Exhibit 10.3
GUARANTY
          For good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the undersigned (the “Guarantors”) jointly, severally
and unconditionally guarantee, in accordance with the terms hereof and without
any prior written notice, the full and punctual payment and performance of all
of the Liabilities (as defined herein) when due (the “Guaranty”), whether
required by acceleration or otherwise of XO COMMUNICATIONS, LLC, a Delaware
limited liability company (the “Company”), to the purchasers listed on
Schedule A and their permitted assigns of the Note Purchase Agreement (the
“Agreement”) entered into on March 13, 2008 by and among the Company and such
purchasers (the “Purchasers”). This Guaranty is an absolute, unconditional and
continuing guaranty of the full and punctual payment as well as performance of
all of the Liabilities whether now outstanding or arising in the future. Should
the Company default in the payment or performance of any of the Liabilities, the
obligations of the Guarantors hereunder with respect to the Liabilities in
default shall, upon demand by the Purchasers, become immediately due and
payable, without further demand or notice of any nature from the Purchasers, all
of which are expressly waived by the Guarantors. Payments by the Guarantors
hereunder may be required by the Purchasers on any number of occasions.
Capitalized terms used herein but not defined shall have the same meanings
ascribed to them in the Agreement.
          The Guarantors have agreed to execute and deliver each provision of
this Guaranty jointly and severally in order to induce the Purchasers on the
date hereof to enter into the Agreement and to purchase the Notes. Such
Agreement confers a substantial direct benefit on the Guarantors. The Guarantors
hereby acknowledge and agree that the foregoing constitutes full and fair
consideration and reasonably equivalent value for the obligations, covenants and
agreements of the Guarantors hereunder.
          “Liabilities” shall mean all payments due under the Agreement, the
Notes outstanding thereunder, the Costs of Company Collection and the Costs of
Guarantors Collection.
          “Costs of Company Collection” shall mean all costs and expenses of any
Purchaser incurred in any enforcement or collection under Section 11 of the
Agreement, including, without limitation, reasonable attorneys’ fees, expenses
and disbursements.
          “Costs of Guarantors Collection” shall mean all costs and expenses of
any Purchaser incurred in any enforcement or collection under this Guaranty,
including, without limitation, reasonable attorneys’ fees, expenses and
disbursements.
          The Guarantors will pay on demand interest on all amounts due to the
Purchasers under this Guaranty from the time the Purchasers first demand payment
of this Guaranty, at a rate equal to the highest rate chargeable to the Company
under the Agreement as of such time.

 

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          The obligations of the Guarantors hereunder shall not be affected by
any fraudulent, illegal, or improper act by the Company, nor by any release,
discharge, or invalidation, by operation of law or otherwise, of the
Liabilities, or by the legal incapacity of the Company, or any other person or
entity liable or obligated to the Purchasers for or on the Liabilities. Interest
and Costs of Company Collection shall continue to accrue and shall continue to
be guarantied hereby notwithstanding any stay to the enforcement thereof against
the Company or disallowance of any claim therefor against the Company. If for
any reason the Company has no legal existence or is under no legal obligation to
discharge any of the Liabilities, or if any of the Liabilities have become
irrecoverable from the Company by reason of the Company’s insolvency,
bankruptcy, reorganization or by other operation of law or for any other reason,
this Guaranty shall nevertheless be binding on the Guarantors as if the
Guarantors had at all times been the principal obligor on the Liabilities. The
obligations of the Guarantors hereunder shall remain in effect in the event that
acceleration of the time for payment of any of the Liabilities is stayed upon
the insolvency, bankruptcy or reorganization of the Company, or for any other
reason, and all such amounts otherwise subject to acceleration under the terms
of any agreement or instrument evidencing or otherwise executed in connection
with the Liabilities shall be immediately due and payable by the Guarantors. The
amount payable by any Guarantor under this Guaranty shall not exceed the maximum
amount that could then be claimed under this Guaranty without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the United States
Bankruptcy Code (11 U.S.C. § 101 et. seq.) or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law.
          This Guaranty incorporates all discussions and negotiations between
the Guarantors and the Purchasers concerning the guaranty provided by the
Guarantors hereby. No such discussions or negotiations shall limit, modify, or
otherwise affect the provisions hereof. No provision hereof may be altered,
amended, waived, cancelled or modified, except by a written instrument executed
by the Requisite Holders and the Guarantors.
          The Guarantors waive promptness, diligences, presentment, demand,
notice (other than pursuant to the first paragraph hereof) and protest with
respect to the Liabilities or this Guaranty, and further waive any delay on the
part of the Purchasers, and further waive notice of acceptance of this Guaranty,
notice of any Liabilities incurred and all other notices of any kind, all
defenses which may be available by virtue of any valuation, stay, moratorium law
or similar law now or hereafter in effect, any right to require the marshalling
of assets of the Company or any other entity or person primarily or secondarily
liable with respect to any of the Liabilities, and all suretyship defenses
generally. Without limiting the generality of the foregoing, the Guarantors
agree to the provisions of any instrument evidencing or otherwise executed in
connection with any Liability and agree that the obligations of the Guarantors
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (i) the failure of the Purchasers to assert any claim or demand or
to enforce any right or remedy against the Company or any other entity or other
person primarily or secondarily liable with respect to any of the Liabilities;
(ii) any extensions, compromise, refinancing, consolidation or renewals of any
Liability; (iii) any change in the time, place or manner of payment of any of
the Liabilities or any

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rescissions, waivers, compromise, refinancing, consolidation or other amendments
or modifications of the Agreement or any other agreement, instrument or note
evidencing or otherwise executed in connection with any of the Liabilities;
(iv) the addition, substitution or release of any entity or other person
primarily or secondarily liable for any Liability; or (v) any other act or
omission which might in any manner or to any extent vary the risk of the
Guarantors or otherwise operate as a release or discharge of the Guarantors, all
of which may be done without notice to the Guarantors.
          The obligations of the Guarantors hereunder are primary, with no
recourse necessary by the Purchasers against the Company prior to proceeding
against the Guarantors hereunder. The Guarantors agree that the Liabilities will
be paid and performed strictly in accordance with their respective terms,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Purchasers with
respect thereto. The Guarantors assent to any indulgence or waiver which the
Purchasers may grant or give the Company and/or any other person liable or
obligated to the Purchasers for or on the Liabilities, without notice to, or
consent from the Guarantors. No compromise, settlement, or release by the
Purchasers of the Liabilities or of the obligations of any such other person
(whether or not jointly liable with the Guarantors) shall affect the obligations
of the Guarantors hereunder. No action by the Purchasers which has been assented
to herein shall affect the obligations of the Guarantors to the Purchasers
hereunder.
          This instrument shall inure to the benefit of the Purchasers, their
successors and assigns, shall be binding upon the heirs, successors,
representatives, and assigns of the Guarantors, and shall apply to all
Liabilities of the Company and any successor to the Company, including any
successor by operation of law.
          This instrument and all documents which have been or may be
hereinafter furnished by the Guarantors to the Purchasers may be reproduced by
the Purchasers by any photographic, photostatic, microfilm, microcard, miniature
photographic, xerographic, or similar process, and the Purchasers may destroy
the original from which such document was so reproduced. Any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made in the regular course of business).
          This instrument shall be governed, construed, and interpreted in
accordance with the laws of the State of New York without regard to conflict of
law principles (except for New York General Obligations Law Section 5-1401). The
Guarantors submits to the jurisdiction of any federal, state or local court
located in the State of New York for all matters in connection with this
Guaranty or any amendment or supplement hereto or to any transaction in
connection herewith as well as for all purposes in connection with any other
relationship between the Guarantors and the Purchasers.
          It is the intention of the Guarantors that the provisions of the
within Guaranty be liberally construed to the end that the Purchasers may be put
in as good a position as if the Company had promptly, punctually, and faithfully
performed all Liabilities and the Guarantors had promptly, punctually and
faithfully performed hereunder.

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          Any determination that any provision herein is invalid, illegal, or
unenforceable in any respect in any instance shall not affect the validity,
legality, or enforceability of such provision in any other instance and shall
not affect the validity, legality, or enforceability of any other provision
contained herein.
          Any notice from the Purchasers to the Guarantors in connection with
this Guaranty shall be sent to the Guarantors at 13865 Sunrise Valley Drive,
Herndon, VA 20171. Any notice or communication pursuant or related to this
Guaranty shall be deemed given if in writing (i) when delivered in person,
(ii) five days after mailing when mailed by first class mail, (iii) when sent by
facsimile transmission, with transmission confirmed or (iv) one day after
sending when transmitted via Federal Express or other overnight courier service.
          This document may be executed in counterparts, each of which shall be
an original but all of which together shall constitute one instrument.
          THE GUARANTORS AGREE THAT NEITHER IT NOR ANY ASSIGNEE OR SUCCESSOR
SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY
OTHER ACTION BASED UPON OR ARISING OUT OF, THIS AGREEMENT OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN THE GUARANTORS AND THE PURCHASERS, OR (B) SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED.
[Signature page follows]

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          IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be
duly executed by an authorized representative as of the 13th day of March 2008.
XO HOLDINGS, INC.
TELECOMMUNICATIONS OF NEVADA, LLC
V&K HOLDINGS, INC.
XO INTERNATIONAL HOLDINGS, INC.
XO INTERNATIONAL, INC.
XO SERVICES, INC.
XO NEVADA MERGER SUB, INC.

         
By:
  /s/ Gregory W. Freiberg    
 
       
 
            Name: Gregory W. Freiberg    
 
            Title: Chief Financial Officer    

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