Document:

exv10w3

Exhibit 10.3

LETTER AGREEMENT

Regarding VoIP Revenue Payment from

LY Holdings, LLC and Lightyear Network Solutions, LLC

     This LETTER AGREEMENT (“Agreement”) certifies that, for good and valuable consideration
received on the date hereof,                      (“Lender”), is entitled to receive each month from
LY Holdings, LLC, a Kentucky limited liability company (“LYH”), and Lightyear Network
Solutions, LLC, a Kentucky limited liability company (“LNS”; collectively with LYH,
“Lightyear”),                      percent (___%) of the Monthly Revenue (as defined herein) from the sales
of products and services generated from Voice over Internet Protocol (“VoIP”) technology, as
determined from the VoIP product codes in Lightyear’s billing system and revenue reports; all as
subject to the terms and conditions set forth herein (the “VoIP Revenue Payment”). For purposes of
this Agreement, “Monthly Revenue” means all revenue from the immediately preceding monthly billings
excluding taxes, loop charges, termination charges, USF charges, PICC charges, monthly recurring
charges and other similar charges.

     1. VoIP Revenue Payment.

          1.1 Generally. Pursuant to, and in consideration for, a loan from Lender to Lightyear
in the amount of $                     evidenced by a promissory note executed by Lightyear to the Lender
contemporaneously with the issuance of this Letter Agreement and made pursuant to a Loan Agreement
(the “Loan Agreement”) by and among Lightyear, Lender and certain other parties dated as of even
date herewith, Lightyear agrees, for the Term (as defined in Section 2 below) to pay Lender
on or before the twentieth (20th) day of each month an amount equal to the VoIP Revenue
Payment; provided, however, all such payments are subject to the restrictions set
forth in Section. 1.2 of this Agreement.

          1.2 Restrictions. Until such time as Lightyear has repaid all indebtedness Lightyear
owes the Banks (as that term is defined in the Loan Agreement), Lightyear shall not pay Lender the
VoIP Revenue Payment, but instead shall accrue such payments as an obligation due Lender with such
accrued obligation fully subordinated to all Lightyear indebtedness and obligations Lightyear owes
to the Banks. The VoIP Revenue Payment shall be unsecured. When all indebtedness and obligations
Lightyear owes the Banks has been repaid, Lightyear shall (a) immediately pay Lender all accrued
VoIP Revenue Payments due and owing Lender under this Agreement up to $___(the “Cap”) and any
such accruals exceeding the Cap may be paid as mutually agreed upon by the Lender, Lightyear and
any third party providing financing to Lightyear for the purpose of repaying the Banks; and (b)
then commence making the VoIP Revenue Payment monthly as set forth in Section 1.1 of this
Agreement.

     2. Term; Termination Fee.

          2.1 Term. The term (“Term”) of this Agreement shall commence as of the date of this
Agreement and continue until the sooner to occur of (a) 120 months, or (b) a Sale Transaction (as
defined hereafter) unless the Successor-in-Interest (as defined hereafter) consents to the
continued payment of the VoIP Revenue Payment pursuant to this Agreement (Lightyear shall use its
best efforts to obtain such consent); provided, however, if the VoIP Revenue

 

 

Payment is terminated pursuant to clause (b) of this Section 2.1 because the
Successor-in-Interest does not consent to the continued payment of the VoIP Revenue Payment (an
“Early Termination Event”), Lightyear shall immediately pay to Lender a termination fee (the
“Termination Fee”) calculated as set forth in Section 2.2 of this Agreement.
Notwithstanding the foregoing, Lightyear shall not pay the Termination Fee unless the Banks have
been repaid in full at the time Termination Fee becomes due; provided, however, in such
circumstances, the Termination Fee shall be accrued by Lightyear for the benefit of Lender on an
unsecured basis until such time as the Banks have been repaid in full and all commitments to make
loans shall have terminated and then the Termination Fee shall be immediately paid to Lender by
Lightyear. For purposes of this Section 2.1, “Sale Transaction” means any sale of all or
substantially all of the membership interests in LYH or LNS, any binding exchange of all or
substantially all of the membership interests in LYH or LNS, any merger involving LYH or LNS, any
sale of all or substantially all of the assets of LYH or LNS, any similar transaction or any
transaction having a similar effect. For purposes of this Section 2.1,
“Successor-in-Interest” means any party that acquires all or substantially all of the membership
interests in LYH or LNS or all or substantially all of the assets of LYH or LNS pursuant to a Sale
Transaction.

          2.2 Termination Fee. Immediately upon an Early Termination Event, Lightyear shall pay
Lender the Termination Fee in the amount of the sum of the VoIP Revenue Payments for the
immediately preceding twelve month period.

     3. Audit Rights of Lender. Lightyear shall maintain complete and accurate
records which are relevant to the determination of the VoIP Revenue Payment due Lender under this
Agreement, and such records shall be open during reasonable business hours for a period of two (2)
years from creation of individual records for examination and audit by Lender not more often than
once each year by a certified public accountant selected by Lender (subject to consent of
Lightyear, such consent not to be unreasonably withheld or delayed). Each party shall bear its own
costs related to such audit; provided, that, for any underpayments greater than five (5) percent by
Lightyear, Lightyear shall pay Lender the amount of underpayment and Lender’s out-of-pocket
expenses. For any underpayments less than five (5) percent by Lightyear found under this Section,
Lightyear shall pay Lender the amount of underpayment. Any overpayments by Lightyear will be
refunded to Lightyear or credited to future payments due from Lightyear to Lender, at Lightyear’s
election. Results of any such audit shall be provided to Lightyear and Lender.

     4. Miscellaneous.

          4.1 Amendment. This Agreement may be changed, modified, or amended only in writing,
which writing shall set forth provisions of such change, modification, or amendment and which shall
be executed by all of the parties hereto.

          4.2 Binding Effect. This Agreement shall inure to and be valid and binding upon each
of the parties hereto, and their respective successors and assigns.

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          4.3 Entire Agreement. This Agreement contains the entire agreement of the parties
pertaining to its subject matter and supersedes all prior written and oral agreements pertaining to
its subject matter.

          4.4 Time is of the Essence. Time shall be of the essence in the performance of all
duties and obligations hereunder.

          4.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Kentucky.

          4.6 No Assignment. Neither this Agreement nor any interest herein or right or
obligation hereunder may be assigned by the Lender in any manner, by operation of law or otherwise,
without the prior written consent of Lightyear.

          4.7 Captions. All captions in this Agreement are intended solely for the convenience
of the parties, and none shall be deemed to affect the meaning and construction of any provision
hereof.

          4.8 Severability. The parties agree that each provision to this Agreement shall be
construed independent of any other provision of this Agreement. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect the other provisions hereof. This
Agreement shall be construed in all respects as if such invalid or unenforceable provision were
omitted.

          4.9 Cumulative Remedies. No right or remedy conferred upon or reserved to any of the
parties under the terms of this Agreement is intended to be, nor shall it be deemed, exclusive of
any other right or remedy provided herein or by law or equity, but each shall be cumulative of
every other right or remedy.

[SPACE INTENTIONALLY BLANK; SIGNATURES ON FOLLOWING PAGE]

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     In Witness Whereof, the parties hereto have caused this Agreement to be signed and
attested by their duly authorized officers the date written below.

	 	 	 	 	 	 	 
	 	 	LY Holdings, LLC	 	 
	 
	 	 	 	 	 	 
	Dated:                                 

	 	By:	 	 	 	 
	 

	 	 	 	 

J. Sherman Henderson, President
	 	 
	 
	 	 	 	 	 	 
	 	 	Lightyear Network Solutions, LLC	 	 
	 
	 	 	 	 	 	 
	Dated:                                 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	J. Sherman Henderson, President	 	 
	 
	 	 	 	 	 	 
	Dated:                                 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Ron Carmicle	 	 

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Schedule to Exhibit 10.3 to Current Report on Form 8-K

Letter Agreement Lenders

Lenders executing VoIP Letter Agreements with Lightyear of the form attached, including Percentage
of Monthly Revenue paid, loaned amount and Cap.

	 	 	 	 	 	 	 	 	 	    	 	 	 
	 	 	 	 	 	 	Loaned	 	 
	Lender	 	Percentage of Monthly Revenue	 	Amount	 	Payment Cap*
	Rigdon O. Dees, III
	 	 	2.00	%	 	$	400,000.00	 	 	$	30,000.00	 
	Rice Realty Company, LLC
	 	 	0.50	%	 	$	150,000.00	 	 	$	7,500.00	 
	LANJK, LLC
	 	 	0.50	%	 	$	150,000.00	 	 	$	7,500.00	 
	CTS Equities Limited Partnership
	 	 	0.50	%	 	$	150,000.00	 	 	$	7,500.00	 
	Ron Carmicle
	 	 	0.50	%	 	$	150,000.00	 	 	$	7,500.00	 

 

	* 	As Lightyear has repaid all indebtedness it owed to the Banks,
the Payment Cap is no longer applicable to the VoIP Letter Agreements.

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 Exhibit 10.4

FIRST MODIFICATION TO LETTER AGREEMENTS

     THIS FIRST MODIFICATION TO LETTER AGREEMENTS (this “Agreement”) is made, entered into and
effective as of the 12th day of February, 2010 by and among (i) LY Holdings, LLC, a
Kentucky limited liability company (“LYH”), and Lightyear Network Solutions, LLC, a
Kentucky limited liability company (“LNS”); and (ii) Rigdon O. Dees, III, individually
(“Dees”), Rice Realty Company, LLC, a Kentucky limited liability company (“RRC”), Ron
Carmicle, individually (“Carmicle”), LANJK, LLC, a Kentucky limited liability company
(“LANJK”), and CTS Equities Limited Partnership, a Nevada limited partnership (“CTS”)
(collectively, the “Lenders”).

     RECITALS:

     A. Each Lender, LYH and LNS are parties to the Letter Agreements relating to VoIP revenue
payments set forth on Exhibit A hereto (the “VoIP Letter Agreements”).

     B. Each Lender, LYH and LNS are parties to the Letter Agreements relating to wireless revenue
payments set forth on Exhibit B hereto (the “Wireless Letter Agreements”).

     C. The VoIP Revenue Payments (as defined in the VoIP Letter Agreements) owed to the Lenders
for 2009 are $101,709.14, and the Wireless Revenue Payments (as defined in the Wireless Letter
Agreements) owed to the Lenders for 2009 are $79,472.07.

     D. The Lenders have agreed (i) to release LYH from all of its obligations under the Letter
Agreements, and (ii) to release LNS from any obligation to pay the VoIP Revenue Payments for 2009
and the Wireless Revenue Payments for 2009.

     E. Each VoIP Letter Agreement and each Wireless Letter Agreement (collectively, the “Letter
Agreements”) provides that under certain circumstances if a “Sale Transaction” (as defined in the
Letter Agreements) occurs, then LYH and LNS shall immediately pay to the Lender a Termination Fee
(as defined in the Letter Agreements) equal to the sum of the VoIP Revenue Payments or the Wireless
Revenue Payments, as applicable, in either case for the immediately preceding twelve full months.

     F. LYH and LNS are contemplating a transaction with Libra Alliance Corporation, a Nevada
corporation (“Libra”), pursuant to which LYH would contribute the membership interests of LNS to
Libra in exchange for common and/or preferred stock of Libra (the “Transaction”).

     G. The parties agree that the Transaction would not constitute a “Sale Transaction” for
purposes of the Letter Agreements, and as a result no Termination Fee would be payable in
connection with the consummation of the Transaction.

     H. Following the consummation of the Transaction, LNS, the Lenders and Libra desire to
negotiate in good faith for Libra to purchase the Letter Agreements from the Lenders.

 

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

     1. Release of LYH. Notwithstanding any provision herein or in any other document to the
contrary, Lenders hereby agree that LYH is hereby released and discharged from all of its
obligations under the Letter Agreements. All references to the term “LYH” or “Lightyear” in the
Letter Agreements shall be deemed to be a reference only to Lightyear Network Solutions, LLC and
not to LY Holdings, LLC.

     2. No Obligation to Pay Revenue Payments. The Lenders hereby forever release and discharge
LNS from any obligation to pay the VoIP Revenue Payments for 2009 and the Wireless Revenue Payments
for 2009.

     3. No Sale Transaction. The parties hereby agree that if the Transaction was consummated, it
would not constitute a “Sale Transaction” for purposes of the Letter Agreements. The parties
further agree that no Termination Fee would be payable as a result of the consummation of the
Transaction.

     4. Subsequent Purchase of Letter Agreements. Following the consummation of the Transaction,
LNS, the Lenders and Libra shall negotiate in good faith for Libra to purchase the Letter
Agreements from the Lenders.

     5. Restatement of Obligations. Except as otherwise expressly set forth herein, each Letter
Agreement shall remain in full force and effect. LNS hereby reaffirms and restates its obligations
under the Letter Agreements as modified herein.

     6. Fees and Expenses. LNS shall pay all reasonable out-of-pocket expenses (including
attorneys’ fees) incurred by the Lenders in connection with the transactions contemplated herein.

     7. Singular and Plural Terms. Wherever the context requires, the singular number shall
include the plural, the plural the singular, and the use of any gender shall include all genders.

     8. Binding Effect. This Agreement shall bind and inure to the benefit of the parties and
their respective successors and permitted assigns. LYH and LNS may not assign this Agreement
without the prior written consent of the Lenders.

     9. Governing Law. This Agreement has been delivered and accepted at and will be deemed to
have been made at Lexington, Kentucky and will be interpreted and the rights and liabilities of the
parties hereto determined in accordance with the laws of the Commonwealth of Kentucky, without
regard to conflicts of law principles.

     10. Jurisdiction. The parties hereby irrevocably agree and submit to the exclusive
jurisdiction of any state or federal court located within Fayette County, Kentucky, and waive any

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objection based on forum non conveniens and any objection to venue of any such action or
proceeding.

     11. Waiver of Jury Trial. The parties hereto each waive any right to trial by jury in any
action or proceeding relating to this Agreement, or any actual or proposed transaction or other
matter contemplated in or relating to any of the foregoing.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

	 	 	 	 	 	 	 
	 	 	LY Holdings, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Title:
	 	/s/ J. Sherman Henderson III
 

President
	 	 
	 

	 	 	 	(“LYH”)	 	 
	 
	 	 	 	 	 	 
	 	 	Lightyear Network Solutions, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Title:
	 	/s/ J. Sherman Henderson III
 

Manager
	 	 
	 

	 	 	 	(“LNS”)	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Rigdon O. Dees III	 	 
	 	 	 	 	 
	 	 	Rigdon O. Dees, III, individually	 	 
	 
	 	 	 	 	 	 
	 	 	Rice Realty Company, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ W. Brent Rice
 

W. Brent Rice, Member
	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Ron Carmicle	 	 
	 	 	 	 	 
	 	 	Ron Carmicle, individually	 	 
	 
	 	 	 	 	 	 
	 	 	LANJK, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Sherman Henderson III
 

	 	 
	 

	 	Title:
	 	Manager	 	 
	 
	 	 	 	 	 	 
	 	 	CTS Equities Limited Partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Chris T. Sullivan
 

Chris T. Sullivan, General Partner
	 	 
	 

	 	 	 	(“Lenders”)

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