EXHIBIT 10.27
LOAN AND PLEDGE AGREEMENT
THIS LOAN AND PLEDGE AGREEMENT (this "Agreement"), dated as of December 12,
2000, is between Independent Wireless One Corporation, a Delaware corporation
(the "Lender"), and Xxxxxx X. Xxxxxxx (the "Borrower").
The parties hereto agree as follows:
1. Amount and Terms of the Loan.
1.1. The Loan. On the terms and subject to the conditions of this
Agreement, the Lender agrees to lend up to $406,000.00 to the Borrower
representing 100% of the purchase price for 58,000.0000 shares of Class B Common
Stock, par value $0.01 per share (collectively, the "Purchased Shares"), of IWO
Holdings, Inc., a Delaware corporation ("Holdings"), to be purchased by Borrower
pursuant to a subscription agreement between the Borrower and Holdings (the
"Subscription Agreement"). Half of this amount (up to $203,000.00) shall be made
in a first loan ("Loan A"), and the other half (up to $203,000.00) shall be made
in a second loan ("Loan B"). The rate of interest for Loan A and Loan B shall be
calculated pursuant to the provisions of the forms of Negotiable Secured
Promissory Note attached hereto as Exhibit A and Exhibit B, respectively. Loans
A and B contemplated hereby are collectively referred to as the "Loan."
1.2. Maturity Date. Subject to the prepayment provisions of
subsections 1.3 and 1.4 and the acceleration provisions set forth below and in
Section 3 below, Loan A shall mature on March 31, 2003 (the "A Maturity Date"),
and Loan B shall mature on the date (the "B Maturity Date") on which the
Borrower is paid his annual cash bonus (the "2000 Bonus") for the fiscal year
beginning January 1, 2000 pursuant to the employment agreement between the
Lender and the Borrower. Notwithstanding the foregoing, all principal and
accrued but unpaid interest outstanding under the Loan will automatically become
due and payable on the earlier of (1) the date the Borrower's employment with
the Lender and its affiliates terminates unless his employment terminates due to
death or Disability (as defined in the employment agreement between the Lender
and Borrower) or (2) the date of an Approved Sale (as defined in the Amended and
Restated Stockholders Agreement, dated as of December 1, 2000, to which Holdings
and the Borrower are parties).
1.3. Mandatory Prepayments and Payments.
(a) Any cash received upon a dividend or distribution with
respect to, or an exchange or conversion of, Pledged Property shall be
applied to reduce the Loan B balance first, if any, and the Loan A balance
second (with any accrued but unpaid interest being reduced first). Any cash
in excess of that applied to repay in full all principal and interest
outstanding under the Loan shall be paid to the Borrower.
(b) The Borrower shall pay from his annual cash bonus, beginning
with his 2000 Bonus, an amount equal to not less than 20 percent (20%) of
such bonus, net of applicable state and federal taxes due thereon, within
five (5) business days of the Borrower's receipt of such bonus. Such
payments shall be applied to reduce the outstanding Loan A balance (with
any accrued but unpaid interest being reduced first).
(c) The Borrower shall pay on the B Maturity Date an amount equal
to the Loan B balance within five (5) business days of the Borrower's
receipt of the 2000 bonus notwithstanding any insufficiency of the 2000
Bonus to pay such amount.
1.4. Optional Prepayments.
(a) The Borrower may make voluntary prepayments on the Loan at
any time without penalty. Any such prepayments shall be applied to reduce
the Loan B balance first, if any, and the Loan A balance second (with any
accrued but unpaid interest being reduced first).
(b) In the event that the Borrower at any time desires to obtain
a release of all or part of any Pledged Property securing the Loan, whether
for the purpose of selling such Pledged Property or otherwise, as a
condition to the release, the Borrower shall make arrangements satisfactory
to the Lender to prepay the greater of (i) an amount as of the date of the
release equal to the value of the Pledged Property sought to be released
and (ii) an amount as of the date of the release so that the outstanding
Loan balance remaining unpaid after giving effect to such pre-payment does
not exceed fifty percent (50%) of the fair market value of the remaining
Pledged Property, as determined in good faith by the Lender. Any such
prepayment shall be applied first to accrued but unpaid interest and then
to principal.
1.5. Evidence of Borrowing. Loan A will be evidenced by a promissory
note in substantially the form attached as Exhibit A to this Agreement ("Note
A"), and Loan B will be evidenced by a promissory note in substantially the form
attached as Exhibit B to this Agreement ("Note B"). The Borrower will promptly
execute and deliver to the Lender any other instruments evidencing the Loan
reasonably requested by the Lender.
2. Security.
2.1. Grant of Security Interest. As security for the Borrower's
performance of this Agreement and the Borrower's indefeasible payment in full of
the Loan and all interest thereon in accordance with this Agreement, the
Borrower hereby pledges, hypothecates, assigns, transfers and delivers to the
Lender and grants the Lender a continuing security interest in the Borrower's
right, title and interest in and to the Pledged Property, to have and to hold,
together with all rights, titles, interests, privileges and preferences
incidental thereto, unto the Lender, its successors and assigns, forever,
subject to the terms and conditions of this Agreement. As used in this
Agreement, "Pledged Property" means (a) with respect to Loan A, 29,000.0000 of
the Purchased Shares, any and all cash, securities or other property issued or
distributed in respect thereof or in exchange therefor, and any and all
proceeds thereof and (b) with respect to Loan B, the remaining 29,000.0000 of
the Purchased Shares, any and all cash, securities or other property issued or
distributed in respect thereof or in exchange therefor, and any and all
proceeds thereof.
2.2. Perfection of Security Interest. Simultaneously with the
execution and delivery of this Agreement, the Borrower will deliver to the
Lender all instruments and certificates evidencing the Pledged Property and will
execute and deliver to the Lender stock powers or assignments in such forms as
may reasonably be requested by the Lender with respect to each such instrument
or certificate. The Borrower will use his reasonable best efforts to perform all
additional acts and execute all other documents reasonably requested by the
Lender at any time to further evidence, perfect, maintain and enforce the
Lender's security interest in the
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Pledged Property. The Borrower will not pledge, sell, assign, transfer,
hypothecate or grant a security interest in any of the Pledged Property to any
other person while any principal or interest remains outstanding on the Loan.
2.3. Voting and Other Rights of the Borrower and the Lender. So long
as no Event of Default (as described in subsection 3.1) has occurred and is
continuing, the Borrower will be entitled to vote and to exercise all other
rights and remedies with respect to the Pledged Property. Upon the occurrence
and during the continuance of an Event of Default, the Lender, subject to the
terms and conditions of this Agreement, will have the right, after the delivery
of written notice to the Borrower, to vote and to exercise all other rights and
remedies with respect to the Pledged Property.
2.4. Release of Collateral. In the event of any prepayment of
principal under the Loan, the Lender will release from the pledge under this
Agreement a portion of the Pledged Property equal to the percentage of the
outstanding principal balance so paid, provided, that the Lender will retain
Pledged Property with an aggregate fair market value, as determined in good
faith by the Lender, equal to at least two hundred percent (200%) of the
outstanding Loan balance as of the date of the prepayment (after giving effect
to the prepayment).
3. Events of Default.
3.1. Events of Default. For purposes of this Agreement, any of the
following events will constitute an Event of Default:
(a) the Borrower fails to pay any amount due under Loan A or Loan
B, as the case may be, and the default remains uncured for a period of (10)
days after the date the Lender gives the Borrower notice of the default;
(b) the Borrower defaults under or breaches any other covenant,
representation or warranty under Note A, Note B or this Agreement and the
default or breach remains uncured for a period of thirty (30) days after
the date the Lender gives the Borrower notice of his default or breach;
(c) the Borrower applies for or consents to the appointment of a
receiver, trustee, custodian or liquidator of any of his property, admits
in writing his inability to pay his debts as they mature, makes a general
assignment as a bankrupt or insolvent or is the subject of an order for
relief under Chapter 7 or Chapter 13 of the United States Bankruptcy Code
or files a voluntary petition in bankruptcy or a petition or answer seeking
an arrangement with creditors to take advantage of any bankruptcy,
insolvency, readjustment or debt or liquidation law or statute, or an
answer admitting the material allegations of a petition filed against him
in any proceeding under any such law; or
(d) any court of competent jurisdiction enters an order, judgment
or decree, without the application, approval or consent of the Borrower,
approving a petition appointing a receiver, trustee, custodian or
liquidator of all or a substantial part of the assets of the Borrower, and
such order, judgment or decree continues unstayed and in effect for a
period of thirty (30) days.
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3.2. Consequences of Events of Default. If an Event of Default occurs
and is continuing, the Lender may accelerate all amounts due on Loan A or Loan
B, as the case may be, foreclose on the Pledged Property and may otherwise
exercise any and all rights of a secured party under applicable law.
4. General.
4.1. Compliance with Withholding. The Lender shall have the right to
require the Borrower to pay to the Lender the amount of any taxes that are
required to be withheld in connection with any repayment of the Loan, any
release of Pledged Property or any sale of Pledged Property. To the extent
permitted by the Lender, the Borrower may elect to have any distribution
otherwise required to be made under this Agreement to be withheld to fulfill any
tax withholding obligation.
4.2. Amendment and Waiver. This Agreement may be amended, and any
provision hereof may be waived, only by a writing signed by the party to be
charged by written agreement of the Borrower and the Lender, without the consent
of any other person.
4.3. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
4.4. Complete Agreement. This document and the documents referred to
herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which relate to the subject matter hereof.
4.5. Governing Law. The provisions of this Agreement shall be
construed in accordance with the internal laws of the State of New York.
4.6. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, but which together shall constitute
one and the same instrument.
4.7. Notices. All notices, requests, demands and other communications
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given if personally delivered, telexed or telecopied to, or, if mailed,
when received by, the other party at the following addresses (or at such other
address as shall be given in writing by either party to the other):
If to the Lender to:
Independent Wireless One Corporation
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
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with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: E. Michael Greancy, Esq.
If to the Borrower to:
Xxxxxx X. Xxxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
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IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first written above.
BORROWER Independent Wireless One Corporation
/s/ Xxxxxx X.Xxxxxxx
------------------------- By: /s/[ILLEGIBLE]
Xxxxxx X. Xxxxxxx ----------------------------------
Name: [ILLEGIBLE]
Title: SECRETARY
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