UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 2, 2018
CINCINNATI
BELL INC.
(Exact Name of Registrant as Specified in its Charter)
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Ohio
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001-8519
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31-1056105
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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221 East Fourth Street
Cincinnati, OH 45202
(Address of Principal Executive Office)
(513)
397-9900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule
12b-2
of the Securities Exchange Act of 1934 (§
240.12b-2
of
this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐
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Item 1.01
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Entry into a Material Definitive Agreement
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Assumption Supplemental Indenture to the 8.00% Indenture
As previously disclosed, on October 6, 2017, CB Escrow Corp. (the “Issuer”), an Ohio corporation and wholly-owned subsidiary of
Cincinnati Bell Inc. (the “Company”), closed an offering (the “8.00% Notes Offering”) of $350 million aggregate principal amount of 8.000% senior notes due 2025 (the “8.00% Notes”). The 8.00% Notes were issued
pursuant to an indenture, dated as of October 6, 2017 (the “Base 8.00% Indenture”), between the Issuer and Regions Bank, as trustee.
Concurrently with the closing of the 8.00% Notes Offering, the Issuer entered into a customary escrow agreement (the “Escrow Agreement”) pursuant to
which the gross proceeds of the 8.00% Notes Offering were deposited into an escrow account (the “Escrow Account”).
On July 2, 2018, the
Company, the guarantors party thereto and Regions Bank, as trustee, entered into the Assumption Supplemental Indenture (the “Assumption Supplemental Indenture”, and together with the Base 8.00% Indenture, the “8.00% Indenture”).
The Assumption Supplemental Indenture supplements the Base 8.00% Indenture by consummating the Company’s assumption of the obligations of the Issuer under the 8.00% Notes and the Base 8.00% Indenture (the “Assumption”) and by adding
the guarantor parties thereto as parties to the 8.00% Indenture and as joint and several guarantors of the 8.00% Notes, in accordance with the terms and conditions of the 8.00% Indenture.
Entry into the Assumption Supplemental Indenture is part of the financing of the cash portion of the aggregate Merger Consideration for the Company’s
previously announced Merger with Hawaiian Telcom (each, as defined below). At the closing of the Merger, the Issuer merged with and into the Company (the “Escrow Merger”), with the Company continuing as the surviving corporation. At the
time of the Escrow Merger, the Company entered into the Assumption Supplemental Indenture and the proceeds from the 8.00% Notes Offering were released from the Escrow Account to the Company.
The 8.00% Notes are senior unsecured obligations of the Company which rank equally in right of payment with all existing and future unsecured senior
indebtedness of the Company, and the 8.00% Notes will be effectively subordinated to all existing and future secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness. The 8.00% Notes will be guaranteed
on a joint and several basis by certain of the Company’s existing and future domestic subsidiaries. Each such guarantee will be a senior unsecured obligation of the applicable guarantor, ranking equally in right of payment with all existing and
future unsecured senior indebtedness of such guarantor and effectively subordinated to all existing and future secured indebtedness of such guarantor to the extent of the value of the assets securing that indebtedness. The 8.00% Notes will be
structurally subordinated to all liabilities (including trade payables) of each subsidiary of the Company that does not guarantee the 8.00% Notes.
The
8.00% Notes will bear interest at a rate of 8.000% per annum, payable semi-annually on April 15 and October 15 of each year, to persons who are registered holders of the 8.00% Notes on the immediately preceding April 1 and
October 1, respectively.
The 8.00% Indenture limits the ability of the Company and its restricted subsidiaries, to incur indebtedness, encumber
their assets, enter into sale and leaseback transactions, make restricted payments, create dividend restrictions and other payment restrictions that affect the Company’s restricted subsidiaries, permit restricted subsidiaries to guarantee
certain indebtedness, enter into transactions with affiliates and sell assets, in each case subject to certain qualifications set forth in the 8.00% Indenture.
In the event of a Change of Control (as defined in the 8.00% Indenture), each holder of the 8.00% Notes will have the right to require the Company to
repurchase all or any part of that holder’s 8.00% Notes at a purchase price of 101% of the principal amount of 8.00% Notes repurchased, plus accrued and unpaid interest, if any, to the date of such repurchase.
The 8.00% Notes will mature on October 15, 2025. However, prior to October 15, 2020, the Company may, at its option, redeem some or all of the 8.00%
Notes at a redemption price equal to 100% of the principal amount of the 8.00% Notes, together with accrued and unpaid interest, if any, plus a “make-whole” premium. On or after October 15, 2020, the Company may, at its option, redeem
some or all of the 8.00% Notes at any time at declining redemption prices equal to (i) 106.000% beginning on October 15, 2020, (ii) 104.000% beginning on October 15, 2021, (iii) 102.000% beginning on October 15, 2022 and (iv) 100.000%
beginning on October 15, 2023 and thereafter, plus, in each case, accrued and unpaid interest, if any, to the applicable redemption date. In addition, before October 15, 2020, and subject to certain conditions, the Company may, at its
option, redeem up to 40% of the aggregate principal amount of 8.00% Notes with the net proceeds of certain equity offerings at 108.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption;
provided
that (i) at least 60% of the aggregate principal amount of 8.00% Notes remains outstanding after such redemption and (ii) the redemption occurs within 180 days of the closing of any such equity offering.
The foregoing description of the 8.00% Indenture does not purport to be complete and is qualified in its entirety
by reference to the full text of the Assumption Supplemental Indenture, a copy of which is filed as Exhibit 4.1 to this Current Report on Form
8-K
and is incorporated by reference into this Item 1.01, and the
Base 8.00% Indenture, a copy of which is filed as Exhibit 4.1 to the Current Report on Form
8-K,
filed by the Company on October 6, 2017 with the Securities and Exchange Commission (the “SEC”),
and is incorporated by reference into this Item 1.01.
Additionally, the foregoing description of the Escrow Agreement does not purport to be complete and
is qualified in its entirety by reference to the full text of the Escrow Agreement, a copy of which is filed as Exhibit 4.2 to the Current Report on Form
8-K,
filed by the Company on October 6, 2017 with
the SEC, and is incorporated by reference into this Item 1.01.
The 8.00% Notes and the related guarantees have not been registered under the Securities
Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from
registration requirements.
Fifth Supplemental Indenture to the 7.00% Indenture
On July 2, 2018, the Company, Hawaiian Telcom, certain of Hawaiian Telcom’s wholly-owned subsidiaries (together with Hawaiian Telcom, the
“Hawaiian Telcom Guarantors”) and Regions Bank, as trustee, entered into a Fifth Supplemental Indenture (the “Fifth Supplemental Indenture”). The Fifth Supplemental Indenture supplements that certain indenture, dated as of
September 22, 2016, among the Company, the guarantors party thereto and Regions Bank, as trustee (as supplemented from time to time prior to the date hereof, the “7.00% Indenture”) governing the issuance of the Company’s 7.00%
Senior Notes due 2024 (the “7.00% Notes”), by adding the Hawaiian Telcom Guarantors as additional parties to the 7.00% Indenture and as joint and several guarantors of the 7.00% Notes, in accordance with the terms and conditions of the
7.00% Indenture.
The foregoing description of the Fifth Supplemental Indenture does not purport to be complete and is qualified in its entirety by
reference to the full text of the Fifth Supplemental Indenture, a copy of which is filed as Exhibit 4.2 to this Current Report on Form
8-K
and is incorporated by reference into this Item 1.01.
The 7.00% Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and,
unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
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Item 2.01
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Completion of Acquisition or Disposition of Assets
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On July 2, 2018, pursuant to the Agreement and
Plan of Merger (the “Merger Agreement”), dated as of July 9, 2017, among the Company, Twin Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Hawaiian Telcom Holdco,
Inc., a Delaware corporation (“Hawaiian Telcom”), Merger Sub merged with and into Hawaiian Telcom (the “Merger”), with Hawaiian Telcom surviving the Merger as a wholly-owned subsidiary of the Company.
As a result of the Merger, each share of Hawaiian Telcom’s common stock, par value $0.01 (“Hawaiian Telcom Common Stock”), outstanding
immediately prior to the effective time of the Merger (the “Effective Time”), other than shares of Hawaiian Telcom Common Stock held by (i) Hawaiian Telcom as treasury stock, (ii) the Company or Merger Sub, (iii) any direct
or indirect wholly-owned subsidiary of the Company or Hawaiian Telcom or (iv) any Hawaiian Telcom stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to the General Corporation Law of the State of Delaware,
was cancelled and converted at the Effective Time into the right to receive, without interest and subject to applicable tax withholding, at the holder of such share’s election and subject to proration as set forth in the Merger Agreement and as
described below:
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(i)
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1.6305 common shares, par value $0.01 per share, of the Company (the “Company Common Shares”) (the “Share Consideration”);
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(ii)
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0.6522 Company Common Shares and $18.45 in cash, without interest (the “Mixed Consideration”); or
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(iii)
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$30.75 in cash, without interest (the “Cash Consideration”, together with and any combination of, the Share Consideration and the Mixed Consideration, the “Merger Consideration”).
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As a result of the Merger, (i) each Hawaiian Telcom restricted stock unit granted on or after
January 1, 2017 that did not provide for automatic vesting upon the consummation of the Merger was converted at the Effective Time into a time-based restricted stock unit of the Company (with any applicable performance criteria deemed satisfied
at target) in respect of a number of Company Common Shares (rounded down to the nearest whole share) based on an exchange ratio of 1.8274 (each, an “Assumed RSU”) and (ii) each other Hawaiian Telcom restricted stock unit (each, a
“Cash-Out
RSU”) was cancelled and converted at the Effective Time into the right to receive in respect of each share of Hawaiian Telcom Common Stock subject to such
Cash-Out
RSU (with any applicable performance criteria calculated based on actual performance), without interest and subject to applicable tax withholding, at the holder of such
Cash-Out
RSU’s election and subject to proration as set forth in the Merger Agreement and as described above, one or more forms of the Merger Consideration.
As previously announced by the Company and Hawaiian Telcom, the deadline for holders of Hawaiian Telcom Common Stock or
Cash-Out
RSUs to make an election as to the form of Merger Consideration was 5:00 p.m., New York time, on June 21, 2018 (the “Election Deadline”). Each share of Hawaiian Telcom Common Stock or
each
Cash-Out
RSU in respect of which a timely and proper election was not made prior to the Election Deadline was cancelled and converted at the Effective Time into the right to receive the Mixed
Consideration.
Elections made in respect of Hawaiian Telcom Common Stock or
Cash-Out
RSUs to receive the Share
Consideration or the Cash Consideration are subject to proration as set forth in the Merger Agreement to ensure that the aggregate number of Company Common Shares issued by the Company in the Merger and the aggregate amount of cash paid by the
Company in the Merger will be the same as if all electing holders received the Mixed Consideration. No fractional Company Common Shares will be issued in the Merger and holders of Hawaiian Telcom Common Stock and
Cash-Out
RSUs will receive cash in lieu of fractional Company Common Shares, if any.
In connection with the
Merger, the Company paid in cash $218,300,658.30 and issued 7,716,840 Company Common Shares in aggregate Merger Consideration. In addition, the Company reserved for issuance 148,625 Company Common Shares in respect of the Assumed RSUs in connection
with the Company’s assumption of the Hawaiian Telcom 2010 Equity Incentive Plan pursuant to the Merger Agreement.
Upon the closing of the Merger,
the shares of Hawaiian Telcom Common Stock, which previously traded under the ticker symbol “HCOM” on The NASDAQ Stock Market (the “NASDAQ”), ceased trading on, and were delisted from, the NASDAQ.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger
Agreement, a copy of which is filed as Exhibit 2.1 to the Current Report on Form
8-K,
filed by the Company on July 10, 2017 with the SEC, and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of
a Registrant
The information set forth in Item 1.01 above with respect to the Assumption is hereby incorporated by reference into this Item 2.03
insofar as it relates to the creation of a direct financial obligation of the Company.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Pursuant to the terms of the Merger Agreement,
at the Effective Time, the size of the Company’s board of directors increased from nine to eleven directors, and Walter A. Dods, Jr. and Meredith J. Ching, both former directors of Hawaiian Telcom, were appointed as directors of the Company to
fill the newly created vacancies.
On July 2, 2018, the Company and Hawaiian Telcom issued a joint press release
announcing the completion of the Merger. A copy of the joint press release is filed as Exhibit 99.1 to this Current Report on Form
8-K
and is incorporated herein by reference.
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Item 9.01
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Financial Statements and Exhibits
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(a) Financial Statements of Businesses Acquired
The financial statements required by Item 9.01(a) will be filed as an amendment to this Current Report on Form
8-K
not
later than 71 days after the date that this Current Report on Form
8-K
is required to be filed.
(b) Pro
Forma Financial Information
The pro forma financial information required by Item 9.01(b) will be filed as an amendment to this Current Report on Form
8-K
not later than 71 days after the date that this Current Report on Form
8-K
is required to be filed.
(d) Exhibits
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Exhibit No.
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Description
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2.1*
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Agreement and Plan of Merger, dated as of July 9, 2017, among Cincinnati Bell Inc., Twin Acquisition Corp. and Hawaiian Telcom Holdco, Inc.
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4.1
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Assumption Supplemental Indenture, dated as of July 2, 2018, by and among Cincinnati Bell Inc., the guarantors party thereto and Regions Bank, as Trustee.
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4.2
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Fifth Supplemental Indenture, dated as of July 2, 2018, by and among Cincinnati Bell Inc., the guarantors party thereto and Regions Bank, as Trustee.
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99.1
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Joint Press Release of Cincinnati Bell Inc. and Hawaiian Telcom Holdco, Inc., dated July 2, 2018.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This communication and the documents incorporated by reference herein may contain “forward-looking” statements, as defined in federal securities laws
including the Private Securities Litigation Reform Act of 1995, which are based on the Company’s current expectations, estimates, forecasts 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. Actual results may differ materially from those expressed in any forward-looking statements. The following important factors, among other things, could
cause or contribute to actual results being materially and adversely different from those described or implied by such forward-looking statements including, but not limited to: those discussed in this communication; the Company operates in highly
competitive industries, and customers may not continue to purchase products or services, which would result in reduced revenue and loss of market share; the Company may be unable to grow its revenues and cash flows despite the initiatives it has
implemented; failure to anticipate the need for and introduce new products and services or to compete with new technologies may compromise the Company’s success in the telecommunications industry; the Company’s access lines, which generate
a significant portion of its cash flows and profits, are decreasing in number. If the Company continues to experience access line losses similar to the past several years, its revenues, earnings and cash flows from operations may be adversely
impacted; negotiations with the providers of content for the Company’s video programming may not be successful, potentially resulting in the Company’s inability to carry certain programming channels, which could result in the loss of
subscribers. In addition, due to the influence of some content providers, the Company may be forced to pay higher rates for some content, resulting in increased costs; the Company’s failure to meet performance standards under its agreements
could result in customers terminating their relationships with the Company or customers being entitled to receive financial compensation, which would lead to reduced revenues and/or increased costs; the Company generates a substantial portion of its
revenue by serving a limited geographic area; a large customer accounts for a significant portion of the Company’s revenues and accounts receivable. The loss or significant reduction in business from this customer would cause operating revenues
to decline and could negatively impact profitability and cash flows; maintaining the Company’s telecommunications networks requires significant capital expenditures, and the Company’s inability or failure to maintain its telecommunications
networks could have a material impact on its market share and ability to generate revenue; increases in broadband usage may cause network capacity limitations, resulting in service disruptions or reduced capacity for customers; the Company may be
liable for the material that content providers distribute over the Company’s networks; cyber attacks, including on the Company’s vendors, or other breaches of network or other information technology security could have an adverse effect on
the Company’s business; natural disasters, terrorist acts or acts of war could cause damage to the Company’s infrastructure and result in significant disruptions to the Company’s operations; the regulation of the Company’s
businesses by federal and state authorities may, among other things, place the Company at a competitive disadvantage, restrict its ability to price its products and services and threaten its operating licenses; the Company depends on a number of
third party providers, and the loss of, or problems with, one or more of these providers may impede the Company’s growth or cause the Company to lose customers; a failure of back-office information technology systems could adversely affect the
Company’s results of
operations and financial condition; if the Company fails to extend or renegotiate its collective bargaining agreements with its labor union when they expire, or if its unionized employees were to
engage in a strike or other work stoppage, the Company’s business and operating results could be materially harmed; the loss of any of the senior management team or attrition among key sales associates could adversely affect the Company’s
business, financial condition, results of operations and cash flows; the Company’s debt could limit the Company’s ability to fund operations, raise additional capital, and fulfill its obligations, which, in turn, would have a material
adverse effect on its businesses and prospects generally; the Company’s credit agreement, the indenture governing the Company’s notes due 2024, the indenture governing the Company’s notes due 2025 and other indebtedness impose
significant restrictions on the Company; the Company depends on its credit agreement and its accounts receivable securitization facility to provide for its short-term financing requirements in excess of amounts generated by operations, and the
availability of those funds may be reduced or limited; the servicing of the Company’s indebtedness is dependent on the Company’s ability to generate cash, which could be impacted by many factors beyond its control; the Company depends on
the receipt of dividends or other intercompany transfers from its subsidiaries and investments; the Merger may not achieve its intended results, and the Company and Hawaiian Telcom may be unable to successfully integrate their operations; the
Company following the closing of the Merger (the “combined company”) is expected to incur expenses related to the integration of the Company and Hawaiian Telcom; the future results of the combined company will suffer if the combined
company does not effectively manage its expanded operations following the Merger; uncertainties associated with the Merger may cause a loss of management personnel and other key employees, which could adversely affect the future business and
operations of the combined company; the combined company will have substantial indebtedness following the Merger and the credit ratings of the combined company or its subsidiaries may be different from what the companies currently expect; the Merger
may involve unexpected costs, unexpected liabilities or unexpected delays; the acquisition of OnX Holdings LLC (“OnX”) may not achieve its intended results, and the Company may be unable to successfully integrate OnX’s operations; the
trading price of the Company’s common shares may be volatile, and the value of an investment in the company’s common shares may decline; the uncertain economic environment, including uncertainty in the U.S. and world securities markets,
could impact the Company’s business and financial condition; the Company’s future cash flows could be adversely affected if it is unable to fully realize its deferred tax assets; changes in tax laws and regulations, and actions by federal,
state and local taxing authorities related to the interpretation and application of such tax laws and regulations, could have a negative impact on the Company’s financial results and cash flows; the Company’s interpretation of the Tax Cuts
and Jobs Act of 2017 could change, and have an adverse impact on financial results; adverse changes in the value of assets or obligations associated with the Company’s employee benefit plans could negatively impact shareowners’ deficit and
liquidity; third parties may claim that the Company is infringing upon their intellectual property, and the Company could suffer significant litigation or licensing expenses or be prevented from selling products; third parties may infringe upon the
Company’s intellectual property, and the company may expend significant resources enforcing its rights or suffer competitive injury; the Company could be subject to a significant amount of litigation, which could require it to pay significant
damages or settlements; the Company could incur significant costs resulting from complying with, or potential violations of, environmental, health and human safety laws; and the other risks and uncertainties detailed in the Company’s filings,
including its Form
10-K
for the fiscal year ended December 31, 2017, with the SEC as well as Hawaiian Telcom’s filings, including its Form
10-K
for the fiscal
year ended December 31, 2017, with the SEC.
These forward-looking statements are based on information, plans and estimates as of the date hereof and
there may be other factors that may cause the Company’s actual results to differ materially from these forward-looking statements. The Company assumes no obligation to update the information contained in this communication except as required by
applicable law.
EXHIBIT INDEX
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Exhibit No.
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Description
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2.1*
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Agreement and Plan of Merger, dated as of July 9, 2017, among Cincinnati Bell Inc., Twin Acquisition Corp. and Hawaiian Telcom Holdco, Inc.
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4.1
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Assumption Supplemental Indenture, dated as of July 2, 2018, by and among Cincinnati Bell Inc., the guarantors party thereto and Regions Bank, as Trustee.
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4.2
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Fifth Supplemental Indenture, dated as of July 2, 2018, by and among Cincinnati Bell Inc., the guarantors party thereto and Regions Bank, as Trustee.
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99.1
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Joint Press Release of Cincinnati Bell Inc. and Hawaiian Telcom Holdco, Inc., dated July 2, 2018.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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CINCINNATI BELL INC.
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Date: July 2, 2018
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By:
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/s/ Christopher J. Wilson
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Name:
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Christopher J. Wilson
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Title:
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Vice President and General Counsel
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Exhibit 4.1
ASSUMPTION SUPPLEMENTAL INDENTURE
Supplemental Indenture (this “
Supplemental Indenture
”), dated as of July 2, 2018, among Cincinnati Bell Inc., an Ohio
corporation (or its permitted successor) (the “
Issuer
”), each subsidiary of the Issuer party hereto (each, a “
Guaranteeing Subsidiary
”) and Regions Bank (or its permitted successor), as trustee under the Indenture
referred to below (the “
Trustee
”). Capitalized terms used herein without definition shall have the meanings ascribed to them in the Indenture.
W I T N E S S E T H
WHEREAS, CB
Escrow Corp., an Ohio corporation (the “
Escrow Issuer
”), and the Trustee have heretofore executed and delivered an Indenture, dated as of October 6, 2017 (as amended, supplemented or otherwise modified from time to time, the
“
Indenture
”), providing for the issuance by the Escrow Issuer of its 8.000% Senior Notes due 2025 (the “
Notes
”);
WHEREAS, pursuant to the terms of the Indenture, substantially concurrently with the Escrow Release, the Issuer shall assume all of the
obligations of the Escrow Issuer under the Notes and the Indenture and the Guaranteeing Subsidiaries shall become parties to the Indenture by a supplemental indenture (the “
Assumption Supplemental Indenture
”) effective upon the
Escrow Release Date;
WHEREAS, this Supplemental Indenture is the Assumption Supplemental Indenture described in the Indenture; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Issuer, the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders as follows:
ARTICLE 1
DEFINITIONS
Section 1.1
Defined Terms
. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or
recitals hereto are used herein as therein defined. The words “herein”, “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
ARTICLE 2
AGREEMENTS
Section 2.1
Agreement to be Bound
.
(a) The Issuer hereby assumes the Escrow Issuer’s obligations under the Notes and the Indenture. The Issuer hereby becomes a party to the
Indenture as the “Issuer” and as such shall have all of the rights and be subject to all of the obligations and agreements of the Issuer under the Notes and the Indenture.
(b) Each Guaranteeing Subsidiary hereby becomes a party to the Indenture as a Guarantor and as
such shall have all of the rights and be subject to all of the obligations and agreements of a Guarantor under the Indenture.
Section 2.2
Guarantee
. Each Guaranteeing Subsidiary agrees, on a joint and several basis, to fully, unconditionally and
irrevocably guarantee to each Holder of the Notes and the Trustee the Note Guarantees pursuant to Article 10 of the Indenture on a senior basis.
ARTICLE 3
MISCELLANEOUS
Section 3.1
Execution and Delivery
. The Issuer agrees that its obligations under the Notes shall remain in full force and
effect notwithstanding the absence of any endorsement of any notation by it on the Notes. Each Guaranteeing Subsidiary agrees that its Note Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Note a
notation of its Note Guarantee.
Section 3.2
Benefits Acknowledged
. Each Guaranteeing Subsidiary’s Note Guarantee is
subject to the terms and conditions set forth in the Indenture. Each Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture
and that the guarantee and waivers made by it pursuant to its Note Guarantee and this Supplemental Indenture are knowingly made in contemplation of such benefits.
Section 3.3
Ratification of Indenture; Supplemental Indentures 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 Indenture 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.
Section 3.4
Severability
. In case any
provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective
only to the extent of such invalidity, illegality or unenforceability.
Section 3.5
Guaranteeing Subsidiary May Consolidate, Etc.,
on Certain Terms
. No Guaranteeing Subsidiary may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into, any Person other than as set forth in Section 10.04 of the Indenture.
Section 3.6
Release
. Each Guaranteeing Subsidiary’s Note Guarantee shall be released as set forth in Section 10.05 of
the Indenture.
Section 3.7
No Recourse Against Others
. Pursuant to Section 12.06 of the Indenture, no director, officer,
employee, incorporator or stockholder of the Issuer or any Guaranteeing Subsidiary shall have any liability for any obligations of the Issuer or such Guaranteeing Subsidiary under the Notes, the Indenture, this Supplemental Indenture, the Note
Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. This waiver and release are part of the consideration for the Note Guarantee.
Section 3.8
Governing Law
. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
2
Section 3.9
Waiver of Jury Trial
. THE ISSUER AND EACH GUARANTEEING SUBSIDIARY HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES, THE NOTE GUARANTEES OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.10
Counterparts
. The parties may sign any number of copies of this Supplemental
Indenture (including by electronic transmission). Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF
transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by
facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 3.11
Effect of Headings
. The
Section headings herein are for convenience only and shall not affect the construction hereof.
Section 3.12
Trustee
. The
Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each
Guaranteeing Subsidiary and the Issuer.
[SIGNATURE PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.
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CINCINNATI BELL INC.
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CBTS LLC (formerly CBTS HOLDCO LLC), as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CBTS TECHNOLOGY SOLUTIONS LLC
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(Successor to CINCINNATI BELL TECHNOLOGY SOLUTIONS INC.; DATA CENTER INVESTMENTS INC.;
DATA CENTERS SOUTH HOLDINGS LLC; DATA CENTERS SOUTH INC. and SUNTEL SERVICES LLC), as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CBTS VIRGINIA LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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[Signature Page to Assumption Supplemental Indenture]
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CINCINNATI BELL ENTERTAINMENT INC., as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CINCINNATI BELL EXTENDED TERRITORIES LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CINCINNATI BELL SHARED SERVICES LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CINCINNATI BELL TELEPHONE COMPANY LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CINCINNATI BELL WIRELESS, LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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[Signature Page to Assumption Supplemental Indenture]
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HAWAIIAN TELCOM COMMUNICATIONS, INC., as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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HAWAIIAN TELCOM HOLDCO, INC., as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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HAWAIIAN TELCOM, INC., as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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HAWAIIAN TELCOM SERVICES COMPANY, INC., as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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ONX USA LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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[Signature Page to Assumption Supplemental Indenture]
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ONX MANAGED SERVICES INC., an Illinois corporation, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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ONX HOLDINGS LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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SYSTEMMETRICS CORPORATION, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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WAVECOM SOLUTIONS CORPORATION, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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[Signature Page to Assumption Supplemental Indenture]
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REGIONS BANK, as Trustee
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By:
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/s/ R. Douglas Milner
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Name:
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R. Douglas Milner
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Title:
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Vice President
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[Signature Page to Assumption Supplemental Indenture]
Exhibit 4.2
FIFTH SUPPLEMENTAL INDENTURE
Supplemental Indenture (this “
Fifth Supplemental Indenture
”), dated as of July 2, 2018, among (i) Cincinnati Bell
Inc., an Ohio corporation (or its permitted successor) (the “
Issuer
”), (ii) each subsidiary of the Issuer identified as a Prior Guaranteeing Subsidiary on
Schedule
I-A
hereto (each, a
“
Prior Guaranteeing Subsidiary
”), (iii) each subsidiary of the Issuer identified as a New Guaranteeing Subsidiary on
Schedule
I-B
hereto (each, a “
New Guaranteeing
Subsidiary
” and together with the Prior Guaranteeing Subsidiaries, the “
Guaranteeing Subsidiaries
”) and Regions Bank (or its permitted successor), as trustee under the Indenture referred to below (the
“
Trustee
”). Capitalized terms used herein without definition shall have the meanings ascribed to them in the Indenture.
W
I T N E S S E T H
WHEREAS, the Issuer and the other Guarantors party thereto have heretofore executed and delivered to the Trustee an
Indenture, dated as of September 22, 2016 (as supplemented by the First Supplemental Indenture, dated as of April 3, 2017, among the Issuer, SunTel Services LLC and the Trustee, the Second Supplemental Indenture, dated as of May 31,
2017, among the Issuer, Cincinnati Bell Telephone Company LLC, Cincinnati Bell Extended Territories LLC and the Trustee, the Third Supplemental Indenture, dated as of October 2, 2017, among the Issuer, Cincinnati Bell Shared Services LLC, Data
Centers South Holdings LLC, Twin Acquisition Corp. and the Trustee and the Fourth Supplemental Indenture, dated as of December 22, 2017, among the Issuer, CBTS Holdco LLC and the Trustee, the “
Indenture
”), providing for the
issuance by the Issuer of its 7.000% Senior Notes due 2024 (the “
Notes
”);
WHEREAS, the Indenture provides that under
certain circumstances each New Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which each New Guaranteeing Subsidiary shall, subject to Article 10 of the Indenture, unconditionally guarantee the
Notes on the terms and conditions set forth therein (each, a “
Note Guarantee
”);
WHEREAS, on July 2, 2018, pursuant
to the Agreement and Plan of Merger between the Issuer and CB Escrow Corp., an Ohio corporation and a wholly-owned subsidiary of the Issuer (the “
Escrow Issuer
”), the Escrow Issuer merged with and into the Issuer (the
“
Escrow Merger
”) and at the effective time of the Escrow Merger, the separate corporate existence of the Escrow Issuer ceased and the Issuer continued as the surviving corporation in the Escrow Merger;
WHEREAS, Section 5.01 of the Indenture provides that, among other things, the Issuer may merge with the Escrow Issuer;
provided
that, among other things, each Prior Guaranteeing Subsidiary shall have by amendment to its Note Guarantee confirmed that such Note Guarantee shall apply to the obligations of the Issuer in accordance with the Notes and the Indenture; and
WHEREAS, pursuant to Section 9.01(7) of the Indenture, the Trustee is authorized to execute and deliver this Fifth Supplemental
Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the Issuer, each Prior Guaranteeing Subsidiary, each New Guaranteeing Subsidiary and the Trustee mutually covenant and agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders
as follows:
ARTICLE 1
DEFINITIONS
Section 1.1.
Defined Terms
. As used in this Fifth Supplemental Indenture, terms defined in the Indenture or in the preamble or
recitals hereto are used herein as therein defined. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Fifth Supplemental Indenture refer to this Fifth Supplemental Indenture as a
whole and not to any particular section hereof.
ARTICLE 2
AGREEMENT TO GUARANTEE
Section 2.1.
Agreement to be Bound
. Each New Guaranteeing Subsidiary hereby becomes a party to the Indenture as a Guarantor and as
such will have all of the rights and be subject to all of the obligations and agreements of a Guarantor under the Indenture.
Section 2.2.
Guarantee
. Each New Guaranteeing Subsidiary agrees, on a joint and several basis with all the existing Guarantors, to
fully, unconditionally and irrevocably Guarantee to each Holder of the Notes and the Trustee the Note Guarantees pursuant to Article 10 of the Indenture on a senior basis.
Section 2.3.
Confirmation of Existing Guarantees
. Each Prior Guaranteeing Subsidiary confirms, on a joint and several basis with
all Guarantors, to fully, unconditionally and irrevocably Guarantee to each Holder of the Notes and the Trustee the Note Guarantees, which shall continue to apply to the obligations of the Issuer after the Escrow Merger in accordance with the Notes
and the Indenture, pursuant to Article 10 of the Indenture on a senior basis.
ARTICLE 3
MISCELLANEOUS
Section 3.1.
Execution and Delivery
. Each New Guaranteeing Subsidiary agrees that its Note Guarantee shall remain in full force
and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
Section 3.2.
Benefits
Acknowledged
. Each New Guaranteeing Subsidiary’s Note Guarantee is subject to the terms and conditions set forth in the Indenture. Each New Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Indenture and this Fifth Supplemental Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee and this Fifth Supplemental Indenture are knowingly made in contemplation of such
benefits.
Section 3.3.
Ratification of Indenture; Supplemental Indentures 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 Fifth Supplemental Indenture 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.
2
Section 3.4.
Severability
. In case any provision in this Fifth Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity,
illegality or unenforceability.
Section 3.5.
New Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms
. Each New
Guaranteeing Subsidiary may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into, any Person other than as set forth in Section 10.04 of the Indenture.
Section 3.6.
Release
. Each New Guaranteeing Subsidiary’s Note Guarantee shall be released as set forth in Section 10.05
of the Indenture.
Section 3.7.
No Recourse Against Others
. Pursuant to Section 12.06 of the Indenture, no director,
officer, employee, incorporator, stockholder, member, manager or partner of each New Guaranteeing Subsidiary shall have any liability for any obligations of such New Guaranteeing Subsidiary under the Notes, the Indenture, this Fifth Supplemental
Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. This waiver and release are part of the consideration for the Note Guarantees.
Section 3.8.
Governing Law
. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS FIFTH SUPPLEMENTAL
INDENTURE.
Section 3.9.
Waiver of Jury Trial
. EACH NEW GUARANTEEING SUBSIDIARY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS FIFTH SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.10.
Counterparts
. The parties may sign any number of copies of this Fifth Supplemental Indenture (including by
electronic transmission). Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Fifth Supplemental Indenture and of signature pages by facsimile or PDF transmission shall
constitute effective execution and delivery of this Fifth Supplemental Indenture as to the parties hereto and may be used in lieu of the original Fifth Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by
facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 3.11.
Effect of Headings
. The
Section headings herein are for convenience only and shall not affect the construction hereof.
Section 3.12.
Trustee
. The
Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fifth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each
Prior Guaranteeing Subsidiary, New Guaranteeing Subsidiary and the Issuer.
[SIGNATURE PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly
executed and attested, all as of the last date below.
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CINCINNATI BELL INC.
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
|
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Title:
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Vice President of Treasury,
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|
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Corporate Finance and Investor
|
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|
Relations
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CBTS LLC (formerly CBTS HOLDCO LLC), as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
|
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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CBTS TECHNOLOGY SOLUTIONS LLC
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(Successor to CINCINNATI BELL TECHNOLOGY SOLUTIONS INC.; DATA CENTER INVESTMENTS INC.;
DATA CENTERS SOUTH HOLDINGS LLC; DATA CENTERS SOUTH INC. and SUNTEL SERVICES LLC), as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
|
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Title:
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Vice President of Treasury,
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|
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Corporate Finance and Investor
|
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|
Relations
|
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CBTS VIRGINIA LLC, as Guaranteeing Subsidiary
|
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
|
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Title:
|
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Vice President of Treasury,
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|
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Corporate Finance and Investor
|
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|
|
Relations
|
[Signature Page to Fifth Supplemental Indenture]
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CINCINNATI BELL ENTERTAINMENT INC., as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
|
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Title:
|
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Vice President of Treasury,
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|
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Corporate Finance and Investor
|
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|
|
Relations
|
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CINCINNATI BELL EXTENDED TERRITORIES LLC, as Guaranteeing Subsidiary
|
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By:
|
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/s/ Joshua T. Duckworth
|
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Name:
|
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Joshua T. Duckworth
|
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Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
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|
|
Relations
|
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|
CINCINNATI BELL SHARED SERVICES LLC, as Guaranteeing Subsidiary
|
|
|
|
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By:
|
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/s/ Joshua T. Duckworth
|
|
Name:
|
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Joshua T. Duckworth
|
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Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
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|
|
Relations
|
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|
|
CINCINNATI BELL TELEPHONE COMPANY LLC, as Guaranteeing Subsidiary
|
|
|
|
|
By:
|
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/s/ Joshua T. Duckworth
|
|
Name:
|
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Joshua T. Duckworth
|
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Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
|
|
|
Relations
|
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|
|
CINCINNATI BELL WIRELESS, LLC, as Guaranteeing Subsidiary
|
|
|
|
|
By:
|
|
/s/ Joshua T. Duckworth
|
|
Name:
|
|
Joshua T. Duckworth
|
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Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
|
|
|
Relations
|
[Signature Page to Fifth Supplemental Indenture]
|
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|
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HAWAIIAN TELCOM COMMUNICATIONS, INC., as Guaranteeing Subsidiary
|
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|
|
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By:
|
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/s/ Joshua T. Duckworth
|
|
Name:
|
|
Joshua T. Duckworth
|
|
Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
|
|
|
Relations
|
|
|
|
HAWAIIAN TELCOM HOLDCO, INC., as Guaranteeing Subsidiary
|
|
|
|
|
By:
|
|
/s/ Joshua T. Duckworth
|
|
Name:
|
|
Joshua T. Duckworth
|
|
Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
|
|
|
Relations
|
|
|
|
HAWAIIAN TELCOM, INC., as Guaranteeing Subsidiary
|
|
|
|
|
By:
|
|
/s/ Joshua T. Duckworth
|
|
Name:
|
|
Joshua T. Duckworth
|
|
Title:
|
|
Vice President of Treasury,
|
|
|
|
Corporate Finance and Investor
|
|
|
|
Relations
|
|
|
|
HAWAIIAN TELCOM SERVICES COMPANY, INC., as Guaranteeing Subsidiary
|
|
|
|
|
By:
|
|
/s/ Joshua T. Duckworth
|
|
Name:
|
|
Joshua T. Duckworth
|
|
Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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ONX USA LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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[Signature Page to Fifth Supplemental Indenture]
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ONX MANAGED SERVICES INC., an Illinois corporation, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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ONX HOLDINGS LLC, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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SYSTEMMETRICS CORPORATION, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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WAVECOM SOLUTIONS CORPORATION, as Guaranteeing Subsidiary
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By:
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/s/ Joshua T. Duckworth
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Name:
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Joshua T. Duckworth
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Title:
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Vice President of Treasury,
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Corporate Finance and Investor
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Relations
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[Signature Page to Fifth Supplemental Indenture]
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REGIONS BANK, as Trustee
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By:
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/s/ R. Douglas Milner
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Name:
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R. Douglas Milner
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Title:
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Vice President
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[Signature Page to Fifth Supplemental Indenture]
Schedule I
A. Prior Guaranteeing Subsidiaries
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1.
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CBTS LLC (formerly known as CBTS Holdco LLC)
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2.
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CBTS Technology Solutions LLC (formerly known as Cincinnati Bell Any Distance Inc.)
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3.
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CBTS Virginia LLC (formerly known as Cincinnati Bell Any Distance of Virginia LLC)
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4.
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Cincinnati Bell Entertainment Inc.
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5.
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Cincinnati Bell Extended Territories LLC
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6.
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Cincinnati Bell Shared Services LLC
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7.
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Cincinnati Bell Telephone Company LLC
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8.
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Cincinnati Bell Wireless, LLC
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B. New Guaranteeing Subsidiaries
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1.
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Hawaiian Telcom Communications, Inc.
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2.
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Hawaiian Telcom Holdco, Inc.
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4.
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Hawaiian Telcom Services Company, Inc.
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5.
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SystemMetrics Corporation
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7.
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OnX Managed Services Inc., an Illinois corporation
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9.
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Wavecom Solutions Corporation
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Exhibit 99.1
Media Materials
Cincinnati Bell Inc. Completes Combination with Hawaiian Telcom
Combination extends reach, enhances scale and strengthens ability to capitalize on fiber demand
Appoints John Komeiji President of Hawaiian Telcom; Walter A. Dods, Jr. and Meredith J. Ching to Board of Directors
CINCINNATI and HONOLULU, July 2, 2018
– Cincinnati Bell (NYSE: CBB) (the “Company” or “Cincinnati Bell”) today announced the
Company has completed its acquisition of Hawaiian Telcom Holdco, Inc. (“Hawaiian Telcom”), the leading integrated communications provider serving Hawai‘i and the state’s fiber-centric technology leader. The combination creates a
stronger communications and technology company that will foster greater innovation as it builds scale and fiber density, enabling the Company to deliver more competitive, cutting-edge products and services to customers as it meets the growing demand
for fiber capacity.
The transaction brings meaningful operational scale and accelerates Cincinnati Bell’s overarching strategy to create a
diversified and balanced revenue mix by expanding the Company’s high-speed, high-bandwidth fiber optic network while building a complementary IT solutions and cloud services business. With the addition of Hawaiian Telcom, the Company enables
further growth opportunities in its Entertainment and Communications business as it successfully migrates customers from legacy services to more advanced fiber offerings.
“Today marks a tremendous milestone for Cincinnati Bell and Hawaiian Telcom as we take an important step together toward expanding our portfolio of
next-generation fiber offerings and securing fiber density value for our customers and shareholders,” said Leigh Fox, President and Chief Executive Officer of Cincinnati Bell. “Fiber density remains a key market differentiator in an
increasingly competitive environment. By allowing us to better anticipate and capitalize on the fast-growing demand for strategic fiber offerings, this combination positions our company to be at the forefront of innovation in telecommunications and
establishes a platform for future growth.”
The transaction builds upon Hawaiian Telcom’s local knowledge and deep fiber infrastructure,
including its direct access to the historic
SEA-US
Trans-Pacific fiber cable linking Asia to the United States. This expanded route diversity provides the combined company with enhanced exposure to key markets
where demand for global communications is steadily rising. Cincinnati Bell is committed to investing in Hawai‘i through the continued buildout of Hawaiian Telcom’s Next Generation Fiber Network, enabling increased access to high-capacity
broadband across the state.
Hawaiian Telcom will retain its name and will continue to be locally managed and operated under the leadership of John
Komeiji, who will serve as President and General Manager of Hawaiian Telcom. Mr. Komeiji has served as Hawaiian Telcom’s Chief Administrative Officer & Legal Counsel for nearly ten years. He has spent the past four decades
investing in Hawai‘i, first as one of the state’s most successful litigators, and then as a corporate leader focused on building a strong and sustainable local company.
“The entire leadership team looks forward to working closely with John, who exhibits an unwavering commitment to serving Hawai‘i, has intimate
knowledge of Hawaiian Telcom and the local community, and has a proven track record of thoughtful leadership,” Mr. Fox added. “We are excited about what today’s news means for our ability to execute on our growth goals in a
rapidly changing industry as we meet the needs of customers across the Hawaiian Islands and our recently expanded North American footprint. With Hawaiian Telcom, Cincinnati Bell has found a great partner for the future.”
Cincinnati Bell has also added two Hawaiian Telcom Board Members, Walter A. Dods, Jr. and Meredith J. Ching,
to its Board of Directors.
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•
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Walter A. Dods Jr. has served in numerous roles on the Hawaiian Telcom Board of Directors since 2005, including as Chairman from 2008-2010. In December of 2008, he retired as Chairman of the Board of First Hawaiian
Bank, from which he retired as chief executive officer four years earlier. In addition to BancWest Corporation, First Hawaiian Bank and Bank of the West, Mr. Dods serves on the boards of the following Hawai‘i businesses: HC&D, LLC;
Pacific Guardian Life Insurance Co., Ltd.; Par Pacific Holdings, Inc., and Servco Pacific Inc. Mr. Dods graduated from St. Louis High School, Honolulu, and received a bachelor’s degree in business administration from the University of
Hawai‘i.
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•
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Meredith J. Ching is Executive Vice President – External Affairs at Alexander & Baldwin, Inc. (A&B), a nearly
150-year
old Hawai‘i company that is the
state’s fourth largest private landowner. Ms. Ching has served on numerous government boards and commissions, and currently serves on the
non-profit
boards of Kapi‘olani Health Foundation,
Hawai‘i Agricultural Foundation, Hawai‘i Ag & Culinary Alliance and the A&B Sugar Museum. Ms. Ching is a graduate of Punahou School in Honolulu, and earned a bachelor’s degree in civil engineering from Stanford
University and a master’s degree in business administration from the University of California at Los Angeles.
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Phil Cox, Chairman of
Cincinnati Bell’s Board of Directors, stated, “Walter and Meredith bring a wealth of experience to the Cincinnati Bell Board of Directors, including decades of work in the Hawai‘i market and intimate knowledge of the Hawaiian Telcom
business. Importantly, they also share our values and commitment to serving our local communities as we provide access to innovative technologies that fuel social and economic development. We are excited to welcome them to the Board.”
About Cincinnati Bell
With headquarters in Cincinnati,
Ohio, Cincinnati Bell Inc. (NYSE: CBB) provides integrated communications solutions – including local and long distance voice, data, high-speed Internet and video – that keep residential and business customers in Greater Cincinnati and
Dayton connected with each other and with the world. In addition, enterprise customers across the United States and Canada rely on CBTS and OnX, wholly-owned subsidiaries, for efficient, scalable office communications systems and
end-to-end
IT solutions. For more information, please visit www.cincinnatibell.com. The information on Cincinnati Bell’s website is not incorporated into this press
release.
About Hawaiian Telcom
Hawaiian Telcom,
established and headquartered in Honolulu since 1883, offers a full range of services to businesses and residential customers including Internet, video, voice, wireless, data network solutions and security, colocation, and managed and cloud
services – all supported by the reach and reliability of its next generation fiber network and 24/7
state-of-the-art
network operations center. With employees statewide sharing a commitment to innovation and a passion for
delivering superior service, Hawaiian Telcom is proud to be Hawai‘i’s Technology Leader. For more information, visit hawaiiantel.com. The information on Hawaiian Telcom’s website is not incorporated into this press release.
Contacts
Investor contact:
Josh Duckworth, +1
513-397-2292
joshua.duckworth@cinbell.com
Media contact:
Cincinnati Bell
Josh Pichler, +1
513-565-0310
josh.pichler@cinbell.com
Hawaiian Telcom
Ann Nishida Fry, +1
808-546-1888
ann.nishida@hawaiiantel.com
Cautionary Statement Concerning
Forward-Looking Statements
This communication and the documents incorporated by reference herein may contain “forward-looking” statements,
as defined in federal securities laws including the Private Securities Litigation Reform Act of 1995, which are based on the Company’s current expectations, estimates, forecasts 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. Actual results may differ materially from those expressed in any forward-looking statements. The following important
factors, among other things, could cause or contribute to actual results being materially and adversely different from those described or implied by such forward-looking statements including, but not limited to: those discussed in this
communication; the Company operates in highly competitive industries, and customers may not continue to purchase products or services, which would result in reduced revenue and loss of market share; the Company may be unable to grow its revenues and
cash flows despite the initiatives it has implemented; failure to anticipate the need for and introduce new products and services or to compete with new technologies may compromise the Company’s success in the telecommunications industry; the
Company’s access lines, which generate a significant portion of its cash flows and profits, are decreasing in number. If the Company continues to experience access line losses similar to the past several years, its revenues, earnings and cash
flows from operations may be adversely impacted; negotiations with the providers of content for the Company’s video programming may not be successful, potentially resulting in the Company’s inability to carry certain programming channels,
which could result in the loss of subscribers. In addition, due to the influence of some content providers, the Company may be forced to pay higher rates for some content, resulting in increased costs; the Company’s failure to meet performance
standards under its agreements could result in customers terminating their relationships with the Company or customers being entitled to receive financial compensation, which would lead to reduced revenues and/or increased costs; the Company
generates a substantial portion of its revenue by serving a limited geographic area; a large customer accounts for a significant portion of the Company’s revenues and accounts receivable. The loss or significant reduction in business from this
customer would cause operating revenues to decline and could negatively impact profitability and cash flows; maintaining the Company’s telecommunications networks requires significant capital expenditures, and the Company’s inability or
failure to maintain its telecommunications networks could have a material impact on its market share and ability to generate revenue; increases in broadband usage may cause network capacity limitations, resulting in service disruptions or reduced
capacity for customers; the Company may be liable for the material that content providers distribute over the Company’s networks; cyber attacks, including on the Company’s vendors, or other breaches of network or other information
technology security could have an adverse effect on the Company’s business; natural disasters, terrorist acts or acts of war could cause damage to the Company’s infrastructure and result in significant disruptions to the Company’s
operations; the regulation of the Company’s businesses by federal and state authorities may, among other things, place the Company at a competitive disadvantage, restrict its ability to price its products and services and threaten its operating
licenses; the Company depends on a number of third party providers, and the loss of, or problems with, one or more of these providers may impede the Company’s growth or cause the Company to lose customers; a failure of back-office information
technology systems could adversely affect the Company’s results of operations and financial condition; if the Company fails to extend or renegotiate its collective bargaining agreements with its labor union when they expire, or if its unionized
employees were to engage in a strike or other work stoppage, the Company’s business and operating results could be materially harmed; the loss of any of the senior management team or attrition among key sales associates could adversely affect
the Company’s business, financial condition, results of operations and cash flows; the Company’s debt could limit the Company’s ability to fund operations, raise additional capital, and fulfill its obligations, which, in turn, would
have a material adverse effect on its businesses and prospects generally; the Company’s credit agreement, the indenture governing the Company’s notes due 2024, the indenture governing the Company’s notes due 2025 and other
indebtedness impose significant restrictions on the Company; the Company depends on its credit agreement and its accounts receivable securitization facility to provide for its short-term financing requirements in excess of amounts generated by
operations, and the availability of those funds may be reduced or limited; the servicing of the Company’s indebtedness is dependent on the Company’s ability to generate cash, which could be impacted by many factors beyond its control; the
Company depends on the receipt of dividends or other intercompany transfers from its subsidiaries and investments; the acquisition of Hawaiian Telcom (the “Merger”) may not achieve its intended results, and the Company and Hawaiian Telcom
may be unable to successfully integrate their operations; the Company following the closing of the Merger (the “combined company”) is expected to incur expenses related to the integration of the Company and Hawaiian Telcom; the future
results of the combined company will suffer if the combined company does not effectively manage its expanded operations following the Merger; uncertainties associated with the Merger may cause a loss of management personnel and other key employees,
which could adversely affect the future business and operations of the combined company; the combined company will have substantial indebtedness following the Merger and the credit ratings of the combined company or its subsidiaries may be different
from what the companies currently expect; the Merger may involve unexpected costs, unexpected liabilities or unexpected delays; the acquisition of OnX Holdings LLC (“OnX”) may not achieve its intended results, and the Company may be unable
to successfully integrate OnX’s operations; the trading price of the Company’s common shares may be volatile, and the value of an investment in the company’s common shares may decline; the uncertain economic environment, including
uncertainty in the U.S. and world securities markets, could impact the Company’s business and financial condition; the Company’s future cash flows could be adversely affected if it is unable to fully realize its deferred tax assets;
changes in tax laws and regulations, and actions by federal, state and local taxing authorities related to the interpretation and application of such tax laws and regulations, could have a negative impact on the Company’s financial results and
cash flows; the Company’s interpretation of the Tax Cuts and Jobs Act of 2017 could change, and have an adverse impact on financial results; adverse changes in the value of assets or obligations associated with the Company’s employee
benefit plans could negatively impact shareowners’ deficit and liquidity; third parties may claim that the Company is infringing upon their intellectual property, and the Company could suffer significant litigation or licensing expenses or be
prevented from selling products; third parties may infringe upon the Company’s intellectual property, and the company may expend significant resources enforcing its rights or suffer competitive injury; the Company could be subject to a
significant amount of litigation, which could require it to pay significant damages or settlements; the Company could incur significant costs resulting from complying with, or potential violations of, environmental, health and human safety laws; and
the other risks and uncertainties detailed in the Company’s filings, including its Form
10-K
for the fiscal year ended December 31, 2017, with the SEC as well as Hawaiian Telcom’s filings,
including its Form
10-K
for the fiscal year ended December 31, 2017, with the SEC. These forward-looking statements are based on information, plans and estimates as of the date hereof and there may be
other factors that may cause the Company’s actual results to differ materially from these forward-looking statements. The Company assumes no obligation to update the information contained in this communication except as required by applicable
law.
