Exhibit 10.2
EXECUTION VERSION
     REGISTRATION RIGHTS AGREEMENT dated as of July 25, 2008 between XO
HOLDINGS, INC., a Delaware corporation (the “Company”), and the entities listed
on the signature pages hereto under the caption “Purchasers” (each a “Purchaser”
and, collectively, the “Purchasers”).
     Pursuant to the Stock Purchase Agreement dated as of July 25, 2008 (the
“Stock Purchase Agreement”) by and between the Company and the Purchasers, the
Purchasers will acquire on the Closing Date an aggregate of 555,000 shares of
the Company’s 7% Class B Convertible Preferred Stock (the “Convertible Preferred
Stock”) and 225,000 shares of the Company’s 9.5% Class C Perpetual Preferred
Stock (the “Perpetual Preferred Stock”). Each of the Convertible Preferred Stock
and Perpetual Preferred Stock shall be referred to as the “Preferred Stock”
herein.
     It is a condition precedent to the consummation of the transactions
contemplated by the Stock Purchase Agreement that the Company and the Purchasers
enter into this Agreement to provide for the rights of the Purchasers with
respect to the registration of the shares of Preferred Stock held by the
Purchasers and the shares of Common Stock issuable upon conversion of the
Convertible Preferred Stock.
     Accordingly, the parties hereto agree as follows:
SECTION 1. Definitions.
     As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
     “Closing Date” is defined in the Stock Purchase Agreement.
     “Commission” means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
     “Common Stock” means the Common Stock, par value $0.01 per share, of the
Company.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
     “Initiating Purchasers” means, collectively, Purchasers who properly
initiate a registration request under this Agreement.
     “Permitted Holder” means and includes: (i) a Purchaser or any Affiliate (as
defined in the Stock Purchase Agreement) of a Purchaser; (ii) any Person to whom
a Purchaser or its transferee transfers its Preferred Stock and/or Common Stock
issued upon conversion of the Convertible Preferred Stock, in whole or in part,
together with the assignment of such Purchaser’s or transferee’s (as applicable)
rights under this Agreement under Section 4.3 hereof;

 

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and (iii) any corporation, limited liability company, partnership, or other
entity, the controlling equity interests in which are held by or for the benefit
of any one or more Persons described in clause (i), (ii), or (iii) of this
definition.
     “Person” means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
     “Registrable Securities” means (i) any shares of Preferred Stock, (ii) any
shares of Common Stock issued or issuable upon the conversion of any Convertible
Preferred Stock held by the Purchasers, and (iii) any shares of Common Stock
issued with respect to the Convertible Preferred Stock or the Common Stock
referred to in clauses (i) and (ii) by way of a stock dividend, stock split or
reverse stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or otherwise. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
(a) when a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (b) when
such securities shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been delivered by
the Company and subsequent public distribution of them shall not require
registration of them under the Securities Act or (c) when such securities are
eligible for sale under clause (b) of Rule 144 of the Securities Act or any
successor provision.
     “Registration Expenses” means all expenses incident to the registration and
disposition of the Registrable Securities pursuant to Section 2 hereof,
including, without limitation, all registration, filing and applicable national
securities exchange fees, all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel to the
underwriters in connection with “blue sky” qualification of the Registrable
Securities and determination of their eligibility for investment under the laws
of the various jurisdictions), all word processing, duplicating and printing
expenses, all messenger and delivery expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of “cold comfort” letters or any special audits required by, or
incident to, such registration, all fees and disbursements of underwriters
(other than underwriting discounts and commissions), all transfer taxes, and all
fees and expenses of counsel to the Purchasers; provided, however, that
Registration Expenses shall exclude, and the Purchasers shall pay, underwriting
discounts and commissions in respect of the Registrable Securities being
registered.
     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

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SECTION 2. Registration Under Securities Act, etc.
     2.1. Demand Registration.
     (a) Requests for Registration. Each Purchaser will have the right, by
written notice delivered to the Company (a “Demand Notice”) and subject to the
terms and conditions set forth in this Agreement, to require the Company to
register Registrable Securities under and in accordance with the provisions of
the Securities Act (a “Demand Registration”); provided that (i) no Purchaser may
make more than one Demand Registration, (ii) the aggregate offering price (net
of underwriters’ discounts and commissions) of the Registrable Securities
requested by the Initiating Purchasers to be so registered pursuant to this
Section must exceed $5,000,000 and (iii) each Initiating Purchaser must provide
to the Company a certificate (the “Authorizing Certificate”) signed by such
Initiating Purchaser. For purposes of the preceding sentence, the filing of two
or more registration statements in response to one Demand Notice shall be
counted as one Demand Registration. Each request for a Demand Registration shall
state the amount of the Registrable Securities proposed to be sold and the
intended method of disposition thereof. The Authorizing Certificate shall set
forth (A) the name of Initiating Purchaser signing such Authorizing Certificate,
(B) the number of Registrable Securities held by such Purchaser and the number
of Registrable Securities such Purchaser has elected to have registered, and
(C) the intended methods of disposition of the Registrable Securities.
     (b) Withdrawal of Registration Request. An Initiating Purchaser may at its
option withdraw Registrable Securities from a registration and, in such event
(1) any continuing registration of Registrable Securities shall constitute the
Demand Registration to which the Initiating Purchaser is entitled and (2) the
withdrawing Initiating Purchaser shall reimburse the Company for the
registration and filing fees (including any fees payable to the SEC, the
Financial Industry Regulatory Authority, or any successor organization) it has
incurred with respect to the withdrawn Registrable Securities (unless all
Registrable Securities are withdrawn, in which case the withdrawing Initial
Purchaser shall reimburse the Company for all costs and expenses incurred by it
in connection with the registration of such Registrable Securities). Subject to
compliance with clause (2) of the preceding sentence, a Demand Registration that
is terminated in its entirety prior to the effected date of the applicable
registration statement will not constitute a Demand Registration.
     (c) Company Right of Deferral. Notwithstanding the foregoing obligations,
if the Company furnishes to an Initiating Purchaser requesting a registration
pursuant to this Section 2.1 a certificate signed by the Company’s chief
executive officer stating that in the good faith judgment of the Company’s Board
of Directors it would be materially detrimental to the Company and its
stockholders for such registration statement to either become effective or
remain effective for as long as such registration statement otherwise would be
required to remain effective, because such action would (i) materially interfere
with a significant acquisition, corporate reorganization, or other similar
transaction involving the Company; (ii) require premature disclosure of material
information that the Company has a bona fide business purpose for preserving as
confidential; or (iii) render the Company unable to comply with requirements
under the Securities Act or Exchange Act, then the Company shall have the right
to defer taking action with respect to such filing, and any time periods with
respect to filing or effectiveness

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thereof shall be tolled correspondingly, for a period of not more than one
hundred twenty (120) days after the request of the Initiating Purchaser is
received by the Company; provided, further, that the Company shall not register
any securities for its own account or that of any other stockholder during such
one hundred twenty (120) day period other than pursuant to a registration
relating to the sale of securities to employees of the Company or a subsidiary
pursuant to a stock option, stock purchase, or similar plan or a registration in
which the only securities being registered are Common Stock issuable upon
conversion of debt securities that are also being registered.
     (d) Recent Registration. The Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to Section 2.1(a):
(i) during the period that is thirty (30) days before the Company’s good faith
estimate of the date of filing of, and ending on a date that is ninety (90) days
after the effective date of, a Company-initiated registration, provided, that
the Company is actively employing in good faith commercially reasonable efforts
to cause such registration statement to become effective; or (ii) if the Company
has effected a Demand Registration pursuant to Section 2.1(a) within the six
(6) month period immediately preceding the date of such request.
     (e) Piggyback Rights. If the Company proposes to file a registration
statement, whether or not for sale for the Company’s own account or for the
account of a shareholder of the Company, on a form and in a manner that would
also permit registration, offer or sale of Registrable Securities, the Company
shall each such time use reasonable efforts to give to the Purchasers holding
Registrable Securities known to the Company written notice of such proposed
filing at least 20 days before the anticipated filing. The notice referred to in
the preceding sentence shall (i) describe the proposed registration and offering
and (ii) offer the Purchaser the opportunity to register, offer or sell such
amount of Registrable Securities as the Purchaser may request (a “Piggyback
Registration”). Subject to Section 2(f), the Company will include in each such
Piggyback Registration (and any related qualification under state blue sky laws
and other compliance filings, and in any underwriting involved therein) all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 10 days after the written notice from the
Company is given.
     (f) Registration of Other Securities. The Company will cause the managing
underwriter or underwriters of a proposed underwritten offering, if any, to
permit any Purchaser holding Registrable Securities requested to be included in
the registration for such offering, to include therein all such Registrable
Securities requested to be so included (such securities, together with any other
shares of the same class requested to be included in such registration by any
other Person pursuant to similar registration rights, the “Piggyback Shares”) on
the same terms and conditions as any securities of the Company included therein
(other than the indemnification by such Purchasers, which will be limited to the
dollar amount of the proceeds received by the Purchaser upon the sale of the
Registrable Securities giving rise to such indemnification obligation; provided,
that the Purchasers give customary representations and warranties); provided
that, if the Company or managing underwriter advises, in good faith, the
Purchasers in writing to the effect that the total amount of securities that the
Purchasers, the Company and any other Person propose to include in a
registration statement is such as to

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materially and adversely affect the success of an offering of securities, then
the Company will include in such registration:
(x) in the case of a registration in connection with a sale of securities for
the Company’s own account, (i) first, 100% of the securities that the Company
proposes to sell for its own account, (ii) second, to the extent that the number
of securities in clause (i) above is less than the number of securities which
the Company or underwriter has advised can be sold in such offering without
having the adverse effect referred to above, the Piggyback Shares, determined
pro rata on the basis of the number of shares of the class being sold owned by
the Purchasers, and (iii) third, to the extent that the number of securities in
clauses (i) and (ii) above is less than the number of securities which the
Company has been advised can be sold in such offering without having the adverse
effect referred to above, the number of Piggyback Shares requested to be
included in such offering by any other Persons pursuant to similar registration
rights, determined pro rata on the basis of the number of shares of the class
being sold owned by such other Persons requesting registration, collectively;
(y) in the case of a Demand Registration (i) first, 100% of the securities, if
any, that the Initiating Purchasers propose to sell, (ii) second, to the extent
that the number of securities in clause (i) above is less than the number of
securities which the Company or underwriter has advised can be sold in such
offering without having the adverse effect referred to above, the Piggyback
Shares, determined pro rata on the basis of the number of shares of the class
being sold owned by the Purchasers, (iii) third, to the extent that the number
of securities in clauses (i) and (ii) above is less than the number of
securities which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, the securities sought to be
included by the Company in the offering and (iv) fourth, to the extent that the
number of securities in clauses (i) through (iii) above is less than the number
of securities which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, the number of Piggyback
Shares requested to be included in such offering by any other Persons pursuant
to similar registration rights, determined pro rata on the basis of the number
of shares of the class being sold owned by such other Persons requesting
registration.
(z) in the case of a registration in connection with a sale of securities on
account of Persons other than the Company or Purchasers (i) first, 100% of the
securities, if any, that those Persons propose to sell, (ii) second, to the
extent that the number of securities in clause (i) above is less than the number
of securities which the Company or underwriter has advised can be sold in such
offering without having the adverse effect referred to above, the Piggyback
Shares, determined pro rata on the basis of the number of shares of the class
being sold owned by the Purchasers, (iii) third, to the extent that the number
of securities in clauses (i) and (ii) above is less than the number of
securities which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, the number of Piggyback
Shares requested to be included in such offering by any other Persons pursuant
to similar registration rights, determined pro rata on the basis of the number
of shares of the class being sold owned by such other Persons

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requesting registration and (iv) fourth, to the extent that the number of
securities in clauses (i) through (iii) above is less than the number of
securities which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, the securities sought to be
included by the Company in the offering.
          (g) Registration Statement Form. Registration under this Section 2.1
shall be on such appropriate registration form of the Commission as, subject to
clause (a) above, shall be selected by the Company and as shall be reasonably
acceptable to the Purchasers. The Company agrees to include in any such
registration statement all information which, in the opinion of counsel to the
Purchasers and counsel to the Company, is necessary or desirable to be included
therein.
          (h) Expenses. The Company shall pay all Registration Expenses in
connection with registration pursuant to this Section 2.1.
          (i) Effective Registration Statement. Registration pursuant to this
Section 2.1 shall not be deemed to have been effected (i) if after it has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason not attributable to the Purchasers and has not thereafter
become effective, or (ii) if the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived.
          (j) Shelf Registration. If the Company effects a registration of
Registrable Securities by means of shelf registration pursuant to Rule 415 under
the Securities Act (a “Shelf Registration Statement”), in addition to the other
requirements contained herein, the Company shall, at its cost, use its
reasonable commercial efforts to keep the Shelf Registration Statement
continuously effective in order to permit the prospectus forming part thereof to
be usable by the Purchasers until such time as all the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding (the “Effectiveness Period”);
provided, however, that the Effectiveness Period in respect of the Shelf
Registration Statement shall be extended to the extent required to permit
dealers to comply with the applicable prospectus delivery requirements under the
Securities Act and as otherwise provided herein.
          (k) Availability. The registration rights set forth in this Agreement
shall not be available to any Purchaser (i) until after the first anniversary of
the purchase by such Purchaser of such shares of Preferred Stock, (ii) if in the
opinion of counsel to the Company, all of the Registrable Securities then owned
by such Purchaser could be sold in any 6-month period pursuant to Rule 144 under
the Securities Act (without giving effect to the provisions of Rule 144(b)(1))
or (iii) if all of the Registrable Securities held by such Purchaser have been
sold in a registration pursuant to the Securities Act or pursuant to said
Rule 144.

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          2.2. Registration Procedures. In connection with the registration of
any Registrable Securities under the Securities Act as provided in Sections 2.1
hereof, the Company shall as expeditiously as possible:
     (a) prepare and file with the Commission the requisite registration
statement to effect such registration (and shall include all financial
statements required by the Commission to be filed therewith) and thereafter use
its reasonable efforts to cause such registration statement to become effective;
provided, however, that before filing such registration statement (including all
exhibits) or any amendment or supplement thereto or comparable statements under
securities or blue sky laws of any jurisdiction, the Company shall as promptly
as practicable furnish such documents to the Purchasers and each underwriter, if
any, participating in the offering of the Registrable Securities and their
respective counsel, which documents will be subject to the review and comments
of the Purchasers, each underwriter and their respective counsel;
     (b) notify the Purchasers of the Commission’s requests for amending or
supplementing the registration statement and the prospectus, and prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement for such period as shall be required for
the disposition of all of such Registrable Securities in accordance with the
intended method of distribution thereof; provided, that except with respect to
any such registration statement filed pursuant to Rule 415 under the Securities
Act, such period need not exceed 365 days;
     (c) furnish, without charge, to the Purchasers and each underwriter such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as the Purchasers
and such underwriters may reasonably request;
     (d) use its reasonable efforts (i) to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such securities or blue sky laws of such States of the United States of America
where an exemption is not available and as the Purchasers or any managing
underwriter shall reasonably request, (ii) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and (iii) to take any other action which may be reasonably necessary or
advisable to enable the Purchasers to consummate the disposition in such
jurisdictions of the securities to be sold by the Purchasers, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not but
for the requirements of this subsection (d) be obligated to be so qualified or
to consent to general service of process in any such jurisdiction;

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     (e) use its reasonable efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to the Purchasers to consummate
the disposition of such Registrable Securities;
     (f) furnish to the Purchasers and each underwriter, if any, participating
in the offering of the securities covered by such registration statement, a
signed counterpart of (i) an opinion of counsel for the Company as is
customarily requested of issuer’s counsel, and (ii) a “comfort” letter signed by
the independent public accountants who have certified the Company’s or any other
entity’s financial statements included or incorporated by reference in such
registration statement, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and, in the
case of the accountants’ comfort letter, with respect to events subsequent to
the date of such financial statements, as are customarily covered in opinions of
issuer’s counsel and in accountants’ comfort letters delivered to the
underwriters in underwritten public offerings of securities (and dated the dates
such opinions and comfort letters are customarily dated);
     (g) promptly notify the Purchasers and each managing underwriter, if any,
participating in the offering of the securities covered by such registration
statement (i) when such registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to such registration statement has been filed, and, with respect to
such registration statement or any post-effective amendment, when the same has
become effective; (ii) of any request by the Commission for amendments or
supplements to such registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or the
initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any of the Registrable Securities for sale under the securities or blue sky
laws of any jurisdiction or the initiation of any proceeding for such purpose;
(v) at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the circumstances
under which they were made, and in the case of this clause (v), at the request
of the Purchasers promptly prepare and furnish to the Purchasers and each
managing underwriter, if any, participating in the offering of the Registrable
Securities, a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and (vi) at any time when
the

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representations and warranties of the Company contemplated by Section 2.2(k)
hereof cease to be true and correct;
     (h) otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve months
beginning with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and
promptly furnish to the Purchasers a copy of any amendment or supplement to such
registration statement or prospectus;
     (i) provide and cause to be maintained a transfer agent and registrar
(which, in each case, may be the Company) for all Registrable Securities covered
by such registration statement from and after a date not later than the
effective date of such registration;
     (j) deliver promptly to counsel to the Purchasers and each underwriter, if
any, participating in the offering of the Registrable Securities, copies of all
correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff with
respect to such registration statement;
     (k) make such representations and warranties to the underwriters, if any,
with respect to the businesses of the Company and its subsidiaries, the
registration statement and documents incorporated by reference or deemed
incorporated by reference therein, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings;
     (l) cause the Company’s management to be made available for, and assist in,
the marketing and disposition of such Registrable Securities in the manner and
to the extent reasonably requested by the managing underwriter, if any,
including, without limitation, participation by management in customary road
shows, investor conferences and other similar presentations;
     (m) use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
     (n) provide a CUSIP number for all Registrable Securities, no later than
the effective date of the registration statement; and
     (o) in connection with any underwritten public offering, make available its
senior executive officers, directors and chairman and otherwise provide
reasonable assistance to the underwriters (taking into account the needs of the
Company’s business) in their marketing of Registrable Securities.

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     The Purchasers will furnish to the Company such information regarding the
Purchasers and the distribution of the Registrable Securities as the Company may
from time to time reasonably request in writing.
     The Purchasers agree that upon receipt of any notice from the Company of
the happening of any event of the kind described in paragraph (g)(iii) or (v) of
this Section 2.2, the Purchasers will, to the extent appropriate, discontinue
their disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until, in the case of
paragraph (g)(v) of this Section 2.2, their receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (g)(v) of this
Section 2.2 and, if so directed by the Company, will deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies, then in
their possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice. If the disposition by the
Purchasers of their securities is discontinued pursuant to the foregoing
sentence, the Company shall extend the period of effectiveness of the
registration statement by the number of days during the period from and
including the date of the giving of notice to and including the date when the
Purchasers shall have received copies of the supplemented or amended prospectus
contemplated by paragraph (g)(v) of this Section 2.2; and, if the Company shall
not so extend such period, the Purchasers’ request pursuant to which such
registration statement was filed shall not be counted for purposes of the
requests for registration to which the Purchasers are entitled pursuant to
Section 2.1 hereof.

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     2.3. Requested Underwritten Offerings. If, pursuant to Section 2.1, the
Initiating Purchasers intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to Section 2.1, and the Company shall
include such information in the Demand Notice. The managing underwriter will be
selected by the Company and shall be reasonably acceptable to a majority in
interest of the Initiating Purchasers. In such event, the right of any Purchaser
to include such Purchaser’s Registrable Securities in such registration shall be
conditioned upon such Purchaser’s participation in such underwriting and the
inclusion of such Purchaser’s Registrable Securities in the underwriting to the
extent provided herein. All Purchasers proposing to distribute their securities
through such underwriting shall (together with the Company) enter into an
underwriting agreement in customary form with the underwriters selected for such
underwriting.
     2.4. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Purchasers, their
underwriters, if any, and their respective counsel, accountants and other
representatives and agents the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and give each of
them such access to its books and records and such opportunities to discuss the
business of the Company with its officers and employees and the independent
public accountants who have certified its financial statements, and supply all
other information reasonably requested by each of them, as shall be necessary or
appropriate, in the opinion of the Purchasers and such underwriters’ respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
     2.5. Unlegended Certificates. In connection with the offering of any
Registrable Securities registered pursuant to this Section 2, the Company shall
(i) facilitate the timely preparation and delivery to the Purchasers and the
underwriters, if any, participating in such offering, of unlegended certificates
representing ownership of such Registrable Securities being sold in such
denominations and registered in such names as requested by the Purchasers or
such underwriters and (ii) instruct any transfer agent and registrar of such
Registrable Securities to release any stop transfer orders with respect to any
such Registrable Securities.
     2.6. No Required Sale. Nothing in this Agreement shall be deemed to create
an independent obligation on the part of the Purchasers to sell any Registrable
Securities pursuant to any effective registration statement.
     2.7. Market Stand-off. Each Purchaser agrees that it will not sell or
otherwise transfer or dispose of any Registrable Securities held by such
Purchaser during any period which the Company determines in its good faith
judgment that the filing of a registration statement under Section 2 or the use
of any related prospectus would require the disclosure of material information
that the Company has a bona fide business purpose for preserving as confidential
or the disclosure of which would impede the Company’s ability to consummate a
significant transaction, and that the Company is not otherwise required by
applicable securities laws or regulations to disclose, upon written notice of
such determination by the Company, until the date upon which the Company
notifies such Purchaser in writing that suspension of such rights for the

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grounds set forth in this Section 2.7 is no longer necessary. The Company agrees
to give such notice as promptly as practicable following the date that such
suspension of rights is no longer necessary.
     2.8. Rule 144. The Company shall take all actions reasonably necessary to
enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144, or (ii) any similar rule or regulation hereafter
adopted by the Commission including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of the Purchasers, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
SECTION 3. Miscellaneous
     3.1. Amendments and Waivers. This Agreement may be amended, modified or
supplemented only by written agreement of the party against whom enforcement of
such amendment, modification or supplement is sought.
     3.2. Notice. All notices and other communications hereunder shall be in
writing and, unless otherwise provided herein, shall be deemed to have been
given when received by the party to whom such notice is to be given at its
address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:

  (a)   If to the Purchasers, to:

Arnos Corp.
c/o Icahn Associates Corp.
767 Fifth Avenue, 47th Floor
New York, NY 10153
Attn: General Counsel

  (b)   If to the Company, to it at :

XO Holdings, Inc.
13865 Sunrise Valley Drive
Herndon, Virginia 20171
Attn: General Counsel
     3.3. Assignment; Third Party Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns. This Agreement may not be
assigned by the Company, without the prior written consent of the Purchasers.
The Purchasers may, at their election, at any time or from time to time, assign
their rights under this Agreement, in whole or in part, to any Affiliate (as
defined in the Stock Purchase Agreement) or any purchaser or other transferee of
shares of Common Stock held by them.
     3.4. Remedies. The parties hereto agree that money damages or other remedy
at law would not be sufficient or adequate remedy for any breach or violation
of, or a default

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under, this Agreement by them and that, in addition to all other remedies
available to them, each of them shall be entitled to an injunction restraining
such breach, violation or default or threatened breach, violation or default and
to any other equitable relief, including without limitation specific
performance, without bond or other security being required. In any action or
proceeding brought to enforce any provision of this Agreement (including the
indemnification provisions thereof), the successful party shall be entitled to
recover reasonable attorneys’ fees in addition to its costs and expenses and any
other available remedy.
     3.5. No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the Purchasers in this Agreement or
otherwise conflicts with the provisions hereof; provided that the Company may
enter into agreements on substantially similar terms as this agreement with
respect to Preferred Stock or other securities sold hereafter. The Company
further represents and warrants that the rights granted to the Purchasers
hereunder do not in any way conflict with and are not inconsistent with any
other agreements to which the Company is a party or by which it is bound.
     3.6. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
control or otherwise affect the meaning hereof.
     3.7. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be
governed by, the laws of the State of New York, without giving effect to the
conflicts of law principles thereof. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and the United States of America located
in the County of New York for any action or proceeding arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any action or proceeding relating thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in
Section 5 hereof shall be effective service of process for any action or
proceeding brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any action or proceeding arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or the
United States of America located in the County of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
     3.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
     3.9. Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction. If any restriction or provision of

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this Agreement is held unreasonable, unlawful or unenforceable in any respect,
such restriction or provision shall be interpreted, revised or applied in a
manner that renders it lawful and enforceable to the fullest extent possible
under law.
     3.10. Further Assurances. Each party hereto shall do and perform or cause
to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
     3.11. Entire Agreement; Effectiveness. This Agreement constitutes the
entire agreement, and supersedes all prior agreements and understandings, oral
and written, between the parties hereto with respect to the subject matter
hereof.

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EXECUTION VERSION
     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized.

            XO HOLDINGS, INC.
      By:   /s/ Carl J. Grivner         Name:   Carl J. Grivner        Title:  
Chief Executive Officer     

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EXECUTION VERSION

                  PURCHASERS    
 
                ARNOS CORP.    
 
           
 
  By:   /s/ Keith Cozza    
 
           
 
  Name:   Keith Cozza    
 
  Title:   Authorized Signatory    
 
                BARBERRY CORP.    
 
           
 
  By:   /s/ Keith Cozza    
 
           
 
  Name:   Keith Cozza    
 
  Title:   Treasurer    
 
                HIGH RIVER LIMITED PARTNERSHIP         BY: Hopper Investments
LLC, its general partner         BY: Barberry Corp., its sole member    
 
           
 
  By:   /s/ Keith Cozza    
 
           
 
  Name:   Keith Cozza    
 
  Title:   Treasurer    
 
                ACF INDUSTRIES HOLDING CORP.    
 
           
 
  By:   /s/ Keith Cozza    
 
           
 
  Name:   Keith Cozza    
 
  Title:   Vice President    

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