Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx Xxxxxx & Xxxxxxx
One New York Plaza 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 Suite 1000
(000) 000-0000 Xxx Xxxx, Xxx Xxxx 00000-0000
(000) 000-0000
XXX XXXXXXXXX
Xxxx 0, 0000
Xxxx X. Xxxxxxx, Esq.
Willkie, Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Stock Purchase Agreement, dated as of January 15, 2002 (the
"Purchase Agreement"), among XO Communications, Inc. (the
"Company"), certain partnerships affiliated with Forstmann
Little & Co. (collectively "Forstmann Little") and Telefonos
de Mexico, S.A. de C.V. ("Telmex")
Dear Xxxx:
As has been indicated to the Company, Forstmann Little and Telmex
(collectively the "Investors") believe that it is virtually impossible that
the conditions to their obligations under the Purchase Agreement will ever
be satisfied. The Investors' belief in this regard is based on a number of
factors, all of which are demonstrated by the substantial decline in the
value of the Company, including the state of the Company's business and
financial condition, pending litigation, the absence, despite months of
negotiations, of any agreement among the Company's stakeholders, the stated
positions of Xxxx Xxxxx and representatives of the bondholders, and the
Company's stated intention to file bankruptcy in the near term.
While the Investors will, of course, continue to fulfill their
obligations under the Purchase Agreement, it is important for the Company
and all of its stakeholders to understand that the Investors will not waive
any of the conditions to their obligations to consummate the transactions
contemplated by the Purchase Agreement. In addition, the Investors will not
undertake any further actions in connection with the Company's ongoing
restructuring efforts (including engaging in any discussions or
negotiations with respect to alternative transactions) that are not
required by the terms of the Purchase Agreement. The Company and its
representatives should not take any action that could lead anyone to
believe that the transactions contemplated by the Purchase Agreement will
be consummated or that Forstmann Little or Telmex intend or are obligated
to consider or consummate any alternative transaction.
In light of the foregoing, the Investors request that the Company
mutually agree with the Investors to terminate the Purchase Agreement to
clarify for all of the Company's stakeholders the restructuring options
actually available to the Company. If the Company declines to do so, the
Investors reserve all of their rights to terminate the Purchase Agreement.
Please be advised that Forstmann Little intends to amend its Schedule
13D regarding its investment in the Company to disclose the contents of
this letter and to attach this letter as an exhibit to that amendment. In
light of the Company's previous public statements about the status of the
Purchase Agreement, we also suggest that the Company seriously consider
whether it has a duty to disclose publicly the contents of this letter.
Forstmann Little and Telmex expressly reserve all of their rights
under the Purchase Agreement and pursuant to applicable law, and this
letter is not to be construed in any manner as a waiver or release of any
of their rights thereunder.
This letter has been executed and is being delivered by Xxxxxxx
Xxxxxxx of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx on behalf of Forstmann
Little and by Xxxxxxx Xxxxxx of Xxxxxx & Xxxxxxx on behalf of Telmex.
Very truly yours, Very truly yours,
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
cc: Xx. Xxxxxxxx X. Xxxxxxxxx
Xx. Xxxxx Xxxxx Xxxxx
Xxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
