Document:

Exhibit 10(s)

February 16, 2001

Minn-Dak Farmers Cooperative
7525 Red River Road
Wahpeton, North Dakota 58075

Minn-Dak Yeast Company, Inc.
18175 Red River Road West
Wahpeton, North Dakota 58075

Gentlemen:

         This letter is to set forth the agreement between Universal Foods
Corporation d/b/a Sensient Technologies Corporation a Wisconsin corporation
("Sensient"), Minn-Dak Yeast Company, Inc., a North Dakota corporation
("Minn-Dak") and Minn-Dak Farmers Cooperative, a North Dakota cooperative
association ("MDFC") relating to the sale of the Red Star Yeast & Products
Division ("Red Star") or Sensient to certain subsidiaries of Lesaffre et
Compagnie, a French corporation ("Lesaffre"). This agreement reflects the
results of discussions among Sensient, Lesaffre, Minn-Dak and the Antitrust
Division of the United States Department of Justice (the "Antitrust Division")
in connection with the review by the Antitrust Division of the sale of Red Star
pursuant to the Hart-Scott-Rodino Antitrust Improvements Acts of 1976, as
amended (the "HSR Act"). The parties agree as follows:

1.       Sensient will not include in the sale of Red Star to Lesaffre its
         equity interest in Minn-Dak or its contractual rights and obligations
         pursuant to the Management Consulting Agreement dated June 13, 1994
         (the "Management Agreement") between Sensient, Minn-Dak and MDFC, the
         Yeast Purchase Agreement dated June 13, 1994 (the "Supply Agreement")
         between Sensient and Minn-Dak and the Shareholders Agreement
         (collectively, the Management Agreement, the Supply Agreement and the
         Shareholders Agreement are hereinafter referred to as "Minn-Dak
         Agreements"). In this connection, the Purchase Agreement between
         Sensient and Lesaffre will provide that customer contracts will not be
         transferred to Lesaffre to the extent that the yeast is sourced from
         Minn-Dak. In addition, Sensient hereby agrees to cancel, effective
         immediately, the Molasses Purchase Agreement dated June 13, 1994
         between Sensient and Minn-Dak, provided that purchase commitments for
         the 2000 beet crop molasses already in place shall remain in effect.

2.       Sensient will organize the Minn-Dak Yeast Sales and Service Division
         (the "Sales Division") to perform the functions contemplated by the
         Minn-Dak Agreements immediately after the sale of Red Star to Lesaffre.
         The Sales Division will include executives with expertise in general
         management, sales and marketing,

<PAGE>

         research and development and yeast distribution sufficient to enable
         Sensient to meet all of its obligations to Minn-Dak. It is anticipated
         that the Sales Division would be staffed as described in Exhibit A
         hereto. The Purchase Agreement between Sensient and Lesaffre will
         prohibit Lesaffre from attempting to hire employees designated by
         Sensient to be part of the Sales Division. In addition to the positions
         described in Exhibit A, Sensient also agrees to adjust the
         organizational chart to provide the following services to Minn-Dak on
         an as needed basis: Yeast Quality Control personnel and Environmental
         Compliance personnel. Sensient also agrees to consult with Minn-Dak,
         and Minn-Dak has to be in basic agreement, before any changes can be
         made to the sales and service organization structure contemplated by
         Exhibit A as adjusted pursuant to this paragraph 2.

3.       In accordance with Sensient's discussions with the Antitrust Division,
         a key objective of the parties hereto will be to assist Minn-Dak to
         grow its business so that it will operate as an effective independent
         fourth competitor in the United States fresh yeast market. To that end,
         Sensient has submitted to Minn-Dak a three-year business plan (the
         "Business Plan"), a copy of which is attached hereto as Exhibit B,
         which the parties hereby adopt and agree to implement in accordance
         with sound business judgment. Under the Business Plan, yeast sales
         volumes are expected to exceed the levels of the Supply Agreement as
         modified herein under paragraph 4 below. Because of that, Minn-Dak
         expects to incur certain new environmental costs to meet these volume
         commitments. These new environmental costs include capital equipment
         necessary to comply with EPA waste water regulations and initial costs
         to comply with EPA air emission regulations dealing with volatile
         organic carbons (VOC's) being emitted from the plant. Such costs to
         comply with EPA waste water and air emission regulations are expected
         to total approximately $2 million. Sensient agrees to share equally
         with Minn-Dak in these environmental costs, provided that: (a) any such
         costs relate to annual production [XXXX] minimum purchase requirement;
         and (b) the amount expended by Sensient for such costs shall not exceed
         $2 million.

4.       For the year ending [XXXX]. In the event that Minn-Dak experiences a
         production problem which will prevent Sensient from meeting customer
         requirements, Sensient will purchase the necessary yeast from an
         alternative source. In such event, the obligations of the parties to
         each other will be suspended for the duration of the production problem
         and, thereafter, the parties will promptly resume performance pursuant
         to the Supply Agreement.

5.       To facilitate the growth contemplated by the Business Plan with respect
         to cream yeast, Sensient will make the capital expenditures necessary
         for the cream yeast load-out facility described in Appendix III to the
         Business Plan. Such facility will be completed within 8 months after
         the effective date of this Agreement. Upon completion of this facility,
         this asset will be entirely owned by Sensient. Upon termination of the
         Minn-Dak agreements, ownership of this asset will transfer to Minn-Dak
         at no cost to Minn-Dak. The original costs of this facility will be
         excluded from the yeast pricing formula in the Supply Agreement, but
         any future additions thereto paid for by Minn-Dak and any maintenance
         will be included in such formula.

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<PAGE>

6.       In order to allow a more adequate period of time for Minn-Dak to
         operate as an effective independent fourth competitor in the United
         States fresh yeast market, Minn-Dak shall have the unilateral right to
         an extension of the term of the Minn-Dak Agreements for an additional
         three years on the currently applicable terms and conditions, except as
         modified herein.

7.       To the extent that any capital expenditures after January 1, 2001,
         excluding the initial cost of the cream yeast load-out facility and any
         participation in specified environmental capital costs, are not fully
         depreciated on a book basis at the termination of the Minn-Dak
         Agreements, Sensient shall compensate Minn-Dak for 50% of the remaining
         depreciation, less $250,000. In the event Minn-Dak remains profitable
         after that date, Minn-Dak will make payment back to Sensient on an
         annual basis for this depreciation.

8.       The parties recognize the intent of the Antitrust Division that
         Minn-Dak be maintained as an independent competitor. In the event that
         Sensient shall enter into an agreement [XXXX].

9.       In consideration of the foregoing commitments by Sensient, Minn-Dak
         will support the efforts of Sensient to obtain clearance by the
         Antitrust Division of the Red Star sale pursuant to the HSR Act and
         will commit to the achievement of the plans outlined in this Agreement.

10.      This Agreement shall be effective on the closing date of the sale of
         Red Star, provided that such closing must occur on or before March 31,
         2001.

11.      The parties hereto agree that from time to time after the effective
         date of this Agreement, each of them will execute and deliver such
         further instruments and documents and take such other action as may be
         necessary or advisable to carry out the purposes and intent of this
         Agreement. The parties hereto further agree that they will exercise
         their best efforts to implement the plans contemplated hereby in such a
         manner as to avoid any unfavorable tax consequences to Minn-Dak.

         If the foregoing accurately sets forth our agreement, please so signify
by signing where indicated below.

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[XXXX] Confidential treatment requested

<PAGE>

                                        Very truly yours,

                                        SENSIENT TECHNOLOGIES
                                        CORPORATION

                                        By: /s/    Kenneth P. Manning
                                            ------------------------------------
                                                Kenneth P. Manning
                                                Chairman, President & Chief
                                                Executive Officer

         Agreed:

         MINN-DAK FARMERS COOPERATIVE

         By: /s/ Steven M. Caspers
             ------------------------------------
                Steven M. Caspers
                Interim President & Chief
                Executive Officer

         MINN-DAK YEAST COMPANY, INC.

         By: /s/ Steven M. Caspers
             ------------------------------------
                Steven M. Caspers
                President

<PAGE>

Exhibit A

Organizational Chart & Biographies

                                 Minn-Dak Yeast
Sales and Service Division

                             JACK H. KOBERSTINE
                               General Manager
                                      |
                                      |
                                      |____ Secretary
                                      |
                                      |
       _______________________________|______________________________
      |                     |                    |                   |
      |                     |                    |                   |
PAUL ERNSTER           JAMES FOY            RAVI ARORA         JUDY PSENKO
------------           ---------            ----------         -----------
Controller             Manager Research     Manager Sales      Manager Logistics
      |                & Development             |
      |                     |                    |
      |                     |                    |
RITA BUGALSKI          ERIC SANDERS         KATHLEEN MAHON
-------------          ------------         --------------
Account Specialist     Lab Tech             Account Manager

<PAGE>

Exhibit B

Business Plan

                                 MINN-DAK YEAST

                                  BUSINESS PLAN

                                DECEMBER 5, 2000

                                TABLE OF CONTENTS

SECTION                                                                    PAGE

Executive Summary                                                          1

Minn-Dak History                                                           2

Business & Industry Overview                                               3

Business Strategy                                                          8

Appendix I - Pro Forma Income Statement                                   10

Appendix II - Organization Chart & Biographies                            12

Appendix III -[XXXX]                                                      15

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[XXXX] Confidential treatment requested

<PAGE>

EXECUTIVE SUMMARY

BUSINESS OVERVIEW

Minn-Dak Yeast Company manufactures and markets fresh yeast products for the
North American commercial baking industry. It is jointly owned by Minn-Dak
Farmers Cooperative and Sensient Technologies Corporation, with 80% and 20%
share ownership respectively. Minn-Dak Farmers Cooperative is a sugarbeet
processor and molasses producer, and provides the Yeast Company its source for
high-sugar content molasses, the primary raw material for yeast manufacturing.
Sensient Technologies Corporation supplies color, flavor and fragrance
technologies and products to the food, cosmetics, specialty-inks and household
products industries. Minn-Dak's corporate offices and manufacturing site are
located in Wahpeton, North Dakota. Sales, marketing, R&D and technical service
are located in Milwaukee, Wisconsin.

Minn-Dak Yeast Company is the fourth largest supplier of fresh yeast in North
America and has a reputation for high quality product and service. They also
enjoy excellent relationships with the major commercial baking companies in
North America, which is demonstrated by the significant presence of these
companies in their customer portfolio.

Minn-Dak operates under the theory of [XXXX]. The unique combination of [XXXX]
enable Minn-Dak to [XXXX].

HISTORICAL AND PROJECTED FINANCIAL SUMMARY

The following table highlights Minn-Dak's strong historical financial
performance, as well as its projected growth.

<TABLE>
<CAPTION>
                                    Pro Forma Results*
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
(in $ mm)                  1998 A      1999 A      2000 A      2001 P      2002 P      2003 P
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
<S>                        <C>         <C>         <C>         <C>         <C>         <C>
Volumes (lbs mm)           [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
Revenues                   [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
  COGS                     [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
Gross Profit               [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
   Freight                 [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
   Selling Expenses        [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
------------------------ ----------- ----------- ----------- ----------- ----------- ----------
Operating Profit           [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]      [XXXX]
</TABLE>

     * In historical years, combines certain RSY & MDY results

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<PAGE>

MINN-DAK HISTORY

The Minn-Dak Yeast Company ("MDY") was founded in 1989 as an independent
producer and marketer of fresh yeast. The Company's principal founder, the
Minn-Dak Farmers Cooperative, saw an opportunity to put the molasses it
generated in the processing of sugarbeets to profitable use by manufacturing
yeast (molasses is the main ingredient used in the production of yeast).

In 1994, Red Star Yeast ("RSY") purchased a 20% stake in MDY by acquiring the
shares of MDY's minority owner. The Cooperative's existing 80% ownership stake
in MDY was not affected by this transaction. Red Star made this acquisition both
because of the financial attractiveness of MDY as an investment and because, in
conjunction with the acquisition, Red Star was granted a supply agreement that
gave RSY access to a low cost source of fresh yeast. As part of this
transaction, RSY agreed to provide technical consulting on an as needed basis
and was given the right to purchase any of the Minn-Dak Farmers Cooperative
molasses not used by MDY.

The supply agreement, the consulting agreement, and the agreement giving RSY
access to any of the Minn-Dak Farmers Cooperative's excess molasses all have ten
year terms and expire in June, 2004.

BUSINESS & INDUSTRY OVERVIEW

FRESH YEAST MARKET

Baker's yeast is typically classified into several different types of fresh and
dry product. Fresh yeast can be produced in liquid (or cream) form and also in a
compressed state where additional liquid is removed from the product which is
then sold in a cake or granular form. High levels of bioactivity and a
relatively short life characterize fresh yeast.

Fresh yeast is Minn-Dak's sole area of production, with the majority of the
product going to large wholesale bakeries. It has a shelf life of two to three
weeks. Liquid yeast, the starting point for all forms of fresh yeast, is
produced in an aerobic fermentation process on a substrate of cane or beet
molasses with additional required nutrients.

CREAM YEAST Cream yeast is liquid yeast in its initial unprocessed form. It is
         shipped directly to customers in insulated trucks for use in cream
         yeast systems. These systems are typically installed and financed by a
         yeast supplier. Cream yeast is typically used by larger bakeries with
         annual consumption in excess of 1.0 million pounds.

COMPRESSED YEAST Compressed yeast is manufactured from liquid yeast by removing
         water with a filtering device. Typically, smaller wholesale and retail
         bakeries purchase compressed yeast, but it is still used by some large
         bakeries. It is normally shipped in refrigerated trucks.

<PAGE>

While Minn-Dak does not currently sell cream yeast (all of its cream is
currently processed to compressed yeast), the Company would be able to market
cream to outside customers with only a modest level of investment.

YEAST MANUFACTURING PROCESS

The complete commercial yeast manufacturing process from molasses to liquid
yeast takes approximately five days from laboratory flasks to commercial state
production. The following outlines this process:

SEED YEAST
      -MOLASSES
           -FERMENTATION
                -SEPARATION
                      -LIQUID YEAST
                            -CREAM YEAST
                            -FILTER PRESS
                                  -COMPRESSED YEAST
                            -FILTER PRESS
                                  -BELT OR FLUID BED DRYER
                                  -DRY YEAST
                            -DRUM DRYER
                                  -NUTRITIONAL YEAST

UNITED STATES DEMAND

Demand for yeast within the U.S. is estimated at 700 million pounds annually,
with a dollar value of $325 million. Fresh yeast consumption, which accounts for
a majority of the total, represents the most significant segment. Unlike other
countries, where the majority of fresh yeast consumption is in the form of
compressed product, U.S. demand for fresh yeast is skewed heavily toward
delivery in cream, or liquid form. Of the 590 million pounds of fresh yeast
consumed annually in the U.S., approximately 50% is sold as cream yeast, with
the remainder sold as compressed yeast.

--------------------------------------------------------------------------------
U.S. Commercial Yeast Demand
--------------------------------------------------------------------------------

          ----------------- ---------------- ---------------- ----------
                                 Volume         Total Value      % of
                             (million lbs.)    ($ millions)      Total
          ----------------- ---------------- ---------------- ----------
          Fresh Yeast*            590              $ 180          55%
          ----------------- ---------------- ---------------- ----------
          Dry Yeast               110              $ 145          45%
          ----------------- ---------------- ---------------- ----------
                                  700              $ 325
          --------------------------------------------------------------
          *On a compressed yeast basis.
          --------------------------------------------------------------

Source: Milling and Baking News | March 28, 2000 and Division estimates.

<PAGE>

Cream yeast delivery has emerged as the preferred method or fresh yeast delivery
by large commercial bakeries in the United States. In the face of slow overall
demand growth for baked goods, the U.S. bakery industry has experienced a
dramatic consolidation during the late 1990's, as many smaller local and
regional bakeries have been acquired by large firms. Today, the top five baking
companies account for approximately 50% of the total fresh yeast consumed in the
United States. Accelerated consolidation with the baking industry has created
large baking companies with fewer, but larger baking facilities focused on
production and procurement efficiencies. As bakeries have consolidated into
larger facilities, they have increasingly converted to cream yeast delivery
systems.

CUSTOMERS

Minn-Dak is the fourth largest North American supplier of yeast to the
commercial bakery segment. Through its existence as an independent company and
then by its association with Red Star, Minn-Dak has developed a reputation for
quality and reliability in the production and delivery of yeast products for the
commercial baking markets. Its customers include such market leaders as
Earthgrains, Pillsbury, Flowers, and Kraft.

Minn-Dak's top [XXXX] customers account for [XXXX] of the Company's total
revenues. This [XXXX] allows Minn-Dak to [XXXX]. These customer relationships
[XXXX]. Product is [XXXX] from Minn-Dak's production facility in Wahpeton, ND.

COMPETITION

In the formation of Minn-Dak as a stand-along entity, there are four significant
producers of fresh yeast in the United States and Canada: Red Star/SAF;
Fleischmann; Lallemand; and Minn-Dak.

MANUFACTURING HIGHLIGHTS

    *   The Minn-Dak Farmers Cooperative local sugarbeet refining activities
        provide an excellent source of high quality molasses that does not have
        to be transported great distances. No other North American yeast maker
        has this advantage.

    *   Water is readily available through two on-site wells.

    *   MDY has a captive and expandable waste treatment facility.

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[XXXX] Confidential treatment requested

<PAGE>

    *   MDY's plant is well-built and modern. On-going maintenance capital
        expenditures are therefore kept to a minimum.

    *   While current capacity is [XXXX] million pounds, Minn-Dak enjoys several
        features which [XXXX].

                  [XXXX]

BUSINESS STRATEGY

OBJECTIVES AND GOALS

Our strategic plan is focused on a three-year period that optimizes our current
business and provides adequate growth to satisfy our shareholder's financial
goals.

We begin with the stated objective: MAINTAIN MINN-DAK YEAST COMPANY AS A
STAND-ALONE, PROFITABLE SUPPLIER OF HIGH-QUALITY FRESH YEAST TO THE NORTH
AMERICAN BAKING INDUSTRY.

    Within this objective are contained the tangible goals of [XXXX]. Achieving
    this [XXXX].

KEY LEVERAGE AREAS

During this three-year period, we will continue to see consolidation throughout
the food and baking industries. As this trend continues, customers will tend to
consolidate toward suppliers they have come to rely on. We find ourselves in a
particularly strong position given the concentration of major bakeries in our
customer portfolio. We will use this strength, combined with our key leverage
areas to facilitate our growth over the next three years and beyond.

Key leverage areas are:

    *   Marketplace credibility
    *   Low cost, high quality manufacturing position
    *   Excellent customer satisfaction with industry's largest users

An explanation for the basis of these strengths is in order. Our credibility in
the baking industry stems from an eleven-year history of supplying a consistent
and reliable fresh yeast product at a competitive price. Combining this track
record with our highly experienced R&D, Technical Service and Sales organization
has made us the supplier of choice at many bakeries. See Appendix 1 for the full
organizational chart and management biographies.

---------------------------------
[XXXX] Confidential treatment requested

<PAGE>

Our manufacturing position is enhanced through [XXXX]. These factors, combined
with [XXXX].

The high level of customer satisfaction that Minn-Dak enjoys is related to the
excellent quality of product we supply and our ability to respond quickly to
ever-changing customer requirements. This, again, is attributable to our highly
experienced and dedicated customer service and logistics organization.

DISCUSSION OF STRATEGY

In year one or our strategy, we will capitalize on our strengths [XXXX]. This
technology has proven to be [XXXX]. Our account portfolio includes many of the
largest commercial bakeries in North America. These companies typically have
[XXXX]. Using our strong relationships at [XXXX].

Years two and three of our strategy focus on [XXXX]. During year two, we will
[XXXX].

The overriding theme to this strategy is [XXXX]. Executing this strategy will
certainly depend greatly on our ability to maintain our current leverage areas
throughout the entire strategic period.

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[XXXX] Confidential treatment requested

<PAGE>

APPENDIX I

PRO FORMA INCOME STATEMENT

[XXXX]

APPENDIX II

ORGANIZATIONAL CHART & BIOGRAPHIES

                               MINN-DAK YEAST
                         SALES AND SERVICE DIVISION

                             JACK H. KOBERSTINE
                               General Manager
                                      |
                                      |
                                      |____ Secretary
                                      |
                                      |
       _______________________________|______________________________
      |                     |                    |                   |
      |                     |                    |                   |
PAUL ERNSTER           JAMES FOY            RAVI ARORA         JUDY PSENKO
------------           ---------            ----------         -----------
Controller             Manager Research     Manager Sales      Manager Logistics
      |                & Development             |
      |                     |                    |
      |                     |                    |
RITA BUGALSKI          ERIC SANDERS         KATHLEEN MAHON
-------------          ------------         --------------
Account Specialist     Lab Tech             Account Manager

---------------------------------
[XXXX] Confidential treatment requested

<PAGE>

KEY MANAGEMENT BIOGRAPHIES - RED STAR YEAST PRODUCTS

----------------------- --------------------------------------------------------
Name                    Position and Experience
----------------------- --------------------------------------------------------
Jack H. Koberstine      President, Red Star Yeast and Products: Mr. Koberstine
                        joined Universal Foods in 1998 with over 15 years of
                        experience in sales, marketing and sales management in
                        the chemical industry. He was made President of Red Star
                        Yeast and Products in April 2000.

                        Mr. Koberstine began his career as a sales trainee in
                        1982 with Hercules Inc., a $2.2 billion chemical company
                        headquartered in Wilmington, Delaware. During the next
                        15 years, he held a series of progressively responsible
                        positions leading to his most recent assignment as
                        Director of Sales and Marketing North America, for the
                        Food Ingredients Division.

                        In this role, Mr. Koberstine was responsible for sales
                        and marketing for the $80 million North American segment
                        of the Food Ingredients Division. He managed a staff of
                        seventeen and played a key role in the development of
                        product line strategies and acquisitions. Mr. Koberstine
                        exceeded business plan revenues by as much as 20% and
                        developed a cost-savings program that reduced expenses
                        by 18%.

                        From 1995 to 1997, Mr. Koberstine was assigned
                        responsibility for developing the worldwide business for
                        the Food Ingredients Division. He spent two years in
                        Denmark, where he successfully implemented a five-year
                        strategic plan designed to achieve 20% annual sales
                        growth. He exceeded that goal during each of his two
                        years in Denmark.

                        In 1998, Mr. Koberstine joined Universal Foods
                        Corporation as Vice President/General Manager of the
                        Dairy and Food Ingredients business units of the Flavor
                        Division. During his tenure with Flavor, Mr. Koberstine
                        implemented a strategic plan that resulted in
                        double-digit revenue growth in a mature market and
                        generated $5 million of operating profit from a
                        break-even position the previous year.

                        B.S. Chemical Engineering
                        University of Illinois, Champaign-Urbana  1982

----------------------- --------------------------------------------------------
Paul J. Ernster         Controller, Red Star Yeast and Products: Mr. Ernster
                        joined Universal Foods in 1971. He has held a number of
                        progressively responsible positions in accounting and
                        finance over the past 29 years at both the corporate and
                        divisional levels. In his current role, Mr. Ernster is
                        Controller of Red Star Yeast and Products.

----------------------- --------------------------------------------------------

<PAGE>

----------------------- --------------------------------------------------------
                        Mr. Ernster began his career with Universal Foods as
                        Assistant Tax Manager. Since then, he has held a number
                        of key accounting positions, including Manager,
                        Corporate General Accounting and Assistant Corporate
                        Controller for Universal Foods. Mr. Ernster was promoted
                        to division Controller of Red Star Yeast in 1984.

                        B.S. Accounting
                        Marquette University, 1966

                        M.S. Business Administration
                        Marquette University, 1981

                        Certified Public Accountant, 1971

                        Member, Wisconsin Institute of Certified Public
                        Accountants

----------------------- --------------------------------------------------------
Dr. James Foy           Director, Research/Development, Red Star Yeast and
                        Products: Dr. Foy joined Universal Foods in 1988, as a
                        Group Leader at the Technical Center for Red Star Yeast.
                        In 1990, Dr. Foy was promoted to Director,
                        Research/Development for Red Star.

                        Prior to joining Red Star Yeast, Dr. Foy was a Research
                        Scientist with the University of California.

                        B.S. Biology
                        University of Cincinnati, 1973

                        M.S. Microbiology
                        University of Miami, Ohio, 1976

                        Ph.D. Microbiology
                        University of Miami, Ohio, 1979

                        Member, American Association of Cereal Chemists
                        Member, American Society for Microbiologists
                        Member, American Society of Bakery Engineers
                        Member, American Institute of Baking
                        Member, American Society for Enology and Viticulture
                        Member, Institute of Food Technologists
                        Member, Scientific Advisory Committee
                        Member, Society for Industrial Microbiology

----------------------- --------------------------------------------------------
Ravi Arora              Marketing Manager, Red Star Yeast and Products: Mr.
                        Arora joined Universal Foods in 1996 as a Senior
                        Scientist/Associate. In January 2000, Mr. Arora was
                        promoted to Manager, Marketing for Red Star Yeast.

----------------------- --------------------------------------------------------

<PAGE>

----------------------- --------------------------------------------------------

                        Prior to joining Red Star Yeast, Mr. Arora worked at the
                        American Institute of Baking as a Teaching Assistant in
                        Cereal Technology. He was also the Director of Big Boss
                        Foods in India.

                        B.S. Food Technology
                        University of Minnesota, 1990

                        MBA candidate
                        Marquette University

                        Member, American Society of Baking Engineers

----------------------- --------------------------------------------------------
Judith Psenko           Manager, Transportation/Logistics Support Systems, Red
                        Star Yeast and Products: Ms. Psenko joined Universal
                        Foods in 1978 as the Manager, Transportation/Logistics
                        Support Systems for Red Star Yeast. During her long
                        career with the Company, Ms. Psenko held a number of
                        positions, including Accounting Assistant, Traffic
                        Coordinator and Supervisor, Transportation. She is
                        currently the Manager, Transportation/Logistics Support
                        Systems for Red Star Yeast.

                        Prior to joining Red Star Yeast, Judith served as the
                        head bookkeeper for Briggs and Stratton Business College
                        and worked in the accounting department as a Treasury
                        Accountant at Northwestern National Insurance. She has
                        also held previous insurance related positions.

                        Associate Degree: Business Data Processing
                        Milwaukee Area Technical College

                        Candidate for Transportation Certificate
                        Milwaukee Area Technical College

----------------------- --------------------------------------------------------

<PAGE>

APPENDIX III

[XXXX]

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                                                                    Exhibit 10.1
                                                                    ------------

                                   TERM SHEET
                                   ----------

                                November 28, 2001
                                -----------------

                        $800 Million Equity Investment in
                             XO Communications, Inc.

Issuer:                       XO Communications, Inc., a Delaware corporation
                              (the "Company").

Investors:                    (1) Forstmann Little & Co. Equity Partnership-VII,
                              L.P., a Delaware limited partnership ("Equity
                              VII"), Forstmann Little & Co. Subordinated Debt
                              and Equity Management Buyout Partnership-VIII,
                              L.P., a Delaware limited partnership ("MBO VIII"
                              and collectively with Equity VII, "Forstmann
                              Little"); and (2) an undisclosed strategic
                              investor (together with its majority owned
                              subsidiaries, "Investor/Partner" and collectively
                              with Forstmann Little, the "Investors").

Investment:                   Forstmann Little shall invest $400 million in
                              exchange for shares of Class A Common Stock
                              ("Class A Common Stock") of the Company and for
                              one share of a new Class D Common Stock ("Class D
                              Common Stock") equal in the aggregate to 39% of
                              the total outstanding equity securities of the
                              Company on a fully diluted basis. Investor/Partner
                              shall invest $400 million in exchange for shares
                              of a new Class C Common Stock ("Class C Common
                              Stock" together with the Class A Common Stock and
                              Class D Common Stock will hereinafter collectively
                              be called, "Common Stock") of the Company equal to
                              39% of the total outstanding equity securities of
                              the Company on a fully diluted basis. The
                              investments of Forstmann Little and
                              Investor/Partner referred to above are hereinafter
                              referred to as the "Investments".

Certain Defined Terms:        For purposes of this term sheet, the following
                              capitalized terms shall have the following
                              meanings: "Major Event" shall mean any merger,
                              consolidation, reorganization or recapitalization
                              of the Company or any sale of all or a substantial
                              portion of the assets of

<PAGE>

                              the Company and its subsidiaries; "Acquisition"
                              shall mean the acquisition by any person or any
                              group of persons (as such terms are used for
                              purposes of Schedule 13D under the Securities
                              Exchange Act of 1934) of more than 50% of the
                              total number of outstanding shares of Common
                              Stock; and the "Board Representation Date" shall
                              mean the date when no director, officer, employee
                              or other representative of Investor/Partner is a
                              member of the board of directors of an entity that
                              competes with the Company such that Section 8 of
                              the Clayton Act would be applicable to
                              Investor/Partner with respect to its having
                              representatives on the Company Board (as
                              hereinafter defined).

Terms of Common Stock:        Each share of Common Stock shall be entitled to
                              one vote. The Class A Common Stock, the Class C
                              Common Stock and the Class D Common Stock shall
                              vote together as a single class on all matters on
                              which holders of Common Stock are entitled to
                              vote. Except for the special voting rights of the
                              Class C Common Stock and the Class D Common Stock
                              set forth below, all Common Stock shall be
                              identical in all respects.

                              Each share of Class C Common Stock shall be
                              convertible, at any time and at the option of the
                              holder thereof, into one share of Class A Common
                              Stock. The share of Class D Common Stock shall
                              automatically convert into Class A Common Stock
                              simultaneously with the conversion of all shares
                              of Class C Common Stock into Class A Common Stock.
                              Each share of Class C Common Stock shall convert
                              into one share of Class A Common Stock at any time
                              such share of Class C Common Stock has been
                              transferred to any person other than
                              Investor/Partner or a majority-owned subsidiary of
                              Investor/Partner.

                              In addition, all shares of Class C Common Stock
                              shall automatically convert into Class A Common
                              Stock under the following circumstances:

                              o         At any time if Investor/Partner and its
                                        majority-owned subsidiaries own Class C
                                        Common

                                      -2-

<PAGE>

                                        Stock representing less than 10% of the
                                        total number of outstanding shares of
                                        Common Stock; or

                              o         Upon the fourth anniversary of the
                                        Closing.

Major Events:                 At any time at which there shall remain
                              outstanding any shares of Class C Common
                              Stock or Class D Common Stock, the affirmative
                              vote of the holders of a majority of the
                              outstanding shares of Class C Common Stock, voting
                              as a separate class, and the affirmative vote of
                              the holder of the share of Class D Common Stock,
                              voting as a separate class, shall be required
                              before the Company may consummate a Major Event.

                              In addition, if, at any time prior to the Board
                              Representation Date there are any outstanding
                              shares of Class C Common Stock, the affirmative
                              vote of the holders of a majority of the
                              outstanding shares of Class C Common Stock voting
                              as a separate class, shall be required before the
                              Company may:

                              o         Acquire, by merger, purchase or
                                        otherwise, any equity interest in or
                                        assets of any other person with a value
                                        greater than 20% of the Company's net
                                        assets;

                              o         Authorize for issuance or issue any
                                        equity securities or derivative
                                        securities with a value in excess of
                                        $100 million (other than to key
                                        employees in the ordinary course of
                                        business consistent with a plan approved
                                        by the Company's Compensation Committee
                                        and Board of Directors);

                              o         Incur indebtedness for borrowed money in
                                        excess of $100 million in aggregate
                                        principal amount; or

                              o         Amend its certificate of incorporation
                                        or bylaws.

                                      -3-

<PAGE>

Use of Proceeds:              $600 million to fund continued development of the
                              Company's network and for general working capital
                              purposes and $200 million to be used in the
                              Restructuring described below.

Restructuring:                It shall be a condition to the obligation of each
                              Investor to consummate the Investment that the
                              Company shall have completed a restructuring (the
                              "Restructuring") which results in the revised
                              capitalization set forth on Exhibit A hereto (the
                              "New Capitalization"). In order to effectuate the
                              Restructuring, the Company shall (A) undertake (i)
                              an exchange offer pursuant to which the Company
                              will offer to exchange all of its outstanding
                              senior notes, subordinated notes and preferred
                              stock for Class A Common Stock and (ii) a related
                              consent solicitation with respect to the approval
                              of a Chapter 11 plan of reorganization in respect
                              of the New Capitalization or (B) if the Company
                              determines that it is not feasible to implement
                              the New Capitalization through an exchange offer
                              or such exchange offer fails to result in the
                              Company having the New Capitalization but the
                              Company has received the consents necessary to
                              confirm a Chapter 11 plan of reorganization in
                              respect of the New Capitalization, the Company
                              shall commence a Chapter 11 case and file the
                              Chapter 11 plan of reorganization that implements
                              the terms of a Restructuring that results in the
                              New Capitalization with the appropriate bankruptcy
                              court and will seek to obtain an order confirming
                              such plan as expeditiously as possible; provided,
                              that, notwithstanding the foregoing, the Company
                              may, if it has obtained such number of consents to
                              be specified in the SPA, commence a case under
                              Chapter 11 of title 11, United States Code, and
                              file a pre-negotiated Chapter 11 plan
                              contemplating the New Capitalization with the
                              appropriate bankruptcy court and seek to obtain an
                              order confirming such plan as expeditiously as
                              possible.

                                      -4-

<PAGE>

Share Purchase Agreement:     The Investors will make their respective
                              investments and acquire their shares of Common
                              Stock pursuant to a Share Purchase Agreement (the
                              "SPA") between the Investors and the Company to be
                              entered into as soon as practicable following the
                              date hereof, but in no event later than December
                              14, 2001. The SPA will have customary
                              representations and warranties, covenants and
                              closing conditions, including the closing
                              conditions discussed below.

Shareholders Agreement:       Concurrently with the execution of the SPA, the
                              Investors and the Company shall enter into a
                              shareholders agreement (the "Shareholders
                              Agreement"), which shall be effective upon the
                              date of the Closing of the Investment (the
                              "Closing").

Corporate Governance:

     Before the Board
     Representation Date:     The number of directors of the Company shall be
                              fixed at not more than 12. Investor/Partner shall
                              be entitled to vote its shares of Class C Common
                              Stock generally for the election of directors. So
                              long as Forstmann Little holds at least 10% of the
                              outstanding Common Stock, Forstmann Little shall
                              have the right to appoint or nominate to the board
                              of directors of the Company (the "Company Board")
                              such number of directors equal to the product of
                              (i) the total number of directors on the Company
                              Board times (ii) the percentage of the total
                              number of outstanding shares of Common Stock owned
                              by both Forstmann Little and Investor/Partner,
                              rounded up to the nearest whole number. Pursuant
                              to the Shareholders Agreement, Investor/Partner
                              will agree to vote its shares of Class C Common
                              Stock for the election of the nominees of
                              Forstmann Little to the Company Board. The
                              composition of the Company Board shall be adjusted
                              annually in accordance with the foregoing
                              provisions. The remaining members of the Company
                              Board shall include the CEO and that number of
                              independent directors required for the Company to
                              continue to be listed on Nasdaq.

                                      -5-

<PAGE>

                              Prior to the Board Representation Date and so long
                              as Investor/Partner holds at least 10% of the
                              outstanding Common Stock, Investor/Partner shall
                              have the right to designate up to 2 non-voting
                              observers to the Company Board. Such observers
                              shall be provided notice of all meetings of the
                              Company Board and actions taken in lieu of meeting
                              and shall have the right to attend all meetings of
                              the Company Board.

                              Prior to the Board Representation Date and so long
                              as Investor/Partner holds at least 10% of the
                              outstanding Common Stock, at least one observer
                              designee of Investor/Partner shall be entitled to
                              receive notice of and attend meetings of each
                              committee of the Company Board.

                              The Board Representation Date will not occur prior
                              to the Closing, and will be subject to all
                              necessary regulatory approvals, including, without
                              limitation FCC approval.

     After the Board
     Representation Date:     The number of directors of the Company shall be
                              fixed at not more than 12. So long as each
                              Investor holds at least 10% of the outstanding
                              Common Stock, such Investor shall have the right
                              to appoint or nominate to the Company Board such
                              number of directors equal to the product of (i)
                              the total number of directors on the Company Board
                              times (ii) the percentage of the total number of
                              outstanding shares of Class A Common Stock owned
                              by such Investor, rounded up to the nearest whole
                              number. Pursuant to the Shareholders Agreement,
                              the Investors will agree to vote their shares of
                              Common Stock for the election of the nominees of
                              the other Investor to the Company Board. The
                              composition of the Company Board shall be adjusted
                              annually in accordance with the foregoing
                              provisions. The remaining members of the Company
                              Board shall include the CEO and that number of
                              independent directors required for the Company to
                              continue to be listed on Nasdaq.

                                      -6-

<PAGE>

                              Subject to the rules and regulations of the
                              Securities and Exchange Commission and Nasdaq, so
                              long as an Investor holds at least 20% of the
                              outstanding Class A Common Stock, at least one
                              designee of such Investor shall be entitled to sit
                              on each committee of the Company Board other than
                              the Executive Committee, which is specifically
                              dealt with below.

                              In addition to Audit and Compensation Committees,
                              the Company Board shall establish and maintain a
                              five-member Executive Committee which shall have
                              responsibility for the strategic direction of the
                              Company. The CEO shall be a member of the
                              Executive Committee. Prior to the Board
                              Representation Date, Forstmann Little shall have
                              the right to have (a) four director designees on
                              the Executive Committee so long as Forstmann
                              Little continues to own at least 15% of the
                              outstanding Common Stock or (b) two director
                              designees on the Executive Committee so long as
                              Forstmann Little continues to own at least 10% but
                              less than 15% of the outstanding Common Stock.
                              After the Board Representation Date, each Investor
                              shall have the right to have (a) two director
                              designees on the Executive Committee so long as
                              such Investor continues to own at least 15% of the
                              outstanding Common Stock or (b) one director
                              designee on the Executive Committee so long as
                              such Investor continues to own at least 10% but
                              less than 15% of the outstanding Common Stock.
                              Thus, initially the Executive Committee shall
                              consist of the CEO and four designees of Forstmann
                              Little. In furtherance of the responsibilities set
                              forth above, the Company shall not take any of the
                              following actions without the approval of at least
                              2/3 of the members of the Executive Committee:

                              o         Approve or modify the business plan,
                                        adopt a new business plan or take any
                                        action that would constitute a material
                                        deviation from the current business
                                        plan;

                              o         Approve or recommend a Major Event;

                                      -7-

<PAGE>

                              o         Acquire, by merger, purchase or
                                        otherwise, any equity interest in or
                                        assets of any other person with a value
                                        greater than $100 million;

                              o         Authorize for issuance or issue any
                                        equity securities or derivative
                                        securities with a value in excess of
                                        $100 million (other than to key
                                        employees in the ordinary course of
                                        business consistent with a plan approved
                                        by the Company's Compensation Committee
                                        and Board of Directors);

                              o         Purchase or redeem any shares of its
                                        capital stock;

                              o         Declare or pay any dividends, or make
                                        any distributions in respect of any
                                        shares of its capital stock;

                              o         Redeem, retire, defease, offer to
                                        purchase or change any material term,
                                        condition or covenant in respect of
                                        outstanding long-term debt;

                              o         Incur indebtedness for borrowed money in
                                        excess of $100 million in aggregate
                                        principal amount;

                              o         Make any material change in its
                                        accounting principles or practices
                                        (other than as required by GAAP or
                                        recommended by the Company's outside
                                        auditors), or remove the Company's
                                        outside auditors or appoint new
                                        auditors; and

                              o         Appoint or terminate or modify the terms
                                        of the employment of any member of the
                                        Company's senior management.

                              Notwithstanding the foregoing, if any of the
                              matters referred to above under the heading "After
                              the Board Representation Date" are not approved by
                              the requisite

                                      -8-

<PAGE>

                              2/3 majority of the Executive Committee and
                              representatives of the Investors have attempted to
                              resolve their differences regarding the matter for
                              at least 30 days, any member of the Executive
                              Committee shall be entitled to present such issue
                              to the Company Board where the issue may be
                              adopted or rejected by a majority vote of the
                              Company Board.

Veto Rights:                  So long as (i) an Investor holds shares of Class A
                              Common Stock representing at least 20% of the
                              outstanding Common Stock and (ii) no Major Event
                              or Acquisition has occurred, the approval of at
                              least one director designee of such Investor shall
                              be required before the Company may take any of the
                              following actions:

                              o         Amend its certificate of incorporation
                                        or bylaws, it being understood and
                                        agreed that the Company's certificate of
                                        incorporation and bylaws shall not
                                        contain any super-majority voting
                                        provisions for Major Events;

                              o         Enter into any transaction with any
                                        affiliate, officer, director or
                                        stockholder;

                              o         File any petition for bankruptcy or make
                                        any assignment for the benefit of
                                        creditors.

Transferability:              Prior to the fourth anniversary of the Closing of
                              the Investment, the shares of Common Stock
                              acquired by each Investor pursuant to the SPA
                              shall be transferable only to affiliates of such
                              Investor. Following such fourth anniversary, such
                              shares shall be freely transferable without
                              restriction under the SPA or otherwise and shall,
                              following such date, be subject to a registration
                              rights agreement (the "Registration Rights
                              Agreement"), the terms of which are summarized
                              below.

Standstill:                   Each Investor will agree that, so long as the
                              other Investor holds at least 20% of the
                              outstanding Common Stock, it will not, without the
                              express written consent of the other Investor, (i)
                              acquire any additional

                                      -9-

<PAGE>

                              shares of Common Stock, other equity securities of
                              the Company or other securities convertible or
                              exchangeable into equity securities of the
                              Company, except pursuant to its pre-emptive rights
                              discussed below, (ii) solicit consents for the
                              election of directors to the Company Board (other
                              than as expressly permitted by the Shareholders
                              Agreement) or seek to change the number of
                              directors on the Company Board, (iii) form,
                              encourage or participate in a "person" within the
                              meaning of Section 13(d)(3) of the Securities
                              Exchange Act of 1934 for the purpose of taking any
                              actions described in this paragraph, (iv) make any
                              shareholder proposals to the Company or (v)
                              propose or commence any mergers, acquisitions,
                              tender offers, asset sale transactions or other
                              business combinations involving the Company.

Shareholder Agreement
Termination:                  The Shareholders Agreement shall terminate when
                              either Investor holds less than 10% of the
                              outstanding Common Stock.

Pre-emptive Rights:           Each Investor shall have a pre-emptive right to
                              purchase its pro rata percentage of any subsequent
                              issuances of equity securities (or equivalents or
                              derivatives thereof) or debt securities by the
                              Company. So long as there remain outstanding any
                              shares of Class C Common Stock, Investor/Partner
                              shall have the right to purchase shares of Class C
                              Common Stock in the exercise of its pre-emptive
                              rights and Forstmann Little shall have the right
                              to purchase shares of Class D Common Stock in the
                              exercise, of its pre-emptive rights.

Lock-Up:                      The Company and each of its directors and officers
                              and each holder of more than 5% of the Company's
                              equity securities (including the Investors) shall
                              be prohibited, directly or indirectly, from
                              issuing, selling or otherwise distributing any
                              equity securities of the Company or any securities
                              convertible or exchangeable into equity securities
                              of the Company for a period of one year following
                              the Closing.

                                      -10-

<PAGE>

Representations, Warranties
  and Covenants:              The SPA will contain standard representations and
                              warranties customary in similar transactions for
                              companies in similar financial positions. The
                              Company will covenant to conduct its business
                              prior to the Closing only in the ordinary course
                              (other than with respect to the Restructuring) and
                              will make other customary pre-Closing covenants,
                              including without limitation:

                              o         No issuances of common stock, options,
                                        warrants or rights to acquire common
                                        stock or securities convertible or
                                        exchangeable into common stock, except
                                        pursuant to one of the Company's stock
                                        option plans or the Restructuring.

                              o         No additional repurchases of the
                                        Company's outstanding debt and equity
                                        securities, except pursuant to the
                                        Restructuring.

                              o         No cash interest payments or cash
                                        dividend payments will be paid by the
                                        Company after November 30, 2001 with
                                        respect to any series or class of the
                                        Company's outstanding senior notes,
                                        subordinated notes, preferred stock and
                                        common stock.

Indemnification:              The Company will indemnify the Investors, their
                              directors, officers, employees, agents and
                              affiliates against all losses, liabilities, or
                              damages arising out of or in connection with the
                              transactions contemplated by this term sheet.

Conditions to Closing         In addition to the consummation of the
                              Restructuring, the SPA will contain standard
                              closing conditions for similar transactions,
                              including the following, each of which shall be
                              fulfilled to the satisfaction of, or waived by,
                              each Investor:

                              o         All shares of Class B Common Stock
                                        ("Class B Common Stock") shall have been
                                        converted into shares of Class A Common
                                        Stock in accordance with the New
                                        Capitalization.

                              o         Receipt of all regulatory approvals
                                        (including those of the SEC and FCC,
                                        DOJ, FTC and state and

                                      -11-

<PAGE>

                                        foreign regulatory authorities, if any)
                                        and third party consents.

                              o         Approval from the Nasdaq Stock Market of
                                        continued listing of the Class A Common
                                        Stock after the Restructuring.

                              o         A restructuring of the Company's bank
                                        credit facilities on terms acceptable to
                                        the Investors, including without
                                        limitation, covenant waivers, covenant
                                        amendments, rescheduling of principal
                                        repayments and increases in the size of
                                        the credit facility.

                              o         All transaction documents, including
                                        without limitation the Company's Amended
                                        and Restated Certificate of
                                        Incorporation and bylaws, shall be in
                                        form and substance reasonably acceptable
                                        to each Investor.

                              o         All court orders necessary to consummate
                                        the Restructuring shall have been
                                        obtained and have become final and
                                        non-appealable.

                              o         There shall not have occurred any
                                        material adverse change in the business,
                                        operations, financial condition or
                                        prospects of the Company and its
                                        subsidiaries, taken as a whole.

                              o         There shall not exist any material
                                        litigation, including, but not limited
                                        to actions seeking injunctive relief,
                                        regarding the transactions contemplated
                                        by this term sheet or that would
                                        otherwise have a material adverse effect
                                        upon the business, operations, financial
                                        condition or prospects of the Company
                                        and its subsidiaries, taken as a whole
                                        (an "MAE").

                              o         There shall not exist any injunction or
                                        other order or decree the effect of
                                        which would prevent the consummation of
                                        the transactions contemplated by this
                                        term sheet or that would otherwise have
                                        an MAE.

                              o         Execution of the Shareholders Agreement.

                              o         Execution of the Registration Rights
                                        Agreement.

                              o         Retention of senior management of the
                                        Company to the satisfaction of, and upon
                                        economic terms acceptable to, each
                                        Investor.

                                      -12-

<PAGE>

Due Diligence:                The Investors expect and intend to have
                              substantially completed a due diligence
                              investigation of the Company within two weeks
                              following the execution of this term sheet,
                              subject to "bring down" due diligence for events
                              subsequent to that two-week period. The SPA will
                              not contain a due diligence condition.

Right to assume obligations:  If either Investor elects to terminate the SPA
                              with respect to its investment based on the
                              failure of one or more of the foregoing conditions
                              to be satisfied, the other Investor may waive such
                              condition(s), assume the obligations of such
                              Investor and consummate the Investment.

Termination:                  Each Investor may terminate the SPA (i) for any
                              material breach by the Company or the other
                              Investor of its representations and warranties or
                              covenants contained in the SPA, (ii) if the
                              Restructuring has not been consummated on terms
                              acceptable to the Investors within 8 months from
                              the earlier of (x) the date of execution of the
                              SPA and (y) December 14, 2001; provided, however,
                              that such period shall be extended for up to 4
                              months if all conditions to Closing other than
                              regulatory approvals shall have been satisfied;
                              and provided, further, that such period shall be
                              further extended for up to an additional 30 days
                              as contemplated under the heading "Expected
                              Closing" below.

Termination Fee:              The Company will pay to each Investor a fee equal
                              to 1% of the "pre-money valuation" of the Company
                              (which fee, the parties acknowledge and agree, as
                              of the date hereof would be $15 million per
                              Investor) upon the termination by the Company of
                              the SPA for the purpose of permitting a third
                              party to make an investment in the Company or in
                              connection with a proposed Major Event or
                              Acquisition. When the Company commences a Chapter
                              11 case in order to effectuate its Chapter 11 plan
                              in respect of the New Capitalization, the Company
                              shall immediately thereafter, but in no event
                              later than three business days after the
                              commencement of the case, seek court approval of
                              the foregoing payments, together with the

                                      -13-

<PAGE>

                              expense reimbursement set forth below, as break-up
                              fees payable to the Investors. With respect to the
                              immediately preceding sentence, time is of the
                              essence; if the court approval referred to in that
                              sentence is not obtained promptly, the Investors
                              shall be entitled to terminate the SPA.

Expected Closing:             Subject to the satisfaction or waiver by the
                              Investors of the closing conditions set forth
                              above, the purchase of Common Stock contemplated
                              by this term sheet will close on a date mutually
                              satisfactory which is not more than 30 days after
                              the later of (i) the date upon which the order of
                              the bankruptcy court confirming the pre-negotiated
                              bankruptcy plan filed pursuant to the terms hereof
                              becomes final and non-appealable and (ii) the date
                              upon which all regulatory approvals necessary to
                              consummate the transactions contemplated by this
                              term sheet have been obtained.

Expenses:                     The Company shall reimburse each Investor for all
                              its reasonable, documented, out-of-pocket costs
                              and expenses (including, without limitation, the
                              fees and expenses of counsel, advisors and
                              accountants) incurred in connection with the
                              transactions contemplated hereby up to a maximum
                              amount per Investor of $3.75 million if the SPA is
                              not executed or $5 million if the SPA is executed,
                              in any case, regardless of whether the Investment
                              is consummated, it being specifically understood
                              and agreed that neither Forstmann Little nor any
                              of its affiliates will receive any fee in
                              connection with the transactions contemplated
                              hereby.

Certain Information:          The directors designated by the Series C and
                              Series D Preferred Stock shall be permitted to
                              participate in all meetings and votes of the
                              Company Board (other than with respect to
                              transactions where Forstmann Little is a party),
                              and shall receive all information provided to
                              other members of the Company Board, regarding the
                              status and terms of any proposals, discussions,
                              negotiations and agreements concerning any
                              proposed investment in, or business combination,
                              other change of control transaction or
                              restructuring involving, the

                                      -14-

<PAGE>

                              Company. These directors shall be permitted to
                              provide any and all such information to Forstmann
                              Little and Investor/Partner and their respective
                              attorneys, advisors and accountants.

Successors and Assigns:       Each Investor can assign its respective rights and
                              remedies under the SPA and the Shareholders
                              Agreement to one of its controlled affiliates
                              which shall agree to be bound by the terms
                              thereof.

Publicity:                    The Investors and the Company agree to consult
                              with each other prior to issuing any public
                              announcement relating to this term sheet or the
                              transactions contemplated hereby.

Governing Law:                New York

                          REGISTRATION RIGHTS AGREEMENT

Concurrently with the execution of the SPA, the Investors and the Company shall
enter into a Registration Rights Agreement (the "Registration Rights
Agreement"), which shall be effective upon the Closing and contain the following
material terms:

Securities Covered:           All Class A Common Stock acquired pursuant to the
                              transactions contemplated by this term sheet.

Demand Rights:                Investor/Partner and Forstmann Little will each
                              have five demand registrations, subject to 90-day
                              blackout periods and standard cut-back rights. The
                              minimum size of a demand registration of the
                              Investors shall be the lesser of 20% of the shares
                              obtained by such Investor pursuant to this term
                              sheet or $50 million unless the amount of Class A
                              Common Stock acquired pursuant to this term sheet
                              which is still subject to registration is less
                              than the lower of such amounts, in which case such
                              minimum shall be the amount of Class A Common
                              Stock still subject to registration.

Piggyback Rights:             The Investors shall have unlimited "piggyback"
                              rights with respect to registered public offerings
                              by the Company, subject to standard underwriters'
                              cutback provisions with priority given to the
                              Company.

                                      -15-

<PAGE>

Expenses of Registration:     The Company will pay the registration expenses of
                              any registration including, without limitation,
                              the SEC and NASD registration fees and the
                              reasonable fees and expenses of counsel for the
                              Investors (but not including underwriters'
                              discounts and commissions).

Indemnification:              The Company will indemnify the Investors, the
                              underwriters and their respective affiliates and
                              control persons against liabilities arising out of
                              misstatements or omissions or alleged
                              misstatements or omissions in the registration
                              statement and prospectus.

                              The Investors will indemnify the Company, the
                              underwriters and their respective affiliates and
                              control persons against liabilities arising out of
                              misstatements or omissions in the registration
                              statement and prospectus, but only with respect to
                              misstatements or omissions made in reliance upon
                              and in conformity with written information
                              furnished to the Company by the Investors
                              expressly for use in such registration statement
                              and prospectus.

Rule 144 Information:         The Company will ensure that there is adequate
                              public information regarding the Company at all
                              times to permit sales of securities pursuant to
                              Rule 144 under the Securities Act of 1933.

            NON-BINDING EFFECT OF TERM SHEET; THIRD-PARTY BENEFICIARY

     Except for the provisions regarding (i) the expense reimbursement provided
for herein, (ii) publicity and (iii) the matters set forth under the heading
"Certain Information", this summary of proposed terms shall not constitute a
legally binding agreement among the Investors and the Company, but is intended
to serve as the basis for the preparation of the SPA, the Registration Rights
Agreement, the Shareholders Agreement and other documents related to the
transactions contemplated by this term sheet, and accordingly, except as
expressly provided in the first clause of this sentence, no legally binding
agreement shall arise until the SPA, in mutually satisfactory form, has been
duly authorized, executed and delivered by the Company and the Investors.

     The Company and Forstmann Little acknowledge that Investor/Partner is a
third-party beneficiary with respect to the binding provisions of this term
sheet. The identity

                                      -16-

<PAGE>

of Investor/Partner will be disclosed to the Company upon the execution by the
Company of this term sheet.

                                        Forstmann Little & Co. Equity
                                          Partnership-VII, L.P.

                                        By: /s/ Sandra Horbach
                                            ------------------------------------

                                        Forstmann Little & Co. Subordinated Debt
                                          and Equity Management Buyout
                                          Partnership Partnership-VIII, L.P.

                                        By: /s/ Sandra Horbach
                                            ------------------------------------

                                        XO Communications, Inc.

                                        By: /s/ Daniel F. Akerson
                                            ------------------------------------

November 28, 2001

                                      -17-

<PAGE>

                                    Exhibit A
                               New Capitalization

     Set forth below is a summary of the proposed New Capitalization.

<TABLE>
<CAPTION>

<S>                                        <C>                                    <C>
----------------------------------------   ------------------------------------   ------------------------------------
                                                        Amount                        Ownership of the Company

----------------------------------------   ------------------------------------   ------------------------------------
Unrestricted Cash                                              to be discussed                   ---

----------------------------------------   ------------------------------------   ------------------------------------
Aggregate Indebtedness(1)                             Not to exceed $1 billion                   ---

----------------------------------------   ------------------------------------   ------------------------------------
Forstmann Little's New Equity (Class A                            $400 million                   39%
Common and Class D Common)

----------------------------------------   ------------------------------------   ------------------------------------
Investor/Partner's New Equity (Class C                            $400 million                   39%
Common)

----------------------------------------   ------------------------------------   ------------------------------------
Management Equity (Class A Common)                                 $41 million(2)                 4%

----------------------------------------   ------------------------------------   ------------------------------------
Other Equity Holders (Class A Common)                             $185 million(3)                18%
----------------------------------------   ------------------------------------   ------------------------------------
</TABLE>

--------
(1) Excludes any capitalized leases.

(2) To the extent management equity includes options, such options are valued at
    their implied valuation before taking into account exercise price.

(3) Implied valuation.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00032-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00032-of-00352.parquet"}]]