exv10w1






Exhibit 10.1




EXECUTION VERSION




      




XO HOLDINGS, INC.




 






STOCK PURCHASE AGREEMENT




 






7.00% Convertible Preferred Stock

9.50% Perpetual Preferred Stock




Dated as of July 25, 2008




      




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	1. ISSUANCE AND SALE OF PREFERRED STOCK
	 	 	1	 
	 
	 	 	 	 
	1.1. Issuance, Purchase and Sale
	 	 	1	 
	 
	 	 	 	 
	1.2. Closing
	 	 	2	 
	 
	 	 	 	 
	1.3. Tax Characterization
	 	 	2	 
	 
	 	 	 	 
	2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	2	 
	 
	 	 	 	 
	2.1. Organization, Qualification, Authorization
	 	 	2	 
	 
	 	 	 	 
	2.2. Material Contracts
	 	 	3	 
	 
	 	 	 	 
	2.3. Incorporation and Good Standing of Subsidiaries
	 	 	3	 
	 
	 	 	 	 
	2.4.
Compliance with Laws, Other Instruments, Etc.
	 	 	4	 
	 
	 	 	 	 
	2.5.
Governmental Authorizations, Etc.
	 	 	4	 
	 
	 	 	 	 
	2.6. Litigation; Observance of Statutes, Regulations and Orders
	 	 	4	 
	 
	 	 	 	 
	2.7. Taxes
	 	 	5	 
	 
	 	 	 	 
	2.8.
Investment Company Act and Holding Company Status, Etc.
	 	 	5	 
	 
	 	 	 	 
	2.9. Offering of Convertible Preferred Stock and Perpetual Preferred Stock
	 	 	5	 
	 
	 	 	 	 
	2.10. Capitalization
	 	 	6	 
	 
	 	 	 	 
	2.11. Fairness Opinion
	 	 	7	 
	 
	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
	 	 	7	 
	 
	 	 	 	 
	4. CONDITIONS OF CLOSING:
	 	 	8	 
	 
	 	 	 	 
	4.1. Conditions to Obligations of the Purchasers
	 	 	8	 
	 
	 	 	 	 
	4.2. Conditions to Obligations of the Company
	 	 	9	 
	 
	 	 	 	 
	5. DEFINITIONS
	 	 	10	 
	 
	 	 	 	 
	5.1. Definitions
	 	 	10	 
	 
	 	 	 	 
	6. MISCELLANEOUS
	 	 	12	 
	 
	 	 	 	 
	6.1. Successors and Assigns; No Third-Party Beneficiaries
	 	 	12	 
	 
	 	 	 	 
	6.2. Fees and Expenses
	 	 	12	 
	 
	 	 	 	 
	6.3. Notices
	 	 	13	 
	 
	 	 	 	 
	6.4. Standstill
	 	 	13	 
	 
	 	 	 	 
	6.5. Subsequent Offerings
	 	 	14	 
	 
	 	 	 	 
	6.6. Reservation of Shares
	 	 	14	 
	 
	 	 	 	 
	6.7. Entire Agreement
	 	 	14	 






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	TABLE OF CONTENTS

	(continued)

	 
	 	 	Page	 
	6.8. Waivers and Amendments
	 	 	15	 
	 
	 	 	 	 
	6.9. Governing Law
	 	 	15	 
	 
	 	 	 	 
	6.10. Severability
	 	 	15	 
	 
	 	 	 	 
	6.11. Titles and Headings
	 	 	15	 
	 
	 	 	 	 
	6.12. Signatures and Counterparts
	 	 	15	 
	 
	 	 	 	 
	6.13. Enforcement of the Agreement
	 	 	16	 
	 
	 	 	 	 
	6.14. Construction
	 	 	16	 






	 	 	 	 	 
	EXHIBIT A

	 	—
	 	Form of Certificate of Designation for Convertible Preferred Stock
	 
	EXHIBIT B

	 	—
	 	Form of Certificate of Designation for Perpetual Preferred Stock
	 
	EXHIBIT C

	 	—
	 	Form of Opinion of Counsel to the Company
	 
	EXHIBIT D

	 	—
	 	Form of Registration Rights Agreement






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STOCK PURCHASE AGREEMENT




     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of July 25, 2008 by and between XO
HOLDINGS, INC., a Delaware corporation (the “Company”) and the entities listed on the signature
pages hereto under the caption “Purchasers” (each such entity, a “Purchaser” and collectively, the
“Purchasers”).



W I T N E S S E T H:




     WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, the Company
wishes to sell to the Purchasers and the Purchasers wish to purchase from the Company an aggregate
of 555,000 shares of the Company’s 7.00% Class B Convertible Preferred Stock (the “Convertible
Preferred Stock”); and



     WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, the Company
wishes to sell to the Purchasers and the Purchasers wish to purchase from the Company an aggregate
of 225,000 shares of the Company’s 9.50% Class C Perpetual Preferred Stock (the “Perpetual
Preferred Stock” and together with the Convertible Preferred Stock, the “Preferred Stock”); and



     WHEREAS, the Purchasers and the Company desire to provide for the purchase and sale of the
Convertible Preferred Stock and Perpetual Preferred Stock and to establish certain rights and
obligations in connection therewith.



     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements set forth in this Agreement, the parties hereto hereby agree as follows:



1. ISSUANCE AND SALE OF PREFERRED STOCK.




1.1. Issuance, Purchase and Sale.




     Upon the terms and subject to the conditions set forth herein, at the Closing (as defined
below) the Company shall sell to the Purchasers, and the Purchasers shall purchase from the
Company, (a) the Convertible Preferred Stock for an aggregate purchase price of $555,000,000, which
will be satisfied through the delivery to the Company by the Purchasers for cancellation all of
their right, title and interest in the Company’s senior indebtedness set forth on Schedule
1.1, which represents all of such indebtedness held by the Purchasers and their Affiliates,
together with all rights to receive principal, interest and other payments with respect thereto,
(the “Tendered Company Debt”) free and clear of all liens, charges and other encumbrances of any
kind and payment of the remaining balance of such purchase price in cash, and (b) the
Perpetual Preferred Stock for an aggregate purchase price of $225,000,000 in cash (collectively,
the “Purchase Price”). The number of shares of Convertible Preferred Stock and Perpetual Preferred
Stock being acquired by each Purchaser, and the portion of the Purchase Price payable therefore, in
cash and in Tendered Company Debt, is set forth under such Purchaser’s name on the signature page
hereto. For the avoidance of doubt, the Purchasers together shall purchase the Preferred Stock in
a ratio of 2.46667 shares of Convertible Preferred



 









 




Stock to each 1.0 share of Perpetual Preferred Stock and 0.405405 shares of Perpetual
Preferred Stock to each 1.0 share of Convertible Preferred Stock.




1.2. Closing.




     (a) The closing of the purchase and sale of the Convertible Preferred Stock and Perpetual
Preferred Stock hereunder shall take place on July 25, 2008 (the “Closing Date”) at the offices of
Dechert LLP, 1775 I Street, N.W., Washington, DC 20006 at 10:00 a.m., subject to the prior
satisfaction or waiver of the conditions set forth in Section 4 (other than those conditions that
by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of
those conditions), or at such other place, time and/or date as shall be mutually agreed by the
Company and the Purchasers.



     (b) At the Closing, the Company shall deliver to each Purchaser certificates representing the
Convertible Preferred Stock and Perpetual Preferred Stock being purchased by such Purchaser, each
registered in the name of such Purchaser or its nominee or designee in such amounts as such
Purchaser shall specify to the Company prior to the Closing. Delivery of such certificates shall be
made against receipt by the Company of the portion of the Purchase Price payable therefor in cash
and, as applicable, Tendered Company Debt, as set forth on the signature pages hereto, which in the
case of cash shall be paid by wire transfer to an account designated by the Company. At the
Closing, each stock certificate evidencing the shares of Preferred Stock so delivered by the
Company at the Closing will be duly registered in the applicable Purchaser’s name in the Company’s
records.



1.3. Tax Characterization.




     The Purchasers and the Company agree that for income tax purposes (i) this Agreement shall
constitute a “plan of reorganization” within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder and (ii)
the exchange of the Company’s indebtedness for the Convertible Preferred Stock shall constitute a
reorganization of the Company under Section 368(a)(1)(E) of the Code.



2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.




     The Company hereby represents and warrants to each Purchaser as of the date hereof and as of
the Closing, as follows:



2.1. Organization, Qualification, Authorization.





     (A) The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and authority to own, lease
and operate its properties, to transact the business it transacts, to execute and deliver this
Agreement and the other Transaction Documents and to perform the provisions hereof and thereof
(including without limitation, the issuance of the Preferred Stock and the adoption by the Company
of each Certificate of Designations for the Preferred Stock). The



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Company is duly qualified as a foreign corporation and is in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out its business and
operations, except where the failure to be so qualified individually and in the aggregate could
not reasonably be expected to have a Material Adverse Effect.




     (B) The execution, delivery and performance of this Agreement and the other Transaction
Documents (including without limitation, the issuance of the Preferred Stock and the adoption by
the Company of each Certificate of Designations for the Preferred Stock) are within the corporate
power of the Company and have been duly authorized by all necessary corporate action on the part
of the Company, including without limitation, the unanimous approval by the Special Committee.
This Agreement and the other Transaction Documents, when executed and delivered by the Company,
are legal, valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, preference or other similar laws relating to or affecting the
enforcement of creditors’ rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law). The shares of
Preferred Stock, when issued and delivered against payment therefor pursuant to this Agreement,
will be duly and validly issued, fully paid and nonassessable. The Shares issuable upon
conversion of the Convertible Preferred Stock, when issued, will be duly and validly issued, fully
paid and nonassessable, and will have been issued in accordance with the registration or
qualification requirements of the Securities Act and any relevant state securities laws or
pursuant to valid exemptions therefrom. The shares of Preferred Stock, when issued, and the
Common Stock issuable upon conversion of the Convertible Preferred Stock, when issued, will be
free of any and all liens. The Company has reserved for issuance a sufficient number of shares of
Common Stock initially issuable upon conversion of the Convertible Preferred Stock.



2.2. Material Contracts.




     All contracts (the “Material Contracts”) required to be filed by the Company under Item 601 of
Regulation S-K of the Securities and Exchange Commission have been filed with the Securities and
Exchange Commission. All Material Contracts are valid, binding and enforceable against Company and,
to Company’s best knowledge, against the other parties thereto, in accordance with their respective
terms and all Material Contracts are in full force and effect to the extent not terminated in
accordance with their respective terms, except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.



2.3. Incorporation and Good Standing of Subsidiaries.




     Each Subsidiary is duly organized, validly existing and in good standing (to the extent such
concepts are recognized in such jurisdictions) under the laws of the jurisdiction of its
organization and is duly qualified as a foreign corporation and is in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out its business and
operations, except where the failure to be so qualified individually and in the aggregate could not
reasonably be expected to have a Material Adverse Effect. Each Subsidiary has the corporate



3









 







power and authority to (i) own or hold under lease the property it purports to own or lease,
as the case may be, and (ii) operate its properties and to transact the business it transacts.



2.4. Compliance with Laws, Other Instruments, Etc.




     The execution, delivery and performance by the Company of this Agreement and the other
Transaction Documents (including without limitation, the issuance of the Preferred Stock and the
adoption by the Company of each Certificate of Designations for the Preferred Stock) does not and
will not: (A) violate any provision of the Certificate of Incorporation or by-laws (or comparable
organizational document) of the Company or any Subsidiary; (B) result in any breach of, or
constitute a default under, or result in the creation of any lien in respect of any property of the
Company or any Subsidiary under any agreement or instrument to which the Company or any Subsidiary
is a party or by which their respective properties may be bound or affected; (C) result in a breach
of any of the terms, conditions or provisions of, or constitute a default under, or permit the
acceleration of rights under or termination of, any Material Contract; or (D) violate any Order,
law, statute, rule or regulation of any Governmental Body applicable to the Company or any
Subsidiary, except, in each case above, as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.



2.5. Governmental Authorizations, Etc.




     No consent, approval or authorization of, or registration or filing with, any Governmental
Body or any other Person is required to be obtained by the Company in connection with the
execution, delivery and performance of this Agreement and the other Transaction Documents
(including without limitation, the issuance of the Preferred Stock and the adoption by the Company
of each Certificate of Designations for the Preferred Stock), except for the filings of the
Certificates of Designation with the Secretary of State of the State of Delaware or any required
filing under the Exchange Act or the Securities Act and except where failure to obtain such
consent, approval or authorization or make such registration or filing would not reasonably be
expected to have a Material Adverse Effect.



2.6. Litigation; Observance of Statutes, Regulations and Orders.




     Except as disclosed in the SEC Reports, there are no actions, suits or proceedings (including
counterclaims) pending or, to the knowledge of the Company, threatened against the Company or any
Subsidiary or any property of the Company or any Subsidiary, in any court or before any arbitrator
of any kind or before or by any Governmental Body, except actions, suits or proceedings which could
not be reasonably expected to have a Material Adverse Effect.



     Neither the Company nor any Subsidiary is in violation of any Order, statute, rule or
regulation of any Governmental Body, except for defaults or violations which, in the aggregate,
could not be reasonably expected to have a Material Adverse Effect.



4









 





2.7. Taxes.




     The Company and its Subsidiaries have filed all material tax returns required to have been
filed by the Company with respect to each taxable period within the last six years in all
jurisdictions in which such returns are required to have been filed by them and have paid all
taxes, assessments, fees and governmental charges due and payable with respect to such returns to
the extent the same have become due and payable and before they have become delinquent, other than
those being contested in good faith by appropriate means and with respect to which the Company or a
Subsidiary, as the case may be, has set aside on its books adequate reserves in conformity with
GAAP or nonpayment of which could not be reasonably expected to have a Material Adverse Effect.



2.8. Investment Company Act and Holding Company Status, Etc.




     Neither the Company nor any Subsidiary is required to register as an investment company under
the Investment Company Act of 1940, as amended.



2.9. Offering of Convertible Preferred Stock and Perpetual Preferred Stock.





     (A) Subject to the accuracy of the Purchasers’ representations and warranties in Section 3
hereof, the offer, sale and issuance of the shares of Preferred Stock and the Common Stock
issuable upon conversion of the Convertible Preferred Stock constitute transactions exempt from
the registration requirements of the Securities Act and the qualification or registration
requirements of any applicable state securities laws and will be effected in compliance therewith.
Neither the Company nor any authorized agent acting on its behalf (i) will knowingly take any
action hereafter that would cause the loss of such exemptions and (ii) has or will sell, offer to
sell or solicit offers to buy any such security or similar securities to, or solicit offers with
respect thereto from, or enter into any preliminary conversations or negotiations relating thereto
with, any Person, so as to bring the issuance and sale of the Securities under the registration
provisions of the Securities Act or any applicable state securities laws.




     (B) The Company intends to make an offering of up to 27,750 shares of the Convertible
Preferred Stock and up to 11,250 shares of the Perpetual Preferred Stock (together as a stapled
unit of 2.46667 shares of Convertible Preferred Stock for each 1.0 share of Perpetual Preferred
Stock and 0.405405 shares of Perpetual Preferred Stock for each 1.0 share of Convertible Preferred
Stock) to certain other stockholders of the Company subsequent to the closing of the transaction
contemplated by this Agreement. Neither the Company nor, to the knowledge of the Company, any
Person acting on its behalf has taken any action (including, without limitation, any offering of
any securities of the Company under circumstances which would require, under the Securities Act,
the integration of such offering with the offering and sale of the Convertible Preferred Stock or
Perpetual Preferred Stock) which might reasonably be expected to subject the offering, issuance or
sale of the shares of Preferred Stock being offered under this Agreement to the registration
requirements of Section 5 of the Securities Act. Notwithstanding anything herein to the contrary,
the Company shall have no obligation to make



5









 







any such offering to such other stockholders and may choose in its sole and absolute
discretion not to do so.



2.10. Capitalization.





     (A) On the date hereof and immediately prior to giving effect to the transactions
contemplated hereby, the authorized capital stock of the Company consists of 1,200,000,000 shares
which consists of: (i) 1,000,000,000 shares of common stock, par value $0.01 per share (the
“Common Stock”) and (ii) 200,000,000 shares of undesignated preferred stock, par value$0.01 per
share (the “Undesignated Preferred Stock”).




     (B) On the date hereof and immediately prior to giving effect to the transactions
contemplated hereby, the issued and outstanding capital stock of the Company consists of
182,075,035 shares of Common Stock and 4,000,000 shares of 6% Class A Convertible Preferred Stock,
par value $0.01 per share (the “6% Preferred Stock”). Immediately following the issuance of the
Preferred Stock to the Purchasers as contemplated hereby, the authorized capital stock of the
Company shall consist of (A) 1,000,000,000 shares of Common Stock, and (B) 200,000,000 shares of
Undesignated Preferred Stock. Immediately following the issuance of the Preferred Stock to the
Purchasers as contemplated hereby, the issued and outstanding capital stock of the Company shall
consist of (A) 182,075,035 shares of Common Stock, (B) 4,000,000 shares of 6% Preferred Stock, (C)
555,000 shares of Convertible Preferred Stock and (D) 225,000 shares of Perpetual Preferred Stock.
All the outstanding shares of capital stock of the Company have been duly and validly issued and
are fully paid and non-assessable, and were issued in accordance with the registration or
qualification requirements of the Securities Act and any relevant state securities laws or
pursuant to valid exemptions therefrom (and no stockholder has a right of rescission or damages
with respect thereto).




     (C) Except as set forth on Schedule 2.10(C) hereto, on the Closing Date after giving effect
to the issuance of the Preferred Stock to the Purchasers as contemplated hereby, there will be no
shares of Common Stock or any other equity security of the Company issuable upon conversion,
exercise or exchange of any security of the Company nor will there be any rights, options or
warrants outstanding or other agreements to acquire shares of Common Stock or any other equity
security of the Company nor will the Company be contractually obligated to purchase, redeem or
otherwise acquire any of its outstanding shares of Capital Stock. No stockholder of the Company
is entitled to any preemptive rights, rights of first refusal or similar rights to subscribe for shares
of capital stock of the Company. Except as set forth on Schedule 2.10(C) hereto, the
Company is not a party to any agreements, understandings, trusts or other collaborative
arrangements concerning the voting or transfer of the capital stock of the Company. The Company
does not have outstanding, and has no obligation to grant or issue, any “phantom stock” or other
right measured by the profits, revenues or results of operations of the Company or any portion
thereof, or any similar rights. The Company has not declared any dividends or distributions that
remain unpaid. Schedule 2.10(C) hereto accurately sets forth as of the Closing Date after giving
effect to the issuance of the Preferred Stock to the Purchasers as contemplated hereby any and all
options, warrants and/or other securities of the Company for



6









 







which shares of Common Stock or any other equity security of the Company are issuable upon
conversion, exercise or exchange therefor, including the number of shares of Common Stock or other
equity security underlying such options, warrants and/or other securities and the applicable
conversion or exercise price therefor.



2.11. Fairness Opinion.




     The Special Committee, on behalf of the Company, has received the written opinions (or oral
opinions to be confirmed in writing) of the fairness to the Company, from a financial point of
view, of the consideration received from the sale of each of the Convertible Preferred Stock and
Perpetual Preferred Stock, based on the principal economic terms of the Convertible Preferred Stock
and Perpetual Preferred Stock, respectively, from its independent financial advisor, Cowen and
Company, LLC.



3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.




     Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as of
the date hereof and as of the Closing, as follows:



     (a) Acquisition for Investment. Such Purchaser is acquiring the Convertible Preferred
Stock and Perpetual Preferred Stock, for its own account, for investment and not with a view to the
distribution thereof within the meaning of the Securities Act.



     (b) Restricted Securities. Such Purchaser understands that (i) the Convertible
Preferred Stock, Perpetual Preferred Stock and the Shares have not been registered under the
Securities Act or any state securities laws by reason of their issuance by the Company in a
transaction exempt from the registration requirements thereof and (ii) the Convertible Preferred
Stock, any Shares issued upon conversion thereof, and the Perpetual Preferred Stock may not be sold
or otherwise disposed of unless such sale or disposition is registered under the Securities Act and
applicable state securities laws or such sale or other disposition is exempt from registration
thereunder.



     (c) Accredited Investor. Such Purchaser is an “accredited investor” (as defined in
Rule 501(a) under the Securities Act). Such Purchaser has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and risks of its
investment in the Convertible Preferred Stock and Perpetual Preferred Stock and is capable of
bearing the economic risks of such investment.



     (d) General. Such Purchaser understands that the Convertible Preferred Stock and
Perpetual Preferred Stock are being offered and sold in reliance on a transactional exemption from
the registration requirements of federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Purchaser set forth herein in order to determine the applicability of such
exemptions and the suitability of such Purchaser to acquire the Convertible Preferred Stock and
Perpetual Preferred Stock. Such Purchaser understands that no federal or state agency or any



7









 







government or governmental agency has passed upon or made any recommendation or endorsement of
the Convertible Preferred Stock and Perpetual Preferred Stock.



     (e) General Solicitation. Such Purchaser is not purchasing the Convertible Preferred
Stock or Perpetual Preferred Stock as a result of any advertisement, article, notice or other
communication regarding the Convertible Preferred Stock or Perpetual Preferred Stock published in
any newspaper, magazine or similar media or broadcast over television or radio or presented at any
seminar or any other general solicitation or general advertisement.



     (f) Authorization. Such Purchaser is a corporation or other legal entity duly
incorporated or formed, as applicable, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority to execute and deliver this Agreement
and the other Transaction Documents to which it is a party and to perform the provisions hereof and
thereof. To the extent such Purchaser holds any of the Tendered Company Debt, such Purchaser owns
such Tendered Company Debt free and clear of all liens, charges and other encumbrances of any kind,
and such Purchaser has not assigned any rights to such Tendered Company Debt to any third party
(other than the Company pursuant to this Agreement). The execution, delivery and performance of
this Agreement has been duly authorized by all necessary corporate or other action on the part of
such Purchaser. This Agreement, when executed and delivered by such Purchaser, is a legal, valid
and binding obligation of such Purchaser enforceable against such Purchaser in accordance with its
respective terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, preference or other similar laws relating to or affecting the enforcement of creditors’
rights generally and by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).



4. CONDITIONS OF CLOSING:




4.1. Conditions to Obligations of the Purchasers.




          The obligations of the Purchasers to consummate the transactions contemplated by this
Agreement are subject to fulfillment or waiver, at or before the Closing Date, of the following
conditions:



          (a) The representations and warranties made by the Company in this Agreement shall have been
true when made and shall be true on and as of the Closing Date as if made on and as of the Closing
Date;



          (b) The Company shall have performed all agreements to be performed by it under this Agreement
on or before the Closing Date;



          (c) The Company shall have delivered to Purchasers an officer’s certificate, dated the Closing
Date, certifying to the satisfaction of the conditions set forth in clauses (a) and (b) of this
Section 4.1;



8









 





     (d) The Company shall have executed and delivered a Registration Rights Agreement in the form
of Exhibit D hereto (the “Registration Rights Agreement”), and the Registration Rights Agreement
shall be in full force and effect;



     (e) The Company shall have filed Certificates of Designation in the form of Exhibits A and B
(the “Certificates of Designation”) with the Secretary of State of the State of Delaware in
accordance with the laws of the State of Delaware and such Certificates of Designation shall be in
full force and effect;



     (f) The Shares shall have been duly authorized and reserved for issuance; and



     (g) The Purchasers shall have received opinions of one or more counsel to the Company, with
respect to the matters set forth in Exhibit C, in form and substance reasonably satisfactory to the
Purchasers.



     (h) The Purchasers shall have received copies of the summary minutes of the Special Committee
and the Board of Directors approving and authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents certified as of the Closing Date by their
respective secretary or assistant secretary as being in full force and effect without modification
or amendment.



     (i) The Company shall have made or obtained, as applicable, all consents, approval orders,
authorizations, registrations, qualifications, designations, declarations, filings and consents of
any Persons, in each case that are necessary in connection with the transactions contemplated by
this Agreement and the other Transaction Documents, and each of the foregoing shall be in full
force and effect and in form and substance reasonably satisfactory to the Purchasers.



     (j) At the Closing, the sale and issuance by the Company, and the purchase by the Purchasers,
of the shares of Preferred Stock to be issued thereat and the issuance by the Company of the Shares
underlying the Convertible Preferred Stock shall be legally permitted by all applicable laws to
which any Purchaser or the Company are subject, and there shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by any Governmental Authority
directing that the transactions provided for herein or in any other Transaction Document not be
consummated as provided herein and therein.



4.2. Conditions to Obligations of the Company.




     The obligations of the Company to consummate the transactions contemplated by this Agreement
are subject to fulfillment or waiver, at or before the Closing Date, of the following conditions:



     (a) The Board of Directors and the Special Committee, on behalf of the Company, shall have
received the written opinions (or oral opinions to be confirmed in writing) of the fairness to the
Company, from a financial point of view, of the consideration received from the sale of each of the
Convertible Preferred Stock and Perpetual Preferred Stock, based on



9









 







the principal economic terms of the Convertible Preferred Stock and Perpetual Preferred Stock,
respectively, from its independent financial advisor, Cowen and Company, LLC, in such form as is
acceptable to the Board of Directors and the Special Committee;



     (b) The Purchase Price, in the case of the cash portion of the Purchase Price, shall have been
paid to the Company by wire transfer of immediately available funds to the account as specified in
writing by the Company and, in the case of the Tendered Company Debt, all of the right, title and
interest in the Tendered Company Debt shall have been assigned, transferred and delivered to the
Company, free and clear of liens, charges and other encumbrances; and



     (c) Each Purchaser shall have executed and delivered the Registration Rights Agreement, and
the Registration Rights Agreement shall be in full force and effect.



     (d) At the Closing, the sale and issuance by the Company, and the purchase by the Purchasers,
of the shares of Preferred Stock to be issued thereat shall be legally permitted by all applicable
laws to which any Purchaser or the Company are subject, and there shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by any Governmental Authority
directing that the transactions provided for herein or in any other Transaction Document not be
consummated as provided herein and therein.



5. DEFINITIONS.




5.1. Definitions.




     Except as otherwise specified or as the context may otherwise require, the following terms
shall have the respective meanings set forth below whenever used in this Agreement and shall
include the singular as well as the plural:



     “Affiliate” of any specified Person means any other Person which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under common control with,
such Person.



     “Agreement” has the meaning specified in the recitals hereto.



     “Board of Directors” means the Board of Directors of the Company or any committee of directors
lawfully exercising the relevant powers of said Board or Directors.



     “Certificates of Designation” has the meaning specified in Section 4.1.



     “Closing Date” has the meaning specified in Section 1.2.



     “Common Stock” means the Common Stock, par value $0.01 per share, of the Company.



     “control” when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the



10









 







ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.



     “Convertible Preferred Stock” has the meaning specified in the recitals hereto.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.



     “GAAP” means generally accepted accounting principles from time to time in effect in the
United States.



     “Governmental Body” means any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign.



     “Material Adverse Effect” means a material adverse effect on (i) the business, operations,
properties, assets or condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole; (ii) the ability of the Company to fully and timely perform its obligations under this
Agreement or the other Transaction Documents and to consummate the transactions contemplated hereby
and thereby; or (iii) the legality, validity, binding effect or enforceability against the Company
of this Agreement and the other Transaction Documents.



     “Perpetual Preferred Stock” has the meaning specified in the recitals hereto.



     “Order” means any written order, writ, injunction, decree, judgment, award, penalty,
determination, direction or demand.



     “Person” or “person” means and includes an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an association, a joint-stock company, an
unincorporated organization and a government or any department or agency thereof.



     “Purchase Price” has the meaning specified in Section 1.1.



     “Purchaser” has the meaning specified in the recitals hereto.



     “Registration Rights Agreement” has the meaning specified in Section 4.1(d).



     “SEC Reports” means all annual reports, quarterly reports, proxy statements and other reports
filed by the Company under the Exchange Act through the date hereof, each as filed with the SEC.



     “Securities Act” means the Securities Act of 1933, as amended.



     “Shares” means the shares of the Company’s Common Stock issuable upon conversion of the
Convertible Preferred Stock.



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     “Special Committee” means the existing Special Committee of the Company’s Board of Directors.



     “Subsidiary” of any Person means any corporation or other entity a majority of the total
combined voting power of all classes of Voting Stock of which shall, at the time as of which any
determination is being made, be owned by such Person and/or one or more of its Subsidiaries. Except
as otherwise expressly indicated herein, references to Subsidiaries shall mean Subsidiaries of the
Company.



     “Tendered Company Debt” has the meaning specified in Section 1.1.



     “Transaction Documents” means this Agreement, the Registration Rights Agreement, the
Certificates of Designations and all other documents required to be delivered hereunder at Closing.



     “Voting Stock” means, with respect to any Person, any shares of stock or other equity
interests of any class or classes of such Person whose holders are entitled under ordinary
circumstances (irrespective of whether at the time stock or other equity interests of any other
class or classes shall have or might have voting power by reason of the happening of any
contingency) to vote for the election of a majority of the directors, managers, trustees or other
governing body of such Person.



6. MISCELLANEOUS.




6.1. Successors and Assigns; No Third-Party Beneficiaries.




     This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and
their respective successors and assigns; provided, however, that no party hereto
shall assign or delegate any of the obligations created under this Agreement without the prior
written consent of the other parties hereto provided, however, that any Purchaser can assign its
rights and obligations hereunder to any one or more of its Affiliates without the consent of any
other party so long as such assignment could not reasonably be expected to have a material adverse
effect on the ability of the applicable Purchaser to fully and timely perform its obligations under
this Agreement or the other Transaction Documents and to consummate the transactions contemplated
hereby and thereby; provided, that, in the event of any assignment to an Affiliate, the Purchaser
shall continue to be bound by Section 6.4. Nothing contained in this Agreement is intended to
confer any rights or remedies under or by reason of this Agreement on any Persons other than the
parties hereto and their respective successors and permitted assigns.



6.2. Fees and Expenses.




     Except as otherwise expressly provided in this Agreement or the other Transaction Documents,
as applicable, all legal, accounting and other fees, costs and expenses of the parties hereto
incurred in connection with this Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby shall be paid by the party incurring such fees, costs or expenses.



12









 





6.3. Notices.




     All notices and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been duly given or made if delivered personally or sent by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the following
addresses:




	 	(a)	 	If to the Purchasers, to:




Arnos Corp.

c/o Icahn Associates Corp.

767 Fifth Avenue, 47th Floor

New York, NY 10153

Attn: General Counsel





	 	(b)	 	If to the Company, to:




XO Holdings, Inc.

13865 Sunrise Valley Drive

Herndon, Virginia 20171

Attn: General Counsel



or to such other persons or at such other addresses as shall be furnished by either party by like
notice to the other, and such notice or communication shall be deemed to have been given or made as
of the date so delivered or mailed. No change in any of such addresses shall be effective insofar
as notices under this Section 6.3 are concerned unless such changed address is located in the
United States of America and notice of such change shall have been given to such other party hereto
as provided in this Section 6.3.




6.4. Standstill.




     Each Purchaser agrees that neither it, nor any of its Affiliates, shall, directly or
indirectly, consummate any transaction (including the conversion of the Convertible Preferred Stock
or the 6% Preferred Stock into Common Stock, the exercise of warrants or options to purchase Common
Stock or a merger pursuant Section 253 of the Delaware General Corporation Law), if as a result of
such transaction, the Purchaser or such Affiliates would own at least 90% of the outstanding shares
of each class of the Company’s capital stock, of which class there are outstanding shares, that
absent the provisions of Section 253 of the Delaware General Corporation Law, would be entitled to
vote on a merger of the Company with or into such Purchaser or Affiliate under the Delaware General
Corporation Law, except solely as a result of (i) a tender offer for all of the outstanding shares
of Common Stock by the Purchaser or its Affiliates wherein a majority of the outstanding shares of
Common Stock not held by such Purchaser or its Affiliates are tendered or (ii) a merger or
acquisition transaction by the Purchaser or its Affiliates that has been approved by a special
committee of the Company’s Board of Directors comprised of disinterested directors in respect of
such merger or acquisition



13









 







wherein the Purchaser or its Affiliates acquire all of the outstanding Common Stock of the
Company. This Section 6.4 shall immediately terminate and be of no further force or effect upon
the consummation of a transaction pursuant to clause (i) or (ii) of this Section 6.4. For the
avoidance of doubt, this Section 6.4 shall not affect or restrict increases in the liquidation
preferences of any securities of the Company, including the Convertible Preferred Stock, as in
effect on the date hereof.



6.5. Subsequent Offerings.




     The Company intends to make an offering of up to 27,750 shares of the Convertible Preferred
Stock and up to 11,250 shares of the Perpetual Preferred Stock (together as a stapled unit of
2.46667 shares of Convertible Preferred Stock for each 1.0 share of Perpetual Preferred Stock and
0.405405 shares of Perpetual Preferred Stock for each 1.0 share of Convertible Preferred Stock) to
certain other stockholders of the Company subsequent to the closing of the transactions
contemplated by this Agreement. The Company agrees that such offering (i) will be effected
pursuant to a private placement exempt from registration under the Securities Act, (ii) will
commence as promptly as practicable following the Closing Date and (iii) will be consummated no
later than 30 days following the Closing Date. Neither the Company nor, to the knowledge of the
Company, any Person acting on its behalf will take any action (including, without limitation, any
offering of any securities of the Company under circumstances which would require, under the
Securities Act, the integration of such offering with the offering and sale of the Convertible
Preferred Stock or Perpetual Preferred Stock) which might reasonably be expected to subject the
offering, issuance or sale of the shares of Preferred Stock being offered under this Agreement to
the registration requirements of Section 5 of the Securities Act. The Company hereby agrees that
any offering of Preferred Stock shall be made as a “stapled” unit of 2.46667 shares of Convertible
Preferred Stock for each 1.0 share of Perpetual Preferred Stock offered and 0.405405 shares of
Perpetual Preferred Stock for each 1.0 share of Convertible Preferred Stock offered. For the
avoidance of doubt, after any such issuance of Preferred Stock, the Convertible Preferred Stock and
Perpetual Preferred Stock so issued will trade separately from each other and not as a “stapled”
unit. Notwithstanding anything herein to the contrary, the Company shall have no obligation to
make any such offering to such other stockholders and may choose in its sole and absolute
discretion not to do so.



6.6. Reservation of Shares.




     The Company shall at all times reserve and keep available out of its authorized and unissued
Common Stock, solely for issuance upon the conversion of the Convertible Preferred Stock, such
number of shares of Common Stock as shall from time to time be issuable upon the conversion of all
the shares of Convertible Preferred Stock then outstanding.



6.7. Entire Agreement.




     This Agreement and the other Transaction Documents and the exhibits and schedules hereto and
thereto, represent the entire agreement and understanding of the parties with reference to the
transactions set forth herein and no representations or warranties have been made in connection
with this Agreement other than those expressly set forth herein or in the



14









 







exhibits, schedules, certificates and other documents delivered in accordance herewith. This
Agreement supersedes all prior negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement, all of which are merged into this Agreement. No prior
drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible
into evidence in any action or suit involving this Agreement.



6.8. Waivers and Amendments.




     This Agreement may be amended, waived, modified or supplemented only by a written instrument
executed by each of the parties hereto and in the case of a waiver, executed by the party hereto
against whom enforcement of such waiver is sought; provided, that, Section 6.4 may only be amended
with the approval by a special committee of the Company’s Board of Directors comprised of
disinterested directors. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach, whether or not
similar, unless such waiver specifically states that it is to be construed as a continuing waiver.



6.9. Governing Law.




     This Agreement shall be governed by and interpreted and enforced in accordance with the laws
of the State of New York without regard to its conflict of laws provisions.



6.10. Severability.




     This Agreement shall be deemed severable, and the invalidity or unenforceability of any term
or provision hereof shall not affect the validity or enforceability of this Agreement or of any
other term or provision hereof; provided, however, that, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.



6.11. Titles and Headings.




     The Section headings and any table of contents contained in this Agreement are solely for
convenience of reference and shall not affect the meaning or interpretation of this Agreement or of
any term or provision hereof.



6.12. Signatures and Counterparts.




     Facsimile transmission of any signed original document and/or retransmission of any signed
facsimile transmission shall be the same as delivery of an original. At the request of either
party, the parties will confirm facsimile transmission by signing a duplicate original document.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall be considered one and the same agreement.



15









 





6.13. Enforcement of the Agreement.




     The parties hereto agree that irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions hereto, this being
in addition to any other remedy to which they are entitled at law or in equity.



6.14. Construction.




     This Agreement has been prepared by Dechert LLP, counsel to the Special Committee of
Independent Directors, on behalf of the Company.



16









 





     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.



	 	 	 	 	 
	 	XO HOLDINGS, INC.

 	 
	 	By:  	/s/ Carl J. Grivner
 	 
	 	 	Name:  	Carl J. Grivner 	 
	 	 	Title:  	Chief Executive Officer 	 
	 




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	 	 	PURCHASERS	 	 
	 
	 	 	 	 	 	 
	 	 	ARNOS CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Keith Cozza	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Keith Cozza	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 
	 	 	Shares of Convertible Preferred Stock	 	 
	 	 	Purchased: 453,535	 	 
	 	 	Purchase Price paid in Tendered	 	 
	 	 	Company Debt: $349,292,615.53	 	 
	 	 	Purchase Price paid	 	 
	 	 	in Cash: $104,242,000	 	 
	 
	 	 	 	 	 	 
	 	 	BARBERRY CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Keith Cozza	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Keith Cozza	 	 
	 

	 	Title:
	 	Treasurer	 	 
	 	 	Shares of Convertible Preferred Stock	 	 
	 	 	Purchased: 40,496	 	 
	 	 	Purchase Price paid in Tendered	 	 
	 	 	Company Debt: $40,496,391.33	 	 
	 
	 	 	 	 	 	 
	 	 	HIGH RIVER LIMITED PARTNERSHIP	 	 
	 	 	BY: Hopper Investments LLC, its general partner	 	 
	 	 	BY: Barberry Corp., its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Keith Cozza	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Keith Cozza	 	 
	 

	 	Title:
	 	Treasurer	 	 
	 	 	Shares of Convertible Preferred Stock	 	 
	 	 	Purchased: 60,969	 	 
	 	 	Purchase Price paid in Tendered	 	 
	 	 	Company Debt: $60,969,008.13	 	 






18









 






	 	 	 	 	 	 	 
	 	 	ACF INDUSTRIES HOLDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Keith Cozza	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Keith Cozza	 	 
	 

	 	Title:
	 	Vice President	 	 
	 	 	Shares of Perpetual Preferred Stock	 	 
	 	 	Purchased: 225,000	 	 
	 	 	Purchase Price paid	 	 
	 	 	in Cash: $225,000,000	 	 






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