Common use of Financial Statements; Absence of Changes Clause in Contracts

Financial Statements; Absence of Changes. (a) Schedule 3.9(a)(i) contains correct and complete copies of the audited consolidated statements of BCI of (1) Assets and Liabilities, (2) Income Statement and (3) Cash Flows (the "Statements"), in each case for the fiscal year ended December 31, 2001 and the unaudited Statements for the nine-months ended September 30, 2002 (collectively, the "Financial Statements"). Also attached as Schedule 3.9(a)(i) is a correct and complete copy of the unaudited consolidated balance sheet and profit and loss statement of BCI and the Sellers for each of October 2002, November 2002, December 2002 and January 2003 (collectively, the "Monthly Statements"). The Financial Statements and the Monthly Statements include information with respect to and reflect the financial condition and results of operation of the Retained Business which are not being transferred hereby, and as to which Sellers makes no representation or warranty of any kind. The Financial Statements and Monthly Statements were prepared in conformity with Generally Accepted Accounting Principles, except as set forth on Schedule 3.9(a)(ii) and subject, in the case of the unaudited Statements for the nine-months ended September 30, 2002 and the Monthly Statements, to year-end adjustments consistent with past practice. (b) Except as set forth therein or on Schedule 3.9(b) with respect to the Business, the Financial Statements and Monthly Statements present fairly the consolidated financial condition and results of operations of BCI and its subsidiaries as of and for the periods then ended. (c) Schedule 3.9(c) is an accurate and complete aging schedule of all Receivables as of November 30, 2002. Except as set forth on Schedule 3.9 (c), (i) each Receivable represents a sale made in the ordinary course of business which arose pursuant to an enforceable written Contract for a bona fide sale of goods or for services performed, and (ii) the applicable Seller has performed all of its obligations to produce the goods or perform the services to which such Receivable relates. (d) Except as set forth in the balance sheets included in the Financial Statements or the balance sheets in the Monthly Statements or on Schedule 3.9(d), there are no liabilities, debts, claims or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due that are required to be included in such Financial Statements in accordance with Generally Accepted Accounting Principles or which are contemplated by this Agreement to constitute Assumed Liabilities. (e) Since December 31, 2002, Sellers have conducted and operated the Business in the ordinary course consistent with past practice, and except as set forth in Schedule 3.9(e): (i) there has been no material destruction, damage or other loss to any material Purchased Assets; (ii) other than in the ordinary course of business, there has been no sale, lease, or other disposition of any Acquired Asset, except for any such transaction less than $100,000 individually in value or $250,000 in value in the aggregate for all such transactions; (iii) Except in compliance with Section 5.15, other than in the ordinary course of business consistent with past practice, there has been no purchase, lease or other acquisition of any properties or assets related to the Business or other capital expenditures related to the Business or with respect to the Acquired Assets other than any such transaction less than $100,000 individually in value or $250,000 in the aggregate for all such transactions; (iv) no Seller has entered into or authorized any material Contract related to the Business or any material amendment or modification to any such Contract, other than in the ordinary course of business and consistent with past practice; and, to Sellers' Knowledge, no parties to such Contracts (including any Seller) having the right to do so have accelerated, terminated, made modifications to or cancelled any such Contract. (v) no Seller has suffered or permitted the imposition of any material Encumbrance (other than Permitted Encumbrances) upon any Acquired Asset; (vi) no Seller has granted any license or sublicense of any rights under or with respect to any IP or IPR related to the Business other than in the ordinary course of business and consistent with past practice; (vii) no Seller has made any loan or advance, individually in excess of $10,000 or in the aggregate in excess of $25,000, or capital contribution to, or investment in, any other Person; (viii) no Seller has entered into any transaction or arrangement of any kind with any director, officer or employee of any Seller or any Affiliate of any Seller (other than another Seller), except as set forth in Schedule 3.8 in response to Section 3.8(a); (ix) no Seller has granted any increase in the base compensation of any of the Business Employees other than in the ordinary course of business consistent with past practice; (x) no Seller has made any other material change to the employment terms for any of the Business Employees terminated the employment of any material Business Employee of any Seller or established or materially modified any Benefit Plan other than as required by applicable Law or entered into an Employment Agreement; (xi) no change has occurred (or circumstance involving a prospective change) which is reasonably likely to have a Material Adverse Effect; (xii) no Seller has waived, released or canceled any claims against third parties or debts owing to it or any rights which have a value in excess of $200,000 individually or $1,000,000 in the aggregate; (xiii) no Seller has made any changes in its accounting systems, policies, principles or practices, other than any changes required by applicable accounting standards or the Securities and Exchange Commission rules and regulations; (xiv) no Seller has made any borrowing, incurred any debt (other than ordinary course borrowings under the Credit Agreement and trade payables in the ordinary course of business and consistent with past practice) or assumed, guaranteed, endorsed (except for the negotiation or collection of negotiable instruments in transactions in the ordinary course of business and consistent with past practice and the guarantee of lease obligations by Broadwing Communications Real Estate Services LLC) or otherwise become liable (whether directly, contingently or otherwise) for the obligations of any other Person, or made any payment or repayment in respect of any indebtedness (other than ordinary course borrowings under the Credit Agreement and accrued expenses in the ordinary course of business and consistent with past practice), in each case, in excess of $50,000 individually or $200,000 in the aggregate; (xv) no Seller has paid any amount, performed any obligation or agreed to pay any amount or perform any obligation, in settlement or compromise of any Action or other claims of liability against any Seller, or any of its directors, officers, employees or agents, in each case, in excess of $200,000 individually or $500,000 in the aggregate; or (xvi) no Seller has contractually committed or agreed to any of the foregoing in the future.

Financial Statements; Absence of Changes. (a) Schedule 3.9(a)(i3.12(a) contains correct true and complete copies of the following audited consolidated financial statements of BCI of the ORiNOCO Business (1) Assets and Liabilities, (2) Income Statement and (3) Cash Flows (the "Statements"), in each case for the fiscal year ended December 31, 2001 and the unaudited Statements for the nine-months ended September 30, 2002 (collectively, the "Financial Statements"). Also attached ): (i) Statement of Net Assets as Schedule 3.9(a)(i) is a correct and complete copy of the unaudited consolidated balance sheet and profit and loss statement of BCI and the Sellers for each of October 2002, November 2002, December 2002 and January 2003 (collectively, the "Monthly Statements"). The Financial Statements and the Monthly Statements include information with respect to and reflect the financial condition and results of operation of the Retained Business which are not being transferred hereby, and as to which Sellers makes no representation or warranty of any kind. The Financial Statements and Monthly Statements were prepared in conformity with Generally Accepted Accounting Principles, except as set forth on Schedule 3.9(a)(ii) and subject, in the case of the unaudited Statements for the nine-months ended September 30, 2002 2001; and (ii) Statement of Net Sales, Cost of Sales and Direct Operating Expenses for the Monthly StatementsYear Ended September 30, to year-end adjustments consistent with past practice2001. (b) Except The Financial Statements were prepared in accordance with GAAP and on the basis of the books and records of the ORiNOCO Business (in each case, as set forth therein or on Schedule 3.9(bof the date of such Financial Statements) applied consistently with respect to the Businessprior periods, and present fairly, in all material respects, the Financial Statements net assets, net sales, cost of sales and Monthly Statements present fairly direct operating expenses of the consolidated financial condition and results of operations of BCI and its subsidiaries ORiNOCO Business as of the dates thereof and for each of the periods then endedended in conformity with GAAP. (c) Schedule 3.9(c) is an accurate and complete aging schedule of all Receivables as of November Since September 30, 2002. Except as set forth on Schedule 3.9 (c)2001, (i) each Receivable represents a sale made in Seller and the ordinary course of business which arose pursuant to an enforceable written Contract for a bona fide sale of goods or for services performed, and (ii) the applicable Seller has performed all of its obligations to produce the goods or perform the services to which such Receivable relates. (d) Except as set forth in the balance sheets included in the Financial Statements or the balance sheets in the Monthly Statements or on Schedule 3.9(d), there are no liabilities, debts, claims or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due that are required to be included in such Financial Statements in accordance with Generally Accepted Accounting Principles or which are contemplated by this Agreement to constitute Assumed Liabilities. (e) Since December 31, 2002, Sellers Subsidiaries have conducted and operated the ORiNOCO Business in the ordinary course consistent with past practice, practice and except as set forth in Schedule 3.9(e): (i) there the ORiNOCO Business has been no material destruction, damage not suffered any change or other loss incurred any liability that has had or could reasonably be expected to any material Purchased Assets; (ii) other than in the ordinary course of business, there has been no sale, lease, or other disposition of any Acquired Asset, except for any such transaction less than $100,000 individually in value or $250,000 in value in the aggregate for all such transactions; (iii) Except in compliance with Section 5.15, other than in the ordinary course of business consistent with past practice, there has been no purchase, lease or other acquisition of any properties or assets related to the Business or other capital expenditures related to the Business or with respect to the Acquired Assets other than any such transaction less than $100,000 individually in value or $250,000 in the aggregate for all such transactions; (iv) no have a Seller has entered into or authorized any material Contract related to the Business or any material amendment or modification to any such Contract, other than in the ordinary course of business and consistent with past practice; and, to Sellers' Knowledge, no parties to such Contracts (including any Seller) having the right to do so have accelerated, terminated, made modifications to or cancelled any such ContractMaterial Adverse Effect. (vd) no Seller has suffered or permitted Schedule 3.12(d) contains true and correct copies of the imposition unaudited interim financial statements of any material Encumbrance the ORiNOCO Business (other than Permitted Encumbrances) upon any Acquired Asset; (vi) no Seller has granted any license or sublicense of any rights under or with respect to any IP or IPR related to the Business other than "Interim Financial Statements"). Except as stated in the ordinary course of business and consistent with past practice; (vii) no Seller has made any loan or advance, individually in excess of $10,000 or in the aggregate in excess of $25,000, or capital contribution to, or investment in, any other Person; (viii) no Seller has entered into any transaction or arrangement of any kind with any director, officer or employee of any Seller or any Affiliate of any Seller (other than another SellerSchedule 3.12(d), except the Interim Financial Statements were prepared using the same methodology as set forth the Financial Statements, and present fairly, in Schedule 3.8 in response to Section 3.8(a); (ix) no Seller has granted any increase in all material respects, the base compensation of any information stated therein for each of the Business Employees other than periods then ended in the ordinary course of business consistent conformity with past practice; (x) no Seller has made any other material change GAAP, subject to the employment terms for any of the Business Employees terminated the employment of any material Business Employee of any Seller or established or materially modified any Benefit Plan other than as required by applicable Law or entered into an Employment Agreement; (xi) no change has occurred (or circumstance involving a prospective change) which is reasonably likely to have a Material Adverse Effect; (xii) no Seller has waived, released or canceled any claims against third parties or debts owing to it or any rights which have a value in excess of $200,000 individually or $1,000,000 in the aggregate; (xiii) no Seller has made any changes in its accounting systems, policies, principles or practices, other than any changes required by applicable accounting standards or the Securities and Exchange Commission rules and regulations; (xiv) no Seller has made any borrowing, incurred any debt (other than ordinary course borrowings under the Credit Agreement and trade payables in the ordinary course of business and consistent with past practice) or assumed, guaranteed, endorsed (except for the negotiation or collection of negotiable instruments in transactions in the ordinary course of business and consistent with past practice normal year-end adjustments and the guarantee absence of lease obligations by Broadwing Communications Real Estate Services LLC) or otherwise become liable (whether directly, contingently or otherwise) for the obligations of any other Person, or made any payment or repayment in respect of any indebtedness (other than ordinary course borrowings under the Credit Agreement and accrued expenses in the ordinary course of business and consistent with past practice), in each case, in excess of $50,000 individually or $200,000 in the aggregate; (xv) no Seller has paid any amount, performed any obligation or agreed to pay any amount or perform any obligation, in settlement or compromise of any Action or other claims of liability against any Seller, or any of its directors, officers, employees or agents, in each case, in excess of $200,000 individually or $500,000 in the aggregate; or (xvi) no Seller has contractually committed or agreed to any of the foregoing in the futurenotes.

Financial Statements; Absence of Changes. (a) Schedule 3.9(a)(iExhibit 2.15(a)(i) contains correct and complete copies of the audited consolidated statements of BCI the Company and its subsidiaries of its: (1i) Assets and Liabilities, (2) Income Statement balance sheet; and (3ii) Cash Flows income statement; and (iii) cash flows (the "“Statements"”), in each case as of and for the fiscal year ended December 31, 2001 2006 and the unaudited Statements as of and for the nine-ten (10) months ended September 30October 31, 2002 2007 (collectively, collectively the "“Financial Statements"). Also attached as Schedule 3.9(a)(i) is a correct and complete copy of the unaudited consolidated balance sheet and profit and loss statement of BCI and the Sellers for each of October 2002, November 2002, December 2002 and January 2003 (collectively, the "Monthly Statements"”). The Financial Statements and the Monthly Statements include information with respect to and reflect the financial condition and results of operation of the Retained Business which are not being transferred hereby, and as to which Sellers makes no representation or warranty of any kind. The Financial Statements and Monthly Statements were prepared in conformity with Generally Accepted Accounting Principles, except as set forth on Schedule 3.9(a)(iiExhibit 2.15(a)(ii) and subject, in (the case of the unaudited Statements for the nine-months ended September 30, 2002 and the Monthly Statements, to year-end adjustments consistent with past practice“GAAP Exceptions”). (b) Except as set forth therein or on Schedule 3.9(b) with respect to the BusinessExhibit 2.15(b), the Financial Statements and Monthly Statements present fairly fairly, in all material respects, the consolidated and consolidating financial condition and results of operations of BCI the Company and its subsidiaries as of and for the periods then endedended in accordance with Generally Accepted Accounting Principles. (c) Schedule 3.9(cExhibit 2.15(c) is an accurate and complete aging schedule of all Receivables as of November 30, 20022007. Except as set forth on Schedule 3.9 (cExhibit 2.15(c), (i) each Receivable represents a sale made in the ordinary course of business which arose pursuant to an enforceable written Contract for a bona fide sale of goods or for services performed, and (ii) the applicable Seller has performed all of its obligations to produce the goods or perform the services to which such Receivable relates. (d) Except as set forth in the balance sheets included in the Financial Statements or the balance sheets in the Monthly Statements or on Schedule 3.9(dExhibit 2.15(d), there are no liabilities, debts, claims or obligations, whether accrued, absolute, contingent or otherwise, whether due or to become due that are required to be included in such Financial Statements in accordance with Generally Accepted Accounting Principles or which are contemplated by this Agreement to constitute Assumed LiabilitiesPrinciples. (e) Since December Except as contemplated by this Agreement and as set forth in Exhibit 2.15(e), since October 31, 20022007, Sellers have conducted and the Company has operated the Business in the ordinary course consistent with past practice, practice and except as set forth in Schedule 3.9(eExhibit 2.15(e): (i) there There has been no material destruction, damage or other loss to any material Purchased Assetsassets; (ii) other Other than in the ordinary course of business, there has been no sale, lease, or other disposition of any Acquired Asset, except for any such transaction less than $100,000 individually in value or $250,000 in value in the aggregate for all such transactionsasset; (iii) Except in compliance with Section 5.15, other than in the ordinary course of business consistent with past practice, there The Company has been no purchase, lease or other acquisition of any properties or assets related to the Business or other capital expenditures related to the Business or with respect to the Acquired Assets other than any such transaction less than $100,000 individually in value or $250,000 in the aggregate for all such transactions; (iv) no Seller has entered into or authorized any material Contract related to the Business or any material amendment or modification to any such Contract, other than in the ordinary course of business and consistent with past practice; and, to Sellers' Knowledge, no parties to such Contracts (including any Seller) having the right to do so have accelerated, terminated, made modifications to or cancelled any such Contract. (v) no Seller has suffered or permitted the imposition of any material Encumbrance (other than Permitted Encumbrances) upon any Acquired Asset; (vi) no Seller has granted any license or sublicense of any rights under or with respect to any IP or IPR related to the Business other than in the ordinary course of business and consistent with past practice; (vii) no Seller has made any loan or advance, individually in excess of $10,000 or in the aggregate in excess of $25,000, or capital contribution to, or investment in, any other Person; (viii) no Seller has entered into any transaction or arrangement of any kind with any director, officer or employee of any Seller or any Affiliate of any Seller (other than another Seller), except as set forth in Schedule 3.8 in response to Section 3.8(a); (ix) no Seller has granted any increase in the base compensation of any of the Business Employees other than in the ordinary course of business consistent with past practice; (x) no Seller has made any other material change to the employment terms for any of the Business Employees terminated the employment of any material Business Employee of any Seller or established or materially modified any Benefit Plan other than as required by applicable Law or entered into an Employment Agreement; (xi) no change has occurred (or circumstance involving a prospective change) which is reasonably likely to have a Material Adverse Effect; (xii) no Seller has not waived, released or canceled any claims against third parties or debts owing to it or any rights which have a value in excess of $200,000 10,000 individually or $1,000,000 50,000 in the aggregate; (xiiiiv) no Seller The Company has not made any borrowing or incurred any debt (other than under the arrangements with 1st Source identified in this Agreement or the Exhibits hereto) or otherwise become liable for the obligations of any other person (other than by operation of law pursuant to the mergers contemplated by Section 6.8); (v) The Company has not made any loan, advance or capital contribution to, or investment in, any other person (other than advances to employees made in the ordinary course of business); (vi) The Company has not granted or permitted the creation of any Lien, other than Permitted Personal Property Liens; (vii) The Company has not made any material changes in its accounting systems, policies, principles or practices, other than any changes required by applicable accounting standards or the Securities and Exchange Commission rules and regulations;standards; and (xivviii) no Seller The Company has made any borrowing, incurred any debt (other than ordinary course borrowings under the Credit Agreement and trade payables in the ordinary course of business and consistent with past practice) or assumed, guaranteed, endorsed (except for the negotiation or collection of negotiable instruments in transactions in the ordinary course of business and consistent with past practice and the guarantee of lease obligations by Broadwing Communications Real Estate Services LLC) or otherwise become liable (whether directly, contingently or otherwise) for the obligations of any other Person, or made any payment or repayment in respect of any indebtedness (other than ordinary course borrowings under the Credit Agreement and accrued expenses in the ordinary course of business and consistent with past practice), in each case, in excess of $50,000 individually or $200,000 in the aggregate; (xv) no Seller has paid any amount, performed any obligation or agreed to pay any amount or perform any obligation, in settlement or compromise of any Action or other claims of liability against any Seller, or any of its directors, officers, employees or agents, in each case, in excess of $200,000 individually or $500,000 in the aggregate; or (xvi) no Seller has not contractually committed or agreed to any of the foregoing in the future.