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CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.24
PURCHASE AND SUPPLY AGREEMENT
This Purchase and Supply Agreement ("Agreement") is entered into effective as
of November 8, 1996 ("Effective Date"), by and between NextWave Telecom Inc.
("NextWave") and The Xxxxx Group Inc., for itself and on behalf of its wholly
owned subsidiaries and divisions which include Xxxxx Telecom Group, Inc.,
Xxxxxxx Electronics Company and Comsearch (individually and collectively,
"Supplier") with reference to the following:
WHEREAS, NextWave Personal Communications Inc., a subsidiary of NextWave, was
the winning bidder for 63 personal communications services ("PCS") licenses in
the C-Block auction conducted by the Federal Communications Commission ("FCC"),
and upon final granting of these licenses, NextWave intends to build and deploy
PCS networks throughout the United States;
WHEREAS, Supplier desires to provide to NextWave, and NextWave desires to
acquire from Supplier, certain RF equipment complying with NextWave's
specifications (the "Equipment") together with associated and ancillary
services ("Services") to NextWave or to one or more of NextWave's Affiliates
(where NextWave may act through such Affiliates, the term NextWave refers to
NextWave and such Affiliates);
WHEREAS, concurrently and in connection with this Agreement, Supplier and
NextWave are entering into that certain Subscription Agreement (the
"Subscription Agreement") pursuant to which SUPPLIER has subscribed to
purchase, in accordance with the terms thereof, one million (1,000,000) shares
of Series B Common Stock ($0.0001 par value) for an aggregate purchase price of
$5 million (the "Shares"); and
WHEREAS, Supplier desires to provide for financing of NextWave's procurement of
the Equipment and Services on the terms set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and for such other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, Supplier and
NextWave, intending to be legally bound, agree as follows:
1. EQUIPMENT SUPPLY AND RELATED SERVICES.
A. Subject to the terms and conditions of this Agreement,
NextWave hereby agrees to purchase from time to time from the date hereof
through the period ending December 31, 2001, $50 Million of Equipment and
Services from Supplier (the "Purchase Commitment") pursuant to one or more
definitive purchase agreements ("Purchase Agreements") to be entered into by
NextWave and Supplier. Subject to delays in NextWave's buildout of its PCS
networks for reasons beyond its control, NextWave hereby agrees to purchase
forty percent (40%) of the Purchase Commitment during the first two years of
the term hereof, and twenty percent (20%) of the Purchase Commitment per year
thereafter. In connection with this Purchase Commitment, Supplier shall make
available to NextWave $50 Million of Financing in accordance with the
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terms of Section 2 hereof. The Purchase Agreements will set forth the
commercial terms governing the purchase of Equipment and Services from Supplier
which shall be acceptable to NextWave and Supplier. During the entire term of
this Agreement, the commercial terms of the Purchase Agreements, taken as a
whole, relating to customer pricing, lead times, financing, warranties and
other terms and conditions will be at least as favorable as the terms and
conditions, taken as a whole, quoted or charged by Supplier to other customers
for similar quantities and shall be, at a minimum, competitive with industry
standards.
B. The parties acknowledge that, concurrent with the execution of
this Agreement, Supplier has executed and delivered to NextWave the
Subscription Agreement pursuant to which Supplier has agreed to purchase shares
of Series B Common Stock (the "Investment") for a total purchase price of Five
Million Dollars ($5,000,000.00). In the event the Investment is not
consummated as contemplated in the Subscription Agreement, this Agreement shall
automatically terminate and neither party shall have any further liability or
obligation to the other party hereunder.
2. FINANCING.
Supplier hereby commits to provide NextWave financing in the aggregate
amount of $50 Million (the "Financing") over a period of five years from the
Effective Date (the "Term") in the form of a multiple drawdown term loan
facility (the "Loans"), pursuant to definitive financing documents to be
entered into by NextWave and Supplier (the "Financing Documents"). The
proceeds of the Loans will be used by NextWave solely to finance the purchase
price of the Equipment and Services supplied by Supplier pursuant to the terms
of this Agreement and the Purchase Agreements. The Loans will be made on the
first day of each month (the "Drawdown Date") to fund payment obligations of
NextWave to Supplier incurred during the immediately preceding month. Loans
made during the first thirty six (36) months of the Term shall bear interest at
a rate equal to *_________________________________________* and shall have
repayment terms as set forth below:
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Loans made during the last twenty four (24) months of the Term shall bear
interest at a rate equal to *______________________* and shall have repayment
terms as set forth below:
*----------------------------------------------------------------------
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The Financing Documents will (i) provide that Supplier shall hold a purchase
money security interest on the Equipment purchased hereunder and (ii) reflect
the terms set forth in this Section 2 and such other terms and conditions as
are customary and usual for such a transaction, including, without limitation,
default and remedies provisions.
3. CONFIDENTIALITY.
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* CONFIDENTIAL TREATMENT REQUESTED
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Supplier acknowledges that all technical documentation delivered to
Supplier by NextWave hereunder, and all other information relating to the
design, development, configuration, use, installation, operation and
maintenance of cell sites and a network system constitute confidential or
proprietary information of NextWave (referred to as "Confidential
Information"). During the Term, and for a period of two (2) years thereafter,
Supplier shall not duplicate, use other than in accordance with this Agreement,
or disclose to any third person, including but not limited to any independent
contractor, consultant, customer or supplier, any Confidential Information of
NextWave. Supplier shall adopt all reasonable precautions to protect
Confidential Information received hereunder and to prevent its dissemination to
unauthorized persons and entities. The foregoing restrictions shall not apply
to any Confidential Information which Supplier can demonstrate: (i) is wholly
and independently developed by Supplier or lawfully received free of
restriction from another source having the rights to furnish such Confidential
Information; (ii) has become generally available to the public without breach
of this Agreement; or (iii) at the time of disclosure to Supplier was known to
Supplier free of restriction. Each party agrees to keep confidential the terms
of this Agreement. Notwithstanding the foregoing, Supplier shall have the
right: (i) to develop independently products and services having features or
functionality contemplated by the Confidential Information and (ii) to market
or otherwise provide such products or services to third parties. In addition,
each party may disclose the terms of this Agreement, and its existence, to the
extent required by law, subject to such party first notifying the other Party.
Each party will have the right to disclose the terms of this Agreement to its
shareholders and investment bankers.
4. GENERAL
(A) The term of this Agreement shall commence on the date hereof,
and shall continue in effect until the last Loan advanced hereunder has been
paid in full. Notwithstanding the foregoing, either party may terminate this
Agreement immediately upon giving notice to the other party at any time after
the occurrence of any of the following events with respect to such other party
(i) insolvency, bankruptcy or liquidation or filing any application therefor,
or other commitment of an affirmative act of insolvency; (ii) attachment,
execution or seizure of substantially all of the assets or filing any
application therefor; (iii) assignment or transfer of that portion of the
business to which this Agreement pertains to a trustee for the benefit of
creditors; (iv) subject to the immediately following sentence, disposition, by
sale or assignment of all rights, of that portion of the business or material
assets to which this Agreement pertains; (v) termination of its business or
dissolution, or (vi) loss of the Company's PCS licenses as a Designated Entity
and Small Business. Notwithstanding the foregoing, in the event Supplier
transfers or sells a division or subsidiary (the "Transferred Entity") that is
providing Equipment or Services hereunder, the balance of NextWave's Purchase
Commitment remaining on the date of such transfer shall be reduced by an amount
equal to a percentage which reflects the amount paid for Equipment and Services
provided by the Transferred Entity prior to the date of such transfer compared
to the total amount paid for Equipment and Services provided by Supplier prior
to the date of such transfer.
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(B) For the purposes of this Agreement, the term "Affiliate" shall
mean: (i) any entity that controls, is controlled by, or is under common
control with a party, directly or indirectly, where "control" means the power,
right or authority, by equity ownership, contract or otherwise, to direct the
management and policies, or elect a majority of the board of directors (or
similar governing body) of an entity. In the case of NextWave, the term
Affiliate shall also include, without limitation, wireless service providers
with which NextWave has entered into, or subsequently enters into, a strategic
relationship from time to time, provided that such wireless service providers
are neither competitors of Supplier nor customers of Supplier prior to their
affiliation with NextWave.
(C) This Agreement shall be binding upon and inure to the benefit
of the parties and their permitted successors and assigns. Notwithstanding the
foregoing, no rights, obligations or liabilities of either party hereunder may
be assigned or transferred by such party without the express prior written
consent of the other party, which shall not be unreasonably withheld, provided
that each party shall have the right to assign this Agreement to an affiliate.
For purposes of this Section 4(C) an "affiliate" means any entity that, either
directly or through one or more intermediaries, controls, is controlled by or
is under common control with a party.
(D) This Agreement constitutes the entire agreement between the
parties and supersedes all prior oral or written negotiations and agreements
between the parties with respect to the subject matter hereof. This Agreement
may be amended or supplemented at any time by mutual written agreement of the
parties, but neither this Agreement nor any term hereof may be amended,
modified, released, discharged, abandoned or changed in any manner except by an
instrument in writing which refers to his Agreement and which is executed by
each of the parties. No waiver by either Party of any of the provisions hereof
will be effective unless explicitly set forth in writing and executed by the
Party so waiving.
(E) The parties hereby agree to execute and deliver all documents
and instruments and to take or cause to be taken such other actions that are
reasonably necessary or appropriate to consummate the transactions contemplated
by this Agreement.
(F) This Agreement is made and entered into in the State of New
York and shall be governed by and construed and enforced in accordance with the
laws of the State of New York.
(G) All notices given by either party hereunder must be in writing
and delivered by certified mail (return receipt requested), overnight courier,
or facsimile with confirmation, at the addresses set forth below:
If to Supplier:
The Xxxxx Group Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Treasurer
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Facsimile: (000) 000-0000
with a copy to:
The Xxxxx Group Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
If to NextWave:
NextWave Telecom Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Legal Department
Facsimile: (000) 000-0000
(H) The Section headings contained in this Agreement are for
reference purposes only and will not affect the meaning or interpretation of
this Agreement.
(I) If any provision of this Agreement will be declared by any
court of competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement will not be affected and will remain in full force
and effect.
(J) This Agreement may be executed in any number of counterparts,
each of which will be deemed to be an original and all of which together will
be deemed to be one and the same instrument. This Agreement may be executed
via facsimile with original signatures to follow via overnight courier.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
AGREED AND ACCEPTED:
The Xxxxx Group Inc. NextWave Telecom Inc.
By: /s/ Xxxxx XxXxxx By: /s/ Xxxxx Xxxxxxx
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Title: Vice President Date: 11/8/96 Title: CEO & President Date: 11/13/96
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