Exhibit 10.17.4
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IWO Holdings, Inc.
Independent Wireless One Corporation
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000
September 17, 2000
Xx. X.X. Xxxx III
c/x Xxxx and Xxxx LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxx Xxxx 00000
Re: Professional Services Agreement, effective as of December 20, 1999
(the "Professional Services Agreement"), among Independent Wireless
One Corporation ("IWO"), IWO Holdings, Inc. ("Holdings") and you;
Stock Option Agreement, made as of December 20, 1999 (the "Stock
Option Agreement"), between Holdings and you; Warrant to Purchase
Shares of Class B Common Stock of IWO Holdings, Inc. (the "Management
Warrant"), issued to you by Holdings; Management Stock Purchase
Agreement, made as of December 20, 1999 (the "Management Stock
Purchase Agreement"), between you and Holdings; Class B Stock
Subscription Agreement, made as of December 20, 1999 (the
"Subscription Agreement"), between you and Holdings; and Indemnity
Agreement, dated as of December 20, 1999 (the "Indemnity Agreement"),
between you and Holdings.
Dear J.K.:
With reference to the above agreements, this letter agreement sets forth
certain understandings reached between Holdings, IWO and you.
1. Attached hereto as Exhibit A is a true and correct copy of the
Professional Services Agreement. Pursuant to section 5(a) thereof, your
engagement thereunder shall terminate as of the date hereof. You shall provide
strategic consulting and advisory services on the terms and conditions set forth
in the Consulting Agreement, dated as of the date hereof (the "Consulting
Agreement"), among IWO, Holdings and you attached hereto as Exhibit B.
2. Attached hereto as Exhibit C is a true and correct copy of the Stock
Option Agreement. You were granted, subject to the terms therein, the option to
purchase 12,902.6218 shares of Holdings' Class B Common Stock. You have
previously exercised your option and purchased 1,000.0000 of such shares. Of the
remaining option to purchase 11,902.6218 of such shares, effective as of the
date hereof :
(a) the option with respect to 10,602.6218 of such shares shall be deemed
to have vested and may be exercised in accordance with the Stock Option
Agreement, and subject to
Section 6(a) of the Stock Option Agreement, will expire on the later of five
years after the date hereof or two years after an Initial Public Offering; and
(b) the option with respect to 1,300.0000 of such shares shall expire and
such portion of the option shall be canceled.
(c) Section 1 shall be amended by deleting the definitions of "Approved
Sale" and "Initial Public Offering" and replacing such definitions with the
following definitions:
'"Approved Sale" means a transaction or a series of related
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transactions other than a Designated Merger: (i) including, but not
limited to, by way of merger or consolidation, which results in any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provisions to either of
the foregoing), other than (A) any one or more of the Initial
Stockholders or Affiliates thereof or (B) a non-U.S. entity with
respect to which an Initial Stockholder or Affiliate thereof has an
administrative relationship, becoming the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of a majority of the total voting power of the capital
stock of Holdings or otherwise able to elect a majority of the board
of directors of Holdings (for purposes of this definition, such
person or group shall be deemed to beneficially own capital stock of
Holdings that is held by any other corporation so long as such person
or group beneficially owns, directly or indirectly, in the aggregate
a majority of the total capital stock of such other corporation); or
(ii) which results in the sale, transfer, assignment, lease,
conveyance or other disposition, directly or indirectly, of all or
substantially all the assets of Holdings and its subsidiaries,
considered as a whole (other than to an Affiliate thereof).
"Initial Public Offering" means the sale of any of the common stock
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of Holdings or the issuance of common stock of any Person in exchange
for 100% of the capital stock of Holdings pursuant to a registration
statement that has been declared effective under the Act, if
following such sale or exchange (i) the issuer is a reporting company
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and (ii) such stock is traded on the New York Stock
Exchange or the American Stock Exchange, or is quoted on the Nasdaq
National Market System or is traded or quoted on any other national
stock exchange or national securities system.
(d) Section 1 shall be amended further by adding the following
definition:
"Designated Merger" means a transaction that results in the merger,
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consolidation or amalgamation of Holdings with or into any Person
that results in the conversion of the outstanding shares of capital
stock of Holdings into shares of capital stock of such Person (or its
Affiliate) and such Person (or its Affiliate) has an affiliation with
Sprint Spectrum L.P
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(or its Affiliates) similar to the affiliation between IWO and Sprint
Spectrum L.P and its Affiliates (other than with respect to the
territory covered).
(e) Section 6(a) shall be amended by deleting such section in its entirety
and replacing such section with the following:
"(a) In the event of an Approved Sale or a Designated Merger, the
unexercised portion of the Option shall terminate upon such Approved
Sale or Designated Merger unless (i) provision is made in writing in
connection with such Approved Sale or Designated Merger for the
assumption of such Options, or for the substitutions of such Options
of new awards covering the securities of a successor entity or an
Affiliate thereof, with appropriate adjustments as to the number and
kind of securities and exercise prices, in which event such
outstanding Options shall continue or be replaced, as the case may be,
in the manner and under the terms so provided; or (ii) the Board of
Directors otherwise shall provide in writing for such adjustments as
it deems appropriate in the terms and conditions of the then-
outstanding Options, including without limitation (A) accelerating the
vesting of outstanding Options and/or (B) providing for the
cancellation of Options and their automatic conversion into the right
to receive the securities, cash or other consideration that a holder
of the shares underlying such Options would have been entitled to
receive upon consummation of such Approved Sale or Designated Merger
had such shares been issued and outstanding immediately prior to the
closing date of the Approved Sale or Designated Merger (net of the
appropriate option exercise prices). If pursuant to this Section 6(a)
the Options are to terminate upon an Approved Sale or Designated
Merger without provision for any of the actions described in clause
(i) or (ii) above, then the Optionee shall be given at least ten (10)
days' prior notice of the proposed Approved Sale or Designated Merger
and shall be entitled to exercise such exercisable but unexercised
portion of the Option at any time during such ten (10) day period up
to and until the close of business on the day immediately preceding
the date of consummation of such Approved Sale or Designated Merger,
and, notwithstanding Section 7 hereof, the Exercise Price may, at the
option of the Optionee, be paid in whole or in part by delivery of
shares of the Class B Common Stock owned by the Optionee (the value of
such shares delivered as payment of the Exercise Price shall be
determined based on and consistent with the value of the consideration
to be tendered in connection with such Approved Sale or Designated
Merger), and upon exercise of the Option the Option Shares shall be
treated in the same manner as the shares of any other holder of Class
B Common Stock."
3. Attached hereto as Exhibit D is a true and correct copy of the
Management Warrant. Such Management Warrant shall be amended as follows:
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(a) The words "or Panthers Merger" shall be inserted at the end of the
parenthetical clause in the heading thereof (appearing below the legend); and
the words "or Termination of Employment" shall be deleted from such
parenthetical clause.
(b) The words "or upon a Panthers Merger" shall be added to the end of the
first sentence in the first full paragraph following the heading thereof; and
the words "or in the event of the termination of Holder's employment with
Holdings or any of its Subsidiaries" shall be deleted from such first full
paragraph.
(c) Section 1 shall be amended by deleting the definition of "Approved
Sale" and replacing such definition with the following definition:
'"Approved Sale" means a transaction or a series of related
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transactions other than a Panthers Merger: (i) including, but not
limited to, by way of merger or consolidation, which results in any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provisions to either of the
foregoing), other than (A) any one or more of the Initial Stockholders
or Affiliates thereof or (B) a non-U.S. entity with respect to which
an Initial Stockholder or Affiliate thereof has an administrative
relationship, becoming the "beneficial owner" (as defined in Rule 13d-
3 under the Exchange Act), directly or indirectly, of a majority of
the total voting power of the capital stock of Holdings or otherwise
able to elect a majority of the board of directors of Holdings (for
purposes of this definition, such person or group shall be deemed to
beneficially own capital stock of Holdings that is held by any other
corporation so long as such person or group beneficially owns,
directly or indirectly, in the aggregate a majority of the total
capital stock of such other corporation); or (ii) which results in the
sale, transfer, assignment, lease, conveyance or other disposition,
directly or indirectly, of all or substantially all the assets of
Holdings and its subsidiaries, considered as a whole (other than to an
Affiliate thereof).
(d) Section 1 shall be amended further by adding the following definition:
"Panthers Merger" means a transaction that (i) results in the merger,
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consolidation or amalgamation or other business combination of
Holdings with or into an entity referred to by Holdings as "Panthers,"
or the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the
assets of Holdings and its subsidiaries, considered as a whole, to
Panthers, and (ii) closes prior to March 31, 2001.
(e) The definitions "Termination of Employment," "Cause," "Disability" and
"Retirement" contained in Section 1 thereof shall be deleted in their entirety.
(f) The words ", provided such occurrence is prior to the Termination of
Employment" shall be deleted from the first sentence in each of Sections 2(a)
and 2(b) thereof.
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(g) Section 2(a)(ii) shall be amended to delete the "or" at the end of
Section 2(a)(ii).
(h) Section 2(a)(iii) shall be amended to replace the "." at the end of
Section 2(a)(iii) with "; or".
(i) Section 2(a) shall be amended to add the following new clause (iv):
"(iv) immediately prior to the closing of a Panthers Merger."
(j) Section 2(b)(ii) shall be amended to delete the "or" at the end of
Section 2(b)(ii).
(k) Section 2(b)(iii) shall be amended to replace the "." at the end of
Section 2(b)(iii) with "; or".
(l) Section 2(b) shall be amended to add the following new clause (iv):
"(iv) immediately prior to the closing of a Panthers Merger."
(m) Section 2(c) shall be amended by deleting such section in its entirety
and replacing such section with the following:
"(c) Holdings shall give to the Holder written notice (the "Holdings
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Notice") of the occurrence of an Approved Sale or a Panthers Merger at
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least 20 days prior to the anticipated closing of such Approved Sale
or Panthers Merger or an Initial Investors Cash-Out within 100 days
following such Initial Investors Cash-Out."
(n) Section 2(f) shall be amended by deleting such section in its entirety
and replacing such section with the following:
"(f) (i) If the Holdings Notice is with respect to a Panthers Merger,
the Holder shall notify Holdings on or before five days prior to the
anticipated closing date of such Panthers Merger of such Holder's
exercise; (ii) with respect to an Approved Sale, if the Holdings
Notice states that Holdings anticipates that such event will cause the
vesting of the 40% IRR Warrant or the 60% IRR Warrant, the Holder
shall notify Holdings on or before five days prior to the anticipated
closing date of such Approved Sale of such Holder's exercise; and
(iii) with respect to an Initial Investors Cash-Out, if the Holdings
Notice states that such event has caused the vesting of either of such
warrants, the Holder shall notify Holdings on or before five days
following receipt of the Holdings Notice of such Holder's exercise of
this Warrant (the "Notice Date") . This Warrant shall be exercisable
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by the Holder in whole only, and not in part, by the surrender of this
Warrant and delivery to Holdings on or before the Notice Date of (i) a
duly executed notice of exercise in the form of Exhibit A (a "Notice
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of Exercise") and (ii) at the option of the Holder, either (A) the
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Exercise Price for the Warrant Shares, payable in cash or by wire
transfer to a bank account designated by Holdings or (B) in the case
of a Panthers Merger, a
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notice by Holder to Holdings requesting the Warrant Shares be issued
net of the appropriate Exercise Price (to be determined based on and
consistent with the value of the consideration to be tendered in
connection with such Panthers Merger)."
(o) Section 2(g) shall be amended by deleting such section in its entirety
and replacing such section with the following:
"(g) This Warrant shall terminate automatically upon the closing of
an Approved Sale or a Panthers Merger and this Warrant shall no longer
be of any force or effect, unless (i) provision is made in writing in
connection with such transaction for the continuance of this Warrant
and for the assumption of this Warrant, or for the substitution for
this Warrant of a new Warrant covering the securities of a successor
entity or an affiliate thereof, with appropriate adjustments as to the
number and kind of securities and exercise price, in which event this
Warrant shall continue or be replaced, as the case may be, in the
manner and under the terms so provided; or (ii) the Board of Directors
of Holdings shall provide in writing for such adjustment as it deems
appropriate in terms and conditions of this Warrant, including without
limitation (A) accelerating the vesting of this Warrant and/or (B)
providing for the cancellation of this Warrant and its automatic
conversion into the right to receive the securities, cash or other
consideration that the Holder would have been entitled to receive upon
consummation of such Approved Sale or Panthers Merger had Warrant
Shares been issued and outstanding immediately prior to the Approved
Sale or Panthers Merger (net of the appropriate exercise price)."
(p) Section 2(h) thereof shall be deleted in its entirety.
4. Attached hereto as Exhibit E is a true and correct copy of the
Management Stock Purchase Agreement. Holdings hereby waives any Repurchase Right
(as defined therein) that it may have pursuant to Section 3(a) thereof and you
hereby waive any Put Right that you may have pursuant to Section (b) thereof.
5. Attached hereto as Exhibit F is a true and correct copy of the
Subscription Agreement.
6. Attached hereto as Exhibit G is a true and correct copy of the
Indemnity Agreement.
7. Holdings or IWO shall retain on mutually acceptable terms Xxxx and
Xxxx LLC as its outside legal counsel for the period commencing the date hereof
through December 31, 2000 and shall pay $25,000 per month as a retainer for
services to be rendered.
8. You, for yourself, your agents, legal representatives, assigns, heirs,
distributees, devisees, legatees, administrators, personal representatives and
executors ("Your Parties"), on the one hand, and Holdings and IWO, its present,
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past and future subsidiaries and affiliates,
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successors and assigns, and their respective present and past officers,
directors, employees and agents ("Our Parties"), on the other hand hereby
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release and forever discharge the other, from any and all claims, demands,
actions, liabilities and other claims for relief and remuneration whatsoever,
whether known or unknown; provided, however, that nothing contained herein shall
relieve IWO, Holdings or you from any obligation arising herein, under the
agreements referenced herein (as modified by this agreement), under the
Indemnity Agreement dated December 20, 1999 between Holdings and you, under the
Indemnity Agreement dated November 5, 1999 between IWO and you, under the
Certificate of Incorporation of Holdings or IWO or under the Stockholders
Agreement dated December 20, 1999 between Holdings, you and the other parties
thereto. Your Parties and Our Parties further agree not to assert any claim,
charge or other legal proceeding against the other, in any forum, based on any
events, whether known or unknown, which are the subject of the release contained
in this Section 8.
9. Except for the changes described herein, the Stock Option Agreement,
the Warrant and the Management Stock Purchase Agreement will be unchanged and
remain in full force and effect.
10. In connection with a Designated Merger if and when requested by the
board of directors of Holdings, you agree to enter into a lockup agreement and a
voting agreement with respect to your shares of capital stock of Holdings and
Parent and any such capital stock that may be acquired upon the exercise of
options or warrants for such capital stock, to the extent and on substantially
the same basis as Investcorp S.A. and its subsidiaries enter into such
agreements with respect to their capital stock of Holdings and Parent.
11. You hereby waive any acceleration of benefits pursuant to the Stock
Option Agreement, the Warrant or the Management Stock Purchase Agreement unless
shareholder approval meeting the requirements of Section 280G(b)(5) of the
Internal Revenue Code of 1986, as amended (the "Code"), with respect to such
benefits is obtained.
12. You agree that this letter agreement (excluding for this purpose
paragraph 11 of such agreement) shall not be effective unless shareholder
approval meeting the requirements of Section 280G(b)(5) of the Code is obtained.
13. This letter agreement shall inure to the benefit of, and be binding
upon, the heirs, executors, administrators, successors and assigns of you,
Holdings and/or IWO.
14. The parties hereto agree to take or cause to be taken all such further
actions as may be reasonably necessary or appropriate to effectuate the intent,
purposes and obligations of this letter agreement.
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Please indicate your acceptance of the terms hereof by signing in the
appropriate space below and sending a facsimile of this letter to Xxxxxxxxx X.
Xxxxxxx at (000) 000-0000.
Very truly yours,
IWO HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive Officer
INDEPENDENT WIRELESS ONE
CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive Officer
Agreed and accepted:
X.X. XXXX III
/s/ X.X. Xxxx III
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