Exhibit 10.2
     
 
XO Communications, LLC
$145,000,000 Senior Notes due April 15, 2009
 
Note Purchase Agreement
 
Dated as of March 13, 2008
     
 

 

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TABLE OF CONTENTS

              Page
SECTION 1. AUTHORIZATION OF NOTES
    1  
Section 1.1. Authorization of Notes
    1  
Section 1.2. Provisions Relating to the Notes
    1  
SECTION 2. SALE AND PURCHASE OF NOTES; GUARANTY AGREEMENT
    2  
Section 2.1. Sale and Purchase of Notes
    2  
Section 2.2. Guaranty Agreement
    2  
SECTION 3. CLOSING
    2  
SECTION 4. PURCHASER’S CONDITIONS TO CLOSING
    3  
Section 4.1. Representations and Warranties
    3  
Section 4.2. Performance; No Default
    3  
Section 4.3. Compliance Certificates
    3  
Section 4.4. Guaranty Agreement
    3  
Section 4.5. Opinions of Counsel
    3  
Section 4.6. Purchase Permitted by Applicable Law, Etc.
    4  
Section 4.7. Waiver
    4  
Section 4.8. Funding Instructions
    4  
Section 4.9. Proceedings and Documents
    4  
SECTION 5. COMPANY’S CONDITIONS TO CLOSING
    4  
Section 5.1. Related Transactions
    4  
Section 5.2. Fairness Opinion
    4  
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    4  
Section 6.1. Organization; Requisite Power and Authority; Qualification
    4  
Section 6.2. Capital Stock and Ownership
    5  
Section 6.3. Due Authorization
    5  
Section 6.4. No Conflict
    5  
Section 6.5. Governmental Consents
    5  
Section 6.6. Binding Obligation
    5  
Section 6.7. Financial Statements
    6  
Section 6.8. No Material Adverse Change
    6  
Section 6.9. Adverse Proceedings, etc.
    6  
Section 6.10. Payment of Taxes
    6  

 

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TABLE OF CONTENTS
(Continued)

              Page
Section 6.11. No Defaults
    6  
Section 6.12. Material Contracts
    6  
Section 6.13. Governmental Regulation
    7  
Section 6.14. Margin Stock
    7  
Section 6.15. Certain Fees
    7  
Section 6.16. Compliance with Statutes, etc.
    7  
Section 6.17. Fairness Opinion
    7  
SECTION 7. REPRESENTATIONS OF THE PURCHASERS
    7  
Section 7.1. Purchase for Investment
    7  
Section 7.2. No Registration under the Securities Act
    7  
Section 7.3. Accredited Investor
    8  
SECTION 8. PAYMENT OF THE NOTES
    8  
Section 8.1. Required Prepayments
    8  
Section 8.2. Optional Prepayments
    8  
Section 8.3. Allocation of Partial Prepayments
    8  
Section 8.4. Maturity; Surrender, Etc.
    8  
SECTION 9. AFFIRMATIVE COVENANTS
    8  
Section 9.1. Financial Statements and Other Reports
    8  
Section 9.2. Existence
    9  
Section 9.3. Payment of Taxes and Claims
    9  
Section 9.5. Insurance
    9  
Section 9.6. Compliance with Laws
    9  
Section 9.6. Subsequent Guarantors
    9  
SECTION 10. EVENTS OF DEFAULT
    9  
SECTION 11. REMEDIES ON DEFAULT, ETC
    11  
Section 11.1. Acceleration
    11  
Section 11.2. Other Remedies
    11  
Section 11.3. Rescission
    11  
Section 11.4. No Waivers or Election of Remedies, Expenses, Etc.
    12  
SECTION 12. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
    12  

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TABLE OF CONTENTS
(Continued)

              Page
Section 12.1. Registration of Notes
    12  
Section 12.2. Transfer and Exchange of Notes
    12  
Section 12.3. Replacement of Notes
    13  
SECTION 13.  PAYMENTS ON NOTES
    13  
Section 13.1. Home Office Payment
    13  
SECTION 14.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
    13  
SECTION 15.  AMENDMENT AND WAIVER
    13  
Section 15.1. Requirements
    13  
Section 15.2. Solicitation of Holders of Notes
    14  
Section 15.3. Binding Effect, Etc.
    14  
SECTION 16.  NOTICES
    15  
SECTION 17.  REPRODUCTION OF DOCUMENTS
    15  
SECTION 18.  CONFIDENTIAL INFORMATION
    15  
SECTION 19.  SUBSTITUTION OF PURCHASER
    16  
SECTION 20.  SUBMISSION TO JURISDICTION
    17  
SECTION 21.  MISCELLANEOUS
    17  
Section 21.1.  Successors and Assigns
    17  
Section 21.2. Payments Due on Non-Business Days
    17  
Section 21.3. Severability
    17  
Section 21.4. Construction
    18  
Section 21.5. Counterparts
    18  
Section 21.6. Governing Law
    18  

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XO Communications, LLC
13865 Sunrise Valley Drive
Herndon, VA 20171
Senior Notes due April 15, 2009
Dated as of March 13, 2008
To the Purchasers listed in
   the attached Schedule A:
Ladies and Gentlemen:
     XO Communications, LLC, a Delaware limited liability company (the
“Company”), agrees with each of the purchasers listed in the attached Schedule A
(the “Purchasers”) as follows:
SECTION 1. Authorization of Notes.
     Section 1.1. Authorization of Notes. The Company shall authorize the issue
and sale of up to $145,000,000 aggregate principal amount of its Senior Notes
due April 15, 2009 (the “Notes”). As used herein, the term “Notes” shall mean
all notes originally delivered pursuant to this Agreement and any such notes
issued in substitution therefor pursuant to Section 12 of this Agreement. The
Notes shall be substantially in the forms set out in Exhibit 1 with such changes
therefrom, if any, as may be approved by the Purchasers and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
     Section 1.2. Provisions Relating to the Notes. Unless interest is paid in
cash as provided below, the unpaid principal amount of the Notes shall bear
interest at the rate of 11.5% per annum, which amounts shall be capitalized and
added to the principal amount of the Notes on April 15, 2008 and quarterly
thereafter on July 15, 2008, October 15, 2008, January 15, 2009 and April 15,
2009 without further action on the part of the Company or any Purchaser (the
“PIK Amount”). At the election of the Company and following approval by a
majority of Holdings’ disinterested independent directors, interest on the
unpaid principal amount of the Notes may be paid on a cash basis, in which case
such interest shall accrue from the preceding interest payment date, at the rate
of 9.5% per annum, and shall be payable on April 15, 2008 and quarterly in
arrears thereafter on July 15, 2008, October 15, 2008, January 15, 2009 and
April 15, 2009. All computations of interest shall be made on the basis of a
360-day year consisting of twelve 30-day months. To the extent permitted by law,
any overdue payment (including any overdue prepayment) of principal and any
overdue payment of interest shall bear cash interest at the Default Rate.

 

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SECTION 2. Sale and Purchase of Notes; Guaranty Agreement.
     Section 2.1. Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company shall issue and sell to each Purchaser
and each Purchaser shall purchase from the Company, at the Closing provided for
in Section 3, Notes in the principal amount specified opposite such Purchaser’s
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Each Purchaser’s obligations hereunder are several and not joint, and
no Purchaser shall have any obligation or liability to any Person for the
performance or nonperformance by any other Purchaser hereunder.
     Section 2.2. Guaranty Agreement. The obligations of the Company hereunder
and under the Notes are jointly and severally absolutely, unconditionally and
irrevocably guaranteed by the Guarantors, pursuant to a Guaranty Agreement dated
as of March 13, 2008 (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the “Guaranty Agreement”) substantially in
the form of Exhibit 2.
SECTION 3. Closing.
     The sale and purchase of the Notes to be purchased by the Purchasers shall
occur at the offices of Pillsbury Winthrop Shaw Pittman LLP, 1540 Broadway, New
York, New York 10036, at 10:00 a.m., New York, New York time, at a closing (the
“Closing”) on March 13, 2008 or on such other Business Day thereafter as may be
agreed upon by the Company and the Purchasers. At the Closing, the Company shall
deliver to each Purchaser a single Note dated the date of the Closing and
registered in such Purchaser’s name (or in the name of its nominee), against
delivery by wire transfer by such Purchaser of immediately available funds in
the amount of the purchase price of such Note for the account of the Company. If
at the Closing the Company shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to any Purchaser’s satisfaction, such
Purchaser shall, at its election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights such Purchaser may have by
reason of such failure or such nonfulfillment. If at the Closing any of the
conditions specified in Section 5 shall not have been fulfilled to the Company’s
satisfaction, the Company shall, at its election, be relieved of all further
obligations under this Agreement. Subject to the satisfaction of the conditions
set forth in this Agreement, the closing of any additional sale of the Notes
(the “Subsequent Closing”) shall take place on or prior to April 15, 2008 and at
such time and/or location(s) or by such other means, including transmission of
signature pages by telecopy, as may be agreed upon by the additional purchasers
of such Notes; provided that the representations and warranties to be delivered
to any additional purchasers and the covenants to which such additional
purchasers shall benefit shall be identical as those provided at the Closing.
SECTION 4. Purchaser’s Conditions to Closing.
     Each Purchaser’s obligation to purchase and pay for the Notes to be sold to
such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
reasonable satisfaction, prior to or at the Closing or Subsequent Closing, of
the following conditions:

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     Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be true and correct in all
material respects when made and at the time of the Closing or Subsequent
Closing, as appropriate.
     Section 4.2. Performance; No Default. The Company and each Guarantor shall
have performed and complied with all agreements and conditions contained in this
Agreement and the Guaranty Agreement required to be performed or complied with
by it prior to or at the Closing and, after giving effect to the issue and sale
of the Notes, no Default or Event of Default shall have occurred and be
continuing.
     Section 4.3. Compliance Certificates.
     (a) Officer’s Certificate. (1) The Company shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing or Subsequent
Closing, as appropriate, in substantially the form attached as Exhibit 4.3(a)(1)
hereto.
     (2) Each Guarantor shall have delivered to such Purchaser an Officer’s
Certificate, dated the date of the Closing or Subsequent Closing, as
appropriate, in substantially the form attached as Exhibit 4.3(a)(2) hereto.
     (b) Secretary’s Certificate. (1) The Company shall have delivered to such
Purchaser a certificate certifying as to the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution and
delivery of the Notes and this Agreement in substantially the form attached as
Exhibit 4.3(b)(1) hereto.
     (2) Each Guarantor shall have delivered to such Purchaser a certificate
certifying as to the resolutions attached thereto and other corporate or similar
proceedings relating to the authorization, execution and delivery of the
Guaranty Agreement in substantially the form attached as Exhibit 4.3(b)(2)
hereto.
     Section 4.4. Guaranty Agreement. The Guaranty Agreement shall have been
duly authorized, executed and delivered by each Guarantor and shall be in full
force and effect and such Purchaser shall have received a duly executed copy
thereof.
     Section 4.5. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such Purchaser, dated
the date of the Closing or Subsequent Closing, as appropriate, one or more
counsel to the Company and the Guarantors covering the matters set forth in
Exhibit 4.5 and covering such other matters incident to the transactions
contemplated hereby as such Purchaser may reasonably request (and the Company
hereby instructs its counsel to deliver such opinion to such Purchaser).
     Section 4.6. Purchase Permitted by Applicable Law, Etc. On the date of the
Closing or Subsequent Closing, as appropriate, such Purchaser’s purchase of
Notes shall (a) be permitted by the laws and regulations of each jurisdiction to
which such Purchaser is subject and (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System).

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     Section 4.7. Waiver. The Company shall have received all requisite waivers
under the Senior Secured Facility.
     Section 4.8. Funding Instructions. At least two Business Days prior to the
date of any Closing or any Subsequent Closing, such Purchaser shall have
received written instructions executed by an authorized financial officer of the
Company directing the manner of the payment of funds and setting forth relevant
payment details.
     Section 4.9. Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory to such Purchaser, and such Purchaser shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser may reasonably request.
SECTION 5. Company’s Conditions to Closing
The Company’s obligations to sell the Notes to each Purchaser at the Closing is
subject to the fulfillment to the Company’s reasonable satisfaction, prior to or
at the Closing, of the following conditions:
     Section 5.1. Related Transactions. The Company shall have consummated the
sale of $75,000,000 of the Notes scheduled to be sold pursuant to this Agreement
in order to effect the Closing.
     Section 5.2. Fairness Opinion. The Special Committee of Independent
Directors of Holdings, on behalf of Holdings, shall have received the written
opinion (or oral opinion to be confirmed in writing) of the fairness to
Holdings, from a financial point of view, of the consideration received from the
sale of the Notes, based on the principal economic terms of the Notes, from its
independent financial advisor, Cowen and Company, LLC, in such form as
acceptable to the Special Committee of Independent Directors of Holdings.
SECTION 6. Representations and Warranties of the Company.
     In order to induce the Purchasers to enter into this Agreement, the Company
represents and warrants to each Purchaser, on the Closing or Subsequent Closing,
as appropriate, that, except as set forth on the Schedules hereto (whether or
not a particular Schedule is described below), the following statements are true
and correct:
     Section 6.1. Organization; Requisite Power and Authority; Qualification.
Each of the Company and its Subsidiaries (i) is validly existing and (to the
extent applicable) in good standing under the laws of its jurisdiction of
organization, (ii) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into this Agreement and the Guaranty Agreement, as
appropriate, and (iii) is qualified to do business and (to the extent
applicable) in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had, and would not be reasonably expected to have, a Material Adverse Effect.

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     Section 6.2. Capital Stock and Ownership. The Capital Stock of the Company
has been duly authorized and validly issued and is fully paid and
non-assessable.
     Section 6.3. Due Authorization. The execution, delivery and performance of
this Agreement and the Guaranty Agreement have been duly authorized by all
necessary action on the part of each party thereto (other than the Purchasers),
including unanimous approval by the Special Committee of Independent Directors
of Holdings.
     Section 6.4. No Conflict. Subject to Schedule 6.4, the execution, delivery
and performance by the Company of this Agreement and the execution, delivery and
performance by the Guarantors of the Guaranty Agreement and the consummation of
the transactions contemplated thereunder do not and will not (a) violate any
provision of any law or any governmental rule or regulation applicable to the
Company or any of its Subsidiaries, any of the Organizational Documents of the
Company or any of its Subsidiaries, or any order, judgment or decree of any
court or other agency of government binding on the Company or any of its
Subsidiaries, except to the extent such violation would not have a Material
Adverse Effect; (b) breach or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of the Company or any of its
Subsidiaries, except to the extent such breach or default would not have a
Material Adverse Effect; (c) result in or require the creation or imposition of
any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries, except to the extent such creation or imposition would not have a
Material Adverse Effect; or (d) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of the
Company or any of its Subsidiaries, which, in either case, has not been
obtained, except to the extent such approval would not reasonably be expected to
have a Material Adverse Effect.
     Section 6.5. Governmental Consents. Subject to Schedule 6.5, the execution,
delivery and performance by each of the Company and the Guarantors of this
Agreement and the Guaranty Agreement, as appropriate, to which it is a party and
the consummation of the transactions contemplated hereunder do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any Governmental Authority, except (a) for such of the
foregoing that will have been made or obtained on or before the Closing or
(b) where failure to do so would not reasonably be expected to result in a
Material Adverse Effect.
     Section 6.6. Binding Obligation. Each of this Agreement and the Guaranty
Agreement has been duly executed and delivered by the Company and each of the
Guarantors party thereto and is the legally valid and binding obligation of such
entity, enforceable against such entity in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws relating to or limiting creditors’ rights
generally or by equitable principles relating to enforceability.
     Section 6.7. Financial Statements. Holdings has filed all financial
statements required to be filed with the Securities and Exchange Commission.

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     Section 6.8. No Material Adverse Change. Except as set forth on
Schedule 6.8, since December 31, 2007, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect.
     Section 6.9. Adverse Proceedings, etc. Except as set forth on Schedule 6.9
or as previously disclosed in a filing with the Securities and Exchange
Commission, there are no Adverse Proceedings, individually or in the aggregate,
that would reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect. No judgment, order, injunction or other restraint
prohibiting or imposing materially adverse conditions upon this Agreement, the
Guaranty Agreement or any of the transactions contemplated hereby or thereby
shall exist.
     Section 6.10. Payment of Taxes. All material tax returns and reports of the
Company and its Subsidiaries required to be filed by any of them have been
timely filed or caused to be filed, and all taxes shown on such tax returns to
be due and payable, and all material assessments, fees and other governmental
charges upon the Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid or caused to be paid when due and payable, except such taxes the
amount, applicability or validity of which are being contested in good faith by
appropriate proceedings and with respect to which reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor. The Company knows of no proposed material tax
assessment against the Company or any of its Subsidiaries that is not being
actively contested by the Company or such Subsidiary in good faith and by
appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
     Section 6.11. No Defaults. Neither the Company nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any of its Contractual
Obligations in effect on the Closing, and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute such a default,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not reasonably be expected to have a Material Adverse Effect.
     Section 6.12. Material Contracts. All contracts required to be filed by
Holdings under Item 601 of Regulation S-K of the Securities and Exchange
Commission have been filed with the Securities and Exchange Commission. All such
material contracts are in full force and effect to the extent not terminated in
accordance with their respective terms.
     Section 6.13. Governmental Regulation. Subject to Schedule 6.13, neither
the Company nor any of the Guarantors is subject to regulation under any other
federal or state statute or regulation which may render all or any portion of
the Notes unenforceable. Neither the Company nor any of its Subsidiaries is
required to register as an investment company under the Investment Company Act.

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     Section 6.14. Margin Stock. Neither the Company nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any Margin Stock.
No part of the proceeds of the Notes shall be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry Margin Stock and the making of the Notes does not and will not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
     Section 6.15. Certain Fees. No broker’s or finder’s fee or commission shall
be payable with respect hereto other than the fees, if any, paid to the
financial and other advisors of Holdings and the Company and the financial and
other advisors of the Special Committee of Independent Directors of Holdings.
     Section 6.16. Compliance with Statutes, etc. Each of the Company and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property, except such non-compliance that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect.
     Section 6.17. Fairness Opinion. The Special Committee of Independent
Directors of Holdings, on behalf of Holdings, has received the written opinion
(or oral opinion to be confirmed in writing) of the fairness to Holdings, from a
financial point of view, of the consideration received from the sale of the
Notes, based on the principal economic terms of the Notes, from its independent
financial advisor, Cowen and Company, LLC, in such form as acceptable to the
Special Committee of Independent Directors of Holdings.
SECTION 7. Representations of the Purchasers.
     Section 7.1. Purchase for Investment. Each Purchaser severally represents
that it is purchasing the Notes for its own account or for one or more separate
accounts maintained by such Purchaser and not with a view to the distribution
thereof. Each Purchaser severally represents that it has not and will not enter
into any contractual relationship with any distributor with respect to the
distribution of the Notes, except with its Affiliates or with the prior written
consent of the Company, that would cause Purchaser to be deemed an underwriter,
as defined in Section 2(11) of the Securities Act.
     Section 7.2. No Registration under the Securities Act. Each Purchaser
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
     Section 7.3. Accredited Investor. Each Purchaser severally represents and
warrants that it is an “accredited investor” as defined in Regulation D under
the Securities Act and is knowledgeable, sophisticated and experienced in
business and financial matters, and it fully understands the limitations on
ownership, sale, transfer or other disposition of the Notes.

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SECTION 8. Payment of the Notes.
     Section 8.1. Required Prepayments. The Notes shall not be subject to any
required prepayment and the entire unpaid principal amount of the Notes plus
accrued and unpaid interest thereon shall be due and payable on the stated
maturity thereof.
     Section 8.2. Optional Prepayments.
     (a) Optional Prepayments of Notes. The Company may, at its option, upon
notice as provided below, prepay at any time all or part of the Notes in an
amount not less than $5 million in aggregate principal amount and integral
multiples of $1 million in excess of that amount of the Notes then outstanding
in the case of a partial prepayment, at 100% of the principal amount so prepaid,
plus accrued and unpaid interest thereon.
     (b) Notice of Optional Prepayments. The Company shall give each holder of
Notes to be prepaid under this Section 8.2 (with a copy to each other holder of
Notes) written notice of each optional prepayment of Notes under this
Section 8.2 not less than five business days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with
Section 8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid.
     Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes, the principal amount of the Notes to be prepaid shall
be allocated among all of the Notes outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof.
     Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date. Any Note paid or prepaid in full shall be surrendered to the Company and
cancelled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
SECTION 9. Affirmative Covenants.
     The Company covenants and agrees that until payment in full of all Notes,
it shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 9.  
     Section 9.1. Financial Statements and Other Reports. Holdings shall make
all filings required to be made with the Securities and Exchange Commission.

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     Section 9.2. Existence. Except as otherwise permitted under this Agreement,
the Company shall, and shall cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, neither the
Company nor any of its Subsidiaries shall be required to preserve any such
existence, right or franchise, license or permit if the Company’s or such
Person’s board of directors (or similar governing body) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Person.
     Section 9.3. Payment of Taxes and Claims. The Company shall, and shall
cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto, except for such non-compliance that could not
reasonably be expected to result in a Material Adverse Effect, and provided, no
such Tax or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
adequate reserves or other appropriate provision, as shall be required in
conformity with GAAP shall have been made therefor.
     Section 9.4. Insurance. The Company shall maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of the Company and its
Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for such Persons, except for such non-compliance that
could not reasonably be expected to result in a Material Adverse Effect.
     Section 9.5. Compliance with Laws. The Company shall comply, and shall
cause each of its Subsidiaries to comply, with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
noncompliance with which could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
     Section 9.6. Subsequent Guarantors. The Company shall use its commercially
reasonable efforts to cause XO Communications Services, Inc. to execute promptly
a joinder agreement to the Guaranty Agreement as soon as practicable following
receipt of all necessary state regulatory approvals related to the granting of
such Guaranty. Once such entity executes such joinder agreement to the Guaranty
Agreement, it shall become a Guarantor for all purposes of this Agreement.
SECTION 10. Events of Default.
     An “Event of Default” shall exist if any of the following conditions or
events shall occur and be continuing:

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     (a) the Company defaults in the payment of any principal on any Note when
the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise;
     (b) the Company defaults in the payment of any interest on any Note for
more than 10 Business Days after the same becomes due and payable;
     (c) the Company defaults in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a) and (b) of this
Section 10) and such default is not remedied within 30 days after the earlier of
(1) a Responsible Officer obtaining actual knowledge of such default and (2) the
Company receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a “notice of default” and to refer
specifically to this paragraph (c) of Section 10);
     (d) the Company or any Significant Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Indebtedness
in an aggregate outstanding principal amount of at least $50,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other condition
exists (which default or condition has not been cured or waived prior to any
action being taken hereunder or under the Notes with respect to such default),
and as a consequence of such default or condition such Indebtedness has become
due and payable before its stated maturity or before its regularly scheduled
dates of payment;
     (e) the Company or any Significant Subsidiary (1) is generally not paying,
or admits in writing its inability to pay, its debts as they become due,
(2) files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (3) makes
an assignment for the benefit of its creditors, (4) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (5) is
adjudicated as insolvent or to be liquidated or (6) takes corporate or other
action for the purpose of any of the foregoing; or
     (f) a court or governmental authority of competent jurisdiction enters an
order appointing, without consent by the Company or any of its Significant
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Significant Subsidiaries, or any such petition shall be filed against the
Company or any of its Significant Subsidiaries and such petition shall not be
dismissed within 60 days; or
     (g) any Guarantor that is a Significant Subsidiary defaults in the
performance of or compliance with any term contained in the Guaranty Agreement
and such default is not remedied within the period of grace, if any, allowed
with respect thereto or the Guaranty Agreement shall cease to be in full force
and effect for any reason whatsoever, including, without limitation, a
determination by any Governmental Authority or court that such agreement is
invalid, void or unenforceable or any Guarantor that is a Significant Subsidiary
shall contest or deny in writing the validity or enforceability of the Guaranty
Agreement or any of its obligations thereunder.

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SECTION 11.Remedies on Default, Etc.
     Section 11.1. Acceleration.
     (a) If an Event of Default with respect to the Company described in
paragraph (e) or (f) of Section 10 (other than an Event of Default described in
clause (1) of paragraph (e) or described in clause (6) of paragraph (e) by
virtue of the fact that such clause encompasses clause (1) of paragraph (e)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
     (b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
     (c) If any Event of Default described in paragraph (a) or (b) of Section 10
has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
     Upon any Note becoming due and payable under this Section 11.1, whether
automatically or by declaration, such Note shall forthwith mature and the entire
unpaid principal amount of such Note, plus all accrued and unpaid interest
thereon shall be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
     Section 11.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 11.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
     Section 11.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 11.1, the Required
Holders, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue cash
interest on the Notes at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 15 and (c) no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to the Notes. No rescission and annulment under
this Section 11.3 shall extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.

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     Section 11.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement, the Guaranty Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 12, the
Company shall pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 11, including, without
limitation, reasonable attorneys’ fees, expenses and disbursements.
SECTION 12. Registration; Exchange; Substitution of Notes.
     Section 12.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary.
     Section 12.2. Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver not more than five Business Days
following surrender of such Note, at the Company’s expense (except as provided
below), one or more new Notes (as requested by the holder thereof) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note shall be payable to such Person as
such holder may request and shall be substantially in the form of Exhibit 1.
Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on or capitalized and added to the principal
amount of such surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid on or capitalized and added to the principal
amount thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less than $5,000,000.
Any transferee, by its acceptance of a Note registered in its name (or the name
of its nominee), shall be deemed to have made the representations set forth in
Section 6.

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     Section 12.3. Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be notice from such
Purchaser of such ownership and such loss, theft, destruction or mutilation),
and
     (a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it, or
     (b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver not more than five
Business Days following satisfaction of such conditions, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on or capitalized and added to the principal amount of such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid on or capitalized and added
to the principal amount of such Note.
SECTION 13. Payments on Notes.
     Section 13.1. Home Office Payment. The Company shall pay all sums becoming
due on such Note for principal and interest by the method and at the address
specified for such purpose below such Purchaser’s name in Schedule A, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company such Purchaser shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office, in connection with any payment or
prepayment in full of any Note. Prior to any sale or other disposition of any
Note held by any Purchaser or its nominee such Purchaser shall, at its election,
either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note pursuant to Section 12.2.
SECTION 14. Survival of Representations and Warranties; Entire Agreement.
     All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and delivery of and payment for the
Notes. All statements contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
SECTION 15. Amendment and Waiver.
     Section 15.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby change the amount or time of any prepayment or payment of
principal of, or reduce the rate or change the time of payment or method of
computation of interest on, the Notes, except as otherwise provided in
Section 11 hereof.

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     Section 15.2. Solicitation of Holders of Notes.
     (a) Solicitation. The Company shall provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with notice at least five
business days in advance of which a decision is required with respect to any
proposed amendment, waiver or consent in respect of any of the provisions hereof
or of the Notes. The Company shall deliver executed or true and correct copies
of each amendment, waiver or consent effected pursuant to the provisions of this
Section 15 to each holder of outstanding Notes promptly (but no later than five
business days) following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.
     (b) Payment. The Company shall not, directly or indirectly, pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
     (c) Consent in Contemplation of Transfer. Any consent made pursuant to this
Section 15 by a holder of Notes that has transferred or has agreed to transfer
its Notes to the Company or any Affiliate (or Person acting on their behalf) and
has provided or has agreed to provide such written consent as a condition to
such transfer shall be void and of no force or effect except solely as to such
holder, and any amendments effected or waivers granted or to be effected or
granted that would not have been or would not be so effected or granted but for
such consent (and the consents of all other holders of Notes that were acquired
under the same or similar conditions) shall be void and of no force or effect
except solely as to such holder.
     Section 15.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 15 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder,
under the Guaranty Agreement or under any Note shall operate as a waiver of any
rights of any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.

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SECTION 16. Notices.
     Any notice or communication pursuant or related to this Agreement 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. Any such
notice must be sent:
     (1) if to any Purchaser or its nominee, to such Purchaser or its nominee at
the address specified for such communications in Schedule A, or at such other
address as such Purchaser or its nominee shall have specified to the Company in
writing,
     (2) if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing, or
     (3) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Chief Financial Officer, or at such other
address as the Company shall have specified to the holder of each Note in
writing.
SECTION 17. Reproduction of Documents.
     This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Purchasers at the Closing (except the
Notes themselves) and (c) financial statements, certificates and other
information hereafter furnished to any holder of the Notes, may be reproduced by
any holder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such holder may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, 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 by any holder of the Notes in the regular course of
business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section 18 shall not
prohibit the Company or any other holder of Notes from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 18. Confidential Information.
     For the purposes of this Section 18, “Confidential Information” shall mean
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement, provided that such term does not include information
that (a) was publicly known or otherwise known to such Purchaser (other than
disclosures pursuant to a confidentiality or other non-disclosure agreement with
Holdings or the Company) prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by such Purchaser or any
Person acting on such Purchaser’s behalf or (c) otherwise becomes known to such
Purchaser other than through disclosure by the Company or any Subsidiary.

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Each Purchaser shall maintain the confidentiality of such Confidential
Information, provided that such Purchaser may deliver or disclose Confidential
Information to (1) its directors, officers, trustees, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by its Notes) who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 18, (2) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 18, (3) any other
holder of any Note, (4) any Person to whom such Purchaser offers to sell any
Note (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 18),
(5) any Federal or state regulatory authority having jurisdiction over such
Purchaser that requires access to such Confidential Information or (6) any other
Person to which such delivery or disclosure may be necessary or appropriate in
the opinion of such Purchaser’s counsel (i) to effect compliance with any law,
rule, regulation or order applicable to such Purchaser (and, if not prohibited
by applicable law, such Purchaser shall use commercially reasonable efforts to
give notice to the Company thereof prior to such disclosure and, in any event,
within a reasonable period of time thereafter), (ii) in response to any subpoena
or other legal process (and, if not prohibited by applicable law, such Purchaser
shall use commercially reasonable efforts to give notice to the Company thereof
prior to such disclosure and, in any event, within a reasonable period of time
thereafter), (iii) in connection with any litigation to which such Purchaser is
a party (and, subject to clause (iv) below, if not prohibited by applicable law,
such Purchaser shall use commercially reasonable efforts to give notice to the
Company thereof prior to such disclosure and, in any event, within a reasonable
period of time thereafter) or (iv) if an Event of Default has occurred and is
continuing, to the extent such Purchaser may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such Purchaser’s Notes, this
Agreement or the Guaranty Agreement. Each holder of a Note, by its acceptance of
a Note, shall be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 19 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder shall enter into an agreement with
the Company embodying the provisions of this Section 18. The terms of this
Section 18 shall not supersede, and shall be in addition to, any prior
agreement, whether written or oral, between the Company or Holdings and any
Purchaser with respect to the confidentiality of information related to the
Company or Holdings.
SECTION 19. Substitution of Purchaser.
     Each Purchaser shall have the right to substitute any one of its Affiliates
as the purchaser of the Notes that such Purchaser has agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement
to be bound by this Agreement and shall contain a confirmation by such Affiliate
of the accuracy with respect to it of the representations set forth in
Section 7. Upon receipt of such notice, wherever the word “Purchaser” is used in
this Agreement (other than in this Section 19), such word shall be deemed to
refer to such Affiliate in lieu of such Purchaser. In the event that such
Affiliate is so substituted as a purchaser hereunder and such Affiliate
thereafter transfers to such Purchaser all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such transfer, wherever the
word “Purchaser” is used in this Agreement (other than in this Section 19), such
word shall no longer be deemed to refer to such Affiliate, but shall refer to
such Purchaser, and such Purchaser shall have all the rights of an original
holder of the Notes under this Agreement.

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SECTION 20. Submission to Jurisdiction.
     Each of the Company and each Purchaser hereby irrevocably consents and
submits to the jurisdiction of any court located within the State of New York
sitting in the Borough of Manhattan and the United States District Court for the
Southern District of New York and irrevocably agrees that all actions or
proceedings relating to this Agreement or the Notes may be litigated in such
courts, and the Company irrevocably waives any objection which it may have based
on improper venue or forum non conveniens to the conduct of any proceeding in
any such court. The Company hereby appoints the Corporation Service Company as
the Company’s agent for the purpose of accepting service of process within the
State of New York and agrees to retain the Corporation Service Company and
consents that all such service of process be made by mail or messenger directed
to the Corporation Service Company, at its office located at 1133 Avenue of the
Americas, Suite 3100, New York, NY 10036, or at such other address of the
Corporation Service Company, located in the State of New York, as may be
designated by the Company by notice to each holder of Notes. Each Purchaser
hereby appoints the entity listed on Schedule A hereto as the Purchaser’s agent
for the purpose of accepting service of process within the State of New York and
agrees to retain such entity and consents that all such service of process be
made by mail or messenger directed to such entity, at its office noted on
Schedule A hereto, or at such other address of such entity, located in the State
of New York, as may be designated by such Purchaser by notice to the Company.
Nothing contained in this Section 20 shall affect the right of any holder of
Notes to serve legal process in any other manner permitted by law or to bring
any action or proceeding in the courts of any jurisdiction against the Company
to enforce a judgment obtained in the courts of any other jurisdiction.
SECTION 21. Miscellaneous.
     Section 21.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
     Section 21.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment on any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day.
     Section 21.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

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     Section 21.4. Construction.
     (a) Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
     (b) Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made by the Company for the purposes of
this Agreement, the same shall be done by the Company in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
     (c) This Agreement has been prepared by Dechert LLP, counsel to the Special
Committee of Independent Directors of Holdings, on behalf of Holdings.
     Section 21.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
     Section 21.6. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York without regard to conflict of law principles (except
for New York General Obligations Law Section 5-1401).
*     *     *     *     *

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     The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set forth.

                      Very truly yours,    
 
                    XO Communications, LLC    
 
               
 
  By   /s/ Carl J. Grivner                  
 
               
 
      Its   Manager    
 
         
 
   

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The foregoing is hereby agreed
to as of the date thereof.
Arnos Corp.

         
By
    /s/  Keith Cozza    
 
       

         
Its
  Authorized Signatory    
 
       

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Information Relating to Purchasers

             
 
  Principal Amount of    
Name and Address of Purchaser
  Notes to Be Purchased    
 
           
Arnos Corp.
  $ 75,000,000      
c/o Icahn Associates Corp.
           
767 Fifth Avenue
           
47th Floor
           
New York, NY 10153
           

             
(1)
  All payments by wire transfer of immediately available funds to:   To be
provided prior to each relevant payment date.    
 
           
 
  with sufficient information to identify the source and application of such
funds.        
 
           
(2)
  All notices of payments and written   Arnos Corp.    
 
  confirmations of such wire transfers:   c/o Icahn Associates Corp.    
 
      767 Fifth Avenue    
 
      47th Floor    
 
      New York, NY 10153    
 
           
(3)
  All other communications   Arnos Corp.    
 
      c/o Icahn Associates Corp.    
 
      767 Fifth Avenue    
 
      47th Floor    
 
      New York, NY 10153    
 
           
(4)
  Agent for service of process:   Icahn Associates Corp.    
 
      767 Fifth Avenue    
 
      47th Floor    
 
      New York, NY 10153    

Schedule A
(to Note Purchase Agreement)

 

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DEFINED TERMS
     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
     “Adverse Proceeding” shall mean any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of the Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign, whether pending or, to the knowledge of any Responsible
Officer, threatened against or affecting Company or any of its Subsidiaries or
any property of the Company or any of its Subsidiaries.
     “Affiliate” shall mean, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise,
provided, however, no Person shall be considered an Affiliate of the Company or
its Subsidiaries if neither the Company nor one of its Subsidiaries owns any
equity interest in such Person.
     “Business Day” shall mean any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York are required or authorized to be
closed.
     “Capital Stock” shall mean any and all shares, interests, participations or
other equivalents (however designated including, without limitation, phantom
stock or stock appreciation rights) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
     “Closing” is defined in Section 3.
     “Company” shall mean XO Communications, LLC, a Delaware limited liability
company, or any successor thereto.
     “Confidential Information” is defined in Section 18.
     “Contractual Obligation” shall mean, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
     “Default” shall mean an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
     “Default Rate” shall mean that rate of cash interest that is 11.5%.
Schedule B
(to Note Purchase Agreement)

 

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     “Event of Default” is defined in Section 10.
     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
     “Financial Officer Certification” shall mean, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer or treasurer of the Company that such financial
statements fairly present, in all material respects, the financial condition of
the Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments.
     “GAAP” shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
     “Governmental Authority” shall mean any federal, state, municipal, national
or other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
     “Governmental Authorization” shall mean any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
     “Guarantor” shall mean: Holdings; Telecommunications of Nevada, LLC; V&K
Holdings, Inc.; XO International Holdings, Inc.; XO International, Inc.; XO
Services, Inc.; and XO Nevada Merger Sub, Inc. For purposes of this Agreement,
the term Guarantor shall also include any entity that becomes party to the
Guaranty Agreement by joinder after the date hereof commencing on the date of
execution of any such joinder.
     “Guaranty Agreement” is defined in Section 2.2.
     “holder” shall mean, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 12.1.
     “Holdings” shall mean XO Holdings, Inc., a Delaware corporation.
     “Indebtedness” shall mean, with respect to any Person, any indebtedness of
such Person (excluding accrued expenses and trade payables), whether or not
contingent (1) in respect of borrowed money, (2) evidenced by bonds, notes,
debentures or similar instruments or letters of credit (for reimbursement
agreements in respect thereof) or (3) in respect of banker’s acceptances.
     “Investment Company Act” shall mean the Investment Company Act of 1940, as
amended.
     “Lien” shall mean (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.

B-2

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     “Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
     “Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Significant Subsidiaries, taken as a whole, (b) the ability of
the Company to perform its material obligations under this Agreement and the
Notes or (c) the validity or enforceability of this Agreement, the Guaranty
Agreement or the Notes.
     “Notes” is defined in Section 1.1.
     “Officer’s Certificate” shall mean a certificate of a Senior Financial
Officer or of any other officer of the Company or a Guarantor, as applicable,
whose responsibilities extend to the subject matter of such certificate.
     “Organizational Documents” shall mean (i) with respect to any corporation,
its certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect to any limited partnership, its certificate of
limited partnership, as amended, and its partnership agreement, as amended,
(iii) with respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company, its articles of
organization, as amended, and its operating agreement, as amended. In the event
any term or condition of this Agreement or the Guaranty Agreement requires any
Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document” shall
only be to a document of a type customarily certified by such governmental
official.
     “Person” shall mean natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
     “PIK Amount” is defined in Section 1.2.
     “Purchasers” is defined in the preamble to this Agreement.
     “Required Holders” shall mean, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding.
     “Responsible Officer” shall mean the Chief Executive Officer of Holdings,
the Chief Financial Officer of Holdings, the General Counsel of Holdings.
     “Securities” shall mean any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
“securities” or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

B-3

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     “Securities Act” shall mean the Securities Act of 1933, as amended.
     “Senior Financial Officer” shall mean the chief financial officer,
principal accounting officer, director of global finance, treasurer or
comptroller of the Company.
     “Senior Secured Facility” shall mean the Amended and Restated Credit and
Guaranty Agreement, dated as of January 16, 2003 (as amended, supplemented or
otherwise modified through the date hereof), by and among XO Communications, LLC
(as successor by merger to XO Communications, Inc.), certain affiliates and
subsidiaries of XO Communications, LLC, as guarantors, the lenders party thereto
from time to time and Mizuho Corporate Bank, Ltd., as Administrative Agent.
     “Significant Subsidiary” shall mean a Subsidiary, i.e., a “restricted
subsidiary”, that is a “significant subsidiary” as defined in Rule 1-02(w) of
Regulation S-X or is otherwise designated a Significant Subsidiary by the
Company; provided that the relevant percentage of consolidated revenues,
consolidated assets and consolidated net income of the Company and its
Subsidiaries which are measured for purposes of this definition shall be 1%, and
not as otherwise specified in such Rule.
     “Subsequent Closing” is defined in Section 3.
     “Subsidiary” shall mean, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
“qualifying share” of the former Person shall be deemed to be outstanding.
Notwithstanding the foregoing, for purposes of Sections 6 and 9, Holdings and
V&K Holdings, Inc. shall be deemed to be Subsidiaries.
     “Tax” shall mean any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.

B-4

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Form of Note
This note has not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), or any state securities laws. neither this note nor any
interest or participation herein may be reoffered, sold, assigned, transferred,
pledged, encumbered or otherwise disposed of in the absence of such registration
unless such transaction is exempt from, or not subject to, the registration
requirements of the Securities Act.
XO Communications, LLC
Senior Note due April 15, 2009

No.                       , 2008 $                                            

     For Value Received, the undersigned, XO Communications, LLC (herein called
the “Company”), a limited liability company organized and existing under the
laws of the State of Delaware, hereby promises to pay to                     ,
or registered assigns, the principal sum of                      Dollars on
April 15, 2009. Unless interest is paid in cash as provided below, the unpaid
principal amount of the Notes shall bear interest at the rate of 11.5% per
annum, which amounts shall be capitalized and added to the principal amount of
the Notes on April 15, 2008 and quarterly thereafter on July 15, 2008,
October 15, 2008, January 15, 2009 and April 15, 2009 without further action on
the part of the Company or any Purchaser (the “PIK Amount”). At the election of
the Company and following approval by a majority of Holdings’ disinterested
independent directors, interest on the unpaid principal amount of the Notes may
be paid on a cash basis, in which case such interest shall accrue from the
preceding interest payment date, at the rate of 9.5% per annum, and shall be
payable on April 15, 2008 and quarterly in arrears thereafter on July 15, 2008,
October 15, 2008, January 15, 2009 and April 15, 2009. All computations of
interest shall be made on the basis of a 360-day year consisting of twelve
30-day months. To the extent permitted by law, any overdue payment (including
any overdue prepayment) of principal and any overdue payment of interest shall
bear cash interest at the Default Rate, as defined in the Note Purchase
Agreement.
     Payments of principal of and interest on this Note are to be made in lawful
money of the United States of America to the holder hereof at the address set
forth in the Note Purchase Agreement referred to below.
     This Note is one of the Senior Notes due April 15, 2009 (herein called the
“Notes”) issued pursuant to that certain Note Purchase Agreement dated as of
March 13, 2008 (as from time to time amended, the “Note Purchase Agreement”),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 18 of the Note Purchase Agreement and (ii) to have made the
representations set forth in Section 7 of the Note Purchase Agreement.
Exhibit 1
(to Note Purchase Agreement)

 

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     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder’s attorney duly authorized in
writing, a new Note for a like principal amount (after giving effect to any
accrued interest added to the principal thereof) shall be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
     This Note is subject to optional prepayment, in whole or in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price and with the effect provided
in the Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, 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).

                      XO Communications, LLC    
 
               
 
  By                          
 
               
 
      Its        
 
               

 

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XO Communications, LLC
OFFICER’S CERTIFICATE
          The undersigned does hereby certify that pursuant to Section 4.3(a)(1)
of the Note Purchase Agreement, dated as of March 13, 2008, between XO
Communications, LLC (the “Company”) and the purchasers named therein, relating
to the issuance and sale of up to $145,000,000 aggregate principal amount of its
Senior Notes due April 15, 2009 (the “Note Purchase Agreement”):
          1. The Company has performed and complied with all covenants and
conditions required by the Note Purchase Agreement that are required to be
performed or complied with by it on or prior to the Closing.
          2. The conditions set forth in Section 4 of the Note Purchase
Agreement have been satisfied as of the Closing.
          3. The representations and warranties of the Company contained in
Section 6 of the Note Purchase Agreement are true and correct in all material
respects as of the Closing.
          Capitalized terms used but not defined herein have the respective
meanings given to them in the Note Purchase Agreement.
[Remainder of this page intentionally left blank.]
Exhibit 4.3(a)(1)
(to Note Purchase Agreement)

 

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     IN WITNESS WHEREOF, the undersigned have executed this Officer’s
Certificate as of the date first set forth above.

                  By:           Name:   Carl J. Grivner        Title:   Manager 
   

 

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[NAME OF GUARANTOR]
OFFICER’S CERTIFICATE
          The undersigned does hereby certify on behalf of [name of Guarantor]
(the “Company”), that pursuant to Section 4.3(a)(2) of the Note Purchase
Agreement, dated as of March 13, 2008, between XO Communications, LLC and the
purchasers named therein, relating to the issuance and sale of up to
$145,000,000 aggregate principal amount of XO Communications, LLC Senior Notes
due April 15, 2009 (the “Note Purchase Agreement”):
          1. To the extent applicable, the Company has performed and complied
with all agreements and conditions contained in the Note Purchase Agreement and
the Guaranty Agreement that are required to be performed or complied with by it
on or prior to the Closing.
          Capitalized terms used but not defined herein have the respective
meanings given to them in the Note Purchase Agreement.
[Remainder of this page intentionally left blank.]
Exhibit 4.3(a)(2)
(to Note Purchase Agreement)

 

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     IN WITNESS WHEREOF, the undersigned have executed this Officer’s
Certificate as of the date first set forth above.

                  By:           Name:           Title:        

 

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XO Communications, LLC
SECRETARY’S CERTIFICATE
          The undersigned, Simone Wu, being the Secretary of XO Communications,
LLC, (the “Company”) hereby certifies on behalf the Company that, pursuant to
Section 4.3(b)(1) of the Note Purchase Agreement, dated as of March 13, 2008,
between the Company and the purchasers named therein, relating to the issuance
and sale of up to $145,000,000 aggregate principal amount of its Senior Notes
due April 15, 2009 (the “Note Purchase Agreement”):
          1. Attached hereto as Exhibit A is a true and correct copy of the
Company’s Certificate of Formation, as amended to date (the “Certificate”). Such
Certificate is in full force and effect as of the date hereof, and there are no
proceedings currently in process or contemplated to amend such Certificate.
          2. Attached hereto as Exhibit B is a true and correct copy of the
Company’s Certificate of Merger filed February 28, 2006.
          3. Attached hereto as Exhibit C is a true and correct copy of the
Company’s Limited Liability Company Agreement (the “LLC Agreement”). Such LLC
Agreement is in full force and effect as of the date hereof, and there are no
proceedings currently in process or contemplated to amend such LLC Agreement.
          4. Attached hereto as Exhibit D is a true and correct copy of the
resolutions adopted by Written Consent of the Managing Board in Lieu of Special
Meeting approving the Note Purchase Agreement and the transactions contemplated
thereby, and no other resolutions have been adopted relating to the subject
matter thereof by the Managing Board or any committee thereof. Said resolutions
have not been altered, modified, rescinded or amended and are in full force and
effect, and there are no proceedings currently in process or contemplated to
amend, annul, rescind, repeal, revoke or supplement such resolutions.
          5. Attached hereto as Exhibit E are the signature and titles of the
[managers][officers of the sole member] of the Company executing the Note
Purchase Agreement or any other related agreement to be executed and delivered
by the Company as or the date hereof.
          6. No action is pending in contemplation of merger, consolidation or
liquidation, dissolution or reorganization of the Company or for the sale, lease
or other transfer of all or substantially all of its assets.
          7. Each manager who signed the Note Purchase Agreement was duly
elected or appointed.
Exhibit 4.3(b)(1)
(to Note Purchase Agreement)

 

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     IN WITNESS WHEREOF, I have set my hand hereto as of the date first set
forth above.

         
 
 
 
Simone Wu    
 
  Secretary        

     I, Carl J. Grivner, Manager of the Company, hereby certify that [Simone Wu]
is the duly elected, qualified and acting Secretary of the Company, and that the
signature appearing above is [her] genuine signature.

                  By:           Carl J. Grivner        Manager     

 

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[NAME OF GUARANTOR]
SECRETARY’S CERTIFICATE
          The undersigned, [                    ], being the Secretary of [name
of Guarantor], (the “Company”) hereby certifies on behalf the Company that,
pursuant to Section 4.3(b)(2) of the Note Purchase Agreement, dated as of
March 13, 2008, between the XO Communications, LLC and the purchasers named
therein, relating to the issuance and sale of up to $145,000,000 aggregate
principal amount of XO Communications, LLC Senior Notes due April 15, 2009 (the
“Note Purchase Agreement”):
          1. Attached hereto as Exhibit A is a true and correct copy of the
Company’s Certificate of [Incorporation][Formation], as amended to date (the
“Certificate”). Such Certificate is in full force and effect as of the date
hereof, and there are no proceedings currently in process or contemplated to
amend such Certificate.
          2. Attached hereto as Exhibit B is a true and correct copy of the
Company’s [Bylaws][Limited Liability Company Agreement] (the “[Bylaws][LLC
Agreement]”). Such [Bylaws] [LLC Agreement] [are][is] in full force and effect
as of the date hereof, and there are no proceedings currently in process or
contemplated to amend such [Bylaws] [LLC Agreement].
          3. Attached hereto as Exhibit C is a true and correct copy of the
resolutions adopted by Written Consent of the [Managing Board][Board of
Directors] in Lieu of Special Meeting approving the Guaranty Agreement and the
transactions contemplated thereby, and no other resolutions have been adopted
relating to the subject matter thereof by the [Managing Board][Board of
Directors] or any committee thereof. Said resolutions have not been altered,
modified, rescinded or amended and are in full force and effect, and there are
no proceedings currently in process or contemplated to amend, annul, rescind,
repeal, revoke or supplement such resolutions.
          4. Attached hereto as Exhibit D are the signature and titles of the
[managers][officers] of the Company executing the Guaranty Agreement or any
other related agreement to be executed and delivered by the Company as or the
date hereof.
          5. No action is pending in contemplation of merger, consolidation or
liquidation, dissolution or reorganization of the Company or for the sale, lease
or other transfer of all or substantially all of its assets.
          6. Each [manager][officer] who signed the Guaranty Agreement or any
related agreements was duly elected or appointed.
Exhibit 4.3(b)(2)
(to Note Purchase Agreement)

 

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     IN WITNESS WHEREOF, I have set my hand hereto as of the date first set
forth above.

         
 
 
 
[                    ]    
 
  Secretary        

     I, [                    ], [Chief Executive Officer] of the Company, hereby
certify that [                    ] is the duly elected, qualified and acting
Secretary of the Company, and that the signature appearing above is [her][his]
genuine signature.

                  By:           [                    ]        [Chief Executive
Officer]     

 

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FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY AND THE GUARANTORS
     The closing opinion of Pillsbury Winthrop Shaw Pittman LLP, special counsel
for the Company which is called for by Section 4.5 of the Agreement, shall be
dated the date of the Closing and addressed to each Purchaser, shall be
reasonably satisfactory in scope and form to each Purchaser and shall be to the
effect that:
          1. The Company is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware, has the
limited liability company power and authority to execute and perform the
Agreement and to issue each Note and has the full limited liability company
power and authority to conduct the activities in which it is now engaged.
          2. The Agreement has been duly authorized by all necessary limited
liability company action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding contract
of the Company enforceable in accordance with its terms.
          3. Each Note has been duly authorized by all necessary limited
liability company action on the part of the Company, has been duly executed and
delivered by the Company and will, upon disbursement of the loan evidenced by
such Note, constitute the legal, valid and binding obligation of the Company, in
each case enforceable against the Company in accordance with its terms.
          4. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Agreement do not conflict with or result in
any breach of any of the provisions of or constitute a default under or result
in the creation or imposition of any Lien upon any of the property of the
Company pursuant to (i) the provisions of the organizational documents of the
Company, (ii) the Senior Secured Facility or (iii) generally applicable New York
law (as defined in such opinion letter, but with specific exclusion of federal
and state telecommunications laws).
          5. The issuance, sale and delivery of each Note under the
circumstances contemplated by the Agreement does not, under existing law,
require the registration of such Note under the Securities Act or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
          6. The Company is not an “investment company” as such term is defined
in the Investment Company Act of 1940, as amended.
          7. The issuance of the Notes and the use of the proceeds of the sale
of the Notes in accordance with the provisions of and contemplated by the
Agreement do not violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
     The closing opinion will contain customary qualifications and assumptions,
including, but not limited to, applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and other similar laws affecting
creditors’ rights generally. Pillsbury Winthrop Shaw Pittman LLP
Exhibit 4.5
(to Note Purchase Agreement)

 

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will also be relying on the closing opinion of Kelley Drye & Warren LLP, special
counsel for the Company and the Guarantors, to the extent such reliance is
required or necessary.
**********
     The closing opinion of Morrison & Foerster LLP, which is called for by
Section 4.5 of the Agreement, shall be dated the date of the Closing and
addressed to each Purchaser, shall be reasonably satisfactory in scope and form
to each Purchaser and shall be to the effect that:
          1. Each Corporate Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified and in good standing in the states listed opposite its
name in the exhibit hereto. The LLC Guarantor is a limited liability company
duly formed, existing and in good standing under the laws of the State of
Delaware, and is in good standing and registered to do business in the states
listed opposite its name in the exhibit hereto.
          2. Each Corporate Guarantor has the corporate power and authority to
execute and deliver, and to perform and observe the provisions of, the Guaranty
Agreement. The LLC Guarantor has the requisite power and authority as a limited
liability company to execute and deliver, and to perform and observe the
provisions of, the Guaranty Agreement.
          3. The Guaranty Agreement has been duly authorized by each of the
Guarantors, and the Guaranty Agreement have been duly executed and delivered by
each such Guarantor. The Guaranty Agreement constitutes the valid and binding
obligation of each of the Guarantors, enforceable against each such Guarantors
in accordance with its terms.
          4. The execution, delivery and performance of the Guaranty Agreement
by the Corporate Guarantors are not in violation of their respective
Certificates of Incorporation and Bylaws. The execution, delivery and
performance of the Guaranty Agreement by the LLC Guarantor is not in violation
of its Certificate of Formation and Limited Liability Company Agreement.
          5. The execution, delivery and performance of the Guaranty Agreement
by each of the Guarantors will not violate or result in a breach of any of the
terms of or constitute a default under or (except as contemplated in the
Guaranty Agreement) result in the creation of any lien, charge or encumbrance on
any property or assets of any Guarantor, pursuant to the terms of any indenture,
mortgage, deed of trust or other material agreement or order described in the
Officer’s Certificates.
          6. None of the Guarantors is, as of the date hereof, required to be
registered as an investment company under the Investment Company Act of 1940, as
amended.
     The closing opinion will contain customary qualifications and assumptions,
including, but not limited to, applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and other similar laws affecting
creditors’ rights generally. Morrison & Foerster LLP will also be relying on the
closing opinion of Kelley Drye & Warren LLP, special counsel for the Company and
the Guarantors, to the extent such reliance is required or necessary.
**********

 

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     The closing opinion of Kelley Drye & Warren LLP, which is called for by
Section 4.5 of the Agreement, shall be dated the date of the Closing and
Subsequent Closing and addressed to each Purchaser, shall be reasonably
satisfactory in scope and form to each Purchaser and shall be to the effect
that:
          1. The XO Parties hold all necessary authorizations from the FCC to
provide the international and interstate telecommunications services that, to
our knowledge, the XO Parties currently are providing. No approval, consent or
withholding of objection on the part of, or filing, registration or
qualification with, the FCC is necessary in connection with the execution,
delivery or performance (a) by the Company of the Note Agreement or the Notes or
(b) by any XO Party of the Guaranty Agreement.
          2. Attachment 1 to Schedule A appended hereto lists all of the states
in which, to our knowledge, any XO Party is authorized to provide intrastate
telecommunications services. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any State Commission
is necessary in connection with the execution, delivery or performance (a) by
the Company of the Note Agreement or the Notes or (b) by any XO Party of the
Guaranty Agreement, except for those approvals, consents or filings which, if
not obtained, would not have a material adverse effect on any of the following:
(a) the properties, business, results of operations, conditions (financial or
otherwise), stockholders’ equity, properties and prospects of the XO Parties,
taken as a whole, (b) the issuance of Notes as described in the Note Agreement
or (c) the grant of the Guaranty (any of the foregoing, a “Material Adverse
Effect”).
          3. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Note Agreement do not conflict with any law,
rule or regulation of the FCC or any State Commission, except for those
conflicts which would not have a Material Adverse Effect.
          4. The execution, delivery and performance by the XO Parties of the
Guaranty Agreement do not conflict with any law, rule or regulation of the FCC
or any State Commission, except for those conflicts which would not have a
Material Adverse Effect.