EXHIBIT 1
CHADMOORE WIRELESS GROUP, INC.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
December 12, 2001
Recovery Equity Investors II, L.P.
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Re: Agreement and Plan of Reorganization dated as of August 21, 2000
by and among Nextel Communications, Inc. ("Nextel"), Nextel
Finance Company ("Acquisition Sub") and Chadmoore Wireless Group, Inc.
("Chadmoore") (the "Agreement"), as amended by the First Amendment
to the Agreement, dated as of August 31, 2000, by the Second
Amendment to the Agreement, dated as of February 20, 2001, by the
Third Amendment to the Agreement, dated as of June 29, 2001 and by the
Fourth Amendment to the Agreement, dated as of November 16, 2001 (the
Agreement, as amended, the "Amended Agreement")
Dear Sirs:
All capitalized terms used and not otherwise defined herein have the respective
meanings assigned to them in the Amended Agreement.
In order to induce Recovery Equity Investors II, L.P., a Delaware limited
partnership ("REI"), to enter into an amended letter agreement relating to its
support of the Amended Agreement and the Reorganization (for purposes hereof,
each of the Amended Agreement and the Reorganization shall mean such Agreement
or Reorganization as in effect or as provided for, as applicable, as of November
16, 2001, and as subsequently amended with REI's prior written consent) and to
resolve issues arising out of the Investment Agreement, dated as of May 1, 1998,
between REI and Chadmoore and agreements related thereto, Chadmoore and REI
entered into a letter agreement dated November 16, 2001 (the "Amended Letter
Agreement"). Chadmoore and REI agree that the Amended Letter Agreement is hereby
amended as follows:
1. Section 3 of the Amended Letter Agreement is deleted
in its entirety and replaced with the following:
"3. If prior to March 31, 2002 (x) the shareholders of
Chadmoore approve both the Reorganization and the Plan, (y) REI
concludes that the Reorganization, together with the liquidation to
be effected under the Plan, conform with all applicable requirements
so as for the Reorganization, together with the liquidation to be
effected under the Plan, to be treated as a tax-free reorganization
under Section 368(a)(1)(C) of the Code for holders of both Common
Stock and Series C Preferred Stock of Chadmoore, as based on a
written opinion by KPMG, Chadmoore's independent accountants, to
such effect, and (z) REI determines, in its reasonable judgment,
that the Closing will occur within no greater than three days, REI
shall loan Chadmoore $6.5 million in cash in exchange for a
promissory note of Chadmoore, payable at REI's option, (i) upon
demand after the Closing Date and in no event later than the seventh
day immediately following the Closing Date in cash (with interest at
10% per annum from the date of issuance to the date immediately
preceding the date of payment, if not paid after demand therefore
and on or prior to the seventh day
immediately following the Closing Date), together with a facility
fee of $975,000 or (ii) on the Closing Date, in such number of
Nextel Shares as is equal in value to 115% of the principal amount
(it being understood that such number of shares is intended to
reflect the uncertainties of the valuation of such Nextel Shares
at the time of payment and that such payment in shares shall be a
distribution in liquidation to REI as a creditor of Chadmoore
pursuant to the Plan) and valued at the Nextel Share Price;
PROVIDED, HOWEVER, that if the Closing does not occur, the note
shall be payable in cash and immediately upon demand (with interest
at 10% per annum from the date of issuance to the date immediately
preceding the date of payment, if not paid after demand), together
with a facility fee of $975,000. Chadmoore shall use its best
efforts to insure that such loan is secured by its assets but
subordinate to debt owed by Chadmoore to GATX Capital Corporation
and Barclays Bank PLC."
2. Section 5 of the Amended Letter Agreement is deleted in
its entirety and replaced with the following:
"5. Immediately following the consummation of the Closing,
Chadmoore shall pay REI all accrued and unpaid amounts due to date
under the Advisory Agreement, dated as of May 1, 1998, between REI
and Chadmoore (the "Advisory Agreement"). Thereafter,
notwithstanding the terms of the Advisory Agreement, in addition to
any continued payments required thereunder, REI shall be entitled
to, and Chadmoore shall pay to REI, an amount equal to $312,500,
which, together with all other remaining fees, shall be pre-paid by
Chadmoore as promptly as possible, but in no event later than thirty
(30) days immediately following the Closing Date."
[signature page to follow]
This letter agreement shall be governed by and construed in accordance with
the domestic laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
This letter agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute
one and the same instrument.
If you are in agreement with the foregoing, please sign the copy of this
letter enclosed and return it to the undersigned, whereupon it will become a
binding obligation between us.
Sincerely yours,
CHADMOORE WIRELESS
GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
Agreed and accepted this
12th day of December, 2001.
RECOVERY EQUITY INVESTORS II, L.P.
By: RECOVERY EQUITY PARTNERS II, L.P.
Its General Partner
By: /s/ Xxxxxx X. Xxxx-Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx-Xxxx
Title: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
