Document:

exv10w1

 

Exhibit 10.1

AMENDMENT NO. 1 TO THE

CREDIT AGREEMENT

Dated as of April 22, 2005

          AMENDMENT
NO. 1 TO THE CREDIT AGREEMENT (this “Amendment”) among COMUNICACIONES NEXTEL DE
MÉXICO, S.A. DE C.V., a sociedad anónima de capital variable organized and existing under the laws
of México (the “Borrower”), the banks, financial institutions and other institutional lenders
parties to the Credit Agreement referred to below (collectively, the
“Lenders”) and CITIBANK, N.A.,
as administrative agent (the “Agent”) for the Lenders.

          PRELIMINARY STATEMENTS:

          (1) The Borrower, the Lenders and the Agent have entered into a Credit Agreement dated as of
October 27, 2004 (such Credit Agreement, as amended, supplemented or otherwise modified through the
date hereof, the “Credit Agreement”). Capitalized terms not otherwise defined in this Amendment
have the same meanings as specified in the Credit Agreement.

          (2) The Borrower and each of the Lenders have agreed to amend the Credit Agreement to extend
the availability of the Commitments as hereinafter set forth.

          (3) Each of the Lenders are, on the terms and conditions stated below, willing to grant the
request of the Borrower and the Borrower and each of the Lenders have agreed to amend the Credit
Agreement as hereinafter set forth.

 

 

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          SECTION 1. Amendments to Credit Agreement. The Credit Agreement is, effective
as of the date hereof and subject to the satisfaction of the conditions precedent set forth in
Section 2, hereby amended by replacing the definition of “Availability Period” in Section 1.01 with
the following:

     “Availability
Period” means the period commencing on the Closing Date and ending on
May 31, 2005.”

          SECTION 2. Conditions of Effectiveness. This Amendment shall become effective as of
the date first above written when, and only when, the Agent shall have received counterparts of
this Amendment executed by the Borrower and all of the Lenders or, as to any of the Lenders, advice
satisfactory to the Agent that such Lender has executed this Amendment, and the consent, as
attached hereto, of each of the Subsidiary Guarantors (the
“Consent”). This Amendment is subject to
the provisions of Section 8.01 of the Credit Agreement, and Section 1 hereof shall become effective
when, and only when, the Agent shall have additionally received all of the following documents,
each such document (unless otherwise specified) dated the date of receipt thereof by the Agent
(unless otherwise specified) and in sufficient copies for each Lender, in form and substance
satisfactory to the Agent (unless otherwise specified) and in sufficient copies for each Lender:

     (a) Copies of the (A) resolutions of the Board of Directors and/or Shareholders of each
Loan Party approving this Amendment, (B) the current by-laws (estatutos sociales) of each
Loan Party as in effect on the date the resolutions specified in clause (A) were adopted,
(C) a power of attorney authorizing the relevant officers of each Loan Party to execute this
Amendment and any other document pertaining to the same and (D) all documents evidencing
other necessary corporate action and governmental approvals, if any, with respect to this
Amendment and the Consent and a certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the absence of any change or amendment to the by-laws (estatutos
sociales) of each Loan Party since the date the resolutions specified in clause (A) were
adopted.

     (b) A certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of the officers of such Loan Party authorized to
sign this Amendment and the other documents to be delivered hereunder.

     (c) Evidence that all fees and expenses of the Agent (including the fees and expenses
of counsel to the Agent) in connection with the execution of this Amendment have been or
will be promptly paid by the Borrower.

     (d) A certificate signed by a duly authorized officer of the Borrower stating that:

     (i) The representations and warranties contained in Section 4 below are
correct on and as of the date of such certificate as though made on and as of
such date; and

 

 

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     (ii) No event has occurred and is continuing that constitutes a
Default.

          SECTION
3. Representations and Warranties of the Borrower. The Borrower represents
and warrants as follows:

     (a) Each Loan Party is a limited liability corporation with variable capital (sociedad
anonima de capital variable) duly existing and legally incorporated under the laws of Mexico
and has all requisite corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own, lease and operate its properties
and to carry on its business as now conducted and as proposed to be conducted.

     (b) The execution, delivery and performance by each Loan Party of this Amendment and
the Consent and the consummation of the transactions contemplated hereby and thereby, (i)
are within each Loan Party’s corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (A) the by-laws (estatutos sociales) of such Loan
Party or (B) any law, regulation or any material contractual obligation binding on or
affecting such Loan Party (including, without limitation, any contractual obligation
involving payment obligations in excess of U.S. $10,000,000 or the Peso Equivalent thereof)
with respect to such Loan Party and (ii) do not result in the imposition of any Lien on any
asset of such Loan Party.

     (c) No authorization or approval or other action by, or notice to or filing with, any
governmental authority or regulatory body or any other third party is required for the due
execution, delivery and performance by any Loan Party of this Amendment (other than filings
that such Loan Party is required to make, if any, for tax purposes, with the Ministry of
Finance, all of which have been duly made or obtained) or the Consent.

     (d) This Amendment and the Consent will be duly executed and delivered by each Loan
Party that is a party hereto or thereto. This Amendment and the Consent when delivered will
be a legal, valid and binding obligation of each Loan Party that is a party hereto or
thereto enforceable against such Loan Party in accordance with its terms.

     (e) There is no pending or to the best knowledge of the Borrower or its Material
Subsidiaries, threatened action, suit, investigation, litigation or proceeding (including,
without limitation, any Environmental Action) affecting any Loan Party or any of its
Subsidiaries before any court, governmental agency or arbitrator that (i) if adversely
determined, would be likely to have a Material Adverse Effect, except as previously
disclosed in Schedule 3.01(d) of the Credit Agreement or (ii) purports to affect the
legality, validity or enforceability of any Loan Documents, or the consummation of the
transactions contemplated hereby or thereby.

     (f) The Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board
of Governors of the U.S. Federal Reserve System), and no proceeds of the Loans will be used
to purchase or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

 

 

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     (g) Each Loan Party and each of their respective Subsidiaries has filed, has caused to be
filed or has been included in all tax returns (national, departmental, local, municipal and
foreign) required to be filed and has paid all taxes, assessments, fees, related liabilities and
other charges (including interest and penalties) due with respect to the years covered by such
returns, except where such taxes or liabilities are being contested in good faith and by proper
proceedings.

     (h) Each Loan Party and each of their respective Subsidiaries is in material compliance
with all applicable laws, ordinances, rules, regulations and requirements of all governmental
authorities (including, without limitation, all governmental licenses, certificates, permits,
franchises and other governmental authorizations and approvals, (including, without limitation, the
Concession Titles) necessary to the ownership of its properties or to the conduct of its business,
Environmental Laws, and laws with respect to social security and pension fund obligations, final
judgments and court orders.)

     (i) To the best of any Loan Party’s knowledge, no income, stamp or other taxes (other
than taxes on, or measured by, net income or net profits) or levies, imposts, deductions, charges,
compulsory loans or withholdings whatsoever are or will be, under applicable law in Mexico,
imposed, assessed, levied or collected by Mexico or any political subdivision or taxing authority
thereof or therein either (i) on or by virtue of the execution, delivery, performance, enforcement
or admissibility into evidence of this Amendment or the Consent or (ii) on any payment to be made
by any Loan Party pursuant to this Amendment, the Consent, or any other Loan Document other than
withholding taxes payable by any Loan Party pursuant to any Loan Document on payments of interest,
commissions and fees, made by any Loan Party to a non resident of Mexico for tax purposes.

     (j) Each Loan Party is subject to civil and commercial law with respect to its
obligations under this Amendment and the Consent, and the execution, delivery and performance by
such Loan Party of this Amendment or the Consent, as the case may be, constitute private and
commercial acts (jure gestionis acts) rather than public or governmental acts (jure
imperil acts). None of the Loan Parties or any of their Subsidiaries or any of their respective
properties has any immunity from jurisdiction of any court or from set-off or any legal process
(whether through service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) under the laws of Mexico. Each Loan Party’s choice of governing law as New
York law and its consent to submission to the jurisdiction of New York federal and state courts
under this Amendment is legal, valid and binding under Mexican Law.

     (k) This Amendment, the Credit Agreement as amended hereby, and the Consent are each in
proper legal form under the law of Mexico for the enforcement thereof against each Loan Party which
is party thereto under the law of Mexico; and to ensure the legality, validity, enforceability or
admissibility in evidence of this Amendment, the Credit Agreement as amended hereby, and the
Consent in Mexico it is not necessary that any such document or any other document be registered,
filed or recorded with any court or other authority in Mexico or that any stamp or similar tax be
paid on or in respect of any document, except that in the event that any legal proceedings

 

 

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with respect to this Amendment, the Credit Agreement as amended hereby, or the Consent are brought
in the courts of Mexico, a Spanish translation of the document required in such proceedings
prepared by a Mexican court-approved translator would have to be approved by the court after the
defendant had been given an opportunity to be heard with respect to the accuracy of such
translation, and the proceedings would thereafter be based upon the translated documents. Any
judgment against any Loan Party of a state or United States federal court in the State of New York,
United States is capable of being enforced in the courts of Mexico; except that if any legal
proceedings for the enforcement of such judgment are brought in the courts of Mexico, a Spanish
translation of such judgment prepared by a Mexican court-approved translator would have to be
approved by the court after the defendant has been given an opportunity to be heard with respect to
the accuracy of the translation, and the proceedings would thereafter be based on the translated
judgment. There is no requirement for the Agent, nor any Lender, to be licensed or qualified with
any governmental authority solely by reason of the execution and performance of this Amendment, the
Credit Agreement as amended hereby, or the Consent.

     (l) Neither the Borrower nor any of its Subsidiaries is an “investment company”, or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”, as
such terms are defined in the Investment Company Act of 1940, as amended.

     (m) No information, exhibit or report furnished by or on behalf of any Loan Party to the
Agent or the Lenders in connection with the negotiation and execution of this Amendment or pursuant
to the terms of this Amendment contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made therein not misleading.

     (n) There are no strikes, slowdowns or work stoppages, and, to the best knowledge of the
Borrower, none is currently threatened, by the employees of the Borrower or any of its Material
Subsidiaries that could reasonably be expected to have a Material Adverse Effect.

     (o) Each Loan Party and each of the Borrower’s Material Subsidiaries (excluding Multifon,
S.A. de C.V., until such time as Multifon, S.A. de C.V. becomes Solvent pursuant to the
requirements of Section 5.01(n) of the Credit Agreement) is and immediately after the execution and
delivery of this Amendment will be Solvent.

 

 

 6

          SECTION
4. Reference to and Effect on the Loan Documents. (a) On and after
the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference
in the Notes and each of the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Amendment.

          (b) The Credit Agreement, as specifically amended by this Amendment, is and shall continue to
be in full force and effect and are hereby in all respects ratified and confirmed.

          (c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Agent under the Credit Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Credit Agreement or any of the other Loan Documents.

          SECTION 5. Costs and Expenses. The Borrower agrees to pay on demand all costs and
expenses of the Agent in connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment and the other instruments and documents to be
delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for
the Agent) in accordance with the terms of Section 8.04 of the Credit Agreement.

          SECTION 6. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute but one
and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment
by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

          SECTION 7. Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 
	 	COMUNICACIONES NEXTEL DE

 MEXICO, S.A. DE C.V.

as Borrower

 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP & General Counsel	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP 	 
	 	 	 	 
	 

 

 

 8

	 	 	 	 	 
	 	CITIBANK, N.A. 

as Administrative Agent 

 	 
	 	By:  	/s/ Carlos Corona
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 

 

 

 9

	 	 	 	 	 
	 	BANCO DE CREDITO DEL PERU,

as Lender 

 	 
	 	By:  	/s/ Alfredo Montero
 	 
	 	 	Title: General Manager 	 
	 	 	 	 
	 
	 	 	 
	 	  	/s/ Jose Larrabure
 	 
	 	 	Title: Assistant Vice President 	 
	 	 	 	 
	 

 

 

 10

	 	 	 	 	 
	 	STANDARD CHARTERED BANK, 

as Lender

 	 
	 	By:  	/s/ Monica Molina A2385
 	 
	 	 	Title: Assistant Vice President     	 
	 	 	 	 
	 
	 	 	 
	 	  	/s/ James P. Hughes A2386
 	 
	 	 	 Vice President        	 
	 	 	 	 
	 

 

 

 11

	 	 	 	 	 
	 	SCOTIABANK INVERLAT, S.A.,

as Lender 

 	 
	 	By:  	/s/  
 	 
	 	 	Title: 	 
	 	 	 	 
	 

 

 

	 	 	 	 	 
	 	 12

ABN AMRO BANK N.V.,

as Lender 

 	 
	 	By:  	/s/  
 	 
	 	 	Title: Vice President	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ BORIS R. ESPINOZA
 	 
	 	 	Title:       VICE PRESIDENT 	 
	 	 	          TELECOMS & MEDIA FINANCE

                       LATIN AMERICA 	 
	 

 

 

13

	 	 	 	 	 
	 	BANCO MERCANTIL DEL NORTE S.A.

as Lender

 	 
	 	By:  	/s/
 	 
	 	 	Title: Director Banca Corporativa	 

	 	 	 	 	 
	 	By:  	/s/  
 	 
	 	 	Title: Director Investments 	 
	 	 	             	 

 

 

14

	 	 	 	 	 
	 	BANCO NACIONAL DE COMERCIO 

EXTERIOR, S.N.C.

as Lender

 	 
	 	By:  	/s/  LUIS ALFONSO ACOSTA COBOS
 	 
	 	 	Title: DIRECTOR CORPORATE FINANCE 	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/  BERNARDO GARCIA FRANCO
 	 
	 	 	Title: VICE PRESIDENT CORPORATE FINANCE 	 

 

 

14

	 	 	 	 	 
	 	BANCO NACIONAL DE MEXICO, S.A.

as Lender 

 	 
	 	By:  	/s/ Antonio Munioz Gumez
 	 
	 	 	Title:
DIRECTOR 	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Roberto Luis Castilto
 	 
	 	 	Title: DIRECTOR
EJECUTIVO	 

 

 

16

	 	 	 	 	 
	 	BAYERISCHE HYPO — UND 

VEREINSBANK A.G., 

as Lender

 	 
	 	By:  	/s/
URS B. Fischer
 	 
	 	 	Title: DIRECTOR        	 

	 	 	 	 	 
	 	By:  	/s/ Lara Cunha
 	 
	 	 	Title: Associate Director 	 

 

 

16

	 	 	 	 	 
	 	CITIBANK N.A., NASSAU, BAHAMAS BRANCH

as Lender

 	 
	 	By:  	/s/  LESLIE MUNROE
	 
	 	 	Title:  ATTORNEY-IN-FACT

           CITIBANK N.A.

           NASSAU, BAHAMAS BRANCH	 

 

 

18

	 	 	 	 	 
	 	EXPORT DEVELOPMENT CANADA
 As Lender	 
	 
	 	  	/s/ Luisa Rebollcdo
 	 
	 	By:  	 Luisa Rebollcdo
 	 
	 	Title:	 Financial Services Manager 	 
	 	 	 
	 	  	/s/  James Mclntyre
 	 
	 	By:  	 James Mclntyre
 	 
	 	Title:	Sr. Financial Services Manager 	 

 

 

19

	 	 	 	 	 
	 	HSBC MEXICO, S.A. 

as Lender

 	 
	 	By:  	/s/
 	 
	 	Title:	 DIRECTOR
EXECUTIVE 	 

 

 

20

	 	 	 	 	 
	 	SOCIETE GENERALE

as Lender

 	 
	 	By:  	/s/  
 	 
	 	 	Title: Managing Director 	 

 

 

21

CONSENT

Dated as of April [22], 2005

          Each of the undersigned, as Subsidiary Guarantors under the Subsidiary Guaranty dated October 27,2004 ( the “Subsidiary Guaranty” in favor
of the Agent and the Lenders Parties to the Credit Agreement referred to in the foregoing Amendment,
hereby consents to such Amendment and hereby confirms and agrees that notwithstanding the effectiveness of such
Amendment , the Subsidiary Guaranty is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all
respects, except that, on and after the effectiveness of such Amendment, each reference in the Subsidiary Guaranty to the “Credit Agreement”,
“thereunder”, “thereof” or words of like import shall mean and be a reference to the Agreement, as amended by such Amendment.

	 	 	 	 	 
	 	INVERSIONES NEXTEL DE MEXICO,

S.A. DE. C.V.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP & General Counsel	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP 	 

 

 

22

	 	 	 	 	 
	 	SERVICIOS DE

RADIOCOMUNICACION MOVIL DE 

MEXICO, S.A. DE C.V.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP & General Counsel	 

	 	 	 	 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP 	 

 

 

23

	 	 	 	 	 
	 	SISTEMAS DE COMUNICACIONES 

TRONCALES, S.A. DE C.V., as Subsidiary

Guarantor

 	 
	 	By:  	/s/  
 	 
	 	 	Title:  VP & General Counsel	 

	 	 	 	 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP 	 

 

 

24

	 	 	 	 	 
	 	TELETRANSPORTES INTEGRALES,

S.A. DE C.V., 

as Subsidiary Guarantor 

 	 
	 	By:  	/s/  
 	 
	 	 	Title: VP & General Counsel	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/  
 	 
	 	 	Title: VPexv10w1

 

Exhibit 10.1

AGREEMENT 

     This Agreement is by and among XO Communications, Inc., a Delaware corporation
(“XO” or the “Company”), certain Subsidiaries of the Company, as Guarantors, as
defined under the terms of that certain Amended and Restated Credit and Guaranty Agreement, dated
as of January 16, 2003 (the “Credit Agreement”), by and among the Company, certain
Subsidiaries of the Company, as Guarantors, the lenders identified on the signature pages thereto
(the “Lenders”), and Mizuho Corporate Bank, Ltd., as Administrative Agent (together with
its permitted successors in such capacity, the “Agent”), the  Requisite Lenders, as defined
under the terms of the Credit Agreement, and Cardiff Holding, LLC (the “Investor”), and
holder of 3,800,000 shares of the Company’s 6% Class A Convertible Preferred Stock, $0.01 par value
per share (the “Preferred Stock”).

RECITALS

     A. Pursuant to Section 10.5 of the Credit Agreement, the Requisite Lenders have the right to
waive provisions of the Credit Documents or consent to a departure of any Credit Party and such
waiver shall be effective upon written concurrence of the Requisite Lenders (capitalized terms used
herein without definition being used as defined in the Credit Agreement).

     B. The undersigned Lenders constitute the Requisite Lenders pursuant to Section 1.1 of the
Credit Agreement.

     C. The Company anticipates that it will not be in compliance with Section 6.6(b) of the Credit
Agreement for the fiscal quarters ended March 31, 2006, June 30, 2006, September 30, 2006 and
December 31, 2006.

     D. The undersigned Lenders are prepared to waive compliance by the Company with the
requirements of Section 6.6(b) of the Credit Agreement on the terms and for the periods set forth
below and for and in consideration of the covenants and agreements of the Company contained herein.

     E. The powers, preferences, and relative, participating, optional, and other special rights of
the Preferred Stock are set forth in that certain Certificate of Designations adopted and approved
by the Company’s Board of Directors on August 5, 2004 (the “Certificate”).

     NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:

 

 

AGREEMENT

     1. Waiver. Effective as of the date of this Waiver, the Requisite Lenders hereby waive
compliance by the Company and the Guarantors with the requirements of Section 6.6(b) of the Credit
Agreement for each of the four fiscal quarters ended March 31, 2006, June 30, 2006, September 30,
2006 and December 31, 2006.

     2. Acknowledgement. Except as expressly provided in Section 1, (a) the execution,
delivery, and performance of this Agreement shall not constitute a waiver of any provision of, or
operate as a waiver of any right, power, or remedy of the Agent or any Lender under the Credit
Agreement or any other Credit Document, and (b) the Credit Agreement and the other Credit Documents
shall remain in full force and effect and are hereby ratified and confirmed. The provisions of
Section 3 below provide rights in addition to and not in limitation of, those set forth in the
Credit Agreement and in the other Credit Documents.

     3. Prepayment and Repurchase Upon Consummation of a Company Sale.

     (a) Upon the consummation of any Qualifying Company Sale (as defined below), the Company will
(i) prepay the Term Loans and all other Obligations outstanding thereunder and under the Credit
Agreement and other Credit Documents in full, such payment to be made in U.S. dollars as is
required by the Credit Agreement and (ii) consummate an offer (the “Redemption Offer”) to
all of the holders of Preferred Stock to redeem all of their outstanding shares of Preferred Stock
at the Liquidation Preference thereof, (calculated through the date of such redemption) (the
“Redemption Amount”) upon the terms and subject to the conditions set forth below. A
“Qualifying Company Sale” is (i) any Company Sale pursuant to a definitive agreement entered into
on or before December 31, 2006 and (ii) any other Company Sale, regardless of the date the
applicable definitive agreement was entered into, if such Company Sale was deemed, pursuant to the
definitive agreement relating to the previous Qualifying Company Sale, to be a superior proposal to
such prior Qualifying Company Sale.

     (b) In the Redemption Offer, the Company shall offer to redeem the Preferred Stock for cash,
provided that if and to the extent the acceptance of the Redemption Offer (after giving effect to
the repayment of all Term Loans and other Obligations outstanding under the Credit Agreement as
contemplated by Section 3(a)) would leave the Company and its Subsidiaries with total cash and
marketable securities of less than $80 million, then, the Company may offer as consideration for
all or the remainder of the Redemption Amount (as the case may be) any other consideration it has
received in the Company Sale in the form of securities or debt or other financial obligations of
any kind (the “Other Consideration”), valued as follows: (i) if the Other Consideration is
assigned a dollar value in the Company Sale, it will be so valued for purposes of the Redemption
Offer; (ii) if no such value is assigned, the Other Consideration will be valued at the average of
the daily closing price therefor on the principal exchange or securities market on which it is
traded for the 10 trading days immediately preceding the Closing of the Company Sale; and (iii) if
no such market price is available for such Other Consideration, at its fair

 

 

market value (being the price that a willing buyer under no compulsion to buy would pay to a
willing seller under no compulsion to sell); provided that if the holder of a majority of the
shares of Preferred Stock outstanding at the time and a special committee of the Board of Directors
of the Company consisting solely of independent directors agree on an amount as the fair market
value then such amount shall be deemed to be the fair market value for this purpose.

     In the event that different types of Other Consideration are offered in the Redemption Offer,
the most liquid kind of Other Consideration shall be offered first, followed by the next most
liquid kind, etc.

     The Company will use all commercially reasonable efforts to (x) obtain all customary and
appropriate registration rights and other rights with respect to any Other Consideration, in each
case designed to ensure that it will be marketable within a reasonable period of time and (y) ensure
that such rights are assignable in the Redemption Offer. Any Other Consideration offered in a
Redemption Offer will be offered together with any such rights. Cash and all types of Other
Consideration shall be allocated pro rata among the accepting offerees in the respective amounts in
which each is being offered as consideration in the Redemption Offer.

     (c) The Redemption Offer shall be conditioned upon the closing of the applicable Company Sale,
and payment shall be made pursuant thereto to all properly accepting holders of Preferred Stock on
the date of such closing. The Redemption Offer shall be made in writing at least 20 Business Days
prior to the earliest reasonably anticipated date for the consummation of the Company Sale and
shall be mailed to all holders of Preferred Stock of record on the most recent practicable date
prior to such mailing. The Redemption Offer shall be made in compliance with all applicable laws
and in accordance with such procedures as the Board of Directors of the Company shall reasonable
determine, and shall remain open, subject to the right of accepting shareholders to withdraw their
acceptances at any time prior to the consummation of the Redemption Offer, until a date (the
“Redemption Date”) on which the Company Sale is consummated or such later date as
represents the minimum time required by applicable law. The Redemption Offer will require
accepting holders of Preferred Stock to surrender the certificate or certificates representing
their tendered shares to the Company, duly endorsed (or otherwise in proper form for transfer, as
determined by the Company), in the manner and at the place designated in the Redemption Offer, and
each surrendered certificate shall be canceled and retired and thereafter represent only the right
to receive the Liquidation Preference attributable to the shares so redeemed calculated as of the
Redemption Date.

     (d) The Investor agrees, on behalf of itself and any of its Affiliates who from time to time
may become holders of Preferred Stock, that it will accept the Redemption Offer to the extent that
cash is offered as consideration therefor, provided that the Investor and such Affiliates shall not
be required to accept the Redemption Offer if, but only to the extent, that such acceptance would
reduce the ownership of the Investor and its Affiliates of Preferred Stock to less than an absolute
majority of the shares of

 

 

Preferred Stock outstanding immediately following consummation of the Redemption Offer. For the
avoidance of doubt, the Investor shall in no event be required to accept any portion of the
Redemption Offer consisting of Other Consideration.

     (e) A “Company Sale” means any of the following: (i) any Change of Control of the Company,
(ii) a sale of all or substantially all of the assets or business of the Company and/or its
Subsidiaries, directly or indirectly, whether through the sale of stock of, or other equity
interests in, Subsidiaries, sale of assets, merger, consolidation, other business combination, or
any combination thereof, (ii) a sale of assets of the Company and/or its Subsidiaries (directly or
indirectly, whether through the sale of stock of, or other equity interests in, Subsidiaries, sale
of assets, merger, consolidation, other business combination or any combination thereof)
representing 50% of more of (x) the total book value of the consolidated total assets of the
Company and its Subsidiaries, exclusive of cash and marketable securities as
 of the last month-end prior to the execution of the contract providing for the actions described in this subsection (ii) (the “Contract”),
or (y) to which 50% or
more of the consolidated total revenues of the Company and its Subsidiaries from operations during
the 12-month period ending on the last month-end prior to the execution
 of the Contract are
attributable, (iii) any merger, liquidation, business combination or consolidation transaction in
which shares of the Company’s common stock are converted into the right to receive cash and/or
securities of an acquiring Person or any other entity or issuer or (iv) any other transaction or
series of related transactions having an economic effect substantially equivalent to any of the
foregoing.

     4. Governing Law. This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and shall be construed and enforced in accordance with, the internal laws of
the State of New York, without regard to conflicts of laws principles.

     5. Counterparts. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to the same document.

[Remainder of Page Intentionally Left Blank]

 

 

     IN WITNESS WHEREOF, the Lenders and the Investor have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as of the date first
written above.

LENDERS:

ARNOS CORP.

By: /s/ Edward E. Mattner

      Name: Edward E. Mattner

      Title: Vice President

HIGH RIVER LIMITED PARTNERSHIP

By: Hopper Investments, LLC, a General Partner

By: Barberry Corp, Member

By: /s/ Edward E. Mattner

      Name: Edward E. Mattner

      Title: Authorized Signatory

 

 

INVESTOR:

CARDIFF HOLDING, LLC

By: Tramore LLC, Managing Member

By: /s/ Edward E. Mattner

      Name: Edward E. Mattner

      Title: Authorized Signatory

Agreed and Acknowledged:

XO COMMUNICATIONS, INC.

/s/ William Garrahan                    

William Garrahan

Senior Vice President and Acting Chief Financial Officer

 

 

GUARANTORS:

ALLEGIANCE TELECOM OF FLORIDA, INC.

ALLEGIANCE TELECOM OF ILLINOIS, INC.

ALLEGIANCE TELECOM OF COLORADO, INC.

ALLEGIANCE TELECOM OF TEXAS, INC.

LHP EQUIPMENT, INC.

TELECOMMUNICATIONS OF NEVADA, LLC

V&K HOLDINGS, INC.

XO ASIA LIMITED

XO COLORADO, LLC

XO COMMUNICATIONS SERVICES, INC.

XO DATA SERVICES, LLC

XO DOMESTIC HOLDINGS, INC.

XO FLORIDA, INC.

XO GLOBAL COMMUNICATIONS, INC.

XO ILLINOIS, INC.

XO INTERACTIVE, INC.

XO INTERCITY HOLDINGS NO.1, LLC

XO INTERCITY HOLDINGS NO.2, LLC

XO INTERNATIONAL HOLDINGS, INC.

XO INTERNATIONAL, INC.

XO LONG DISTANCE SERVICES, INC.

XO LONG DISTANCE SERVICES (VIRGINIA), LLC

XO LMDS HOLDINGS NO. 1, INC.

XO NETWORK SERVICES (VIRGINIA) LLC

XO MANAGEMENT HOLDINGS, INC.

XO MANAGEMENT SERVICES, INC.

XO MANAGEMENT SERVICES, NEVADA, INC.

XO MINDSHARE, LLC

XO MINNESOTA, LLC

XO NEVADA MERGER SUB, INC.

XO ONE, INC.

XO SERVICES, INC.

XO TEXAS, INC.

XO VIRGINIA, LLC

/s/ William Garrahan                    

William Garrahan

Senior Vice President and Acting Chief Financial Officer

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