EXHIBIT 10.16
PROFESSIONAL SERVICES AGREEMENT
THIS PROFESSIONAL SERVICES AGREEMENT, effective as of December 20, 1999, is
hereby made by and between INDEPENDENT WIRELESS ONE CORPORATION ("IWO") a
Delaware corporation, IWO Holdings Inc., a Delaware corporation ("Holdings" and
along with its wholly owned subsidiary, IWO, the "Corporation") having an office
at 000 Xxxxx Xxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxx, 00000-0000 and Xx. X.X. Xxxx,
III, Esq., 000 Xxxxxxxxx Xxxxxx, Xxxxx, Xxx Xxxx, 00000 (the "Counsel").
W I T N E S S E T H:
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WHEREAS, IWO and Counsel have entered into a Professional Services
Agreement;
WHEREAS, Holdings has, as of the date of this Agreement, entered into an
agreement to acquire IWO; and
WHEREAS, IWO desires to continue and extend the terms of the professional
services of Counsel, and Holdings desires to induce and secure the services of
Counsel.
IT IS THEREFORE AGREED that in consideration of the mutual promises, terms,
provisions, and conditions set forth in this Agreement, the parties hereby agree
as follows:
1. Engagement. Subject to the terms and conditions set forth in this
Agreement, the Corporation hereby offers and Counsel hereby accepts the
appointment to act in the capacity of an Independent Contractor for the purposes
and upon the terms hereinafter set forth.
2. Term. Counsel's engagement hereunder shall commence effective as of
the date of the first closing of the asset transfer and of the Affiliation
Agreement between the Corporation and Sprint PCS (the "Effective Date") and
shall continue until December 31, 2002 or the death of Counsel or unless and
until terminated by either party pursuant to Paragraph 5 below. The term of this
Agreement is hereafter referred to as "the term of this Agreement" or "the term
hereof."
3. Capacity and Performance.
(a) During the term hereof, with respect to IWO, Counsel shall serve
as Executive Vice President, General Counsel and Secretary and, with respect to
Holdings, Counsel shall serve as General Counsel, Executive Vice President and
Secretary.
(b) During the term hereof, Counsel shall have all powers and duties
consistent with his position, subject to the reasonable direction and control of
the Corporation's Chief Executive Officer ("CEO"), and shall perform or shall
have performed under his direction and supervision such other duties on behalf
of the Corporation and its Affiliates and have such other responsibilities as
may reasonably be designated from time-to-time by the CEO or by the
Corporation's Board of Directors (the "Board"), provided always that the same
shall be consistent with Counsel's ethical and professional responsibilities.
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(c) During the term hereof, Counsel shall devote and expend for the
benefit of the Corporation, as reasonably requested by the Corporation, up to
two thousand (2,000) billable hours per annum working time exclusively to the
business and affairs of the Corporation. During the term hereof, Counsel shall
use his best efforts, professional judgment, skill, and knowledge to xxxxxx the
advancement of the business and interests of the Corporation and shall
efficiently perform his duties hereunder. Subject to his ethical and
professional responsibilities, Counsel shall be entitled without constraint to
engage in any other professional or business activity or serve in any industry,
trade, governmental, or academic position during the term of this Agreement
including, without limitation, telephone, wireless, fiber, internet and cable
television businesses. Subject to the direction of the CEO and/or the Board as
aforesaid, Counsel's principal area of responsibility and authority shall be
that of the Chief Legal Officer of the Corporation and, as such, he shall direct
and supervise the legal affairs of the Corporation with respect to all aspects
of governmental regulation, compliance with applicable laws, supervision and
delegation and retention of outside independent counsel when appropriate in his
opinion, legal aspects of contract negotiation and administration and
compliance. Counsel shall have the authority to expend funds for the use or
retention of outside counsel in an annual amount agreed to by Counsel and
Corporation. The Corporation agrees that the duties assigned to Counsel shall
not be inconsistent with the foregoing and shall not oblige Counsel to engage in
any activity nor perform any act that would be inconsistent with his ethical and
professional responsibilities, and that Counsel shall have such powers,
authority, and facilities at his disposal as are suitable to his position and as
shall reasonably be required to enable him to discharge his duties in an
efficient and professional manner. Notwithstanding anything to the contrary
contained in this Paragraph 3, in no event shall Counsel engage in any activity
which would in anyway actually and materially conflict with the business
interests of the Corporation.
4. Compensation and Benefits. The Corporation shall pay, as compensation
for all services performed by Counsel under and during the term hereof and
subject to performance of Counsel's duties and of the obligations of Counsel,
pursuant to this Agreement or otherwise, the following, each and all of which
shall be considered remuneration for purposes of this Agreement:
(a) Base Fee. During the term hereof, the Corporation shall pay
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Counsel (or, as directed by Counsel, to any law firm or professional association
or entity with which Counsel is affiliated) an hourly fee of two hundred dollars
($200.00) for a total of no more than two thousand hours per annum, for all
legal services and consulting performed personally by Counsel. Notwithstanding
any other provision of this Agreement, if Counsel should expend, in his
discretion, more than 2,000 billable hours on behalf of the Corporation per
annum, Counsel shall not receive hourly compensation for any such additional
hours over 2,000. In accordance with the provisions of Subparagraph (e) of this
Paragraph 4, Counsel shall have the authority to cause the Corporation to employ
or otherwise engage the professional services of another licensed attorney
selected by Counsel (herein "Assistant Counsel"), and Counsel shall have the
authority to retain or otherwise engage one full-time, fully dedicated paralegal
to aid in the legal services to be performed by Counsel and Assistant Counsel.
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(b) Other Benefits.
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(i) Counsel shall be entitled to an allowance of one hundred
fifty dollars ($150.00) per month, payable on the first day
of each month during the term hereof to defray the costs of
the use of an automobile for business purposes (such
allowance is in addition to reimbursable expenses in 4(c)
below).
(ii) Counsel shall be entitled during the term hereof to the
exclusive use of two (2) computers with all appropriate
peripherals.
(iii) Counsel shall be entitled during the term hereof to three
(3) wireless telephones and a payment of all tolls and
charges associated with the use thereof.
(iv) On January 4, 1999, Counsel shall be paid a bonus for the
year ending December 31, 1999 in the sum of three hundred
thousand dollars ($300,000.00) representing a bonus for
services rendered.
(v) A success bonus in an amount up to three hundred thousand
dollars ($300,000.00) based upon the Board's reasonable
discretionary evaluation of Counsel's individual
performance, such performance criteria to be developed in
consultation with Counsel and issued within forty-five (45)
days after the commencement of each relevant fiscal year of
the Corporation (or portion thereof) during the term of
Counsel's employment. Individual performance criteria may
include, by way of example only, strategic goals and plans
of the Corporation as well as a reward for exceeding those
goals or plans.
(c) Business Expenses. The Corporation shall pay or reimburse Counsel
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for all reasonable and necessary business expenses incurred or paid by Counsel
in the performance of his duties and responsibilities hereunder, subject to any
such reasonable substantiation and documentation as may be specified by the
Corporation from time-to-time. Such expenses shall include, without limitation:
(i) in accordance with standard Corporation policy, charges for travel, mileage,
tolls, parking, and lodging (but not in connection with home-to-Utica office
commuting); and (ii) actual costs incurred by Counsel (not including any
overhead or administrative factors) for courier services, overnight delivery,
postage, online research, photocopying, printing, facsimile, long distance
charges, and the like. Counsel's said expenses shall be invoiced to the
Corporation monthly, and the Corporation shall make payment thereon within
thirty (30) days after receipt of each valid invoice.
(d) Stock Options. In addition to the basic compensation and cash
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bonus compensation provided for herein Counsel shall be entitled during the term
of his employment to participate in the Management Stock Incentive Plan, dated
as of the date hereof, of the Corporation and pursuant thereto has been granted
certain non-qualified options pursuant to a
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Stock Option Agreement entered into between the employee and the Corporation as
of the date hereof. Such Agreement is incorporated herein by reference as
Exhibit A.
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(e) Assistant Counsel and Paralegal. The Corporation shall hire and
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retain as employees, at all times during the term hereof, an Assistant, Counsel
and a Paralegal to assist Counsel in the performance of his duties hereunder,
the recruitment and supervision of whom shall be under the primary
responsibility and authority of Counsel. In such connection, the Corporation
shall budget up to seventy-five thousand dollars ($75,000.00) and forty-five
thousand dollars ($45,000.00) per annum as basic salary compensation for the
position of Assistant General Counsel and Paralegal respectively.
5. Termination of Engagement.
(a) Notwithstanding anything to the contrary express or implied
herein, Counsel's engagement hereunder shall terminate upon written notice by
either party to the other of the notifying party's intention to terminate
Counsel's performance and services hereunder. In such connection it is
understood and agreed that the Corporation may terminate this Agreement and
dismiss Counsel (and any Assistant Counsel and other contractors retained
hereunder) without cause and for any reason deemed sufficient by the
Corporation.
(b) Upon the effective date of notice of termination of Counsel's
engagement hereunder pursuant to this subsection (a) above: (i) the Corporation
shall not have any further obligation or liability to Counsel under this
Agreement, other than for Base Fee and Additional Professional Fees earned and
unpaid through the date of termination, as well as for any benefits accruing
through the date of termination; and (ii) all obligations and provisions of this
Agreement shall terminate except with respect to any accrued and unpaid or
unexercised monetary obligations or benefits and except for the provisions of
Sections 6 through (and inclusive of) 18 hereof.
6. Restrictive Covenants. In consideration of the payment to Counsel of
the compensation specified in Paragraph 4 above, Counsel hereby covenants and
agrees as follows:
(a) Counsel shall treat either as trade secrets or as confidential or
proprietary information of the Corporation (i) any data or information acquired
during the course of or as a result of his employment, which is not otherwise
available to Counsel except by reason of his employment, including but not
limited to such items as reports or findings from tests, investigative studies,
consultations or the like, methodology, proposals, systems, programs, or
marketing techniques, and strategies developed by but not generally released by
the Corporation or peculiar to the business of any customer of the Corporation
and all particularized information relating thereto; (ii) names or lists of the
Corporation's clients or information, data, or services made available to such
clients not made public by the Corporation and non-public information relating
to the operating methods or plans or requirements of any customer of the
Corporation; and (iii) any other data or information designated either by the
Corporation or by any of its customers or clients as confidential or
proprietary.
(b) All improvements, discoveries, programs, processes, innovations,
and inventions (whether or not deemed patentable) conceived, devised, made,
developed, or
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perfected by Counsel during any period of his engagement by the Corporation or
any period prior to the effective date hereof during which Counsel was in the
service of any entity acquired by the Corporation or any period prior to the
effective date hereof during which Counsel was in the service of any entity
acquired by the Corporation and related in any material way to the business,
including development and research of the Corporation, shall be made and
promptly disclosed to the Corporation and the same shall be the sole and
absolute property of the Corporation. Upon request of the Corporation, Counsel
will execute all documents reasonably deemed appropriate by the Corporation to
secure the foregoing rights and for obtaining the grants of patents, both
domestic and foreign, with respect to such improvements, discoveries, programs,
processes, innovations, or inventions and for vesting title to such patents in
the Corporation, provided, however, that Counsel shall not be required to incur
any costs or legal expenses in conjunction with the compliance of any such
request.
(c) Counsel agrees to refrain, except as properly required in the
business of the Corporation, or as authorized in writing by the Corporation, (i)
from using for Counsel's own benefit any matters to be treated as trade secrets
or as confidential or proprietary information under Paragraph (a) above; (ii)
from using these matters for the benefit of any other person, firm, or
corporation; (iii) from disclosing these matters to any other person, firm, or
corporation; and (iv) from authorizing or permitting such disclosure during the
term of his employment or thereafter.
(d) Counsel agrees to surrender to the Corporation at any time upon
request and in any event upon termination of this Agreement, except as the
Corporation may otherwise consent in writing, all written documents, sketches,
records, or information whether copyrighted or patented or not, or any copies of
imitations thereof, whether made by Counsel or not, which embody or contain or
describe in any way those matters to be treated as trade secrets or as
confidential or proprietary information under Paragraph (a) above. The
Corporation shall not unreasonably withhold authorization for Counsel to retain
any matters covered by this Paragraph 6, the continued possession of which by
Counsel will not, in the Corporation's sole but reasonable opinion, be
detrimental to the best interest of the Corporation.
(e) Counsel agrees, during the term of this Agreement and for a
period of two (2) years after the termination thereof, whether such termination
be voluntary or not, that Counsel will not except at the direction of the
Corporation, either directly or indirectly, for himself as a proprietor,
principal partner, director, officer, employee, agent or other representative
acquire or attempt to acquire the business then conducted by the Corporation
with any customer of the Corporation under any contracts existing or proposals
submitted on or before the date of termination of this Agreement; provided,
however, that nothing contained in this Subparagraph (e) or elsewhere in this
Agreement shall be construed to impede or diminish Counsel's right and
entitlement, hereby confirmed, to pursue the practice of law in the furnishing
of legal representation to clients, subject only to the constraints of
applicable ethical rules and those provisions of this Agreement regarding
confidential or proprietary information.
The term "customer of the Corporation" for purposes hereof shall
mean any individual or entity which is the ultimate user or recipient of the
Corporation's (or any subsidiary of the Corporation) services and products
whether the same be made available directly to such entity or through an
intermediate purchaser of such services and products.
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(f) Counsel agrees to refrain, during the term of his employment and
for one (1) year thereafter, from hiring or offering to hire, except with the
written permission of the Corporation, any employee of the Corporation or from
enticing away or in any other manner persuading or attempting to persuade any
employee of the Corporation to discontinue his relationship with the
Corporation; provided, however, that nothing herein shall prohibit Counsel from
hiring or offering to hire, any employee of the Corporation where the initial
hiring inquiry was solely initiated by any such employee or a third party
without direction from Counsel.
(g) No provision of this Paragraph 6 is intended to limit Counsel's
right to use or disclose information which is in the public domain or a matter
of common knowledge, or which is generally known in the industry, or acquired by
him from a third party not prohibited from making such disclosure to him, or
which information was already known to Counsel other than by breach of this
Agreement; nor is it intended to limit Counsel's obligation to comply with
lawful subpoenas or to other lawful process.
(h) No act or failure to act shall be a waiver of any right conveyed
hereunder, except an express waiver in writing. The rights reserved to the
Corporation under this Paragraph 6 of this Agreement are necessarily of a
special, unique, unusual, and extraordinary character, which gives them a
peculiar value, the loss of which cannot reasonably or adequately be compensated
for in damages in an action at law, and the breach by Counsel of any of the
provisions in this Paragraph 6 will cause the Corporation irreparable injury.
Therefore, in addition to any other available remedies, the Corporation shall be
entitled to an injunction to restrain any violation of this Agreement by
Counsel, his agents, servants, or employees and all persons, firms, or
corporations acting for or with him. The obligations of Counsel under the
covenants herein contained shall not cease upon termination of his employment
for whatever reason, except where otherwise limited in time above.
These covenants contained in this Paragraph 6 on the part of
Counsel shall each be construed as an agreement independent of any other
provision in this Agreement, and the existence of any claim or cause of action
of Counsel against the Corporation, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Corporation
of such covenants. It is the intention of both parties to make the covenants of
this Paragraph 6 binding only to the extent that it may be lawfully done under
existing applicable law. In the event that any part of any covenant of this
Paragraph 6 is determined by a court of law to be overly broad thereby making
the covenant unenforceable, the parties hereto agree, and it is their desire,
that such court shall substitute a reasonable judicially enforceable limitation
in place of the offensive part of the covenant, and that as so modified the
covenant shall be as fully enforceable as set forth herein by the parties
themselves in the modified form.
7. Conflicting Agreements. Counsel hereby represents and warrants that
the execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which Counsel is a
party or is bound and that Counsel is not subject to any covenants against
competition or similar covenants that would affect the performance of his
obligations hereunder.
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8. Definitions. Words or phrases that are initially capitalized or are
within quotation marks shall have the meanings provided in this Section 12 and
as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
(a) "Affiliates" means all persons and entities. directly or
indirectly controlling, controlled by or under common control with the
Corporation, where control may be either management authority or equity
interest, including without limitation, IWO.
(b) "Person" means an individual, corporation, association,
partnership, estate, trust, or any other entity or organization.
9. Assignment. Neither the Corporation nor Counsel may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other, provided, however,
that the Corporation may assign its rights and obligations under this Agreement
without the consent of Counsel in the event that the Corporation shall hereafter
effect a reorganization, or consolidate with or merge into any other Person, or
transfer, all or substantially all, of its properties or assets to any other
Person. However, any such assignment or delegation shall not relieve the
Corporation of its financial obligations to Counsel under this Agreement. Except
in conjunction with his estate planning or in the event of death, Counsel may
not assign any rights under this Agreement. This Agreement shall inure to the
benefit of and be binding upon the Corporation and Counsel, and their respective
successors, executors, administrators, heirs, and permitted assigns.
10. Severability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. If, however, such remainder of this Agreement
materially changes any right or benefit accruing to Counsel, then Counsel shall
have the right to terminate this Agreement on thirty days' written notice to
Corporation.
11. Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
12. Notice. Any notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given when delivered personally, one (1) day after being
sent by recognized overnight courier service with all charges prepaid or charged
to the sender's account, or three (3) days after being mailed by certified mail,
return receipt requested, addressed to the party being notified at the address
of such party first set above, or at such other address as such party may
hereafter have designated by notice; provided, however, that any notice of
change of address shall not be effective until its receipt by the party to be
charged therewith. Copies of any notices or other communications to the
Corporation shall simultaneously be sent by first class mail to:
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Independent Wireless One Corporation
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Notice to Holdings shall be as follows:
c/o Investcorp International Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
13. Enforcement of Covenants: Injunctive Relief. Counsel acknowledges and
agrees that were he to breach any of the covenants contained in this Agreement,
the damage would be irreparable, Counsel therefore agrees that the Corporation,
in addition to any other remedies available to either of them, shall be entitled
to preliminary and permanent injunctive relief against any breach or threatened
breach by Counsel of any of said covenants, without having to post bond.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of
Counsel's engagement.
15. Amendment. This Agreement may be amended or modified only by a written
instrument signed by Counsel and by an expressly authorized representative of
the Corporation.
16. Headings. The headings and captions in this Agreement are for
convenience only and in no way define the scope or content of any provision of
this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same instrument.
18. Governing Law. This Agreement shall be construed and enforced under
and be governed in all respects by the laws of the State of New York, without
regard to the conflict of laws principles thereof
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by Counsel and the Corporation, by its duly authorized representative, as of the
date first above written.
INDEPENDENT WIRELESS ONE CORPORATION
BY: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President and Chief Executive
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Officer
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IWO HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President and Chief Executive
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Officer
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COUNSEL
/s/ X.X. Xxxx III
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X. X. Xxxx III, Esq.
