Document:

exv10w5

 

Exhibit 10.5

TAX ALLOCATION AGREEMENT

     Agreement as of January 16, 2003 by and among Starfire Holding Corporation
(“Parent”), a Delaware corporation, having offices at 767 Fifth Avenue, New
York and XO Communications, Inc., a Delaware corporation (“XO”), having
offices at 11111 Sunset Hills Road, Reston Virginia, 20160 and the XO
Subsidiaries (as defined below).

     WHEREAS, Parent is the common parent of an affiliated group (as such term
is defined in the Internal Revenue Code of 1986, as amended, or any succeeding
law (the “Code”)) of corporations for federal income tax purposes which
includes the XO Group (as defined below):

     WHEREAS, Parent and its subsidiaries have been filing consolidated federal
income tax returns (“Consolidated Federal Returns”) and will continue to file
Consolidated Federal Returns for all periods in which Parent and XO are members
of an affiliated group (as defined in the Code);

     WHEREAS, it is contemplated that the XO Group will continue to file
separate state income or franchise tax returns unless Parent elects to file
such returns on a consolidated or combined basis with the XO Group
(“Consolidated State Returns”);

     WHEREAS, XO is undergoing a restructuring of its equity and debt pursuant
to a bankruptcy plan (the “Restructuring”);

     WHEREAS, upon completion of the Restructuring, XO will have minority
shareholders and third-party lenders; and

     WHEREAS, Parent and XO believe it is desirable to provide for the
allocation and payment of federal and state income tax liabilities and certain
related matters.

     NOW, THEREFORE, in consideration of the foregoing and of the covenants set
forth below, the parties hereto have agreed as follows:

	1.	 	Definitions.

	 	(i)	 	“XO Group” means XO together with the XO
Subsidiaries. “XO Subsidiaries” means all direct and indirect
subsidiaries of XO that are eligible to be included in a
Consolidated Return (as defined below) with XO.

 

 

	 	(ii)	 	“Consolidated Returns” mean all Consolidated
Federal Returns and Consolidated State Returns.
	 
	 	(iii)	 	“Federal Income Taxes” means any income tax
imposed under the Code including, without limitation, the
corporate income tax, the minimum tax imposed on corporations,
and the personal holding company tax.
	 
	 	(iv)	 	“State Income Taxes” means any income or
franchise tax imposed under the tax law of any state (or
political subdivision thereof) including, without limitation,
corporate income taxes and minimum taxes.
	 
	 	(v)	 	“Net Operating Loss” means the amount of any net
operating loss as defined in the Code or under the tax law of
any state.
	 
	 	(vi)	 	“Net Capital Loss” means the amount of any net
capital loss as defined in the Code or under the tax law of
any state.
	 
	 	(vii)	 	“Credit” means the amount of any tax credit
allowed under the Code or under the tax law of any state
including, without limitation, investment tax credits ad
foreign tax credits.
	 
	 	(viii)	 	The “Regulations” means the regulations and proposed
regulations issued by the Secretary of the Treasury
interpreting the Code.
	 
	 	(ix)	 	The “Consolidated Group” means the affiliated
group (as defined in the Code) of which Parent (or its
successor) is the common parent, for so long as such
affiliated group files a Consolidated Return.
	 
	 	(x)	 	“Tax Benefits” as to any entity (or group of
entities) means the Net Operating Loss, Net Capital Loss, and
Credits generated by or available to such entity (or group of
entities) and any carryforwards thereof.
	 
	 	(xi)	 	“Final Determination” shall mean the final
resolution of liability for any Tax for a taxable period, (i)
by IRS Form 870 or 870-AD (or any successor form thereto), on
the date of the final acceptance by or on behalf of a party
thereto, or by a comparable form under the laws of another
jurisdiction; except that a Form 870 or 870-AD or comparable
form that reserves (whether by its terms or by operation of
law) the right of the

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	 	 	 	taxpayer to file a claim for refund and/or the right of
taxing authority to assert a further deficiency shall not
constitute a Final Determination; (ii) by a decision,
judgment, decree, or other order by a court of competent
jurisdiction, which has become final and unappealable; (iii)
by a closing agreement or accepted offer in compromise under
Section 7121 or 7122 of the Code, or comparable agreement
under the laws of another jurisdiction; (iv) by any allowance
of a refund or credit in respect of an overpayment of Tax,
but only after the expiration of all periods during which
such refund may be recovered (including by way of offset) by
the Tax imposing jurisdiction; or (v) by any other final
disposition, including by reason of the expiration of the
applicable statute of limitations or by mutual agreement of
the parties.

	2.	 	Joinder in Consolidated Returns.

	 	(a)	 	XO hereby agrees and consents (i) to join with the
Consolidated Group in the filing of Consolidated Returns with
respect to any fiscal year in which Parent elects to file such
returns, (ii) to use its best efforts to cause each of the XO
Subsidiaries to consent to the filing of Consolidated Returns for
such years, (iii) to furnish to Parent all information relating to
members of the XO Group as may be necessary or appropriate for the
preparation of Consolidated Returns, (iv) to execute and deliver to
Parent, and use its best efforts to cause the XO Subsidiaries to
execute and deliver to Parent, all consents, directors’ resolutions
and other documentation which Parent may reasonably require to
evidence Parent’s authority to file Consolidated Returns, and (v) to
maintain the same fiscal year as Parent and use its best efforts to
cause the XO Subsidiaries to maintain the same fiscal year as Parent
for all periods in which Parent and XO are members of an affiliated
group (as defined in the Code); provided, however, the foregoing
shall not be interpreted to prevent XO from taking any action
pursuant to the Restructuring, including, without limitation,
issuing additional stock pursuant to warrants, options or rights to
subscribe to its stock, which would cause the XO Group to not be a
part of the Consolidated Group.

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	 	(b)	 	Parent hereby consents to join with the Consolidated Group in
the Filing of Consolidated Returns; provided, however, that Parent
is not precluded from taking any action which would require Parent
to discontinue the filing of Consolidated Returns including, without
limitation, a sale or other disposition of all or a portion of its
stock ownership in XO and/or the filing of an application with the
Commissioner of Internal Revenue, or other appropriate authorities,
including tax authorities of any state (or political subdivision
thereof) (“Taxing Authorities”) on behalf of the Consolidated Group,
requesting permission to discontinue the filing of Consolidated
Returns.
	 
	 	(c)	 	Parent shall prepare and file Consolidated Returns on behalf
of the Consolidated Group and may charge XO and the XO Subsidiaries
an appropriate amount for XO’s share of reasonable out-of-pocket
expenses related to the preparation of such returns. Parent shall
make all decisions regarding any elections or other matters relating
to the preparation and filing of Consolidated Returns; provided,
however, that in making elections and other decisions with respect
to members of the XO Group, Parent shall consult with the XO Group
and in good faith consider their recommendations regarding the
possibility of making such elections in a manner as to maximize the
Tax Benefits that would be available to the XO Group upon a
Deconsolidation Event (as defined below).
	 
	 	(d)	 	XO will promptly pay to Parent an appropriate amount for all
reasonable out-of-pocket expenses (including legal and accounting
expenses) incurred by Parent in connection with any administrative
or judicial proceedings with respect to such Consolidated Returns to
the extent that such proceedings are reasonably allocable to the XO
Group.

	3.	 	Payment of Tax and Refunds.

     Subject to the provisions of this Agreement and compliance with the terms
hereof, Parent shall be obligated to and shall make all payments and be
entitled to all refunds of Federal Income Taxes and estimated Federal Income
Taxes on behalf of any and all members of the Consolidated Group, and shall
indemnify and hold the members of the XO Group harmless against all such Taxes
(including penalties and interest). Further, subject to the provisions of this

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Agreement and compliance with the terms hereof, whenever Parent elects to
file state or local income or franchise tax returns on a consolidated or
combined basis, Parent shall be obligated to and shall make all payments and be
entitled to all refunds of such State Income Taxes and estimated State Income
Taxes (such actual and estimated State Income Taxes are referred to herein as
“Consolidated State Income Taxes”) on behalf of all members of the Consolidated
Group, and shall indemnify and hold the members of the XO Group harmless
against all such Taxes (including penalties and interest). Subject to the
provisions of Section 5(a) of this Agreement, (and to the extent not
indemnified pursuant to the two immediately preceding sentences) for all
periods on or after the date hereof, including periods after a Deconsolidation
Event, Parent shall indemnify and hold XO and the other members of the XO Group
harmless against all Federal Income Taxes, Consolidated State Income Taxes, and
State Income Taxes and local income taxes payable by or with respect to any
member of the Consolidated Group other than the members of the XO Group,
including any interest and penalties with respect thereto and reasonable
out-of-pocket expenses (including legal and accounting expenses) incurred by
the XO Group in connection with an administrative or judicial proceeding
initiated by a governmental authority relating to any such tax.

	4.	 	Payments by XO to Parent.

	 	(a)	 	XO shall pay to Parent, for the Consolidated Group’s 2003
taxable year and subsequent fiscal years or periods during which XO
is included in a Consolidated Return with the Consolidated Group, an
amount equal to the amount of Federal Income Taxes and Consolidated
State Income Taxes that the XO Group would have been required to pay
to the Taxing Authorities if it were not part of the Consolidated
Group and if the XO Group had filed separate Consolidated Returns
for federal state and/or local tax purposes, as the case may be,
with respect to the XO Group (the “XO Group Taxes”). The above
calculation shall give effect to any federal, state or local Net
Operating Loss, Net Capital Loss and Credit carryforwards which
would have been available to the XO Group if it had never been
included in a Consolidated Return with the Consolidated Group, but
such calculation shall be subject to any audit adjustments and any
limitations on the utilization of tax attributes (including, without
limitation, such carryforwards and any limitations on the
utilization of depreciation, amortization or other similar

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	 	 	 	deductions) of the XO Group imposed by law (including, without
limitation, any such limitation imposed as a result of the
Restructuring).
	 
	 	(b)	 	XO shall pay to Parent any amount (including amounts in
respect of estimated tax) that would be due on the basis of the
foregoing calculations within three business days after Parent
notifies XO of the calculated amount, but in no event earlier than
the times such payments are, or would be required, to be made to the
applicable Taxing Authorities. The excess of any amounts paid to
Parent, with respect to estimated tax payments under this Section
4(b) for a taxable year, over the liability of the XO Group to
Parent under this Section 4(b) for such year, shall be refunded by
Parent to XO within three business days after XO notified Parent
that it has made such an excess payment. At XO’s election, such
refund may be applied as a credit against any future estimated tax
of the XO Group.
	 
	 	(c)	 	XO shall indemnify and hold Parent harmless against any
liability for any interest and penalties with respect thereto
imposed upon Parent by reason of any false or fraudulent information
supplied by any member of the XO Group to Parent in connection with
the determination of the federal, state, or local income tax
liability payable by any member of the Consolidated Group.

	5.	 	Adjustments During Consolidation.

	 	(a)	 	In the event of a Final Determination with respect to the tax
liability of the Consolidated Group, appropriate adjustments
(including, without limitation, adjustments to XO’s payment
obligation under Section 4(a)) shall, except as inconsistent with
this Agreement, be made hereunder consistent with such Final
Determination. Further, XO shall pay to Parent any interest,
penalties and additions to tax imposed in connection with a Final
Determination to the extent that such amounts are attributable to
items of XO or its subsidiaries. Similarly, Parent shall pay XO any
interest received from a governmental authority in connection with a
Final Determination that there has been an overpayment, together
with the amount of any refund received, to the extent attributable
to items of XO or its subsidiaries.

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	 	(b)	 	Payments under this Section 5 shall be made promptly after
the amounts thereof are determined. For purposes of this Agreement,
any Net Operating Loss, Net Capital Loss, or Credit shall be carried
forward.

	6.	 	Adjustments After Deconsolidation.

	 	(a)	 	If there is a change in the ownership of the stock of XO or
other event (a “Deconsolidation Event”) and XO ceases to join in the
filing of Consolidated Federal Returns and where applicable,
Consolidated State Returns with Parent, and any member of the XO
Group would have been entitled, if XO had never joined in the filing
of such Consolidated Returns, to carry forward to a taxable year
(“Post-Consolidation Year”) which is not a taxable year for which XO
joined in the filing of such Consolidated Returns, a Tax Benefit
which originated in a taxable year prior to a Post-Consolidation
Year (“Non-Available XO Carryforward Items”), then no later than
April 15 following each Post-Consolidation Year, Parent shall be
obligated to pay to XO an amount equal to the excess of (i) the XO
Group’s actual Federal Income Taxes and, where applicable, actual
State Income Taxes for such Post-Consolidation Year over (ii) such
Federal Income Taxes and, where applicable, State Income Taxes for
such Post-Consolidation Year computed as if such Non-Available XO
Carryforward Items were available to the XO Group. The calculation
in Section 6(a)(ii) above shall be subject to any audit adjustments
and any limitations on the utilization of the Non-Available XO
Carryforward Items imposed by law (including, without limitation,
any such limitation imposed or which would have been imposed as a
result of the Restructuring or the Deconsolidation Event).
	 
	 	(b)	 	Parent shall not be required to make payments to XO under
Section 6(a) to the extent that such payments would cause cumulative
payments made by Parent to XO under Section 6(a) to exceed the
cumulative reductions in Federal Income Taxes and, where applicable,
Consolidated State Income Taxes, of the Consolidated Group which
resulted from the inclusion of the XO Group in the Consolidated
Group. Such cumulative reductions shall be determined (i) by
deeming the reduction in State Income Taxes (if any) to be reduced
by any

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	 	 	 	corresponding increase in Federal Income Taxes; (ii) without any
adjustment for an increase or reduction in Federal Income Taxes
(and, where applicable, Consolidated State Income Taxes) resulting
from the Deconsolidation Event; and (iii) by apportioning the
reduction in Federal Income Taxes and, where applicable,
Consolidated State Income Taxes, resulting from the use of Tax
Benefits of members of the XO Group and non-members in accordance
with the principles of the federal income tax consolidated return
regulations (and similar provisions of applicable state tax law)
that determine the Tax Benefits that would be attributed to a
member in the event such member ceases to be a member of the
consolidated group.
	 
	 	(c)	 	If in a Post-Consolidation Year, any member of the
Consolidated Group (other than any member of the XO Group) would
have been entitled, if XO had never joined in the filing of
Consolidated Returns with the Consolidated Group, to carry forward a
Tax Benefit which originated in prior taxable year, then no later
than April 15 following each such Post Consolidation Year XO shall
reimburse Parent for such Tax Benefit on an equitable basis and
consistent with the principles of this Section 6 (including the
limitations on such payment which correspond to the limitations set
forth in Section 6(b)).

	7.	 	Certain Transactions

     Notwithstanding anything in this Agreement to the contrary, in the event
of the occurrence of any transaction the result of which is that there are no
longer any holders (other than Parent and its Affiliates or any other single
person or “group” as such term is used in Rule 13D under the Securities
Exchange Act of 1934) of equity securities of XO, all of Parent’s payment
obligations under this Agreement shall terminate immediately prior to the
transaction and for purposes of Section 4(a) of this Agreement, the computation
of the XO Group Taxes shall not give effect to any Net Operating Loss, Net
Capital Loss or Credits carryforwards referred to in the second sentence
thereof. For the purpose of determining holders of equity securities pursuant
to this Section 7, neither (x) warrantholders who have no right to receive
equity securities of XO on exercise thereof nor (y) the holders of equity
securities of the acquiring company, shall be considered holders of equity
securities.

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	8.	 	Late Filing.

     Notwithstanding any other provisions of this agreement, Parent shall
indemnify and hold harmless the XO Group against any interest or penalties
incurred by reason of late filing of any Consolidated Return for the
Consolidated Group, or by reason of late payment of any tax or estimated tax
for the Consolidated Group, unless such late filing or late payment is due to
the fault of XO or any other member of the XO Group.

	9.	 	State Taxes.

     XO and each of the XO Subsidiaries shall continue to prepare and file all
applicable state tax returns, at their own expense, and to pay, or cause its
subsidiaries to so prepare, file and pay, all amounts shown to be due
thereunder unless Parent elects to have XO and/or members of the XO Group file
state and/or local tax returns on a consolidated or combined basis with Parent.

	10.	 	Accounting.

	 	(a)	 	For the purpose of the computation of assumed tax liabilities
herein, all payments made (i) by Parent to XO and (ii) by XO to
Parent, pursuant to the provisions thereof shall not be considered
income to the recipient of the payment or an expense of the payor,
but rather shall be considered the payment of a tax. Any difference
between a Consolidated Group member’s tax liability under this
Agreement and such member’s liability under Treasury Regulation
Sections 1.1502-33 and 1.1552-1 shall be treated as a distribution
with respect to its stock or as a contribution to its capital, as
the case may be.
	 
	 	(b)	 	The calculation of the amounts hereunder shall be determined
by Parent; provided, however, that if XO disputes such
determination, KPMG LLP or another mutually acceptable nationally
recognized accounting firm shall determine such amounts.

	11.	 	Parties.

		
	 	        Any corporation which is an XO Subsidiary on January 1, 2003 or
which becomes an XO Subsidiary at any time subsequent to such date shall
automatically be subject to the terms and conditions of this Agreement.
If any entity other than Parent shall become the common parent of the
affiliated group of corporations for federal income tax purposes

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	 	which includes members of the XO, Parent shall cause such entity to
enter into an agreement substantially identical to this Agreement with
XO.

	12.	 	Notices.

     All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed to have been duly and properly given or sent
(a) on the date when such notice, request, consent or other communication is
personally delivered with receipt acknowledged, or (b) if mailed, three days
after the date on which the same is deposited in a post office box and sent by
certified or registered mail, return receipt requested, postage prepared and
addressed to the party for whom intended at its address set forth below or to
such other address or addresses as any of the parties hereto shall theretofore
designated by notice hereunder.

	 
	If to Parent, at:

	Starfire Holding Corporation
	767 Fifth Avenue
	New York, New York 10153

	If to XO or the XO Subsidiaries, at:

	XO Industries, Incorporated
	11111 Sunset Hills Road
	Reston, Virginia 20160

	13.	 	Entire Agreement.

     This agreement (a) contains the entire understanding of the parties hereto
with respect to the subject matter hereof, (b) shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and performed therein, and (c) shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

	14.	 	Amendments.

     This Agreement may not be modified, changed or amended except by a writing
signed by all parties hereto.

	15.	 	Further Assurances.

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     Each of the parties hereto agrees to execute, acknowledge, deliver, file,
record and publish such further certificates, instruments, agreements and other
documents, and to take all such further actions as may be required by law or
deemed necessary or useful in furtherance of the objectives and intentions
underlying this Agreement and not inconsistent with the terms hereof.

	16.	 	Captions.

     Captions are inserted for convenience only and shall not be given any
legal effect.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of January
16, 2003.

	 
	Starfire Holding Corporation

	By:    /s/ Jordan Bleznick                      
	             Vice President & Senior Tax Counsel

	XO Communications, Inc.

	By:    /s/ Gary D. Begeman                      
	             Senior Vice President, General Counsel

11exv10w6

 

Exhibit 10.6

ASSIGNMENT AND ASSUMPTION OF OPTION AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION OF OPTION AGREEMENT (“Agreement”) made this
15th day of January, 2003, by and between XO COMMUNICATIONS, INC., a Delaware
corporation (“Assignor”) and DIXON PROPERTIES LLC, a Delaware limited liability
company (“Assignee”) and shall be effective on January 16, 2003 (“Effective
Date”);

WITNESSETH:

     WHEREAS, on June 17, 2002, XO filed a voluntary petition for relief under
chapter 11 of title 11 of the United States Code, in the United States
Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”).

     WHEREAS, by that certain Option Agreement (“Option”) dated as of October
31, 2002, as amended on December 13, 2002, by and between The Lincoln National
Life Insurance Company (“Optionor”) and XO Communications, Inc. (“Optionee”),
Optionor did grant an option for Optionee to purchase that certain building and
real property located at 11111 Sunset Hills Road, Reston, Virginia
(“Building”);

     WHEREAS, by order dated November 15, 2002, the Bankruptcy Court approved
the Option;

     WHEREAS, Assignor has leased a substantial portion of the Building
pursuant to that certain Amended and Restated Deed of Lease (“Deed of Lease”)
dated as of October 30, 2002, between the Optionor and the Optionee;

     WHEREAS, on December 23, 2002, Assignor exercised the Option in accordance
with its terms;

     WHEREAS, Assignee is and shall be deemed to be an “Affiliate” of Assignor
to which the Assignor may assign its rights under the Option pursuant to
Section 7.9 of the Option;

     WHEREAS, Assignor desires to assign to Assignee all of Assignor’s rights
and interests as Optionee under the Option, and Assignee desires to assume all
of Assignor’s obligations as Optionee under the Option upon and subject to the
terms and conditions set forth herein;

     NOW THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

 

     1.     Assignment and Assumption.

             (a)    Assignor hereby assigns to Assignee all of Assignor’s rights and
interest in and to the Option, a true and complete copy of which is attached
hereto as Exhibit A and incorporated herein by reference, subject, however, to
the terms hereof.

             (b)    On and after the Effective Date, Assignee shall assume and hereby
agrees promptly and faithfully to keep, fulfill, observe, perform and discharge
each and every covenant, duty, debt and obligation on Assignor’s part to be
performed that may accrue and become performable, due or owing from and after
the Effective Date under the terms of the Option.

     2.     Restated Lease. As a material inducement to Assignor entering into
this Agreement, Assignor and Assignee shall enter into a lease amendment
relating to the Deed of Lease in accordance with the terms and conditions set
forth on Exhibit B which is attached hereto and made a part hereof.

     3.     Indemnity.

     Assignor represents that to the best of its knowledge the Option is in
full force and effect, and that it is not in breach of the Option. Assignor
further represents that (i) Assignor has validly exercised the Option and that
same is binding upon and enforceable against Optionor and (ii) the Bankruptcy
Approval Conditions (as defined in Section 1.3 of the Option), have been
satisfied and the Purchase Price (as defined in the Option) will be
$31,400,000.

             (a)    Assignor will indemnify and hold Assignee harmless from and defend
Assignee against any and all claims, demands, causes of action, losses, costs
(including, without limitation, court costs and reasonable attorneys’ fees),
liabilities and damages of any kind or nature whatsoever that Assignee may
sustain by reason of Assignor’s breach or nonfulfillment prior to the Effective
Date, of any covenant or obligation under the Option or this Agreement on its
part to be performed.

             (b)    Assignee will indemnify and hold Assignor harmless from and defend
Assignor against any and all claims, demands, causes of action, losses, costs
(including, without limitation, court costs and reasonable attorneys’ fees),
liabilities and damages of any kind or nature whatsoever that Assignor may
sustain by reason of Assignee’s breach or nonfulfillment on and after the
Effective Date, of any covenant or obligation under the Option or this
Agreement on its part to be performed.

     4.     Building Matters. Assignor and Assignee hereby recognize and agree
that Assignee shall be specifically and independently responsible for matters
of due diligence regarding its proposed acquisition of the Building pursuant to
the Option. To the extent Assignor provides or has provided Assignee with due
diligence materials, reports, tests or studies relating to the Building or the
structure, function or status thereof (including, without limitation, any such
materials, reports, tests or studies provided to Assignor by the Optionor),
Assignee hereby

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 releases and holds Assignor harmless from any findings, conclusions,
inaccuracies or contents relating to such due diligence materials, or the like.
Assignee expects to seek reliance letters from persons that provided due
diligence materials, reports, tests or studies relating to the Building or the
structure, function or status thereof and Assignor agrees to use commercially
reasonable efforts to cooperate with Assignee in connection therewith.

     5.     Notices. Any notice to be given pursuant to this Agreement shall be in
writing and shall be served by hand or private express mail carrier, or by
United States certified or registered mail.

             (a)    Notices to Assignee shall be mailed or delivered to Assignee c/o Icahn
Associates Corp., 767 Fifth Avenue, 47th Floor, NY, NY 10153, Attention: Marc
Weitzen, unless otherwise directed in writing by Assignee.

             (b)    Notices to Assignor shall be mailed or delivered to Assignor at XO
Communications, Inc., 11111 Sunset Hills Road, Reston, Virginia 20190,
Attention: Legal Department, with a copy to XO Communications, 1633 Westlake
Avenue North, Suite 200, Seattle, Washington 98109, Attention: Michael
Targett, Esq., unless otherwise directed in writing by Assignor.

             (c)    Any reference to “days” herein refers to calendar days.

     6.     Brokers. Assignee warrants and represents to Assignor that no real
estate agent, broker, finder or other such persons or firms have negotiated or
brought about this transaction.

     7.     Successors and Assigns. This Agreement shall bind and benefit the
parties and their respective successors and permitted assigns. Neither this
Agreement nor the rights or privileges hereunder shall be further assigned by
either party without the express written consent of both parties to this
Agreement. Any consent pursuant to this section may be withheld in the sole
but reasonable discretion of each party.

     8.     Amendments. This Agreement shall not be changed except by written
instrument signed by Assignor and Assignee.

     9.     Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together should constitute one and the same instrument.

     10.     Recitals. The Recitals set forth on the first page of this Agreement
are hereby incorporated herein by reference as if fully set forth at this point
in the text of this Agreement.

     11.    Prevailing Party Legal Fees. In the event any legal proceeding is
commenced related to this Agreement, the prevailing party in such proceeding
shall be entitled to recover its reasonable attorneys’ fees, costs and expenses
of litigation from the non-prevailing party.

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     12.     Time is of the Essence. For purposes of this Agreement, time shall be
considered of the essence.

     13.     Bankruptcy Court Approval. The assignment of the rights and
obligations of the Assignor to Assignee and the effectiveness of this Agreement
are subject to, and conditioned upon, the approval by the Bankruptcy Court of
the parties entering into and performing this Agreement by an order that
becomes final and not subject to appeal.

     14.     Governing Law. This Agreement shall be governed by and construed
under the laws of the Commonwealth of Virginia (excluding any conflict of law
rules which may direct interpretation to the laws of any other state).

     15.     Survival. All of the representations, warranties, covenants,
indemnities and other provisions of this Agreement shall survive the settlement
or closing on the Building and/or subject Property.

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     IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of Assignor and Assignee as of the date first above
written.

	 	 	 	 	 
	WITNESS:	 	
ASSIGNOR:	 	 
	 
	 	 	
XO COMMUNICATIONS, INC.,

a Delaware corporation	 	 
	 
	   /s/ Francis J. Kelleher

	 	
By:    /s/ Gary D. Begeman

	 	(SEAL)
	 
	 	 	
Name:       Gary D. Begeman

	 	 
	 
	 	 	
Title:     Senior Vice President

	 	 

	 	 	 	 	 
	WITNESS:	 	
ASSIGNEE:	 	 
	 
	 	 	
DIXON PROPERTIES LLC,

a Delaware limited liability company	 	 
	 
	   /s/ Matt Goldfarb

	 	
By:    /s/ Robert Mitchell

	 	(SEAL)
	 
	 	 	
Name:       Robert Mitchell

	 	 
	 
	 	 	
Title:    Authorized  Signatory

	 	 

List of Exhibits:

Exhibit A — Option Agreement

Exhibit B – Terms of Amendment to Restated Lease

#193636

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EXHIBIT A

OPTION AGREEMENT

(intentionally omitted)

 

 

 

 

 

 

 

 

EXHIBIT B

TERMS OF AMENDMENT TO DEED OF LEASE

	•	 	The Deed of Lease shall be amended or restated to delete any
requirement of a security deposit, and the security deposit held by the
current Landlord shall be returned to Assignor within two (2) days of
Assignee’s receipt of the security deposit from the current Landlord.
	 
	•	 	Notwithstanding anything set forth in the Deed of Lease, Assignee
and Assignor agree that there will not be a remeasuring of the Building
or the Leased Premises (as defined in the Deed of Lease) except as
agreed to by Assignee and Assignor in writing.

[CONTINUED ON NEXT PAGE]

 

 

 

 

 

 

 

 

EXHIBIT B

TERMS OF AMENDMENT TO DEED OF LEASE

(CONTINUED)

The rent schedules set forth in the Deed of Lease Section 3.1(a) and (b), will be modified as follows:

3.1 Base Rent

(a)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Base Rent Schedule
	
	 	 	 	 	 	 	 	 	 	 	 	 
	Months	 	Per RSF	 	 	Annually	 	 	Monthly
	
	 	 	 	 	 	 	 	 	 	 	 	 
	Building Purchase Date by Assignee through 11/14/03
	 	$	22.50	 	 	$	3,768,637.50	*	 	$	314,053.13	*
	following 12 mos.
	 	$	23.27	 	 	$	3,897,608.60	*	 	$	324,800.72	*
	following 12 mos.
	 	$	24.05	 	 	$	4,028,254.75	 	 	$	335,687.90	 
	following 12 mos.
	 	$	24.86	 	 	$	4,163,925.70	 	 	$	346,993.81	 
	following 12 mos.
	 	$	25.70	 	 	$	4,304,621.50	 	 	$	358,718.46	 

*Subject to subsection (b), below.

(b)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Building Purchase Date by Assignee through 11/14/03
	 	$	22.50	 	 	$	3,251,902.50	 	 	$	270,991.88	 
	following 12 mos
	 	$	23.27	 	 	$	3,363,189.83	 	 	$	280,265.82	 

 

 

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