit Suisse First Boston (“CSFB”) and The Bank of New York (“BNY”), as co-documentation agents (collectively, the “Co-Documentation Agents”) for the Lender Parties (as hereinafter defined), PNC Bank, N.A. (“PNC,” and collectively with CSFB and BNY, the “Co-Arrangers”), SALOMON SMITH BARNEY INC. (“SSBI”) and BANC OF AMERICA SECURITIES LLC (“BAS”), as joint lead arrangers and joint book managers (collectively, the “Arrangers”).

PRELIMINARY STATEMENTS:

(1)In connection with the acquisition by BRW of all of the issued and outstanding Equity Interests in IXC Communications, Inc. (“IXC”), a Delaware corporation, and the merger of IXC and a wholly owned subsidiary of BRW into a corporation subsequently renamed Broadwing Communications Inc. (“BCI”), the Borrowers entered into a Credit Agreement dated as of November 9, 1999 (the “Original Credit Agreement”) with the banks, financial institutions and other institutional lenders party thereto (the “Original Lenders”), BRW, as guarantor, the Agents, the Co-Documentation Agents, the Arrangers and the Co-Arrangers. Pursuant to the terms of the Original Credit Agreement, the Original Lenders made advances to the Borrowers in order to consummate such acquisition, to refinance certain Indebtedness of BRW and IXC and its Subsidiaries outstanding at such time, to fund capital expenditures and to pay fees and expenses incurred in connection with the consummation of such acquisition and refinancing and the other transactions described in the Original Credit Agreement.

(2)In connection with the implementation of an incremental term B facility, the Borrowers entered into an amendment and restatement of the Original Credit Agreement dated as of January 12, 2000 (the “Existing Credit Agreement”) with the banks, financial institutions and other institutional lenders party thereto, BRW, as guarantor, the Agents, the Co-Documentation Agents, the Arrangers and the Co-Arrangers.  Pursuant to the Fourth Amendment

to the Amendment and Restatement of the Credit Agreement dated as of June 27, 2001, the Existing Credit Agreement was further amended to provide, in part, for the implementation of an additional incremental term C facility in accordance with the terms of the Existing Credit Agreement.

(3)Concurrently with the effectiveness of this Agreement, BRW will issue $350,000,000 of senior subordinated discount notes due 2009 (the “Junior Notes”) pursuant to the terms of an indenture (as amended in accordance with the terms of this Agreement, the “Junior Notes Indenture”) not materially less favorable to the Lenders than the form of the draft thereof dated  March 26, 2003, by and among BRW, the guarantors party thereto and The Bank of New York, as trustee and the Purchase Agreement (as amended in accordance with the terms of this Agreement, the “Purchase Agreement”) dated December 9, 2002 among BRW and GS Mezzanine Partners II, L.P (“GSMP”) and GS Mezzanine Partners II Offshore, L.P. (together with GSMP, “Goldman”) together with warrants to purchase shares of common stock of BRW (the “Warrants”) pursuant to the terms of the Warrant Agreement not materially less favorable to the Lenders than the form of the draft thereof dated March 26, 2003 among BRW and Goldman (as amended in accordance with the terms of this Agreement, the “Warrant Agreement”).

(4)The Borrowers have requested that the Lenders amend and restate the terms of the Existing Credit Agreement in its entirety to provide, in part, for an extension of the maturity date of the Revolving Credit Facility to March 1, 2006, such amendments as shall be required to permit the issuance of the Junior Notes and permit the satisfaction of the conditions precedent to such issuance, approval of certain matters relating to BCI and its Subsidiaries and a modification of certain of the Lender Parties’ rights with respect to BCI in exchange for a partial prepayment of outstanding Advances and reduction of the Commitments of the Lender Parties under the Facilities as otherwise hereinafter set forth.  The Lender Parties have indicated their willingness to amend and restate the Existing Credit Agreement on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the Existing Credit Agreement is hereby amended and restated in its entirety and the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.  Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Administrative Agent” has the meaning specified in the recital of parties to this Agreement.

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“Administrative Agent’s Account” means the account of the Administrative Agent maintained by the Administrative Agent with Citibank, N.A. at its office at 399 Park Avenue, New York, New York 10043, Account No.  36852248, Attention:  John Judge, or such other account as the Administrative Agent shall specify in writing to the Lender Parties.

“Advance” means a Term A Advance, a Term B Advance, a Term C Advance, a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit Advance and, collectively, the “Advances”.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person.  For purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to vote 5% or more of the Voting Interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

“Agents” has the meaning specified in the recital of parties to this Agreement.

“Agreement Value” means, for each Hedge Agreement, on any date of determination, an amount determined by the Administrative Agent equal to:  (a) in the case of a Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc., as amended from time to time (the “Master Agreement”), the amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was being terminated early on such date of determination, (ii) such Loan Party or Subsidiary was the sole “Affected Party”, and (iii) the Administrative Agent was the sole party determining such payment amount (with the Administrative Agent making such determination pursuant to the provisions of the form of Master Agreement); or (b) in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement determined by the Administrative Agent based on the settlement price of such Hedge Agreement on such date of determination, or (c) in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement determined by the Administrative Agent as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Loan Party or Subsidiary pursuant to such Hedge Agreement; capitalized terms used and not otherwise defined in this definition shall have the respective meanings set forth in the above described Master Agreement.

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“Applicable Lending Office” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“Applicable Margin” means (i) in the case of the Revolving Credit Facility, 4.25% per annum for Eurodollar Rate Advances and 3.25% per annum for Base Rate Advances, and (ii) in the case of each Term Facility, 3.75% per annum for Eurodollar Rate Advances and 2.75% per annum for Base Rate Advances.

“Appropriate Lender” means, at any time, with respect to (a) any of the Term or Revolving Credit Facilities, a Lender that has a Commitment with respect to such Facility at such time, (b) the Letter of Credit Facility, (i) any Issuing Bank and (ii) if the other Revolving Credit Lenders have made Letter of Credit Advances pursuant to Section 2.03(c) that are outstanding at such time, each such other Revolving Credit Lender and (c) the Swing Line Facility, (i) any Swing Line Bank and (ii) if the other Revolving Credit Lenders have made Swing Line Advances pursuant to Section 2.02(b) that are outstanding at such time, each such other Revolving Credit Lender.

“Approved Fund” means, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“Arrangers” means each of SSBI and BAS.

 “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit C hereto.

“Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

“Backbone Fiber” means a fiber connecting Los Angeles, California and New York, New York.

“Bank of America” has the meaning specified in the recital of parties to this Agreement.

“Bankruptcy Code” means the U.S. Bankruptcy Code (11 U.S.C. §§ 101 et. seq.).

“BAS” has the meaning specified in the recital of parties to this Agreement.

“Base Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of:

(a)the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate; and

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(b)½ of 1% per annum above the Federal Funds Rate.

“Base Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(i).

“BCI” has the meaning specified in the Preliminary Statements.

 “BCI Default” means any BCI Event of Default or any event that would constitute a BCI Event of Default but for the requirement that notice be given or time elapse or both.  For the avoidance of doubt, a BCI Default is not for any purpose a Default under any Loan Document.  Any express statement to the effect that a reference to a Default does not include a BCI Default is made solely for the sake of clarity and does not imply that a BCI Default might in any circumstance be a Default.

“BCI Event of Default” means a BCI Event of Default under Section 7.03.  For the avoidance of doubt, a BCI Event of Default is not for any purpose under any Loan Document an Event of Default.  Any express statement to the effect that a reference to an Event of Default does not include a BCI Event of Default is made solely for the sake of clarity and does not imply that a BCI Event of Default might in any circumstance be an Event of Default.

“BCI Exchange” means the exchange of common or preferred stock or other Equity Interests of BRW or Subordinated Debt of BRW for the BCI Exchangeable Preferred Stock and/or the BCI Senior Subordinated Notes, including by way of a sale of common or preferred stock or other Equity Interests of BRW or Subordinated Debt of BRW to a third party in accordance with Sections 5.02(b)(i)(F) or 5.02(g)(xi).

“BCI Exchangeable Preferred Stock” means the 12½% Series B Junior Exchangeable Preferred Stock Due 2009 of BCI.

“BCI Group” means BCI and its Subsidiaries.

“BCI Letters of Credit” means all letters of credit issued for the account of BCSI pursuant to Section 2.01(d) of the Existing Credit Agreement.

“BCI Maximum Investment” means the sum of (1) $118,000,000 (including Advances made to BCSI after October 1, 2002) plus (2) the aggregate amount of net cash dividends and net cash distributions paid by any member of the BCI Group after October 1, 2002 to any member of the BRW Group plus (3) the aggregate amount of Revolving Credit Borrowings made under Section 5.02(e)(ix)(E) plus (4) without duplication, the net amount of cash advanced or otherwise transferred by BCI or any of its Subsidiaries to BRW or any of its Subsidiaries pursuant to the BRW Cash Management System or so that a Default under Section 5.02(w) shall not occur or be continuing.

“BCI Net Cash Proceeds” shall mean Net Cash Proceeds from the sale, lease, transfer or other disposition of all or substantially all of the assets of BCI and/or its Subsidiaries less (to the extent not already deducted in computing Net Cash Proceeds) all

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amounts in respect of liabilities and claims not assumed by the buyer of such assets, including, without limitation:

(i)claims paid in cash in settlement of trade payables incurred in the ordinary course of business,

(ii)amounts paid in cash to terminate circuit lease obligations, capital leases, real property leases, leasehold interests and contractual obligations for network elements,

(iii)cash collection costs of accounts receivable incurred in the ordinary course of business,

(iv)reasonable closing costs relating to sales of assets to the extent not otherwise deducted,

(v)cash settlement of Deferred Revenue liabilities of BCI and its Subsidiaries,

(vi)payment of intercompany debt other than intercompany debt owed to (i) a  Subsidiary of BCI, and (ii) a Subsidiary of BRW that is not a Subsidiary Guarantor,

(vii)other current ordinary course operating expense obligations, and

(viii)reserves maintained in accordance with Section 5.02(e)(ix)(E) for amounts that may be required to be paid in respect of non-discharged liabilities or claims in the future;

but not to include prepayment or repayment of principal, interest, liquidation preference, dividends or any other amounts payable on or with respect to the BCI Senior Subordinated Notes, the BCI 12 ½% Senior Notes or the BCI Exchangeable Preferred Stock, and in each case to the extent, but only to the extent, that the amounts so deducted are properly attributable to BCI or any of its Subsidiaries and are actually required to be paid substantially contemporaneously with such transaction (or reflect good faith estimates of amounts taken in reserve pursuant to clause (viii)) to a Person that is not an Affiliate of such Person or any of the Loan Parties or of any Affiliate of any of the Loan Parties (other than as permitted in clause (vi) above).

“BCI 9% Indenture” means the Indenture dated as of April 21, 1998, as amended in accordance with the terms of this Agreement, between BCI and The Bank of New York (as successor to IBJ Schroder Bank & Trust Company), as trustee pursuant to which the BCI Senior Subordinated Notes were issued.

 “BCI Senior Subordinated Notes” means the 9% Senior Subordinated Notes due 2008 of BCI issued pursuant to the BCI 9% Indenture.

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“BCI 12 1/2% Senior Notes” means the 12 1/2% Senior Notes of BCI due 2005.

“BCSI” has the meaning specified in the recital of parties to this Agreement.

“BCSI Sale Agreement” means the Agreement for the Purchase and Sale of Assets dated as of February 22, 2003, by and between BCSI and the other Sellers party thereto and the Buyers party thereto, together with all the exhibits and schedules thereto and all other agreements contemplated to be entered into thereunder as and when such other agreements become effective, in each case as amended in accordance with the terms of this Agreement.

 “BCSI Subsidiary Guaranty” has the meaning specified in Section 3.01(a)(iii).

“Blocking Event” means any of the following events:

(a)a Default described in Section 7.01(a) occurs and is continuing, or

(b)a Default described in Section 7.01(f) or an Event of Default  (other than an Event of Default described in Section 7.01(a)) occurs and is continuing and delivery by the Administrative Agent to BRW of a notice (a “Blockage Notice”) of such Default or Event of Default (it being understood that (x) the Administrative Agent may not deliver a subsequent Blockage Notice unless and until at least 360 consecutive days shall have elapsed since the day of delivery of the immediately prior Blockage Notice and (y) no such Default or Event of Default that existed or was continuing on the date of delivery of any Blockage Notice shall be, or be made, the basis of a subsequent Blockage Notice unless such Default or Event of Default shall have been waived for a period of not less than 180 consecutive days);

provided, however, that a Blocking Event shall cease to occur upon the earlier of:

(i)the date upon which the Default or Event of Default giving rise to a Blocking Event described in clause (a) or (b) above is cured or waived or shall have ceased to exist, or

(ii)in the case of a Blocking Event described in clause (b) above, 179 consecutive days having passed after the Blockage Notice is received by BRW.

“BNY” has the meaning specified in the recital of parties to this Agreement.

“BofA Credit Agreement” means the 364-Day Credit Agreement dated as of September 27, 1999 among BRW, as borrower, the lenders party thereto, CUSA, as administrative agent, Bank of America, as syndication agent, and SSBI and BAS, as joint lead arrangers and joint book managers.

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 “Borrower” and “Borrowers” have the meaning specified in the recital of parties to this Agreement.

“Borrower’s Account” means (a) an account maintained by BRW with Citibank at its office at 399 Park Avenue, New York, New York 10043, or (b) such other account as BRW shall specify in writing to the Administrative Agent.

“Borrowing” means a Term A Borrowing, a Term B Borrowing, a Term C Borrowing, a Revolving Credit Borrowing or a Swing Line Borrowing.

“BRW” has the meaning specified in the recital of parties to this Agreement.

“BRW Administrative Expenses” means all administrative expenses incurred by BRW in the ordinary course of business, including, without limitation, those related to compensation arrangements, litigation, insurance, taxes (federal, state and local), health and welfare, office supplies, contractual obligations, travel, director’s fees paid to and expenses of BRW’s Board of Directors and payments to investment banks, advisors and consultants.

“BRW Cash Management System” has the meaning set forth in Section 5.01(r).

“BRW Group” means BRW and its Subsidiaries other than the BCI Group.

“BRW Guaranty” has the meaning specified in Section 6.01.

“BRW Sale Arrangements” means the arrangements under the Sellers’ Parent Guaranty, the APTIS Software Agreement, the Intellectual Property Rights Assignment Agreement, the Transition Services Agreement and the Intercompany Agreements, in each case as defined in the BCSI Sale Agreement.

 “BRW 7¼% Notes” means the BRW $50 Million 7¼% Notes due June 15, 2023.

“BRW Subsidiary Guaranty” has the meaning specified in Section 3.01(a)(iii).

“Business Day” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

“Capital Expenditures” means, for any Person for any period, the sum of, without duplication, (a) all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during such period for equipment, fixed assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP, reflected as additions to property, plant or equipment on a Consolidated balance sheet of such Person, plus (b) the aggregate principal amount of all Obligations under Capitalized Leases assumed or incurred in connection with any such expenditures.  For purposes of this definition, the purchase

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price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Cash Equivalents” means any of the following, to the extent owned by BRW or any of its Subsidiaries (including BCI and its Subsidiaries) free and clear of all Liens other than Liens created under the Collateral Documents and having a maturity of not greater than 90 days from the date of acquisition thereof:

(a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States,

(b) insured certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System, issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any State thereof and has combined capital and surplus of at least $1 billion,

(c) commercial paper issued by any corporation organized under the laws of any State of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P’s, or

(d) Investments in money market funds registered under the Investment Company Act of 1940, as amended, that satisfy the requirements of Rule 2a-7 of such Act.

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

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time.

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and Liability Information System maintained by the U.S. Environmental Protection Agency.

“Certificate of Designation” means the certificate of designation for the BCI Exchangeable Preferred Stock, as amended in accordance with the terms of this Agreement.

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“CFC” means a “controlled foreign corporation” under Section 957 of the Internal Revenue Code of 1968, as amended from time to time.

“Change of Control” means the occurrence of any of the following:  (a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of BRW (or other securities convertible into such Voting Interests) representing 20% or more of the combined voting power of all Voting Interests of BRW; or (b) during any period of up to 24 consecutive months, commencing before or after the date of this Agreement, individuals who at the beginning of such 24-month period were, or who were nominated by individuals who were, directors of BRW shall cease for any reason to constitute a majority of the board of directors of BRW; or (c) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of BRW; or (d) prior to the Part II Effective Date, BRW shall cease to own 100% of the Equity Interests in BCSI or BCI (other than in connection with a sale or other disposition of assets of BCI and its Subsidiaries pursuant to Section 5.02(e)(ix) and, in the case of BCI, the BCI Exchangeable Preferred Stock); or (e) any “change of control” as defined in the BRW 7¼% Notes or in the Oak Hill Indenture or in the Junior Notes.

 “Citibank” means Citibank, N.A., a national banking association.

“Co-Arrangers” has the meaning specified in the recital of parties to this Agreement.

“Co-Documentation Agents” has the meaning specified in the recital of parties to this Agreement.

“Collateral” means all “Collateral” referred to in the Collateral Documents and all other property that is or is intended to be subject to any Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

“Collateral Account” has the meaning specified in the Security Agreements.

“Collateral Documents” means, collectively, the Shared Collateral Security Agreement, the Non-Shared Collateral Security Agreement, the Collateral Trust Agreement and any other agreement that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

“Collateral Trust Agreement” means the Second Amendment and Restatement of the Collateral Trust Agreement dated as of the date hereof by and between BRW and Wilmington Trust Company, and John M. Beeson, as collateral trustees, as amended from time to time in accordance with its terms.

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“Commitment” means a Term A Commitment, a Term B Commitment, a Term C Commitment, a Revolving Credit Commitment or a Letter of Credit Commitment.

“Company” has the meaning specified in the Preliminary Statements.

“Confidential Information” means all information, including material nonpublic information within the meaning of Regulation FD promulgated by the Securities and Exchange Commission, received from the Borrowers relating to the Borrowers or their respective businesses, other than any such information that is available to any Agent or any Lender Party on a nonconfidential basis prior to disclosure by the Borrowers; provided that, in case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Consolidated EBITDA” means, with respect to any Person for any period, the sum of (a) net income (or net loss) of such Person and its Subsidiaries, plus (b) the sum of the following expenses that have been deducted from the determination of consolidated net income of such Person and its Subsidiaries for such period:

(i)all Consolidated Interest Expense (including, for purposes of this definition only, all interest and payment Obligations in respect of Debt referred to in clause (h) of the definition of “Debt” herein) plus, to the extent deducted in the computation of Consolidated Interest Expense under clause (C) or (D) of the definition thereof, all interest not payable in cash and any amortization of financing fees or other charges or expenses incurred in connection with the issuance of any Debt or preferred stock or the obtaining of any amendment, waiver or other modification in respect of any Debt or preferred stock, minus, to the extent added in the computation of Consolidated Interest Expense under clause (e) of the definition thereof, dividends paid in cash in respect of preferred stock, in each case of such Person and its Subsidiaries for such period,

(ii)income tax expense of such Person and its Subsidiaries for such period,

(iii)all depreciation expense of such Person and its Subsidiaries for such period,

(iv)without duplication of clause (i) above, all amortization expense of such Person and its Subsidiaries for such period,

(v)(A) all non-cash and non-recurring cash charges deducted in determining the consolidated net income of such Person and its Subsidiaries for such period in an amount not to exceed $100,000,000 in the aggregate for the four consecutive fiscal quarters ended on or immediately prior to the date of determination, and (B) all

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extraordinary losses deducted in determining the consolidated net income of such Person and its Subsidiaries for such period (provided that any cash payment made with respect to any such non-cash charge shall be subtracted in computing Consolidated EBITDA during the period in which such cash payment is made) less (C) all extraordinary gains and non-cash or non-recurring gains added in determining the consolidated net income of such Person and its Subsidiaries for such period, in each case determined in accordance with GAAP for such period,

(vi)minority interest expense (income),

(vii)non-cash losses for such period not to exceed $200,000,000 (in aggregate for all impacted periods) and cash losses for such period not to exceed $100,000,000 (in aggregate for all impacted periods), in each case, resulting from the 2001 Restructuring and deducted in determining the consolidated net income of BRW in the first quarter of Fiscal Year 2002 and all other quarters impacted as a result of the 2001 Restructuring,

(viii)all charges taken in accordance with SFAS 142,

(ix)all charges taken in accordance with SFAS 144 (A) as of December 31, 2002 or (B) in an aggregate amount not to exceed $50,000,000 for all such charges taken in any consecutive four fiscal-quarter period commencing after December 31, 2002, and

(x)all non-cash amounts deducted from net income due to the initial recording of any expense item in respect of an obligation classified as a debt obligation under FASB Interpretation No. 45 (it being understood that all subsequent non-cash adjustments to such amount shall, as applicable, be added to ordeducted from Consolidated EBITDA).

Consolidated EBITDA of BRW and its Subsidiaries shall be computed to exclude all income (including interest income), loss and other effects of BCI and its Subsidiaries on the financial statements of BRW and its Subsidiaries, except that interest expense of BCI and its Subsidiaries in respect of the Advances shall be included in the computation of Consolidated EBITDA (it being understood that the foregoing is not intended to require any adjustments to exclude the results for BRW and its Subsidiaries in respect of operating transactions between BRW and its Subsidiaries and BCI and its Subsidiaries).  It is understood and agreed that, using calculations based on the interim financial statements that have been delivered to the Lenders, Consolidated EBITDA of BRW and its Subsidiaries for the fiscal quarter ended March 31, 2002 was $127,600,000, Consolidated EBITDA of BRW and its Subsidiaries for the fiscal quarter ended June 30, 2002 was $134,500,000 and Consolidated EBITDA of BRW and its Subsidiaries for the fiscal quarter ended September 30, 2002 was $137,700,000.

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“Consolidated Interest Expense” means, with respect to any Person for any period, the interest expense paid or payable on all Debt (excluding all indebtedness and payment Obligations referred to in clauses (g) and (h) of the definition of “Debt” herein, other than the BCI Exchangeable Preferred Stock) of such Person and its Subsidiaries for such period, determined on a Consolidated basis and in accordance with GAAP, including, without limitation, (a) in the case of the Borrowers, (i) interest expense paid or payable in respect of Debt resulting from Advances and (ii) all fees paid or payable pursuant to Section 2.08(a), (b) the interest component of all Obligations in respect of Capitalized Leases, (c) commissions, discounts and other fees and charges paid or payable in connection with letters of credit (including, without limitation, the Letters of Credit), (d) the net payment, if any, paid or payable in connection with Hedge Agreements less the net credit, if any, received in connection with Hedge Agreements, and (e) dividends paid in cash in respect of preferred stock, but excluding (A) any amortization of original issue discount, (B) the interest portion of any deferred payment obligation, (C) any other interest not payable in cash, (D) any amortization of financing fees or other charges or expenses incurred in connection with the issuance of any Debt or preferred stock or the obtaining of any amendment, waiver or other modification in respect of any Debt or preferred stock, (E) to the extent included in “interest expense” in accordance with GAAP, any penalties paid or payable in connection with the prepayment of any Debt and (F) all non-cash interest expense due to the initial recording of any expense item in respect of an obligation classified as a debt obligation under FASB Interpretation No. 45 and all subsequent non-cash adjustments to such amount.  It is understood and agreed that, using calculations based on the interim financial statements that have been delivered to the Lenders, Consolidated Interest Expense of BRW and its Subsidiaries for the fiscal quarter ended March 31, 2002 was $31,800,000, Consolidated Interest Expense of BRW and its Subsidiaries for the fiscal quarter ended June 30, 2002 was $32,500,000 and Consolidated Interest Expense of BRW and its Subsidiaries for the fiscal quarter ended September 30, 2002 was $32,600,000.

“Consultant” has the meaning specified in Section 5.01(j)(I)(3)(f).

“Contingent Obligation” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt, leases, dividends or other payment Obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain revolving credit or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary

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obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Conversion”, “Convert” and “Converted” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.09 or 2.10.

“Convertible Certificate of Designation” means the certificate of designation for the Convertible Preferred Stock, as amended in accordance with the terms of this Agreement.

“Convertible Preferred Stock” means the 6¾% Cumulative Convertible Preferred Stock of BRW.

“CSFB” has the meaning specified in the recital of parties to this Agreement.

“CSFB Fee Letter” means the confidential fee letter, dated May 21, 2001, from CSFB to the Borrowers.

“CUSA” has the meaning specified in the recital of parties to this Agreement.

“Debt” of any Person means, without duplication for purposes of calculating financial ratios, (a) all indebtedness of such Person for borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than trade payables not overdue by more than 60 days incurred in the ordinary course of such Person’s business), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such capital stock, valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all Contingent Obligations of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or for which the

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holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations; provided that for purposes of calculating the financial ratios set forth in the financial covenants in Section 5.04, the definition of Debt shall not include contingent obligations under the Sellers’ Parent Guaranty (as defined in the BCSI Sale Agreement) or any other similar guaranty by BRW of obligations of BCI and its Subsidiaries under a sale agreement entered into pursuant to Section 5.02(e)(ix) in lieu of the BCSI Sale Agreement until either a claim is made thereunder (unless the obligation underlying such claim is paid by BCI or its Subsidiaries or the total amount of such obligation is being disputed in good faith by BCI or its Subsidiaries) or BCI has defaulted on its obligations with respect to the BCSI Sale Agreement or such other sale agreement entered into in lieu of the BCSI Sale Agreement.

“Debt/EBITDA Ratio” means, at any date of determination, the ratio of Consolidated Debt of BRW and its Subsidiaries (excluding all indebtedness and payment Obligations referred to in clauses (g) and (h) of the definition of “Debt” herein) as at such date of determination to Consolidated EBITDA of BRW and its Subsidiaries for the period of four consecutive fiscal quarters of BRW ended on or immediately prior to such date.

“Default” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

“Default Termination Notice” has the meaning specified in Section 2.01(d).

“Defaulted Advance” means, with respect to any Lender Party at any time, the portion of any Advance required to be made by such Lender Party to any Borrower pursuant to Section 2.01 or 2.02 at or prior to such time that has not been made by such Lender Party or by the Administrative Agent for the account of such Lender Party pursuant to Section 2.02(e) as of such time.  In the event that a portion of a Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the remaining portion of such Defaulted Advance shall be considered a Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed made in part.

“Defaulted Amount” means, with respect to any Lender Party at any time, any amount required to be paid by such Lender Party to any Agent or any other Lender Party hereunder or under any other Loan Document at or prior to such time that has not been so paid as of such time, including, without limitation, any amount required to be paid by such Lender Party to (a) any Swing Line Bank pursuant to Section 2.02(b) to purchase a portion of a Swing Line Advance made by such Swing Line Bank, (b) any Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a Letter of Credit Advance made by such Issuing Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to reimburse the Administrative Agent for the amount of any Advance made by the Administrative Agent for the account of such Lender Party, (d) any other Lender Party pursuant to

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Section 2.13 to purchase any participation in Advances owing to such other Lender Party and (e) any Agent or any Issuing Bank pursuant to Section 8.05 to reimburse such Agent or such Issuing Bank for such Lender Party’s ratable share of any amount required to be paid by the Lender Parties to such Agent or such Issuing Bank as provided therein.  In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be paid hereunder or under any other Loan Document on the same date as the Defaulted Amount so deemed paid in part.

“Defaulting Lender” means, at any time, any Lender Party that, at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of any action or proceeding of a type described in Section 7.01(f).  For purposes of Section 9.01(a) and (b) only, the definition of Defaulting Lender shall not include any Lender that is a Disputing Lender.

“Deferred Revenue” means, at any date for any Person, amounts appearing as a liability on the financial statements of such Person and its Subsidiaries as prepared according to GAAP classified as deferred revenue to the extent of cash received in connection therewith.

“Disputing Lender” shall mean any Lender that becomes a Defaulting Lender because such Lender in good faith has determined that the conditions precedent to funding the applicable Advance set forth in Section 3.02 of this Agreement have not been satisfied.

“Domestic Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrowers and the Administrative Agent.

“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

“Effective Date” has the meaning specified in Section 3.01(I).

“Eligible Assignee” means (a) with respect to any Facility (other than the Letter of Credit Facility), (i) a Lender; (ii) an Affiliate or an Approved Fund of a Lender; or (iii) any other Person approved by the Administrative Agent and, so long as no Default has occurred and is continuing at the time any assignment is effected pursuant to Section 9.07, BRW, such approval not to be unreasonably withheld or delayed and, in the case of BRW, such approval to be deemed to have been given if no objection thereto is received by the Administrative Agent and the assigning Lender within two Business Days after the date on which notice of the proposed assignment is sent to BRW; and (b) with respect to the Letter of Credit Facility, a Person that is an Eligible Assignee under clause (a) of this definition and is a commercial bank organized under the laws of the United States of America or any state thereof;  provided, however, that neither any Loan Party

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nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

“Environmental Action” means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged injury or threat to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“Environmental Law” means any applicable Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial interpretation relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 “Equity Interests” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

“ERISA Event” means (a)(i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of  Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably

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expected to occur with respect to such Plan within the following 30 days; (b) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the incurrence by any Loan Party or any ERISA Affiliate of any liability under Title IV of ERISA with respect to any Plan; (e) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (f) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan.

“Escrow Agreements” means each of the Escrow Agreement (Cranberry Adjustment), the Escrow Agreement (Closing Adjustment Receivables), the Escrow Agreement (Second Stage Closing) and the Escrow Agreement (Working Capital/Indemnity), in each case as defined in the BCSI Sale Agreement.

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrowers and the Administrative Agent.

“Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, an interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) obtained by dividing (a) the rate per annum appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period equal to such Interest Period (provided that, if for any reason such rate is not available, the term “Eurodollar Rate” shall mean, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.

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“Eurodollar Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(ii).

“Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

“Events of Default” has the meaning specified in Section 7.01.

“Excess Cash Flow” means, for any period (without duplication),

(a)the sum of:

(i)Consolidated net income (or loss) of BRW and its Subsidiaries for such period adjusted to exclude any cash gains attributable to any transaction that requires prepayment of Term Advances pursuant to Section 2.06(b); plus

(ii)the aggregate amount of depreciation, amortization and all other non-cash charges deducted in arriving at such Consolidated net income (or loss); plus

(iii)the sum of (i) the amount, if any, by which Net Working Capital decreased plus (ii) the net amount, if any, by which Deferred Revenues of BRW and its Subsidiaries increased; minus

(b)the sum of:

(i)the sum of (A) the aggregate amount of all non-cash credits included in arriving at such Consolidated net income (or loss) plus (B) the amount, if any, by which Net Working Capital increased plus (c) the net amount, if any, by which Deferred Revenues of BRW and its Subsidiaries decreased; plus

(ii)the sum of (A) the aggregate amount of Capital Expenditures of BRW and its Subsidiaries paid in cash during such period to the extent permitted by this Agreement (except to the extent attributable to the incurrence of Obligations under Capitalized Leases or otherwise financed by long term Debt or with funds that would have constituted Net

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Cash Proceeds) plus (B) cash consideration paid during such fiscal year by BRW and its Subsidiaries to make acquisitions or other capital investments (except to the extent financed by incurring long-term Debt or with funds that would otherwise have constituted Net Cash Proceeds) plus (C) the net amount of cash used by BRW and its Subsidiaries in Permitted BCI Transactions during such Fiscal Year (except to the extent financed with Advances under the Revolving Credit Facility or by incurring long-term Debt); plus

(iii)the aggregate amount of all regularly scheduled principal payments of Funded Debt made during such period; plus

(iv)the aggregate principal amount of all optional prepayments of Term Advances made during such period pursuant to Section 2.06(a); plus

(v)the aggregate principal amount of all cash payments or prepayments of the Revolving Credit Advances that permanently reduce the Revolving Credit Commitments.

 “Excluded Entities” means CBT, Wireless LLC and the Mutual Subsidiaries.

“Excluded Equity Agreements” means the (i) Operating Agreement of Wireless LLC between AT&T Wireless PCS Inc. and Wireless Co., dated as of December 31, 1998 and (ii) Network Membership License Agreement between AT&T Corp. and its affiliated companies, including AT&T Wireless Services, Inc., and Wireless LCC, dated as of February 4, 1998, as amended as of April 16, 1999.

“Existing Credit Agreement” has the meaning specified in the Preliminary Statements.

 “Existing Debt” means Debt of each Loan Party and its Subsidiaries outstanding immediately before giving effect to the consummation of the Transaction.

“Extraordinary Receipt” means any cash received by or paid to or for the account of any Person not in the ordinary course of business, including, without limitation, tax refunds, pension plan reversions, proceeds of insurance (including, without limitation, any key man life insurance but excluding proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustment received in connection with any purchase agreement; provided, however, that an Extraordinary Receipt shall not include cash receipts received from proceeds of insurance, condemnation awards (or payments in lieu thereof) or indemnity payments to the extent that such proceeds, awards or payments (A) in respect of loss or damage to equipment, fixed assets or real property are applied (or in respect of which expenditures were previously incurred) to replace or repair the equipment, fixed assets or real property in respect of which such proceeds were received in accordance with the terms of the Loan

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Documents, so long as the applicable Borrower or its Subsidiaries have entered into a legal, valid and binding agreement with respect thereto within 12 months after the occurrence of such damage or loss and with a closing thereunder and application of such proceeds within 6 months thereafter or (B) are received by any Person in respect of any third party claim against such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and expenses of such Person with respect thereto.

“Facilities Period” means the period commencing on the Effective Date and ending December 29, 2007.

“Facility” means the Term A Facility, the Term B Facility, the Term C Facility, the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letters” means collectively, (i) the fee letter dated as of October 20, 1999 between BRW and the Agents, (ii) the fee letter dated as of January 27, 2003 between BRW, SSBI and the Administrative Agent, and (iii) the fee letter dated as of January 27, 2003 between BRW and BAS.

“Final Maturity Date” means, (i) in the case of the Term A Facility, the earlier of November 9, 2004 and the date of termination in whole of the Term A Commitments pursuant to Section 2.05 or 7.01, (ii) in the case of the Term B Facility, the earlier of December 30, 2006 and the date of termination in whole of the Term B Commitments pursuant to Section 2.05 or 7.01, and (iii) in the case of the Term C Facility, the earlier of June 29, 2007 and the date of termination in whole of the Term C Commitments pursuant to Section 2.05 or 7.01.

“Fiscal Year” means a fiscal year of BRW and its Consolidated Subsidiaries ending on December 31 in any calendar year.

“Foreign Subsidiary” means a Subsidiary organized under the laws of a jurisdiction other than the United States or any State thereof or the District of Columbia.

“FTI” means FTI Consulting, Inc.

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“FTI Report” means the report provided by FTI and posted to the BRW IntraLinks website by the Administrative Agent on January 28, 2003 and distributed to the Lenders at the bank meeting with BRW held on the same date.

“Funded Debt” of any Person means Debt in respect of the Advances, in the case of the Borrowers, and all other Debt of such Person that by its terms matures more than one year after the date of determination or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year after such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year after such date.

“GAAP” has the meaning specified in Section 1.03.

“Goldman”has the meaning specified in the Preliminary Statements.

 “Granting Lender” has the meaning specified in Section 9.07(j).

“Guaranties” means the BRW Guaranty and the Subsidiary Guaranties.

“Guarantors” means BRW and the Subsidiary Guarantors.

“Guaranty Supplement” has the meaning specified in the Subsidiary Guaranties.

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other hedging agreements.

“Hedge Bank” means any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Secured Hedge Agreement.

 “Indemnified Party” has the meaning specified in Section 9.04(b).

 “Index Debt” means long-term senior unsecured Debt of BRW that is not guaranteed or otherwise credit enhanced.

“Information Materials” means the Amendment Package dated as of January 2003, and the other information materials (other than the FTI Report) reviewed by BRW and posted to the BRW IntraLinks website by the Administrative Agent on January 28, 2003 and distributed to the Lenders at the bank meeting with BRW held on the same date and used by the Arrangers in connection with the seeking of approvals of the amendments effected by this Agreement.

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 “Initial Issuing Banks”, “Initial Lender Parties” and “Initial Lenders” each has the meaning specified in the recital of parties to this Agreement.

“Interest Coverage Ratio” means, at any date of determination, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense, in each case, of or by BRW and its Subsidiaries during the four consecutive fiscal quarters most recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be.

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by either Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by such Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be one, two, three or six months, and, subject to clause (c) of this definition, nine or twelve months as such Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

(a)such Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after any principal repayment installment date for such Facility unless, after giving effect to such selection, the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to such principal repayment installment date for such Facility shall be at least equal to the aggregate principal amount of Advances under such Facility due and payable on or prior to such date;

(b)Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

(c)no Borrower shall be entitled to select an Interest Period having a duration of nine or twelve months unless, by 3:00 P.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, each of the Appropriate Lenders notifies the Administrative Agent that such Lender Party will be providing funding for such Borrowing with such Interest Period (the failure of any of the Appropriate Lenders to so respond by such time being deemed for all purposes of this Agreement as an objection by such Lender Party to the requested duration of such Interest Period); provided that if any of the Appropriate Lenders objects (or is deemed to have objected) to the requested duration of such Interest Period, the duration of the Interest Period for such Borrowing shall be one, two, three or six months, as specified by such Borrower

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in the applicable Notice of Borrowing or notice of Conversion as the desired alternative to the requested Interest Period of nine or twelve months therefor;

(d)whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

(e)whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

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

“Investment” in any Person means any loan or advance to such Person, any purchase or other acquisition of any Equity Interests or Debt or the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or any other direct or indirect investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (i) or (j) of the definition of “Debt” in respect of such Person.

“Investment Grade Date” means the first day on which the ratings established by both S&P and Moody’s for the Index Debt are, respectively, BBB- or better and Baa3 or better.

“IRU” means an indefeasible right to use fiber or telecommunications capacity.

“Issuing Banks” means each Initial Issuing Bank and any other Revolving Credit Lender approved as an Issuing Bank by the Administrative Agent and the Borrowers and any Eligible Assignee to which a Letter of Credit Commitment hereunder has been assigned pursuant to Section 9.07 so long as each such Revolving Credit Lender or each such Eligible Assignee expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an Issuing Bank and notifies the Administrative Agent of its Applicable Lending Office and the amount of its Letter of Credit Commitment (which information shall be recorded by the Administrative Agent in the Register), for so long as such Initial Issuing Bank, Revolving Credit Lender or Eligible Assignee, as the case may be, shall have a Letter of Credit Commitment.

 “June BCSI  Agreement” means the First Amended and Restated Credit Agreement, as amended, among BCSI, as borrower, the lenders party thereto,

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NationsBank, N.A., as administrative agent, Credit Suisse First Boston, TD Securities (USA), Inc. and Export Development Corporation, as co-syndication agents and BAS as sole lead arranger and sole book runner.

 “Junior Notes”has the meaning specified in the Preliminary Statements.

“Junior Notes Documents” means the Junior Notes, the Junior Notes Indenture, the Purchase Agreement, the Warrants, the Warrant Agreement and any other agreements, indentures and instruments pursuant to which the Junior Notes or the Warrants are issued.

“Junior Notes Indenture”has the meaning specified in the Preliminary Statements.

“L/C Cash Collateral Account” has the meaning specified in the Security Agreements.

“L/C Related Documents” has the meaning specified in Section 2.04(d)(ii).

“Lender Party” means any Lender, any Issuing Bank or any Swing Line Bank.

“Lenders” means the Initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 9.07 for so long as such Initial Lender or Person, as the case may be, shall be a party to this Agreement.

“Letter of Credit Advance” means an advance made by any Issuing Bank or any Revolving Credit Lender pursuant to Section 2.03(c).

“Letter of Credit Agreement” has the meaning specified in Section 2.03(a).

“Letter of Credit Commitment” means, with respect to any Issuing Bank at any time, the amount set forth opposite such Issuing Bank’s name on Schedule I hereto under the caption “Letter of Credit Commitment” or, if such Issuing Bank has entered into one or more Assignment and Acceptances, set forth for such Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Issuing Bank’s “Letter of Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Letter of Credit Facility” means, at any time, an amount equal to the lesser of (a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time and (b) $20,000,000, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Letters of Credit” has the meaning specified in Section 2.01(d).

“Lien” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien

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or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“Loan Documents” means (a) for purposes of this Agreement and the Notes and any amendment, supplement or modification hereof or thereof, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) the Fee Letters and the CSFB Fee Letter, and (vi) each Letter of Credit Agreement and (b) for purposes of the Guaranties and the Collateral Documents and for all other purposes other than for purposes of this Agreement and the Notes, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) the Fee Letters and the CSFB Fee Letter, (vi) each Letter of Credit Agreement, and (vii) each Secured Hedge Agreement, in each case as amended.

“Loan Parties” means the Borrowers and each of the Guarantors.

“Margin Stock” has the meaning specified in Regulation U.

“Material Adverse Change” means any material adverse change in the business, assets, condition (financial or otherwise), operations, or prospects of BRW and its Subsidiaries, taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, condition (financial or otherwise), operations or prospects of BRW and its Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party under any Transaction Document or (c) the ability of BRW or any of its Subsidiaries to perform its material Obligations under the Related Documents and its Obligations under the Loan Documents to which it is or is to be a party.

“Material Contract” means with respect to any Person, each contract or other arrangement to which such Person is a party for which breach, nonperformance, cancellation or failure to renew could be expected to have a Material Adverse Effect.

“Minimum Liquidity” means the sum of (i) collected cash balances and Cash Equivalents of BRW and its Subsidiaries and (ii) the amount available to be drawn under the Revolving Credit Facility.

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

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

“Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA

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Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

“Mutual Subsidiaries” means Mutual Signal Holding Corporation, Mutual Signal Corporation, Mutual Signal Corporation of Michigan and MSM Associates Limited Partnership.

“Net Cash Proceeds” means, with respect to any sale, lease, transfer or other disposition of any asset or the incurrence or issuance of any Debt or the sale or issuance of any Equity Interests (including, without limitation, any capital contribution) by any Person, or any Extraordinary Receipt received by or paid to or for the account of any Person, the aggregate amount of cash received from time to time (whether as initial consideration or through payment or disposition of deferred consideration) by or on behalf of such Person in connection with such transaction after deducting therefrom only (without duplication):

(a) reasonable and customary brokerage commissions, underwriting fees and discounts, legal fees, finder’s fees and other similar fees and commissions;

(b) the amount of taxes payable in connection with or as a result of such transaction;

(c) the amount of any Debt secured by a Lien on such asset that, by the terms of the agreement or instrument governing such Debt, is required to be repaid upon such disposition; and

(d) in the case of any sale, lease, transfer or other disposition of any property or asset, the amount required to be reserved, in accordance with GAAP as in effect on the date on which the Net Cash Proceeds from such sale, lease, transfer or other disposition are determined, and so reserved, against liabilities under indemnification obligations, pension and other post-employment benefit liabilities or other similar contingent liabilities associated with the property and assets subject to such sale, lease, transfer or other disposition that are required to be so provided for under the terms of the documentation for such sale, lease, transfer or other disposition;

in each case to the extent, but only to the extent, that the amounts so deducted are properly attributable to such transaction or to the property or asset that is the subject thereof and (i) in the case of clauses (a) and (c) of this definition, are actually paid substantially contemporaneously with the receipt of such cash to a Person that is not an Affiliate of such Person or any of the Loan Parties or of any Affiliate of any of the Loan Parties and (ii) in the case of clauses (b) and (d) of this definition, are actually paid substantially contemporaneously with the receipt of such cash to a Person that is not an Affiliate of such Person or any of the Loan Parties or any Affiliate of any of the Loan Parties or, so long as such Person is not otherwise indemnified therefor, are reserved for in accordance with GAAP at the time of receipt of such cash, based upon such Person’s reasonable estimate of such taxes or contingent liabilities, as the case may be (as

27

determined reasonably and in good faith by the treasurer or chief financial officer of such Person); provided, however, that if, at the time such taxes or such contingent liabilities are actually paid or otherwise satisfied, the amount of the reserve therefor exceeds the amount paid or otherwise satisfied, then the Borrowers shall reduce the Commitments in accordance with the terms of Section 2.05(b), and shall prepay the outstanding Advances in accordance with the terms of Section 2.06(b)(ii) and (iii), in an amount equal to the amount of such excess reserve.

 “Net Working Capital” means, at any date, (a) the consolidated current assets of BRW and its Subsidiaries as of such date (excluding cash and cash equivalents) minus (b) the consolidated current liabilities of BRW and its Subsidiaries as of such date (excluding current liabilities in respect of Debt).

“New Notes” means (i) Subordinated Debt of BRW evidenced by the Subordinated Debt Documents, (ii) Senior Notes and (iii) the Junior Notes.

 “Non-Shared Collateral Security Agreement” has the meaning specified in Section 3.01(a)(ii).

“Note” means a Term A Note, a Term B Note, a Term C Note or a Revolving Credit Note.

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

“Notice of Issuance” has the meaning specified in Section 2.03(a).

“Notice of Renewal” has the meaning specified in Section 2.01(d).

“Notice of Swing Line Borrowing” has the meaning specified in Section 2.02(b).

“Notice of Termination” has the meaning specified in Section 2.01(d).

“NPL” means the National Priorities List under CERCLA.

“Oak Hill Debt” means the Obligations of BRW under the Oak Hill Indenture.

“Oak Hill Indenture” means the Indenture, dated as of July 21, 1999, between BRW, as Issuer, and The Bank of New York, as Trustee, as amended in accordance with the terms of this Agreement.

“Oak Hill Waiver” has the meaning specified in Section 3.01(II)(b).

“Obligation” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in

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Section 7.01(f).  Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

“OECD” means the Organization for Economic Cooperation and Development.

“Original Credit Agreement” has the meaning specified in the Preliminary Statements.

“Other Permitted Equity” means an Equity Interest of BRW other than common stock that (i) is a security that is not guaranteed or secured and ranks junior to the Facilities and the New Notes in all respects, (ii) has a term extending to at least December 31, 2007 and is not mandatorily redeemable or putable prior to such date (other than pursuant to a customary change of control provision), (iii) has covenants and change of control provisions no more restrictive than those customarily contained in senior subordinated or subordinated public high yield issues for similar issuers and (iv) if convertible or exchangeable, is convertible or exchangeable only into BRW’s common stock.

 “Other Taxes” has the meaning specified in Section 2.12(b).

“Part II Effective Date” has the meaning specified in Section 3.01(II).

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

“Permitted BCI Transaction” means:

(A) any (a) Investment in the BCI Group, (b) Restricted Payment made to the BCI Group, (c) Debt incurred for the benefit of the BCI Group or in connection with a sale of the BCI Group permitted under Section 5.02(e)(ix), (d) Lien incurred for the benefit of the BCI Group or in connection with a sale of the BCI Group permitted under Section 5.02(e)(ix), (e) asset purchase for the benefit of the BCI Group without charge or allocation to the BCI Group, (f) payment in respect of operating expenses or net operating losses of the BCI Group (including payments for direct expenses of the BCI Group that are made by the BRW Group and not charged or allocated to the BCI Group or payments made by the BRW Group for shared expenses that are not charged or allocated to the BCI Group), (g) tax reimbursement allowed for the benefit of any member of the BCI Group, (h) Equity Interest of any member of the BRW Group issued to the BCI Group, and (i) any other transaction in, to or for the benefit of the BCI Group, excluding in each case items set forth in clause (B) below, in each case (1) made or incurred directly or indirectly by the BRW Group after October 1, 2002 and (2) after giving effect to which the aggregate amount of cash plus the fair value of non-cash property transferred from the BRW Group to the BCI Group in such transaction plus the

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value of any obligations incurred or assumed by the BRW Group in connection with such transaction does not exceed the BCI Maximum Investment for all such transactions specified in clauses (a) through (i) in aggregate, and

(B) each of the following transactions:

(i)the issuance of Equity Interests or the incurrence of Debt in connection with any BCI Exchange and the application of proceeds thereof to the extent permitted under Section 5.02,

(ii)the Guarantees,

(iii)Liens under the Loan Documents,

(iv)scheduled principal and interest payments (or capital contributions made solely for the purpose of funding such payments) made or guaranteed by any member of the BRW Group in respect of the Obligations of BCSI under the Loan Documents,

(v)payments made by any member of the BRW Group under the Guarantees in respect of the Obligations of BCSI under the Loan Documents,

(vi)non-cash payments made solely through reductions in the principal amount of any intercompany notes issued by any member of the BCI Group to any member of the BRW Group in respect of net operating losses of the BCI Group used by the BRW Group or other Investments in the form of reductions of such intercompany notes,

(vii)Permitted Obligations,

(viii)interest payments made or funded by any member of the BRW Group in respect of the BCI Senior Subordinated Notes and the BCI 12 1/2% Senior Notes,

(ix)the accrual and capitalization of interest on intercompany notes issued by the BCI Group to BRW or to any other member of the BRW Group,

(x)the payment by the BCI Group of non-cash management fees to the BRW Group made solely through adjustments to intercompany notes issued by any member of the BCI Group to any member of the BRW Group in any amount not to exceed $2,000,000 per quarter,

(xi)any transactions of the type described on Schedule 1.01, and

(xii)any non-cash transition arrangements or other related services provided to or for the benefit of a buyer in connection with a transaction permitted under Section 5.02(e)(ix), including under any BRW Sale Arrangements;

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provided no Default or Event of Default has occurred and is continuing at the time of such transaction; provided further that any such Permitted BCI Transaction is also permitted under Section 5.11 of the Junior Notes Indenture.

“Permitted Liens” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced:  (a) Liens for taxes, assessments and governmental charges or levies not yet due and payable; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than 30 days and (ii) individually or together with all other Permitted Liens outstanding on any date of determination do not materially adversely affect the use of the property to which they relate; (c) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; and (d) easements, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes.

“Permitted Obligations” means, in connection with:

(A)  the BCSI Sale Agreement, all obligations under the Sellers’ Parent Guaranty (as defined in the BCSI Sale Agreement) and under the other BRW Sale Arrangements, and

(B) any other sale, transfer or other disposition of the assets of BCI and/or its Subsidiaries permitted under Section 5.02(e)(ix), (a) any customary indemnification obligation of the type described in clause (A), including for excluded liabilities or tax payments of any member of the BCI Group not assumed by the purchaser as expressly set forth in the related purchase and sale agreement or (b) any obligation of the types referred to in clause (i) of the definition of “Debt” in respect of any such obligation specified in clause (a) created, incurred or otherwise arising in connection with such sale, transfer or other disposition of  assets of BCI.

“Permitted Preferred Stock” means the Convertible Preferred Stock and the BCI Exchangeable Preferred Stock.

“Permitted Preferred Stock Documents” means, collectively, the Certificate of Designation and the Convertible Certificate of Designation, any subscription agreements therefor and all of the other agreements, instruments and other documents pursuant to which the Permitted Preferred Stock will be or has been issued or otherwise setting forth the terms of the Permitted Preferred Stock, in each case as such agreement, instrument or other document may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, but only to the extent permitted under the terms of the Loan Documents.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association,

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joint venture or other entity, or a government or any political subdivision or agency thereof.

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

“Pledged Debt” has the meaning specified in Section 1(a)(iv) of the Shared Collateral Security Agreement and Section 1(a)(vi) of the Non-Shared Collateral Security Agreement.

“Pledged Shares” has the meaning specified in Section 1(a)(iii) of the Shared Collateral Security Agreement and Section 1(a)(v) of the Non-Shared Collateral Security Agreement.

“PNC” has the meaning specified in the recital of parties to this Agreement.

“Preferred Interests” means, with respect to any Person, Equity Interests issued by such Person that are entitled to a preference or priority over any other Equity Interests issued by such Person upon any distribution of such Person’s property and assets, whether by dividend or upon liquidation.

“Prepackaged Plan” means a plan of reorganization filed in a proceeding under Chapter 11 of the Bankruptcy Code which plan shall have been accepted prior to such filing by the holders of the minimum amount of each class of claims or interests impaired under such plan that would be necessary to achieve acceptance thereof pursuant to Section 1126 of the Bankruptcy Code.

“Pro Rata Share” of any amount means, with respect to any Revolving Credit Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 7.01, such Lender’s Revolving Credit Commitment as in effect immediately prior to such termination) and the denominator of which is the Revolving Credit Facility at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 7.01, the Revolving Credit Facility as in effect immediately prior to such termination).

“Purchase Agreement”has the meaning specified in the Preliminary Statements.

“PWC” means PricewaterhouseCoopers LLP.

“Real Estate SPV” means Broadwing Communications Real Estate Services LLC, a Delaware limited liability company.

 “Redeemable” means, with respect to any Equity Interest, any Debt or any other right or Obligation, any such Equity Interest, Debt, right or Obligation that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

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“Register” has the meaning specified in Section 9.07(d).

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Related Documents” means the Junior Notes Documents, the Oak Hill Indenture, the BCSI Sale Agreement, the Subordinated Debt Documents, any intercompany notes issued pursuant to Section 5.02(b)(ii) and Section 5.02(b)(i)(D), all agreements, indentures and instruments pursuant to which the Senior Notes are issued, the certificate of incorporation of Wireless Holdco, documents related to the Surviving Debt and the Permitted Preferred Stock Documents.

“Related Fund” means, with respect to any Lender which is a fund that invests in loans, any other fund that invests in loans and is controlled by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 “Required Lenders” means, at any time, Lenders owed or holding at least  a majority in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time and (c) the aggregate Unused Revolving Credit Commitments at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time, (C) the aggregate unused Term Commitments of such Lender at such time and (D) the Unused Revolving Credit Commitment of such Lender at such time.  For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to any Swing Line Bank and of Letter of Credit Advances owing to any Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments.

“Responsible Officer” means the chief executive officer, the president, the chief financial officer, the principal accounting officer or the treasurer (or the equivalent of any of the foregoing) of a Borrower or any of its Subsidiaries or any other officer, partner or member (or person performing similar functions) of such Borrower or any of its Subsidiaries responsible for overseeing the administration of, or reviewing compliance with, all or any portion of this Agreement and the other Loan Documents.

“Restricted Payment” has the meaning specified in Section 5.02(g).

 “Revolving Credit Advance” has the meaning specified in Section 2.01(b).

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.

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“Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Revolving Credit Commitment” or, if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Revolving Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Lender” means any Lender that has a Revolving Credit Commitment.

“Revolving Credit Note” means a promissory note of a Borrower payable to the order of any Revolving Credit Lender, in substantially the form of Exhibit A-1 hereto, evidencing the aggregate indebtedness of such Borrower to such Lender resulting from the Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances made by such Lender, as amended.

“Secured Hedge Agreement” means any Hedge Agreement required or permitted under Article V that is entered into by and between any Borrower and any Hedge Bank.

“Secured Obligations” has the meaning specified in Section 2 of the Security Agreements.

“Secured Parties” means the Agents and the Lender Parties.

“Security Agreements” means the Shared Collateral Security Agreement or the Non-Shared Collateral Security Agreement.

“Senior Notes” means senior unsubordinated notes of BRW which have customary high yield covenants for similar issuers, are unsecured and have the benefit of no upstream guaranties or other claims against Subsidiaries of BRW (including BCI and its Subsidiaries).

“Senior Secured Debt/EBITDA Ratio” means, at any date of determination, the ratio of Consolidated Senior Secured Debt of BRW and its Subsidiaries as at such date of determination to Consolidated EBITDA of BRW and its Subsidiaries for the period of four consecutive fiscal quarters of BRW ended on or immediately prior to such date.

“Senior Secured Debt” means, as of any date, the Advances and that portion of  the Debt (excluding all indebtedness and payment Obligations referred to in clauses (g) and (h) of the definition of “Debt” herein) of BRW and its Subsidiaries that ranks pari passu with the Advances made to BRW and is secured by any collateral, including, without limitation, the BRW 7¼ % Notes. “Senior Secured Debt” shall also at all times include the medium term notes of CBT issued under CBT’s indenture dated as of October

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27, 1993, and CBT’s 6.30% Debentures due 2028 issued under CBT’s indenture dated as of November 30, 1998.

“Shared Collateral Security Agreement” has the meaning specified in Section 3.01(a)(ii).

 “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained, and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

“Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as 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.

“SPC” has the meaning specified in Section 9.07(j).

“Specified Default” means any default or event of default under any Debt of BRW or any of its Subsidiaries of the type described in Section 7.01(p) or by reason of a cross default to the Oak Hill Indenture resulting from a default or event of default under the Oak Hill Indenture of the type described in Section 7.01(p).

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

“SPV” has the meaning specified in Section 5.01(s).

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

“SSBI” has the meaning specified in the recital of parties to this Agreement.

 “Subordinated Debt” means any Debt of any Loan Party that is subordinated to the Obligations of such Loan Party under the Loan Documents and that either (a) contains

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terms and conditions that comply with the requirements of Section 5.02(b)(i)(F)(y) or (b) contains terms and conditions reasonably satisfactory to the Required Lenders.

“Subordinated Debt Documents” means all agreements, indentures and instruments pursuant to which Subordinated Debt is issued and that either (a) contains terms and conditions that comply with the requirements of Section 5.02(b)(i)(F)(y) or (b) contains terms and conditions reasonably satisfactory to the Required Lenders, in each case as amended, to the extent permitted under the Loan Documents.

“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.  Notwithstanding the foregoing, for purposes of this Agreement only but not the other Loan Documents, references to “Subsidiaries” of BRW shall not include BCI or any Subsidiary of BCI unless an express reference to BCI or BCI and its Subsidiaries is made, except that at all times after BRW shall deliver written notice to the Administrative Agent stating that Broadwing Telecommunications Inc. shall thereafter be deemed to be a Subsidiary of BRW for all purposes hereunder in accordance with Section 5.02(d)(iii), Broadwing Telecommunications Inc. shall thereafter be deemed to be a Subsidiary of BRW notwithstanding that it may at any such time be a Subsidiary of BCI.

“Subsidiary Guaranties” has the meaning specified in Section 3.01(a)(iii).

“Subsidiary Guarantors” means the Subsidiaries of BRW (including BCI and its Subsidiaries) listed on Schedule II hereto and each other Subsidiary of BRW (including BCI and its Subsidiaries) that shall be required to execute and deliver a guaranty pursuant to Section 5.01(j).

“Surviving Debt” means Debt of each Loan Party and its Subsidiaries outstanding immediately prior to the Effective Date.

“Swing Line Advance” means an advance made by (a) any Swing Line Bank pursuant to Section 2.01(c) or (b) any Revolving Credit Lender pursuant to Section 2.02(b).

“Swing Line Bank” means, initially, each of CUSA, Bank of America and  PNC or any other Lender selected by BRW pursuant to Section 2.01(c).

“Swing Line Borrowing” means a borrowing consisting of a Swing Line Advance made by any Swing Line Bank pursuant to Section 2.01(c) or the Revolving Credit Lenders pursuant to Section 2.02(b).

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“Swing Line Facility” has the meaning specified in Section 2.01(c).

“Syndication Agent” has the meaning specified in the recital of parties to this Agreement.

“Taxes” has the meaning specified in Section 2.12(a).

“Term A Advance” has the meaning specified in Section 2.01(a)(i).

 “Term A Borrowing” means a borrowing consisting of simultaneous Term A Advances of the same Type made by the Term A Lenders.

“Term A Commitment” means, with respect to any Term A Lender at any time, the aggregate amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Term A Commitment”, or, if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Term A Commitment”, as the case may be, in each case as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Term Advances” means, collectively, Term A Advances, Term B Advances and Term C Advances.

“Term A Facility”  means, at any time, the aggregate amount of the Term A Lenders’ Term A Commitments at such time.

“Term A Lender” means each Lender that has made a Term A Advance.

“Term  A Note” means a promissory note of a Borrower payable to the order of any Term A Lender, in substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of such Borrower to such Lender resulting from the Term A Advance made by such Lender, as amended.

“Term B Advance” has the meaning specified in Section 2.01(a)(ii).

“Term B Borrowing” means a borrowing consisting of simultaneous Term B Advances of the same Type made by the Term B Lenders.

“Term B Commitment” means, with respect to any Term B Lender at any time, the aggregate amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Term B Commitment”, or, if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Term B Commitment”, as the case may be, in each case as such amount may be reduced at or prior to such time pursuant to Section 2.05.

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“Term B Facility”  means, at any time, the aggregate amount of the Term B Lenders’ Term B Commitments at such time.

“Term B Lender” means each Lender that has made a Term B Advance.

“Term  B Note” means a promissory note of a Borrower payable to the order of any Term B Lender, in substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of such Borrower to such Lender resulting from the Term B Advance made by such Lender, as amended.

“Term Borrowings” means, collectively, Term A Borrowings, Term B Borrowings and Term C Borrowings.

“Term C Advance” has the meaning specified in Section 2.01(a)(iii).

“Term C Borrowing” means a borrowing consisting of simultaneous Term C Advances of the same Type made by the Term C Lenders.

“Term C Commitment” means, with respect to any Term C Lender at any time, the aggregate amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Term C Commitment”, or, if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Term C Commitment”, as the case may be, in each case as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Term C Facility”  means, at any time, the aggregate amount of the Term C Lenders’ Term C Commitments at such time.

“Term C Lender” means each Lender that has made a Term C Advance.

“Term  C Note” means a promissory note of a Borrower payable to the order of any Term C Lender, in substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of such Borrower to such Lender resulting from the Term C Advance made by such Lender, as amended.

 “Term Commitments” means, collectively, Term A Commitments, Term B Commitments and Term C Commitments.

“Term Facility” means, collectively, the Term A Facility, the Term B Facility  and the Term C Facility.

“Termination Date” means the earlier of March 1, 2006 and the date of termination in whole of the Revolving Credit Commitments and the Letter of Credit Commitments pursuant to Section 2.05 or 7.01.

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 “Term Lenders” means, collectively, Term A Lenders, Term B Lenders and Term C Lenders.

 “Term Notes” means, collectively, Term A Notes, Term B Notes and Term C Notes.

“Transaction” means the issuance of the Junior Notes and the execution, delivery and performance of the Loan Documents.

“Transaction Documents” means, collectively, the Loan Documents and the Related Documents.

“Transfer” has the meaning specified in Section 5.01(j)(I)(3)(d).

“2004 Letters of Credit” means (i) the $47,742 letter of credit issued to Utah State Retirement Investment Fund issued by Bank of America that expires April 20, 2004 and (ii) the $138,112 letter of credit issued to Overseas Partners (333), Inc. issued by Bank of America that expires July 14, 2004.

 “Type” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

 “Unused Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Banks pursuant to Section 2.03(c) and outstanding at such time and (C) the aggregate principal amount of all Swing Line Advances made by the Swing Line Banks pursuant to Section 2.01(c) and outstanding at such time.

“Voting Interests” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“Warrant Agreement” has the meaning specified in the Preliminary Statements.

“Warrants”has the meaning specified in the Preliminary Statements.

“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in respect of which any Loan Party could have liability.

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

“Wireless Holdco”means Cincinnati Bell Wireless Holdings LLC, a Delaware limited liability company.

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

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02.  Computation of Time Periods; Other Definitional Provisions.  In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.  References in the Loan Documents to any agreement or contract “as amended” shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

SECTION 1.03.  Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in effect on the Effective Date (“GAAP”).

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT

SECTION 2.01.  The Advances and the Letters of Credit(a)  The Term Advances.  (i) Each Term A Lender made advances (each a “Term A Advance”) to the Borrowers prior to the Effective Date under Section 2.01(a)(i) of the Existing Credit Agreement in an aggregate amount equal to such Lender’s Term A Commitment.  All Term A Advances outstanding on the Effective Date shall for all purposes be deemed to have been made hereunder and shall constitute use of the Term A Facility. Amounts outstanding under this Section 2.01(a)(i) and repaid or prepaid may not be reborrowed.

(ii) Each Term B Lender made incremental term B advances (each a “Term B Advance”) to the Borrowers prior to the Effective Date under Sections 2.01(a)(ii) and 2.05(c) of the Existing Credit Agreement in an aggregate amount equal to such Lender’s Term B Commitment.  All Term B Advances outstanding on the Effective Date shall for all purposes be deemed to have been made hereunder and shall constitute use of the Term B Facility. Amounts outstanding under this Section 2.01(a)(ii) and repaid or prepaid may not be reborrowed.

(iii) Each Term C Lender made a single incremental term C advance (each a “Term C Advance”) to the Borrowers prior to the Effective Date under Sections 2.01(a)(iii) and 2.05(c) of the Existing Credit Agreement in an aggregate amount equal to such Lender’s Term C Commitment.  All Term C Advances outstanding on the Effective Date shall for all purposes be

40

deemed to have been made hereunder and shall constitute use of the Term C Facility. Amounts outstanding under this Section 2.01(a)(iii) and repaid or prepaid may not be reborrowed.

(b)The Revolving Credit Advances.  Each Revolving Credit Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each a “Revolving Credit Advance”) to BRW from time to time on any Business Day during the period from the date hereof until the Termination Date in an amount for each such Advance not to exceed such Lender’s Unused Revolving Credit Commitment at such time.  Each Revolving Credit Borrowing shall be in an aggregate amount of (i) $10,000,000 or an integral multiple of $1,000,000 in excess thereof in respect of Eurodollar Rate Advances and (ii) $10,000,000 or an integral multiple of $1,000,000 in excess thereof in respect of Base Rate Advances (in each case, other than a Borrowing the proceeds of which shall be used solely to repay or prepay in full outstanding Swing Line Advances or outstanding Letter of Credit Advances) and shall consist of Revolving Credit Advances made simultaneously by the Revolving Credit Lenders ratably according to their Revolving Credit Commitments.  The Revolving Credit Advances made to BRW and to BCSI under Section 2.01(b) of the Existing Credit Agreement and outstanding on the Effective Date shall for all purposes be deemed to have been made hereunder and shall constitute use of the Revolving Credit Facility.  Within the limits of each Revolving Credit Lender’s Unused Revolving Credit Commitment in effect from time to time, the Borrowers may borrow under this Section 2.01(b), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(b). BCSI may not borrow any new Revolving Credit Advances under this Section 2.01(b).

(c)The Swing Line Advances.  BRW may request any Swing Line Bank to make, and such Swing Line Bank may, if in its sole discretion it elects to do so, make, on the terms and conditions hereinafter set forth, Swing Line Advances to BRW from time to time on any Business Day during the period from the date hereof until the Termination Date (i) in an aggregate amount owing to all Swing Line Banks not to exceed at any time outstanding $75,000,000 (the “Swing Line Facility”) and (ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate of the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time.  No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance.  Each Swing Line Borrowing shall be in an amount of $500,000 or an integral multiple of $100,000 in excess thereof and shall be made as a Base Rate Advance.  Any Swing Line Advances made to BRW and to BCSI under Section 2.01(c) of the Existing Credit Agreement and outstanding on the Effective Date shall for all purposes be deemed to have been made hereunder and shall constitute use of the Swing Line Facility.  Within the limits of the Swing Line Facility and within the limits referred to in clause (ii) above, so long as any Swing Line Bank, in its sole discretion, elects to make Swing Line Advances, BRW may borrow under this Section 2.01(c), repay pursuant to Section 2.04(c) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(c).  BCSI may not borrow any new Swing Line Advances under this Section 2.01(c).  BRW may select any Lender to act as a Swing Line Bank or remove any Lender as a Swing Line Bank at its discretion; provided that (i) each such Lender expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Swing Line Bank and notifies the Administrative Agent of its acceptance of such

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appointment and (ii) there are no more than four Swing Line Banks (including all Swing Line Banks that have issued Swing Line Advances that remain outstanding) at any one time.

(d)The Letters of Credit.  Each Issuing Bank severally agrees, on the terms and conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit (the “Letters of Credit”) for the account of BRW from time to time on any Business Day during the period from the date hereof until 5 Business Days before the Termination Date in an aggregate Available Amount (i) for all Letters of Credit issued by such Issuing Bank not to exceed at any time the lesser of (x) the Letter of Credit Facility at such time and (y) such Issuing Bank’s Letter of Credit Commitment at such time and (ii) for each such Letter of Credit not to exceed an amount equal to the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time.  The 2004 Letters of Credit and all Letters of Credit issued for the account of BRW or BCSI under Section 2.01(d) of the Existing Credit Agreement and outstanding on the Effective Date shall for all purposes be deemed to have been issued hereunder and shall constitute use of the Letter of Credit Facility.  No Letter of Credit shall have an expiration date (including all rights of the Borrowers or the beneficiary to require renewal) later than the earlier of 5 Business Days before the Termination Date and one year after the date of issuance thereof, but may by its terms be renewable annually upon notice (a “Notice of Renewal”) given to the Issuing Bank that issued such Letter of Credit and the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business Days prior to the date of the proposed renewal of such Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless such Issuing Bank has notified such Borrower (with a copy to the Administrative Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least 30 Business Days prior to the date of automatic renewal of its election not to renew such Letter of Credit (a “Notice of Termination”).  If either a Notice of Renewal is not given by such Borrower or a Notice of Termination is given by the relevant Issuing Bank pursuant to the immediately preceding sentence, such Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the relevant Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or such Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement.  Each Letter of Credit shall contain a provision authorizing the Issuing Bank that issued such Letter of Credit to deliver to the beneficiary of such Letter of Credit, upon the occurrence and during the continuance of an Event of Default, a notice (a “Default Termination Notice”) terminating such Letter of Credit and giving such beneficiary 15 days to draw such Letter of Credit.  Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, BRW may request the issuance of Letters of Credit under this Section 2.01(d), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.04(d) and request the issuance of additional Letters of Credit under this Section 2.01(d).  BCSI may not request the issuance of any new Letters of Credit under this Section 2.01(d).

SECTION 2.02.  Making the Advances  (a)  Except as otherwise provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in

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the case of a Borrowing consisting of Eurodollar Rate Advances, or the first Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by BRW to the Administrative Agent, which shall give to each Appropriate Lender prompt notice thereof by telex or telecopier.  Each such notice of a Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately in writing, or telex or telecopier, in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Facility under which such Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance.  Each Appropriate Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Commitments under the applicable Facility of such Lender and the other Appropriate Lenders.  After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to BRW by crediting the Borrower’s Account; provided, however, that, in the case of any Revolving Credit Borrowing, the Administrative Agent shall first make a portion of such funds equal to the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances made by any Swing Line Bank or any Issuing Bank, as the case may be, and by any other Revolving Credit Lender and outstanding on the date of such Revolving Credit Borrowing, plus interest accrued and unpaid thereon to and as of such date, available to such Swing Line Bank or such Issuing Bank, as the case may be, and such other Revolving Credit Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.

(b)Each Swing Line Borrowing shall be made on notice, given not later than 1:00 P.M. (New York City time) on the date of the proposed Swing Line Borrowing, by BRW to any Swing Line Bank and the Administrative Agent.  Each such notice of a Swing Line Borrowing (a “Notice of Swing Line Borrowing”) shall be by telephone, confirmed immediately in writing, or telex or telecopier, specifying therein the requested (i) date of such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing).  If, in its sole discretion, it elects to make the requested Swing Line Advance, such Swing Line Bank will make the amount thereof available to the Administrative Agent at the Administrative Agent’s Account, in same day funds.  After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to BRW by crediting the Borrower’s Account.  Upon written demand by any Swing Line Bank with an outstanding Swing Line Advance, with a copy of such demand to the Administrative Agent, each other Revolving Credit Lender shall purchase from such Swing Line Bank, and such Swing Line Bank shall sell and assign to each such other Revolving Credit Lender, such other Lender’s Pro Rata Share of such outstanding Swing Line Advance as of the date of such demand, by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of such Swing Line Bank, by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Swing Line Advance to be purchased by such Lender.  BRW hereby agrees to each such sale and assignment.  Each Revolving Credit Lender agrees to purchase its Pro Rata

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Share of an outstanding Swing Line Advance on (i) the Business Day on which demand therefor is made by the Swing Line Bank that made such Advance, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Upon any such assignment by a Swing Line Bank to any other Revolving Credit Lender of a portion of a Swing Line Advance, such Swing Line Bank represents and warrants to such other Lender that such Swing Line Bank is the legal and beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swing Line Advance, the Loan Documents or any Loan Party.  If and to the extent that any Revolving Credit Lender shall not have so made the amount of such Swing Line Advance available to the Administrative Agent, such Revolving Credit Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by such Swing Line Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate.  If such Lender shall pay to the Administrative Agent such amount for the account of such Swing Line Bank on any Business Day, such amount so paid in respect of principal shall constitute a Swing Line Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance made by such Swing Line Bank shall be reduced by such amount on such Business Day.

(c)Anything in subsection (a) above to the contrary notwithstanding, (i) BRW may not select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $10,000,000 or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (ii) the Term Advances may not be outstanding as part of more than five separate Borrowings and the Revolving Credit Advances may not be outstanding as part of more than five separate Borrowings.

(d)Each Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and binding on BRW.  In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, BRW shall indemnify each Appropriate Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

(e)Unless the Administrative Agent shall have received notice from an Appropriate Lender prior to the date of any Borrowing under a Facility under which such Lender has a Commitment that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to BRW on such date a corresponding

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amount.  If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and BRW severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to BRW until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of BRW, the interest rate applicable at such time under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes.

(f)The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

SECTION 2.03.  Issuance of and Drawings and Reimbursement Under Letters of Credit  (a)  Request for Issuance.  Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the proposed issuance of such Letter of Credit, by BRW to any Issuing Bank, which shall give to the Administrative Agent and each Revolving Credit Lender prompt notice thereof by telex or telecopier.  Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”) shall be by telephone, confirmed immediately in writing, or telex or telecopier, specifying therein the requested (A) date of such issuance (which shall be a Business Day), (B) Available Amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied by such application and agreement for letter of credit as such Issuing Bank may specify to BRW for use in connection with such requested Letter of Credit (a “Letter of Credit Agreement”).  If (x) the requested form of such Letter of Credit is acceptable to such Issuing Bank in its sole discretion and (y) it has not received notice of objection to such issuance from Lenders holding at least 50% of the Revolving Credit Commitments such Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to BRW at its office referred to in Section 9.02 or as otherwise agreed with BRW in connection with such issuance.  In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

(b)Letter of Credit Reports.  Each Issuing Bank shall furnish (A) to the Administrative Agent on the first Business Day of each week a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the previous week and drawings during such week under all Letters of Credit issued by such Issuing Bank, (B) to each Revolving Credit Lender on the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the preceding month and drawings during such month under all Letters of Credit issued by such Issuing Bank and (C) to the Administrative Agent and each Revolving Credit Lender on the first Business Day of each calendar quarter a written report setting forth the

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average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit issued by such Issuing Bank.

(c)Drawing and Reimbursement.  The payment by any Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by such Issuing Bank of a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft.  Upon written demand by any Issuing Bank with an outstanding Letter of Credit Advance, with a copy of such demand to the Administrative Agent, each Revolving Credit Lender shall purchase from such Issuing Bank, and such Issuing Bank shall sell and assign to each such Revolving Credit Lender, such Lender’s Pro Rata Share of such outstanding Letter of Credit Advance as of the date of such purchase, by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of such Issuing Bank, by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Letter of Credit Advance to be purchased by such Lender.  Promptly after receipt thereof, the Administrative Agent shall transfer such funds to such Issuing Bank.  BRW hereby agrees to each such sale and assignment.  In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Pro Rata Share of each Letter of Credit Advance made by the Issuing Bank and not reimbursed by the Borrower on the date made, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Revolving Credit Lender acknowledges and agrees that its obligation to purchase its Pro Rata Share pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Revolving Credit Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business Day on which demand therefor is made by the Issuing Bank which made such Advance, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day, or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Upon any such assignment by an Issuing Bank to any Revolving Credit Lender of a portion of a Letter of Credit Advance, such Issuing Bank represents and warrants to such other Lender that such Issuing Bank is the legal and beneficial owner of such interest being assigned by it, free and clear of any liens, but makes no other representation or warranty and assumes no responsibility with respect to such Letter of Credit Advance, the Loan Documents or any Loan Party.  If and to the extent that any Revolving Credit Lender shall not have so made the amount of such Letter of Credit Advance available to the Administrative Agent, such Revolving Credit Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by such Issuing Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for its account or the account of such Issuing Bank, as applicable.  If such Lender shall pay to the Administrative Agent such amount for the account of such Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance made by such Lender on such Business Day for purposes of this Agreement, and

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the outstanding principal amount of the Letter of Credit Advance made by such Issuing Bank shall be reduced by such amount on such Business Day.

(d)Failure to Make Letter of Credit Advances.  The failure of any Lender to make the Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date.

SECTION 2.04.  Repayment of Advances  (a)  Term Advances.  (i) The Borrowers shall repay to the Administrative Agent for the ratable account of the Term A Lenders the aggregate outstanding principal amount of the Term A Advances on the following dates in the amounts set forth opposite such dates (in each case which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.06):

Date	Amount
June 27, 2003	$	172,992,155.71
September 29, 2003	42,515,080.83
December 30, 2003	42,515,080.83
March 30, 2004	64,536,193.98
June 29, 2004	64,536,193.98
September 29, 2004	64,536,193.98
November 9, 2004	64,536,193.98

provided, however, that, notwithstanding the foregoing provisions of this Section 2.04(a)(i), the final principal repayment installment of the Term A Advances shall be repaid in full on the Final Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of all Term A Advances outstanding on such date.

(ii) The Borrowers shall repay to the Administrative Agent for the ratable account of the Term B Lenders the aggregate outstanding principal amount of the Term B Advances on the following dates in an amount equal to the percentage of the aggregate principal amount of all of the Term B Advances outstanding on January 12, 2002 under the Existing Credit Agreement (after giving effect to all Borrowings under Section 2.01(a)(ii) of the Existing Credit Agreement, if any, made during such period) set forth opposite such dates (in each case which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.06):

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Date	Percentage
March 29, 2003	0.25	%
June 27, 2003	0.25	%
September 29, 2003	0.25	%
December 30, 2003	0.25	%
March 30, 2004	0.25	%
June 29, 2004	0.25	%
September 29, 2004	0.25	%
December 30, 2004	0.25	%
March 30, 2005	0.25	%
June 29, 2005	0.25	%
September 29, 2005	0.25	%
December 30, 2005	0.25	%
March 30, 2006	24.00	%
June 29, 2006	24.00	%
September 29, 2006	24.00	%
December 30, 2006	24.00	%

provided, however, that, notwithstanding the foregoing provisions of this Section 2.04(a)(ii), the final principal repayment installment of the Term B Advances shall be repaid in full on the Final Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of all Term B Advances outstanding on such date.

(iii)The Borrowers shall repay to the Administrative Agent for the ratable account of the Term C Lenders the aggregate outstanding principal amount of the Term C Advances on the following dates in an amount equal to the percentage of the aggregate principal amount of all of the Term C Advances outstanding on January 12, 2002 under the Existing Credit Agreement set forth opposite such dates (in each case which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.06):

Date	Percentage
March 29, 2003	0.25	%
June 27, 2003	0.25	%
September 29, 2003	0.25	%
December 30, 2003	0.25	%
March 30, 2004	0.25	%
June 29, 2004	0.25	%
September 29, 2004	0.25	%
December 30, 2004	0.25	%
March 30, 2005	0.25	%
June 29, 2005	0.25	%
September 29, 2005	0.25	%
December 30, 2005	0.25	%
March 30, 2006	0.25	%
June 29, 2006	0.25	%
September 29, 2006	23.875	%
December 30, 2006	23.875	%
March 30, 2007	23.875	%
June 29, 2007	23.875	%

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provided, however, that, notwithstanding the foregoing provisions of this Section 2.04(a)(iii), the final principal repayment installment of the Term C Advances shall be repaid in full on the Final Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of all Term C Advances outstanding on such date.

(b)Revolving Credit Advances.  Each of the Borrowers shall repay to the Administrative Agent for the ratable account of the Revolving Credit Lenders on the Termination Date the aggregate principal amount of the Revolving Credit Advances made to such Borrower and outstanding on such date.

(c)Swing Line Advances.  Each of the Borrowers shall repay to the Administrative Agent for the account of each Swing Line Bank and each other Revolving Credit Lender that has made a Swing Line Advance the outstanding principal amount of each Swing Line Advance made to such Borrower by each of them on the earlier of the maturity date specified in the applicable Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing) and the Termination Date.

(d)Letter of Credit Advances.  (i) Each of the Borrowers shall repay to the Administrative Agent for the account of each Issuing Bank and each other Revolving Credit Lender that has made a Letter of Credit Advance on the earlier of the day on which such Advance was made and the Termination Date, the outstanding principal amount of each Letter of Credit Advance made to such Borrower by each of them; provided, that to the extent not promptly repaid by such Borrower, a Base Rate Advance shall be deemed made automatically by each Issuing Bank and each other Revolving Credit Lender, in an amount equal to such Issuing Bank’s or Lender’s Pro Rata Share of such outstanding Letter of Credit Advance, on the date on which such repayment is required in the aggregate amount of such Letter of Credit Advance, without regard to minimum borrowing amounts or to the conditions set forth in Section 3.02.

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(ii)The Obligations of each of the Borrowers under this Agreement, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances:

(A)any lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “L/C Related Documents”);

(B)any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of such Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents;

(C)the existence of any claim, set-off, defense or other right that such Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

(D)any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(E)payment by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit;

(F)any exchange, release or non-perfection of any Collateral or other collateral, or any release or amendment or waiver of or consent to departure from the Guaranties or any other guarantee, for all or any of the Obligations of such Borrower in respect of the L/C Related Documents; or

(G)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, such Borrower or a guarantor.

(e) Designation of Amortization Payments. BRW may elect to have any amortization payment of any Facility made pursuant to this Section 2.04 applied to the Advances made to BRW rather than the Advances made to BCSI upon prior notice to the Administrative Agent.

SECTION 2.05.  Termination or Reduction of the Commitments; Increase of the Commitments.  (a)  Optional. BRW may, upon at least three Business Days’ notice to the Administrative Agent, terminate in whole or reduce in part the unused portions of the Letter of

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Credit Facility and the Unused Revolving Credit Commitments; provided, however, that each partial reduction of a Facility shall be in an aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof. Each reduction of the Unused Revolving Credit Commitments pursuant to this Section 2.05(a) shall be applied to the scheduled commitment reduction installments of the Revolving Credit Facility on a pro rata basis.

(b)Mandatory.  (i) Each Term Facility shall be automatically and permanently reduced, on a pro rata basis, on each date on which the Term Advances outstanding thereunder are repaid or prepaid by an amount equal to the amount by which the aggregate Term Commitments for such Facility immediately prior to such reduction exceed the aggregate unpaid principal amount of such Term Advances then outstanding.

(ii)The Letter of Credit Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

(iii) The Swing Line Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

(iv)The Revolving Credit Facility shall be automatically and permanently reduced, on the following dates in the amount set forth opposite such dates (after giving effect to all reductions in such amounts on or prior to any such date as a result of the application of commitment reductions in accordance with the order of priority set forth in subsection (a) or (b)(v) of this Section 2.05), provided that each such reduction of the Revolving Credit Facility shall be made ratably among the Revolving Credit Lenders in accordance with their Revolving Credit Commitments:

Date	Amount
March 30, 2005	$	50,000,000
June 29, 2005	$	50,000,000
September 29, 2005	$	50,000,000
December 30, 2005	$	50,000,000

provided, however, that notwithstanding the foregoing provisions of this clause (iv), all of the Revolving Credit Commitments of the Revolving Credit Lenders shall be terminated in whole on the Termination Date.

(v)The Revolving Credit Facility shall be automatically and permanently reduced ratably among the Revolving Credit Lenders in accordance with their Revolving Credit Commitments in an amount equal to the prepayments of the Revolving Credit Advances pursuant to clause (x) of the proviso in Section 5.02(b)(i)(B), and each reduction of the

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Revolving Credit Commitments pursuant to this Section 2.05(b)(v) shall be applied to the scheduled commitment reduction installments of the Revolving Credit Facility on a pro rata basis.

SECTION 2.06.  Prepayments.  (a)  Optional.  Each Borrower may, upon at least one Business Day’s notice in the case of Base Rate Advances and three Business Days’ notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given such Borrower shall, prepay the outstanding aggregate principal amount of the Advances comprising part of the same Borrowing made by such Borrower in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period for such Advance, such Borrower shall also pay any amounts owing pursuant to Section 9.04(c).  Each such prepayment of any Term Advances shall be applied to the installments thereof for such Facility pro rata to the remaining installments thereof.

(b)Mandatory.  (i)  Following the end of each Fiscal Year of BRW commencing with the Fiscal Year ending December 31, 2003, the Borrowers shall, on the 90th day following the end of such Fiscal Year, prepay an aggregate principal amount of the Advances comprising part of the same Borrowings made by such Borrower in an amount equal to 75% of the Excess Cash Flow for such Fiscal Year.  Each such prepayment shall be applied ratably first to the Term Facilities and to the installments thereof pro rata to the remaining installments thereof, and second to the Revolving Credit Facility as set forth in clause (vi) below.

(ii)The Borrowers shall, on the date of receipt of the Net Cash Proceeds by any Loan Party or any of its Subsidiaries from (A) the sale, lease, transfer or other disposition of any assets of any Loan Party or any of its Subsidiaries (other than any sale, lease, transfer or other disposition of assets pursuant to (x) clauses (i) through (vii) and (ix) of Section 5.02(e) or (y) pursuant to clause (viii) of Section 5.02(e) if the proceeds are being reinvested in the existing lines of business of BRW and its Subsidiaries in accordance with such clause (viii)) or (B) any Extraordinary Receipt received by or paid to or for the account of any Loan Party or any of its Subsidiaries and not otherwise included in clause (A) above, prepay an aggregate principal amount of the Advances comprising part of the same Borrowings in an amount equal to the amount of such Net Cash Proceeds.  Each such prepayment shall be applied ratably first to the Term Facilities and to the installments thereof pro rata to the remaining installments thereof and second to the Revolving Credit Facility as set forth in clause (vi) below.

(iii)The Borrowers shall, on the date of the incurrence or issuance by any Loan Party or any of its Subsidiaries of any Debt (other than Debt incurred or issued pursuant to Section 5.02(b)), prepay an aggregate principal amount of the Advances comprising part of the same Borrowings in an amount equal to the amount of such Net Cash Proceeds.  Each such prepayment shall be applied ratably first to the Term Facilities and to the installments thereof pro rata to the remaining installments thereof and second to the Revolving Credit Facility as set forth in clause (vi) below.

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(iv)The Borrowers shall, on each Business Day, prepay an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Letter of Credit Advances and the Swing Line Advances in an amount equal to the amount by which (A) the sum of the aggregate principal amount of (x) the Revolving Credit Advances, (y) the Letter of Credit Advances and (z) the Swing Line Advances then outstanding plus the aggregate Available Amount of all Letters of Credit then outstanding exceeds (B) the Revolving Credit Facility on such Business Day.

(v)The Borrowers shall, on each Business Day, pay to the Administrative Agent for deposit in the L/C Cash Collateral Account an amount sufficient to cause the aggregate amount on deposit in the L/C Cash Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such Business Day.

(vi)Prepayments of the Revolving Credit Facility made pursuant to clause (i), (ii), (iii) or (iv) above shall be first applied to prepay Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Swing Line Advances then outstanding until such Advances are paid in full, third applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such Advances are paid in full and fourth deposited in the L/C Cash Collateral Account to cash collateralize 100% of the Available Amount of the Letters of Credit then outstanding.  Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied to reimburse the relevant Issuing Bank or Revolving Credit Lenders, as applicable.

(vii)All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid.

(viii)Anything contained in this Section 2.06(b) to the contrary notwithstanding, (A) if, following the occurrence of any “Asset Disposition” (as such term is defined in the Junior Notes Indenture or any comparable definition in any other Debt document to which either Borrower is a party (any “Other Debt Document”)), the issuance of equity or any other event under any Other Debt Document (a “Prepayment Event”), by any Loan Party or any of its Subsidiaries, either Borrower is required to commit by a particular date (a “Commitment Date”) to apply or cause its Subsidiaries to apply an amount equal to any of the “Net Proceeds” (as defined in the Junior Notes Indenture or any comparable definition in any Other Debt Document, as the case may be) thereof in a particular manner, or to apply by a particular date (an “Application Date”) an amount equal to any such “Net Proceeds” in a particular manner, in either case in order to excuse such Borrower from being required to make an “Asset Sale Offer” (as defined in the Junior Notes Indenture or any comparable definition in any Other Debt Document, as the case may be) or any other prepayment of such Debt under such Other Debt Document (a “Debt Prepayment”) in connection with such “Asset Sale” or other Prepayment Event, as the case may be, and such Borrower shall have failed to so commit or to so apply an amount equal to such “Net Proceeds” at least 30 days before the Commitment Date or the Application Date, as the case may be, or (B) if either Borrower at any other time shall have failed to apply or commit or cause to be applied any amount equal to any such “Net Proceeds” and ,

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within 30 days thereafter assuming no further application or commitment of an amount equal to such “Net Proceeds” such Borrower would otherwise be required to make an “Asset Sale Offer” or Debt Prepayment, as the case may be, in respect thereof, then in either such case such Borrower shall immediately apply or cause to be applied an amount equal to such “Net Proceeds” to the payment of the Advances in the manner set forth in Section 2.06(b)(ii) in such amounts as shall excuse such Borrower from making any such “Asset Sale Offer” or Debt Prepayment, as the case may be.

(c)Pro Rata Treatment. All prepayments of the Term Facilities under this Section 2.06 shall be applied to prepay the Term A Advances then outstanding, the Term B Advances then outstanding and the Term C Advances then outstanding on a pro rata basis.

(d)Designation of Prepayments.  BRW may elect to have any prepayment of the Facilities made pursuant to this Section 2.06 applied to the Advances made to BRW rather than the Advances made to BCSI upon prior notice to the Administrative Agent.

SECTION 2.07.  Interest.  (a)  Scheduled Interest.  Each Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from such Borrower from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(i)Base Rate Advances.  During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each month March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

(ii)Eurodollar Rate Advances.  During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b)Default Interest.  Upon the occurrence and during the continuance of a Default under 7.01(a), (e) or (f), the Borrowers shall pay interest on (i) the unpaid principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable under the Loan Documents that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case of interest, on the Type of

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Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to clause (a)(i) above.

(c)Notice of Interest Period and Interest Rate.  Promptly after receipt of a Notice of  Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period”, the Administrative Agent shall give notice to the appropriate Borrower and each Appropriate Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

SECTION 2.08  Fees.  (a)  Commitment Fee.  BRW shall pay to the Administrative Agent for the account of the Lenders a commitment fee, from the date hereof in the case of each Initial Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date, payable in arrears on the date of the initial Borrowing hereunder, thereafter quarterly on the last day of each March, June, September and December, and on the Termination Date, at a rate per annum equal to 0.625% on the sum of the average daily Unused Revolving Credit Commitment of such Lender plus its Pro Rata Share of the average daily outstanding Swing Line Advances during such quarter; provided, however, that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

(b)Letter of Credit Fees, Etc.  (i)  BRW shall pay to the Administrative Agent for the account of each Revolving Credit Lender a commission, payable in arrears quarterly on the last day of each March, June, September and December and on the earliest to occur of the full drawing, expiration, termination or cancellation of any Letter of Credit and on the Termination Date, on such Lender’s Pro Rata Share of the average daily aggregate Available Amount during such quarter of all Letters of Credit outstanding from time to time at the Applicable Margin from time to time on Eurodollar Rate Advances.

(ii)BRW shall pay to each Issuing Bank, for its own account, (A) a commission, payable in arrears quarterly on the last day of each March, June, September and December and on the Termination Date, on the average daily amount of its Letter of Credit Commitment during such quarter, from the date hereof until the Termination Date, at the rate of 0.25% per annum, (B) customary fees for issuance of letters of credit for each Letter of Credit issued by such Issuing Bank in an amount to be agreed upon between the Borrowers and such Issuing Bank on the date of issuance of such Letter of Credit, payable on such date and (C) such other commissions, transfer fees and other fees and charges in connection with the issuance or administration of each Letter of Credit as the Borrowers and such Issuing Bank shall agree.

(c)Agents’ Fees.  BRW shall pay to each Agent for its own account such fees as may from time to time be agreed between BRW and such Agent.

SECTION 2.09  Conversion of Advances  (a)  Optional.  Each Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion

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and subject to the provisions of Sections 2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising the same Borrowing made by such Borrower into Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(c), no Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(c) and each Conversion of Advances comprising part of the same Borrowing under any Facility shall be made ratably among the Appropriate Lenders in accordance with their Commitments under such Facility.  Each such notice of Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances.  Each notice of Conversion shall be irrevocable and binding on such Borrower.

(b)Mandatory.  (i)  On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $10,000,000, such Advances shall automatically Convert into Base Rate Advances.

(ii)If a Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify such Borrower and the Appropriate Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance.

(iii)Upon the occurrence and during the continuance of any Default, (x) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

SECTION 2.10.  Increased Costs, Etc.  (a)  If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining or participating in Letters of Credit or of agreeing to make or of making or maintaining Letter of Credit Advances (excluding, for purposes of this Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender Party is organized or has its Applicable Lending Office or any political subdivision thereof), then the Borrowers shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party additional amounts sufficient to compensate such Lender Party for such increased cost; provided, however, that a Lender Party claiming additional amounts under this Section 2.10(a)

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agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party.  A certificate as to the amount of such increased cost, submitted to the Borrowers by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error.

(b)If any Lender Party determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender Party or any corporation controlling such Lender Party and that the amount of such capital is increased by or based upon the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such type or the issuance or maintenance of or participation in the Letters of Credit (or similar contingent obligations), then, upon demand by such Lender Party or such corporation (with a copy of such demand to the Administrative Agent), the Borrowers shall pay to the Administrative Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit.  A certificate as to such amounts submitted to the Borrowers by such Lender Party shall be conclusive and binding for all purposes, absent manifest error.

(c)If, with respect to any Eurodollar Rate Advances under any Facility, Lenders owed or holding not less than a majority in interest of the then aggregate unpaid principal amount thereof  notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrowers and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance under such Facility will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrowers that such Lenders have determined that the circumstances causing such suspension no longer exist.

(d)Notwithstanding any other provision of this Agreement, if the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrowers through the Administrative Agent, (i) each Eurodollar Rate Advance under each Facility under which such Lender has a Commitment will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to Convert Advances into, Eurodollar

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Rate Advances shall be suspended until the Administrative Agent shall notify the Borrowers that such Lender has determined that the circumstances causing such suspension no longer exist; provided, however, that, before making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

SECTION 2.11.  Payments and Computations.  (a)  The Borrowers shall make each payment hereunder and under the Notes, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.15), not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day funds, with payments being received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day.  The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by such Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by such Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.07(d), from and after the effective date of such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b)Each Borrower hereby authorizes each Lender Party and each of its Affiliates, if and to the extent payment owed to such Lender Party is not made when due hereunder or, in the case of a Lender, under the Note held by such Lender, to charge from time to time, to the fullest extent permitted by law, against any or all of such Borrower’s accounts with such Lender Party or such Affiliate any amount so due.

(c)All computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit commissions shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable.  Each determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error.

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(d)Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commitment fee, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

(e)Unless the Administrative Agent shall have received notice from the applicable Borrower prior to the date on which any payment is due to any Lender Party hereunder that such Borrower will not make such payment in full, the Administrative Agent may assume that such Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each such Lender Party on such due date an amount equal to the amount then due such Lender Party.  If and to the extent such Borrower shall not have so made such payment in full to the Administrative Agent, each such Lender Party shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender Party together with interest thereon, for each day from the date such amount is distributed to such Lender Party until the date such Lender Party repays such amount to the Administrative Agent, at the Federal Funds Rate.

(f)If the Administrative Agent receives funds for application to the Obligations under the Loan Documents under circumstances for which the Loan Documents do not specify the Advances or the Facility to which, or the manner in which, such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each Lender Party ratably in accordance with such Lender Party’s proportionate share of the principal amount of all outstanding Advances and the Available Amount of all Letters of Credit then outstanding, in repayment or prepayment of such of the outstanding Advances or other Obligations owed to such Lender Party, and for application to such principal installments, as the Administrative Agent shall direct.

SECTION 2.12.  Taxes.  (a)  Any and all payments by the Borrowers hereunder or under the Notes shall be made, in accordance with Section 2.11, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender Party and each Agent, (i) taxes that are imposed on its overall net income (including franchise taxes imposed in lieu thereof) by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Lender Party or such Agent, as the case may be, is organized or in which its principal office is located or any political subdivision thereof, (ii) in the case of each Lender Party, taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Lender Party’s Applicable Lending Office or any political subdivision thereof and (iii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction described in clauses (i) or (ii) above (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being hereinafter referred to as “Taxes”).  If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under

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any Note to any Lender Party or any Agent, (i) the sum payable by such Borrower shall be increased as may be necessary so that after such Borrower and the Administrative Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Lender Party or such Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make all such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b)In addition, the Borrowers shall pay any present or future stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as “Other Taxes”).

(c)The Borrowers shall indemnify each Lender Party and each Agent for and hold them harmless against the full amount of Taxes and Other Taxes (including Taxes or Other Taxes imposed on amounts payable under this Section 2.12) imposed on or paid by such Lender Party or such Agent (as the case may be) and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto.  This indemnification shall be made within 30 days from the date such Lender Party or such Agent (as the case may be) makes written demand therefor.

(d)Promptly after the date of any payment of Taxes, the Borrowers shall furnish to the Administrative Agent, at its address referred to in Section 9.02, the original or a certified copy of a receipt evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)Each Lender Party organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender Party, on or prior to the date of its designation of a new lending office and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender Party in the case of each other Lender Party, and from time to time thereafter as requested in writing by the Borrowers (but only so long thereafter as such Lender Party remains lawfully able to do so), provide each of the Administrative Agent and the Borrowers with two properly completed original Internal Revenue Service forms W-8BEN or W-8ECI, as appropriate, or any properly completed successor or other form prescribed by the Internal Revenue Service, certifying that such Lender Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or the Notes.  If the forms provided by a Lender Party at the time such Lender Party first becomes a party to this Agreement (or designates a new lending office) accurately indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender Party provides the appropriate forms accurately certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms; provided, however, that if, at the effective date of the Assignment and Acceptance pursuant to which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to payments under subsection (a) of this

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Section 2.12 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender Party assignee on such date.  If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-BEN or W-8ECI, that the applicable Lender Party reasonably considers to be confidential, such Lender Party shall give notice thereof to the Borrowers and shall not be obligated to include in such form or document such confidential information.

(f)For any period with respect to which a Lender Party has failed to provide such Borrower with the appropriate form described in subsection (e) above (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided (but only so long as such Lender Party is not lawfully able to provide such form) or if such form otherwise is not required under subsection (e) above), such Lender Party shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender Party become subject to Taxes because of its failure to deliver a form required hereunder, the Borrowers shall take such steps as such Lender Party shall reasonably request to assist such Lender Party to recover such Taxes.

(g)In the event that an additional payment is made under Section 2.12 for the account of any Lender Party and such Lender Party, in its sole opinion, determines that it has finally and irrevocably received or been granted a refund in respect of any Taxes or Other Taxes paid pursuant to this Section 2.12, such Lender Party shall promptly remit such refund to the Borrowers, net of all out-of-pocket expenses of Lender Party; provided, however, that the Borrowers, upon request of such Lender Party, agree to promptly return such refund to such Lender Party in the event such Lender Party is required to repay such refund to the relevant taxing authority.  Nothing contained herein shall interfere with the right of a Lender Party to arrange its tax affairs in whatever manner it thinks fit nor oblige any Lender Party to apply for any refund or to disclose any information relating to its tax affairs or any computations in respect thereof.

SECTION 2.13.  Sharing of Payments, Etc.  If any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, other than as a result of an assignment pursuant to Section 9.07) (a) on account of Obligations due and payable to such Lender Party hereunder and under the Notes at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender Party at such time to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time) of payments on account of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time obtained by all the Lender Parties at such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party hereunder and under the Notes at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing to such Lender Party at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes

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at such time) of payments on account of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes at such time obtained by all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party’s ratable share (according to the proportion of (i) the purchase price paid to such Lender Party to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other Lender Party’s required repayment to (ii) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by the purchasing Lender Party in respect of the total amount so recovered; provided further that, so long as the Obligations under the Loan Documents shall not have been accelerated, any excess payment received by any Appropriate Lender shall be shared on a pro rata basis only with other Appropriate Lenders.  Each Borrower agrees that any Lender Party so purchasing an interest or participating interest from another Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest or participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of such Borrower in the amount of such interest or participating interest, as the case may be.

SECTION 2.14.  Use of Proceeds.  The proceeds of the Term Advances were used prior to the Effective Date (and each Borrower represents that it used such proceeds) as follows: (i) by BCSI solely to refinance certain existing debt outstanding on the closing date of the Original Credit Agreement, including the June BCSI Agreement, to fund Capital Expenditures, to pay transaction fees and expenses under the Original Credit Agreement and other general corporate purposes, in each case, to the extent permitted hereunder and under applicable Surviving Debt documents (as defined under the Original Credit Agreement) and to repurchase a portion of the BCI Senior Subordinated Notes; and (ii) by BRW solely to refinance the BofA Credit Agreement, to pay transaction fees and expenses under the Original Credit Agreement, to make equity contributions and intercompany loans to BCI and its Subsidiaries, to enable BCI to refinance certain existing debt outstanding on the closing date of the Original Credit Agreement and to repurchase a portion of the BCI Senior Subordinated Notes and for other general corporate purposes, in each case, to the extent permitted hereunder and under applicable Surviving Debt documents (as defined under the Original Credit Agreement).  The proceeds of the Revolving Credit Advances and issuances of Letters of Credit shall be available to BRW (and BRW agrees that it shall use such proceeds and Letters of Credit) solely to fund Capital Expenditures, to make limited equity contributions and intercompany loans to BCI and its Subsidiaries and for other general corporate purposes, in each case, to the extent permitted hereunder and under the applicable Surviving Debt documents and the Junior Notes.

SECTION 2.15.  Defaulting Lenders.  (a)  In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to BRW and (iii) BRW shall be required to make any payment hereunder or

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under any other Loan Document to or for the account of such Defaulting Lender, then BRW may, so long as no Default shall occur or be continuing at such time and to the fullest extent permitted by applicable law, set off and otherwise apply the Obligation of BRW to make such payment to or for the account of such Defaulting Lender against the obligation of such Defaulting Lender to make such Defaulted Advance. In the event that, on any date, BRW shall so set off and otherwise apply its obligation to make any such payment against the obligation of such Defaulting Lender to make any such Defaulted Advance on or prior to such date, the amount so set off and otherwise applied by BRW shall constitute for all purposes of this Agreement and the other Loan Documents an Advance by such Defaulting Lender made on the date of such setoff under the Facility pursuant to which such Defaulted Advance was originally required to have been made pursuant to Section 2.01.  Such Advance shall be considered, for all purposes of this Agreement, to comprise part of the Borrowing in connection with which such Defaulted Advance was originally required to have been made pursuant to Section 2.01, even if the other Advances comprising such Borrowing shall be Eurodollar Rate Advances on the date such Advance is deemed to be made pursuant to this subsection (a).  BRW shall notify the Administrative Agent at any time BRW exercises its right of set-off pursuant to this subsection (a) and shall set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Advance required to be made by such Defaulting Lender and (B) the amount set off and otherwise applied in respect of such Defaulted Advance pursuant to this subsection (a).  Any portion of such payment otherwise required to be made by BRW to or for the account of such Defaulting Lender which is paid by BRW, after giving effect to the amount set off and otherwise applied by BRW pursuant to this subsection (a), shall be applied by the Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.

(b)In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to any Agent or any of the other Lender Parties and (iii) the applicable Borrower shall make any payment hereunder or under any other Loan Document to the Administrative Agent for the account of such Defaulting Lender, then the Administrative Agent may, on its behalf or on behalf of such other Agents or such other Lender Parties and to the fullest extent permitted by applicable law, apply at such time the amount so paid by such Borrower to or for the account of such Defaulting Lender to the payment of each such Defaulted Amount to the extent required to pay such Defaulted Amount.  In the event that the Administrative Agent shall so apply any such amount to the payment of any such Defaulted Amount on any date, the amount so applied by the Administrative Agent shall constitute for all purposes of this Agreement and the other Loan Documents payment, to such extent, of such Defaulted Amount on such date.  Any such amount so applied by the Administrative Agent shall be retained by the Administrative Agent or distributed by the Administrative Agent to such other Agents or such other Lender Parties, ratably in accordance with the respective portions of such Defaulted Amounts payable at such time to the Administrative Agent, such other Agents and such other Lender Parties and, if the amount of such payment made by such Borrower shall at such time be insufficient to pay all Defaulted Amounts owing at such time to the Administrative Agent, such other Agents and such other Lender Parties, in the following order of priority:

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(i)first, to the Agents for any Defaulted Amounts then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to the Agents;

(ii)second, to the Issuing Banks and the Swing Line Banks for any Defaulted Amounts then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to the Issuing Banks and the Swing Line Banks; and

(iii)third, to any other Lender Parties for any Defaulted Amounts then owing to such other Lender Parties, ratably in accordance with such respective Defaulted Amounts then owing to such other Lender Parties.

Any portion of such amount paid by such Borrower for the account of such Defaulting Lender remaining, after giving effect to the amount applied by the Administrative Agent pursuant to this subsection (b), shall be applied by the Administrative Agent as specified in subsection (c) of this Section 2.15.

(c)In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance or a Defaulted Amount and (iii) any Borrower, any Agent or any other Lender Party shall be required to pay or distribute any amount hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then such Borrower or such Agent or such other Lender Party shall pay such amount to the Administrative Agent to be held by the Administrative Agent, to the fullest extent permitted by applicable law, in escrow or the Administrative Agent shall, to the fullest extent permitted by applicable law, hold in escrow such amount otherwise held by it.  Any funds held by the Administrative Agent in escrow under this subsection (c) shall be deposited by the Administrative Agent in an account with Citibank, in the name and under the control of the Administrative Agent, but subject to the provisions of this subsection (c).  The terms applicable to such account, including the rate of interest payable with respect to the credit balance of such account from time to time, shall be Citibank’s standard terms applicable to escrow accounts maintained with it.  Any interest credited to such account from time to time shall be held by the Administrative Agent in escrow under, and applied by the Administrative Agent from time to time in accordance with the provisions of, this subsection (c).  The Administrative Agent shall, to the fullest extent permitted by applicable law, apply all funds so held in escrow from time to time to the extent necessary to make any Advances required to be made by such Defaulting Lender and to pay any amount payable by such Defaulting Lender hereunder and under the other Loan Documents to the Administrative Agent or any other Lender Party, as and when such Advances or amounts are required to be made or paid and, if the amount so held in escrow shall at any time be insufficient to make and pay all such Advances and amounts required to be made or paid at such time, in the following order of priority:

(i)first, to the Agents for any amounts then due and payable by such Defaulting Lender to them hereunder, in their capacities as such, ratably in accordance with such respective amounts then due and payable to the Agents;

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(ii)second, to the Issuing Banks and the Swing Line Banks for any amounts then due and payable to them hereunder, in their capacities as such, by such Defaulting Lender, ratably in accordance with such respective amounts then due and payable to the Issuing Banks and the Swing Line Banks;

(iii)third, to any other Lender Parties for any amount then due and payable by such Defaulting Lender to such other Lender Parties hereunder, ratably in accordance with such respective amounts then due and payable to such other Lender Parties; and

(iv)fourth, to BRW for any Advance then required to be made by such Defaulting Lender pursuant to a Commitment of such Defaulting Lender.

In the event that any Lender Party that is a Defaulting Lender shall, at any time, cease to be a Defaulting Lender, any funds held by the Administrative Agent in escrow at such time with respect to such Lender Party shall be distributed by the Administrative Agent to such Lender Party and applied by such Lender Party to the Obligations owing to such Lender Party at such time under this Agreement and the other Loan Documents ratably in accordance with the respective amounts of such Obligations outstanding at such time.

(d)The rights and remedies against a Defaulting Lender under this Section 2.15 are in addition to other rights and remedies that BRW may have against such Defaulting Lender with respect to any Defaulted Advance and that any Agent or any Lender Party may have against such Defaulting Lender with respect to any Defaulted Amount.

SECTION 2.16.  Evidence of Debt.  (a)  Each Lender Party shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Advance owing to such Lender Party from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.  Each Borrower agrees that upon notice by any Lender Party to such Borrower (with a copy of such notice to the Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, such Borrower shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a Revolving Credit Note and one or more Term Notes, as applicable, in substantially the form of Exhibits A-1 and A-2 hereto, as the case may be, payable to the order of such Lender Party in a principal amount equal to the Revolving Credit Commitment, the Term A Commitment, the Term B Commitment and the Term C Commitment, as the case may be, of such Lender Party.  All references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder.

(b)The Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall include a control account, and a subsidiary account for each Lender Party, in which accounts (taken together) shall be recorded (i) the Borrower and the date and amount of each Borrowing made hereunder (or under the Existing Credit Agreement, as the case may be), the Type of Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable

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from such Borrower to each Lender Party hereunder, and (iv) the amount of any sum received by the Administrative Agent from such Borrower hereunder and each Lender Party’s share thereof.

(c)Entries made in good faith by the Administrative Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from each Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest error; provided, however, that the failure of the Administrative Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement.

ARTICLE III

CONDITIONS OF EFFECTIVENESS, LENDING AND

ISSUANCES OF LETTERS OF CREDIT

SECTION 3.01.  (I) Conditions Precedent to Effectiveness of this Agreement. This Agreement (other than as set forth in Section 3.01(II)) shall become effective on and as of the first date (the “Effective Date”) on which all of the following conditions precedent shall have been satisfied:

(a)The Administrative Agent shall have received on or before the Effective Date the following, each dated such day (unless otherwise specified), in form and substance satisfactory to the Agents (unless otherwise specified) and (except for the Notes) in sufficient copies for each Lender Party:

(i)The Notes payable to the order of the Lenders that have requested replacement Notes prior to the Effective Date.

(ii)An amended and restated security agreement from (a) BRW in substantially the form of Exhibit D-1 hereto (the “Shared Collateral Security Agreement”) and (b) the other Loan Parties in substantially the form of Exhibit D-2 hereto (the “Non-Shared Collateral Security Agreement”; together with the Shared Collateral Security Agreement, each other security agreement and security agreement supplement delivered pursuant to Section 5.01(j), in each case as amended, the “Security Agreements”), duly executed by each Loan Party party thereto).

(iii)An amended and restated guaranty from (a) the Subsidiary Guarantors who have guaranteed the Obligations of BCSI and its Subsidiaries under the Loan Documents (the “BCSI Subsidiary Guaranty”) and (b) the Subsidiary Guarantors who have guaranteed the Obligations of BRW and its Subsidiaries under the Loan Documents (the “BRW Subsidiary Guaranty”), in each case, in substantially the form of Exhibit E hereto (together with each other guaranty and guaranty supplement delivered pursuant to Section 5.01(j), in each

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case as amended, the “Subsidiary Guaranties”), duly executed by each Subsidiary Guarantor party thereto.

(iv)Certified copies of the resolutions of the Board of Directors (or persons performing similar functions), or, in the case of wholly owned Subsidiaries, action by unanimous written consent of the sole shareholder, of each Loan Party approving the Transaction and each Loan Document to which it is or is to be a party, the consummation of each aspect of the Transaction involving or affecting such Loan Party and the other transactions contemplated by any of the foregoing, and of all documents evidencing other necessary corporate action and governmental and other third party approvals, consents, authorizations, notices and filings of actions with respect to the Transaction and each Loan Document to which it is or is to be a party.

(v)A certificate of each Loan Party, signed on behalf of such Loan Party by its President or a Vice President or Treasurer and its Secretary or any Assistant Secretary (or persons performing similar functions), dated the Effective Date (the statements made in which certificate shall be true on and as of the Effective Date), certifying as to (A) the absence of any amendments to the charter, articles of incorporation or certificate of formation, as applicable, of such Loan Party since the date such documents were delivered to the Administrative Agent under the Existing Credit Agreement, (B) the absence of any amendments to the bylaws or limited liability company agreement, as applicable, of such Loan Party since the date such documents were delivered to the Administrative Agent under the Existing Credit Agreement, (C) no proceeding for dissolution or liquidation of such Loan Party has been commenced by such Loan Party, (D) the truth of the representations and warranties contained in the Loan Documents as they relate to such Loan Party as though made on and as of the Effective Date (except to the extent they expressly relate to an earlier date, in which case certifying that such representations and warranties are true and correct as of such earlier date) and (E) the absence of any event relating to such Loan Party occurring and continuing, or reasonably expected to result from the consummation of the Transaction, that constitutes a Default.

(vi)A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the names and true signatures of the officers, partners, members or equivalent persons of such Loan Party authorized to sign each Transaction Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

(vii) A favorable opinion of Cravath, Swaine & Moore, with respect to the Loan Documents, in form reasonably acceptable to the Agents.

(viii)A favorable opinion of Frost Brown Todd, with respect to the Loan Documents, in form reasonably acceptable to the Agents.

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(ix)A favorable opinion of Shearman & Sterling, counsel for the Administrative Agent, in form and substance satisfactory to the Administrative Agent.

(x) Counterparts of this Agreement duly executed by the Required Lenders, all of the Revolving Credit Lenders, the Agents and the Borrowers.

(xi) Such other documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the authorization of the Transaction and other legal matters relating to the Borrowers and the Transaction.

(b)Before giving effect and immediately after giving pro forma effect to the Transaction, there shall have occurred no Material Adverse Change since December 31, 2001.

(c)There shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or, to the best knowledge of any Loan Party or any of its Subsidiaries, threatened before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Transaction Document except for the matters described in Schedule 4.01(f) hereto (the “Disclosed Litigation”), as they relate to the consummation of  the Transaction; and there shall have been no material adverse change in the status, or the reasonably anticipated financial effect on any Loan Party or any of its Subsidiaries, of such Disclosed Litigation from that described on Schedule 4.01(f) hereto.

(d)All governmental and third party consents and approvals and authorizations of, notices and filings to or with, and other actions by any other Person necessary in connection with any aspect of the Transaction, any of the Loan Documents or the Related Documents or any of the other transactions contemplated thereby, shall have been obtained (without the imposition of any conditions that are not acceptable to the Lender Parties) and shall remain in effect; all applicable waiting periods in connection with the Transaction shall have expired without any action being taken by any competent authority, and no law or regulation shall be applicable in the judgment of the Lender Parties, in each case that restrains, prevents or imposes materially adverse conditions upon the Transaction or the rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any properties now owned or hereafter acquired by any of them.

(e)The final Junior Note Documents executed by BRW and the other parties thereto shall have terms and conditions not materially less favorable to the Lender Parties than those set forth in the version of the drafts of the Purchase Agreement and the Junior Notes Indenture most recently posted on or before March 21, 2003 to the BRW IntraLinks website by the Administrative Agent for review by the Lender Parties.

(f)BRW shall have received not less than $339,500,000 in net cash proceeds from the sale of the Junior Notes and not less than $169,750,000 of such net cash

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proceeds shall have been applied to the prepayment of the Facilities in accordance with clause (x) of the proviso in Section 5.02(b)(i)(B) and not less than $50,250,000 of such net cash proceeds shall have been applied as a prepayment to the Revolving Credit Advances made by BRW with a corresponding permanent reduction in the Revolving Credit Commitment.

(g)The Borrowers shall have paid all accrued fees of the Agents and the Lender Parties (including the amendment fees payable to the Lender Parties on the Effective Date as agreed among the Agents and BRW) and all accrued expenses of the Agents (including the reasonable accrued fees and expenses of counsel to the Administrative Agent to the Lender Parties).

(II)  Conditions Precedent to Effectiveness of the Part II Effective Date.  The Part II Effective Date shall become effective without any further action on the part of any party hereto on and as of the first date (the “Part II Effective Date”) on which all of the following conditions precedent shall have been satisfied:

(a)The Effective Date shall have occurred.

(b)BRW shall have obtained a waiver (the “Oak Hill Waiver”) from the holders of the Oak Hill Debt of all default provisions in Sections 6.1(f) or (g) of the Oak Hill Indenture by, against or with respect to BCI or any of its Subsidiaries and similar provisions, if any, in the notes issued in connection therewith in form and substance reasonably satisfactory to the Agents.

(c)As of the date of effectiveness of the Oak Hill Waiver, no other Debt of BRW or any of its Subsidiaries shall have been accelerated by reason of a Specified Default.

(d)BRW shall be in compliance with Section 5.02(v) with respect to fees, cash pay interest or other cash pay financial consideration paid to holders of any Debt in connection with any matter referred to in clauses (b) or (c) above, if any.

(e)The Facilities, or any part thereof, shall not have been accelerated pursuant to Section 7.01.

SECTION 3.02.  Conditions Precedent to Each Borrowing and Issuance and Renewal.  The obligation of each Appropriate Lender to make an Advance (other than a Letter of Credit Advance made by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Revolving Credit Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the initial Borrowing), and the obligation of each Issuing Bank to issue a Letter of Credit (including the initial issuance) or renew a Letter of Credit and the right of BRW to request a Swing Line Borrowing, shall be subject to the further conditions precedent that on the date of such Borrowing or issuance or renewal (a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing, Notice of Swing Line Borrowing, Notice of Issuance or Notice of Renewal and the acceptance by BRW of the proceeds of such Borrowing or of such Letter of Credit or the

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renewal of such Letter of Credit shall constitute a representation and warranty by BRW, on its behalf and on behalf of BCSI, that both on the date of such notice and on the date of such Borrowing or issuance or renewal such statements are true):

(i)the representations and warranties contained in each Loan Document (except to the extent made by or relating to BCI or any Subsidiary of BCI) are correct on and as of such date, before and after giving effect to such Borrowing or issuance or renewal as though made on and as of such date; and

(ii)no Default has occurred and is continuing, or would result from such Borrowing or issuance or renewal or from the application of the proceeds therefrom; and

(b) the Administrative Agent shall have received such other certificates, opinions and other  documents as any Appropriate Lender through the Administrative Agent may reasonably request in order to confirm (i) the accuracy of BRW’s representations and warranties (except to the extent relating to BCI or any Subsidiary of BCI), (ii) BRW’s timely compliance with the terms, covenants and agreements set forth in this Agreement and (iii) the absence of any Default; and (c) prior to and after giving effect to any Revolving Credit Advance (and giving effect to any debt service and other payments anticipated to be made within 20 days of such Revolving Credit Advance), the total cash and Cash Equivalents held by BRW and its Subsidiaries, on a Consolidated basis, shall not exceed (A) prior to the completion of the Second Stage Closing under the BCSI Sale Agreement (or the final consummation of any transaction effected under Section 5.02(e)(ix) in lieu of a transaction under the BCSI Sale Agreement), $50,000,000 and (B) thereafter, $40,000,000, excluding, in each case in clauses (A) and (B), amounts held in cash collateral accounts pursuant to Section 5.02(e)(ix)(E).

SECTION 3.03.  Determinations Under Section 3.01.  For purposes of determining compliance with the conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender Parties unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender Party prior to the Effective Date specifying its objection thereto and, if an initial Borrowing is requested to be made on the Effective Date, such Lender Party shall not have made available to the Administrative Agent such Lender Party’s ratable portion of such Borrowing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01.  Representations and Warranties of the Borrowers.  Each Borrower represents and warrants as follows:

(a)Each Loan Party and each of its Subsidiaries (i) is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) is duly qualified and in good standing as a foreign corporation or limited liability company in each other jurisdiction in which it owns or

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leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed could not be reasonably likely to have a Material Adverse Effect and (iii) has all requisite power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted.  Each of the Loan Parties has all of the requisite power and authority, and the legal right, to execute and deliver each of the Loan Documents and the Related Documents to which it is or is to be a party, to perform all of its Obligations hereunder and thereunder and to consummate the Transaction and all of the other transactions contemplated hereby and thereby.

(b)Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Subsidiaries of each Loan Party, showing as of the date hereof (as to each such Subsidiary) the jurisdiction of its organization, the number and type of each class of its Equity Interests authorized, and the number outstanding, on the date hereof and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such Loan Party and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the date hereof.  All of the outstanding Equity Interests in each Loan Party’s Subsidiaries has been validly issued, are fully paid and non-assessable and are owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens, except those created under the Collateral Documents.

(c)The execution, delivery and performance by each Loan Party of each Transaction Document to which it is or is to be a party, and the consummation of the Transaction, are within such Loan Party’s corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene such Loan Party’s charter or bylaws, (ii) violate any law, rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default or, except as set forth in the attached Schedule 4.01(c)(iii), require any payment to be made under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties or (iv) except for the Liens created under the Loan Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries.  No Loan Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which could have a Material Adverse Effect.

(d)No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of any Transaction Document to which it is or is to be a party, or for the consummation of the Transaction, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under

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the Collateral Documents (including the first priority nature thereof) or (iv) the exercise by any Agent or any Lender Party of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or made and are in full force and effect.  Notwithstanding the foregoing, it is understood that (i) no regulatory approvals have been obtained in connection with the pledge of shares of any regulated entity and (ii) as of the date hereof no regulatory approvals have been obtained or are being sought in connection with the possible exercise of remedies under this Agreement or any of the Collateral Documents.  All applicable waiting periods in connection with the Transaction have expired without any action having been taken by any competent authority restraining, preventing or imposing materially adverse conditions upon the Transaction or the rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any properties now owned or hereafter acquired by any of them.

(e)This Agreement has been, and each other Transaction Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto.  This Agreement is, and each other Transaction Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms.

(f)There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or, to the best knowledge of any Loan Party, threatened before any court, governmental agency or arbitrator of any kind that (i) either individually or in the aggregate, could be reasonably likely to have a Material Adverse Effect other than any such action, suit, investigation, litigation or proceeding affecting BCI or any of its Subsidiaries after the Part II Effective Date which does not affect BRW or any of its Subsidiaries, or (ii) in which there is a reasonable likelihood of an adverse determination and which purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the Transaction, any of the Loan Documents or the Related Documents or any of the other transactions contemplated hereby.

(g)The Consolidated balance sheets of BRW and its Subsidiaries (including BCI and its Subsidiaries) as at December 31, 2001, and the related Consolidated and consolidating, if any, statements of income and Consolidated statement of cash flows of BRW and its Subsidiaries (including BCI and its Subsidiaries) for the fiscal year then ended, accompanied by an unqualified opinion of PWC independent public accountants, and the Consolidated and consolidating, if any, balance sheets of BRW and its Subsidiaries (including BCI and its Subsidiaries) as at September 30, 2002, and the related Consolidated and consolidating statements of income and Consolidated statement of cash flows of BRW and its Subsidiaries (including BCI and its Subsidiaries) for the nine months then ended, duly certified by the Chief Financial Officer of BRW, copies of which have been furnished to each Lender Party, fairly present the Consolidated and consolidating financial condition of BRW and its Subsidiaries (including BCI and its

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Subsidiaries) as at such dates and the Consolidated and consolidating results of operations of BRW and its Subsidiaries (including BCI and its Subsidiaries) for the periods ended on such dates, all in accordance with generally accepted accounting principles applied on a consistent basis, and since December 31, 2001, there has been no Material Adverse Change;

(h)[Intentionally Omitted.]

(i)The Consolidated and consolidating forecasted balance sheets, statements of income and statements of cash flows of BRW and its Subsidiaries included in the Information Materials (as applicable) or delivered to the Lender Parties pursuant to Section 5.03 were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, BRW’s best estimate of its future financial performance.

(j)Neither the Information Materials nor any other information, exhibit or report furnished by or on behalf of any Loan Party to any Agent or any Lender Party in connection with the Loan Documents or pursuant to the terms of the Loan Documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading.

(k)No Borrower is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and following the application of the proceeds of each Advance or drawing under each Letter of Credit, not more than 25% of the value of the assets (of BRW and its Subsidiaries (including BCI and its Subsidiaries) on a Consolidated basis) subject to the provisions of Section 5.02(a) or 5.02(e) or subject to any restriction contained in any agreement or instrument between BRW and any Lender Party or any Affiliate of any Lender Party relating to Debt within the scope of 7.01(e) will be Margin Stock.  For purposes of this Section 4.01(k), “assets” of BRW or any of its Subsidiaries includes, without limitation, treasury stock of BRW that has not been retired.

(l)Neither any Loan Party nor any of its Subsidiaries is an “investment company”, or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended.  Neither any Loan Party nor any of its Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.  Neither the making of any Advances, nor the issuance of any Letters of Credit, nor the application of the proceeds or repayment thereof by such Borrower, nor the consummation of the other transactions contemplated by the Transaction Documents, will violate any provision of any such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.

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(m)Neither any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any charter or corporate restriction that could have a Material Adverse Effect.

(n)All filings and other actions necessary or desirable to perfect and protect the security interest in the Collateral created under the Collateral Documents have been duly made or taken and are in full force and effect, and the Collateral Documents create in favor of the Administrative Agent for the benefit of the Secured Parties a valid and, together with such filings and other actions, perfected first priority security interest in the Collateral, securing the payment of the Secured Obligations, and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken.  The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for the liens and security interests created or permitted under the Loan Documents.

(o)BRW and its Subsidiaries, on a consolidated basis, is Solvent (it being understood and agreed that a going concern qualification for Fiscal Year 2002 shall not in and of itself be deemed to evidence that BRW is not Solvent).

(p)(i)  No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to have a Material Adverse Effect on any Loan Party or any ERISA Affiliate.

(ii)Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service and furnished or made available to the Lender Parties, is complete and accurate in all material respects and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.

(iii)Neither any Loan Party nor any ERISA Affiliate has incurred or to the best knowledge of any Loan Party or any ERISA Affiliate is reasonably expected to incur any Withdrawal Liability in respect of any Multiemployer Plan.

(iv)Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan to the best knowledge of any Loan Party or any ERISA Affiliate is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.

(q)Except for such matters that could not be reasonably likely to have a Material Adverse Effect (i) the operations and properties of each Loan Party and each of its Subsidiaries comply in all respects with all Environmental Laws and Environmental Permits, all past non-compliance with such Environmental Laws and Environmental Permits has been resolved without ongoing obligations or costs, and no circumstances exist that could be reasonably likely to (A) form the basis of an Environmental Action

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against any Loan Party or any of its Subsidiaries or any of their properties or (B) cause any such property to be subject to any liens and/or environmental transfer act restrictions under any Environmental Law.  In addition to the foregoing, it is understood and agreed that the Borrowers will comply with regulatory requirements set forth in Schedule 4.01(q);

(ii)none of the properties currently or formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or, to the knowledge of any Loan Party or any of their Subsidiaries, proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list; and during the ownership or operation thereof by any Loan Party or any of their Subsidiaries, Hazardous Materials were not and have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries; and

(iii)neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any governmental or regulatory authority or the requirements of any Environmental Law; and during the ownership or operation thereof by any Loan Party or any of their Subsidiaries, all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries were and have been disposed of in a manner not reasonably expected to result in liability to any Loan Party or any of its Subsidiaries.

(r)(i)  Each Loan Party and each of its Subsidiaries and Affiliates has filed, has caused to be filed or has been included in all material tax returns (Federal, state, local and foreign) required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties, except any taxes that are being contested in good faith by appropriate proceedings and for which the Loan Party, its Subsidiaries or its Affiliates, as the case may be, has set aside on its books adequate reserves;

(ii)The aggregate unpaid amount, as of the date hereof, of adjustments to the Federal, state, local and foreign income tax liability of each Loan Party and each of its Subsidiaries and Affiliates  proposed by the Internal Revenue Service or by any state, local and foreign taxing authorities with respect to any years for which the expiration of the applicable statute of limitations for assessment or collection has not occurred by reason of extension or otherwise along with any issues raised by the Internal Revenue Service in respect of such years could not, in the aggregate, reasonably be expected to have a Material Adverse Effect; and

(s)[Intentionally Omitted.]

(t)Set forth on Schedule 4.01(t) hereto is a complete and accurate list of all Surviving Debt, showing as of the date hereof the obligor and the principal amount outstanding thereunder, the maturity date thereof and the amortization schedule therefor.

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(u)Set forth on Schedule 4.01(u) hereto is a complete and accurate list of all Liens as of the date of the Existing Credit Agreement on the property or assets of any Loan Party or any of its Subsidiaries; providedthat each Borrower further represents and warrants that no Liens exist on such property or assets other than Liens created under the Loan Documents, those listed on Schedule 4.01(u) and those permitted under Section 5.02(a).

(v)Set forth on Schedule 4.01(v) hereto is a complete and accurate list of all Investments held by any Loan Party or any of its Subsidiaries on the date hereof, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

(w)Set forth on Schedule 4.01(w) hereto is a complete and accurate list of all Material Contracts of each Loan Party and its Subsidiaries, showing as of the date hereof the parties, subject matter and term thereof.  Each such Material Contract has been duly authorized, executed and delivered by all parties thereto, has not been amended or otherwise modified, is in full force and effect and is binding upon and enforceable against all parties thereto in accordance with its terms, and there exists no default under any Material Contract by any party thereto.

ARTICLE V

COVENANTS OF THE BORROWERS

SECTION 5.01.  Affirmative Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, BRW and, where specifically indicated, BCSI will:

(a)Compliance with Laws, Etc.  (i) Comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970 and (ii) except as provided in Section 5.01(e), obtain and maintain in effect all Governmental Authorizations that are necessary (A) to own or lease and operate their respective property and assets and to conduct their respective businesses as now conducted and as proposed to be conducted, except where and to the extent that the failure to obtain or maintain in effect any such Governmental Authorization, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, or (B) for the due execution, delivery or performance by BRW or any of its Subsidiaries of any of the Loan Documents or the Related Documents to which it is or is to be a party, or for the consummation of any aspect of the Transaction or any of the other transactions contemplated hereby and thereby.  This Section 5.01(a) shall not apply to compliance with Environmental Laws or Environmental Permits (which is the subject of Section 5.01(c)).

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(b)Payment of Taxes, Etc.  Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property; provided, however, that neither BRW nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.

(c)Compliance with Environmental Laws.  Comply, cause each of its Subsidiaries and use its best efforts (which efforts shall include ensuring that all applicable leases, licenses or other such agreements include provisions requiring such compliance) to cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all Environmental Laws and Environmental Permits; obtain and renew and cause each of its Subsidiaries to obtain and renew all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up Hazardous Materials from any of its properties, to the extent required by Environmental Laws, except where and to the extent that the failure to comply with Environmental Laws, obtain or renew Environmental Permits or to conduct such cleanup, removal, remedial or other action, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; provided, however, that neither BRW nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances.

(d)Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which BRW or such Subsidiary operates (it being understood that, to the extent consistent with prudent business practice of persons carrying on a similar business in a similar location, a program of self-insurance for first or other loss layers may be utilized in an aggregate amount not to exceed $50,000,000).

(e)Preservation of Corporate Existence, Etc.  Except as otherwise permitted under Section 5.02(d) or 5.02(e)(ix), preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its existence, legal structure, legal name (it being understood that legal name changes for BRW and any of its Subsidiaries (including BCI and its Subsidiaries) may be made so long as BRW makes arrangements acceptable to the Agents to timely refile financing statements and other filings relating to security interests), rights (charter and statutory), permits, licenses, approvals, privileges and franchises.

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(f)Visitation Rights.  Upon reasonable notice, at any reasonable time and from time to time, permit any of the Agents or any of the Lender Parties (coordinated through the Administrative Agent), or any agents or representatives thereof, to examine and, with the consent of BRW, which consent shall not be unreasonably withheld, make copies of and abstracts from the records and books of account of, and visit the properties of, each Borrower and any of its Subsidiaries, and to discuss the affairs, finances and accounts of each Borrower and any of its Subsidiaries with any of their officers or directors and, together with an authorized representative of a Loan Party, with their independent certified public accountants.

(g)Keeping of Books.  Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of BRW and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.

(h)Maintenance of Properties, Etc.  Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted.

(i)Transactions with Affiliates.  With respect to each Borrower, conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates on terms that are fair and reasonable and no less favorable to each Borrower or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a Person not an Affiliate (it being understood that any transaction involving the Oak Hill Debt, the Junior Notes or any Related Document that is expressly permitted under Section 5.02, any Permitted BCI Transaction, any transaction of the type described in Schedule 1.01 and any non-cash transition arrangements or other related services provided to or for the benefit of a buyer in connection with a transaction permitted under Section 5.02(e)(ix), including under any BRW Sale Arrangements, shall be deemed not to violate this Section 5.01(i)).

(j)Covenant to Guarantee Obligations and Give Security.  (I) Upon (A) the occurrence and during the continuance of a Default or (B) the Index Debt of BRW being rated lower than BB- by S&P or Ba3 by Moody’s, then each Borrower shall, in each case at such Borrower’s expense and to the fullest extent permitted under the Certificate of Designation and the BCI 9% Indenture (it being acknowledged by the Agents that all actions required to be taken under this subsection (j)(I) on or prior to the Effective Date have already been taken):

(1)as soon as practicable but in any event by April 15, 2002, furnish to the Administrative Agent a description of the real and personal properties of each of the Loan Parties and their respective Subsidiaries (other than the Excluded Entities) (by street address and property type maintained at such address) in detail reasonably satisfactory to the Administrative Agent;

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(2)by June 2, 2002, cause each Subsidiary (other than the Excluded Entities and a CFC) (to the extent it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or Guaranty Supplement, in form and substance satisfactory to the Administrative Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents,

(3) within 15 days thereafter duly execute and deliver, and cause each such Subsidiary (other than the Excluded Entities) and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver, to the Administrative Agent mortgages, pledges, assignments, security agreement supplements and other security agreements, as specified by and in form and substance satisfactory to the Administrative Agent, securing payment of all the Obligations of the applicable Loan Party, such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such real and personal properties other than:

a.fiber in which an IRU has been granted prior to the date hereof or pursuant to Section 5.02(e)(i) or 5.02(e)(viii)(B);

b.the Equity Interests of Wireless LLC held by Wireless Holdco;

c.the Spectrum Assets;

d.any item of real property of BRW or such Subsidiaries that has been irrevocably transferred under title documents satisfactory to the Agents to the Real Estate SPV under terms and conditions acceptable to the Agents (a “Transfer”); provided that if such real property is transferred out of the Real Estate SPV, the Real Estate SPV will be required to deliver mortgages, assignments, surveys (if requested by the Administrative Agent) and title insurance all in form and substance satisfactory to the Agents on such real property at or before the time of such transfer unless such real property is sold or otherwise transferred to a Person in a transaction permitted by Section 5.02(e);

e.any item of real property, the mortgage or Transfer, as the case may be, of which is prohibited by or would constitute a breach of or a default under or give rise to a right of termination under the underlying documentation, where despite the use of best efforts by BRW or such Subsidiaries to obtain a consent to so mortgage or Transfer, such consent cannot be obtained; provided that BRW or such Subsidiaries will attempt to obtain the

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consent to Transfer if a consent to mortgage any such property interest cannot be obtained;

f.any property interest that BRW has requested be excluded and as to which the Agents, after consultation with an independent consultant to be retained on behalf of the Agents (the “Consultant”), determine that a mortgage or Transfer, as the case may be, is not cost effective in relationship to the benefits to be received by the Lenders from the mortgage or Transfer of such property interest (a list of which real property interests excluded from the requirements of Section 5.01(j)(I) pursuant to clause (e) or (f) hereof will be provided to the Lenders as promptly as practicable by BRW);

provided, however, that:

(A)for purposes of this Section 5.01(j)(I)(3), the use of “best efforts” will not require the payment of any monetary consideration or expending continued efforts to obtain such consent if BRW has diligently followed all agreed upon procedures in attempting to obtain such consent unless, after BRW advises that it cannot obtain a particular consent, the Agents, in their discretion reasonably exercised and in consultation with the Consultant, determine that the value to the Lenders of such collateral warrants paying additional consideration or expending continuing efforts to obtain such consent;

(B)notwithstanding the foregoing, theAgents may request that BRW or its Subsidiaries (including BCI and its Subsidiaries) grant mortgages on additional real property (other than real property that is held in the Real Estate SPV) and provide surveys, title insurance or other reports specified in Section 5.02(j)(I)(6) on any real property (other than real property that is held in the Real Estate SPV) at any time in their sole discretion; and

(C)in the event that there is a change in the circumstances which gave rise to any real property interest being excluded from the requirements of this Section 5.01(j)(I) or the restrictions which prevented delivering documents hereunder or consummating a Transfer of such real property no longer exist, BRW and its Subsidiaries (including BCI and its Subsidiaries) shall promptly Transfer such real property to the Real Estate SPV or execute and deliver to the Administrative Agent all applicable documents required to be delivered under this Section 5.01(j)(I);

(D)if (1) CBT ceases to be subject to all regulation relating to telecommunications businesses by all federal, state and local

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governmental authorities which prohibits, restricts or requires regulatory approval for the (x) pledging of assets or (y) incurrence of indebtedness, and (2) any action described in clause (x) or (y) could not in the determination of BRW reasonably exercised be expected to result in any such regulatory authority taking an action or refusing to take an action which action or refusal to take any action could have a material adverse effect on CBT, then CBT shall cease to be an Excluded Entity and shall as promptly as practicable deliver to the Administrative Agent supplements to the Security Agreements and Subsidiary Guaranties in form and substance satisfactory to the Administrative Agent and shall as promptly as practicable take all steps necessary to comply with this Section 5.01(j).

(4)within 30 days thereafter, take, and cause such Subsidiary or such parent to take, whatever action (including, without limitation, the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on and security interests in the real and personal properties purported to be subject to the mortgages, pledges, assignments, security agreement supplements and security agreements delivered pursuant to this Section 5.01(j), enforceable against all third parties in accordance with their terms,

(5)within 35 days thereafter, deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent (x) as to the matters contained in clauses (1) through (4) above, as to such guaranties, guaranty supplements, mortgages, pledges, assignments, security agreement supplements and security agreements being legal, valid and binding obligations of each Loan Party party thereto enforceable in accordance with their terms, (y) as to the matters contained in clause (4) above, as to such recordings, filings, notices, endorsements and other actions being sufficient to create valid perfected Liens on such properties, and (z) as to such other matters as the Administrative Agent may reasonably request,

(6)as promptly as practicable thereafter, deliver to the Administrative Agent title search reports (review of which shall be limited to the verification of the transferees of such property except in the case of real properties for which mortgages are being delivered) on all real property held by BRW and its Subsidiaries (including BCI and its Subsidiaries but excluding Excluded Entities) as requested by the Administrative Agent, and upon the request of the Administrative Agent in its sole discretion, deliver to the Administrative Agent with respect to each parcel of real property owned or held by the entity that is the subject of such request, formation or acquisition title reports (review of which

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shall be limited to the verification of the transferees of such property except in the case of real properties for which mortgages are being delivered), surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance satisfactory to the Administrative Agent, provided, however, that title insurance policies, surveys and engineering, soils and other reports, and environmental assessment reports will not be required for any real property that is held in the Real Estate SPV, provided further to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent,

(7)upon the occurrence and during the continuance of a Default, promptly cause to be deposited any and all cash dividends paid or payable to it or any of its Subsidiaries from any of its Subsidiaries from time to time into the Administrative Agent’s Account, and with respect to all other dividends paid or payable to it or any of its Subsidiaries from time to time, promptly execute and deliver, or cause such Subsidiary to promptly execute and deliver, as the case may be, any and all further instruments and take or cause such Subsidiary to take, as the case may be, all such other action as the Administrative Agent may deem necessary or desirable in order to obtain and maintain from and after the time such dividend is paid or payable a perfected, first priority lien on and security interest in such dividends,

(8)at any time and from time to time, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent may deem necessary or desirable in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, mortgages, pledges, assignments, security agreement supplements and security agreements;

provided, however, that the Agents, acting jointly, may extend any of the time limits set forth above by up to 30 days (or up to an additional (x) 90 days, solely in the case of obtaining required approvals or consents for the pledging of assets, or (y) 120 days, solely in the case of obtaining required regulatory approvals for the pledging of assets)(it being understood that the Agents will grant any requested extension pursuant to this proviso if such extension is required solely because of the need to obtain regulatory approvals and BRW, BCI and their Subsidiaries are using their best efforts to obtain such approvals); and

(II)  Upon (A) the formation or acquisition of any new direct or indirect Subsidiaries by any Loan Party (other than CBT or any of CBT’s Subsidiaries) or (B) the date on which (x) all Excluded Equity Agreements in effect on the date hereof that limit, restrict or prohibit the creation, pledge or assignment of a security interest in the Excluded Equity Interests (as defined in the Security Agreements) are no longer in effect or (y) the creation, pledge or assignment of such security interest is no longer prohibited, then each Borrower shall, in each case at such Borrower’s expense:

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(1)within 10 days thereafter, cause each Subsidiary, to duly execute and deliver to the Administrative Agent a guaranty or Guaranty Supplement, in form and substance satisfactory to the Administrative Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents,

(2)within 15 days thereafter duly execute and deliver, and cause each such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver, to the Administrative Agent pledges, assignments, security agreement supplements and other security agreements, as specified by and in form and substance satisfactory to the Administrative Agent, securing payment of all the Obligations of the applicable Loan Party, such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such personal property,

(3)within 30 days thereafter, take, and cause such Subsidiary or such parent to take, whatever action (including, without limitation, the filing of Uniform Commercial Code financing statements) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on and security interests in the personal property purported to be subject to the pledges, assignments, security agreement supplements and security agreements delivered pursuant to this Section 5.01(j) enforceable against all third parties in accordance with their terms,

(4)within 35 days thereafter, deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent (x) as to the matters contained in clauses (1) through (3) above, as to such guaranties, Guaranty Supplements, pledges, assignments, security agreement supplements and security agreements being legal, valid and binding obligations of each Loan Party party thereto enforceable in accordance with their terms, (y) as to the matters contained in clause (3) above, as to such recordings, filings, and other actions being sufficient to create valid perfected Liens on such properties, and (z) as to such other matters as the Administrative Agent may reasonably request, and

(5)at any time and from time to time, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent may deem necessary or desirable in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, pledges, assignments, security agreement supplements and security agreements.

(k)Further Assurances.  (i)  Promptly upon request by any Agent, or any Lender Party through the Administrative Agent, in the case of each Borrower, correct, and cause each of its Subsidiaries promptly to correct, any material defect or error that

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may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and

(ii)Promptly upon request by any Agent, or any Lender Party through the Administrative Agent, in the case of each Borrower, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignment, transfers, certificates, assurances and other instruments as any Agent, or any Lender Party through the Administrative Agent, may reasonably require from time to time in order to (A) carry out more effectively the purposes of the Loan Documents, (B) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (C) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (D) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

(l)Performance of Related Documents.  Perform and observe, and cause each of its Subsidiaries to perform and observe, all of the terms and provisions of each Related Document to be performed or observed by it, maintain each such Related Document in full force and effect (other than in connection with a BCI Exchange to the extent permitted by Section 5.02), enforce such Related Document in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Related Document such demands and requests for information and reports or for action BRW or any of its Subsidiaries is entitled to make under such Related Document.

(m)Preparation of Environmental Reports.  Upon the occurrence of a Default or other circumstances that may reasonably be likely to have a Material Adverse Effect, at the request of the Administrative Agent, provide to the Lender Parties within 60 days after such request, at the expense of BRW, an environmental site assessment report in connection with such Default or other circumstances for any of its or its Subsidiaries’ properties described in such request, prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance, removal or remedial action in connection with any Hazardous Materials on such properties; without limiting the generality of the foregoing, if the Administrative Agent determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Administrative Agent may retain an environmental consulting firm to prepare such report at the expense of BRW, and BRW hereby grants and agrees to cause any

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Subsidiary that owns any property described in such request to grant at the time of such request to the Agents, the Lender Parties, such firm and any agents or representatives thereof an irrevocable non-exclusive license, subject to the rights of tenants, to enter onto their respective properties to undertake such an assessment.

(n)Compliance with Terms of Leaseholds.  Make all payments and otherwise perform all obligations in respect of all leases of real property to which BRW or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

(o)Interest Rate Hedging.  Maintain in full force and effect each of the interest rate Hedge Agreements in existence on the Effective Date that were entered into pursuant to Section 5.01(o) of the Existing Credit Agreement to the extent such Hedge Agreements were required thereunder immediately prior to the occurrence of the Effective Date.

(p)Performance of Material Contracts.  Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as BRW or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

(q)[Intentionally Omitted].

(r)Cash Management System. Maintain the cash management system with Broadwing Financial LLC, as more particularly described in the attached Schedule 5.01(r) (the “BRW Cash Management System”).

(s) Separate Corporate Existence of Special Purpose Vehicles.  Cause each of Wireless Holdco and, so long as any Collateral is held thereby, Broadwing Communications Real Estate Services LLC (each an “SPV”) to comply in all respects with the terms and provisions of the corporate separateness covenants set forth in the supplements to the Subsidiary Guaranties to which each SPV is a party as if such covenants were set forth in full in this Agreement.

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(t)Separate Corporate Existence of BCI Group.   With respect to each Borrower, comply and cause each of its Subsidiaries to comply with the following to the extent applicable to it:

(i)to the extent that any member of the BCI Group has cash, each member of the BCI Group will maintain its own deposit account or accounts, separate from those of the BRW Group, with commercial banking institutions and ensure that its funds will not be used for other than its corporate uses, nor will such funds be commingled with the funds of any member of the BRW Group and vice versa (except as contemplated by paragraph (r) above);

(ii)each member of the BCI Group will maintain a separate address from the address of any member of the BRW Group and vice versa, or to the extent any members of the BCI Group have offices in the same location as any members of the BRW Group, maintain a fair and appropriate allocation of overhead costs among them, with each such entity bearing its fair share of such expense;

(iii)the BCI Group will issue separate financial statements prepared not less frequently than quarterly and prepared in accordance with GAAP (except for the omission of certain footnotes and other presentation items required by GAAP with respect to audited financial statements), which financial statements need not be separately audited or reviewed by an independent accounting firm;

(iv)each member of the BCI Group will conduct its affairs strictly in accordance with its certificate of formation and limited liability company agreement (or similar constitutive documents) and observe all necessary, appropriate and customary company (or corporate) formalities, including, but not limited to, holding all regular and special members’ and board of managers’ (or stockholders’ and directors’ or other similar Persons) meetings appropriate to authorize all company (or corporate) action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts, to the extent applicable;

(v)other than as required under the Loan Documents or pursuant to the terms of any documents governing any Existing Debt, and except for any transaction of the type described on Schedule 1.01 and any non-cash transition arrangements or other related services provided to or for the benefit of a buyer in connection with a transaction permitted under Section 5.02(e)(ix), including any BRW Sale Arrangements, each member of the BCI Group will refrain from assuming or guaranteeing any of the liabilities or pledging any of its assets for the benefit of any member of the BRW Group and each member of the BRW Group will refrain from assuming or guaranteeing any of the liabilities or pledging any of its assets for the benefit of any member of the BCI Group or holding out its

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credit as being available to satisfy the obligations of the BCI Group;

(vi)each member of the BCI Group will use its best efforts to refrain from using the stationery of any member of the BRW Group but instead effecting all written communications in its own name (it being understood that it may use the same domain name for electronic mail as members of the BRW Group) and vice versa; and

(vii)each member of the BCI Group will conduct all its business in its own name and use its best efforts to avoid the appearance that it is conducting business on behalf of any member of the BRW Group and vice versa; provided that in the event either Group conducts business on behalf of any member of the other Group, such agency relationship shall be fully disclosed to applicable third parties when acting in such capacity, in each case except for any transaction of the type described on Schedule 1.01 and any non-cash transition arrangements or other related services provided to or for the benefit of a buyer in connection with a transaction permitted under Section 5.02(e)(ix), including any BRW Sale Arrangements.

(u)Minimum Liquidity Plan.   In the event that the Minimum Liquidity of BRW and its Subsidiaries is below $50,000,000 for more than 5 consecutive Business Days, (i) notify the Agents thereof in writing within 3 Business Days after the end of such 5 Business Day period, (ii) prepare a contingent liquidity plan for BRW to be delivered to the Agents within 30 days after the date of such notification which plan shall demonstrate to the reasonable satisfaction of the Agents the actions that BRW will take to ensure that the Minimum Liquidity of BRW will be greater than $50,000,000 through December 31, 2005 and (iii) meet with the Agents to discuss the contingent liquidity plan and the finances of BRW as they may reasonably request and provide the Agents access to the books and records of BRW so that the Agents may complete such due diligence analysis of the liquidity and finances of BRW as they reasonably deem necessary.

SECTION 5.02.  Negative Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, no Borrower will, at any time:

(a)Liens, Etc.  Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a financing statement that names any Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, except:

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(i)Liens created under the Loan Documents;

(ii)Permitted Liens;

(iii)Liens existing on the date hereof and described on Schedule 4.01(u) hereto;

(iv)purchase money Liens upon or in real property or equipment acquired or held by such Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of any such property or equipment to be subject to such Liens, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that do not secure the purchase price), or extensions, renewals, refundings or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any property other than the property or equipment being acquired, constructed or improved, and no such extension, renewal, refunding or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed, refunded or replaced (except to the extent of financed construction or improvement); and provided further that the aggregate principal amount of the Debt secured by Liens permitted by this clause (iv) shall not exceed the amount permitted under Sections 5.02(b)(iii)(B) and 5.02(b)(v)(B) at any time outstanding;

(v)Liens arising in connection with Capitalized Leases permitted under Sections 5.02(b)(iii)(C) and 5.02(b)(v)(C); provided that no such Lien shall extend to or cover any Collateral or assets other than the assets subject to such Capitalized Leases;

(vi)Liens (including financing statements and undertakings to file financing statements) arising solely from precautionary filings of financing statements under the Uniform Commercial Code of the applicable jurisdiction in respect of equipment leases under which the Borrowers or any of their Subsidiaries is the lessee; provided that any such Lien in respect of any equipment lease is limited to the equipment being leased under such lease and the proceeds thereof;

(vii)Leases, subleases, licenses and sublicenses of the type referred to in Section 5.02(e)(vii) granted to third parties in the ordinary course of business, in each case not interfering in any respect with the Liens of the Administrative Agent or the Lenders granted by the Loan Documents and not otherwise prohibited by the terms of the Loan Documents;

(viii)banker’s liens and rights of offset of the holders of Debt of the Borrowers or any Subsidiary on monies deposited by the Borrowers or any

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Subsidiary with such holders of Debt in the ordinary course of business of the Borrowers or any such Subsidiary;

(ix)other Liens that do not, in the aggregate, attach to a material portion of the assets of the Borrowers or any of their Subsidiaries and do not secure obligations in an aggregate amount in excess of $5,000,000;

(x)Liens for judgments not in excess of $30,000,000 for which appropriate reserves have been maintained in accordance with GAAP and Liens for judgments in excess of $30,000,000 in respect of which (i) no enforcement proceedings have been commenced by any creditor upon such judgment or (ii) there has been no period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, has not been in effect;

(xi)Liens, leases and grants of indefeasible rights of use, rights of use and similar rights in respect of capacity, dark fiber and similar assets of BRW, BCI and their Subsidiaries in the ordinary course of business either existing as of the date hereof or as permitted under Section 5.02(e)(i) or 5.02(e)(viii)(B);

(xii) any Lien, lease or other grant on or of any assets of BRW or its Subsidiaries other than assets constituting Collateral under the Loan Documents that at the time created, incurred, assumed or otherwise arising constituted or resulted from a Permitted BCI Transaction so long as at such time no BCI Event of Default specified under Section 7.03(b) shall have occurred with respect to BCI or any of its Subsidiaries (other than a proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code); and

(xiii) any escrow arrangement funded with or constituted from asset sale proceeds in respect of any agreement providing for Permitted Obligations (including escrow arrangements under each of the Escrow Agreements) and Liens on Acquired Assets (as defined in the BCSI Sale Agreement) under the Security Agreement (as defined in the BCSI Sale Agreement).

(b)Debt.  Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:

(i)in the case of BRW,

(A)Debt in respect of Hedge Agreements maintained under Section 5.01(o) and other Hedge Agreements not in violation of Section 5.02(n); provided that no Hedge Agreement with any Person other than a Lender Party (or Affiliate of a Lender Party) may be a Secured Hedge Agreement,

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(B)New Notes issued for cash (without duplication of clause (E) below); provided that (x) 100% of the first $150 million (after giving effect to the issuance of the Junior Notes) of Net Cash Proceeds from the issuance of New Notes shall be applied to prepay the Facilities, with such prepayment to be allocated ratably to the Revolving Credit Advances (as set forth in Section 2.06(b)(v)), the Term A Advances, the Term B Advances and the Term C Advances and to the remaining installments of the Term A Advances,  Term B Advances and Term C Advances, respectively, pro rata and (y) 100% of the Net Cash Proceeds in excess of $150 million (after giving effect to the issuance of the Junior Notes) from the issuance of New Notes shall be applied to prepay the Facilities, with such prepayment to be allocated first ratably to the Term A Advances, the Term B Advances and the Term C Advances and applied to the remaining installments thereof pro rata and second to the Revolving Credit Advances as set forth in clause 2.06(b)(v) (it being understood that all expenses or other amounts deducted in determining the calculation of Net Cash Proceeds from the issuance of New Notes at the same time shall be applied equally over the total principal amount of the New Notes being issued at such time); provided that the Administrative Agent shall have received a certificate of a Responsible Officer of BRW certifying that after giving effect to such issuance, BRW and its Subsidiaries are on a pro forma basis in compliance with Section 5.04 during the Facilities Period,

(C)Paid in kind interest in respect of the Oak Hill Debt, the Junior Notes, and any other Debt permitted under this Section,

(D)Debt owed to a wholly owned Subsidiary of BRW permitted under Section 5.02(f)(xi); provided that such Debt (x) shall constitute Pledged Debt, (y) shall be on terms acceptable to the Agents and (z) if evidenced by promissory notes, shall be in form and substance satisfactory to the Agents and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Administrative Agent pursuant to the terms of the Security Agreements; provided further, however, that BRW may not incur such Debt to service Debt under the New Notes or make payments in respect of Other Permitted Equity if a Blocking Event has occurred and is continuing,

(E)Debt in respect of the Junior Notes and any Debt extending the maturity of, or refunding, renewal or refinancing, in whole or in part, the Junior Notes, provided that the terms of any such extending, refunding, renewal or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Loan Documents, provided further that (1) the principal amount of such Debt shall not be increased above the principal amount thereof outstanding (plus accrued interest and fees thereon) immediately prior to such

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extension, refunding, renewal or refinancing, (2) the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding, renewal or refinancing, (3) such Debt as so refunded, refinanced or renewed shall not mature prior to the stated maturity date or mandatory redemption date of the Junior Notes being so extended, refunded, refinanced or renewed, (4) such extended, refunded, renewed or refinanced Debt shall be subordinated to the Obligations under the Facilities to at least the same extent as the Junior Notes, (5) such Debt as so refunded, refinanced or renewed shall not contain any grant of collateral or rights to collateral or any covenants or defaults that are more restrictive, or subordination terms that are more narrow, in any material respect than the terms of the Junior Notes being so extended, refunded, refinanced or renewed, and (6) such Debt as so refunded, refinanced or renewed will not provide any put, redemption or prepayment right, or any amortization or maturity date, prior to the end of the Facilities Period, and

(F)Debt of BRW incurred in connection with a BCI Exchange including Debt of BRW issued to a third party provided that the proceeds of such Debt are applied to the prepayment or retirement of the BCI Senior Subordinated Notes (and any Debt extending the maturity of, or refunding, renewing or refinancing, in whole or in part, such Debt of BRW, provided that the terms of any such extending, refunding, renewal or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, satisfy the requirements set forth in clause (E) above with each reference therein to Junior Notes being replaced with a reference to the Debt under this clause (F)); provided that such Debt (v) contains only pay in kind interest payment obligations during the Facilities Period, (w) is not convertible or exchangeable for any Equity Interests other than common stock of BRW, (x) the aggregate amount of cash paid in respect of redemptions, repayments or fees in connection with all BCI Exchanges shall not exceed the amounts agreed to in writing by BRW and the Agents and (y) any instrument or agreement evidencing such Debt entered into in connection with any BCI Exchange will not contain any grant of collateral or rights to collateral or any covenants or defaults that are more restrictive, or subordination terms that are more narrow (e.g., no less favorable to the Lender Parties), in any material respect than the terms of the Oak Hill Indenture and will not provide any put, redemption or prepayment right, or any amortization or maturity date, prior to the end of the Facilities Period;

(ii)in the case of any Subsidiary of BRW (including BCI and its Subsidiaries), Debt owed to BRW or to a wholly owned Subsidiary of BRW, provided that, in each case, such Debt (A) shall constitute Pledged Debt, (B) shall be on terms acceptable to the Agents, (C) if evidenced by promissory notes, in form and substance satisfactory to the Agents and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan

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Documents to which such holder is a party and delivered to the Administrative Agent pursuant to the terms of the Security Agreements and (D) in the case of BCI or any of its Subsidiaries, the incurrence of such Debt is permitted under Section 5.02(f)(xiii); and

(iii)in the case of BRW and its Subsidiaries other than Wireless LLC,

(A)Debt under the Loan Documents,

(B)Debt secured by Liens permitted by Section 5.02(a)(iv) not to exceed $75,000,000 in aggregate principal amount at any time outstanding; provided that any Debt outstanding under this clause (B) of a type described in Section 5.02(b)(v)(B), will automatically reduce the amount of Debt of such type permitted to be outstanding at such time under Section 5.02(b)(v)(B),

(C)Capitalized Leases not to exceed in the aggregate $125,000,000 at any time outstanding,and to the extent included in “Capitalized Leases” for purposes of GAAP, IRUs incurred in the ordinary course of business; provided that any Debt outstanding under this clause (C) of a type described in Section 5.02(b)(v)(C), will automatically reduce the amount of Debt of such type permitted to be outstanding at such time under Section 5.02(b)(v)(C),

(D)the Surviving Debt (other than Debt under (iii)(C) above), and any Debt extending the maturity of, or refunding, renewal or refinancing, in whole or in part, any Surviving Debt, provided that the terms of any such extending, refunding, renewal or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Loan Documents, provided further that (1) the principal amount of such Surviving Debt shall not be increased above the principal amount thereof outstanding (plus accrued interest and fees thereon) immediately prior to such extension, refunding, renewal or refinancing, (2) the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding, renewal or refinancing, (3) such Surviving Debt as so refunded, refinanced or renewed shall not mature prior to the stated maturity date or mandatory redemption date of the Surviving Debt being so extended, refunded, refinanced or renewed, (4) if the Surviving Debt being so extended, refunded, refinanced or renewed is subordinated in right of payment or otherwise to the Obligations of the Borrowers or any of their Subsidiaries under and in respect of the Loan Documents, such extended, refunded, renewed or refinanced Surviving Debt shall be subordinated to such Obligations to at least the same extent, (5) such Surviving Debt as so refunded, refinanced or renewed shall not contain any grant of collateral or rights to collateral or any covenants or defaults that are more restrictive, or

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subordination terms that are more narrow, in any material respect than the terms of the Surviving Debt being so extended, refunded, refinanced or renewed and (6) such Surviving Debt as so refunded, refinanced or renewed will not provide any put, redemption or prepayment right, or any amortization or maturity date, prior to the end of the Facilities Period,

(E)unsecured Debt incurred in the ordinary course of business for borrowed money or for the deferred purchase price of property or services, maturing after the Final Maturity Date of the Term C Facility, and aggregating, on a Consolidated basis, not more than $65,000,000 in aggregate principal amount at any one time outstanding,

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

(G) unsecured short-term Debt in an aggregate principal amount not to exceed $20,000,000,

(H)Contingent Obligations of BRW or any of its Subsidiaries that are Subsidiary Guarantors guaranteeing all or any portion of the outstanding Obligations of any of the other Loan Parties other than with respect to the Senior Notes or in connection with the BCI Exchange; provided that (i) such Obligations are not otherwise prohibited under the terms of the Loan Documents and such Contingent Obligations are unsecured or (ii) in the case of such outstanding Contingent Obligations in respect of obligations of BCI or any of its Subsidiaries, such Contingent Obligations are permitted under Section 5.02(f)(xiii),

(I)Debt consisting of debits and credits among the Subsidiaries of BRW arising under the BRW Cash Management System,

(J)Debt of one or more Foreign Subsidiaries arising in the ordinary course of business in an aggregate principal amount not to exceed $5,000,000 at any time outstanding; provided that all such Debt incurred pursuant to this subclause (K) shall be nonrecourse in all respects to the property and assets of the Loan Parties and their Subsidiaries (other than one or more of the Foreign Subsidiaries),

(K)Debt consisting of guaranties of the obligations of BRW under the Junior Notes,

(L)Debt constituting Permitted Obligations, and

(M)Debt that at the time created, incurred, assumed or otherwise arising constituted a Permitted BCI Transaction so long as at such time no BCI Event of Default specified under Section 7.03(b) shall have occurred with respect to BCI or any of its Subsidiaries (other than a

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proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code); and

(iv)in the case of Wireless LLC,

(A)Debt relating to the acquisition of the Spectrum Assets not to exceed $60,000,000 in aggregate principal amount at any time outstanding,

(B)Capitalized Leases, Debt secured by Liens permitted by Section 5.02 (a)(iv) or unsecured Debt, in the case of such unsecured Debt, maturing after the Final Maturity Date of the Term C Facility, in the ordinary course of business for borrowed money or for the deferred purchase price of property or services, not to exceed $50,000,000 in aggregate principal amount at any time outstanding under this clause (B), provided that any Debt outstanding under this clause (B) of a type described in Section 5.02(b)(iii)(B), (C) or (E), as the case may be, will automatically reduce the amount of Debt of such type permitted to be outstanding at such time under such clause (B), (C) or (E), as applicable,

(C)Debt of the type and subject to the restrictions set forth in Sections 5.02(b)(ii) and 5.02(b)(iii)(F) and (I), and

(D)Debt (x) existing on May 1, 2002 and (y) refinancings of such Debt, in the case of clause (y), subject to the restrictions set forth in Section 5.02(b)(iii)(D) except that no Surviving Debt to be refinanced pursuant to this clause (D) that is owed to BRW or to a Subsidiary of BRW may be refinanced with Debt owed to a Person other than a Subsidiary of BRW; provided that any Debt outstanding at any time under clause (x) of a type described in any clause of Section 5.02(b)(iii) will automatically reduce the amount of Debt of such type permitted to be outstanding at such time under such clause of Section 5.02(b)(iii), as applicable.

(v)in the case of BCI and its Subsidiaries,

(A)Debt under the Loan Documents,

(B)Debt secured by Liens permitted by Section 5.02(a)(iv) existing on the Effective Date not to exceed $75,000,000 in aggregate principal amount at any time outstanding, provided that any Debt outstanding under this clause (B) of a type described in Section 5.02(b)(iii)(B), will automatically reduce the amount of Debt of such type permitted to be outstanding at such time under Section 5.02(b)(iii)(B),

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(C)Capitalized Leases existing on the Effective Date not to exceed in the aggregate $125,000,000 at any time outstanding,and to the extent included in “Capitalized Leases” for purposes of GAAP, IRUs incurred in the ordinary course of business provided that any Debt outstanding under this clause (C) of a type described in Section 5.02(b)(iii)(C), will automatically reduce the amount of Debt of such type permitted to be outstanding at such time under Section 5.02(b)(iii)(C),

(D)the Surviving Debt (other than Debt under Section 5.02(b)(v)(C) above), and any Debt extending the maturity of, or refunding, renewal or refinancing, in whole or in part, any Surviving Debt, provided that the terms of any such extending, refunding, renewal or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Loan Documents, provided further that (1) the principal amount of such Surviving Debt shall not be increased above the principal amount thereof outstanding (plus accrued interest and fees thereon) immediately prior to such extension, refunding, renewal or refinancing, (2) the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding, renewal or refinancing (other than in connection with a BCI Exchange), (3) such Surviving Debt as so refunded, refinanced or renewed shall not mature prior to the stated maturity date or mandatory redemption date of the Surviving Debt being so extended, refunded, refinanced or renewed, (4) if the Surviving Debt being so extended, refunded, refinanced or renewed is subordinated in right of payment or otherwise to the Obligations of the Borrowers or any of their Subsidiaries under and in respect of the Loan Documents, such extended, refunded, renewed or refinanced Surviving Debt shall be subordinated to such Obligations to at least the same extent, (5) such Surviving Debt as so refunded, refinanced or renewed shall not contain any grant of collateral or rights to collateral or any covenants or defaults that are more restrictive, or subordination terms that are more narrow, in any material respect than the terms of the Surviving Debt being so extended, refunded, refinanced or renewed and (6) such Surviving Debt as so refunded, refinanced or renewed will not provide any put, redemption or prepayment right, or any amortization or maturity date, prior to the end of the Facilities Period,

(E)Debt in respect of intercompany notes issued by BCI or its Subsidiaries to any member of the BRW Group,

(F)Debt under the Escrow Agreements or under the Security Agreement (as defined in the BCSI Sale Agreement) and all joint and several obligations of the Sellers (as defined in the BCSI Sale Agreement) under the BCSI Sale Agreement,

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

(H)Debt consisting of debits and credits among BCI and its  Subsidiaries arising under the BRW Cash Management System,

(I)unsecured Debt in an amount not to exceed $10,000,000, and

(J)Capitalized Leases and vendor financing entered into after the Effective Date not to exceed in the aggregate $10,000,000 at any time outstanding.

(c)Change in Nature of Business.  Make, or permit any of its Subsidiaries to make, any material change in the nature of its business as carried on at the date hereof, it being agreed that no transaction under Section 5.02(e)(ix) shall constitute such a change.

(d)Mergers, Etc.  Merge into or consolidate with any Person or permit any Person to merge into it, or permit any of its Subsidiaries to do so, except that:

(i)any Subsidiary of BRW may merge into or consolidate with any other Subsidiary of BRW and any Subsidiary of BCI may merge into or consolidate with any other Subsidiary of BCI, provided that, in the case of any such merger or consolidation, the Person formed by such merger or consolidation shall be a wholly owned Subsidiary of BRW or BCI, as the case may be, provided further that, in the case of any such merger or consolidation to which a Subsidiary Guarantor is a party, the Person formed by such merger or consolidation shall be a Subsidiary Guarantor (or, any transaction to which BCSI is a party, a Borrower);

(ii)BRW may merge with or into any wholly owned Subsidiary of BRW that is formed solely for the purpose of effecting a corporate name change and the transfer of related intellectual property, provided that BRW is the surviving corporation in respect of such merger;

(iii)after the consummation of a sale of all or substantially all of the assets of BCI and its Subsidiaries in accordance with Section 5.02(e)(ix) or the consummation of a confirmed plan of reorganization under Chapter 11 of the Federal Bankruptcy Code with respect to BCI, Cincinnati Bell Any Distance, Inc. may merge with or into Broadwing Telecommunications Inc.; provided that the surviving corporation in respect of such merger shall be deemed to be a Subsidiary of BRW for all purposes hereunder notwithstanding that it may be a Subsidiary of BCI, and BRW shall deliver written notice to the Administrative Agent to that effect;

(iv)any Mutual Subsidiary may merge into another Mutual Subsidiary or into BCSI, and

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(v)following the completion of a BCI Exchange in respect of 66 2/3% or more of the outstanding BCI Exchangeable Preferred Stock, BCI may merge with a newly formed special purpose Subsidiary of BRW, provided that the surviving corporation in respect of such merger shall be deemed to be BCI for all purposes hereunder, including without limitation, the covenants set forth in Section  5.01(t);

provided, however, that in each case, immediately after giving effect thereto, no event shall occur and be continuing that constitutes a Default and, in the case of any such merger to which BCSI is a party, BCSI is the surviving corporation.

(e)Sales, Etc., of Assets.  Sell, lease, transfer or otherwise dispose of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire any assets other than Inventory to be sold in the ordinary course of its business, except:

(i)dispositions of inventory in the ordinary course of its business,  including, without limitation, fiber swaps and capacity swaps in the ordinary course of business;

(ii)dispositions of equipment which, in the aggregate during any Fiscal Year, have a fair market value or book value, whichever is greater, of $250,000 or less;

(iii)dispositions of property that is substantially worn, damaged, obsolete or, in the reasonable judgment of the applicable Borrower, no longer best used or useful in the conduct of its business or operations or that of any of its Subsidiaries;

(iv)transfers of assets necessary to give effect to merger or consolidation transactions permitted by Section 5.02(d); provided, however, that no assets shall be transferred hereunder by any Loan Party to CBT or its Subsidiaries in an amount exceeding $1,000,000 in book value of assets;

(v)the disposition of cash or investment securities in the ordinary course of management of the investment portfolio of the applicable Borrower and its Subsidiaries and any disposition of any Investment acquired as consideration received in respect of or as a result of any transaction under Section 5.02(e)(ix);

(vi)the sale or discount without recourse of delinquent accounts receivable or notes receivable for collection purposes, or the conversion or exchange of delinquent accounts receivable into or for notes receivable in connection with the compromise or collection thereof, each in the ordinary course of business and not intended to constitute a financing arrangement;

(vii)operating leases entered into in the ordinary course of business and subleases of real property and licenses of intellectual property in the ordinary

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course of its business, in each case, not intended to constitute a financing arrangement;

(viii)so long as immediately before and after giving effect to such asset sale, no event shall occur and be continuing that constitutes a Default, Restricted Asset Dispositions.  “Restricted Asset Dispositions” means

(A) any sale of assets of BRW and its Subsidiaries not otherwise permitted to be sold, leased, transferred or disposed of pursuant to this Section 5.02(e) so long as the fair market value of all of the property and assets of BRW and its Subsidiaries so sold, leased, transferred or otherwise disposed of pursuant to this clause (viii) does not exceed $50,000,000 per annum, provided, that (x) the gross proceeds received from any such sale shall be at least equal to the fair market value of the property and assets so sold, leased, transferred or otherwise disposed of, determined at the time of such sale, lease, transfer or other disposition and (y) at least 80% of the value of the aggregate consideration received from any such sale, lease, transfer or other disposition shall be in cash and shall be received within 5 Business Days after the date of consummation of such transaction; or

(B) any sale of or granting of any interest in dark fiber or IRUs in dark fiber or fiber capacity, provided (i) that such sale or granting would not result in BRW and its Subsidiaries having the cumulative indefeasible right to use the telecommunications capacity on less than 12 Backbone Fibers, and (ii) that the Responsible Officers or Board of Directors, as the case may be, of BRW has determined in good faith that the disposition of the fiber capacity involved in such sale or granting would not cause a shortage of fiber capacity to BRW or any of its Subsidiaries that would interfere with BRW’s or any of its Subsidiaries’ ability to continue to provide telecommunications services at the then current level and those levels projected over the term of this Agreement,

provided that, BRW shall, on the date of receipt by any Loan Party or any of its Subsidiaries of the Net Cash Proceeds from any such sale, lease, transfer, or other disposition pursuant to this subclause (viii), prepay the Advances pursuant to, and in the amount and order of priority set forth in, Section 2.06(b)(ii), as specified therein unless such Net Cash Proceeds in an amount not to exceed $20,000,000 in any Fiscal Year are reinvested in the existing lines of business as of the Effective Date of BRW and its Subsidiaries with reasonable promptness and, in any event, not later than 3 months from the date of receipt thereof.  The failure of BRW to prepay the Advances with such Net Cash Proceeds on the date of receipt of such proceeds shall constitute a representation by BRW as of such date that the Net Cash Proceeds from such sale, lease, transfer or other disposition will be reinvested in the existing lines of business of BRW and its Subsidiaries with reasonable promptness and, in any event, not later than 3 months from the date of

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receipt thereof and that such reinvested Net Cash Proceeds do not exceed $20,000,000 in aggregate for such Fiscal Year.  The quarterly compliance certificate of the Chief Financial Officer of BRW delivered pursuant to Section 5.03(c) shall contain a certification by such officer that all such Net Cash Proceeds received during such fiscal quarter from each asset sale pursuant to this subclause (viii) will be so reinvested within such time period and all such Net Cash Proceeds so reinvested during such Fiscal Year do not exceed such dollar limit.  A Responsible Officer of BRW shall notify the Administrative Agent in writing on the date of receipt of such Net Cash Proceeds in the event that such Net Cash Proceeds will not be so reinvested within such 3 month period or if the amount of reinvested Net Cash Proceeds exceeds $20,000,000 in such Fiscal Year and such Net Cash Proceeds shall be applied within 3 Business Days following receipt of such Net Cash Proceeds to prepay the Advances outstanding at such time pursuant to, and in the amount and order of priority set forth in Section 2.06(b)(ii);

(ix)the sale, lease, transfer or other disposition of all or substantially all of the assets of BCI and its Subsidiaries for cash or other consideration and/or the assumption of liabilities of BCI and its Subsidiaries; provided that:

(A)so long as no BCI Event of Default specified under Section 7.03(b) shall have occurred with respect to BCI or any of its Subsidiaries (other than a proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code), promptly after the determination of the BCI Net Cash Proceeds in respect thereof, 60% of the BCI Net Cash Proceeds from any such disposition shall be applied to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii),

(B)if a BCI Event of Default specified under Section 7.03(b) (other than a proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code) shall have occurred and be continuing with respect to BCI or any of its Subsidiaries, promptly after the determination of the BCI Net Cash Proceeds in respect thereof, 100% of the Net Cash Proceeds from any such disposition shall be applied to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii),

(C)the remaining 40% of BCI Net Cash Proceeds (together with any unused portion of the BCI Maximum Investment) may be applied (x) to the prepayment of the BCI Senior Subordinated Notes and

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the BCI 12 1/2% Senior Notes and (y) to amounts paid in connection with a BCI Exchange to the extent permitted under Section 5.02(v),

(D)collected cash balances remaining at BCI and its Subsidiaries on the first anniversary of such disposition that are not required in the ongoing business of BCI and its Subsidiaries and are not being held in reserves taken in respect of good faith estimates of amounts that may be required to be paid in respect of non-discharged liabilities or claims in the future shall be applied to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii),

(E)BRW may retain part of the Net Cash Proceeds for the payment of current ordinary course operating expense obligations of BCI and its Subsidiaries and in respect of  reserves in accordance with GAAP for good faith estimates of amounts that may be required to be paid in respect of non-discharged liabilities or claims in the future; provided that (w) BRW shall advise the Administrative Agent of the aggregate amount so retained, (x) such amounts shall be applied to prepay Revolving Credit Borrowings (without any reduction of the Revolving Credit Commitments) and a portion of the Revolving Credit Commitments (the “Reserved Commitments”) equal to such amount shall thereafter be available solely for the uses specified in this paragraph (E) or to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii) (it being understood that if BRW intends that any portion of the Revolving Credit Borrowing is to be used for any such purpose it shall give the Administrative Agent written notice of the amount thereof to be so used and the amount of the Reserved Commitments remaining after giving effect to such use), (y) at the time BRW determines that all such operating expenses or such non-discharged liabilities or contingent liabilities are actually paid or otherwise satisfied, BRW shall so advise the Administrative Agent and shall make a request for a Revolving Credit Borrowing  in the amount of the unused portion of the Reserved Commitments and shall apply the proceeds of such Borrowing to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii), and (z) from time to time, if BRW determines that the unused portion of the Reserved Commitments exceeds the amount of all such operating expenses or such non-discharged liabilities or contingent liabilities that have not at such time yet been paid or otherwise satisfied, BRW may so advise the Administrative Agent and make a request for a Revolving Credit Borrowing in the amount of such excess and apply the proceeds of such Borrowing to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii), provided further that (1) upon the occurrence of a

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Default under Section 7.01(a), (f) or 7.03(b) or an Event of Default, a request for a Revolving Credit Borrowing shall automatically be deemed to have been made by BRW in an amount equal to the amount of Reserved Commitments or (2) upon the request of the Agents upon the occurrence of any other Default (other than a Default specified in clause (1) above) or in the event that the Minimum Liquidity (including the amount of the Reserved Commitments) is less than $50,000,000, BRW shall make a request for a Revolving Credit Borrowing in an amount equal to such Reserved Commitments and upon such request or deemed request, (x) the proceeds of such Revolving Credit Borrowing shall be deposited by BRW to a deposit account maintained with the Administrative Agent in which the Administrative Agent, for the benefit of the Lender Parties, has a security interest pursuant to the terms of the Security Agreements, and (y) such funds will be held in such deposit account as Collateral for the Obligations hereunder pursuant to the terms of the Security Agreements; provided still further that (x) so long as no Default under Section 7.01(a), (f) or 7.03(b) or Event of Default exists, BRW may withdraw funds from such account in accordance with the terms of the Security Agreements for the uses specified in this paragraph (E) or to prepay the Advances in the order of priority set forth in Section 2.06(b)(ii) and (y) if, at the time such operating expenses or such non-discharged liabilities or contingent liabilities are actually paid or otherwise satisfied, the amount of the funds reserved therefor exceeds the amount paid or otherwise satisfied, then BRW shall prepay the Advances in accordance with Section 2.06(b)(ii) in an amount equal to such excess reserve, and

(F)BRW shall use commercially reasonable efforts to dispose of any consideration (other than cash, assumption of liabilities and any Equity Interest in C III Communications, LLC, or any Affiliate thereof not to exceed 5% of the total Equity Interests outstanding of such issuance, in connection with the BCSI Sale Agreement) received in respect of such sale, lease, transfer or other disposition for cash as promptly as reasonably practicable and for fair value subject to restrictions on sales of such non-cash assets contained in any agreement or instrument in respect of such non-cash asset and shall promptly thereafter prepay the Advances in accordance with Section 2.06(b)(ii) in an amount equal to 60% of such BCI Net Cash Proceeds; and

(x)any sale, lease, transfer or other disposition of any asset of BRW and its Subsidiaries that constituted or resulted from a Permitted BCI Transaction so long as at such time no BCI Event of Default specified under Section 7.03(b) shall have occurred with respect to BCI or any of its Subsidiaries (other than a

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proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code).

(f)Investments in Other Persons.  Make or hold, or permit any of its Subsidiaries to make or hold, any Investment in any Person, unless such investment satisfies the requirements of one or more of (i) through (xiv) below:

(i)equity Investments by BRW and its Subsidiaries (including BCI and its Subsidiaries) in their Subsidiaries outstanding on the date hereof and (A) additional investments in wholly owned Subsidiaries of BRW that are Subsidiary Guarantors, (B) additional investments in Excluded Entities other than the Mutual Subsidiaries in an aggregate amount invested from January 12, 2000 not to exceed $10,000,000, (C) additional investments in Foreign Subsidiaries in an aggregate amount invested from January 12, 2000 not to exceed $2,000,000, and (D) additional investments in Cincinnati Bell Wireless LLC (x) in an aggregate amount invested from January 12, 2000 not to exceed $25,000,000 and (y) other investments resulting in it or its Subsidiaries owning the Spectrum Assets;

(ii)loans and advances to employees in the ordinary course of the business of BRW and its Subsidiaries as presently conducted in an aggregate principal amount not to exceed $25,000,000 at any time outstanding; provided, however, for purposes of this Section, “advances” will not restrict advances for travel expenses to employees advanced and repaid in the ordinary course of business; provided further that such loans and advances are made in compliance with Section 5.01(t)(iv);

(iii)Investments by BRW and its Subsidiaries (including BCI and its Subsidiaries) in Cash Equivalents;

(iv)Investments existing on the date hereof and described on Schedule 4.01(v) hereto;

(v)Investments by BRW in Hedge Agreements permitted under Section 5.02(b)(i)(A);

(vi)Investments consisting of intercompany Debt permitted under Section 5.02(b)(ii);

(vii)other Investments made prior to May 1, 2002 and other Investments made on or after May 1, 2002 (other than Investments in BRW and the Mutual Subsidiaries made after April 15, 2002) in an aggregate amount invested not to exceed $25,000,000 at any time with Investments valued, in the case of each Investment, at the time such Investment is made less the aggregate amount of Investments made under Section 5.02(f)(viii) (it being understood that any Investment may continue to be held if permitted when made notwithstanding

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subsequent changes in the value of such Investment), provided that with respect to Investments made under this clause (vii):  (1) any newly acquired or organized Subsidiary of BRW or any of its Subsidiaries shall be a wholly owned Subsidiary of BRW or its Subsidiaries; (2) immediately before and after giving effect thereto, no Default shall have occurred and be continuing or would result therefrom; (3) any company or business acquired or invested in pursuant to this clause (vii) shall be in the same line of business (or a related line of business) as the business of BRW or any of its Subsidiaries; (4) immediately after giving effect to the acquisition of a company or business pursuant to this clause (vii), BRW shall be in pro forma compliance with the covenants contained in Section 5.04, calculated based on the financial statements most recently delivered to the Lender Parties pursuant to Section 5.03 and as though such acquisition had occurred at the beginning of the four-quarter period covered thereby, as evidenced by a certificate of the Chief Financial Officer of BRW delivered to the Lender Parties demonstrating such compliance; (5) BRW and/or its Subsidiaries and such newly created or acquired Subsidiary shall comply with the requirements of 5.01(j); (6) any Investment made under this clause (vii) that is not an acquisition of an Equity Interest shall be made by a Subsidiary of BRW that is a Subsidiary Guarantor; and (7) no Investment made under this clause (vii) may be made in BCI or any of its Subsidiaries unless such Investment is a Permitted BCI Transaction and BCI and/or such Subsidiary and such newly created or acquired Subsidiary shall comply with the requirements of 5.01(j);

(viii)Investments other than Investments in BRW and the Mutual Subsidiaries made after April 15, 2002 in an aggregate amount of $50,000,000 for any investments valued as of the date such Investment is made, including, without limitation, joint ventures; provided, however, that with respect to any joint venture, such Investment shall be (1) made through a newly organized bankruptcy remote special purpose vehicle, wholly owned by BRW or any of its Subsidiaries; (2) immediately before and after giving effect thereto, no Default shall have occurred and be continuing or would result therefrom; (3) any company or business acquired or invested in pursuant to this clause (viii) shall be in the same line of business (or related line of business) as the business of BRW or any of its Subsidiaries; (4) BRW and/or its Subsidiaries and such newly created or acquired Subsidiary shall comply with the requirements of 5.01(j); (5) neither the Borrowers nor any of their Subsidiaries (other than such special purpose vehicle) shall become liable for the Debt of the joint venture except to the extent the Borrowers or such Subsidiary would be permitted under Section 5.02(b) to incur such Debt; and (6) any company or business acquired or invested in pursuant to this clause (viii) shall not be or become a Subsidiary of BCI unless such Investment is a Permitted BCI Transaction and BCI and such newly created or acquired Subsidiary shall comply with the requirements of 5.01(j);

(ix)Investments consisting of debits and credits between Broadwing Financial LLC and BRW and its Subsidiaries (including BCI and its Subsidiaries) pursuant to the BRW Cash Management System; provided that such Investments

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between Broadwing Financial LLC and BRW shall be subject to the restrictions set forth in Section 5.02(f)(xi), and Investments that arose under the centralized cash management system between BRW and its Subsidiaries (including BCI and its Subsidiaries) prior to May 31, 2002; provided further that all such Investments made by BRW and each Subsidiary Guarantor are evidenced by promissory notes and constitute Pledged Debt;

 (x)Investments consisting of loans, advances and payables due from suppliers or customers made by the Borrowers or their Subsidiaries in the ordinary course of business;

(xi)Investments consisting of cash advances to BRW to pay (x) BRW Administrative Expenses, (y) dividends and payments referred to in clauses (iv) and (v) of Section 5.02(g) and (z) debt service for Debt of BRW that is permitted under this Agreement; provided that (1) such advances are evidenced by promissory notes, in form and substance satisfactory to the Agents, and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Administrative Agent pursuant to the terms of the Security Agreements, (2) such advances are not made earlier than 1 Business Day before the day that the obligations are to be paid and (3) the proceeds of such advances are either deposited directly to a deposit account maintained with the Administrative Agent or another Lender and in which the Administrative Agent, for the benefit of the Lenders, has a security interest pursuant to the terms of the Security Agreements or applied directly for a purpose referred to in clause (x), (y) or (z) above; provided further, however, that if a Blocking Event has occurred and is continuing, no such Investments shall be made in respect of a payment on the New Notes or the Other Permitted Equity;

(xii)Investments in respect of Permitted Obligations;

(xiii)(I) Investments by BRW and its Subsidiaries in BCI and its Subsidiaries outstanding on the date hereof, and (II) each additional Investment by BRW and its Subsidiaries in BCI and its Subsidiaries that at the time created, incurred, assumed, made or otherwise arising constituted or resulted from a Permitted BCI Transaction so long as at such time no BCI Event of Default specified under Section 7.03(b) shall have occurred with respect to BCI or any of its Subsidiaries (other than a proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code);

(xiv) any Investment acquired as consideration received in respect of or as a result of any transaction under Section 5.02(e)(ix); and

(xv) Investments by BCI and its Subsidiaries in BCI and its Subsidiaries;

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provided thatno Investments shall be made on or after April 15, 2002 in Excluded Entities other than (x) Investments in Wireless LLC, (y) Investments consisting of debits and credits arising pursuant to the BRW Cash Management System (including such Investments made by Excluded Entities that are Subsidiaries of BCI prior to the date that is 30 days after the Effective Date); provided that all such cash advances made to such Excluded Entities constitute Pledged Debt; provided further that all such Investments made to the Mutual Subsidiaries be in an amount not to exceed $100,000 in aggregate at any time, and (z) in the case of CBT, Investments made pursuant to Section 5.02(f)(vi)).

(g)Restricted Payments.  Declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such or issue or sell any Equity Interests or accept any capital contributions, or permit any of its Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in BRW or to issue or sell any Equity Interests therein (each a “Restricted Payment”), except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

(i)BRW may declare and pay dividends and distributions payable only in common stock of BRW or issue common stock of BRW to officers, directors and employees as part of compensation arrangements,

(ii)any Subsidiary may (A) declare and pay cash dividends to any other wholly owned Subsidiary of BRW (including BCI and its Subsidiaries) of which it is a Subsidiary and (B) accept capital contributions from its parent to the extent permitted under Sections 5.02(f)(i) and 5.02(f)(xii),

(iii)BCI may declare and pay scheduled dividend payments on the BCI Exchangeable Preferred Stock,

(iv)BRW may declare and pay scheduled dividend payments on the Convertible Preferred Stock and the Other Permitted Equity,

(v)payments pursuant to stock option plans or other stock related benefit plans approved by the Board of Directors of the Borrowers and in the ordinary course of business made to directors, officers, and employees of the Borrowers to repurchase capital stock of the Borrowers or equity equivalents of the Borrowers held by such Persons in case of resignation, the cessation of the employment or retirement of such Person (by death, disability or otherwise),

(vi)any Subsidiary of BRW (including BCI and its Subsidiaries) may:

(A)declare and pay cash dividends to BRW to pay (x) BRW Administrative Expenses, (y) dividends and payments referred to in

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clauses (iv) and (v) of Section 5.02(g) and (z) debt service for Debt of BRW that is permitted under this Agreement; provided that (1) such dividends are not paid earlier than 1 Business Day before the day that the obligations are to be paid and (2) the proceeds of such dividends are deposited directly to a deposit account maintained with the Administrative Agent in which the Administrative Agent, for the benefit of the Lenders, has a security interest pursuant to the terms of the Security Agreements or applied directly for a purpose referred to in clause (x), (y) or (z) above, and

(B)distribute non-cash assets to BRW in connection with the merger or consolidation of a Subsidiary; provided that no Default has occurred and is continuing at the time of such transfer and the distribution of such non-cash assets is accompanied by a substantially simultaneous transfer of such non-cash assets from BRW to another Subsidiary,

(vii)(x) any Subsidiary of BRW (including BCI and its Subsidiaries) may make a dividend of Equity Interests, or distribution of Equity Interests, of any of its Subsidiaries to BRW or any wholly-owned Subsidiary of BRW that is a Subsidiary Guarantor and (y) Mutual Signal Holding Corp. may distribute all or substantially all of its assets to BCSI; provided in the case of clauses (x) and (y) such dividend or distribution is not materially adverse to the Lenders in the sole determination of the Administrative Agent.

(viii)BRW may issue and sell additional common stock for cash; provided that 50% of the Net Cash Proceeds of such issuance of additional common stock (other than common stock issued to employees, officers and directors as part of compensation arrangements) in excess of the first $50,000,000 in aggregate of such Net Cash Proceeds received pursuant to this clause (viii) and clause (x) below shall be applied to prepay the Facilities first ratably to the Term A Advances, the Term B Advances and the Term C Advances and to the remaining installments thereof pro rata and second to the Revolving Credit Advances as set forth in clause 2.06(b)(v); provided further that the Administrative Agent shall have received a certificate of a Responsible Officer of BRW certifying that after giving effect to such issuance, BRW and its Subsidiaries are on a pro forma basis in compliance with Section 5.04 during the Facilities Period,

(ix)BRW may issue additional common stock upon the conversion of any of the Convertible Preferred Stock and the Other Permitted Equity,

(x)BRW may issue and sell Other Permitted Equity for cash; provided that 50% of the Net Cash Proceeds of the issuance of such Other Permitted Equity in excess of the first $50,000,000 in aggregate of such Net Cash Proceeds received pursuant to this clause (x) and clause (viii) above shall be applied to prepay the Facilities first ratably to the Term A Advances, the Term B Advances

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and the Term C Advances and to the remaining installments thereof pro rata and second to the Revolving Credit Advances as set forth in clause 2.06(b)(v); provided further that the Administrative Agent shall have received a certificate of a Responsible Officer of BRW certifying that after giving effect to such issuance, BRW and its Subsidiaries are on a pro forma basis in compliance with Section 5.04 during the Facilities Period,

(xi)as part of any BCI Exchange, (1) BCI may redeem the BCI Exchangeable Preferred Stock and (2) BRW may issue capital or preferred stock or other Equity Interests of BRW (including capital or preferred stock or other Equity Interests of BRW issued to a third party provided that the proceeds of such issuance are applied to the prepayment or retirement of the BCI Senior Subordinated Notes); provided that (A) any such preferred stock or other Equity Interest (x) contains only pay in kind interest payment obligations during the Facilities Period, and (y) is not convertible or exchangeable for any Equity Interests other than common stock of BRW, (B) the aggregate amount of cash paid in respect of redemptions, repayments or fees in connection with all BCI Exchanges shall not exceed the amounts agreed to in writing by BRW and the Agents and (C) any instrument or agreement evidencing such preferred stock or other Equity Interest entered into in connection with a BCI Exchange will not contain any grant of collateral or rights to collateral or any covenants or defaults that are more restrictive, or subordination terms that are more narrow, in any material respect than the terms of the Oak Hill Indenture and will not provide any put, redemption or prepayment right, or any amortization or maturity date, prior to the end of the Facilities Period,

(xii) BRW may issue the Warrants and additional shares of common stock of BRW upon exercise of the Warrants in accordance with the terms of the Warrant Agreement as in effect on the date hereof, and

(xiii) BRW and its Subsidiaries may effect any such transaction that at the time so effected constituted or resulted from a Permitted BCI Transaction so long as at such time no BCI Event of Default specified under Section 7.03(b) shall have occurred with respect to BCI or any of its Subsidiaries (other than a proceeding in connection with a Prepackaged Plan or a sale agreement executed prior to commencement of such proceedings which agreement contemplates a sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 363 of the Bankruptcy Code).

(h)Amendments of Constitutive Documents.  Amend, or permit any of its Subsidiaries to amend, its certificate of incorporation or bylaws or other constitutive documents, except (i) in connection with any BCI Exchange, or (ii) where such amendment could not reasonably be expected to have a Material Adverse Effect or to adversely affect the rights or interests of the Lender Parties; provided that copies of any such amendment to the certificate of incorporation, by-laws or other constitutive

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documents of any Borrower or any Subsidiary shall be delivered promptly to the Administrative Agent.

(i)Accounting Changes.  Make or permit, or permit any of its Subsidiaries (other than BCI and its Subsidiaries) to make or permit, any change in (i) accounting policies or reporting practices, except as required by generally accepted accounting principles, or (ii) Fiscal Year.

(j)Prepayments, Etc., of Debt.  Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Debt, except (i) the prepayment of the Advances in accordance with the terms of this Agreement, (ii) the repurchase of the BCI Senior Subordinated Notes and the BCI 12 1/2% Senior Notes to the extent permitted under Section 5.02(e)(ix)(C) or otherwise repurchase the BCI 12 1/2% Senior Notes for an aggregate amount not to exceed an amount agreed to in writing by BRW and the Agents or, (iii) regularly scheduled or required repayments or redemptions of Surviving Debt so long as such repayment or redemption does not violate any subordination terms of such Surviving Debt, (iv) consummation of any BCI Exchange to the extent permitted under Sections 5.02(b)(i)(F) and 5.02(g)(xi), (v) the payment of guaranty obligations of BRW in respect of Permitted Obligations, or (vi) the tender of Junior Notes to effect the exercise of the Warrants to the extent provided in the Junior Note Documents in effect on the date hereof, or amend, modify or change in any manner any term or condition of any Surviving Debt or Subordinated Debt, or permit any of its Subsidiaries to do any of the foregoing other than to prepay any Debt payable to the Borrowers provided that, with respect to any prepayment of Debt of any member of the BCI Group by any member of the BRW Group, such prepayment is permitted under Section 5.02(f)(xiii), and amendments, modifications or changes to any instrument relating to the BCI Senior Subordinated Notes in connection with any BCI Exchange to the extent permitted under Sections 5.02(b)(i)(F).

(k)Amendment, Etc., of Related Documents.  Cancel or terminate any Related Document or consent to or accept any cancellation or termination thereof, amend, modify or change in any manner any term or condition of any Related Document or give any consent, waiver or approval thereunder, waive any default under or any breach of any term or condition of any Related Document, agree in any manner to any other amendment, modification or change of any term or condition of any Related Document or take any other action in connection with any Related Document, in each case if such action would in any material respect impair the value of the interest or rights of any Loan Party thereunder or the rights or interests of any Agent or any Lender Party, or permit any of its Subsidiaries to do any of the foregoing, other than amendments, modifications or changes to the Related Documents in connection with (i) effecting any BCI Exchange or (ii) to the extent permitted under Section 5.02(v).

(l)Negative Pledge.  Enter into or suffer to exist, or permit any of its Subsidiaries (other than BCI and its Subsidiaries) to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of

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its property or assets except (i) in favor of the Secured Parties or (ii) in connection with (A) any Surviving Debt to the extent such agreement is in effect on the date hereof (and any extension, renewal, refunding or replacement thereof), (B) any purchase money Debt permitted by Section 5.02(b)(iii)(B) solely to the extent that the agreement or instrument governing such Debt prohibits a Lien on the property acquired with the proceeds of such Debt, and (C) any agreement setting forth customary restrictions on the subletting, assignment or transfer of any property or asset that is a lease, license or conveyance of similar property or assets or (iii) provisions in the Junior Notes and customary provisions in the New Notes; provided such provisions permit Liens under the Loan Documents.

(m)Partnerships, Etc.  Become a general partner in any general or limited partnership or joint venture, or permit any of its Subsidiaries (other than BCI and its Subsidiaries) to do so except to the extent that the investment in any such partnership or joint venture is an investment permitted by Section 5.02(f) and the indebtedness of any such entity (to the extent BRW or any Subsidiary is liable therefor) is permitted pursuant to Section 5.02(b).

(n)Speculative Transactions.  Engage, or permit any of its Subsidiaries (other than BCI and its Subsidiaries) to engage, in any transaction speculative in nature, except those entered into in the ordinary course of business to eliminate or mitigate risks to which BRW or any of its Subsidiaries is exposed in the conduct of its business or the management of its liabilities (including but not limited to transactions entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)).

(o)Formation of Subsidiaries; Existing Lines of Business.  (i) Organize or invest, or permit any Subsidiary (other than BCI and its Subsidiaries) to organize or invest, in any new Subsidiary except as permitted under Sections 5.02(d) and 5.02(f)(i) or (ii) enter into, or permit any Subsidiary to enter into, any line of business other than the lines of business currently engaged in by BRW and its Subsidiaries on the Effective Date.

(p)Payment Restrictions Affecting Subsidiaries.  Directly or indirectly, enter into or suffer to exist, or permit any of its Subsidiaries (other than BCI and its Subsidiaries) to enter into or suffer to exist, any agreement or arrangement limiting the ability of any of its Subsidiaries to declare or pay dividends or other distributions in respect of its Equity Interests or repay or prepay any Debt owed to, make loans or advances to, or otherwise transfer assets to or invest in, BRW or any of its Subsidiaries (whether through a covenant restricting dividends, loans, asset transfers or investments, a financial covenant or otherwise), except (i) the Loan Documents, (ii) any agreement or instrument evidencing Surviving Debt as in effect on the date hereof, (iii) any Permitted Preferred Stock Documents, (iv) the Junior Notes and (v) any Debt or preferred stock issued pursuant to a BCI Exchange in accordance with Sections 5.02(b)(i)(F) or 5.02(g)(xi).

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(q)Section 355(e). With respect to BRW, take any action that could reasonably be expected to result in BRW being required to recognize gain under Section 355(e) of the Code.

(r) Exchange of BCI Exchangeable Preferred Stock.  Exchange the BCI Exchangeable Preferred Stock into Debt except to the extent such Debt is permitted under Section 5.02(b)(i)(F).

(s)Deposit Accounts.  (i) Except for accounts subject to the Escrow Agreements or any similar escrow accounts entered into pursuant to a sale agreement in accordance with Section 5.02(e)(ix) in lieu of the BCSI Sale Agreement, hold any deposit accounts of either Borrower or any of their Subsidiaries (other than payroll, workmen’s compensation, health and welfare, PAC accounts and similar types of accounts) that are not held with the Administrative Agent or with a third party bank subject to a control agreement that is in form and substance reasonably satisfactory to the Administrative Agent.

(ii)Upon release to the Borrowers or any of their Subsidiaries of any amounts in any account subject to an Escrow Agreement or any similar escrow accounts entered into pursuant to a sale agreement in accordance with Section 5.02(e)(ix) in lieu of the BCSI Sale Agreement, if BRW makes a good faith determination that additional amounts are needed to pay liabilities pursuant to Section 5.02(e)(ix)(E), BRW shall apply such amounts to prepay Revolving Credit Borrowings (without any reduction of the Revolving Credit Commitments) and such amounts shall increase the Reserved Commitments under Section 5.02(e)(ix)(E); provided that if the Reserved Commitments shall previously have been drawn to fund a collateral account pursuant to Section 5.02(e)(ix)(E), such amount shall instead be deposited to such account; provided further that if BRW makes a good faith determination that additional amounts are not needed to pay liabilities pursuant to Section 5.02(e)(ix)(E), such Net Cash Proceeds shall be applied to repay the Advances in accordance with clauses (A), (B) and (C) of Section 5.02(e)(ix).

(t)Negative Covenants Applicable to Wireless Holdco.  Notwithstanding Section 5.02, permit Wireless Holdco to enter into or conduct any business, or engage in any activity (including, without limitation, any action or transaction that is restricted under Section 5.02 without regard to any of the enumerated exceptions to such covenants) other than providing general management services to Wireless LLC, holding the Equity Interests of Wireless LLC, exercising the voting rights and obligations as a member of Wireless LLC, holding and operating the Spectrum Assets, performing any obligations under the Loan Documents and engaging in other activities incidental and directly related to its existence and the foregoing.

(u)Negative Covenants Applicable to the Real Estate SPV.  Notwithstanding Section 5.02, so long as the Real Estate SPV holds any Collateral, permit the Real Estate SPV to enter into or conduct any business, or engage in any activity (including, without limitation, any action or transaction that is restricted under Section 5.02 without regard to any of the enumerated exceptions to such covenants) other than holding real property

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interests and entering into and performing its obligations under leases with respect thereto, performing its obligations under the Loan Documents and engaging in other activities incidental and directly related to its existence and the foregoing.

(v) Covenant Regarding Other Debt Holders.  In connection with obtaining the Oak Hill Waiver or any other waiver or forbearance by any holder of any Debt of any right to accelerate such Debt as a result of a Specified Default, (i) prior to the end of the Facilities Period, pay or otherwise provide cash fees, additional cash pay interest or other cash pay financial consideration in excess of the amounts agreed to in writing by BRW and the Agents to any holder of any such Debt or (ii) modify any existing agreement or instrument or enter into any additional agreement or instrument after the date hereof with any holder of any such Debt in connection with effecting any of the foregoing unless such modifications or additional agreements or instruments provide that (A) any additional payment obligations arising under any such modification or additional agreement or  instrument shall be (x) permitted under clause (i) above or (y) payable in kind and not be subject to any put, redemption or prepayment right during the Facilities Period, and (B) no such modification will (w) add any collateral or rights to collateral, (x) advance any amortization requirement or maturity date, (y) change any covenant, default or provision with the result that it is in any material respect more restrictive (e.g., less favorable to the Borrowers or their Subsidiaries or the Lender Parties) than the terms of the Junior Notes Indenture or change any term of subordination with the result that it is in any material respect more narrow (e.g., less favorable to the Borrowers or their Subsidiaries or the Lender Parties) than the terms of the Junior Notes Indenture or (z) add any new covenant or default provision that is in any material respect more restrictive (e.g., less favorable to the Borrowers or their Subsidiaries or the Lender Parties) than the terms of the Junior Notes Indenture.

(w) Covenant Regarding BCI Cash and Cash Expenditures.  Permit BCI and its Subsidiaries to (A) except as a result of any transaction permitted under Section 5.02(e)(ix), hold collected cash balances (net of any cash in accounts subject to the Escrow Agreements or other escrow arrangements permitted under Section 5.02(a)(xiii) or required under Section 5.02(e)(ix)(E)) in excess of $15,000,000 at any time, and (B) other than in connection with the payment of claims and liabilities following any transaction permitted under Section 5.02(e)(ix), make cash expenditures other than in the ordinary course of business consistent with past practices.

SECTION 5.03.  Reporting Requirements.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrowers will furnish to the Agents and the Lender Parties:

(a)Default Notice.  As soon as possible and in any event within two days after the occurrence of each Default or any event, development or occurrence reasonably likely to have a Material Adverse Effect continuing on the date of such statement, a statement of the chief financial officer of BRW setting forth details of such Default and the action that the Borrowers have taken and proposes to take with respect thereto.

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(b)Annual Financials.  As soon as available and in any event within 95 days after the end of each Fiscal Year, a copy of (1) the annual audit report for such year for BRW and its Subsidiaries (including BCI and its Subsidiaries), including therein a Consolidated balance sheet of BRW and its Subsidiaries (including BCI and its Subsidiaries)  as of the end of such Fiscal Year and Consolidated and consolidating statements of income and Consolidated and consolidating statements of cash flows of BRW and its Subsidiaries (including BCI and its Subsidiaries) for such Fiscal Year, in each case accompanied by an opinion acceptable to the Required Lenders of PWC or other independent public accountants of recognized standing acceptable to the Required Lenders ( it being understood and agreed that a qualified opinion for Fiscal Year 2002 shall not be deemed to be not “acceptable” solely because of such qualification provided that  the Agents receive confirmation from PWC as to the absence of significant factors resulting in the qualification other than the financial condition and liquidity of BCI and the bankruptcy default relating to BCI in the Oak Hill Indenture), together with (i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of BRW and its Subsidiaries (including BCI and its Subsidiaries), which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in GAAP used in the preparation of such financial statements, BRW shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP, (2)  the annual unaudited report for such year for BRW and its Subsidiaries (other than BCI and its Subsidiaries), including therein a Consolidated balance sheet of BRW and its Subsidiaries as of the end of such Fiscal Year and Consolidated and consolidating statements of income and Consolidated and consolidating statements of cash flows of BRW and its Subsidiaries for such Fiscal Year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments) by the Chief Financial Officer of BRW as having been prepared in accordance with GAAP, and (3) a certificate of the Chief Financial Officer of BRW stating that no Default has occurred and is continuing or, if a default has occurred and is continuing, a statement as to the nature thereof and the action that BRW has taken and proposes to take with respect thereto.

(c)Quarterly Financials.  As soon as available and in any event within 50 days after the end of each of the first three quarters of each Fiscal Year, Consolidated and consolidating balance sheets of BRW and its Subsidiaries (including BCI and its Subsidiaries) and of BRW and its Subsidiaries (other than BCI and its Subsidiaries), in each case, as of the end of such quarter and Consolidated and consolidating statements of income and a Consolidated and consolidating statement of cash flows of BRW and its Subsidiaries (including BCI and its Subsidiaries) and of BRW and its Subsidiaries (other than BCI and its Subsidiaries), in each case, for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and Consolidated

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and consolidating statements of income and a Consolidated and consolidating statement of cash flows of BRW and its Subsidiaries (including BCI and its Subsidiaries) and of BRW and its Subsidiaries (other than BCI and its Subsidiaries), in each case, for the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments) by the Chief Financial Officer of BRW as having been prepared in accordance with GAAP, together with (i) a certificate of said officer stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that BRW has taken and proposes to take with respect thereto and (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by BRW in determining compliance with the covenants contained in Section 5.04, provided that in the event of any change in GAAP used in the preparation of such financial statements, BRW shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP.

(d)Annual Forecasts.  As soon as available and in any event no later than 15 days before the end of each Fiscal Year, forecasts prepared by management of BRW in form satisfactory to the Agents, of balance sheets, income statements and cash flow statements on a quarterly basis for the Fiscal Year following such Fiscal Year and on an annual basis for each Fiscal Year thereafter until the Final Maturity Date of the Term C Facility.

(e) Quarterly Cash Budget.  As soon as available and in any event no later than 20 Business Days after the commencement of each fiscal quarter, (i) a forecasted budget of BCI’s cash expenditures for such fiscal quarter, (ii) a reconciliation of actual results to the budget for the immediately preceding fiscal quarter and (iii) a review and reconciliation for the immediately preceding fiscal quarter of all reserves referred to under Section 5.02(e)(ix)(E), with a copy delivered to FTI by BRW, which items shall be reviewed by FTI in consultation with BRW for one day each fiscal quarter at the expense of BRW not to exceed $10,000 plus reasonable out-of-pocket expenses per review; provided that the expense of each such review may be increased to not more than $25,000 plus reasonable out-of-pocket expenses if the First Stage Closing Date (as defined in the BCSI Sale Agreement) does not occur by June 30, 2003 or if the Agents reasonably determine that the scope of FTI’s review should be increased.

(f)Litigation.  Promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting any Loan Party or any of its Subsidiaries of the type described in Section 4.01(f).

(g)Securities Reports.  Promptly after the sending or filing thereof, copies of all proxy statements, financial statements and reports that any Loan Party or any of its Subsidiaries sends to its stockholders, and copies of all regular, periodic and special

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reports, and all registration statements, that any Loan Party or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange (or, unless any Lender Party requests otherwise, if any mailing or filing is available electronically on Edgar, any website maintained by BRW or any other electronic source generally accessible, in lieu of providing physical copies, a notice of such mailing or filing may be given to each Lender Party together with instructions for the electronic retrieval thereof).

(h)Creditor Reports.  Promptly after the furnishing thereof, copies of any statement or report furnished to any holder of Debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lender Parties pursuant to any other clause of this Section 5.03.

(i)Agreement Notices.  Promptly upon receipt thereof, copies of all notices, requests and other documents received by any Loan Party or any of its Subsidiaries under or pursuant to any Related Document or instrument, indenture, loan or credit or similar agreement and copies of all notices of default or termination under or related to any Material Contract and, from time to time upon request by the Administrative Agent, such information and reports regarding the Related Documents, the Material Contracts and such instruments, indentures and loan and credit and similar agreements as the Administrative Agent may reasonably request.

(j)ERISA.  (i)  ERISA Events and ERISA Reports.  (A) Promptly and in any event within 10 days after any Loan Party or any ERISA Affiliate knows or has reason to know that any ERISA Event has occurred, a statement of the Chief Financial Officer of BRW describing such ERISA Event and the action, if any, that such Loan Party or such ERISA Affiliate has taken and proposes to take with respect thereto and (B) on the date any records, documents or other information must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such records, documents and information;

(ii)Plan Terminations.  Promptly and in any event within five Business Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan;

(iii)Plan Annual Reports.  Promptly upon the request of either Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan; and

(iv)Multiemployer Plan Notices.  Promptly and in any event within five Business Days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that

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may be incurred, by such Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B);

provided, however, that the statement under Section 5.03(i)(i)(A) and the notice under Section 5.03(i)(iv) are required to be given only if the event or circumstance identified in such statement or notice, when aggregated with any other events or circumstances required to be reported under this Section 5.03(i) could reasonably be expected to result in a Material Adverse Effect.

(k)Environmental Conditions.  Promptly and in any event within five Business Days after a Responsible Officer becomes aware of the assertion or occurrence thereof, notice of:

(i)any condition or occurrence on or arising from any property owned or operated by any of the Loan Parties or any of their respective Subsidiaries that resulted or is alleged to have resulted in noncompliance by any such Loan Party or any such Subsidiary with any Environmental Law or Environmental Permit in such a manner as, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; and

(ii)any condition or occurrence on any property owned or operated by any of the Loan Parties or any of their respective Subsidiaries that could reasonably be expected to cause such property to be subject to any restrictions on the ownership, occupancy, use or transferability by any such Loan Party or any such Subsidiary of such property under any Environmental Law which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

All such notices shall set forth in reasonable detail the nature of the condition, occurrence, removal or remedial action described therein and, in the case of each such condition or occurrence, the action that such Loan Party or such Subsidiary has taken and/or proposes to take with respect thereto.

(l)Insurance.  As soon as available and in any event within 30 days after the end of each Fiscal Year, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such additional information as any Agent, or any Lender Party through the Administrative Agent, may reasonably specify.

(m)BCI Sale Information.  At the end of each fiscal quarter following the First Stage Closing Date (as defined in the BCSI Sale Agreement) or any other closing of the sale of all or substantially all of the assets of BCI and its Subsidiaries pursuant to Section 5.02(e)(ix) if other than pursuant to the BCSI Sale Agreement, a report summarizing the amount of funds held in the accounts subject to an Escrow Agreement, all amounts held in reserve pursuant to Section 5.02(e)(ix)(E), and the status of the sale of assets of BCI and its Subsidiaries pursuant to the BCSI Sale Agreement (or any similar agreement entered into pursuant to Section 5.02(e)(ix) if other than the BCSI Sale Agreement).

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(n)Other Information.  Such other information respecting the business, condition (financial or otherwise), operations, performance, properties or prospects of any Loan Party or any of its Subsidiaries as any Agent, or any Lender Party through the Administrative Agent, may from time to time reasonably request.

SECTION 5.04.  Financial Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder:

(a)Debt to EBITDA Ratio.  BRW and its Subsidiaries, on a consolidated basis, will maintain at all times a Debt/EBITDA Ratio of not more than the amount set forth below during each period set forth below:

Period	Ratio
From January 1, 2003 through March 31, 2003	5.20
From April 1, 2003 through June 30, 2003	5.60
From July 1, 2003 through September 30, 2003	5.90
From October 1, 2003 through March 30, 2004	6.20
From March 31, 2004 through June 29, 2004	6.10
From June 30, 2004 through September 29, 2004	5.95
From September 30, 2004 through December 30, 2004	5.85
From December 31, 2004 through March 30, 2005	5.75
From March 31, 2005 through June 29, 2005	5.60
From June 30, 2005 through September 29, 2005	5.45
From September 30, 2005 through December 30, 2005	5.25
From December 31, 2005 through March 30, 2006	5.10
From March 31, 2006 through June 29, 2006	5.00
From June 30, 2006 through September 29, 2006	4.90
From September 30, 2006 December 30, 2006	4.75
From December 31, 2006 through March 30, 2007	4.70
From March 31, 2007 through June 29, 2007	4.65
From June 30, 2007 and thereafter	4.55

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(b)Senior Secured Debt to EBITDA Ratio.  BRW and its Subsidiaries, on a consolidated basis, will maintain at all times a Senior Secured Debt/EBITDA Ratio of not more than the amount set forth below during each period set forth below:

Period	Ratio
From January 1, 2003 through March 31, 2003	3.45
From April 1, 2003 through June 30, 2003	3.70
From July 1, 2003 through September 30, 2003	3.85
From October 1, 2003 through March 30, 2004	4.00
From March 31, 2004 through June 29, 2004	3.85
From June 30, 2004 through September 29, 2004	3.75
From September 30, 2004 through December 30, 2004	3.60
From December 31, 2004 through March 30, 2005	3.50
From March 31, 2005 through June 29, 2005	3.35
From June 30, 2005 through September 29, 2005	3.25
From September 30, 2005 thorough December 30, 2005	3.05
From December 31, 2005 through March 30, 2006	2.95
From March 31, 2006 through June 29, 2006	2.85
From June 30, 2006 through September 29, 2006	2.75
From September 30, 2006 through December 30, 2006	2.60
From December 31, 2006 through March 30, 2007	2.60
From March 31, 2007 through June 29, 2007	2.50
From June 30, 2007 and thereafter	2.45

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(c)Interest Coverage Ratio.  BRW and its Subsidiaries, on a consolidated basis, will maintain at all times an Interest Coverage Ratio of not less than the amount set forth below during each period set forth below:

Period	Ratio
From January 1, 2003 through March 31, 2003	3.75
From April 1, 2003 through June 30, 2003	3.30
From July 1, 2003 through September 30, 2003	2.95
From October 1, 2003 through December 31, 2003	2.70
From January 1, 2004 through March 31, 2004	2.65
From April 1, 2004 through June 30, 2004	2.80
From July 1, 2004 through September 30, 2004	2.70
From October 1, 2004 through December 31, 2004	2.60
From January 1, 2005 through March 31, 2005	2.45
From April 1, 2005 through June 30, 2005	2.35
From July 1, 2005 through September 30, 2005	2.35
From October 1, 2005 through December 31, 2005	2.35
From January 1, 2006 through March 31, 2006	2.40
From April 1, 2006 through June 30, 2006	2.40
From July 1, 2006 through September 30, 2006	2.45
From October 1, 2006 through December 31, 2006	2.45
From January 1, 2007 through March 31, 2007	2.50
From April 1, 2007 through June 30, 2007 and thereafter	2.50

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(d)Maximum Capital Expenditures.  BRW will not make, or permit any of its Subsidiaries to make, any Capital Expenditures that would cause the aggregate of all such Capital Expenditures made by BRW and such Subsidiaries in any period set forth below to exceed the amount set forth below for such period:

Period	Amount
January 1, 2003 through December 31, 2003	$	146,000,000
January 1, 2004 through December 31, 2004	$	114,000,000
January 1, 2005 through December 31, 2005	$	114,000,000
January 1, 2006 through December 31, 2006	$	112,000,000
January 1, 2007 through June 29, 2007 and thereafter	$	118,000,000

provided that (i) any amount permitted above that is not used in any Fiscal Year may be carried forward to the next Fiscal Year (but not to succeeding years) it being understood that any such amounts carried forward will be the first funds used in such next Fiscal Year, (ii) BRW shall be permitted to make any Capital Expenditures that are required pursuant to any binding direction or requirement of any applicable telecommunications regulatory authority or any regulatory authority having jurisdiction over BRW’s telecommunications operations or equipment which becomes effective after the date hereof not to exceed $25,000,000  in any Fiscal Year or $50,000,000 in aggregate for the term of the Facilities, so long as BRW provides satisfactory documentation thereof, (iii) the amount of permitted Capital Expenditures in any Fiscal Year will be increased by the amount of Net Cash Proceeds from issuances of common stock or Other Permitted Equity that are retained by BRW pursuant to Sections 5.02(g)(viii) and 5.02(g)(x) (after giving effect to all required prepayments of the Facilities) in an amount not to exceed $25,000,000 per Fiscal Year and (iv) any amount permitted under clause (iii) that is not used in the Fiscal Year in which such additional amount arises may be carried forward to the next Fiscal Year (but not to succeeding years) it being understood that any such amounts carried forward will be the first funds used in such next Fiscal Year after the application of any amount under clause (i) in such Fiscal Year.  To the extent that any consideration paid for Capital Expenditures constitutes capital stock of BRW, such consideration shall not constitute a Capital Expenditure for purposes of the limitations in this Section 5.04(d).

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ARTICLE VI

BRW GUARANTY

SECTION 6.01.  BRW Guaranty.  (a)  BRW hereby unconditionally and irrevocably guarantees (the undertaking by BRW under this Article VI being, as amended from time to time, the “BRW Guaranty”) the punctual payment when due, whether at scheduled maturity or at a date fixed for prepayment or by acceleration, demand or otherwise, of all of the Obligations of each of the other Loan Parties now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premium, fees, indemnification payments, contract causes of action, costs, expenses or otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by the Administrative Agent or any of the other Secured Parties in enforcing any rights under this BRW Guaranty.  Without limiting the generality of the foregoing, the liability of BRW shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any of the other Loan Parties to the Administrative Agent or any of the other Secured Parties under or in respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Loan Party.

(b)BRW and, by its acceptance of this BRW Guaranty, the Administrative Agent and each of the other Secured Parties, hereby confirm that it is the intention of all such Persons that this BRW Guaranty and the Obligations of BRW hereunder not constitute a fraudulent transfer or conveyance for purposes of the United States Federal Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state Requirements of Law covering the protection of creditors’ rights or the relief of debtors to the extent applicable to this BRW Guaranty and the BRW Obligations hereunder.  To effectuate the foregoing intention, BRW, the Administrative Agent and each of the other Secured Parties hereby irrevocably agree that, solely with respect to the Guaranteed Obligations and the other liabilities of BRW under this BRW Guaranty which result from or arise out of its guarantee under subsection (a) of this Section 6.01 of the Obligations of the Loan Parties under or in respect of the Loan Documents, such Guaranteed Obligations and other liabilities shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of BRW that are relevant under such Requirements of Law, and after giving effect to any collections from, any rights to receive contributions from, or payments made by or on behalf of, any of the Subsidiaries of BRW in respect of the Obligations of such Subsidiary under the Subsidiaries Guarantees and, in the case of this BRW Guaranty, result in the Guaranteed Obligations and all other liabilities of BRW under this BRW  Guarantee not constituting a fraudulent transfer or conveyance.

(c)BRW hereby unconditionally and irrevocably agrees that, in the event any payment shall be required to be made to the Secured Parties under this BRW Guaranty or the Subsidiary Guaranties or any other guarantee, BRW will contribute, to the maximum extent

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permitted by law, such amounts to each other guarantor as would maximize the aggregate amount payable to the Secured Parties under or in respect of the Loan Documents.

SECTION 6.02.  Guarantee Absolute.  (a)  BRW guarantees that all of the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any Requirements of Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or any of the other Secured Parties with respect thereto.  The Obligations of BRW under this BRW Guaranty are independent of the Guaranteed Obligations or any other Obligations of any of the other Loan Parties under or in respect of the Loan Documents, and a separate action or actions may be brought and prosecuted against BRW to enforce this BRW Guaranty, irrespective of whether any action is brought against any of the other Loan Parties or whether any of the other Loan Parties is joined in any such action or actions.  The liability of BRW under this BRW Guaranty shall be absolute, unconditional and irrevocable irrespective of, and BRW hereby irrevocably waives any defenses it may now have or may hereafter acquire in any way relating to, any and all of the following:

(i)any lack of validity or enforceability of any of the Loan Documents or any other agreement or instrument relating thereto;

(ii)any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any of the Loan Parties under or in respect of the Loan Documents, or any other amendment or waiver of, or any consent to departure from, any of the Loan Documents (including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any of the other Loan Parties or any of their respective Subsidiaries or otherwise);

(iii)any taking, exchange, release or nonperfection of any of the Collateral, or any taking, release or amendment or waiver of, or consent to departure from, the Subsidiary Guaranties or any other guarantee, for all or any of the Guaranteed Obligations;

(iv)any manner of application of Collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral for all or any of the Guaranteed Obligations or any other Obligations of any of the other Loan Parties under or in respect of the Loan Documents, or any other property and assets of any of the other Loan Parties or any of their respective Subsidiaries;

(v)any change, restructuring or termination of the legal structure or existence of any of the other Loan Parties or any of their respective Subsidiaries;

(vi)any failure of any of the Secured Parties to disclose to any of the Loan Parties any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any of the other Loan Parties now or hereafter known to such Secured Party;

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(vii)the failure of any other Person to execute the Subsidiary Guaranties or any other guarantee or agreement or the release or reduction of liability of any of the other Loan Parties or any other guarantor or surety with respect to the Guaranteed Obligations; or

(viii)any other circumstance (including, without limitation, any statute of limitations or any existence of or reliance on any representation by the Administrative Agent or any of the other Secured Parties) that might otherwise constitute a defense available to, or a discharge of, BRW, such Borrower, any of the other Loan Parties or any other guarantor or surety.

This BRW Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Administrative Agent or any of the other Secured Parties or by any other Person upon the insolvency, bankruptcy or reorganization of any of the other Loan Parties or otherwise, all as though such payment had not been made, and BRW hereby unconditionally and irrevocably agrees that it will indemnify the Administrative Agent and each of the other Secured Parties, upon demand, for all of the costs and expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by the Administrative Agent or such other Secured Party in connection with any such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, a fraudulent transfer or a similar payment under any bankruptcy, insolvency or similar Requirements of Law.

(b)BRW hereby further agrees that, as between BRW on the one hand, and the Administrative Agent and the Secured Parties, on the other hand, (i) the Guaranteed Obligations of BRW may be declared to be forthwith due and payable as provided in Section 7.01 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 7.01) for purposes of Section 6.01, notwithstanding any stay, injunction or other prohibition preventing such declaration in respect of the Obligations of any of the Loan Parties guaranteed hereunder (or preventing such Guaranteed Obligations from becoming automatically due and payable) as against any other Person and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations (or such Guaranteed Obligations being deemed to have become automatically due and payable) as provided in Section 7.01, such Guaranteed Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by BRW for all purposes of this Guarantee.

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SECTION 6.03.  Waivers and Acknowledgments.  (a)  BRW hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, protest, dishonor and any other notice with respect to any of the Guaranteed Obligations and this BRW Guaranty, and any requirement that the Administrative Agent or any of the other Secured Parties protect, secure, perfect or insure any Lien or any property or assets subject thereto or exhaust any right or take any action against any of the other Loan Parties or any other Person or any of the Collateral.

(b)BRW hereby waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by the Administrative Agent or the other Secured Parties which in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of BRW or any other rights of BRW to proceed against any of the other Loan Parties, any other guarantor or any other Person or any of the Collateral, and (ii) any defense based on any right of setoff or counterclaim against or in respect of the Obligations of BRW under this BRW Guaranty.

(c)BRW hereby unconditionally and irrevocably waives any duty on the part of the Administrative Agent or any of the other Secured Parties to disclose to BRW any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any of the other Loan Parties or any of their respective Subsidiaries or the property and assets thereof now or hereafter known by the Administrative Agent or such other Secured Party.

(d)BRW hereby unconditionally waives any right to revoke this BRW Guaranty, and acknowledges that this BRW Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

(e)BRW hereby acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in Section 6.02 and in this Section 6.03 are knowingly made in contemplation of such benefits.

SECTION 6.04.  Subrogation.  BRW hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or may hereafter acquire against any of the other Loan Parties or any other insider guarantor that arise from the existence, payment, performance or enforcement of the Obligations of BRW under this BRW Guaranty or any of the other Loan Documents, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Administrative Agent or any of the other Secured Parties against such other Loan Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute, common law or any other Requirements of Law, including, without limitation, the right to take or receive from such other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until such time as all of the Guaranteed Obligations and all of the other amounts payable under this BRW Guaranty shall have been paid in full in cash, all of the Secured Hedge Agreements shall have expired or

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been terminated and the Commitments shall have expired or terminated.  If any amount shall be paid to BRW in violation of the immediately preceding sentence at any time prior to the latest of (a) the payment in full in cash of all of the Guaranteed Obligations and all of the other amounts payable under this BRW Guaranty, (b) the expiration or termination of all of the Secured Hedge Agreements and (c) the Termination Date, such amount shall be received and held in trust for the benefit of the Administrative Agent and the other Secured Parties, shall be segregated from the other property and funds of BRW and shall be delivered forthwith to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and the other amounts payable under this BRW Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as Collateral for any of the Guaranteed Obligations or any of the other amounts payable under this BRW Guaranty thereafter arising.  If (i) BRW shall pay to the Administrative Agent all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all of the other amounts payable under this BRW Guaranty shall have been paid in full in cash, (iii) all of the Secured Hedge Agreements shall have expired or been terminated and (iv) the Termination Date shall have occurred, the Administrative Agent and the other Secured Parties will, at BRW’s  request and expense, execute and deliver to BRW appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer of subrogation to BRW of an interest in the Guaranteed Obligations resulting from the payment made by BRW under this BRW Guaranty.

SECTION 6.05.  Continuing Guarantee; Assignments.  This BRW Guaranty is a continuing guarantee and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of all of the Guaranteed Obligations and all of the other amounts payable under this BRW Guaranty, (ii) the expiration or termination of all of the Secured Hedge Agreements and (iii) the Termination Date, (b) be binding upon BRW and its respective successors and assigns and (c) inure to the benefit of, and be enforceable by, the Administrative Agent and the other Secured Parties and their respective successors, transferees and assigns.  Without limiting the generality of clause (c) of the immediately preceding sentence, any of the Lenders may assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender under this Article VI or otherwise, in each case as provided in Section 9.07.

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01.  Events of Default.  If any of the following events (“Events of Default”) shall occur and be continuing:

(a)(i) either Borrower shall fail to pay any principal of any Advance made to it when the same shall become due and payable, whether by scheduled maturity or at a date fixed for prepayment or by acceleration, demand or otherwise, or (ii) either

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Borrower shall fail to pay any interest on any Advance made to it, or any Loan Party shall fail to make any other payment under or in respect of any Loan Document required to have been made by it, whether by scheduled maturity or at a date fixed for prepayment or by acceleration, demand or otherwise in each case under this clause (ii) within three Business Days after the same becomes due and payable; provided that the failure by BCSI to pay any such amount upon an acceleration of Advances made to BCSI due to a BCI Event of Default shall not constitute an Event of Default of BRW; or

(b)any representation or warranty made by BRW or any of its Subsidiaries (or any of its officers) under or in connection with any Loan Document shall prove to have been incorrect in any material respect (except to the extent relating to BCI or any Subsidiary of BCI) on the date as of which it was made or deemed made; or

(c)BRW shall fail to perform or observe any term, covenant or agreement contained in Section 2.14, 5.01(e), (f), (i), (j), (m) or (o), 5.02, 5.03 or 5.04; or

(d)BRW or any of its Subsidiaries shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 30 days after the earlier of the date on which (i) a Responsible Officer becomes aware of such failure or (ii) written notice thereof shall have been given to BRW by any Agent or any Lender Party; or

(e)BRW or any of its Subsidiaries shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Debt of BRW (other than amounts under the Sellers’ Parent Guaranty (as defined in the BCSI Sale Agreement) that are the subject of a good faith dispute by BRW) or such Subsidiary (as the case may be) that is outstanding in a principal amount (or, in the case of any Hedge Agreement, an Agreement Value) of at least $20,000,000 either individually or in the aggregate (but excluding Debt outstanding hereunder), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or any such Debt shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; provided that any Specified Default under the Oak Hill Indenture shall not constitute an Event of Default under this clause (e) at any time after the Part II Effective Date; or

(f)BRW or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall

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make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against BRW or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or BRW or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or

(g)any judgments or orders, either individually or in the aggregate, for the payment of money in excess of $30,000,000 shall be rendered against BRW or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(h)any non-monetary judgment or order shall be rendered against BRW or any of its Subsidiaries that could have a Material Adverse Effect, and there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(i)any provision of any Loan Document of BRW or any of its Subsidiaries after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or enforceable against any such Loan Party party to it, or any such Loan Party shall so state in writing; or

(j)any Collateral Document of BRW or any of its Subsidiaries or financing statement after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority lien on and security interest in the Collateral purported to be covered thereby; if such Collateral is property of BRW or its Subsidiaries; or

(k)a Change of Control shall occur; or

(l)any ERISA Event shall have occurred with respect to a Plan that could reasonably be expected to have a Material Adverse Effect; or

(m)any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as

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Withdrawal Liability (determined as of the date of such notification) could reasonably be expected to have a Material Adverse Effect; or

(n)any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount that could reasonably be expected to have a Material Adverse Effect; or

(o)an “Event of Default” (as defined in the Junior Notes Indenture or the Oak Hill Indenture, as the case may be) shall have occurred and be continuing under the Junior Notes Indenture or the Oak Hill Indenture other than an Event of Default specified in clause (p)(i) below; or

(p)(i) prior to the occurrence of the Part II Effective Date, the occurrence of any of (x) an “Event of Default” (as defined in the Oak Hill Indenture) under Section 6.1(f) or (g) of the Oak Hill Indenture (as in effect on the date hereof) in respect of any default of the type specified in clause (f) above by, against or with respect to BCI or any of its Subsidiaries or (y) any default of the type specified in clause (f) shall have occurred by, against or with respect to BCI or any of its Subsidiaries or (ii) repayment of the Oak Hill Debt shall have been accelerated,

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrowers, declare the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, (A) by notice to the Borrowers, declare the Notes, all interest thereon and all other amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrowers and (B) by notice to each applicable Issuing Bank, direct such Issuing Bank to deliver a Default Termination Notice to the beneficiary of each Letter of Credit issued by it and each such Issuing Bank shall deliver such Default Termination Notices; provided, however, that,

(A) prior to the Part II Effective Date, in the event of an actual or deemed entry of an order for relief with respect to either Borrower under the Federal Bankruptcy Code, (x) the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving

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Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters of Credit shall automatically be terminated and (y) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrowers, and

(B) on and after the Part II Effective Date, in the event of an actual or deemed entry of an order for relief with respect to BRW or any of its Subsidiaries under the Federal Bankruptcy Code, (1) the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters of Credit shall automatically be terminated and (2) the Notes of the Borrowers, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrowers.

For the avoidance of doubt, the Administrative Agent and the Lenders agree that a BCI Default or BCI Event of Default shall not under any circumstances give rise to any right to accelerate any of the Obligations of BRW or any of its Subsidiaries or to seek any recourse under the Guarantees or Collateral provided by BRW or its Subsidiaries to support the Obligations of BCSI prior to the earlier of (a) the final maturity date of the Facilities and (b) the acceleration of the Notes of BRW resulting from an independent Event of Default.

SECTION 7.02.  Actions in Respect of the Letters of Credit upon Default.  If any Event of Default shall have occurred and be continuing, the Administrative Agent may, or shall at the request of the Required Lenders, irrespective of whether it is taking any of the actions described in Section 7.01 or otherwise, make demand upon the Borrowers to, and forthwith upon such demand the Borrowers will, pay to the Administrative Agent on behalf of the Lender Parties in same day funds at the Administrative Agent’s office designated in such demand, for deposit in the L/C Cash Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding.  If at any time the Administrative Agent determines that any funds held in the L/C Cash Collateral Account are subject to any right or claim of any Person other than the Agents and the Lender Parties or that the total amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the Borrowers will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the L/C Cash Collateral Account, an amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the L/C Cash Collateral Account that the Administrative Agent determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied to reimburse the relevant Issuing Bank or Revolving Credit Lenders, as applicable, to the extent permitted by applicable law.

SECTION 7.03.  BCI Events of Default. If any of the following events (“BCI Events of Default”) shall occur and be continuing:

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(a)any default of the type specified in clauses (b), (c), (d), (e), (g), (h), (i) or (j) of Section 7.01 shall have occurred by, against or with respect to BCI or any of its Subsidiaries; or

(b)any default of the type specified in clause (f) of Section 7.01 shall have occurred by, against or with respect to BCI or any of its Subsidiaries;

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrowers, declare the Notes of BCSI, all interest thereon and all other amounts payable by BCSI under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Notes of BCSI, all such interest thereon and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrowers and (ii) by notice to each applicable Issuing Bank, direct such Issuing Bank to deliver a Default Termination Notice to the beneficiary of each Letter of Credit issued by it for the account of BCSI or any of its Subsidiaries and each such Issuing Bank shall deliver such Default Termination Notices; provided, however, that, in the event of an actual or deemed entry of an order for relief with respect to BCI or any of its Subsidiaries under the Federal Bankruptcy Code, the Notes of BCSI, all such interest and all such amounts due by BCSI shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by BCSI, it being understood and agreed that any such entry of an order for relief with respect to BCI or any of its Subsidiaries will not at any time after the Part II Effective Date, constitute an Event of Default or cause an automatic acceleration of the Notes of BRW or the termination of the Commitments of each Lender Party or the obligation of each Lender Party to make Advances or of each Issuing Bank to issue Letters of Credit to BRW.

For the avoidance of doubt, the Administrative Agent and the Lenders agree that a BCI Default or BCI Event of Default shall not under any circumstances give rise to any right to accelerate any of the Obligations of BRW or any of its Subsidiaries or to seek any recourse under the Guarantees or Collateral provided by BRW or its Subsidiaries to support the Obligations of BCSI prior to the earlier of (a) the final maturity date of the Facilities and (b) the acceleration of the Notes of BRW resulting from an independent Event of Default.

ARTICLE VIII

THE AGENTS

SECTION 8.01.  Authorization and Action.  (a)  Each Lender Party (in its capacities as a Lender, a Swing Line Bank (if applicable), an Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto.  As to any matters not expressly provided for by the Loan Documents (including, without

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limitation, enforcement or collection of the Notes), no Agent shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lender Parties and all holders of Notes; provided, however, that no Agent shall be required to take any action that exposes such Agent to personal liability or that is contrary to this Agreement or applicable law.  Each Agent agrees to give to each Lender Party prompt notice of each notice given to it by the Borrowers pursuant to the terms of this Agreement.

(b)The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each Lender Party (in its capacity as a Lender and a Secured Party) hereby appoints and authorizes the Administrative Agent to act as the agent of such Lender Party for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto.  The Administrative Agent may from time to time in its discretion appoint any of the other Lender Party or any of the Affiliates of a Lender Party to act as its co-agent or sub-agent for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder at the direction of the Administrative Agent.  In this connection, the Administrative Agent, as “collateral agent”, and such co-agents and sub-agents shall be entitled to the benefits of all provisions of this Article VIII (including, without limitation, Section 8.05, as though such co-agents or sub-agents were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

(c)Each of the Co-Arrangers shall have no powers or discretion under this Agreement or any of the other Loan Documents other than those bestowed upon it as a co-agent or sub-agent from time to time by the Administrative Agent pursuant to subsection (b) of this Section 8.01, and each Lender Party hereby acknowledges that none of the Co-Arrangers have any liability under this Agreement or any of the other Loan Documents.

SECTION 8.02.  Agents’ Reliance, Etc.  Neither any Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with the Loan Documents, except for its or their own gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, each Agent:  (a) may treat the payee of any Note as the holder thereof until, in the case of the Administrative Agent, the Administrative Agent receives and accepts an Assignment and Acceptance entered into by the Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any other Agent, such Agent has received notice from the Administrative Agent that it has received and accepted such Assignment and Acceptance, in each case as provided in Section 9.07; (b) may consult with legal counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Lender Party and shall not be responsible to any Lender Party for any statements, warranties or representations (whether written or oral) made in or in connection with the Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the performance

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or observance of any of the terms, covenants or conditions of any Loan Document on the part of any Loan Party or to inspect the property (including the books and records) of any Loan Party; (e) shall not be responsible to any Lender Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; and (f) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, telecopy or telex) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 8.03.  The Administrative Agent, the Syndication Agent, the Co-Arrangers and Affiliates.  With respect to its Commitments, the Advances made by it and the Notes issued to it, CUSA, Bank of America, SSBI and BAS shall have the same rights and powers under the Loan Documents as any other Lender Party and may exercise the same as though it were not an Agent; and the term “Lender Party”, “Lender Parties”, “Secured Party” or “Secured Parties” shall, unless otherwise expressly indicated, include CUSA, Bank of America, SSBI and BAS in their respective individual capacities.  CUSA, Bank of America, SSBI and BAS and their respective affiliates (whether or not parties hereto) may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, any Loan Party, any of its Subsidiaries and any Person that may do business with or own securities of any Loan Party or any such Subsidiary, all as if CUSA, Bank of America, SSBI and BAS were not Agents  and without any duty to account therefor to the Lender Parties.

SECTION 8.04.  Lender Party Credit Decision.  Each Lender Party acknowledges that it has, independently and without reliance upon any Agent or any other Lender Party and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender Party also acknowledges that it will, independently and without reliance upon any Agent or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

SECTION 8.05.  Indemnification.  (a)  Each Lender Party severally agrees to indemnify each Agent (to the extent not promptly reimbursed by the Borrowers) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Agent under the Loan Documents (collectively, the “Lender Indemnified Costs”); provided, however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction.  In the case of any claim, investigation, litigation or proceeding giving rise to any Lender Indemnified Costs, the indemnification provided by the Lender Parties under this Section 8.05 shall apply whether or

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not any such claim, investigation, litigation or proceeding is brought by such Agent, any of the Lender Parties or a third party.  Without limiting any of the provisions of the immediately preceding sentence, each of the Lender Parties hereby agrees to reimburse the Agents promptly upon demand for its ratable share of any costs and expenses (including, reasonable fees and expenses of counsel) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any of the other Loan Documents, to the extent that such Agent is not promptly reimbursed for such costs and expenses by the Borrowers.

(b)Each Lender Party severally agrees to indemnify each Issuing Bank (to the extent not promptly reimbursed by the Borrowers) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Issuing Bank in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Issuing Bank under the Loan Documents; provided, however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Issuing Bank’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction.  Without limitation of the foregoing, each Lender Party agrees to reimburse such Issuing Bank promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by such Borrower under Section 9.04, to the extent that such Issuing Bank is not promptly reimbursed for such costs and expenses by such Borrower.

(c)For purposes of this Section 8.05, the Lender Parties’ respective ratable shares of any amount shall be determined, at any time, according to the sum of (i) the aggregate principal amount of the Advances outstanding at such time and owing to the respective Lender Parties, (ii) their respective Pro Rata Shares of the aggregate Available Amount of all Letters of Credit outstanding at such time, (iii) the aggregate unused portions of their respective Term Commitments at such time and (iv) their respective Unused Revolving Credit Commitments at such time; provided that the aggregate principal amount of Swing Line Advances owing to any Swing Line Bank and of Letter of Credit Advances owing to any Issuing Bank shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments.  The failure of any Lender Party to reimburse any Agent or any Issuing Bank, as the case may be, promptly upon demand for its ratable share of any amount required to be paid by the Lender Parties to such Agent or such Issuing Bank, as the case may be, as provided herein shall not relieve any other Lender Party of its obligation hereunder to reimburse such Agent or such Issuing Bank, as the case may be, for its ratable share of such amount, but no Lender Party shall be responsible for the failure of any other Lender Party to reimburse such Agent or such Issuing Bank, as the case may be, for such other Lender Party’s ratable share of such amount.  Without prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender Party contained in this Section 8.05 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents.

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SECTION 8.06.  Successor Agents.  Any Agent may resign as to any or all of the Facilities at any time by giving written notice thereof to the Lender Parties and the Borrowers and may be removed as to all of the Facilities at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent as to such of the Facilities as to which such Agent has resigned or been removed.  If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent’s giving of notice of resignation or the Required Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the Lender Parties, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States or of any State thereof and having a combined capital and surplus of at least $250,000,000.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent as to all of the Facilities and upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the mortgages, if any, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Administrative Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent as to less than all of the Facilities and upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the mortgages, if any, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Administrative Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Administrative Agent as to such Facilities, other than with respect to funds transfers and other similar aspects of the administration of Borrowings under such Facilities, issuances of Letters of Credit (notwithstanding any resignation as Administrative Agent with respect to the Letter of Credit Facility) and payments by the Borrowers in respect of such Facilities, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement as to such Facilities, other than as aforesaid.  If within 45 days after written notice is given of the retiring Agent’s resignation or removal under this Section 8.06 no successor Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (a) the retiring Agent’s resignation or removal shall become effective, (b) the retiring Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (c) the Required Lenders shall thereafter perform all duties of the retiring Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a successor Agent as provided above.  After any retiring Agent’s resignation or removal hereunder as Agent as to any of the Facilities shall have become effective, the provisions of this Article VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent as to such Facilities under this Agreement.

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ARTICLE IX

MISCELLANEOUS

SECTION 9.01.  Amendments, Etc.  No amendment or waiver of any provision of this Agreement, the Notes or any of the other Loan Documents, nor consent to any departure by any of the Loan Parties therefrom, shall in any event be effective unless the same shall be in writing and signed by each of the Loan Parties party to such Loan Document and directly affected by such amendment, waiver or consent and signed (or in the case of the Collateral Documents, consented to) by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that:

(a)no amendment, waiver or consent shall, unless in writing and signed by the Borrowers and all of the Lenders (other than any of the Lenders that is, at such time, a Defaulting Lender), do any of the following at any time:

(i)waive any of the conditions specified in Section 3.01 or, in the case of the initial Borrowing under any Facility, Section 3.02;

(ii)change the number of Lenders or the percentage of the Commitments or the aggregate outstanding principal amount of Advances or the aggregate Available Amount of outstanding Letters of Credit that, in each case, shall be required for the Lender Parties or any of them to take any action hereunder;

(iii)release (x) the guarantee of BRW under Article VI herein or (y) all or substantially all of the value of the guarantees of the Subsidiaries under the Subsidiary Guaranties (other than in connection with a disposition or sale of assets permitted by this Agreement);

(iv)release all or substantially all of the Collateral in any transaction or series of related transactions (other than in connection with a disposition or sale of assets permitted by this Agreement);

(v)change any purchase obligation of any Lender under Section 2.13; or

(vi)amend this Section 9.01;

(b)no amendment, waiver or consent shall, unless in writing and signed by the Borrowers and the Required Lenders and each of the Lenders (other than any of the Lenders that is, at such time, a Defaulting Lender) that has a Commitment or an Advance then outstanding under the Term A Facility, the Term B Facility, the Term C Facility or the Revolving Credit Facility, as the case may be, if such Lender is directly affected by such amendment, waiver or consent:

(i)increase the Commitments of such Lender;

(ii)reduce the principal of, or stated rate of interest on, the Advances held by such Lender or any fees or other amounts payable hereunder to such

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Lender or reduce or relieve any repayment obligation of the Revolving Credit Lenders under Section 2.03(c); or

(iii)postpone any date scheduled for any payment of principal of, or interest on, the Advances held by such Lender pursuant to Section 2.04 or 2.07, or postpone scheduled reductions of the Revolving Credit Facility pursuant to Section 2.05 or any date fixed for any payment of fees or the Guaranteed Obligations payable hereunder to such Lender; and

(c)no amendment, waiver or consent shall, unless in writing and signed by the Borrowers and the Required Lenders and, if the Lenders under any such Facility are directly affected by such amendment, waiver or consent, Lenders holding more than 50% of the aggregate Commitments or, if no Commitments are then outstanding under such Facility, the Advances then outstanding, under the Term A Facility, the Term B Facility, the Term C Facility or the Revolving Credit Facility, as the case may be, change the order of application of any reduction in the Commitments in any manner that materially affects any Lender Party under such Facility at any time when all or a portion of the Term A Facility, the Term B Facility or the Term C Facility remains in effect or permanently reduce the Revolving Credit Facility;

and provided further that no amendment, waiver or consent shall, unless in writing and signed by each Swing Line Bank or each Issuing Bank, as the case may be, in addition to the Lenders required above to take such action, affect the rights or duties of such Swing Line Bank or such Issuing Bank under this Agreement or any of the other Loan Documents; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lender Parties required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or any of the other Loan Documents.  Notwithstanding any of the foregoing provisions of this Section 9.01, none of the defined terms set forth in Section 1.01 shall be amended, supplemented or otherwise modified hereafter in any manner that would change the meaning, purpose or effect of this Section 9.01 or any section referred to herein unless such amendment, supplement or modification is agreed to in writing by the number and percentage of Lenders (and each Swing Line Bank, each Issuing Bank and the Administrative Agent, in each case, if applicable) otherwise required to amend such section under the terms of this Section 9.01.

SECTION 9.02.  Notices, Etc.  All notices and other communications provided for hereunder shall be in writing (including telegraphic, telecopy or telex communication) and mailed, telegraphed, telecopied, telexed or delivered, if to any of the Borrowers, at its address at 201 East Fourth Street, 102-760, P.O. Box 2301, Cincinnati, Ohio 45201-2301, Attention:  Treasurer, Telecopier No.: 513-397-4177; if to any Initial Lender Party, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender Party; if to the Syndication Agent, at its address at 1101Wootton Parkway, Third Floor, Rockville, Maryland 20852-1059, Attention: Michael Heredia, Telecopier No.: (301) 517-3236, with a copy to Wayne Gero, One Independence Center, 101 N. Tryon St., Charlotte, NC  28255, Telecopier No.: 704-409-0050; and if to the Administrative Agent, at its

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address at 388 Greenwich Street, 21^st Floor, New York, NY 10013, Attention:  John Judge; Telecopier No.: 212-816-8084; or, as to the Borrowers or the Administrative Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrowers and the Administrative Agent.  All such notices and other communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerback, respectively, except that notices and communications to any Agent pursuant to Article II, III or VIII shall not be effective until received by such Agent.  Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof.

SECTION 9.03.  No Waiver; Remedies.  No failure on the part of any Lender Party or any Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 9.04.  Costs and Expenses.  (a) Each of the Borrowers hereby agrees to pay on demand (i) all costs and expenses of each Agent in connection with the preparation, execution, delivery, administration, modification and amendment of the Loan Documents (including, without limitation, (A) all due diligence, collateral review, syndication, transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and recording fees and expenses and (B) the reasonable fees and expenses of counsel for the Agents with respect thereto, with respect to advising the Agents as to their rights and responsibilities, or the perfection, protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto) and (ii) all costs and expenses of each Agent and each Lender Party in connection with the enforcement of the Loan Documents, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent and each Lender Party with respect thereto).

(b)Each of the Borrowers hereby jointly and severally agrees to indemnify, defend and save and hold harmless each Agent, each Lender Party and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection

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therewith) (i) the Transaction (or any aspect thereof), (ii) the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Transaction Documents or any of the transactions contemplated thereby, including, without limitation, any acquisition or proposed acquisition (including, without limitation, the Transaction) by BRW or any of its Subsidiaries (including BCI and its Subsidiaries) or Affiliates of all or any portion of the Equity Interests in or Debt securities or substantially all of the property or assets of any other Person or (iii) the actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 9.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified Party, whether or not any Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated.  Each Borrower also agrees not to assert any claim against any Agent, any Lender Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Transaction Documents or any of the transactions contemplated by the Transaction Documents.

It is understood and agreed that, unless (i) a conflict of interest between such Indemnified Party and any Loan Party or any of their respective Affiliates may exist in respect of such Indemnifiable Matter in the reasonable opinion of counsel for such Indemnified Party or (ii) there may be one or more legal defenses available to such Indemnified Party that are different from or in addition to, but in any such case are adverse to, any other Loan Parties or any of their respective Affiliates, each Indemnified Party shall reasonably endeavor to work cooperatively with each of the Borrowers with a view toward minimizing the legal and other expenses associated with any defense and any potential settlement or judgment; provided that no Indemnified Party shall be required to disclose information of a type that lenders do not generally disclose to borrowers or that such Indemnified Party would be prohibited from disclosing based on any Federal, state or foreign authority or examiner regulating such Indemnified Party.  To the extent reasonably practicable and not disadvantageous to any Indemnified Party, it is anticipated that a single counsel selected by the Borrowers and reasonably satisfactory to such Indemnified Party may be used and such Borrowers shall be responsible for all fees and expenses of each such counsel.  Notwithstanding the foregoing, such Indemnified Party shall have the right (but not any obligation) to retain separate co-counsel and shall have the right, but not the obligation, to assert any and all defenses, cross-claims and counterclaims that it may have, and the fees and expenses of any such co-counsel shall be at the expense of such Indemnified Party (except that such Borrower or Borrowers shall be responsible for the fees and expenses of the separate co-counsel (x) to the extent such Indemnified Party reasonably concludes that any of the counsel chosen by such Borrower or Borrowers to participate in the defense of any such Indemnifiable Matter has a conflict of interest, (y) if such Borrower or Borrowers do not employ counsel reasonably satisfactory to such Indemnified Party or (z) if such Borrower or Borrowers or its counsel does not at all times defend such

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Indemnifiable Matter vigorously and in good faith.  Settlement of any claim or litigation involving any material indemnified amount will require the approval of the Borrowers (not to be unreasonably withheld).

(c)If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by any Borrower to or for the account of a Lender Party other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d), acceleration of the maturity of the Notes pursuant to Section 7.01 or for any other reason, or by an Eligible Assignee to a Lender Party other than on the last day of the Interest Period for such Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 9.07 as a result of a demand by such Borrower pursuant to Section 9.07(a), or if such Borrower fails to make any payment or prepayment of an Advance for which a notice of prepayment has been given or that is otherwise required to be made, whether pursuant to Section 2.04, 2.06 or 7.01 or otherwise, such Borrower shall, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender Party to fund or maintain such Advance.

(d)If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or any Lender Party, in its sole discretion.

(e)Without prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of each Borrower contained in Sections 2.10 and 2.12 and this Section 9.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Loan Documents.

SECTION 9.05.  Right of Set-off.  Upon (a) the occurrence and during the continuance of any Event of Default and (b) the making of the request or the granting of the consent specified by Section 7.01 to authorize the Administrative Agent to declare the Notes due and payable pursuant to the provisions of Section 7.01, each Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account of each Borrower against any and all of the Obligations of the Borrowers now or hereafter existing under the Loan Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under this Agreement or such Note or Notes and although such Obligations may be unmatured.  Each Agent and each Lender Party agrees promptly to notify the Borrowers after any such set-off and application; provided, however, that the failure to give such notice

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shall not affect the validity of such set-off and application.  The rights of each Agent and each Lender Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Agent, such Lender Party and their respective Affiliates may have.

SECTION 9.06.  Binding Effect.  The amendment and restatement contemplated by this Agreement shall become effective as set forth in Section 3.01 and thereafter shall be binding upon and inure to the benefit of each Borrower, each Agent and each Lender Party and their respective successors and assigns, except that no Borrower shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender Parties.

SECTION 9.07.  Assignments and Participations.  (a)  Each Lender may and, so long as no Default shall have occurred and be continuing, if demanded by BRW (following a demand by such Lender pursuant to Section 2.10 or 2.12) upon at least five Business Days’ notice to such Lender and the Administrative Agent, will assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations under and in respect of one or more Facilities, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $1,000,000 or an integral multiple of $1,000,000 in excess thereof (or such lesser amount as shall be approved by the Administrative Agent and, so long as no Default shall have occurred and be continuing at the time of effectiveness of such assignment, the Borrowers) under each Facility for which a Commitment is being assigned; provided, that in the event of concurrent assignments to two or more Related Funds, all such concurrent assignments shall be aggregated in determining compliance with this requirement, (iii) each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand by the Borrowers pursuant to this Section 9.07(a) shall be arranged by the Borrowers after consultation with the Administrative Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrowers pursuant to this Section 9.07(a) unless and until such Lender shall have received one or more payments from either the Borrowers or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement, (vi) [intentionally omitted] and (vii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note or Notes subject to such assignment and a processing and recordation fee of $3,500; provided, however, that for each such assignment

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made as a result of a demand by any Borrower pursuant to this Section 9.07(a), such Borrower shall pay to the Administrative Agent the applicable processing and recordation fee; provided further, that no such fee shall be payable in the case of any assignment to a Related Fund; and provided still further that, in the case of contemporaneous assignments by a Lender to more than one fund managed by the same investment advisor (which funds are not then Lenders hereunder), only a single such fee shall be payable for such contemporaneous assignments.

(b)Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the case may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than its rights under Sections 2.10, 2.12 and 9.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Lender’s or Issuing Bank’s rights and obligations under this Agreement, such Lender or Issuing Bank shall cease to be a party hereto).

(c)By executing and delivering an Assignment and Acceptance, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and the other parties thereto and hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon any Agent, such assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender or Issuing Bank, as the case may be.

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(d)The Administrative Agent, acting for this purpose (but only for this purpose) as the agent of each of the Borrowers, shall maintain at its address referred to in Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lender Parties and the Commitment under each Facility of, and principal amount of the Advances owing under each Facility to, each Lender Party from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and each Borrower, the Agents and the Lender Parties may treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement.  The Register shall be available for inspection by any Borrower or any Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice.

(e)Upon its receipt of an Assignment and Acceptance executed by an assigning Lender Party and an assignee, together with any Note or Notes subject to such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrowers and each other Agent.  In the case of any assignment by a Lender, within five Business Days after its receipt of such notice, each Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under each Facility pursuant to such Assignment and Acceptance and, if any assigning Lender has retained a Commitment hereunder under such Facility, a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder.  Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A-1 or A-2 hereto, as the case may be.

(f)Each Issuing Bank may assign to one or more Eligible Assignees all or a portion of its rights and obligations under the undrawn portion of its Letter of Credit Commitment at any time; provided, however, that (i) except in the case of an assignment to a Person that immediately prior to such assignment was an Issuing Bank or an assignment of all of an Issuing Bank’s rights and obligations under this Agreement, the amount of the Letter of Credit Commitment of the assigning Issuing Bank being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $5,000,000 and shall be in an integral multiple of $1,000,000 in excess thereof, (ii) each such assignment shall be to an Eligible Assignee and (iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500.

(g)Each Lender Party may sell participations to one or more Persons (other than any Loan Party or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it); provided, however, that (i) such

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Lender Party’s obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lender Parties shall continue to deal solely and directly with such Lender Party in connection with such Lender Party’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or release all or substantially all of the Collateral.

(h)Any Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.07, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrowers furnished to such Lender Party by or on behalf of the Borrowers; provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party.

(i)Notwithstanding any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

(j)Notwithstanding anything to the contrary contained herein, any Lender Party, (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrowers (an “SPC”) the option to provide all or any part of any Advance that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Advance, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant to the terms hereof.  The making of an Advance by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender.  Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender Party would otherwise be liable for so long as, and to the extent, the Granting Lender provides such indemnity or makes such payment and (ii) no SPC shall be entitled to the benefits of Sections 2.10 and 2.12 (or any other increased costs protection provision).  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior Debt of any SPC, it will not institute against, or join any other person in instituting

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against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained in this Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrower, the Syndication Agent and the Administrative Agent and without paying any processing fee therefor, assign all or any portion of its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Advances to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC.  This subsection 9.07(j) may not be amended without the prior written consent of each Granting Lender, all or any part of whose Advances are being funded by the SPC at the time of such amendment.  For the avoidance of doubt, with respect to the Agents, the other Lender Parties and the Borrowers, the Granting Bank shall for all purposes, including, without limitation, the approval of any amendment or waiver of any provision of any Loan Document, be the Lender Party of record hereunder.

(k)Notwithstanding any other provision set forth in this Agreement, any Lender Party that is a fund that invests in bank loans may pledge all or any portion of its rights in connection with this Agreement to the trustee for holders of obligations owed, or securities issued, by such fund as security for such obligations or securities; provided that nothing contained herein shall affect any obligations of the Lender Party or such pledgee to comply with the requirements of Section 9.07 in order for such pledgee to become a Lender Party under this Agreement.  No pledge described in the immediately preceding sentence shall release such Lender Party from its obligations under this Agreement.

SECTION 9.08.  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of an original executed counterpart of this Agreement.

SECTION 9.09.  No Liability of the Issuing Banks.  Each Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit issued on behalf of such Borrower with respect to its use of such Letter of Credit.  Neither any Issuing Bank nor any of its officers or directors shall be liable or responsible for:  (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that such Borrower shall have a claim against such Issuing Bank, and such Issuing Bank shall be liable to such Borrower, to the extent of any direct, but not consequential, damages suffered by such Borrower that such Borrower proves were caused by (i) such Issuing Bank’s willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of

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Credit comply with the terms of the Letter of Credit or (ii) such Issuing Bank’s willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit.  In furtherance and not in limitation of the foregoing, such Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

SECTION 9.10.  Confidentiality. (a) The parties hereto hereby agree that each party (and each employee, representative or other agent of such party) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure (as such terms are used in Sections 6011, 6111 and 6112 of the Internal Revenue Code and the Treasury  Regulations promulgated thereunder) of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.  For this purpose, tax treatment and tax structure shall not include the identity of any existing or future party (or any Affiliate of such party) to the Transaction.

(b) Subject to paragraph (a) of this Section 9.10, neither the Agents nor any Lender Party may disclose to any Person any confidential, proprietary or non-public information of the Borrowers furnished to the Agents or the Lender Parties by the Borrowers (such information being referred to collectively herein as the “Borrower Information”), except that each of the Agents and each of the Lender Parties may disclose Borrower Information (i) to its and its affiliates’ employees, officers, directors, agents, accountants, attorneys and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Borrower Information and instructed to keep such Borrower Information confidential on substantially the same terms as provided herein), (ii) to the extent requested by any regulatory authority or self regulatory body operating pursuant to statutory authority having or claiming authority to regulate or oversee any aspect of any business of any Lender or that of any of its Affiliates, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party to this Agreement who have agreed to hold the Borrower Information in confidence on substantially the same terms as provided herein, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section 9.10, to any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement, (vii) to the extent such Borrower Information (A) is or becomes generally available to the public on a non-confidential basis other than as a result of a breach of this Section 9.10 by such Agent or such Lender Party, or (B) is or becomes available to such Agent or such Lender Party on a nonconfidential basis from a source other than the Borrowers, (viii) with the consent of the Borrowers, or (xi) to any direct or indirect contractual counterparty in swap agreements or such contractual counterparty’s professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty is subject to the confidentiality obligations of this Agreement). Any Person required to maintain the confidentiality of Borrower Information as provided in this Section 9.10 shall be considered to

144

have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Borrower Information as such Person would accord to its own confidential information; provided, however, that with respect to disclosures pursuant to clauses (ii) and (iii) of this Section 9.10 (other than disclosures pursuant to routine regulatory examinations), unless prohibited by law or applicable court order, each Lender Party and each Agent shall attempt to notify the Borrowers of any request by any governmental agency or representative thereof or other Person for disclosure of Borrower Information after receipt of such request, and if reasonable, practicable and permissible, before disclosure of such Borrower Information.  It is understood and agreed that the Borrowers and their respective Affiliates may rely upon this Section 9.10 for any purpose, including without limitation to comply with Regulation FD promulgated by the Securities and Exchange Commission.

(c)Subject to paragraph (a) of this Section 9.10,  the Borrowers may not disclose to any Person the amount or terms of any fees (other than as set forth in this Agreement) payable to the Agents (such information being collectively referred to herein as the “Facility Information”), except  that the Borrowers may disclose the Facility Information (i) to its and its affiliates’ employees, officers, directors, agents and advisors who have a need to know the Facility Information in connection with this Agreement and the transactions contemplated hereby or (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process.

SECTION 9.11.  Release of Collateral.  Upon (a) the Investment Grade Date or (b) the sale, lease, transfer or other disposition of any item of Collateral of any Loan Party (including, without limitation, as a result of the sale, in accordance with the terms of the Loan Documents, of the Loan Party that owns such Collateral) in accordance with the terms of the Loan Documents, the Administrative Agent will, at the Borrowers’ expense, execute and deliver to such Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents in accordance with the terms of the Loan Documents.  Without limiting the foregoing, the lenders hereby authorize and direct the Administrative Agent, at the Borrowers’ expense, in connection with any transaction permitted under Section 5.02(e)(ix) to take any and all actions required to release from the assignment and security interest granted under the Collateral Documents any and all Collateral consisting of assets of BCI and its Subsidiaries subject to such transaction and to terminate any and all other arrangements for the benefit of the Lenders in respect of assets of BCI and its Subsidiaries subject to such transaction (including but not limited to the arrangements in respect of the Real Estate SPV).

SECTION 9.12.  Jurisdiction, Etc.  (a)  Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, 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 any such New York State court or, to the fullest extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such

145

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 shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction.

(b)Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that 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 or any of the other Loan Documents to which it is a party in any New York State or Federal court.  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.

SECTION 9.13.  Integration.  This Agreement and the other Loan Documents represent the entire agreement of the Borrowers, the Guarantors, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any Borrower, any Guarantor, the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

SECTION 9.14.  Governing Law.  This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 9.15.  Waiver of Jury Trial.  Each of the Borrowers, the Agents and the Lender Parties irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the Advances, the Letters of Credit or the actions of any Agent or any Lender Party in the negotiation, administration, performance or enforcement thereof.

SECTION 9.16.  BCSI Sale Agreement.  Each of the Borrowers, the Agents and the Lender Parties agrees that it is their intent to permit the BCSI Sale Agreement and the transactions contemplated thereby. Notwithstanding any other provision of any Loan Document to the contrary, (a) the BCSI Sale Agreement and each transaction contemplated thereby shall be permitted and (b) no action taken or omitted to be taken in compliance with or in furtherance of the BCSI Sale Agreement and the transactions contemplated thereby shall for any purpose constitute a Default or Event of Default, a BCI Default or BCI Event of Default or a breach of any representation or warranty, covenant or other agreement under any Loan Document.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written

BROADWING INC.
By	/s/ Mark W. Peterson
Title: Vice President & Treasurer
BROADWING COMMUNICATIONS SERVICES INC.
By	/s/ Mark W. Peterson
Title: Vice President and Treasurer
CITICORP USA, INC.,
as Administrative Agent, Initial Lender, Initial Issuing Bank and Swing Line Lender
By	/s/ John T. Judge
Title: Vice President
BANK OF AMERICA, N.A.,
as Syndication Agent, Initial Lender, Initial Issuing Bank and Swing Line Lender
By	/s/ Michael R. Heredia
Title: Managing Director

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Lenders:

Name of Institution

By

Title:

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Schedule II to the

Credit Agreement

List of Subsidiary Guarantors

BRW Guarantors:

Broadwing Financial LLC

Broadwing Holdings Inc.

Zoomtown.Com Inc.

Cincinnati Bell Any Distance Inc.

Cincinnati Bell Wireless Company

Cincinnati Bell Wireless Holdings LLC

Cincinnati Bell Public Communications Inc.

Cincinnati Bell Telecommunications Services Inc.

BCSI Guarantors:

Broadwing Financial LLC

Broadwing Communications Inc.

Broadwing Communications Services Inc.

Broadwing Holdings Inc.

Zoomtown.Com Inc.

Cincinnati Bell Any Distance Inc.

Cincinnati Bell Wireless Company

Cincinnati Bell Wireless Holdings LLC

Broadwing Telecommunications Inc.

IXC Business Services, LLC

Broadwing Communications Services of Virginia, Inc.

IXC Internet Services, Inc.

Broadwing Communications Real Estate Services LLC

Broadwing Technology Solutions Inc.

Cincinnati Bell Public Communications Inc.

Cincinnati Bell Telecommunications Services Inc.

Broadwing Services LLC

Broadwing Logistics LLC

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Schedule 5.01(r)
to the Credit Agreement

Description of Centralized
BRW Cash Management System:  Cash Management
Procedures and Intercompany Lending

BRW and its Subsidiaries (including, for all purposes of this Schedule 5.01(r), BCI and its Subsidiaries) each maintain a cash concentration account at PNC Bank, N.A., in Cincinnati, Ohio.  These accounts are directly connected to each other through daily sweeping transactions.  The sweeping transactions are set up to automatically transfer any excess balances at BRW and its Subsidiaries into the cash concentration account (the “Cash Concentration Account”) held by Broadwing Financial LLC at the end of each business day.  If BRW or a Subsidiary concentration account has a negative balance at the end of a business day, funds are automatically transferred from the Cash Concentration Account into BRW’s or such Subsidiary’s account.  Sweeping transfers made from the Cash Concentration Account into the BRW account or a Subsidiary account are booked as a loan to BRW or such Subsidiary, as the case may be.  Sweeping transfers made from the BRW account or a Subsidiary account to the Cash Concentration Account are booked as a loan to Broadwing Financial LLC.  The net amount borrowed or loaned by BRW or each Subsidiary is added to BRW’s or such Subsidiary’s previous outstanding loan balance with Broadwing Financial LLC and rolled forward.

No amount may be transferred to the BRW concentration account in respect of a payment on the New Notes or the Other Permitted Equity if a Blocking Event has occurred and is continuing.

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EXHIBITS D-1, D-2, E-1 and E-2

PLEASE SEE SEPARATELY EXECUTED DOCUMENTS.

151

EXECUTION COPY

$1,605,041,000

SECOND AMENDMENT AND RESTATEMENT

OF THE

CREDIT AGREEMENT

Dated as of March 26, 2003

Among

BROADWING INC.

and

BROADWING COMMUNICATIONS SERVICES INC.

as Borrowers

and

BROADWING INC.

as Parent Guarantor

THE INITIAL LENDERS, INITIAL ISSUING BANKS AND

 SWING LINE BANKS NAMED HEREIN

as Initial Lenders, Initial Issuing Banks and Swing Line Banks

and BANK OF AMERICA, N.A.

as Syndication Agent

and

CITICORP USA, INC.

as Administrative Agent

and

CREDIT SUISSE FIRST BOSTON
and

THE BANK OF NEW YORK

as Co-Documentation Agents

and

PNC BANK, N.A.

as Agent

and

SALOMON SMITH BARNEY INC.

BANC OF AMERICA SECURITIES LLC

as Joint Lead Arrangers and Joint Book Managers

152

Table of Contents

S&S DRAFT

153

154

155

SCHEDULES
Schedule I	-	Commitments and Applicable Lending Offices
Schedule II	-	Subsidiary Guarantors
Schedule 1.01	-	BCI Group Transactions
Schedule 4.01(b)	-	Subsidiaries
Schedule 4.01(c)(iii)	-	Conflicts
Schedule 4.01(d)	-	Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(f)	-	Disclosed Litigation
Schedule 4.01(q)	-	Environmental
Schedule 4.01(t)	-	Surviving Debt
Schedule 4.01(u)	-	Liens
Schedule 4.01(v)	-	Investments
Schedule 4.01(w)	-	Material Contracts
Schedule 5.01(r)	-	Cash Management
EXHIBITS
Exhibit A-1	-	Form of Revolving Credit Note
Exhibit A-2	-	Form of Term Note
Exhibit B	-	Form of Notice of Borrowing
Exhibit C	-	Form of Assignment and Acceptance
Exhibit D-1	-	Form of Shared Collateral Security Agreement
Exhibit D-2	-	Form of Non-Shared Collateral Security Agreement
Exhibit E-1	-	Form of BCSI Subsidiary Guaranty
Exhibit E-2	-	Form of BRW Subsidiary Guaranty

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EX-10.4

Exhibit 10.4

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

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

ARTICLE 1.

DEFINITIONS AND ACCOUNTING TERMS

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

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

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

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

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

1

; or

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

(c)           if the Specified Date occurs between two Accrual Dates, the Accreted Value shall equal the sum of (A) the Accreted Value for the Accrual Date immediately preceding such Specified Date and (B) an amount equal to the product of (1) the Accreted Value for the immediately following Accrual Date less the Accreted Value for the immediately preceding Accrual Date multiplied by (2) a fraction, the numerator of which is the number of days elapsed from the immediately preceding Accrual Date to the Specified Date, using a 360-day year of twelve 30-day months, and the denominator of which is 180.  In the event the Trustee is required to take any action which requires the calculation described in the preceding sentence, upon request by the Trustee, the Company shall calculate such Accreted Value and set forth such amount in an Officers’ Certificate; or

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

If an Event of Default has occurred and is continuing on or prior to the Specified Date, the Accreted Value on such date shall be increased (until such time as no Event of Default is continuing) by an amount equal to the product of (A) a fraction, the numerator of which is the number of days, using a 360-day year of twelve 30-day months, since the immediately preceding Accrual Date during which such Event of Default occurred and was continuing and the denominator of which is 360, multiplied by (B) 0.0075.

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

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

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

“Affiliate Transaction” is defined in Section 5.06.

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

“Appendix” is defined in the recitals.

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

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

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

“Asset Disposition” means the disposition by the Company or any Restricted Subsidiary of the Company whether by sale, issuance, lease (as lessor (other than under operating leases)), transfer, loss, damage, destruction, condemnation or other transaction (including any merger or consolidation) or series of related transactions of any of the following:  (a) any of the Capital Stock of any of the Company’s Restricted Subsidiaries, (b) all or substantially all of the assets of the Company or any of its Restricted Subsidiaries (it being

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understood and agreed that the disposition of the BCI Group or any assets of the BCI Group does not constitute a disposition of all or substantially all of the assets of the Company or any of its Restricted Subsidiaries) or (c) any other assets of the Company or any of its Restricted Subsidiaries.  Notwithstanding the foregoing, Asset Dispositions shall be deemed not to include (i) a transfer of assets by (x) the Company to a Wholly Owned Restricted Subsidiary of the Company, or by a Restricted Subsidiary of the Company to the Company or to another Wholly Owned Restricted Subsidiary of the Company or (y) the Company or a Restricted Subsidiary to CBW, or by CBW to the Company or to another Wholly Owned Restricted Subsidiary of the Company; provided that the aggregate amount of all such transfers to CBW, together with the amount of all Permitted Investments made pursuant to clause (i)(A)(y) of the definition thereof, shall not exceed 5% of Consolidated Total Assets, (ii) an issuance of Capital Stock by a Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company, (iii) a Restricted Payment that is permitted by the provisions of Section 5.02, (iv) a Permitted Investment, (v) any conversion of Cash Equivalents into cash or any other form of Cash Equivalents, (vi) any foreclosure on assets, (vii) sales or dispositions of past due accounts receivable or notes receivable in the Ordinary Course of Business, (viii) transactions permitted under Article 6 hereof, (ix) grants of credits and allowances in the Ordinary Course of Business, (x) operating leases or the sublease of real or personal property or licenses of intellectual property, in each case, on commercially reasonable terms entered into in the Ordinary Course of Business, (xi) trade-ins or exchanges of equipment or other fixed assets, (xii) the sale and leaseback of any assets within 180 days of the acquisition thereof, (xiii) sales of damaged, worn-out or obsolete equipment or assets that, in the Company’s reasonable judgment, are no longer either used or useful in the business of the Company or its Subsidiaries, (xiv) dispositions of inventory in the Ordinary Course of Business; (xv) the disposition of cash or investment securities in the ordinary course of management of the investment portfolio of the Company and its applicable Subsidiaries; (xvi) sales of assets with a fair market value of less than $250,000; or (xvii) sales of other assets with a fair market value not to exceed $10,000,000 in the aggregate in any fiscal year.

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

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

“Bankruptcy Law” means Title 11 of the United States Code or any similar federal or state bankruptcy, insolvency, reorganization or other law for the relief of debtors.

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

“BCI Group” means BCI and its Subsidiaries.

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

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“Blockage Notice” is defined in Section 8.03.

“Blockage Period” is defined in Section 8.03.

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

“Business Day” means any day other than a Legal Holiday.

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

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

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

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

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

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

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

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

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

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

“Change of Control” means the occurrence of any of the following:  (a) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or more related transactions, of all or substantially all of the properties and assets of the Company and its Subsidiaries, taken as a whole (it being understood and agreed that the disposition of the BCI Group does not constitute a disposition of all or substantially all of the properties and assets of the Company and its Subsidiaries, taken as a whole), to any Person unless: (x) pursuant to such transaction such assets are changed into or exchanged for, in addition to any other consideration, securities of such Person that represent immediately after such transaction at least a majority of the aggregate voting power of the Voting Stock of such Person and (y) no “person” (as such term is used in Section 13(d)(3) of the Exchange Act) or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) is the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of either the total economic value of such Person or the total voting power of the Voting Stock of such Person; (b) the adoption of a plan relating to the liquidation or dissolution of the Company; (c) any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of either the total economic value of the Company’s outstanding Capital Stock or the total voting power of the Voting Stock of the Company; (d) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors of the Company or whose nomination for election by the shareholders of the Company, was approved

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

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

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

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

“Cincinnati Bell Group” means the Company and its Restricted Subsidiaries.

“Closing Date” is defined in the Purchase Agreement.

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

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

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

“Company” is defined in the preamble.

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

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

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

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

“Consolidated EBITDA” means for the applicable period of measurement, the Consolidated Net Income of the Company and its Restricted Subsidiaries on a consolidated basis, plus, without duplication, the following for the Company and its Restricted Subsidiaries to the extent deducted in calculating such Consolidated Net Income:  (i) Consolidated Interest Expense for such period, plus (ii)  provisions for taxes based on income, plus (iii) total depreciation expense, plus (iv) total amortization expense, plus (v) other non-cash items reducing Consolidated Net Income (excluding any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item) less other non-cash items increasing Consolidated Net Income (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period), plus (vi) charges taken in accordance with SFAS 142, plus (vii) all net cash extraordinary losses less net cash extraordinary gains, plus (vii) all restructuring charges set forth on Schedule 1.1(a).

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

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

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

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

“Convertible Preferred Stock” means the 12 ½% Series B Junior Exchangeable Preferred Stock Due 2009 of BCI and the 6 ¾% Cumulative Convertible Preferred Stock of the Company.

“Convertible Subordinated Notes” means those certain 6 ¾% Convertible Subordinated Notes due 2009 of the Company issued pursuant to the Convertible Subordinated Indenture with an original aggregate issue price of $400,000,000, and any such notes issued in exchange or replacement therefor.

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

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

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

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

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

“Custodian” is defined in Section 7.01.

“Definitive Note” is defined in the Appendix.

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

“Depositary” is defined in the Appendix.

“Designated Senior Indebtedness” means (i) Indebtedness under or in respect of the Credit Agreement and (ii) any other Indebtedness constituting Senior Indebtedness which, at the time of determination, has an aggregate principal amount of at least $25,000,000 and is specifically designated in the instrument evidencing such Senior Indebtedness as “Designated Senior Indebtedness” by the Company.

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

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

“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, requests, licenses, authorizations and 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.

“Event of Default” is defined in Section 7.01.

“Excess Proceeds” is defined in Section 5.05(b).

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

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

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

“Exchange Notes” is defined in the recitals.

“Existing BCSI Loan” means Indebtedness of BCSI Incurred under the Credit Agreement prior to the date of this Indenture and any Indebtedness of BCSI Incurred under the Credit Agreement for the purpose of making interest payments on (w) the Existing BCSI Loan, (x) any Indebtedness of the BCI Group Incurred under the Credit Agreement after the date of this Indenture subject to the limitations set forth in Section 5.11(a), (y) BCI’s 9% Senior Subordinated Notes Due 2008 or (z) BCI’s 12 ½% Senior Series B Notes due 2005.

“Existing Indebtedness” all Indebtedness of the Company and its Restricted Subsidiaries existing as of the Closing Date (after giving effect to the redemption, repurchase, repayment or prepayment of Indebtedness out of the proceeds of the Notes); provided that for purposes of Section 5.04(b), Existing Indebtedness shall not include Indebtedness of the type permitted to be Incurred by Section 5.04(b)(iii) and (v).

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

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

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

“Global Notes Legend” is defined in the Appendix.

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

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

“Guaranteed Obligations” is defined in Section 11.01(a).

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

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

“Incur” is defined in Section 5.04(a).

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

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all Interest Swap Obligations of such Person; and (ix) all obligations represented by a Disqualified Capital Stock of such Person.  The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer, but only to the extent to which there is recourse to such Person for the payment of such Indebtedness.

“Indenture” is defined in the preamble.

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

“Initial Notes” is defined in the recitals.

“Institutional Accredited Investor” is defined in the Appendix.

“Interest Coverage Test” is defined in Section 5.04.

“Interest Payment Date” is defined in Exhibit A.

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

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

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Company (to the extent of the Company’s percentage ownership therein) at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary of the Company and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary of the Company (to the extent of the Company’s percentage ownership therein) at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company; and (ii) the amount of any Investment shall be the original cost of such Investment plus the cost of all additional Investments by the Company or any of its Restricted Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced (other than for purposes of calculations under Section 5.11) by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment; provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in New York or Ohio or at a place of payment are authorized by law, regulation or executive order to remain closed.  If any payment date in respect of the Notes is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

“Leverage Test” is defined in Section 5.04.

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

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

“Material Restricted Subsidiary” means a Restricted Subsidiary that constitutes a Material Subsidiary.

“Material Subsidiary” means any Subsidiary that is or would be a “significant subsidiary” of the Company within the meaning of Rule 1-02 of Regulation S-X promulgated by the Commission.

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

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

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“Net Proceeds” means cash proceeds actually received by the Company or any of its Restricted Subsidiaries from any Asset Disposition (including insurance proceeds, awards of condemnation, and payments under notes or other debt securities received in connection with any Asset Disposition), net of (a) the costs of such sale, issuance, lease, transfer or other disposition (including all legal, title and recording tax expenses, commissions and other fees and expenses incurred and all Taxes required to be paid or accrued as a liability under GAAP as a consequence of such sale, lease or transfer), (b) amounts applied to repayment of Indebtedness (other than revolving credit Indebtedness under the Credit Agreement, without a corresponding reduction in the revolving credit commitment) secured by a Lien on the asset or property disposed of, (c) if such Asset Disposition involves the sale of a discrete business or product line, any accrued liabilities of such business or product line required to be paid or retained by the Company or any of its Restricted Subsidiaries as part of such disposition, (d) appropriate amounts to be provided by the Company or a Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with an Asset Disposition and retained by the Company or such Restricted Subsidiary, as the case may be, after such Asset Disposition, including, without limitation, pension and benefit liabilities, liabilities related to environmental matters or liabilities under any indemnification obligations associated with such Asset Disposition and (e) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition, but only to the extent required by constituent documents of such Subsidiary or such joint venture.

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

“Note Registration” shall mean the first to occur of (i) the consummation of a Registered Exchange Offer and (ii) the effectiveness of a Shelf Registration Statement filed with the Commission.

“Notes” is defined in the recitals.

“Notes Custodian” is defined in the Appendix.

“Notice of Default” is defined in Section 9.05.

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

“Offer Amount” is defined in Section 4.10(c).

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

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

15

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

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

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

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

“Paying Agent” is defined in Section 2.03.

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

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

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

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Subsidiary of the Company whose primary business is the same, related, ancillary or complementary to the business in which the Company and its Restricted Subsidiaries were engaged on the date of this Indenture and (y) a Guarantor hereunder or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, a Restricted Subsidiary of the Company and whose primary business is the same, related, ancillary or complementary to the business in which the Company and its Subsidiaries were engaged in on the date of this Indenture; provided that at the time of such purchase or Investment, (x) no Default or Event of Default exists or would be caused upon the consummation thereof and (y) in the case of Permitted Acquisitions involving any consideration other than the Common Stock of the Company, after giving effect to such Permitted Acquisition, the Company can Incur $1.00 of Indebtedness under Section 5.04(a).

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

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

“Permitted Investments” means:

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

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of the second sentence of the definition thereof, shall not exceed 5% of Consolidated Total Assets and (B) any acquisition by the Company or a Wholly Owned Restricted Subsidiary of the Company of beneficial interest in a Restricted Subsidiary of the Company from another Restricted Subsidiary of the Company or the Company;

(ii)           any Investment in Cash Equivalents or the Notes;

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

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

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

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

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

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

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

(x)            any Investment existing on the date of this Indenture, any Investment received as a distribution in respect of such existing Investment and any Investment received in exchange for such existing Investment; provided that, in the case of an exchange, the fair market value (as determined in good faith by the Board of Directors of the Company) of the Investment being exchanged is at least equal to the fair market value (as determined in good faith by the Board of Directors of the Company) of the Investment for which such Investment is being exchanged;

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

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

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

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

(xv)         Investments consisting of debits and credits between Broadwing Financial LLC and the Company, its Restricted Subsidiaries and, subject to Section 5.11, its Unrestricted Subsidiaries pursuant to the Centralized Cash Management System;

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

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

(xviii)      Investments permitted to be made by Section 5.11;

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

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

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

“Permitted Liens” means:

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

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

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

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

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

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

(vii)         Liens securing Capitalized Lease Obligations and purchase money Indebtedness permitted pursuant to Section 5.04(b)(iii); provided, however, that in the case of purchase money Indebtedness (a) the Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of the Company or any Restricted Subsidiary of the Company other than the property and assets so acquired, constructed, repaired, added to or improved and (b) the Lien securing such Indebtedness shall be created within 180 days after the date of such acquisition or, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien or, in the case of a Refinancing of any purchase money Indebtedness, within 180 days of such Refinancing;

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

(ix)           Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

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

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

(xii)          Liens in existence on the date hereof;

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

(xiv)        leases, subleases, licenses and sublicenses of the type referred to in clause (x) in the second sentence of the definition of “Asset Disposition” granted to third parties in the Ordinary Course of Business;

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

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

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

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

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

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

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

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

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

“Preferred Stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation, and shall include the 6¾% Convertible Preferred Stock of the Company.

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

“Purchase Date” is defined in Section 4.10(c).

“Purchasers” is defined in the Appendix.

“QIB” is defined in the Appendix.

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

“Redemption Price,” when used with respect to any Note to be redeemed, means the price at which such Note is to be redeemed pursuant to this Indenture and the Notes.

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

“Registered Exchange Offer” is defined in the Appendix.

“Registrar” is defined in Section 2.03.

“Registration Default” is defined in Exhibit A.

“Regular Record Date” is defined in Exhibit A.

“Regulation S” is defined in the Appendix.

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

“Required Holders” means Holders holding more than 50% of the then outstanding aggregate principal amount at Maturity of the Notes (exclusive of Notes then owned directly or indirectly by the Company, or any of its Subsidiaries or Affiliates).

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

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

“Restricted Notes Legend” is defined in the Appendix.

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“Restricted Payments” is defined in Section 5.02.

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

“Rule 501” is defined in the Appendix.

“Rule 144A” is defined in the Appendix.

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

“Securities Act” is defined in the Appendix.

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

“Senior Notes” means those certain 7¼% Senior Notes due 2023 of the Company issued pursuant to an indenture dated as of July 1, 1993 in the aggregate principal amount of $50,000,000, and any such notes issued in exchange or replacement therefor.

“Senior Subordinated Indebtedness” means the Notes and any other Indebtedness of the Company permitted hereunder which expressly ranks pari passu to the payment and performance of the Notes.

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

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“Shelf Registration Statement” is defined in the Appendix.

“Special Interest” is defined in Exhibit A.

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

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

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

“Stated Maturity Date” is defined in Exhibit A.

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

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

“Successor Company” is defined in Section 6.01.

“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.

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

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

“Transaction Documents” is defined in the Purchase Agreement.

“Transfer Restricted Notes” is defined in the Appendix.

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

“Trustee” is defined in the preamble.

“Trust Officer” means, when used with respect to the Trustee, the president, any vice president (whether or not designated by a number or a word or words added before or after the title “vice president”), the secretary, any assistant secretary, the treasurer, any assistant treasurer, or any other officer of the Trustee in its Corporate Trust Administration Department customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.

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

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

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

The Board of Directors of the Company may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided that subject to Section 5.11:  (i) the Company certifies to the Holders that such designation complies with Section 5.02; and (ii) each Subsidiary to be so designated and each of its Subsidiaries (other than any member of the BCI Group, except as provided in

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

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

Any such designation by the Board of Directors of the Company shall be evidenced to the Holders by promptly filing with the Holders a copy of the Board Resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing provisions.

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

“Warrant Agreement” is defined in the Purchase Agreement.

“Warrants” is defined in the Purchase Agreement.

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

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

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

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

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

SECTION 1.02.      Incorporation by Reference of Trust Indenture Act.  This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture.  The following TIA terms have the following meanings:

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

“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

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

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

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions.

SECTION 1.03.      Rules of Construction.  Unless the context otherwise requires:

(a)           a term has the meaning assigned to it;

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

(c)           “or” is not exclusive;

(d)           “including” means including without limitation;

(e)           “to” and “until” each mean “to but excluding”;

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

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

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

(i)            unsecured Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

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

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

ARTICLE 2.

THE NOTES

SECTION 2.01.              Form and Dating.  Provisions relating to the Initial Notes and the Exchange Notes to be issued in exchange for the Initial Notes or otherwise as provided in this Indenture are set forth in the Appendix, which is hereby incorporated in and expressly made a part of this Indenture.  The Initial Notes and such Exchange Notes shall be a separate series of Notes.  The Initial Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Exchange Notes to be issued in exchange for the Initial Notes or otherwise pursuant to this Indenture and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  Each Note shall be dated the date of its authentication.  The Notes shall be issuable only in registered form without interest coupons and only in denominations of $1,000 (in principal amount at Maturity) and multiples thereof.  The Initial Notes and the Exchange Notes shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

SECTION 2.02.              Execution and Authentication.  One officer shall sign the Notes for the Company by manual or facsimile signature.

If an officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid neverthe­less.

A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note.  The signature shall be con­clusive evidence that the Note has been authenticated under this Indenture.

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The Trustee shall, upon written direction of the Company, authenticate and make available for delivery Notes as set forth in the Appendix.

The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Notes.  Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Company.  Unless limited by the terms of such appoint­ment, an authenticating agent may authenti­cate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

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

(b)           the Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee in writing of the name and address of any such agent.  If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 9.07.  The Company or any of its domestically organized Wholly Owned Restricted Subsidiaries (other than any member of the BCI Group) may act as Paying Agent or Registrar.

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

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

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

SECTION 2.05.              Holder Lists.  The Trustee  shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders.  If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

SECTION 2.06.              Transfer and Exchange.  The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with the Appendix.  When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met.  When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.  To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Notes at the Registrar’s request.  The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.06.  The Company shall not be required to make and the Registrar need not register transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed.

Prior to the due presentation for registration of transfer of any Note, the Company, the Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and (subject to paragraph 2 of the Notes) interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Guarantors, the Paying Agent, the Trustee or the Registrar shall be affected by notice to the contrary.

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

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

SECTION 2.07.              Replacement Notes.  If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the New York Uniform Commercial Code are met, such that the Holder (a) satisfies the Company or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Company or the Trustee  prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the New York Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced.  The Company and the Trustee may charge the Holder for their expenses in replacing a Note.  In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay such Note instead of issuing a new Note in replacement thereof.

Every replacement Note is an additional obligation of the Company.

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

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

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

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Redemption Date, the Stated Maturity Date or maturity date money sufficient to pay all principal and interest and Special Interest, if any, payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and inter­est on them ceases to accrue.

SECTION 2.09.              Temporary Notes.  Until Definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes.  Temporary Notes

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shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes.  Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Notes and deliver them in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Company, without charge to the Holder.

SECTION 2.10.              Cancellation.  The Company at any time may deliver Notes to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures or deliver canceled Notes to the Company pursuant to written direction by an officer.  The Company may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation.  The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.

SECTION 2.11.              Defaulted Interest.  If the Company defaults in a payment of interest or Special Interest, if any, on the Notes, the Company shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner.  The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date.  The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

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

ARTICLE 3.

REDEMPTION

SECTION 3.01.              Notices to Trustee.  If the Company elects to redeem Notes pursuant paragraph 5 of the Notes or is obligated to purchase Notes pursuant to Section 4.09 or Section 4.10, it shall notify the Trustee in writing of the Redemption Date and the principal amount at Maturity of Notes to be redeemed.  The redemption provisions of paragraph 5 of the Notes are fully incorporated herein.  The Trustee may conclusively rely on an Officers’ Certificate and the calculations given therein in making any redemption in accordance with paragraph 5 of the Notes.

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The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 45 days before the Redemption Date unless the Trustee consents to a shorter period.  Such notice shall be accompanied by an Officers’ Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein.  If fewer than all the Notes are to be redeemed, the record date relating to such redemption shall be selected by the Company and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee.  Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.

SECTION 3.02.              Selection of Notes To Be Redeemed.  If fewer than all the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro rata from all of the Holders.  The Trustee shall make the selection from outstanding Notes not previously called for redemption.  The Trustee may select for redemption portions of the principal amount at Maturity of Notes that have denominations larger than $1,000.  Notes and portions of them the Trustee selects shall be in principal amounts at maturity of $1,000 or a multiple thereof.  Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.  The Trustee shall notify the Company promptly of the Notes or por­tions of Notes to be redeemed.

SECTION 3.03.              Notice of Redemption.  (a) At least 30 days but not more than 60 days before a date for redemp­tion of Notes, the Company shall mail a notice of redemption by first-class mail, to each Holder of Notes to be redeemed at such Holder’s registered address.

The notice shall identify the Notes to be redeemed and shall state:

(i)            the Redemption Date;

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

(iii)          the name and address of the Paying Agent;

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

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

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

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

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

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

SECTION 3.04.              Effect of Notice of Redemption.  Once notice of redemption is mailed, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price stated in the notice.  Upon surrender to the Paying Agent, such Notes shall be paid at the Redemption Price stated in the notice, plus accrued interest and Special Interest, if any, to the Redemption Date; provided, however, that if the Redemption Date is after a Regular Record Date and on or prior to the Interest Payment Date, the accrued interest and Special Interest, if any, shall be payable to the Holder of the redeemed Notes registered on the relevant Regular Record Date.  Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

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

SECTION 3.06.              Notes Redeemed in Part.  Upon surrender of a Note that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company’s expense) a new Note equal in principal amount at Maturity to the unredeemed portion of the principal amount at Maturity of the Note surrendered.

SECTION 3.07.               Tender of Notes in Exercise of Warrants.  The Warrant Agreement provides that the holder of a Warrant may exercise such Warrant by surrendering a Note or a portion thereof then held by such holder in payment of the exercise price for all Warrant Shares then exercised equal to 100% of that portion of the Accreted Value of such Notes, which the Holder thereof directs the Company to accept in payment of such exercise price.  To the extent the Accreted Value of such surrendered Note is greater than the aggregate amount of the exercise price for all Warrant Shares then paid for by surrender thereof (exclusive of the portion of such exercise price paid for by accrued interest, if any, on such Surrendered Note), the Company shall deliver a new Note to the tendering Holder thereof, in accordance with the provisions of this Indenture, dated the date of the original issuance of the tendered Note, in the principal amount to maturity which bears the same proportion to the principal amount at maturity of such surrendered Note immediately prior to acceptance by the Company as the remaining portion of the Accreted Value of such surrendered Note bears to the Accreted Value of such surrendered Note immediately prior to acceptance by the Company.  On the date the Company accepts such

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surrendered Note in payment of the exercise price for the Warrants, the Company shall pay all accrued and unpaid interest on the Accreted Value of the Notes cancelled pursuant to this Section 3.07 up to but excluding such Redemption Date.

ARTICLE 4.

AFFIRMATIVE COVENANTS

SECTION 4.01.              Payment of Notes.

(a)           The Company shall pay the principal of and interest on the Notes on or before the dates and in the manner provided in the Notes and in this Indenture.  Principal of and interest on the Notes shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal of and interest on the Notes then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

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

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

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

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partnership or other existence of any of its Restricted Subsidiaries if the loss thereof does not and would not reasonably be expected to result in a Material Adverse Effect.

SECTION 4.04.              Maintenance of Properties.  The Company will cause all properties used or useful in the conduct of its business or the business of any of its Restricted Subsidiaries to be maintained and kept in good condition, repair and working order, ordinary wear and tear excepted, and will cause to be made all necessary repairs, renewals and replacements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly conducted; provided, however,  that the foregoing shall not prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance does not and would not reasonably be expected to result in a Material Adverse Effect.

SECTION 4.05.              Taxes

(a)           Payment of Taxes and Other Claims.  The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material Taxes for which the Company or any of its Restricted Subsidiaries could be liable and (ii) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a Lien upon the property of the Company or any of its Restricted Subsidiaries; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such Tax or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings, provided that appropriate reserves therefor are established in the Company’s consolidated financial statements in accordance with GAAP.

(b)           Tax Returns.  The Company and its Restricted Subsidiaries shall timely file or cause to be filed when due all material Tax Returns that are required to be filed by or with respect to the Company or any of its Subsidiaries for taxable years ending after the Closing Date and shall pay any Taxes due in respect of such Tax Returns except as permitted under Section 4.05(a).

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

SECTION 4.06.              Compliance Certificate.  The Company shall deliver to the Trustee within (a) 50 days after the end of each of the first three fiscal quarters of the Company’s fiscal year, and (b) within 95 days of the end of the fiscal year of the Company, an Officers’ Certificate made on behalf of the Company stating that in the course of the performance by the signers of their duties as officers of the Company they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period.  If they do, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto.  The Company also shall comply with Section 314(a)(4) of the TIA.

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SECTION 4.07.              Compliance with Law.  The Company will, and will cause each of its Restricted Subsidiaries to, comply with all Applicable Laws and all Environmental Laws and will obtain and maintain, and will cause each of its Restricted Subsidiaries to obtain and maintain, all Permits necessary to the ownership of their respective properties or to the conduct of their respective businesses, except where and to the extent the failure to so comply with Applicable Laws and all Environmental Laws or to obtain and maintain in effect any such Permits could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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

SECTION 4.09.              Offer to Repurchase Upon Change of Control.

(a)           Upon the occurrence of a Change of Control, the Company shall make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $1,000 of principal amount at Maturity or a multiple thereof) of each Holder’s Notes at an offer price in cash equal to 101% of the Accreted Value thereof, plus accrued and unpaid interest thereon, if any, as of the Change of Control Payment Date (the “Change of Control Payment”) in accordance with the terms set forth below; provided, however, that, notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to purchase the Notes pursuant to this Section 4.09 in the event that it has exercised its right to redeem all the Notes under paragraph 5 of the Notes.  The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control, and the Company shall not be in violation of this Indenture by reason of any act required by such rule or other Applicable Law.

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

(i)            that the Change of Control Offer is being made pursuant to this Section 4.09 and that all Notes tendered will be accepted for payment;

(ii)           the purchase price and the purchase date, which shall be at least 10 Business Days but no more than 60 days from the date on which the Company mails notice of the Change of Control (the “Change of Control Payment Date”);

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

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Paying Agent for such purpose, at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

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

(v)           other information required to be included pursuant to Section 3.03.

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

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

(e)           The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in a manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.09 and such third party purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

SECTION 4.10.               Offer to Purchase by Application of Excess Proceeds.

(a)           In the event that, pursuant to Section 5.05, the Company shall be required to commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it shall follow the procedures specified in this Section 4.10.  Each Asset Sale Offer shall remain open for not less than ten (10) Business Days nor more than sixty (60) days immediately following its commencement, except to the extent that a longer period is required by Applicable Law (the “Offer Period”).

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

(i)            that the Asset Sale Offer is being made pursuant to this Section 4.10 and Section 5.05 and the length of time the Asset Sale Offer shall remain open;

(ii)           the Offer Amount and the Purchase Date;

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

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

(v)           other information required to be included pursuant to Section 3.03.

(c)           On or before the Business Day immediately after the termination of the Offer Period (the “Purchase Date”), the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, Notes or portions thereof tendered pursuant to the Asset Sale Offer with an Accreted Value equal to the Accreted Value required to be purchased pursuant to Section 5.05 plus accrued and unpaid interest, if any, thereon to the Purchase Date (the “Offer Amount”) or, if the Accreted Value of Notes tendered is less than the Offer Amount, the Company shall purchase all Notes tendered in response to the Asset Sale Offer.  Payment for any Notes so purchased shall be made in the same manner as interest payments are made.  The Company shall promptly (but in any case not later than five (5) Business Days after the Purchase Date) mail or deliver by wire transfer to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note and deliver it to such Holder, in a principal amount at Maturity equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof.

SECTION 4.11.              Other Covenants.  The Company hereby agrees, to the extent reasonably practicable but subject to the limitations set forth in Section 5.11:

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

(b)           Not to commingle assets of the Cincinnati Bell Group with those of the BCI Group, except as permitted to be invested to effect the Centralized Cash Management

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System pursuant to Section 5.02(f)(ix) of the Credit Agreement, as in effect on the date of this Indenture;

(c)           To maintain separate financial statements of the Cincinnati Bell Group from those of the BCI Group, which financial statements need not (except as provided in Section 9 of the Purchase Agreement) be separately audited or reviewed by an independent accounting firm;

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

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

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

(g)           Other than as required under the Credit Documents or pursuant to the terms of any documents governing Existing Indebtedness, not to pledge the assets of the Cincinnati Bell Group for the benefit of the BCI Group; and

(h)           To hold itself out as a separate entity from the BCI Group.

SECTION 4.12.              Further Assurances.  The Company shall, upon the request of Holders, execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the provisions of this Indenture.

SECTION 4.13.              Future Guarantors.  Subject to Section 11.02(b), the Company shall cause each Restricted Subsidiary that is (a) acquired or formed after the Closing Date and is a Restricted Subsidiary that is also a guarantor under the Credit Agreement or (b) an existing Restricted Subsidiary that becomes a guarantor under the Credit Agreement to become a Guarantor, and, if applicable, to execute and deliver to the Trustee a supplemental guarantee in the form of Exhibit C pursuant to which such Restricted Subsidiary will guarantee payment of the Notes.

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

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ARTICLE 5.

NEGATIVE COVENANTS APPLICABLE TO COMPANY AND ITS SUBSIDIARIES

SECTION 5.01.              Stay, Extension and Usury Laws.  The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of its obligations under the Notes or this Indenture, and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants (to the extent that it may lawfully do so) that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holders, but shall suffer and permit the execution of every such power as though no such law has been enacted.

SECTION 5.02.              Restricted Payments.  (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of Capital Stock (including any payment in connection with a merger or consolidation involving the Company or any of its Restricted Subsidiaries), except (x) dividends or distributions payable solely in its Capital Stock (other than Disqualified Capital Stock or Capital Stock convertible into or exchangeable for Disqualified Capital Stock) and (y) dividends or distributions payable to the Company or to a Restricted Subsidiary (and, if the Restricted Subsidiary making such dividend or distribution has equityholders other than the Company or another Restricted Subsidiary, to such equityholders on a pro rata basis), (ii) purchase, redeem or otherwise acquire for value any shares of Capital Stock of the Company or any of its Restricted Subsidiaries now or hereafter outstanding held by a Person other than the Company or another Restricted Subsidiary, (iii) make any payment or prepayment of principal of, premium, if any, interest, redemption, exchange, purchase, retirement, defeasance, sinking fund or other payment with respect to, any Subordinated Indebtedness prior to scheduled maturity, scheduled payment, scheduled repayment or scheduled sinking fund payment thereof (except redemption, exchange, purchase, retirement, defeasance, sinking fund or other payment within six months of the final maturity thereof; provided that no such redemption, exchange, purchase, retirement, defeasance, sinking fund or other payment may be made prior to the final maturity may be made with respect to the Convertible Subordinated Notes) or (iv) make any Restricted Investments (the items described in clauses (i), (ii), (iii), and (iv) are referred to as “Restricted Payments”); except that the Company or any Restricted Subsidiary of the Company may make a Restricted Payment if at the time of and after giving effect to such Restricted Payment;

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

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

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(C)           such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of this Indenture (excluding Restricted Payments permitted by Section 5.02(b)(i) through (v), inclusive, (viii) and (ix)), is less than the sum, without duplication, of (1) the Applicable Percentage of the Consolidated Net Income for the period (taken as one accounting period) from the beginning of (x) if the Closing Date occurs in the first half of a fiscal quarter, such fiscal quarter or (y) if the Closing Date occurs in the second half of a fiscal quarter, the fiscal quarter commencing after the Closing Date, in each case, to the end of the Company’s most recently ended fiscal quarter for which internal financial statements of the Company and its Restricted Subsidiaries are, or should have been, available in accordance with the Transaction Documents at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (2) to the extent that any Restricted Investment that was made after the date of this Indenture is sold for cash or otherwise liquidated or repaid for cash, the lesser of (x) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (y) the initial amount of such Restricted Investment, plus (3) the amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued as provided in the definition of the “Investment”), plus (4) net cash dividends or other net cash distributions paid to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries (for the avoidance of doubt, only to the extent not included in clause (1) above) but only for the purpose of making (x) prior to the Distribution Date, Restricted Investments and (y) after the Distribution Date any Restricted Payments (whether or not constituting Restricted Investments), plus (5) the aggregate Net Proceeds received by the Company from the issue or sale of its Capital Stock (other than Disqualified Capital Stock) or other capital contributions subsequent to the date of this Indenture (other than Net Proceeds received from an issuance or sale of such Capital Stock to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan, option plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary), but only for the purpose of making (x) prior to the Distribution Date, Restricted Investments and (y) after the Distribution Date any Restricted Payments (whether or not constituting Restricted Investments), plus (6) aggregate net cash proceeds received by the Company from the issue or sale since the Closing Date of debt securities that have been converted into Capital Stock (other than Disqualified Capital Stock) of the Company, but only for the purpose of making (x) prior to the Distribution Date, Restricted Investments and (y) after the Distribution Date any Restricted Payments (whether or not constituting Restricted Investments).

(b)           The foregoing provisions shall not prohibit any of the following if no Default or Event of Default shall have occurred and be continuing immediately after any such transaction:

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

(ii)           the pro rata redemption or repurchase by any Restricted Subsidiary of the Company of its Common Stock;

(iii)          the making by the Company of regularly scheduled payments in respect of any Subordinated Indebtedness permitted hereby in accordance with the terms of, and only to the extent required by, and subject to the subordination provisions contained in, any agreement pursuant to which such Subordinated Indebtedness was issued; provided that the regularly scheduled payments in respect of Convertible Subordinated Notes permitted by this clause (iii) may not exceed an effective rate of 10% per annum;

(iv)          the making by the Company and its Restricted Subsidiaries of Permitted Acquisitions;

(v)           the making by the Company of (x) regularly scheduled dividend payments in respect of 6 ¾% Cumulative Convertible Preferred Stock of the Company in accordance with the terms thereof and (y) regularly scheduled interest payments (excluding any common and non-redeemable preferred equity component thereof) in respect of Alternative Mezzanine Debt in accordance with the terms thereof;

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

(vii)         the repurchase or other acquisition of shares of, or options to purchase shares of, common stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases shall not exceed $2,000,000 in any calendar year;

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

(ix)           the making by the Company and its Restricted Subsidiaries of other Restricted Payments not to exceed $5,000,000 in the aggregate since the date of this Indenture; and

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(x)            the making by the Company and its Restricted Subsidiaries of Restricted Payments permitted to be made by Section 5.11.

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

SECTION 5.03.              Dividend and Other Payment Restrictions Affecting Subsidiaries.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to (a)(i) pay dividends or make any other distributions to the Company with respect to any Capital Stock of such Restricted Subsidiary or any other interest or participation in, or measured by, such Restricted Subsidiary’s profits, or (ii) pay any Indebtedness owed by such Restricted Subsidiary to the Company or any of the Company’s other Restricted Subsidiaries, (b) make loans or advances to the Company or any of the Company’s Restricted Subsidiaries or (c) transfer any of such Restricted Subsidiary’s properties or assets to the Company or any of the Company’s Restricted Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) existing Indebtedness and agreements listed on Schedule 5.03, in each case, as in effect on the date of this Indenture, (ii) the Credit Documents as in effect as of the date of this Indenture, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or Refinancings thereof permitted hereunder, provided, however, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or Refinancings are not materially more restrictive with respect to such provisions than those contained in the Credit Documents on the date hereof, (iii) this Indenture and the Notes, (iv) Applicable Law, (v) any encumbrance or restriction (1) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract or (2) contained in security agreements securing Indebtedness of the Company or a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements, (vi) capital leases or purchase money obligations for property acquired in the Ordinary Course of Business that impose restrictions of the nature described in clause (v) above on the property so acquired, (vii) Permitted Refinancing Indebtedness; provided, however, that such restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive than those contained in the agreements governing the Indebtedness being Refinanced, (viii) any instrument governing Indebtedness, Capital Stock or assets of a Person acquired by the Company or any of the Company’s Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such instrument was created or such Indebtedness was Incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be Incurred, (ix) secured Indebtedness otherwise permitted to be Incurred pursuant to this Indenture that limits the right of the debtor thereunder to dispose of the assets securing such Indebtedness, (x) contracts for the sale of assets, including without limitation customary restrictions with respect to a Subsidiary

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

SECTION 5.04.              Incurrence of Indebtedness and Issuance of Preferred Stock

(a)           The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise (including by operation of law), with respect to (collectively, “Incur”) any Indebtedness (including Acquired Indebtedness) and shall not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company and the Guarantors may Incur Indebtedness (including Acquired Indebtedness), and the Company and the Guarantors may guarantee such Indebtedness, if immediately after the Incurrence of such Indebtedness, both (i) prior to the Distribution Date, the Consolidated EBITDA to Consolidated Interest Ratio for the most recent four full fiscal quarter period for which consolidated financial statements of the Company and its Restricted Subsidiaries are, or should have been, available in accordance with the Transaction Documents is 3.0 to 1.00 or greater (this test is referred to herein as the “Interest Coverage Test”), and (ii) the Consolidated Adjusted Debt to Adjusted EBITDA Ratio is less than (A) 4.75 to 1.00 if such Incurrence occurs on or prior to December 31, 2002, (B) 4.5 to 1.00 if such Incurrence occurs on or after January 1, 2003 and on or prior December 31, 2003, (C) 4.25 to 1.00 if such Incurrence occurs on or after January 1, 2004 and on or prior December 31, 2004 or (D) 4.00 to 1.00 if such Incurrence occurs on or after January 1, 2005 (the test set forth in sub-paragraph (ii) hereof is referred to herein as “Leverage Test”).  For the purpose of the calculation of the Leverage Test (both before and after the Distribution Date) and, prior to the Distribution Date, the Interest Coverage Test, with respect to any period included in such calculation, Consolidated EBITDA, the components of Consolidated Interest Expense, and Consolidated Adjusted Debt and Capital Expenditures shall be calculated with respect to such period by the Company in good faith on a pro forma basis (including and consistent with Permitted Adjustments), giving effect to any Permitted Acquisition, Asset Disposition or Incurrence or redemption or repayment of Indebtedness that has given rise to the need for such calculation, has occurred during such period or has occurred after such period and on or prior to the date of such calculation (each a “Subject

46

Transaction”), including, with regards to Permitted Acquisitions and Asset Dispositions, by using the historical financial statements of any business so acquired or to be acquired or sold or to be sold and the consolidated financial statements of the Company and its Restricted Subsidiaries which shall be reformulated as if such Subject Transaction, and any Indebtedness Incurred or redeemed or repaid in connection therewith, had been consummated or Incurred or redeemed or repaid at the beginning of such period (and assuming that such Indebtedness bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the weighted average of the interest rates applicable to outstanding revolving loans under the Credit Agreement Incurred during such period).

(b)           The foregoing provisions shall not apply to:

(i)            the Incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness (including, without limitation, all pay-in-kind interest under the Convertible Subordinated Indenture; provided that the Company will not permit the rate of interest on the Convertible Subordinated Notes to exceed of 10% per annum);

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

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

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

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

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

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

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

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

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

(x)            the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation

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

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

(xii)          the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be Incurred by another provision of this Section 5.04;

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

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

(xv)         Indebtedness permitted to be Incurred by Section 5.11;

(xvi)        the Incurrence of Indebtedness by the Company as a result of its indemnification obligations permitted pursuant to Section 5.06(c) and Section 5.06(d);

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

(xviii)      Indebtedness of a Restricted Subsidiary that is not a Guarantor Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date that such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness (x) prior to the Distribution Date, pursuant to the definition of the “Other Senior Indebtedness” (without regard to the dollar limit set forth therein) and pursuant to Section 5.04(a) and (y) after the Distribution Date, pursuant to Section 5.04(a), in each case, after giving effect to the Incurrence of such Indebtedness pursuant to this clause (xviii);

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(xix)         the Incurrence by the Company of unsecured short-term Indebtedness in the Ordinary Course of Business in the form of swing lines of credit and overdraft protection lines of credit in an aggregate principal amount not to exceed $20,000,000; provided that the amount of Indebtedness permitted to be incurred pursuant to clause (vii) above shall be reduced by the amount of Indebtedness outstanding pursuant to this clause (xix);

(xx)          in the case of CBT, the Incurrence by CBT of Indebtedness to finance Capital Expenditures mandated by the Ohio, Indiana or Kentucky Public Utilities Commission; provided that (x) at the time such Capital Expenditures must be made, CBT is not permitted to Incur Indebtedness under any other provision of this Section 5.04 and does not have sufficient internally-generated funds to make such Capital Expenditures and (y) the aggregate amount of such Indebtedness at any one time outstanding, together with all Indebtedness outstanding pursuant to Section 5.04(b)(iii)(A) does not exceed the Applicable Capital Lease Amount;

(xxi)         the Incurrence of Attributable Debt with respect to Sale and Leaseback Transactions by CBW and CBT of towers and associated equipment, cabling, antennae and other appurtenances thereto, in each case, used in the operation of CBW’s wireless business; provided that the proceeds of such Indebtedness shall be used to prepay Indebtedness under the Credit Agreement in accordance with Section 5.05;

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

(xxiii)       the Incurrence on the Closing Date of the Alternative Mezzanine Debt.

(c)           For purposes of determining compliance with this Section 5.04, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (i) through (xxi) of the immediately preceding paragraph or is entitled to be Incurred pursuant to Section 5.04(a), the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with Section 5.04 and will only be required to include the amount and type of such Indebtedness in one of such clauses of Section 5.04(b) or pursuant to Section 5.04(a).  Accrual of interest, accretion of accreted value, amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms as the Indebtedness on which such interest is being paid and any other issuance of securities paid-in-kind shall not be deemed to be an Incurrence of Indebtedness for purposes of Section 5.04.  In addition, the Company may, at any time, change the classification of an item of Indebtedness (or any portion thereof) to any other clause of Section 5.04(b) or to Indebtedness properly Incurred under Section 5.04(a) provided that the Company would be permitted to Incur such item of Indebtedness (or portion thereof) pursuant to such other clause of this Section 5.04(b) or Section 5.04(a), as the case may be, at such time of reclassification.

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(d)           Notwithstanding anything herein to the contrary, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, Incur or permit to exist any Indebtedness entered into after the date of this Indenture unless, subject to the proviso of clause (i) to the definition of the “Unrestricted Subsidiary,” the documents governing such Indebtedness designate each member of the BCI Group as an “unrestricted subsidiary” (or provide for equivalent treatment of the BCI Group if designation of unrestricted subsidiaries is not customary for such type of Indebtedness) and restricts the dealings among the Company and its Restricted Subsidiaries, on the one hand, and the BCI Group, on the other hand, at least to the same extent and with the same effect as under this Indenture and consistent with Sections 5.01(t) and 5.02 (insofar as it relates to the Permitted Obligations and Permitted BCI Transactions (each as defined in the Credit Agreement)) of the Credit Agreement as in effect on the date of this Indenture.

SECTION 5.05.              Asset Dispositions.

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

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Equivalents within 90 days after the Asset Disposition (to the extent of the cash received), shall be deemed to be cash for purposes of this provision.

(b)           Subject to clause (a)(i) above, within 365 days after the receipt of any Net Proceeds from an Asset Disposition, the Company or the Restricted Subsidiary making such Asset Disposition, as the case may be, may, at its option, apply such Net Proceeds (i) to permanently reduce Senior Indebtedness or any Indebtedness of the Restricted Subsidiaries of the Company which are not Guarantors, or to purchase the Notes (with the consent of the Holders thereof to the extent required) or Indebtedness ranking pari passu with the Notes (and to correspondingly reduce commitments with respect thereto, to the extent applicable) or (ii) to the acquisition of a controlling interest in another business, the making of Capital Expenditures or the investment in or acquisition of other long-term assets, in each case, in the same or a similar line of business as the Company and its Subsidiaries engaged in at the time such assets were sold or in a business reasonably related, complementing or ancillary thereto or a reasonable expansion thereof.  Pending the final application of any such Net Proceeds, the Company may temporarily reduce revolving credit Indebtedness under the Credit Agreement or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture.  Any Net Proceeds from Asset Dispositions that are not applied or invested as provided in the first sentence of this paragraph shall be deemed to constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds in any fiscal year $5,000,000, the Company shall make an Asset Sale Offer pursuant to Section 4.10 to purchase the maximum Accreted Value of Notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the outstanding Accreted Value thereof, plus accrued and unpaid interest, thereon to the date of purchase, in accordance with the procedures set forth in Section 4.10; provided, however, that if the Company elects (or is required by the terms of any other Senior Subordinated Indebtedness), such Asset Sale Offer may be made ratably to purchase the Notes and other Senior Subordinated Indebtedness of the Company.  Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.

(c)           Subject to clause (a)(i) above, Net Proceeds from Asset Dispositions in excess of the $20,000,000 per fiscal year limitation set forth in Section 5.05(a)(i) shall be applied, substantially concurrently with the receipt thereof, to permanently reduce Senior Indebtedness.  Any such Net Proceeds remaining after all Senior Indebtedness has been permanently repaid shall constitute the Excess Proceeds with respect to which an Asset Sale Offer pursuant to Section 4.10 shall be made as provided in the foregoing clause (b).

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

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

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

(b)           transactions (i) in the ordinary course of the business of the Company or any of its Restricted Subsidiaries and upon terms which are not materially less favorable to the Company or such Restricted Subsidiary than would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate of the Company and (ii) with respect to which the Company delivers to the Trustee (A) with respect to any Affiliate Transaction involving aggregate consideration in excess of $3,000,000, a resolution of the Board of Directors of the Company set forth in an Officers’ Certificate certifying that such Affiliate transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company, and (B) with respect to any Affiliate Transaction or series of Affiliate Transactions involving in excess of $30,000,000, an opinion as to the fairness of such Affiliate Transaction to the Company from a financial point of view issued by an Independent Qualified Party;

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

(d)           payment of director’s fees plus expenses and customary indemnification of directors;

(e)           the payment of the fees, expenses and other amounts payable by the Company and its Restricted Subsidiaries in connection with the transactions contemplated by the Transaction Documents that were disclosed to the Purchasers on or prior to the Closing Date;

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

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

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

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

53

Affiliate of the Company or its subsidiaries by virtue of the fact that Person has made an Investment in or owns any Capital Stock of such company or other Person which are fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the Board of Directors, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(j)            the issuance of payments, awards or grants, in cash or otherwise, pursuant to, or the funding of, employment arrangements approved by the Board of Directors of the Company in good faith and customary loans and advances to employees of the Company, or any Restricted Subsidiary of the Company to the extent otherwise permitted in this Indenture;

(k)           transactions with the BCI Group (other than those set forth in clause (l) below) (A) set forth on Schedule 5.06 or (B) permitted by Section 5.11, in each case, so long as such transactions are conducted in the Ordinary Course of Business and upon terms which are not less favorable to the Company or such Restricted Subsidiary than would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate of the Company; and

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

SECTION 5.07.               Limitation on Liens.  The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Lien (other than (a) Liens securing the Guarantee by the Company and the Restricted Subsidiaries of Indebtedness Incurred and other Obligations under the Credit Documents, (b) Liens securing any Senior Indebtedness (including Attributable Debt, if applicable) and (c) Permitted Liens) on any asset now owned or hereafter acquired to secure any Indebtedness of the Company or such Restricted Subsidiary; provided that the Company or any Restricted Subsidiary may create, incur or assume Lien to secure any Indebtedness or a Guarantee thereof, so long as concurrently with the incurrence or assumption of such Lien the Company or such Restricted Subsidiary effectively provides that the Notes shall be secured equally and ratably with (or prior and senior to, in the case of Liens with respect to Subordinated Indebtedness) such Indebtedness, so long as such Indebtedness shall be so secured.

SECTION 5.08.              Limitation on Issuances and Sales of Capital Stock of Subsidiaries.  The Company shall not, and shall not permit any Restricted Subsidiary to, transfer, convey, sell, issue, lease or otherwise dispose of any Capital Stock of any Restricted Subsidiary to any Person (other than to the Company or another Restricted Subsidiary of the Company), unless (a) prior to the Distribution Date, such transfer, conveyance, sale, lease or other disposition is of (x) all the Capital Stock of such Restricted Subsidiary or (y) Capital Stock of a Restricted Subsidiary that is a Guarantor and (b) such transfer, conveyance, sale, lease or other disposition shall be made in accordance with the provisions of Section 5.05, including the provisions of Section 5.05 governing the application of Net Proceeds from such transfer, conveyance, sale, lease or other disposition; provided, however, that (i) this Section 5.08 shall not restrict any pledge of Capital

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Stock of the Company and its Restricted Subsidiaries securing Indebtedness under the Credit Documents or other Indebtedness permitted to be secured by Section 5.07 and (ii) clause (a) above does not apply to (x) to the issuances of Capital Stock of CBW pursuant to capital calls in accordance with the provisions of CBW’s organizational documents in existence on the date of this Indenture and (y) any other sales and issuances of Capital Stock of CBW so long as CBW remains a Restricted Subsidiary of the Company.

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

SECTION 5.10.               Conduct of Business.  The Company shall not and shall not permit any of its Subsidiaries directly or indirectly to engage in any business other than business of the type engaged in at the date hereof and any business reasonably related, complementing or ancillary thereto or a reasonable expansion thereof.

SECTION 5.11.               Restrictions on Dealings with BCI Group.  (a) The Company hereby acknowledges and agrees that each member of the BCI Group is hereby designated as an Unrestricted Subsidiary.  Notwithstanding any provision contained in this Indenture, the Company shall not, without the consent of the Required Holders, redesignate any member of the BCI Group as a Restricted Subsidiary.  Furthermore, no member of the Cincinnati Bell Group may (1) make any Restricted Payment to, (2) issue Capital Stock of any member of the Cincinnati Bell Group to, (3) make any Investment in (including, without limitation, by (x) becoming an obligor, whether directly or by way of Guarantee on any Indebtedness to or for the benefit of any member of the BCI Group, (y) purchasing an asset for the BCI Group without charge or allocation to the BCI Group or (z) making any payments in respect of operating expenses or net operating losses of the BCI Group (including payments for direct expenses of the BCI Group that are made by the Cincinnati Bell Group and not charged or allocated to the BCI Group or payments made by the Cincinnati Bell Group for shared expenses that are not charged or allocated to the BCI Group)) or (4) allow any tax reimbursement for the benefit of, any member of the BCI Group unless, immediately following such payment, Incurrence, allowance or payment:

(i)            no Default or Event of Default shall then have occurred or be continuing; and

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

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(b)           The foregoing restrictions shall not apply to, without duplication, (q) Permitted Obligations (as defined in the Credit Agreement on the date hereof) and any transactions set forth on Schedule 5.11(b), (r) any customary non-cash transition arrangements or other related services provided for the benefit of a buyer in connection with a disposition of any properties or assets of the BCI Group, (s) the accrual and capitalization of interest on intercompany notes issued by the BCI Group to the Company or its Restricted Subsidiaries, (t) the issuance of Capital Stock of the Company (other than Disqualified Capital Stock) and the related payment of up to $1,000,000 in cash in exchange for shares of BCI’s 12 ½% Series B Junior Exchangeable Preferred Stock Due 2009 or BCI’s 9% Senior Subordinated Notes due 2008 (the “9% BCI Notes”) or, in the case of the 9% BCI Notes, the issuance of Capital Stock of the Company (other than Disqualified Stock) or Indebtedness Incurred in compliance with Section 5.04 the net proceeds of which are used, substantially contemporaneously with such issuance, to redeem such 9% BCI Notes, (u) guarantees by the Company and its Restricted Subsidiaries of the Existing BCSI Loan, (v) Liens on assets of the Company and its Restricted Subsidiaries to secure the Existing BCSI Loan, (w) (1) scheduled principal and interest payments made or guaranteed by the Company or any of its Restricted Subsidiaries in respect of the Existing BCSI Loan (or capital contributions made solely for the purpose of funding such payments), (2) scheduled interest payments with respect to the 9% BCI Notes and BCI’s 12 ½% Senior Series B Notes due 2005 and (3) the redemption of BCI’s 12 ½% Senior Series B Notes due 2005 outstanding on the date hereof at the applicable redemption premium pursuant to the documentation governing such notes as in effect on the date hereof, (x) payments made by the Company or any of its Restricted Subsidiaries under the guarantee of the Existing BCSI Loan, (y) non-cash payments made in the form of reductions in the principal amount of any intercompany notes issued by the BCI Group to the Company or its Restricted Subsidiaries in respect of net operating losses of the BCI Group used by the Company and its Restricted Subsidiaries or other Investments in the form of reduction of such intercompany notes and (z) the payment by the BCI Group of non-cash management fees to the Cincinnati Bell Group in an amount not to exceed $2,000,000 per quarter.

SECTION 5.12.              Sale of Assets of the BCI Group.  Notwithstanding any provision contained in this Indenture, the execution and delivery of the Agreement for the Purchase and Sale of Assets dated as of February 22, 2003 (the “BCSI Purchase Agreement”) by and between BCSI, Broadwing Communications Services of Virginia, Inc., Broadwing Communications Real Estate Services LLC, Broadwing Services LLC, IXC Business Services LLC, Broadwing Logistics LLC, Broadwing Telecommunications Inc., IXC Internet Services, Inc., and MSM Associates, Limited Partnership, on the one side, and C III Communications, LLC, and C III Communications Operations, LLC, on the other side, and the performance by the Company and its Subsidiaries of all transactions contemplated thereby shall be permitted by, and shall not constitute a Default or Event of Default under, this Indenture.

ARTICLE 6.

SUCCESSOR COMPANY

Notwithstanding anything in this Indenture to the contrary:

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

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

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

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

(d)           the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) are permitted by and comply with this Indenture.

(e)           The restrictions contained in this Section 6.01 shall not apply to any disposition of properties or assets of the BCI Group.

SECTION 6.02.              Successor Company Substituted.  The Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, but the Company in the case of a conveyance, transfer or lease of all or substantially all its assets shall not be released from the obligation to pay the principal of and interest on the Notes.

ARTICLE 7.

EVENTS OF DEFAULT; REMEDIES

SECTION 7.01.              Events of Default.  An Event of Default shall exist upon the occurrence of any of the following specified events (each an “Event of Default”):

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

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

(c)           the Company fails to observe or perform (i) any provision of Section 4.11, Article 5 or Article 6 of this Indenture and either (x) prior to the Distribution Date, such failure continues for a period of twenty (20) days after the Holders of at least 25% in principal amount at Maturity of the outstanding Notes notify the Company and the Trustee in writing of such Default (which notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default”) or (y) after the Distribution Date, such failure continues for a period of thirty (30) days after a Notice of Default, or (ii) any other covenant or other agreement in this Indenture, the Notes or, prior to the Distribution Date, the Purchase Agreement and such failure continues for a period of (x) thirty (30) days prior to the Distribution Date or (y) sixty (60) days after the Distribution Date, in each case, after a Notice of Default;

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

(e)           (i) prior to the Distribution Date, a default occurs under any mortgage, indenture, agreement or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or payment of which is Guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the date of this Indenture, which default in the case (but only in the case) of Senior Indebtedness (A) constitutes a failure to pay at final maturity (after giving effect to any applicable grace periods and any extensions thereof) the principal amount of such Senior Indebtedness or (B) shall have resulted in such Senior Indebtedness being accelerated or otherwise become or being declared due and payable prior to its stated maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness (other than Senior Indebtedness) under which there has been a default, and together with the principal amount of any such other Senior Indebtedness under which there has been a default in payment at final maturity or the maturity of which has been accelerated or otherwise become or being declared due prior to its stated maturity, aggregates $20,000,000 (or such lower amount as may be set forth in Section 7.01(e) of the Credit Agreement, as such provision may be amended in the future, or in a similar provision) or more; or

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

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

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

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

(i)            commences a voluntary case or proceeding,

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

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

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

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

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

(i)            is for relief against the Company or any of its Material Restricted Subsidiaries in an involuntary case or proceeding;

(ii)           appoints a Custodian of the Company or any of its Material Restricted Subsidiaries or for all or any substantial part of the property of the Company or any of its Subsidiaries or approves as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of any of the foregoing; or

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

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

SECTION 7.02.              Acceleration.  If an Event of Default (other than an Event of Default specified in Section 7.01(g) or (h) with respect to the Company) occurs and is continuing, the Trustee or the Holders of 25% or more in principal amount at Maturity of the then outstanding Notes, may, by notice to the Company, declare the principal of and accrued but unpaid interest and any Special Interest on all the Notes to be due and payable.  Upon such a declaration, such principal and interest will be due and payable immediately.  If an Event of Default specified in Section 7.01(g) or (h) with respect to the Company occurs, the principal of and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  The Holders of a majority in principal amount at Maturity of the outstanding Notes by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal of or interest on Notes that has become due solely because of acceleration.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.

If an Event of Default has occurred and is continuing, the Notes will accrue an additional interest at 3% per annum, until such time as no Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable); provided that 2.25% of such additional interest shall be payable in cash and 0.75% of such additional interest shall be added to the principal amount of the Notes as set forth in the definition of Accreted Value.

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

SECTION 7.03.              Other Remedies.  Notwithstanding any other provision of this Indenture, if an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

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

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

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the terms of this Indenture or (c) a Default in respect of a provision that under Section 13.02 cannot be amended without the consent of each Holder affected.  When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

SECTION 7.05.              Control by Majority.  The Holders of a majority in principal amount at Maturity of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 9.01, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in per­sonal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  Prior to taking any action hereunder, the Trustee shall be entitled to indemni­fication satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

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

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

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

(iii)          such Holder or Holders offer to the Trustee reasonable security or indemnity against any loss, liability or expense;

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

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

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

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

SECTION 7.08.              Collection Suit by Trustee.  If an Event of Default speci­fied in Section 7.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue portion of the principal amount and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 9.07.

SECTION 7.09.              Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company or any Subsidiary, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such pay­ments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disburse­ments and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 9.07.

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

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

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

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

FOURTH:  to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, and any Special Interest without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, any Special Interest and interest, respectively; and

FIFTH:  to the Company.

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

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

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

ARTICLE 8.

SUBORDINATION

SECTION 8.01.              Agreement to Subordinate.  The Company agrees, and each Holder by accepting a Note agrees, that the Note Amounts are subordinated in right of payment, to the extent and in the manner provided in this Article 8, to the prior Payment in Full of all Senior Indebtedness of the Company and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness.  The Notes shall in all respects rank pari passu with all other Senior Subordinated Indebtedness of the Company and only Indebtedness of the Company that is Senior Indebtedness of the Company shall rank senior to the Notes in accordance with the provisions set forth herein.  All provisions of this Article 8 shall be subject to Section 8.12.

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

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

(b)           until the Senior Indebtedness of the Company is Paid in Full, any payment or distribution to which Holders would be entitled but for this Article 8 shall be made to holders of such Senior Indebtedness as their interests may appear, except that Holders may receive and retain payments made from the defeasance trust described under Section 10.01 so long as, on the date or dates the respective amounts were paid into the defeasance trust, such payments were made with respect to the Notes without violating the subordination provisions described herein.

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

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any other corporation provided for by such plan of reorganization or readjustment which stock or securities are subordinated in right of payment to all then outstanding Senior Indebtedness to substantially the same extent as, or to a greater extent than, the Notes are so subordinated as provided in this Article 8.

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

(a)           a default in the payment of the principal of, premium, if any, or interest on any Designated Senior Indebtedness of the Company occurs and is continuing or any other amount owing in respect of any Designated Senior Indebtedness of the Company is not paid when due, whether at the due date of any such payment or by declaration of acceleration, prepayment, call for redemption or otherwise; or

(b)           any other default (beyond any applicable period of grace) on Designated Senior Indebtedness of the Company occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms;

until, in either case, the earliest to occur,

(i)            the default has been cured or waived and any such acceleration has been rescinded; or

(ii)           such Designated Senior Indebtedness has been Paid in Full;

provided, however, that the Company may pay the Notes without regard to the foregoing if the Company and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (a) or (b) above has occurred and is continuing.

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

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payments on the Notes after the end of such Blockage Period, including any missed payments.  Not more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period; provided, however, that if any Blockage Notice within such 360-day period is given by or on behalf of any holders of Designated Senior Indebtedness other than the holders of Senior Indebtedness under the Credit Agreement, the Representative under the Credit Agreement may give another Blockage Notice within such period; and, provided, further, that in no event may the total number of days during which any Blockage Period or Periods is in effect exceed 179 days in the aggregate during any consecutive 360 day period.  For purposes of this Section 8.03, no default or event of default that existed or was continuing on the date of the commencement of any Blockage Period with respect to the Designated Senior Indebtedness initiating such Blockage Period shall be, or be made, the basis of the commencement of a subsequent Blockage Period by the Representative of such Designated Senior Indebtedness, whether or not within a period of 360 consecutive days.  Notwithstanding the foregoing, the Company may pay the Notes without regard to the foregoing if the Company and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in this clause (c) has occurred and is continuing.

SECTION 8.04.              Acceleration of Payment of Notes.  If payment of the Notes is accelerated because of an Event of Default, the Company or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness of the Company (or their Representative) of the acceleration.  If any Designated Senior Indebtedness of the Company is outstanding, the Company may not pay the Notes until five Business Days after such holders or the Representative of such Designated Senior Indebtedness receive notice of such acceleration (which notice, for the avoidance of doubt, shall not be effective prior to the earlier to occur of (x) the expiration of such five-day period and (y) the acceleration of such Designated Senior Indebtedness) and, thereafter, may pay the Notes only if this Article 8 otherwise permits payment at that time.

SECTION 8.05.              When Distribution Must Be Paid Over.  If a payment or distribution is made to Holders that because of this Article 8 should not have been made to them, the Holders who receive the distribution shall hold it in trust for holders of Senior Indebtedness of the Company and pay it over to them as their interests may appear.

SECTION 8.06.              Subrogation.  After all Senior Indebtedness of the Company is Paid in Full and until the Notes are paid in full in cash, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to Senior Indebtedness.  A distribution made under this Article 8 to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on such Senior Indebtedness.

SECTION 8.07.              Relative Rights.  This Article 8 defines the relative rights of Holders and holders of Senior Indebtedness of the Company.  Nothing in this Indenture shall:

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

(b)           prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Indebtedness of the Company to receive distributions otherwise payable to Holders.

SECTION 8.08.              Subordination May Not Be Impaired by the Company.  No right of any holder of Senior Indebtedness of the Company to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture.

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

The Trustee in its individual or any other capacity may hold Senior Indebtedness of the Company with the same rights it would have if it were not Trustee.  The Registrar and the Paying Agent may do the same with like rights.  The Trustee shall be entitled to all the rights set forth in this Article 8 with respect to any Senior Indebtedness of the Company that may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article 9 shall deprive the Trustee of any of its rights as such holder.  Nothing in this Article 8 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 9.07 or any other Section of this Indenture.

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

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

SECTION 8.12.              Trust Monies Not Subordinated.  Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article 10 by the Trustee for the payment of principal of and interest on the Notes and Additional Amounts, if any, in respect thereof shall not be subordinated to the prior payment of any Senior Indebtedness of the Company or subject to the restrictions set forth in this

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

SECTION 8.13.              Trustee Entitled To Rely.  Upon any payment or distribution pursuant to this Article 8, the Trustee and the Holders shall be entitled to rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 8.02 are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives for the holders of Senior Indebtedness of the Company for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 8.  In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Company to participate in any payment or distribution pursuant to this Article 8, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 8, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pendent judicial determination as to the right of such Person to receive such payment.  The provisions of Sections 9.01 and 9.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 8.

SECTION 8.14.              Trustee To Effectuate Subordination.  Each Holder by accepting a Note authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Indebtedness of the Company as provided in this Article 8 and appoints the Trustee as attorney-in-fact for any and all such purposes.

SECTION 8.15.              Trustee Not Fiduciary for Holders of Senior Indebtedness.  Neither the Trustee nor any Holder shall be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company or shall be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Company or any other Person, money or assets to which any holders of Senior Indebtedness of the Company shall be entitled by virtue of this Article 8 or otherwise.

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

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SECTION 8.17.              Trustee’s Compensation Not Prejudiced.  Nothing in this Article shall apply to amounts due to the Trustee pursuant to other sections of this Indenture, including, but not limited to, Section 9.07 hereof.

ARTICLE 9.

TRUSTEE

SECTION 9.01.              Duties of Trustee.  (a)  If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b)           Except during the continuance of an Event of Default:

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

(ii)           in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the require­ments of this Indenture.  However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

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

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

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

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

(iv)          No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

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

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

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

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

SECTION 9.02.              Rights of Trustee.  (a) The Trustee may rely on any document believed by it to be genu­ine and to have been signed or presented by the proper per­son.  The Trustee need not investigate any fact or matter stated in the document.

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

(c)           The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

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

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

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

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

(h)           The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders, pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby.

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SECTION 9.03.              Individual Rights of Trustee.  The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent, Registrar or co-paying agent may do the same with like rights.  However, the Trustee must comply with Sections 9.10 and 9.11.

SECTION 9.04.              Trustee’s Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity, priority or adequacy of this Indenture, or the Notes, it shall not be account­able for the Company’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication.  The Trustee shall not be responsible for any conduct or omission by the Company or the occurrence of any Event of Default.

SECTION 9.05.              Notice of Defaults.  If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Holder notice of the Default (“Notice of Default”) within 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee.  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note, if any), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders.  If a Notice of Default has been given to the Company by the Holders, a copy of such Notice of Default shall be delivered by the Company to the Trustee.  Except as expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein, in any other Transaction Document or in any of the documents executed in connection with the Notes, or as to the existence of a Default or Event of Default hereunder or thereunder, and may assume that no such Default or Event of Default has occurred unless it has actual knowledge or received written notice thereof.

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

Following a Note Registration, a copy of each report at the time of its mailing to Holders shall be filed with the Commission and each stock exchange (if any) on which the Notes are listed.  The Company agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof.

SECTION 9.07.              Compensation and Indemnity.  The Company shall pay to the Trustee from time to time compensation for its services as may be agreed to between the Trustee and the Company in writing.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents,

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counsel, accountants and experts.  The Company shall indemnify the Trustee against any and all loss, liability or expense (including reasonable and documented attorneys’ fees) incurred by or in connection with the administration of this trust and the performance of its duties hereunder.  The Trustee shall notify the Company of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Company shall not relieve the Company of its indemnity obligations hereunder.  The Company shall defend the claim and the indemnified party shall provide reasonable cooperation at the Company’s expense in the defense.  Such indemnified parties may have separate counsel and the Company shall pay the fees and expenses of such counsel; provided, however, that the Company shall not be required to pay such fees and expenses if it assumes such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment, there is no conflict of interest between the Company and such parties in connection with such defense; provided, further, however, that the selection of the Company’s counsel shall be reasonably acceptable to the Trustee.  The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party’s own willful misconduct or negligence.

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

The Company’s obligations pursuant to this Section 9.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee.  Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 7.01(g) or (h) with respect to the Company or the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

All indemnifications and releases from liability granted hereunder to the Trustee shall extend to its officers, directors, employees, agents, successors and assigns.

SECTION 9.08.              Replacement of Trustee.  (a) The Trustee may resign at any time by so notifying the Company in writing in accordance with the provisions of Section 12.02.  Any resignation of the Trustee shall be effective immediately upon receipt by the Company of such notice (unless such notice shall specify a later time as the effective time of such resignation, in which case such later time shall be the effective time), and the resignation of the Trustee shall not prejudice any rights of the Trustee to receive any compensation, any reimbursement of any expenses or any indemnity or right to being defended and held harmless under this Indenture.  The Holders of a majority in principal amount at Maturity of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee.  The Company shall remove the Trustee if:

(i)            the Trustee fails to comply with Section 9.10;

(ii)           the Trustee is adjudged bankrupt or insolvent;

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(iii)          a receiver or other public officer takes charge of the Trustee or its property; or

(iv)          the Trustee otherwise becomes incapable of acting.

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

(c)           A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the succes­sor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to Holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 9.07.

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

(e)           If the Trustee fails to comply with Section 9.10, unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Holder who has been a bona fide Holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appoint­ment of a successor Trustee.

(f)            Notwithstanding the replacement of the Trustee pursuant to this Section 9.08, the Company’s obligations under Section 9.07 shall continue for the benefit of the retiring Trustee.

SECTION 9.09.              Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers or sells all or substantially all its corporate trust business or assets to, another corporation or banking associa­tion, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion, sale or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

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SECTION 9.10.              Eligibility; Disqualification.  The Trustee shall at all times satisfy the require­ments of TIA § 310(a).  The Trustee shall have, or in the case of a corporation included in a bank holding company system, the related bank holding company shall have, a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA § 310(b), subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are out­standing if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

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

SECTION 9.12.              Appointment of Co-Trustee.  It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including the law of the State of New York) denying or restricting the right of banking corporations or associations to transact business as trustee in such jurisdiction.  It is recognized that, in case of litigation under this Indenture, and in particular in the case of the enforcement thereof on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any action which may be desirable or necessary in connection therewith, it may be necessary that an additional individual or institution act as a separate or Co-Trustee.

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

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

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

ARTICLE 10.

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 10.01.            Discharge of Liability on Notes; Defeasance.  (a)  When (i) all outstanding Notes (other than Notes replaced or paid pursuant to Section 2.07) have been canceled or delivered to the Trustee for cancellation or (ii) all outstanding Notes have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to Article 3 hereof, and the Company irrevocably deposits with the Trustee funds in an amount sufficient, or U.S. Government Obligations, the principal of and interest on which will be sufficient, or a combination thereof sufficient, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), to pay the principal amount of and interest on the outstanding Notes when due at maturity or upon redemption of all outstanding Notes, including interest thereon to maturity or such Redemption Date (other than Notes replaced or paid pursuant to Section 2.07), and Special Interest, if any, and if in either case the Company pays all other sums payable hereunder by the Company, then this Indenture shall, subject to Section 10.01(c), cease to be of further effect.  The Trustee shall acknowledge satisfaction and dis­charge of this Indenture on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Company.

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

In the event that the Company terminates all of its obligations under the Notes and this Indenture by exercising its legal defeasance option, the obligations under the Guarantees shall each be terminated simultaneously with the termination of such obligations.

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

Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obliga­tions that the Company terminates.

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

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Notes have been paid in full.  Thereafter, the Company’s obligations in Sections 9.07, 10.05 and 10.06 shall survive.

SECTION 10.02.            Conditions to Defeasance.

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

(i)            the Company irrevocably deposits in trust with the Trustee money in an amount sufficient, or U.S. Government Obligations the principal of and interest on which will be sufficient, or a combination thereof sufficient, to pay the principal of and interest on the Notes when due at maturity or redemption, as the case may be, including interest thereon to maturity or such Redemption Date and Special Interest, if any;

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

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

(iv)          the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is quali­fied as, a regulated investment company under the Investment the Company Act of 1940;

(v)           in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;

(vi)          in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such cove­nant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and

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

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

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

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

If money for the payment of principal of or interest on the Notes has been deposited with the Trustee or Paying Agent and remains unclaimed for two years after such amount is due and payable, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, the Trustee and the Paying Agent shall have no further liability for such funds and Holders entitled to the money must look only to the recipient and not to the Trustee for payment.

SECTION 10.05.            Indemnity for Government Obligations.  The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the princi­pal and interest received on such U.S. Government Obliga­tions.

SECTION 10.06.            Reinstatement.  If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 10 by reason of any legal proceeding or by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article 10 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 10; provided, however, that, if the Company has made any payment of interest on principal of any Notes because of the reinstatement of its Obligations, the Company shall be subrogated to the

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

ARTICLE 11.

Guarantees

SECTION 11.01.            Guarantees.  (a) Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Company under this Indenture (including obligations to the Trustee) and the Notes, whether for payment of principal of, or interest on the Notes and all other monetary obligations of the Company under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Company whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”).  Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article 11 notwithstanding any extension or renewal of any Guaranteed Obligation.

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

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

(d)           Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection)

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and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.

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

(f)            Except as expressly set forth in Sections 10.01 and 11.02, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, wilful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.

(g)           Except as expressly set forth in Sections 10.01 and 11.02, each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations.  Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.

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

(i)            Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations and all obligations to which the Guaranteed Obligations are subordinated as provided in Article 12.  Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided

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in Article 7 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 7, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 11.01.

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

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

SECTION 11.02.            Limitation on Liability.  (a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering the Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(b)           Any Guarantee of any Subsidiary Guarantor shall terminate and be of no further force or effect and such Subsidiary Guarantor shall be deemed to be released from all obligations under this Article 11 upon (i) the sale or other disposition (including through merger or consolidation) of the Capital Stock, or all or substantially all the assets, of the applicable Guarantor if such sale or other disposition is made in compliance with Section 5.08; (ii) the designation by the Company of any Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the provisions of this Indenture; or (iii) the applicable Guarantor ceasing to be a Subsidiary of the Company as a result of any foreclosure of any pledge or security interest securing Senior Indebtedness or other exercise of remedies in respect thereof if such Guarantor is released from its guarantees of, and all pledges and security interests granted in connection with, such Senior Indebtedness.

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

SECTION 11.03.             Successors and Assigns.  This Article 11 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

SECTION 11.04.             Execution of Supplemental Indenture for Future Guarantors.  Each Subsidiary which is required to become a Guarantor pursuant to Section 4.13 shall promptly

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execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Subsidiary shall become a Guarantor under this Article 11 and shall guarantee the Guaranteed Obligations.  Concurrently with the execution and delivery of such supplemental indenture to this Indenture, the Company shall deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms and or to such other matters as the Trustee may reasonably request.

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

SECTION 11.06.            Endorsement of Guarantees.  To evidence its Guarantee set forth in this Article 11, each Guarantor hereby agrees that a notation of such Guarantee substantially in the form of Exhibit D to this Indenture shall be endorsed by an officer of such Guarantor on each Definitive Note and each Global Exchange Note authenticated and delivered by the Company; provided that the Guarantee set forth in this Article 11 shall remain in full force and effect notwithstanding any failure of a Guarantor to endorse on each Note a notation of Guarantee.

ARTICLE 12.

SUBORDINATION OF THE GUARANTEES

SECTION 12.01.            Agreement To Subordinate.  Each Guarantor agrees, and each Holder by accepting a Note agrees, that the obligations of a Guarantor hereunder are subordinated in right of payment, to the extent and in the manner provided in this Article 12, to the prior Payment in Full of all Senior Indebtedness of such Guarantor and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness of such Guarantor.  The obligations hereunder with respect to a Guarantor shall in all respects rank pari passu with all other Senior Subordinated Indebtedness of such Guarantor and shall rank senior to all existing and future Subordinated Obligations of such Guarantor; and only Indebtedness of such Guarantor that is Senior Indebtedness of such Guarantor shall rank senior to the obligations of such Guarantor in accordance with the provisions set forth herein.

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

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

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before the Holders shall be entitled to receive any payment pursuant to any Guaranteed Obligations from such Subsidiary Guarantor; and

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

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

SECTION 12.03.            Default on Designated Senior Indebtedness of a Guarantor.  A Guarantor may not make any payment pursuant to any of the Guaranteed Obligations or repurchase, redeem or otherwise acquire for value any Notes if:

(a)           a default in the payment of the principal of, premium, if any, or interest on any Designated Senior Indebtedness of such Guarantor occurs and is continuing or any other amount owing in respect of any Designated Senior Indebtedness of such Guarantor is not paid when due, whether at the due date of any such payment or by declaration of acceleration, prepayment, call for redemption or otherwise; or

(b)           any other default (beyond any applicable period of grace) on Designated Senior Indebtedness of such Guarantor occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms;

until, in either case, the earlier to occur

(i)            the default has been cured or waived and any such acceleration has been rescinded; or

(ii)           such Designated Senior Indebtedness has been Paid in Full;

provided, however, that such Guarantor may pay its Guarantee without regard to the foregoing if such Guarantor and the Trustee receive written notice approving such payment from the Representative of the holders of the Designated Senior Indebtedness of such Guarantor with respect to which either of the events in clause (a) or (b) above has occurred and is continuing.

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

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

SECTION 12.04.            Demand for Payment.  If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on a Guarantor pursuant to Article 11, the Trustee shall promptly notify the holders of the Designated Senior Indebtedness of such Guarantor (or the Representative of such holders) of such demand.  If any Designated Senior Indebtedness of such Guarantor is outstanding, such Guarantor may not pay its Guarantee until five Business Days after such holders or the Representative of the holders of the Designated Senior Indebtedness of such Guarantor receive notice of such demand (which notice, for the avoidance of doubt, shall not be effective prior to the earlier to occur of (x) the expiration of such five-day period and (y) the acceleration of such Designated Senior Indebtedness) and, thereafter, may pay its Guarantee only if this Article 12 otherwise permits payment at that time.

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

SECTION 12.06.            Subrogation.  After all Senior Indebtedness of a Guarantor is Paid in Full and until the Notes are paid in full in cash, Holders shall be subrogated to the rights of holders of Senior Indebtedness of such Guarantor to receive distributions applicable to Designated Senior Indebtedness of such Guarantor.  A distribution made under this Article 12 to holders of Senior Indebtedness of such Guarantor which otherwise would have been made to Holders is not, as between such Guarantor and Holders, a payment by such Guarantor on Senior Indebtedness of such Guarantor.

SECTION 12.07.            Relative Rights.  This Article 12 defines the relative rights of Holders and holders of Senior Indebtedness of a Guarantor.  Nothing in this Indenture shall:

(a)           impair, as between a Guarantor and Holders, the obligation of a Guarantor which is absolute and unconditional, to make payments with respect to the Guaranteed Obligations to the extent set forth in Article 11; or

(b)           prevent the Trustee or any Holder from exercising its available remedies upon a default by a Guarantor under its obligations with respect to the Guaranteed Obligations, subject to the rights of holders of Senior Indebtedness of such Guarantor to receive distributions otherwise payable to Holders.

SECTION 12.08.            Subordination May Not Be Impaired by a Guarantor.  No right of any holder of Senior Indebtedness of a Guarantor to enforce the subordination of the obligations of such Guarantor hereunder shall be impaired by any act or failure to act by such Guarantor or by its failure to comply with this Indenture.

SECTION 12.09.            Rights of Trustee and Paying Agent.  Notwithstanding Section 12.03, the Trustee or the Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives written notice from a Responsible Officer that payments may not be made under this Article 12.  A Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness of a Guarantor may give the written notice; provided, however, that if an issue of Senior Indebtedness of a Guarantor has a Representative, only the Representative may give the written notice.

The Trustee in its individual or any other capacity may hold Senior Indebtedness of a Guarantor with the same rights it would have if it were not Trustee.  The Registrar and co-registrar and the Paying Agent may do the same with like rights.  The Trustee shall be entitled to all the rights set forth in this Article 12 with respect to any Senior Indebtedness of a Guarantor which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness of such Guarantor; and nothing in Article 9 shall deprive the Trustee of any of its

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rights as such holder.  Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 9.07 or any other Section of this Indenture.

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

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

SECTION 12.12.            Trustee Entitled To Rely.  Upon any payment or distribution pursuant to this Article 12, the Trustee and the Holders shall be entitled to rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives for the holders of Senior Indebtedness of a Guarantor for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness of a Guarantor and other Indebtedness of a Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.  In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of a Guarantor to participate in any payment or distribution pursuant to this Article 12, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness of such Guarantor held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 12, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.  The provisions of Sections 9.01 and 9.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 12.

SECTION 12.13.            Trustee To Effectuate Subordination.  Each Holder by accepting a Note authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Indebtedness of each of the Guarantors as provided in this Article 12 and appoints the Trustee as attorney-in-fact for any and all such purposes.

SECTION 12.14.            Trustee Not Fiduciary for Holders of Senior Indebtedness of a Guarantor.  Neither the Trustee nor the Holder shall be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of a Guarantor or shall be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the relevant Guarantor or any other Person, money or assets to which any holders of Senior Indebtedness of such Guarantor shall be entitled by virtue of this Article 12 or otherwise.

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

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

ARTICLE 13.

AMENDMENTS

SECTION 13.01.            Without Consent of Holders.

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

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

(ii)           to comply with Article 6;

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

(iv)          to add Guarantees of the Notes;

(v)           to secure the Notes;

(vi)          to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company;

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

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(viii)        subject to the final sentence of Section 13.02(a),to comply with any requirement of the Commission in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA;

(ix)           to make any change that does not adversely affect the rights of any Holder;

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

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

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

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

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

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

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

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

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

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

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

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

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

An amendment under this Section 13.02 may not make any change that adversely affects the rights under Article 8 or Article 12 of any holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or any group or Representative thereof authorized to give a consent) consent to such change.

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

SECTION 13.03.            Compliance with Trust Indenture Act.  Every amendment to this Indenture or the Notes shall comply with the TIA as then in effect.

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

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

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SECTION 13.05.            Notation on or Exchange of Notes.  If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment.

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

ARTICLE 14.

MISCELLANEOUS

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

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

if to the Company:

Broadwing Inc.

201 West Fourth Street

Cincinnati, Ohio

Attention:  Mark Peterson

(facsimile no.:  (513) 397-4177)

with copies to:

Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY  10019

Attention:  William V. Fogg, Esq.

(facsimile no.:  (212) 474-3700)

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if to the Trustee:

The Bank of New York

101 Barclay Street – 8W

New York, New York  10286

Attention:  Corporate Trust Administration

(facsimile no.:  (212) 815-5704/5707)

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

Any notice or communication mailed to a Holder shall be mailed first class mail, to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

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

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

SECTION 14.04.            Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

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

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

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

(a)           a statement that the individual making such certificate or opinion has read such covenant or condi­tion;

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

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

(d)           a statement as to whether or not, in the opin­ion of such individual, such covenant or condition has been complied with.

SECTION 14.06.             When Notes Disregarded.  In determining whether the Holders of the required principal amount at Maturity of Notes have concurred in any direction, waiver or consent hereunder, under the Notes, the Purchase Agreement or the Exchange and Registration Rights Agreement, Notes owned by (x) the Company, any Subsidiary or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Subsidiary or (y) except in the case of any determination pursuant to Section 13.02(a)(i) through (vii), the holder of any Subordinated Indebtedness or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with such holder of Subordinated Indebtedness shall in each case be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the officer of the Trustee actually knows are so owned shall be so disregarded.  Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.

SECTION 14.07.            Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by or a meeting of Holders.  The Registrar and the Paying Agent may make reasonable rules for their functions.

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

SECTION 14.09.            GOVERNING LAW.  THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 14.10.            No Recourse Against Others.  A director, officer, employee, stockholder or member, as such, of the Company or any of the Subsidiaries shall not have any liability for any obligations of the Company or any of the Subsidiaries under the Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Holder shall waive and release all such lia­bility.  The waiver and release shall be part of the consi­deration for the issue of the Notes.

SECTION 14.11.            Successors.  All agreements of the Company and each Subsidiary in this Indenture and the Notes shall bind its successors.  All agreements of the Trustee in this Indenture shall bind its successors.

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SECTION 14.12.            Multiple Originals; Counterparts.  The parties may sign any number of counterparts of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

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

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

SECTION 14.15.            Intent to Limit Interest to Maximum.  In no event shall the interest rate payable on the Notes under this Indenture, plus any other amounts paid by the Company to the Holders in connection therewith, exceed the highest rate permissible under law that a court of competent jurisdiction shall, in the final determination, deem applicable.  The Company and the Trustee, in executing and delivering this Indenture, intend legally to agree upon the rate or rates of interest and the manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceed the maximum allowable under applicable law, then, ipso facto as of the date of this Indenture, the Company is and shall be liable only for the payment of such maximum as allowed by law, and payment received from the Company in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of any Notes then outstanding to the extent of such excess, or, if such excess exceeds the then outstanding principal, such excess shall be first set-off against any other amounts then due and owing by the Company and refunded to the Company.

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

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

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

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

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APPENDIX A

PROVISIONS RELATING TO

INITIAL NOTES

AND EXCHANGE NOTES

1.             Definitions

1.1           Definitions

For the purposes of this Appendix A, except where the context otherwise requires, the following terms shall have the meanings indicated below:

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

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

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

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

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

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

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

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

“Purchasers” means 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 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

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

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

“Registered Exchange Offer” means the offer by the Company, pursuant to the Exchange and Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for their Initial Notes, a like aggregate principal amount at Maturity of Exchange Notes registered under the Securities Act.

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

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

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

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

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

“Shelf Registration Statement” means a registration statement filed by the Company in connection with the offer and sale of Initial Notes pursuant to the Exchange and Registration Rights Agreement.

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

1.2           Other Definitions

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

2.The Notes

2.1           Form and Dating

(a)   The Initial Notes issued on the date hereof will be sold by the Company pursuant to the Purchase Agreement to the Purchasers.  All such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, Accredited Investors in accordance with Rule 501.  A pledge by any Holder of an Initial Note shall not constitute a transfer unless and until such pledge shall be realized upon.

96

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

Initial Notes will be exchanged for Exchange Notes in the Registered Exchange Offer pursuant to the Exchange and Registration Rights Agreement.  Exchange Notes will also be issued upon the sale of Initial Notes (i) under a Shelf Registration Statement or (ii) at any time that the Initial Notes being sold are not Transfer Restricted Notes.  Exchange Notes shall, except as provided in Sections 2.3 and 2.4, be issued in global form bearing the Global Notes Legend (the “Global Exchange Notes”).  The aggregate principal amount at Maturity of the Global Exchange Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.

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

The Company shall execute and the Trustee shall, in accordance with this Paragraph 2.1(c) and Paragraph 2.2 and pursuant to an order of the Company signed by one officer, authenticate and deliver one Global Exchange Note that (i) shall be registered in the name of the Depositary for such Global Exchange Note or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instruc­tions or held by the Trustee as Notes Custodian.

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Exchange Note held on their behalf by the Depositary or by the Trustee as Notes Custodian or under such Global Exchange Note, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Exchange Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Exchange Note.

(d)           Definitive Notes.  Except as provided in Paragraph 2.3 or 2.4, owners of beneficial interests in Global Exchange Notes will not be entitled to receive physical delivery of certificated Notes.

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

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

2.3           Transfer and Exchange.

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

(i)            to register the transfer of such Definitive Notes; or

(ii)           to exchange such Definitive Notes for an equal principal amount at Maturity of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if its reasonable require­ments for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange:

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

(2)           in the case of Transfer Restricted Notes are accompanied by the following additional information and documents, as applicable:

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

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

(C)           if such Definitive Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth on the reverse side of the Initial Note) and (y) if the Company, the Registrar or the Trustee so requests, an opinion of

98

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

(b)           Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Exchange Note.  A Definitive Note may not be exchanged for a beneficial interest in a Global Exchange Note except (i) as part of a Registered Exchange Offer, (ii) upon sale of the Definitive Note under the Shelf Registration Statement, (iii) upon sale of the Definitive Note at the time such Definitive Note is not a Transfer Restricted Note or (iv) upon presentation to the Trustee of Definitive Notes that are not Transfer Restricted Notes.  Upon receipt by the Trustee of a Definitive Note, duly endorsed or accom­panied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, together with written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Global Exchange Note to reflect an increase in the aggregate principal amount at Maturity of the Notes represented by the Global Exchange Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Notes Cus­todian, the aggregate principal amount at Maturity of Notes represented by the Global Exchange Note to be increased by the aggregate principal amount at Maturity of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Exchange Note equal to the principal amount at Maturity of the Definitive Note so canceled.  If no Global Exchange Notes are then outstanding and the Global Exchange Note has not been previously exchanged for certificated Notes pursuant to Paragraph 2.4, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers’ Certificate, a new Global Exchange Note in the appropriate principal amount at Maturity.

(c)           Transfer and Exchange of Global Exchange Notes.  (i)  The transfer of the Global Exchange Note or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor.  A transferor of a beneficial interest in a Global Exchange Note shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Exchange Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Exchange Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Exchange Note being transferred.

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

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(d)           Legend.

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

“THIS NOTE 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 NOTE 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 REGISTRATION.

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

100

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

Each Definitive Note shall bear the following additional legend:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

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

(iii)          After a transfer of any Initial Notes during the period of the effectiveness and pursuant to a Shelf Registration Statement with respect to such Initial Notes, all requirements pertaining to the Restricted Notes Legend on such Initial Notes shall cease to apply and the requirements that any such Initial Notes be issued in global form shall become applicable.

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

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

101

(f)            Obligations with Respect to Transfers and Exchanges of Notes.

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

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

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

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

(g)           No Obligation of the Trustee.

(i)            The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Exchange Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes.  All notices and communica­tions to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Exchange Note).  The rights of beneficial owners in any Global Exchange Note shall be exercised only through the Depositary subject to the applicable rules and pro­cedures of the Depositary.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its mem­bers, participants and any beneficial owners.

(ii)           The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Inden­ture or under applicable law with respect to any trans­fer of any interest in any Note (including any trans­fers between or among Depositary participants, members or beneficial owners in any Global Exchange Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when

102

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

2.4  Definitive Notes

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

(b)           Any Global Exchange Note that is transferable to the beneficial owners thereof pursuant to this Paragraph 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Exchange Note, an equal aggregate principal amount at Maturity of Definitive Notes of authorized denominations.  Any portion of a Global Exchange Note transferred pursuant to this paragraph shall be executed, authenticated and delivered only in denominations of $1,000 (in principal amount at Maturity) and any multiple thereof and registered in such names as the Depositary shall direct.  Any certificated Initial Note in the form of a Definitive Note delivered in exchange for an interest in the Global Exchange Note shall, except as otherwise provided by Paragraph 2.3(d), bear the Restricted Notes Legend.

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

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

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EXHIBIT A

FORM OF FACE OF INITIAL NOTE

THIS NOTE 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 NOTE 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 REGISTRATION.

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH COMPANY OR ANY AFFILIATE OF COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR OR TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(5) OR (6) ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT AT MATURITY OF THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER

1

INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

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

This debt instrument is issued with original issue discount.

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

2

No. [                 ] $

Senior Subordinated Discount Note due 2009

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

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

3

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

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

BROADWING INC.
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

	By:
		Authorized Signatory
Dated:

4

FORM OF REVERSE SIDE OF INITIAL NOTE

Senior Subordinated Discount Note due 2009

1.Interest

(a)           BROADWING INC., an Ohio corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay cash interest on the Accreted Value at such date, in arrears, on each of June 30 and December 31 of 2003 through 2006, commencing on June 30, 2003, and then on each of June 30, 2007, January 20, 2008 and on the Stated Maturity Date (each, an “Interest Payment Date”), at the rate of 12% per annum, compounded semi-annually, until the principal hereof is paid.  Such interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no such interest has been paid or duly provided for, from March 26, 2003 until the principal hereof is due.  Principal of the Notes will accrete as set forth in the Indenture.  Interest shall be paid in cash.  Any principal of, or premium or installment of interest or Special Interest (as hereinafter defined) on this Note which is overdue shall bear interest at the rate equal to 2.25% per annum above the cash interest rate from the date such amounts are due until they are paid (to the extent that the payment of such interest shall be legally enforceable), and such excess interest shall be payable in cash on demand.  In addition, the accretion of principal on the Notes will increase as set forth in the Indenture.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

(b)           Special Interest.  The holder of this Note is entitled to the benefits of the Exchange and Registration Rights Agreement, dated as of the date hereof, by and among the Company and the Purchasers named therein.  Capitalized terms used in this paragraph (b) but not defined herein have the meanings assigned to them in the Exchange and Registration Rights Agreement.  If (i) the Exchange Offer Registration Statement is not filed with the Commission within 90 days following the Trigger Date, (ii) the Shelf Registration Statement is not filed within 30 days after, or is not declared effective within 150 days after, filing is required or requested pursuant to the Exchange and Registration Rights Agreement, (iii) the Exchange Offer Registration Statement is not declared effective on or prior to 150 days after the Trigger Date, (iv) the Registered Exchange Offer is not consummated on or prior to 180 days after the Trigger Date, or (v) the Shelf Registration Statement is filed and declared effective but shall thereafter cease to be effective prior to the end of the Shelf Registration Period (other than during a Suspension Period permitted under the Exchange and Registration Rights Agreement) (at any time that the Company and the Guarantors are obligated to maintain the effectiveness thereof) (each such event referred to in clauses (i) through (v), a “Registration Default”), the Company and the Guarantors will be jointly and severally obligated to pay Special Interest to each holder of Transfer Restricted Notes, during the period of one or more such Registration Defaults, at the rate equal to $0.05 per week per $1,000 of principal amount at Maturity for the first 90 days during the period of one or more such Registration Defaults, which amount shall increase by $0.05 per week per $1,000 of principal amount at Maturity for each subsequent 90-day period during the continuance of one or more Registration Default, until such time as no Registration Default is in effect (such amount equal to the “Special Interest”), up to a maximum amount of Special Interest for all Registration Defaults of $0.192 per week per $1,000 of principal amount at Maturity.  All accrued Special Interest shall be paid to Holders in the same manner as interest

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payments on the Notes on semi-annual payment dates which correspond to interest payments for the Notes.  Following the cure of all Registration Defaults, the accrual of Special Interest shall cease.  The Trustee shall have no responsibility with respect to the determination of the amount of any such Special Interest.

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

2.Method of Payment

The Company shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders of Notes at the close of business on the June 15 or December 15 next preceding the Interest Payment Date (or, in the case of the Stated Maturity Date and the Interest Payment Date immediately preceding the Stated Maturity Date, January 5) even if Notes are canceled after the record date and on or before the Interest Payment Date.  Holders must surrender Notes to a Paying Agent to collect principal payments.  The Company shall pay principal, Special Interest, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  The Company will make all money payments in respect of a certificated Note (including principal and interest), at the office of the Paying Agent or, at the option of the Company, by mailing a check to the registered address of each Holder thereof; provided, however, that money payments on the Notes shall be made, in the case of a Holder of at least $1,000,000 aggregate principal amount at Maturity of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3.Paying Agent and Registrar

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

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4.Indenture

The Company issued the Notes under an Indenture, dated as of  March 26, 2003 (the “Indenture”), by and between the Company and the Trustee.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and used but not defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all terms and provisions of the Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions.

The Notes are senior subordinated unsecured discount obligations of the Company limited to $441,628,051.27 aggregate principal amount at Maturity at any one time outstanding (subject to Section 2.07 of the Indenture).  This Note is one of the series of the Initial Notes that are referred to in the Indenture issued in an aggregate original principal amount at Maturity of $441,628,051.27.  The Notes include the Initial Notes and any Exchange Notes issued in exchange for Initial Notes.  The Initial Notes and the Exchange Notes are treated as a single class of Notes under the Indenture.  The Initial Notes of each series and the Exchange Notes of the corresponding series are treated as a single series of Notes under the Indenture.  The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of Capital Stock of such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and make asset sales.  The Indenture also imposes limitations on the ability of the Company to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of the property of the Company.

The Notes are guaranteed, on a senior subordinated basis, by all existing and future Restricted Subsidiaries that are or shall become Guarantors in accordance with the terms of the Indenture.

5.Optional Redemption

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

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

On any Interest Payment Date occurring on or prior to March 26, 2006, the Company may redeem all or any part (in the principal amount at Maturity of not less than $5,000,000 and integral multiples thereof) of the then outstanding Accreted Value of Notes upon not less than thirty (30) nor more than sixty (60) days’ notice by mail at a price equal to the sum of (x) 100% of the Accreted Value of such Notes being redeemed as of the applicable Interest Payment Date plus (y) a Make Whole Premium.  As used herein, the “Make Whole Premium” means, as at any date, (a) an amount equal to the present value of the remaining payments of interest on the Notes and the Redemption Price of the Notes, assuming that on March 26, 2006 the entire Accreted Value of the Notes then outstanding will be redeemed at 108% of the Accreted Value thereof, together with accrued interest, and using an annual discount factor (applied semi-annually) equal to the Treasury Rate plus 0.50%, less (b) the Accreted Value of the Notes outstanding as at the day of determination; provided, however, that in no case shall the Make Whole Premium be less than zero.  For purposes of this definition, the “Treasury Rate” shall mean a rate equal to the then current yield to maturity on the most actively traded U.S. Treasury security having a maturity on March 26, 2006.  In the event there are not actively traded U.S. Treasury securities with a maturity on March 26, 2006, then the yield to maturity shall be determined by linear interpolation using the closest, but shorter, maturity for actively traded U.S. Treasury securities and the closest, but longer, maturity for actively traded U.S. Treasury maturities.

6.Sinking Fund

The Notes are not subject to any sinking fund.

7.Notice of Redemption

Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address.  Notes in denominations larger than $1,000 (in principal amount at Maturity) may be redeemed in part but only in multiples of $1,000 (in principal amount at Maturity).  If money sufficient to pay the redemption price of and accrued and unpaid interest and Special Interest, if any, on all Notes (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent on or before the Redemption Date and certain other conditions are satisfied, on and after such date, cash interest and Special Interest, if any, ceases to accrue on such Notes (or such portions thereof) called for redemption.

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

Upon the occurrence of a Change of Control, each Holder of Notes shall have the right, subject to certain conditions specified in the Indenture, to require the Company to repurchase all or any part of the Notes of such Holder at a purchase price in cash equal to 101% of the Accreted Value of the Notes to be repurchased, plus accrued and unpaid interest thereon and Special Interest, if any, in respect thereof to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due and Special Interest, if any, on the relevant Interest Payment Date) as provided in, and subject to the terms of, the Indenture.

In accordance with Section 4.10 of the Indenture, the Company will be required to offer to purchase Notes upon the occurrence of certain sales of assets.

9.Subordination.

The Notes are subordinated to Senior Indebtedness, as defined in the Indenture.  To the limited extent provided in the Indenture, Senior Indebtedness must be paid before the Notes may be paid.  Each of the Company and the Guarantors agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give them effect and appoints the Trustee as attorney-in-fact for such purpose.

10.Denominations; Transfer; Exchange

The Notes are in registered form without coupons in denominations of $1,000 (in principal amount at Maturity) and multiples thereof.  A Holder may transfer or exchange Initial Notes in accordance with the Indenture.  Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorse­ments or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Company shall not be required to make and the Regis­trar need not register transfers or exchanges of Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days prior to a selection of Notes to be redeemed.

11.Persons Deemed Owners

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

12.Unclaimed Money

If money for the payment of principal of or interest on the Notes has been deposited with the Trustee or Paying Agent and remains unclaimed for two years after such amount is due and payable, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, the Trustee and the Paying Agent shall have no further liability for such funds and Holders entitled to the money must look only to the recipient and not to the Trustee for payment.

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13.           Discharge and Defeasance

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

14.Amendment, Waiver

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

15.Defaults, Remedies and Acceleration

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the Holders of 25% or more in principal amount at Maturity of the outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable.  Upon such a declaration, such principal and interest shall be due and payable immediately.  If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  Under certain circumstances, the Holders of a majority in principal amount at Maturity of the Notes may rescind any such acceleration with respect to the Notes and its consequences.  If an Event of Default has occurred and is continuing, the Notes will accrue an additional interest at 3% per annum, until such time as no Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable); provided that 2.25% of such additional

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interest shall be payable in cash and 0.75% of such additional interest shall be added to the principal amount of the Notes as set forth in the definition of Accreted Value.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense.  Except to enforce the right to receive payment of principal or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given to the Trustee written notice stating that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount at Maturity of the outstanding Notes have requested the Trustee in writing to pursue the remedy, (iii) such Holder or Holders have offered to the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount at Maturity of the outstanding Notes have not given the Trustee a direction inconsistent with such request during such 60-day period.  Subject to certain restrictions, the Holders of a majority in principal amount at Maturity of the out­standing Notes are given the right to direct the time, method and place of conducting any proceed­ing for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  The Trustee, how­ever, may refuse to follow any direction that conflicts with law or the Indenture or, subject to certain exceptions in the Indenture, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability.  Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

16.Trustee Dealings with the Company

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

17.No Recourse Against Others

A director, officer, employee or stockholder, as such, of the Company or any of the Subsidiaries shall not have any liability for any obligations of the Company or any of the Subsidiaries under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their crea­tion.  By accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the considera­tion for the issue of the Notes.

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18.Authentication

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

19.Abbreviations

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

20.Governing Law

THIS NOTE 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.

21.Registration Rights

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

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

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

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

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

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

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

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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $               principal amount at Maturity of Notes held in definitive form by the undersigned.

The undersigned has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

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

CHECK ONE BOX BELOW

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

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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

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

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

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

Dated:
	NOTICE:  To be executed by
	an executive officer

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section  4.09 (Change of Control) or Section 4.10 (Application of Excess Proceeds from Sale of Assets) of the Indenture, check the box:

o	o
Limitation on Sales of Assets and Subsidiary Stock	Change of Control

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.09 or 4.10 of the Indenture, state the principal amount at Maturity ($1,000 or a multiple thereof):

$
Date:		Your Signature:
(Sign exactly as your name appears on the other side of the Note)
Signature Guarantee:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee

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EXHIBIT B

FORM OF FACE OF EXCHANGE NOTE

[Global Notes Legend]

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

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

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

This debt instrument is issued with original issue discount.

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

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No. [                   ] $

Senior Subordinated Discount Note due 2009

[CUSIP No.             ]

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

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

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

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

BROADWING INC.
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

	By:
		Authorized Signatory
Dated:

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

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FORM OF REVERSE SIDE OF EXCHANGE NOTE

Senior Subordinated Discount Note due 2009

1.Interest

BROADWING INC., an Ohio corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay cash interest at the Accreted Value at such date, in arrears, on each of June 30 and December 31 of 2003 through 2006, commencing on June 30, 2003, and then on each of June 30, 2007, January 20, 2008 and on the Stated Maturity Date (each, an “Interest Payment Date”), at the rate of 12% per annum, compounded semi-annually, until the principal hereof is paid.  Such interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no such interest has been paid or duly provided for, from March 26, 2003 until the principal hereof is due.  Principal of the Notes will accrete as set forth in the Indenture.  Interest shall be paid in cash.  Any principal of, or premium or installment of interest on this Note which is overdue shall bear interest at the rate equal to 2.25% per annum above the cash interest rate from the date such amounts are due until they are paid (to the extent that the payment of such interest shall be legally enforceable), and such excess interest shall be payable on demand.  In addition, the accretion of principal on the Notes will increase as set forth in the Indenture.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Agreement, be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date.  “Regular Record Date” for such interest shall be the fifteenth (or, in the case of a Regular Record Date for the Stated Maturity Date and the Interest Payment Date immediately preceding the Stated Maturity Date, the fifth) calendar day (whether or not a Business Day) immediately preceding such Interest Payment Date.

2.Method of Payment

The Company shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders of Notes at the close of business on the June 15 or December 15 next preceding the Interest Payment Date (or, in the case of the Stated Maturity Date and the Interest Payment Date immediately preceding the Stated Maturity Date, January 5) even if Notes are canceled after the record date and on or before the Interest Payment Date.  Holders must surrender Notes to a Paying Agent to collect principal payments.  The Company shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  The Company will make all money payments in respect of a certificated Note (including principal and interest), of the Paying Agent or, at the option of the Company, by mailing a check to the registered address of each Holder thereof; provided, however, that money payments on the Notes shall be made, in the case of a Holder of at least $1,000,000 aggregate principal amount at Maturity of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects pay­ment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

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3.Paying Agent and Registrar

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

4.Indenture

The Company issued the Notes under an Indenture, dated as of March 26, 2003 (the “Indenture”), by and between the Company and the Trustee.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and used but not defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all terms and provisions of the Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions.

The Notes are senior subordinated unsecured discount obligations of the Company limited to $441,628,051.27 aggregate principal amount at Maturity at any one time outstanding (subject to Section 2.07 of the Indenture).  This Note is one of the Exchange Notes referred to in the Indenture issued in an aggregate principal amount at Maturity of $441,628,051.27.  The Notes include the Exchange Notes issued in exchange for Initial Notes.  The Initial Notes and the Exchange Notes are treated as a single class of Notes under the Indenture.  The Initial Notes of each series and the Exchange Notes of the corresponding series are treated as a single series of Notes under the Indenture.  The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of Capital Stock of such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and make asset sales.  The Indenture also imposes limitations on the ability of the Company to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of the property of the Company.

The Notes are guaranteed, on a senior subordinated basis, by all existing and future Restricted Subsidiaries that are or shall become Guarantors in accordance with the terms of the Indenture.

5.Optional Redemption

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

21

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

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

On any Interest Payment Date occurring on or prior to March 26, 2006, the Company may redeem all or any part (in the principal amount at Maturity of not less than $5,000,000 and integral multiples thereof) of the then outstanding Accreted Value of Notes upon not less than thirty (30) nor more than sixty (60) days’ notice by mail at a price equal to the sum of (x) 100% of the Accreted Value of such Notes being redeemed as of the applicable Interest Payment Date plus (y) a Make Whole Premium.  As used herein, the “Make Whole Premium” means, as at any date, (a) an amount equal to the present value of the remaining payments of interest on the Notes and the Redemption Price of the Notes, assuming that on March 26, 2006 the entire Accreted Value of the Notes then outstanding will be redeemed at 108% of the Accreted Value thereof, together with accrued interest, and using an annual discount factor (applied semi-annually) equal to the Treasury Rate plus 0.50%, less (b) the Accreted Value of the Notes outstanding as at the day of determination; provided, however, that in no case shall the Make Whole Premium be less than zero.  For purposes of this definition, the “Treasury Rate” shall mean a rate equal to the then current yield to maturity on the most actively traded U.S. Treasury security having a maturity on March 26, 2006.  In the event there are not actively traded U.S. Treasury securities with a maturity on March 26, 2006, then the yield to maturity shall be determined by linear interpolation using the closest, but shorter, maturity for actively traded U.S. Treasury securities and the closest, but longer, maturity for actively traded U.S. Treasury maturities.

6.Sinking Fund

The Notes are not subject to any sinking fund.

7.Notice of Redemption

Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address.  Notes in denominations larger than $1,000 (in principal amount at Maturity) may be redeemed in part but only in multiples of $1,000 (in principal amount at Maturity).  If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent on or before the Redemption Date and certain other conditions are satisfied, on and

22

after such date, cash interest ceases to accrue on such Notes (or such portions thereof) called for redemption.

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

Upon the occurrence of a Change of Control, each Holder of Notes shall have the right, subject to certain conditions specified in the Indenture, to require the Company to repurchase all or any part of the Notes of such Holder at a purchase price in cash equal to 101% of the Accreted Value of the Notes to be repurchased, plus accrued and unpaid interest thereon and Special Interest, if any, in respect thereof to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due and Special Interest, if any, on the relevant Interest Payment Date) as provided in, and subject to the terms of, the Indenture.

In accordance with Section 4.10 of the Indenture, the Company will be required to offer to purchase Notes upon the occurrence of certain sales of assets.

9.Subordination

The Notes subordinated to Senior Indebtedness, as defined in the Indenture.  To the limited extent provided in the Indenture, Senior Indebtedness must be paid before the Notes may be paid.  Each of the Company and the Guarantors agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give them effect and appoints the Trustee as attorney-in-fact for such purpose.

10.Denominations; Transfer; Exchange

The Notes are in registered form without coupons in denominations of $1,000 (in principal amount at Maturity) and multiples thereof.  A Holder may transfer or exchange Initial Notes in accordance with the Indenture.  Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorse­ments or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Company shall not be required to make and the Registrar need not register transfers or exchanges of Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days prior to a selection of Notes to be redeemed.

11.Persons Deemed Owners

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

12.Unclaimed Money

If money for the payment of principal of or interest on the Notes has been deposited with the Trustee or Paying Agent and remains unclaimed for two years after such amount is due and payable, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, the Trustee and the Paying Agent shall have no further liability for such

23

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

13.Discharge and Defeasance

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

14.Amendment, Waiver

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

15.Defaults, Remedies and Acceleration

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the Holders of 25% or more in principal amount at Maturity of the outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable.  Upon such a declaration, such principal and interest shall be due and payable immediately.  If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  Under certain circumstances, the Holders of a majority in principal amount at Maturity of the Notes may rescind any such acceleration with respect to the Notes and its consequences.  If an

24

Event of Default has occurred and is continuing, the Notes will accrue an additional interest at 3% per annum, until such time as no Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable); provided that 2.25% of such additional interest shall be payable in cash and 0.75% of such additional interest shall be added to the principal amount of the Notes as set forth in the definition of Accreted Value.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense.  Except to enforce the right to receive payment of principal or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given to the Trustee written notice stating that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount at Maturity of the out­standing Notes have requested the Trustee in writing to pursue the remedy, (iii) such Holder or Holders have offered to the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount at Maturity of the outstanding Notes have not given the Trustee a direction inconsistent with such request during such 60-day period.  Subject to certain restrictions, the Holders of a majority in principal amount at Maturity of the out­standing Notes are given the right to direct the time, method and place of conducting any proceed­ing for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  The Trustee, how­ever, may refuse to follow any direction that conflicts with law or the Indenture or, subject to certain exceptions in the Indenture, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability.  Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

16.Trustee Dealings with the Company

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

17.No Recourse Against Others

A director, officer, employee or stockholder, as such, of the Company or any of the Subsidiaries shall not have any liability for any obligations of the Company or any of the Subsidiaries under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their crea­tion.  By accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the considera­tion for the issue of the Notes.

25

18.Authentication

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

19.Abbreviations

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

20.Governing Law

THIS NOTE 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.

21.CUSIP Numbers

the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

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

26

ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

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

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

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

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

27

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section  4.09 (Change of Control) or Section 4.10 (Application of Excess Proceeds from Sale of Assets) of the Indenture, check the box:

o	o
Limitation on Sales of Assets and Subsidiary Stock	Change of Control

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.09or 4.10 of the Indenture, state the principal amount at Maturity ($1,000 or a multiple thereof):

$

Date:	Your Signature:
(Sign exactly as your name appears on the other side of the Note)
Signature Guarantee:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee

28

Execution copy

BROADWING INC.

Senior Subordinated Discount Notes due 2009

INDENTURE

Dated as of March 26, 2003

THE BANK OF NEW YORK,

Trustee

TABLE OF CONTENTS

i

ii

iii

Appendix A   Provisions Relating to the Initial Notes and the Exchange Notes

EXHIBITS:

Exhibit A	–	Form of Initial Note
Exhibit B	–	Form of Exchange Note
Exhibit C	–	Form of Supplemental Guarantee
Exhibit D	–	Form of Notation of Guarantee
SCHEDULES:
Schedule 1.1(a)		Restructuring Charges included in Consolidated EBITDA
Schedule 5.03		Agreements containing dividend restrictions

iv

Schedule 5.06 –	Affiliate Transactions
Schedule 5.11(b)	Existing Contractual Arrangements with BCI Group

v

EXHIBIT C

FORM OF SUPPLEMENTAL GUARANTEE

SUPPLEMENTAL GUARANTEE (this “Supplemental Guarantee”), dated as of                       , between                                      , (the “New Guarantor”), a direct or indirect Broadwing Inc. (or its successor), an Ohio corporation (the “Company”), and The Bank of New York, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company and the Domestic Subsidiaries listed on the signature pages thereof have each heretofore executed and delivered to the Trustee an Indenture (the “Indenture”), dated as of March 26, 2003, providing for the issuance by the Company of its Senior Subordinated Discount Notes due 2009 (the “Notes”); and

WHEREAS, Section 11.05 of the Indenture provides that under certain circumstances the Company is required to cause the Guarantor to execute and deliver to the Trustee for the benefit of the Holders a supplemental agreement pursuant to which the Guarantor shall unconditionally guarantee all of the Company’s obligations under the Notes pursuant to a Guarantee on the terms and conditions set forth herein;

WHEREAS, pursuant to Section 13.01 of the Indenture, the Trustee, the Company and the Guarantors are authorized to execute and deliver this Supplemental Indenture;

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor covenants and agrees for the equal and ratable benefit of the Holders of the Notes as follows:

1.             CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2.             AGREEMENT TO GUARANTEE; EXCHANGE AND REGISTRATION RIGHTS AGREEMENT.  The New Guarantor hereby agrees, jointly and severally with all other Guarantors, to unconditionally guarantee the Company’s obligations under the Notes on the terms and subject to the conditions set forth in Article 11 and Article 12 of the Indenture and to be bound by all other applicable provisions of the Indenture.  The Guarantor further agrees to become a party to the Exchange and Registration Rights Agreement and to be bound by all provisions thereof.

3.             RATIFICATION OF SUPPLEMENTAL GUARANTEE; SUPPLEMENTAL GUARANTEES PART OF INDENTURE.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Guarantee shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

C-1

4.             NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporator or stockholder of the New Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, any Guarantee, the Indenture or this Supplemental Guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes.  Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Securities and Exchange Commission that such a waiver is against public policy.

5.             EFFECTIVENESS.  This Supplemental Guarantee shall be effective upon execution by the parties hereto.

6.             RECITALS.  The recitals contained herein shall be taken as the statements of the Company and the Guarantors assume no responsibility for their correctness.

7.             NEW YORK LAW TO GOVERN.  THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE.

8.             TRUSTEE MAKES NO REPRESENTATION.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Guarantee.

9.             COUNTERPARTS.  The parties may sign any number of copies of this Supplemental Guarantee.  Each signed copy shall be an original, but all of them together represent the same agreement.

10.           EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

[New Guarantor]
By:
	Name:
	Title:

C-2

EXHIBIT D

FORM OF NOTATION OF GUARANTEE

The undersigned have guaranteed this Note on a subordinated basis as provided in the Indenture.

[GUARANTOR]
By:
	Name:
	Title:

D-1

Schedule 1.1(a)

Restructuring Charges Included in

Consolidated EBITDA

December 2001	$	10,000,000
September 2002	$	4,100,000
December 2002	$	1,800,000

Schedule 5.03

Restrictions on Transferability and Dividend Payments as of 12-09-02

1.The Operating Agreement dated December 31, 1998 between Cincinnati Bell Wireless Company and AT&T Wireless PCS Inc., together with the Related Agreements thereto contain limitations on the transferability of the member interests and assets of Cincinnati Bell Wireless LLC, and the payment of dividends.

2.The Operating Agreement of Cincinnati Bell Wireless Holdings LLC (“CBWH”) dated June 2, 2002 contains restrictions on the ability of CBWH to transfer and obtain assets, and restrictions on affiliate transactions.

Schedule 5.06

Affiliate Transactions and Relationships with the BCI Group as of 12-09-02

1.PENSION

The Company and its Subsidiaries participate in the defined benefit pension plan (the “Plan”) of the Company.  Each Subsidiary is charged an expense related to its portion of the Plan, on a month-to-month basis, based on the “all participants” allocation method, pursuant to which the allocation of expenses of the Plan are calculated by independent actuaries.

2.MANAGEMENT FEE ARRANGEMENT

Corporate expenses of the Company incurred on behalf of all of the Company’s Subsidiaries are allocated, on a month-to-month basis, to the Subsidiaries based on the Massachusetts Formula, a common method of expense allocation.   Services received by the Subsidiaries from the Company pursuant to this arrangement include, but are not limited to treasury, tax, accounting, finance, cash management, communications, legal and information technology.

3.             INTERCOMPANY PROMISSORY NOTE

BCI is a party to an Intercompany Promissory Note dated as of June 26, 2001 (the “Note”), payable to the Company and evidencing funds provided by the Company to BCI for its operating, investing and financing needs.  The Note bears interest at the rate applicable to borrowings by the Company under the Credit Agreement, which rate is adjusted monthly.

4.PAYROLL AND ACCOUNTS PAYABLE PROCESSING

Cincinnati Bell Telephone (“CBT”), a wholly-owned subsidiary of the Company, provides payroll and accounts-payable processing services, on a month-to-month basis, for the Company and its Subsidiaries.  The rate payable for these services is based on a “per check” fee commensurate with commercially available third party processing rates.

5.             PROVISION OF SERVICES TO CINCINNATI BELL TELEPHONE

Broadwing Technology Services provides subcontracting services to CBT for certain of CBT’s customers who have contracted for managed internet and hardware services.  The subcontracting services are provided to CBT on an arms-length basis.

Schedule 5.11(b)

Existing Contractual Arrangements with BCI Group

1.             All existing arrangements currently between Broadwing Inc. and its subsidiaries on the one hand and BCI and its Subsidiaries on the other hand that become BRW Sale Arrangements (as defined in the Credit Agreement on the date hereof) upon effectiveness of the BCI Sale Agreement.

2.             Provision by Broadwing Technology Solutions Inc. of subcontracting services for CBT hosting/collocation customers provided on an arm’s length basis.

3.             Provision by Broadwing Technology Solutions Inc. of helpdesk support services to Broadwing Inc. and its subsidiaries provided on an arm’s length basis.

4.             Provision by CBT of local access equipment and services for BCI subsidiaries provided on an arm’s length basis.

5.             Shared intercompany resources and supplies such as copiers, telephones, computers, etc. the cost of which is fairly allocated between the users based on their respective levels of utilization.

6.             Lease of CBT data center space by Broadwing Technology Solutions Inc. for fair market rent and separately identified as space of the lessee.

EX-12.1

Exhibit 12.1 to

Form 10-K for 2002

Broadwing Communications Inc.

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends

($ in millions)

	Company												Predecessor
	2002			2001			2000			Period from November 10 to December  31, 1999			Period from January 1 to November 9, 1999			1998
Pre-tax loss from continuing operationsbefore adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees plus fixed charges	$	(2,430.7	)	$	(486.2	)	$	(616.6	)	$	(45.5	)	$	(230.5	)	$	(43.1		)
Fixed Charges:
Interest expense, etc.	81.7			91.1			92.3			9.0			51.0			47.9
Appropriate portion of rentals	2.6			2.5			2.1			0.2			1.5			0.9
Preferred stock dividends of majoritysubsidiaries	—			—			—			—			—			—
Total Fixed Charges	84.3			93.6			94.4			9.2			52.5			48.8
Preferred dividend requirements	45.9			46.2			47.1			6.6			56.5			58.2
Total Fixed Charges and preferred dividends	$	130.2		$	139.8		$	141.5		$	15.8		$	109.0		$		107.0
Ratio of earnings to combined fixed chargesand preferred dividends	(18.7		)	(3.5		)	(4.4		)	(2.9		)	(2.1		)	(0.4			)
Coverage Deficiency	$	2,560.9		$	626.0		$	758.1		$	61.4		$	339.5		$		150.2

EX-21.1

Exhibit 21.1 to

Form 10-K for 2002

Subsidiaries of the Registrant

(as of February 28, 2003)

Subsidiary Name	State of Incorporation
Broadwing Communications Services Inc.	Delaware
Broadwing Technology Solutions Inc.	Ohio
Broadwing Communications Services of VA, Inc.	Virginia
Broadwing Communications Real Estate Services LLC	Delaware
Broadwing Services LLC	Delaware
Broadwing Telecommunications Inc.	Delaware
IXC Business Services LLC	Delaware
IXC Internet Services Inc.	Delaware
Broadwing Logistics LLC	Delaware
Mutual Signal Holding Corporation	Delaware
Mutual Signal Corporation	New York
Mutual Signal Corporation of Michigan	New York
MSM Assoc. Limited Partnership	Delaware

EX-99.1

Exhibit 99.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Broadwing Communications Inc. (the “Company”) on Form 10-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin W. Mooney, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

/s/ Kevin W. Mooney

Kevin W. Mooney

Chief Executive Officer

March 31, 2003

EX-99.2

Exhibit 99.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Broadwing Communications Inc. (the “Company”) on Form 10-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas L. Schilling, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

/s/ Thomas L. Schilling

Thomas L. Schilling

Chief Financial Officer

March 31, 2003

EX-99.3

Exhibit 99.3

THIS AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
A SOLICITATION OF ANY KIND.  SUCH AN OFFER OR SOLICITATION WILL BE
MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS

EXCHANGE AND VOTING AGREEMENT

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

WHEREAS, the Company intends to offer to exchange (the “Exchange Offer”) any and all outstanding Notes for shares of the Company’s common stock, par value $0.01 per share (the “Broadwing Stock”), and concurrently with making the Exchange Offer, the Company plans to engage in a related solicitation (the “Consent Solicitation”) of consents of the Noteholders to certain amendments to the Indenture (as defined below) to, among other things, eliminate all  restrictive covenants therein all as contemplated by the Exchange Offer and Consent Solicitation;

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

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

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

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

“Agreement” means this Exchange and Voting Agreement, including the Schedule and Annex hereto.

“Indenture” means the Indenture dated as of April 21, 1998, between BCI (as successor to IXC Communications, Inc.) and IBJ Schroder Bank & Trust Company, pursuant to which the Notes were issued, as amended and supplemented through the date hereof.

“Person” means any individual, partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization, governmental unit or other entity.

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

“Term Sheet” means that certain Term Sheet attached hereto as Annex A which sets forth the material terms and conditions of the Exchange Offer and Consent Solicitation.  The Term Sheet shall be deemed a part of this Agreement and references to the Agreement shall be deemed to include the Term Sheet.

“Transfer” means to directly or indirectly (i) sell (through a direct sale, constructive sale or otherwise), pledge, assign, encumber, grant a proxy, grant an option with respect to, transfer or dispose of any participation or interest (voting or otherwise) in or (ii) enter into an agreement, voting trust, commitment or other arrangement to sell (through a direct sale, constructive sale or otherwise), pledge, assign, encumber, grant a proxy, grant an option with respect to, transfer or dispose of any participation or interest (voting or otherwise) in, or the act thereof.  The term “constructive sale” means a short sale with respect to the subject security, entering into or acquiring an offsetting derivative contract with respect to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any other hedging or other derivative transaction that has the effect of materially changing the economic benefits and risks of ownership.

2.  Agreement to Complete the Exchange Offer and Consent Solicitation.  Subject to the terms and conditions of this Agreement, the parties to this Agreement agree to use commercially reasonable efforts to complete the Exchange Offer and Consent Solicitation.  The obligations of the parties hereunder are several and not joint and no party hereto shall be responsible for the failure of any other party hereto to perform its obligations hereunder.

3.  Agreements of the Company.  (a) The Company agrees to use its commercially reasonable efforts to commence the Exchange Offer and the Consent Solicitation as promptly as practicable, to do all things reasonably necessary and appropriate in furtherance thereof, including filing any related documents with the Securities and Exchange Commission (the “Commission”).

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

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results in an alteration of the terms of the Exchange Offer and Consent Solicitation not permitted by Section 6, this Agreement and all of the obligations and undertakings of the parties set forth in this Agreement shall terminate and expire.

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

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

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

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

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

Each Noteholder acknowledges that by tendering its Notes in the Exchange Offer, it will be deemed to have delivered the consents required in the Consent Solicitation for the amendments to the Indenture.

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

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

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power, authority or right to vote such Notes to grant its consent pursuant to the Consent Solicitation and agree to the amendments to the Indenture.

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

(e)  Each Noteholder further agrees that it will not object to, or otherwise commence or support any proceeding or material action to oppose, the Exchange Offer and Consent Solicitation and shall not take any action that (x) is materially inconsistent with its representations, warranties and agreements set forth herein or (y) would unreasonably delay the consummation of the Exchange Offer and Consent Solicitation.

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

6.  Amendments to the Exchange Offer and Consent Solicitation.  The Company shall not alter the material terms and conditions of the Exchange Offer and Consent Solicitation in a manner adverse to the Noteholders without the prior written consent of the Noteholders.  Notwithstanding the foregoing, the Company may extend the expiration date of the Exchange Offer, if at the time of any such extension the conditions to closing set forth in the Exchange Offer shall not have been satisfied or waived as provided in this Agreement.

7.  Termination of Agreement.  Notwithstanding anything to the contrary set forth in this Agreement unless the Exchange Offer and Consent Solicitation have been consummated as provided in this Agreement, this Agreement and all of the obligations and undertakings of the parties set forth in this Agreement shall terminate and expire upon the earliest to occur of:

(i)  mutual written consent of the Company and each Noteholder;

(ii) a material alteration by the Company of the terms of the Exchange Offer and Consent Solicitation not permitted under Section 6;

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

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

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(v) written notice from the Company to the Noteholders, if the “First Stage Closing” referred to in the Agreement for the Purchase and Sale of Assets dated as of February 22, 2003 (the “Sale Agreement”) between certain subsidiaries of BCI, as Sellers, and the Buyers party thereto shall not have been consummated by June 30, 2003 in accordance with the terms currently set forth in the Sale Agreement.

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

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

(ii) the execution, delivery and performance by it of this Agreement do not and shall not (A) violate any provision of law, order, rule or regulation applicable to it or any of its affiliates or its certificate of incorporation or bylaws or other organizational documents or those of any of its subsidiaries or (B) conflict with, result in the breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligations to which it or any of its affiliates is a party or under its certificate of incorporation, bylaws or other governing instruments;

(iii) the execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with, the consent or approval of, notice to, or any other action with respect to, any Federal, state or other governmental authority or regulatory body, except for (A) the registration under the Securities Act of the shares of the Broadwing Stock to be issued in the Exchange Offer and such consents, approvals, authorizations, registrations or qualifications as may be required under the state securities or Blue Sky laws in connection with the issuance of those shares, (B) the filing with the Commission of a Statement on Schedule TO with respect to the Exchange Offer, including the exhibits thereto and (C) such other filings as may be necessary or required by the Commission;

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

(v) it has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement.

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

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

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

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

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

9.  No Public Announcement.  Each Noteholder agrees that it shall not make any announcement or disclosure regarding this Agreement or the transactions contemplated herein without the prior written consent of the Company.

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

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

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

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

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

15.  Complete Agreement.  This Agreement, including the Schedule and Annex hereto, constitutes the complete agreement between the signatories to this Agreement with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, agreements and understandings with respect to the subject matter hereof.  The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the signatories to this Agreement.

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

Broadwing Inc.

201 East Fourth Street

Cincinnati, OH  45202

Attention:  Thomas W. Bosse, Esq.

Facsimile:   (513) 397-9557

Telephone: (513) 397-9900

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With a copy to:

Cravath, Swaine & Moore

825 Eighth Avenue

New York, NY  10019

Facsimile:  (212) 474-3700

Telephone:  (212) 474-1000

Attention:  William V.  Fogg, Esq.

       and Robert Townsend, Esq.

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

Notices mailed or transmitted in accordance with the foregoing shall be deemed to have been given upon receipt.

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

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

Each of the signatories to this Agreement waives its right to trial by jury in any suit, action or proceeding with respect to this Agreement and the transactions contemplated hereby.

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

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

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

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22.  Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of the signatories to this Agreement and their respective successors, permitted assigns, heirs, executors, administrators and representatives. The agreements, representations and obligations of the undersigned parties under this Agreement are, in all respects, several and not joint.

23.  Additional Notes.  If, after the date hereof, a Noteholder acquires beneficial or record ownership of any additional Notes for itself or any account or fund managed  by such Noteholder (any such Notes, “Additional Notes”), such Noteholder shall notify the Company of such acquisition and the provisions of this Agreement shall be applicable to such Additional Notes as if such Additional Notes had been Notes owned by such Noteholder as of the date hereof.   The provisions of the immediately preceding sentence shall be effective with respect to Additional Notes without action by any person or entity immediately upon the acquisition by such Noteholder of beneficial or record ownership of such Additional Notes.

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

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

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

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

28.  Mutual Release.  (a) In consideration of the agreements set forth herein and subject to paragraph (b) below (including that the releases provided for in this Section 28 are effective only upon the consummation of the Exchange Offer and Consent Solicitation), each of the signatories hereto hereby unconditionally releases, and forever discharges and acquits, each of the other signatories hereto, their parents, subsidiaries and affiliates and their respective directors, officers, executives, employees, attorneys, advisors, representatives and shareholders (the “Released Persons”),  from all, and all

9

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

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

[SIGNATURES BEGIN ON NEXT PAGE]

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

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

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

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

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

Schedule A

To the Exchange and Voting Agreement

Noteholder and Principal Amount of Notes Held

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

Annex A

To the Exchange and Voting Agreement

Broadwing Inc.

Term Sheet For Proposed Exchange Offer and Consent Solicitation

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

EXCHANGE OFFER:

Each Noteholder, in exchange for all outstanding Notes (plus accumulated and unpaid interest thereon) owned by such Noteholder, will receive on the date of the closing of the Exchange Offer and Consent Solicitation (the “Closing Date”) a number of shares of Broadwing Stock determined by multiplying (i) the fraction, the numerator of which is the aggregate principal amount of Notes owned by such Noteholder on the Closing Date, and the denominator of which is the aggregate principal amount of Notes outstanding on the Closing Date, by (ii) 11,076,253.  The Company shall have the option to pay a portion of the Exchange Offer consideration in cash, but in no event shall such cash payment exceed 1% of the total Exchange Offer consideration.

The consummation of the Exchange Offer will be subject to the condition that there be validly tendered and not withdrawn not less than 95% of the aggregate outstanding principal amount Notes (the “Minimum Tender Condition”).

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

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

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EX-99.4

Exhibit 99.4

THIS AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
A SOLICITATION OF ANY KIND.  SUCH AN OFFER OR SOLICITATION WILL BE
MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS

EXCHANGE AND VOTING AGREEMENT

EXCHANGE AND VOTING AGREEMENT, dated as of March 24, 2003, by and among Broadwing Inc., an Ohio corporation (the “Company”), and the undersigned beneficial owners of (or investment managers or advisors for accounts or funds that own) the 12 ½% Series B Junior Exchangeable Preferred Stock due 2009 (the “Preferred Stock”) of Broadwing Communications Inc., a Delaware corporation and a subsidiary of the Company (“BCI”) (together with their applicable transferees, successors and assigns, each a “Stockholder” and, collectively, the “Stockholders”).

WHEREAS, the Company intends to offer to exchange (the “Exchange Offer”) each outstanding share of the Preferred Stock for shares of the Company’s common stock, par value $0.01 per share (the “Broadwing Stock”), and concurrently with making the Exchange Offer, the Company plans to engage in a related solicitation (the “Consent Solicitation”) of consents of the Stockholders to certain amendments to the Certificate of Designation (as defined below) to, among other things, eliminate all voting rights and restrictive covenants therein all as contemplated by the Exchange Offer and Consent Solicitation;

WHEREAS, the Company and the Stockholders have engaged in good faith negotiations with the objective of consummating the Exchange Offer and Consent Solicitation substantially on the terms set forth in the Term Sheet attached hereto as Annex A, as each may be amended in accordance with the terms hereof; and

WHEREAS, the Company and the Stockholders desire that the Company conduct the Exchange Offer and the Consent Solicitation as soon as practicable all as contemplated by the Exchange Offer and Consent Solicitation.

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

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

“Agreement” means this Exchange and Voting Agreement, including the Schedule and Annex hereto.

“Certificate of Designation” means  the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of the 12 ½% Junior Exchangeable Preferred Stock Due 2009 and 12 ½% Series B Junior Exchangeable Preferred Stock Due 2009 and Qualifications, Limitations and Restrictions Thereof, relating to the Preferred Stock, as amended and supplemented through the date hereof.

“Engagement Letters” means the letter agreement by and between Houlihan Lokey Howard & Zukin, the Company and BCI dated February 10, 2003 and the letter agreement by and between Akin Gump Strauss Hauer & Feld, LLP and BCI dated January 29, 2003.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations of the Federal Trade Commission promulgated thereunder.

“Minimum Tender Condition” means the condition to the consummation of the Exchange Offer that there be validly tendered and not withdrawn not less than 662/3% of the outstanding shares of the Preferred Stock.

“Person” means any individual, partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization, governmental unit or other entity.

“Required Holders” means the Stockholders that hold, in the aggregate, at least a majority of the outstanding shares of Preferred Stock held by all of the Stockholders.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Term Sheet” means that certain Term Sheet attached hereto as Annex A which sets forth the material terms and conditions of the Exchange Offer and Consent Solicitation.  The Term Sheet shall be deemed a part of this Agreement and references to the Agreement shall be deemed to include the Term Sheet.

“Transfer” means to directly or indirectly (i) sell (through a direct sale, constructive sale or otherwise), pledge, assign, encumber, grant a proxy, grant an option with respect to, transfer or dispose of any participation or interest (voting or otherwise) in or (ii) enter into an agreement, voting trust, commitment or other arrangement to sell (through a direct sale, constructive sale or otherwise), pledge, assign, encumber, grant a proxy, grant an option with respect to, transfer or dispose of any participation or interest (voting or otherwise) in, or the act thereof.  The term “constructive sale” means a short sale with respect to the subject security, entering into or acquiring an offsetting derivative contract with respect to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any other hedging or other derivative

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transaction that has the effect of materially changing the economic benefits and risks of ownership.

2.  Agreement to Complete the Exchange Offer and Consent Solicitation.  Subject to the terms and conditions of this Agreement, the parties to this Agreement agree to use commercially reasonable efforts to complete the Exchange Offer and Consent Solicitation.  The obligations of the parties hereunder are several and not joint and no party hereto shall be responsible for the failure of any other party hereto to perform its obligations hereunder.

3.  Agreements of the Company.  (a) The Company agrees to use its commercially reasonable efforts to commence the Exchange Offer and the Consent Solicitation as promptly as practicable, to do all things reasonably necessary and appropriate in furtherance thereof, including filing any related documents with the Securities and Exchange Commission (the “Commission”), and to cause the Registration Statement (as defined below) to be declared effective under the Securities Act as promptly as practicable.

(b)  The Company shall file, on or before April 15, 2003, with the Commission a Registration Statement on Form S-4 or any other appropriate form (the “Registration Statement”) under the Securities Act covering the offering of the shares of Broadwing Stock to be offered in exchange for the shares of Preferred Stock in connection with the Exchange Offer.

(c)  Nothing in this Agreement shall be deemed to prevent the Company or BCI from taking, or failing to take, any action that it is obligated to take (or fail to take) in the performance of any fiduciary or similar duty which the Company or BCI owes to any other Person; provided, however, that such fiduciary or similar duty shall apply only in the circumstance that BCI or the Company receives an unsolicited offer or expression of bona fide interest from a third party with respect to a potential merger, acquisition, business combination or other strategic combination involving BCI or the Company; it being understood and agreed that if any such action (or failure to act) that the board of directors of BCI or the Company determines to be in the best interests of BCI or the Company would alter the terms of the Exchange Offer and Consent Solicitation in a manner not permitted by Section 6, this Agreement and all of the obligations and undertakings of the parties set forth in this Agreement shall terminate and expire.

(d)  The Company shall provide the Stockholders with a reasonable opportunity to review and comment upon the form and substance of the documents and other materials that the Company shall distribute to the Stockholders to effect the Exchange Offer and Consent Solicitation.

(e) The Company will provide the Stockholders with written notice of any executed amendments, waivers or supplements (other than any amendments, waivers or supplements relating to immaterial, and non-economic matters) to the terms of the Sale Agreement (as defined below) immediately after the execution of any such amendment,

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waiver or supplement.  The Company hereby acknowledges that its failure to provide such notice will preclude the Company’s right to terminate this Agreement pursuant to Section 7(vi).

4.  Agreements of the Stockholders.  Subject to the terms and conditions of this Agreement:

(a)  Each Stockholder agrees with each of the other parties to this Agreement, in connection with and conditioned upon the consummation of the Exchange Offer and Consent Solicitation and when solicited in accordance with applicable securities law, to:

(i)  tender (or cause to be tendered) all of the Preferred Stock held by such Stockholder in exchange for shares of Broadwing Stock pursuant to and in accordance with the Exchange Offer and Consent Solicitation within 10 business days following the commencement of the Exchange Offer;

(ii) vote (or cause to be voted) its shares of Preferred Stock to grant its consent pursuant to the Consent Solicitation and agree to the amendments to the Certificate of Designation; and

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

Each Stockholder acknowledges that by tendering its Preferred Stock in the Exchange Offer, it will be deemed to have delivered the consents required in the Consent Solicitation for the amendments to the Certificate of Designation.

In furtherance of the foregoing, each Stockholder hereby grants, so long as this Agreement remains in effect, an irrevocable proxy, coupled with an interest, to each of the President and the Secretary of the Company and any other Company-authorized representative or agent to vote all of the shares of the Preferred Stock beneficially owned by such Stockholder to grant its consent pursuant to the Consent Solicitation and agree to the amendments to the Certificate of Designation.  So long as this Agreement remains in effect, such Stockholder hereby ratifies and approves of each and every action taken by the President and the Secretary of the Company and any other Company-authorized representative or agent pursuant to the foregoing proxy.  So long as this Agreement remains in effect, if requested by the Company, such Stockholder will execute and deliver applicable proxy materials in furtherance of the provisions of this Section 4(a).

(b)  Each Stockholder agrees, so long as this Agreement remains in effect, not to Transfer any of the shares of Preferred Stock held by it, in whole or in part, unless the transferee agrees in writing to be bound by the terms of this Agreement.  In the event that any Stockholder Transfers any of the Preferred Stock, as a condition precedent to such Transfer, such Stockholder shall notify the Company prior to such transfer and agrees to cause the transferee to execute and deliver an acknowledgement, in the form attached

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hereto as Annex B, whereby such transferee agrees to be bound by the terms of this Agreement for so long as this Agreement shall remain in effect.  Such acknowledgement shall be delivered to the Company prior to the consummation of such Transfer.  Any Transfer of the Preferred Stock in violation of the foregoing shall be deemed void.

(c)  Each Stockholder agrees, so long as this Agreement remains in effect, not to  commit any act that could restrict or otherwise affect its legal power, authority or right to tender or vote all of the shares of Preferred Stock then owned of record or beneficially by it.  So long as this Agreement remains in effect, no Stockholder will enter into any voting agreement with any person or entity with respect to any of such  shares, grant any person or entity any proxy (revocable or irrevocable) or power of attorney with respect to any of such shares, deposit any of such shares in a voting trust or otherwise enter into any agreement or arrangement with any person or entity limiting or affecting such Stockholder’s legal power, authority or right to vote such shares to grant its consent pursuant to the Consent Solicitation and agree to the amendments to the Certificate of Designation.

(d)  Subject to the provisions of Section 29, each Stockholder agrees that it will permit public disclosure, including in a press release and in the registration statement for the Exchange Offer and Consent Solicitation, of the contents of this Agreement, including, but not limited to, the commitments contained in this Section 4 and the Term Sheet; provided, however, unless required by applicable law, such press release will not include the name of any of the Stockholders.

(e)  Each Stockholder further agrees, so long as this Agreement remains in effect, that it will not object to, or otherwise commence or support any proceeding or material action to oppose, the Exchange Offer and Consent Solicitation and shall not take any action that (x) is materially inconsistent with its representations, warranties and agreements set forth herein or (y) would unreasonably delay the consummation of the Exchange Offer and Consent Solicitation.

5.  Effectiveness of this Agreement.  The effectiveness of this Agreement, and the respective obligations of the parties under this Agreement, are conditioned upon the receipt by the Company of the consent and signature hereto of each of the Stockholders listed on Schedule A hereto; provided that such Stockholders hold in the aggregate not less than 66 2/3% of the outstanding shares of the Preferred Stock.

6.  Amendments to the Exchange Offer and Consent Solicitation.  The Company shall not alter the material terms and conditions of the Exchange Offer and Consent Solicitation as set forth in the Term Sheet in a manner adverse to the Stockholders without the prior written consent of the Stockholders.  Notwithstanding the foregoing, the Company may extend the expiration date of the Exchange Offer, if at the time of any such extension the conditions to closing set forth in the Exchange Offer shall not have been satisfied or waived as provided in this Agreement.

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7.  Termination of Agreement.  Notwithstanding anything to the contrary set forth in this Agreement, unless the Exchange Offer and Consent Solicitation have been consummated as provided in this Agreement, this Agreement and all of the obligations and undertakings of the parties set forth in this Agreement shall terminate and expire upon the earliest to occur of:

(i)  mutual written consent of the Company and each Stockholder;

(ii) written notice from the Company to the Stockholders, in the event the Minimum Tender Condition is not satisfied at any time after the effectiveness of this Agreement;

(iii) written notice from the Required Holders to the other signatories hereto of an alteration by the Company of the terms of the Exchange Offer and Consent Solicitation not permitted under Section 6;

(iv) written notice from the Company to the Stockholders of the Company’s intent to terminate this Agreement upon a determination by the Board of Directors that such termination is in the best interests of the Company pursuant to the exercise of its fiduciary duties in accordance with Section 3(c);

(v) written notice from the Company or the Required Holders to the other signatories hereto after July 30, 2003, if the closing of the Exchange Offer and Consent Solicitation has not occurred on or before such date;

(vi) written notice from the Company to the Stockholders, if the “First Stage Closing” referred to in the Agreement for the Purchase and Sale of Assets dated as of February 22, 2003 (the “Sale Agreement”) between certain subsidiaries of BCI, as Sellers, and the Buyers party thereto shall not have been consummated by June 30, 2003 in accordance with the terms currently set forth in the Sale Agreement, together with any immaterial and non-economic amendments, waivers or supplements thereto after the date hereof;

(vii)  written notice from the Required Holders to the other signatories hereto, if the Company or BCI shall make an assignment for the benefit of creditors, or an order, judgment or decree shall be entered adjudicating the Company or BCI bankrupt or insolvent, or any order for relief with respect to the Company or BCI is entered under the U.S. Bankruptcy Code, or the Company or BCI petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Company or BCI or of any substantial part of the assets of the Company or BCI, or commences any proceeding relating to the Company or BCI under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, or any such petition or application is filed, or any such proceeding is commenced, against the Company or BCI and either (A) the Company or BCI by any act

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indicates its approval thereof, consents thereto or acquiescences therein or (B) such petition, application or proceeding is not dismissed within 60 days; and

(viii)  written notice from the Company or the Required Holders, as the case may be, to the other signatories hereto, if any Stockholder or the Company, respectively, shall fail to perform, in any material respect, any of its obligations hereunder and such failure shall remain uncured at the conclusion of the ten-business-day period that shall commence on the date on which the Company or the Required Holders, as the case may be, give such written notice.

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

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

(ii) the execution, delivery and performance by it of this Agreement do not and shall not (A) violate any provision of law, order, rule or regulation applicable to it or any of its affiliates or its certificate of incorporation or bylaws or other organizational documents or those of any of its subsidiaries or (B) conflict with, result in the breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligations to which it or any of its affiliates is a party or under its certificate of incorporation, bylaws or other governing instruments;

(iii) the execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with, the consent or approval of, notice to, or any other action with respect to, any Federal, state or other governmental authority or regulatory body, except for (A) the registration under the Securities Act of the shares of the Broadwing Stock to be issued in the Exchange Offer and such consents, approvals, authorizations, registrations or qualifications as may be required under the state securities or Blue Sky laws in connection with the issuance of those shares, (B) the filing with the Commission of a Statement on Schedule TO with respect to the Exchange Offer, including the exhibits thereto, (C) such other filings as may be necessary or required by the Commission and (D) any filings required under the HSR Act;

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

(v) it has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement.

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(b)  Each of the Stockholders further represents and warrants to the other signatories to this Agreement that:

(i) as of the date of this Agreement, such Stockholder (together with its affiliates) is the beneficial owner of, or the investment adviser or manager for the beneficial owners of, the number of shares of Preferred Stock, set forth opposite such Stockholder’s name on Schedule A hereto, with the requisite power and authority to vote and dispose of such Preferred Stock, and such shares of Preferred Stock are owned free and clear of any liens, encumbrances, equities or claims;

(ii) as of the date of this Agreement and for so long as this Agreement remains in effect, such Stockholder has full legal power, authority and right to vote all of such shares of Preferred Stock then held of record or beneficially owned by it to grant its consent pursuant to the Consent Solicitation and agree to the amendments to the Certificate of Designation without the consent, approval of, or any other action on the part of, any other person or entity; and such Stockholder has not entered into any voting agreement (other than this Agreement) with any person or entity with respect to any of such shares, granted to any person or entity any of such shares, deposited any such shares in a voting trust or entered into any arrangement or agreement with any person or entity limiting or affecting its legal power, authority or right to vote such shares on any matter;

(iii) such Stockholder has reviewed, or has had the opportunity to review, with the assistance of professional and legal advisors of its choosing, sufficient information necessary for such Stockholder to decide to tender its Preferred Stock and grant its consent pursuant to the Exchange Offer and Consent Solicitation, respectively; and

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

(c)  The Company further represents and warrants to the Stockholders that, upon the delivery of the Broadwing Stock to the Stockholders upon consummation of with the Exchange Offer, the Broadwing Stock may be resold without registration under the Securities Act; provided that such Stockholder is not an “affiliate” (as defined in the Securities Act) of the Company and would not be deemed an “underwriter” (as defined in the Securities Act) with respect to the Broadwing Stock.

9.  No Public Announcement.  Each Stockholder agrees that it shall not make any announcement or disclosure regarding this Agreement or the transactions contemplated herein without the prior written consent of the Company.

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

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

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

13.   Stop Transfer Restriction.  In furtherance of this Agreement, each of the Stockholders shall, and hereby does, authorize the Company’s counsel to notify BCI’s transfer agent that a stop transfer restriction has been imposed with respect to all of the shares of Preferred Stock owned by such Stockholder (and that this Agreement places limits on the voting and Transfer of such shares), which shall remain in effect unless and until an acknowledgement in the form set forth in Annex B has been delivered to the Company prior to any Transfer.  Notwithstanding the foregoing sentence, if such a stop transfer is imposed and this Agreement is terminated, the Stockholders may notify the transfer agent that the stop transfer is terminated and the Company shall (and shall cause BCI to) provide any and all notices or instructions to reflect such termination.

14.  Fees and Expenses.  In accordance with the terms of the Engagement Letters, the Company shall timely pay in full the reasonable and documented fees and expenses of Akin Gump Strauss Hauer & Feld, LLP and Houlihan Lokey Howard & Zukin, in their respective capacities as legal counsel and financial advisors to the Stockholders in connection with the Exchange Offer and Consent Solicitation; provided, however, the Company agrees that it will not terminate the engagements set forth in the Engagement Letters prior to the earlier of the termination of the Company’s obligations under this Agreement or the conclusion of the Exchange Offer and Consent Solicitation.

15.  Further Assurances.  Each of the signatories to this Agreement hereby further covenants and agrees to execute and deliver all further documents and agreements and take all further action that may be reasonably necessary or desirable in order to enforce and effectively implement the terms and conditions of this Agreement and the Exchange Offer and Consent Solicitation.

16.  Complete Agreement.  This Agreement, including the Schedule and Annex hereto, constitutes the complete agreement between the signatories to this Agreement with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, agreements and understandings with respect to the subject matter hereof. 

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The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the signatories to this Agreement.

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

Broadwing Inc.

201 East Fourth Street

Cincinnati, OH  45202

Attention:  Thomas W. Bosse, Esq.

Facsimile:   (513) 397-9557

Telephone: (513) 397-9900

with a copy to:

Cravath, Swaine & Moore

825 Eighth Avenue

New York, NY  10019

Facsimile:  (212) 474-3700

Telephone:  (212) 474-1000

Attention:  William V.  Fogg, Esq. and

                  Robert Townsend, Esq.

if to a Stockholder, to the address set forth on the signature pages to this Agreement, with a copy to the Stockholders’ counsel:

Akin Gump Strauss Hauer & Feld LLP

590 Madison Avenue

New York, NY  10022

Facsimile:  (212) 872-1002

Telephone: (212) 872-1025

Attention:   Michael S. Stamer, Esq.

Notices mailed or transmitted in accordance with the foregoing shall be deemed to have been given upon receipt.

18.  Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its choice of law rules (except for Section 5-1401 of the New York General Obligation Law).

19.  Jurisdiction; Waiver of Jury Trial.  By its execution and delivery of this Agreement, each of the signatories to this Agreement irrevocably and unconditionally agrees that any legal action, suit or proceeding against it with respect to any matter under

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or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, shall be brought in a federal or state court of competent jurisdiction in the State of New York in the Borough of Manhattan.  By its execution and delivery of this Agreement, each of the signatories to this Agreement irrevocably accepts and submits itself to the jurisdiction of a court of competent jurisdiction in the State of New York, as applicable under the preceding sentence, with respect to any such action, suit or proceeding.

Each of the signatories to this Agreement waives its right to trial by jury in any suit, action or proceeding with respect to this Agreement and the transactions contemplated hereby.

20.  Consent to Service of Process.  Each of the signatories to this Agreement irrevocably consents to service of process by mail at the address listed with the signature of each such party on the signature pages to this Agreement.  Each of the signatories to this Agreement agrees that its submission to jurisdiction and consent to service of process by mail is made for the express benefit of each of the other signatories to this Agreement.

21.  Specific Performance.  It is understood and agreed by each of the signatories to this Agreement that money damages would not be a sufficient remedy for any breach of this Agreement by any party and each non-breaching party shall be entitled to specific performance, injunctive, rescissionary or other equitable relief as remedy for any such breach.

22.  Headings.  The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.

23.  Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of the signatories to this Agreement and their respective successors, permitted assigns, heirs, executors, administrators and representatives. The agreements, representations and obligations of the undersigned parties under this Agreement are, in all respects, several and not joint.

24.  Additional Shares.  If, after the date hereof, a Stockholder acquires beneficial or record ownership of any additional shares of Preferred Stock for itself or any account or fund managed by such Stockholder (any such shares, “Additional Shares”), such Stockholder shall promptly notify the Company of such acquisition and the provisions of this Agreement shall be applicable to such Additional Shares as if such Additional Shares had been shares of Preferred Stock owned by such Stockholder as of the date hereof.   The provisions of the immediately preceding sentence shall be effective with respect to Additional Shares without action by any person or entity immediately upon the acquisition by such Stockholder of beneficial or record ownership of such Additional Shares.

25.  Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the

11

same agreement.  Delivery of an executed counterpart of a signature page by facsimile shall be as effective as delivery of a manually executed counterpart.

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

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

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

29.  Disclosure of Individual Holdings.  Unless required by applicable law, the Company shall not disclose the number of shares of the Preferred Stock held by a Stockholder without the prior written consent of such Stockholder; provided, however, that if such disclosure is required by law, the Company shall afford such Stockholder a reasonable opportunity to review and comment upon any such disclosure prior to the release or publication thereof.  The foregoing shall not prohibit the Company from disclosing the aggregate number of shares of the Preferred Stock held by the Stockholders as a group.

30.  HSR Act.  In the event the Company and one or more of the Stockholders shall be required to make any filings with the Federal Trade Commission pursuant to the HSR Act, the Company shall timely pay all related filing fees and expenses that any such Stockholder would otherwise be required to pay in connection therewith.

31.  Mutual Release.  (a) In consideration of the agreements set forth herein and subject to paragraph (b) below (including that the releases provided for in this Section 31 are effective only upon the consummation of the Exchange Offer and Consent Solicitation), each of the signatories hereto hereby unconditionally releases, and forever discharges and acquits, BCI, its parent, subsidiaries and affiliates and their respective directors, officers, executives, employees, attorneys, advisors, representatives and shareholders (the “Released Persons”), from all, and all manner of, actions, suits, debts, claims, duties, payment and performance of all obligations, liabilities and indebtedness of every kind, direct or indirect, determined or undetermined, at law or in equity, whether or not asserted or raised and existing or alleged to exist or to have existed, at any time, which such signatory ever had or has or may have at this time against any Released

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Person, arising out of, relating to, or incurred in connection with, the Preferred Stock, the Certificate of Designation, this Agreement or the Exchange Offer and Consent Solicitation, or any transaction entered into hereunder or thereunder or any action taken or omitted to be taken by the Released Persons hereunder or thereunder (collectively, the “Released Claims”).

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

[SIGNATURES BEGIN ON NEXT PAGE]

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

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

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ALLIANCE CAPITAL MANAGEMENT L.P., as investment advisor
By:		/s/ Michael Sohr
	Name:		Michael Sohr
	Title:		Vice President
1345 Avenue of the Americas
New York, NY  10105

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FIDELITY MANAGEMENT & RESEARCH CO.:

Fidelity Advisor Series II: Fidelity Advisor High Income Advantage Fund
Pension Investment Committee of General Motors for General Motors Employees Domestic Group Pension Trust
Commonwealth of Massachusetts Pension Reserves Investment Management Board
By:		/s/ Thomas Saviers
	Name:  Thomas Saviers
	Title: Portfolio Manager
c/o Fidelity Investments
82 Devonshire Street, E20E
Boston, MA  02109
Attn:  Nate Van Duzer

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FIDELITY MANAGEMENT & RESEARCH CO.:

Fidelity Puritan Trust: Fidelity Puritan Fund
Variable Insurance Products Fund: High Income Portfolio
Variable Insurance Products Fund II: Asset Manager Portfolio
Illinois Municipal Retirement Fund Master Trust
Fidelity School Street Trust: Fidelity Strategic Income Fund
Fidelity Advisor Series II: Fidelity Advisor Strategic Income Fund
Fidelity Advisor Series I: Fidelity Advisor Balanced Fund
The Assets Management Committee of The Coca-Cola Company Master Retirement Trust
Variable Insurance Products Fund II: Asset Manager: Growth Portfolio
Fidelity Institutional High Yield Fund, LLC
By:		/s/ Mark Notkin
	Name:  Mark Notkin
	Title: Portfolio Manager
c/o Fidelity Investments
82 Devonshire Street, E20E
Boston, MA  02109
Attn:  Nate Van Duzer

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GMT CAPITAL CORP.
By:		/s/ Joe Mathias
	Name:  Joe Mathias
	Title: Vice President
2100 RiverEdge Parkway, Suite 840
Atlanta, GA  30328

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GRYPHON PARTNERS L.P.
By:		/s/ Michael H. Scholten
	Name:  Michael H. Scholten
	Title: Partner
500 Crescent Court, Suite 270
Dallas, TX  75201

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MORGAN STANLEY INVESTMENT MANAGEMENT, on behalf of certain institutional accounts
By:		/s/ Deanna Loughnane
	Name:  Deanna Loughnane
	Title:  Executive Director
1 Tower Bridge
100 Front Street
West Conshohocken, PA 19428

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OZ MANAGEMENT, LLC, as investment manager, on behalf of:
OZ MAC 13 LTD.
FLEET MARITIME, INC.
GOLDMAN, SACHS & CO. PROFIT
SHARING MASTER TRUST
OZ MASTER FUND, LTD.
By:		/s/ Joel M. Frank
	Name:  Joel M. Frank
	Title: Chief Financial Officer
9 West 57th Street, 39th Floor
New York, NY  10019

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OZF MANAGEMENT, L.P., as investment manager, on behalf of:
OZF CREDIT OPPORTUNITIES
MASTER FUND, LTD.
OZF CREDIT OPPORTUNITIES
MASTER FUND II, LTD.
By: OZF Management, LLC, General
Partner
By:		/s/ Stephen C. Freidheim
	Name:  Stephen C. Freidheim
	Title: Managing Member
9 West 57th Street, 39th Floor
New York, NY  10019

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Schedule A

To the Exchange and Voting Agreement

Stockholder and Number of Shares of Preferred Stock Held

NAME	SHARES OF PREFERRED STOCK
Alliance Capital Management L.P., as investment advisor	XXX
Fidelity Management & Research Co., on behalf of funds and accounts managed by it	XXX
GMT Capital Corp.	XXX
Gryphon Partners L.P.	XXX
Morgan Stanley Investment Management(1), on behalf of certain institutional accounts	XXX
OZ Management, LLC, as investment manager	XXX
OZF Management, L.P., as investment manager	XXX
Total	266,514

(1) With respect solely to Section 8(b)(ii), Morgan Stanley Investment Management (“MSIM”)  hereby qualifies its representations and warranties as follows:  (i) MSIM acts as asset manager/agent for account(s) that own Preferred Stock, (ii) MSIM does not have the voting authority with respect to such account(s) to grant an irrevocable proxy to the Company that is effective after the date of a Transfer, not caused or initiated by MSIM, of any shares of Preferred Stock subsequent to the date hereof, that results in the replacement of MSIM as asset manager/agent (a “Permitted Transfer”); and (iii) as of the date hereof, MSIM is not aware of any request to (x) Transfer any shares of Preferred Stock managed by MSIM to another asset manager/agent or (y) replace MSIM as asset manager/agent for any shares of Preferred Stock.  Provided that such representations and warranties are accurate, the Company and BCI agree that a Permitted Transfer will result in such shares of Preferred Stock no longer being subject to the terms and conditions of the Agreement.

23

Annex A

To the Exchange and Voting Agreement

Broadwing Inc.

Term Sheet For Proposed Exchange Offer and Consent Solicitation

This Term Sheet sets forth the principal terms and conditions, as each may be amended in accordance with the terms of the Exchange and Voting Agreement (the “Agreement”), by which Broadwing Inc. (the “Company”) intends to offer to exchange (the “Exchange Offer”) each outstanding share of 12 ½% Series B Junior Exchangeable Preferred Stock due 2009 (the “Preferred Stock”) of Broadwing Communications Inc. (“BCI”) for shares of the Company’s common stock, par value $0.01 per share (the “Broadwing Stock”), and concurrently with making the Exchange Offer, the Company plans to engage in a related solicitation (the “Consent Solicitation”) of consents of the holders of the Preferred Stock to certain amendments to the related certificate of designation under which the Preferred Stock was issued to, among other things, eliminate all voting rights and restrictive covenants.  The Company also shall have the option to pay a portion of the Exchange Offer consideration in cash.  Capitalized terms used and not defined herein shall have the meanings assigned to them in the Agreement .

EXCHANGE OFFER:

Each Stockholder, in exchange for all outstanding shares of Preferred Stock (plus accumulated and unpaid dividends thereon) owned by such Stockholder, will receive on the date of the closing of the Exchange Offer and Consent Solicitation (the “Closing Date”) a number of shares of Broadwing Stock determined by multiplying (i) the fraction, the numerator of which is the number of shares of Preferred Stock owned by such Stockholder on the Closing Date, and the denominator of which is the total number of shares of Preferred Stock outstanding on the Closing Date, by (ii) 14,148,329.  The Company shall have the option to pay a portion of the Exchange Offer consideration in cash, but in no event shall such cash payment exceed 1% of the total Exchange Offer consideration.

The consummation of the Exchange Offer will be subject to the condition that there be validly tendered and not withdrawn not less than 66 2/3% of the outstanding Preferred Stock (the “Minimum Tender Condition”).

	The Exchange Offer will include a simultaneous  solicitation  of  consents (each, a “Consent”) to amendments to the certificate of designation under which the Preferred Shares were issued to, among other things, eliminate all voting rights and restrictive covenants therein and such other provisions as shall be determined by the Company.
	All tendering holders of Preferred Stock will be deemed to have delivered a Consent with respect to any Preferred Stock tendered.
CONDITIONS TO CLOSING:	The Exchange Offer and Consent Solicitation will be subject to the following conditions, which may be waived by the Company in its sole discretion:
	(i) the Minimum Tender Condition shall have been met;
	(ii) the registration statement registering the Exchange Offer and Solicitation Consent having been declared effective by the Commission;
	(iii) subject to Section 3(e) of the Agreement, the “First Stage Closing” referred to in the Sale Agreement shall have been consummated on or before June 30, 2003 in accordance with the terms currently set forth in the Sale Agreement, together with any immaterial and non-economic amendments, waivers or supplements thereto after the date hereof;
	(iv) the absence of any threatened or pending litigation or other legal action relating to the Exchange Offer or the Consent Solicitation or the Merger (as defined below);
	(v) the Company shall not have received any  unsolicited offer or expression of bona fide interest from a third party with respect to a

2

	potential merger, acquisition, business combination or other strategic combination involving BCI or the Company, that if the board of directors of BCI or the Company determines it to be in the best interests of BCI or the Company to accept, would alter the terms of the Exchange Offer and Consent Solicitation in a manner not permitted by Section 6 of the Agreement; and
	(vi) no governmental approvals are required in order to complete the Exchange Offer or the Consent Solicitation or the Merger.
MERGER:	If the Exchange Offer and Consent Solicitation are completed, the Company  will effect a merger of BCI (the “Merger”), unless it is not lawful to do so, in which any remaining shares of Preferred Stock not tendered will be converted into the same number of shares of Broadwing Stock and cash, if any, that  tendering holders received in the Exchange Offer.
GOVERNING LAW:	New York law.

3

Annex B

To the Exchange and Voting Agreement

[Form of Acknowledgement of Transfer]

Broadwing Inc.

201 East Fourth Street

Cincinnati, OH  45202

Attn:  Thomas W. Bosse, Esq.

Ladies and Gentlemen:

Reference is made to that certain Exchange and Voting Agreement, dated as of March 25, 2003 (the “Agreement”), by and among Broadwing Inc. (the “Company”) and certain beneficial owners of (or investment managers or advisors for accounts that own) the 12 ½% Series B Junior Exchangeable Preferred Stock due 2009 (the “Preferred Stock”) of Broadwing Communications, Inc.

[Name of transferor] intends to transfer [insert number] shares of Preferred Stock to the undersigned.

The undersigned acknowledges that the foregoing shares of Preferred Stock will be transferred to the undersigned subject to the Agreement and that the undersigned agrees to be bound by the terms of the Agreement for so long as the Agreement shall remain in effect.

Very truly yours,

[Transferee]

By:

Name:

Title: