Exhibit 24
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Exhibit C
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REGISTRATION RIGHTS AGREEMENT
Dated as of ________ __, 2002
among
XO Communications, Inc.
Forstmann Little & Co. Equity Partnership-VII, L.P.,
Forstmann Little & Co. Subordinated Debt and Equity Management
Buyout Partnership-VIII, L.P.
and
Telefonos de Mexico, S.A. de C.V.
TABLE OF CONTENTS
PAGE
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1. Definitions............................................................1
2. Registration Under Securities Act, etc.................................3
2.1. Registration on Request.........................................3
2.2. Incidental Registration.........................................5
2.3. Registration Procedures.........................................6
2.4. Underwritten Offerings.........................................10
2.5. Preparation; Reasonable Investigation..........................11
2.6. Indemnification................................................12
2.7. Unlegended Certificates........................................15
2.8. No Required Sale...............................................15
3. Rule 144..............................................................15
4. Amendments and Waivers................................................15
5. Notice................................................................15
6. Assignment; Third Party Beneficiaries.................................16
7. Remedies..............................................................17
8. No Inconsistent Agreements............................................17
9. Descriptive Headings..................................................17
10. Governing Law.........................................................17
11. Counterparts..........................................................17
12. Invalidity of Provision...............................................18
13. Further Assurances....................................................18
14. Entire Agreement; Effectiveness.......................................18
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as
of __________ __, 2002, is among XO Communications, Inc., a Delaware
corporation (the "Company"), 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 Telefonos de Mexico, S.A. de C.V., a sociedad
anonima de capital variable ("Telmex"; Forstmann Little and Telmex are
sometimes hereinafter referred to as the "Purchasers" and each is sometimes
individually referred to as a "Purchaser").
WHEREAS, pursuant to the Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of January 15, 2002, among the Company and
the Purchasers, (a) Forstmann Little will acquire (i) __________shares (the
"New Class A Shares") of Class A Common Stock, par value $0.01 per share,
of the Company ("Class A Common Stock") and (ii) 2 shares of Class D Common
Stock, par value $0.01 per share, of the Company (the "Class D Common
Shares") and (b) Telmex will acquire ___________ shares of Class C Common
Stock, par value $0.01 per share, of the Company (the "Class C Common
Shares").
WHEREAS, each share of the Class C Common Shares and each Class D
Common Share is convertible, under certain circumstances, into one share of
Class A Common Stock, subject to adjustment.
WHEREAS, as part of, and as partial consideration for, the
acquisition of the New Class A Shares and the Class D Common Shares by
Forstmann Little and the acquisition of the Class C Common Shares by
Telmex, the Company hereby grants to the Purchasers certain registration
rights with respect to certain shares of Class A Common Stock to be issued
or issuable to each of them upon consummation of the transactions
contemplated by the Stock Purchase Agreement.
Accordingly, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, unless the context
otherwise requires, the following terms have the following respective
meanings:
"Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time with primary
responsibility for administering the Securities Act.
"Common Stock" means the New Class A Shares and the Class C
Common Shares and any shares of Class A Common Stock acquired by a Holder
upon the conversion of shares of the Class C Common Shares or the Class D
Common Shares, collectively.
"Demand Holders" means Forstmann Little and Telmex and each
Permitted Transferee of Forstmann Little or Telmex that is a Holder and to
which Forstmann Little or Telmex has expressly assigned demand rights under
Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall include a
reference to the comparable section, if any, of any such similar federal
statute.
"Holders" means the Purchasers and any of their Permitted
Transferees who agree to be bound by the provisions of this Agreement.
"Permitted Transferee" means any Person to whom any Purchaser
shall have the right to transfer any Registrable Securities in accordance
with the terms of the Stockholders Agreement, dated as of __________ __,
2002, among Forstmann Little and Telmex and the Company, as in effect at
the time of such transfer.
"Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
"Registrable Securities" means (i) the New Class A Shares; (ii)
any shares of Class A Common Stock issued or issuable upon conversion of
the Class C Common Shares or the Class D Common Shares; and (iii) any
shares of Class A Common Stock or other securities of the Company issued or
issuable with respect to the Class A Common Stock referred to in clauses
(i) and (ii) by way of a stock dividend or stock split or in connection
with a recapitalization, merger, consolidation or otherwise. As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities (a) when a registration statement with respect to
the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) when such securities shall
have been otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration of them under the Securities Act, or (c) when all such
securities owned by a Holder are eligible for sale under Rule 144(k) under
the Securities Act or any successor provision.
"Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to
Section 2 hereof, including, without limitation, all registration, filing
and applicable national securities exchange fees, all fees and expenses of
complying with state securities or blue sky laws (including fees and
disbursements of counsel to the underwriters or any Holder in connection
with "blue sky" qualification of the Registrable Securities and
determination of their eligibility for investment under the laws of the
various jurisdictions), all word processing, duplicating and printing
expenses, all messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants,
including the expenses of "cold comfort" letters or any special audits
required by, or incident to, such registration, all fees and disbursements
of underwriters (other than underwriting discounts and commissions), all
transfer taxes, and all fees and expenses of counsel to any Holder;
provided, however, that Registration Expenses shall exclude, and the
Holders shall pay, underwriting discounts and commissions in respect of the
Registrable Securities being registered.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act shall include a
reference to the comparable section, if any, of any such similar Federal
statute.
2. Registration Under Securities Act, etc.
2.1. Registration on Request.
(a) Request. Each Demand Holder shall have the right to
require the Company to effect the registration under the Securities Act of
all or part of the Registrable Securities, by delivering a written request
thereof to the Company specifying the number of shares of Registrable
Securities it wishes to register and the intended method of distribution.
The Company shall (i) use its reasonable best efforts to effect the
registration under the Securities Act (including by means of a shelf
registration pursuant to Rule 415 under the Securities Act if so requested
by the Demand Holder making such request) of the Registrable Securities
which the Company has been so requested to register by Demand Holders, for
distribution in accordance with the intended method of distribution set
forth in the written request delivered by such Demand Holder, such
registration to be effected as expeditiously as possible (but in any event
within 90 days of receipt of such written request), and (ii) if requested
by such Demand Holder, use its reasonable best efforts to obtain
acceleration of the effective date of the registration statement relating
to such registration.
(b) Limitations on Registration on Request. Each of the
Purchasers and its respective Permitted Transferees that are Demand Holders
shall collectively be entitled to require the Company to effect, and the
Company shall effect, five (5) registrations, for a total of ten (10)
registrations for all Demand Holders, pursuant to this Section 2.1. The
Company shall not be required to effect any registration upon request by
any Demand Holder if such registration does not meet the Minimum Size (as
hereinafter defined). "Minimum Size" means the lesser of (i) an anticipated
aggregate public offering price (before deducting underwriting discounts
and commissions) of $50 million or (ii) an anticipated registration,
offering and sale of 20% or more of the shares of Common Stock acquired by
such Purchaser pursuant to the Stock Purchase Agreement, unless the total
amount of Registrable Securities owned by a Demand Holder is less than the
amounts referred to in both clauses (i) and (ii) above, in which case the
Minimum Size with respect to such Demand Holder shall be such lesser
amount.
(c) Registration of Other Securities. Whenever the
Company shall effect a registration pursuant to this Section 2.1 in
connection with an underwritten offering by Demand Holders of Registrable
Securities, no securities other than Registrable Securities shall be
included among the securities covered by such registration if inclusion of
such other securities would result in a request by the managing
underwriters for a reduction in the number of Registrable Securities
requested to be so registered.
(d) Registration Statement Form. Registrations under
this Section 2.1 shall be on such appropriate registration form of the
Commission as, subject to clause (a) above, shall be selected by the
Company and as shall be reasonably acceptable to the Demand Holder. The
Company agrees to include in any such registration statement all
information that, in the opinion of counsel to a Holder and counsel to the
Company, is necessary or desirable to be included therein.
(e) Expenses. The Company shall pay all Registration
Expenses in connection with any registration requested pursuant to this
Section 2.1.
(f) Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been
effected (including for purposes of paragraph (b) of this Section 2.1) (i)
unless a registration statement with respect thereto has become effective
and has been kept continuously effective for a period of at least 365 days
(or such shorter period which shall terminate when all the Registrable
Securities covered by such registration statement have been sold pursuant
thereto), (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason not
attributable to a Holder of Registrable Securities covered by such
registration statement and has not thereafter become effective, or (iii) if
the conditions to closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not satisfied or
waived.
(g) Selection of Underwriters. The underwriters of each
underwritten offering of the Registrable Securities so to be registered
shall be selected by the Demand Holders of a majority of the Registrable
Securities included in such registration request, subject to the Company's
approval, which approval shall not be unreasonably withheld.
(h) Right to Withdraw. If the managing underwriter of
any underwritten offering shall advise the Holders participating in such
offering and registration that the Registrable Securities covered by the
registration statement cannot be sold in such offering within a price range
acceptable to any such Holder, such Holder shall have the right to decline
to participate in such offering and registration. In addition, if such
managing underwriter shall advise such Holders that the Registrable
Securities covered by the registration statement cannot be sold in such
offering within a price range acceptable to Holders of a majority of the
Registrable Securities included in such registration, then the Holders of a
majority of the Registrable Securities so included shall have the right to
notify the Company in writing that they have determined that the
registration statement shall be abandoned or withdrawn, in which event the
Company shall abandon or withdraw such registration statement. In the event
of such abandonment or withdrawal, such request shall not be counted for
purposes of the requests for registration to which the Holders are entitled
pursuant to this Section 2.1, and the Holders that sought to participate in
such offering and registration shall, on a pro rata basis, pay, or
reimburse the Company for, all Registration Expenses related thereto.
(i) Postponement. The Company shall be entitled once in
any six-month period to postpone for a reasonable period of time (but not
exceeding 90 days) the filing of any registration statement required to be
prepared and filed by it pursuant to this Section 2.1 if the Company
determines, in its reasonable judgment, that such registration and offering
would materially interfere with any material financing, corporate
reorganization or other material transaction involving the Company or any
significant subsidiary, or would require premature disclosure thereof, and
promptly gives the Holders participating in such registration written
notice of such determination, containing a general statement of the reasons
for such postponement (which the Holders shall maintain in strict
confidence) and an approximation of the anticipated delay. If the Company
shall so postpone the filing of a registration statement, (i) the Company
shall use its reasonable best efforts to limit the delay to as short a
period as is practicable and (ii) the Demand Holders of a majority of the
Registrable Securities included in such registration shall have the right
to withdraw the request for registration by giving written notice to the
Company at any time and, in the event of such withdrawal, such request
shall not be counted for purposes of the requests for registration to which
the Demand Holders are entitled pursuant to this Section 2.1.
(j) Shelf Registration. If the Demand Holders request
that the Company effect a registration of Registrable Securities by means
of shelf registration pursuant to Rule 415 under the Securities Act (a
"Shelf Registration Statement"), in addition to the other requirements
contained herein, the Company shall, at its cost, use its reasonable best
efforts to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by any
Holder until such time as all the Registrable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding (the "Effectiveness
Period"); provided, however, that the Effectiveness Period in respect of
the Shelf Registration Statement shall be extended to the extent required
to permit dealers to comply with the applicable prospectus delivery
requirements under the Securities Act and as otherwise provided herein.
2.2. Incidental Registration.
(a) Right to Include Registrable Securities. If the
Company at any time proposes to register any of its securities for its own
account or the account of any other stockholder (including any Demand
Holder) under the Securities Act by registration on Form X-0, X-0 or S-3 or
any successor or similar form(s) (except registrations on any such Form or
similar form(s) solely for registration of securities in connection with an
employee benefit plan or dividend reinvestment plan or a merger or
consolidation or incidental to an issuance of securities under Rule 144A
under the Securities Act), it will each such time give prompt written
notice to all of the Holders of its intention to do so and of the Holders'
rights under this Section 2.2. Upon the written request of any Holder
(which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such Holder), made as promptly as practicable
and in any event within 30 days after the receipt of any such notice (10
days if the Company states in such written notice or gives telephonic
notice to the each of the Holders, with written confirmation to follow
promptly thereafter, stating that (i) such registration will be on Form S-3
and (ii) such shorter period of time is required because of a planned
filing date), the Company shall use its reasonable best efforts to effect
the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by such Holder;
provided, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay
registration of such securities, the Company shall give written notice of
such determination and its reasons thereof to each of the Holders
requesting registration under this Section 2.2 (which such Holders will
hold in strict confidence) and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any
obligation of the Company to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of the Holders to
request that such registration be effected as a registration under Section
2.1 and (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities. No registration
effected under this Section 2.2 shall relieve the Company of its obligation
to effect any registration upon request under Section 2.1. The Company will
pay all Registration Expenses in connection with any registration of
Registrable Securities requested pursuant to this Section 2.2.
(b) Right to Withdraw. Any Holder shall have the right
to withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2 at any time prior to
the execution of an underwriting agreement with respect thereto by giving
written notice to the Company of its request to withdraw.
(c) Priority in Incidental Registrations. If the
managing underwriter of any underwritten offering shall inform the Company
by letter of its belief that the number of Registrable Securities requested
to be included in such registration, when added to the number of other
securities to be offered in such registration, would materially adversely
affect such offering, then the Company shall include in such registration,
to the extent of the number which the Company is so advised can be sold in
(or during the time of) such offering without so materially adversely
affecting such offering, securities in the following priority: (A)
securities proposed to be included by the Company, (B) on a pro rata basis
in accordance with (i) the number of securities proposed to be included by
the stockholders (including Demand Holders), if any, triggering such
registration and (ii) the Registrable Securities requested by Holders to be
included in such registration pursuant to this Section 2.2 and then (C) any
other securities of the Company requested to be included in such
registration by any other holder having the right to include securities, on
a pro rata basis, based on the number of shares of Common Stock held, or
obtainable by exercise or conversion of other securities of the Company, by
such holder.
(d) Plan of Distribution. Any participation by Holders
of Registrable Securities in a registration by the Company shall be in
accordance with the Company's plan of distribution, provided that the
Holders of a majority of the Registrable Securities included in such
registration shall in consultation with the Company have the right to
select a co-managing underwriter.
2.3. Registration Procedures. If and whenever the Company is
required to use its reasonable best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Sections
2.1 and 2.2 hereof, the Company shall as expeditiously as possible:
(a) prepare and file with the Commission as soon as
practicable the requisite registration statement to effect such
registration (and shall include all financial statements required
by the Commission to be filed therewith) and thereafter use its
reasonable best efforts to cause such registration statement to
become effective; provided, however, that before filing such
registration statement (including all exhibits) or any amendment
or supplement thereto or comparable statements under securities
or blue sky laws of any jurisdiction, the Company shall as
promptly as practicable furnish such documents to each Holder and
each underwriter, if any, participating in the offering of the
Registrable Securities and their respective counsel, which
documents will be subject to the review and comments of each such
Holder, each underwriter and their respective counsel; and
provided, further, however, that the Company may discontinue any
registration of its securities which are not Registrable
Securities at any time prior to the effective date of the
registration statement relating thereto;
(b) notify each Holder of Registrable Securities
covered by any registration statement of the Commission's
requests for amending or supplementing such registration
statement and the prospectus, and prepare and file with the
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such
registration statement for such period as shall be required for
the disposition of all of such Registrable Securities in
accordance with the intended method of distribution thereof;
provided, that except with respect to any such registration
statement filed pursuant to Rule 415 under the Securities Act,
such period need not exceed 365 days;
(c) furnish, without charge, to each Holder of
Registrable Securities covered by any registration statement and
each underwriter such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such Holders and
such underwriters may reasonably request;
(d) use its reasonable best efforts (i) to register or
qualify all Registrable Securities and other securities covered
by such registration statement under such securities or blue sky
laws of such States of the United States of America where an
exemption is not available and as each Holder of Registrable
Securities covered by such registration statement or any managing
underwriter shall reasonably request, (ii) to keep such
registration or qualification in effect for so long as such
registration statement remains in effect, and (iii) to take any
other action which may be reasonably necessary or advisable to
enable each Holder of Registrable Securities covered by a
registration statement to consummate the disposition in such
jurisdictions of the securities to be sold by such Holders
pursuant thereto, except that the Company shall not for any such
purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but
for the requirements of this subsection (d) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction;
(e) use its reasonable best efforts to cause all
Registrable Securities covered by such registration statement to
be registered with or approved by such other federal or state
governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to any Holder of
Registrable Securities covered by such registration statement to
consummate the disposition of such Registrable Securities;
(f) furnish to each Holder and each underwriter, if
any, participating in the offering of the securities covered by
such registration statement, a signed counterpart of (i) an
opinion of counsel for the Company, and (ii) a "comfort" letter
signed by the independent public accountants who have certified
the Company's or any other entity's financial statements included
or incorporated by reference in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in
accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates
such opinions and comfort letters are customarily dated) and, in
the case of the legal opinion, such other legal matters;
(g) promptly notify each Holder and each managing
underwriter, if any, participating in the offering of the
securities covered by such registration statement (i) when such
registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or
post-effective amendment to such registration statement has been
filed, and, with respect to such registration statement or any
post-effective amendment, when the same has become effective;
(ii) of any request by the Commission for amendments or
supplements to such registration statement or the prospectus
related thereto or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of
any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale under
the securities or blue sky laws of any jurisdiction or the
initiation of any proceeding for such purpose; (v) at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the
circumstances under which they were made, and in the case of this
clause (v), at the request of any Holder of Registrable
Securities covered by such registration statement promptly
prepare and furnish to such Holder and each managing underwriter,
if any, participating in the offering of the Registrable
Securities, a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as
thereafter delivered to such Holders, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the
circumstances under which they were made; and (vi) at any time
when the representations and warranties of the Company
contemplated by Section 2.4(a) or (b) hereof cease to be true and
correct;
(h) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the
first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule
158 promulgated thereunder, and promptly furnish to each Holder
of Registrable Securities covered by a registration statement a
copy of any amendment or supplement to such registration
statement or prospectus;
(i) provide and cause to be maintained a transfer agent
and registrar (which, in each case, may be the Company) for all
Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such
registration statement;
(j) (i) use its reasonable best efforts to cause all
Registrable Securities covered by such registration statement to
be listed on the NASDAQ "national market system" or the principal
securities exchange on which similar securities issued by the
Company are then listed (if any), if the listing of such
Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed,
use its reasonable best efforts to (x) cause all such Registrable
Securities to be listed on a national securities exchange or (y)
failing that, secure designation of all such Registrable
Securities as a NASDAQ "national market system security" within
the meaning of Exchange Act Rule 11Aa2-1 of the Commission or (z)
failing that, to secure NASDAQ authorization for such shares and,
without limiting the generality of the foregoing, to arrange for
at least two market makers to register as such with respect to
such shares with the National Association of Securities Dealers,
Inc.;
(k) deliver promptly to counsel to each Holder and each
underwriter, if any, participating in the offering of the
Registrable Securities, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its
staff with respect to such registration statement;
(l) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the
registration statement;
(m) provide a CUSIP number for all Registrable
Securities, no later than the effective date of the registration
statement; and
(n) in connection with any underwritten public
offering, make available its senior executive officers, directors
and chairman and otherwise provide reasonable assistance to the
underwriters (taking into account the needs of the Company's
business) in their marketing of Registrable Securities.
The Company may require each Holder of Registrable Securities covered by a
registration statement to furnish the Company such information regarding
such Holder and the distribution of the Registrable Securities of such
Holder as the Company may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in paragraph
(g)(iii) or (v) of this Section 2.3, such Holder will, to the extent
appropriate, discontinue its disposition of Registrable Securities pursuant
to the registration statement relating to such Registrable Securities
until, in the case of paragraph (g)(v) of this Section 2.3, its receipt of
the copies of the supplemented or amended prospectus contemplated by
paragraph (g)(v) of this Section 2.3 and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other
than permanent file copies, then in its possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of
such notice. If the disposition by a Holder of its securities is
discontinued pursuant to the foregoing sentence, the Company shall extend
the period of effectiveness of the registration statement by the number of
days during the period from and including the date of the giving of notice
to and including the date when such Holder shall have received copies of
the supplemented or amended prospectus contemplated by paragraph (g)(v) of
this Section 2.3; and, if the Company shall not so extend such period, the
request pursuant to which such registration statement was filed shall not
be counted for purposes of the requests for registration to which the
Holders are entitled pursuant to Section 2.1 hereof.
2.4. Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering by the Holders pursuant to a
registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement (in the form of underwriting agreement
used at such time by the managing underwriter(s)) with a managing
underwriter or underwriters selected by the Demand Holders of a majority of
the Registrable Securities included in such registration. Such underwriting
agreement shall be satisfactory in form and substance to Demand Holders of
a majority of the Registrable Securities included in such registration and
shall contain such representations and warranties by, and such other
agreements on the part of, the Company and such other terms as are
generally prevailing in agreements of the managing underwriter(s),
including, without limitation, their customary provisions relating to
indemnification and contribution. Each Holder participating in such
registration shall be a party to such underwriting agreement and may, at
its option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the benefit of
such Holder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holder. No underwriting
agreement (or other agreement in connection with such offering) shall
require any Holder to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding the ownership of such Holder's
Registrable Securities and such Holder's intended method or methods of
disposition or to furnish any indemnity to any Person which is broader than
the indemnity to be furnished by such Holder pursuant to Section 2.6(b).
(b) Incidental Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into any underwriting agreements in connection
therewith, all of the Registrable Securities to be included in such
registration shall be subject to such underwriting agreements. Each Holder
of Registrable Securities included in such registration shall be a party to
such underwriting agreement and may, at its option, require that any or all
of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holder. No underwriting agreement (or other agreement in connection with
such offering) shall require any Holder to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding the ownership of such
Holder's Registrable Securities and such Holder's intended method or
methods of disposition or to furnish any indemnity to any Person which is
broader than the indemnity to be furnished by such Holder pursuant to
Section 2.6(b).
2.5. Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give each
Holder of Registrable Securities covered by such registration statement,
its underwriters, if any, and its counsel, accountants and other
representatives and agents the opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and give each of them such access to its books and
records and such opportunities to discuss the business of the Company with
its officers and employees and the independent public accountants who have
certified its financial statements, and supply all other information
reasonably requested by each of them, as shall be necessary or appropriate,
in the opinion of such Holder and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities
Act.
2.6. Indemnification.
(a) Indemnification by the Company. The Company agrees
that in the event of any registration of any securities of the Company
under the Securities Act, the Company shall, and hereby does, indemnify and
hold harmless each Holder, its directors, officers, members, partners,
agents and affiliates and each other Person who participates as an
underwriter in the offering or sale of such securities and each other
Person, if any, who controls such Holder or any such underwriter within the
meaning of the Securities Act, against any losses, claims, damages, or
liabilities, joint or several, to which such Holder or any such director,
officer, member, partner, agent or affiliate or underwriter or controlling
Person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities, joint or several (or actions
or proceedings, whether commenced or threatened, in respect thereof), arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, (ii) any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, or (iii) any
violation by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration, and the
Company shall reimburse such Holder and each such director, officer,
member, partner, agent or affiliate, underwriter and controlling Person for
any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided that the Company shall not be liable in any such case
to a Holder or any such director, officer, member, partner, agent,
affiliate, or controlling Person to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such
Holder, specifically stating that it is for use in the preparation thereof.
Such indemnity shall remain in full force regardless of any investigation
made by or on behalf of a Holder or any such director, officer, member,
partner, agent, affiliate, underwriter or controlling Person and shall
survive the transfer of such securities by a Holder.
(b) Indemnification by the Holders. As a condition to
including any Registrable Securities in any registration statement, the
Company shall have received an undertaking reasonably satisfactory to it
from each Holder so including any Registrable Securities to indemnify and
hold harmless, severally and not jointly (in the same manner and to the
same extent as set forth in paragraph (a) of this Section 2.6), the
Company, and each director of the Company, each officer of the Company and
each other Person, if any, who controls the Company within the meaning of
the Securities Act, with respect to any statement or alleged statement in
or omission or alleged omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, but only to the extent
such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder specifically stating that it
is for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement;
provided, however, that the liability of such indemnifying party under this
Section 2.6(b) shall be limited to the amount of proceeds (net of expenses
and underwriting discounts and commissions) received by such indemnifying
party in the offering giving rise to such liability. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or
on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such securities by such Holder.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subsections of
this Section 2.6, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to
the latter of the commencement of such action or proceeding; provided,
however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this Section 2.6, except to the extent
that the indemnifying party is actually prejudiced by such failure to give
notice, and shall not relieve the indemnifying party from any liability
which it may have to the indemnified party otherwise than under this
Section 2.6. In case any such action or proceeding is brought against an
indemnified party, the indemnifying party shall be entitled to participate
therein and, unless in the opinion of outside counsel to the indemnified
party a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, to assume the defense thereof,
jointly with any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such action or
proceeding include both the indemnified party and the indemnifying party
and if in the opinion of outside counsel to the indemnified party there may
be legal defenses available to such indemnified party and/or other
indemnified parties which are different from or in addition to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to defend such action or
proceeding on behalf of such indemnified party or parties, provided,
however, that the indemnifying party shall be obligated to pay for only one
counsel and one local counsel for all indemnified parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified
party for any legal expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation (unless the first proviso in the preceding sentence shall be
applicable). No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent. No
indemnifying party shall, without the consent of the indemnified party
(which consent shall not be unreasonably withheld or delayed), consent to
entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such
claim or litigation.
(d) Contribution. If the indemnification provided for
in this Section 2.6 shall for any reason be held by a court to be
unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under subsection (a)
or (b) hereof, the indemnified party and the indemnifying party under
subsection (a) or (b) hereof shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating the same), (i) in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in
respect thereof, with respect to the statements or omissions which resulted
in such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law
or if the allocation provided in this clause (ii) provides a greater amount
to the indemnified party than clause (i) above, in such proportion as shall
be appropriate to reflect not only the relative fault but also the relative
benefits received by the indemnifying party and the indemnified party from
the offering of the securities covered by such registration statement as
well as any other relevant equitable considerations. The parties hereto
agree that it would not be just and equitable if contributions pursuant to
this Section 2.6(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to in the preceding sentence of this Section
2.6(d). No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be
unreasonably withheld. Notwithstanding anything in this subsection (d) to
the contrary, no indemnifying party (other than the Company) shall be
required to contribute any amount in excess of the proceeds (net of
expenses and underwriting discounts and commissions) received by such party
from the sale of the Registrable Securities in the offering to which the
losses, claims, damages or liabilities of the indemnified parties relate.
(e) Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subsections of this
Section 2.6 (with appropriate modifications) shall be given by the Company
and the Holders with respect to any required registration or other
qualification of securities under any federal, state or blue sky law or
regulation of any governmental authority other than the Securities Act. The
indemnification agreements contained in this Section 2.6 shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any indemnified party and shall survive the transfer of
any of the Registrable Securities by a Holder.
(f) Indemnification Payments. The indemnification and
contribution required by this Section 2.6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or
liability is incurred.
2.7. Unlegended Certificates. In connection with the
offering of any Registrable Securities registered pursuant to this Section
2, the Company shall (i) facilitate the timely preparation and delivery to
each Holder and underwriter, if any, participating in such offering, of
unlegended certificates representing ownership of such Registrable
Securities being sold in such denominations and registered in such names as
requested by such Holder or such underwriters and (ii) instruct any
transfer agent and registrar of such Registrable Securities to release any
stop transfer orders with respect to any such Registrable Securities.
2.8. No Required Sale. Nothing in this Agreement shall be
deemed to create an independent obligation on the part of any Holder to
sell any Registrable Securities pursuant to any effective registration
statement.
3. Rule 144. The Company shall take all actions reasonably
necessary to enable each Holder of Registrable Securities to sell such
securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144, or (ii) any similar
rule or regulation hereafter adopted by the Commission including, without
limiting the generality of the foregoing, filing on a timely basis all
reports required to be filed by the Exchange Act. Upon the request of any
Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
4. Amendments and Waivers. This Agreement may be amended,
modified or supplemented only by written agreement of the Company and
Holders of a majority of the Registrable Securities of each Purchaser and
its Permitted Transferees, provided, however, that any amendment that would
materially and adversely affect any particular Holder or Holders shall also
require the written consent of such Holder or Holders.
5. Notice. All notices and other communications hereunder shall
be in writing and, unless otherwise provided herein, shall be deemed to
have been given when received by the party to whom such notice is to be
given at its address set forth below, or such other address for the party
as shall be specified by notice given pursuant hereto:
(a) If to Forstmann Little, to:
c/o Forstmann Little & Co.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
(b) If to Telmex, to:
Telefonos de Mexico, S.A. de C.V.
Parque Xxx 000, Xxxx 00
Xxxxxxx Xxxxxxxxxx
00000 Xxxxxx, D.F.
Attention: Lic. Xxxxxx Xxxxxxxxx Xxxxxxx
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
(c) If to the Company, to it at:
XO Communications, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
6. Assignment; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. This
Agreement may not be assigned by the Company, without the prior written
consent of the Holders. The Purchasers and each of their Permitted
Transferees may, at their election, at any time or from time to time,
assign their rights under this Agreement, in whole or in part, to any
purchaser or other transferee of shares of Registrable Securities held by
them to the extent such Person agrees in writing to be bound by all of the
provisions applicable hereunder to the transferring Holder; provided,
however, that (i) no Permitted Transferee or assignee of any Purchaser
shall have any demand rights pursuant to Section 2.1 unless such demand
rights are expressly assigned to such Permitted Transferee or assignee in
writing and (ii) no such assignment will increase the total number of
registrations pursuant to Section 2.1 or underwritten offerings the Company
is required to effect hereunder. If the Company is a party to any merger or
consolidation pursuant to which the Registrable Securities are converted
into or exchanged for securities or the right to receive securities of any
other Person ("Conversion Securities"), the issuer of such Conversion
Securities shall assume (in a writing delivered to each Holder) all
obligations of the Company under this Agreement. The Company shall not
effect any merger or consolidation unless the issuer of any Conversion
Securities complies with the provisions of this Section 6.
7. Remedies. The parties hereto agree that money damages or other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in
addition to all other remedies available to them, each of them shall be
entitled to an injunction restraining such breach, violation or default or
threatened breach, violation or default and to any other equitable relief,
including without limitation specific performance, without bond or other
security being required. In any action or proceeding brought to enforce any
provision of this Agreement (including the indemnification provisions
thereof), the successful party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other
available remedy.
8. No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The
Company further represents and warrants that the rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with any other agreements to which the Company is a party or by which it is
bound.
9. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only
and shall not control or otherwise affect the meaning hereof.
10. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights and obligations of the parties hereto
shall be governed by, the laws of the State of New York, without giving
effect to the conflicts of law principles thereof. Each of the parties to
this Agreement hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York and the
United States of America located in the County of New York for any action
or proceeding arising out of or relating to this Agreement (and agrees not
to commence any action or proceeding relating thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in
Section 5 hereof shall be effective service of process for any action or
proceeding brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying
of venue of any action or proceeding arising out of this Agreement in the
courts of the State of New York or the United States of America located in
the County of New York, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
12. Invalidity of Provision. The invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction. If any restriction or provision
of this Agreement is held unreasonable, unlawful or unenforceable in any
respect, such restriction or provision shall be interpreted, revised or
applied in a manner that renders it lawful and enforceable to the fullest
extent possible under law.
13. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall
execute and deliver all other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
14. Entire Agreement; Effectiveness. This Agreement constitutes
the entire agreement, and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect
to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized.
XO COMMUNICATIONS, INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive
Officer
FORSTMANN LITTLE & CO. EQUITY
PARTNERSHIP VII, L.P.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx,
Title: General Partner
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP - VIII, L.P.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx,
Title: General Partner
TELEFONOS DE MEXICO, S.A. DE C.V.
By:
---------------------------------
Name: Xxxxx Xxxxx Xxxxx
Title: Director General
