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EXHIBIT 10.30
LICENSE PURCHASE
THIS LICENSE PURCHASE AGREEMENT (the "Agreement") is made the
11th day of September, 1998 by and between Leap Wireless International, Inc., a
Delaware Corporation (the "Buyer") and Airgate Wireless, L.L.C., a Delaware
limited Liability company (the "Seller").
WHEREAS, Seller (i) has acquired the authorization of the Federal
Communications Commission (the "FCC") to construct and operate personal
communication systems ("PCS") in the Basic Trading Areas ("BTAs") listed on
Exhibit A attached hereto (collectively referred to herein as the "Licenses");
WHEREAS, Seller desires to sell to Buyer and Buyer desires to
purchase from Seller all right, title and interest in and to the Licenses; and
WHEREAS, Seller and Buyer desire to enter into this Agreement to
effect the purchase and sale of the Licenses pursuant to the terms set forth
herein except as specifically provided otherwise herein;
WHEREAS, the prior consent of the FCC to the transfer of the
Licenses from the Seller to Buyer is required, and the parties intend that the
transactions contemplated by this Agreement will be consummated only if such
consent is obtained;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, each intending
to be legally bound, do hereby agree as follows:
1. SALE AND PURCHASE OF LICENSES.
(a) Purchase of Licenses. Subject to the terms and conditions set
forth herein, the Seller agrees to sell the Licenses to the Buyer and the Buyer
agrees to purchase the Licenses from the Seller at the Closing (as defined
below).
(b) Purchase Price. Subject to adjustment as provided in
subparagraph (c) below, the purchase price for the Licenses shall be Nineteen
Million Four Hundred Fifty Thousand Dollars ($19,450,000) (the "Purchase
Price"), payable as set forth below:
(1) Upon execution of this Agreement, Buyer shall pay Six
Hundred Thousand Dollars ($600,000) (the "Initial Payment") to an escrow account
(the "Escrow") with Xxxxx Xxxx Xxxxxxxxx and Xxxxx, Chartered ("Escrow Agent"),
payable pursuant to an escrow agreement in form and substance as set forth in
Exhibit B. In the event this Agreement terminates pursuant to Section 2(a)
hereof, and the Closing does not occur for a reason attributable to a breach by
Buyer of its obligations under this Agreement, the Initial Payment shall be paid
to Seller upon the termination of this Agreement. Such payment shall constitute
liquidated damages, and Seller shall be entitled to the full amount of the
Initial Payment without having to demonstrate quantifiable damages, it being
recognized that accurate calculation of actual damages would prove
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to be impractical.
(2) Delivery of a cash payment in the amount equal to the
difference between the Purchase Price and the sum of (i) the outstanding
principal and accrued interest on the Assumed FCC debt at the time of closing
and (ii) the Initial Payment.
(3) Assumed Liabilities. On the Closing Date, the Buyer
shall assume and agrees to discharge the liabilities and obligations of Seller,
accruing after the Closing Date, under the FCC notes (individually the "FCC
Notes") and security agreements, copies of which Seller shall provide to Buyer
within three (3) business days (the "Assumed FCC Debt"). Subject to the
provisions of subparagraph (c) below, Seller agrees to make all payments due
under the Assumed FCC Debt up to and including the Closing Date. Other than the
Assumed FCC Debt, Buyer shall not assume or be obligated to pay, perform or
otherwise discharge any liability or obligation of the Seller, direct or
indirect, known or unknown, absolute or contingent.
(c) Adjustment to Purchase Price.
(1) If the FCC has not granted the FCC Consent (as
defined below) within six (6) months after the
execution of this Agreement (the "Adjustment Date")
due to concerns about the Buyer's qualifications to
be a "Designated Entity" as provided in Section
3(e) below and the parties have timely entered into
the Management Agreement (as defined below), then
the Purchase Price shall be increased by an amount
equal to the interest payments Seller has made on
the Assumed FCC Debt from the Adjustment Date to
the Closing.
(2) If the FCC shall impose any unjust enrichment
penalty upon Seller solely by virtue of Buyer not
qualifying for the same level Designated Entity
benefits for which Seller qualified, the Purchase
Price shall be increased by the amount of the
penalty imposed upon Seller.
(d) Allocation of Purchase Price. The Purchase Price shall be
allocated such that 10% (Ten percent) ($1,945,000) of the Purchase Price shall
be allocated to the non-capitalization provision set forth in Section 5(f) of
this Agreement; provided that Buyer shall agree to any reasonable sub-allocation
of such Purchase Price, as may exist on a market by market, and may be
determined by Seller. Buyer and Seller will follow and use such allocation in
all income, sales and other tax returns, filings or other related reports made
by them to any governmental agencies. To the extent that disclosures of this
allocation are required to be made by the parties to the Internal Revenue
Service ("IRS") under the provisions of Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code") or any regulations thereunder, each of
Buyer and Seller will disclose such reports to the other prior to filing with
the IRS.
2. CLOSING.
(a) Closing Date. The Closing shall take place within ten (10)
days after the grant
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of the consent of the Assignment of the licenses to the Buyer by the FCC (the
"FCC Consents") by Final Order on such date as Buyer shall fix by notice in
writing to Seller given at least two (2) Business Days prior thereto. Subject to
Subparagraph 2 (b) below, this Agreement shall terminate automatically if Final
Orders granting the FCC Consents are not issued by June 30, 1999 in which event,
except as provided below, neither party hereto shall have any further obligation
to the other party to consummate the transactions contemplated hereby, and (i)
all rights of the parties theretofore accrued hereunder for breach hereof,
including without limitation, rights to specific performance, shall not thereby
be extinguished and may be prosecuted hereunder as provided in Section 10(a) to
the extent the claimant has been materially damaged by such breach by the other
party, and (ii) each party will promptly redeliver all documents, work papers
and other materials of the other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof to the party
furnishing the same, and all other obligations of the parties under this
Agreement shall terminate and (iii) the Initial Payment shall be distributed
from the Escrow to Seller if the Agreement terminates for a reason attributable
to a breach by Buyer of its obligations under the terms of this Agreement. For
purposes of this Agreement, the term "Final Order" shall mean a written action
or order issued by the FCC or other governmental authority (i) which has not
been reversed, stayed, enjoined, set aside, annulled or suspended and (ii) With
respect to which (a) no requests have been filed and are still pending for
administrative or judicial review, reconsideration, appeal or stay and the time
for filing any such requests and the for the FCC or other governmental authority
to set aside the action on its own motion have expired, (b) in the event of
review, reconsideration or appeal, the time for further review, reconsideration
or appeal has expired, and (c) in the event of a stay, such stay has been
dismissed and the time for review, reconsideration or appeal thereof has
expired.
(a) Extension of Closing. If the Closing has not occurred by June
30, 1999 (the "Extension Date"), Buyer shall have the option to either (i) let
this Agreement terminate pursuant to subparagraph (a) above, or (ii) extend the
term of this Agreement for a period of two months by (1) giving written notice
to Seller setting forth the length of such extension and (2) giving the Escrow
Agent written direction to release funds from the Escrow to make payment in the
amount currently scheduled to be paid to the FCC on July 31, 1999.
(b) Closing Place. The Closing shall be held at the offices of
Xxxxx Xxxx Xxxxxxxxx and Xxxxx, chartered 0000 00xx Xxxxxx, XX Xxxxx 0000
Xxxxxxxxxx, X.X. 00000, or any other place that is agreed upon in writing by
Buyer and Seller.
(d) Buyer's Closing Deliveries. Subject to fulfillment or waiver
of the conditions set forth in Article 6, at the Closing the Buyer shall deliver
to the Seller all of the following;
(1) the Initial Payment;
(2) Cash Payment equal to the difference between the
Purchase Price and the sum of (i) the Initial
Payment and (ii) the outstanding principal balance
and accrued interest on the Assumed FCC Debt at the
time of Closing (such cash payment and the Initial
Payment being the "Cash Payment");
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(3) Documents necessary to assume the Assumed FCC debt
or to arrange for such debt to be extinguished and
replaced with debt to the FCC for which Buyer shall
be responsible; and
(4) Such other documents as the Seller may reasonably
request or as may be otherwise necessary to
evidence and effect the transaction contemplated by
this Agreement.
(d) Seller's Closing Deliveries. Subject to fulfillment or waiver
of the conditions set forth in Article 7, at the Closing, the Seller shall
deliver to the Buyer all of the following:
(1) a certificate of good standing of Seller issued
within 30 days prior to the Closing Date by the
Secretary of State of Delaware;
(2) a certificate of an officer or member of Seller,
dated the Closing Date, certifying that as of the
Closing Date, each representation and warranty of
the Seller contained in this Agreement is true and
correct an all material respects and that the
Seller has complied in all material respects with
all of the terms, provisions and covenants of this
Agreement;
(3) A certificate of a Manager of the Seller dated the
Closing Date, as to the written consent of the
Board of Managers authorizing the execution and
performance of this Agreement and the transactions
contemplated hereby;
(4) an assignment of the Licenses in a form reasonably
acceptable to Buyer;
(5) an opinion of Seller's counsel, in a form
reasonably acceptable to both Buyer and Seller and
consistent with industry practices;
(6) all required third party consents to the
consummation by Seller of the transactions
contemplated by this Agreement; and
(7) Such other documents as the Buyer may reasonably
request or as may be otherwise necessary to
evidence and effect the transactions contemplated
by this Agreement.
In addition to the above deliveries, the Seller shall take all
steps and actions as the Buyer may reasonably request or as my otherwise be
necessary to put the Buyer in actual possession or control of the Licenses.
3. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE BUYER.
The Buyer hereby represents, warrants and covenants to the Seller
as follows:
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(a) Organization, Standing and Power of the Buyer. The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. The Buyer has all requisite power and authority
to conduct the business contemplated by it and to own, lease and operate any
properties or assets in connection therewith and has applied for qualification
or is duly qualified to do business as a foreign corporation in good standing in
those jurisdictions, other than the state of its incorporation, in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing would not materially adversely affect the ability of the Buyer to
consummate the transactions contemplated by this Agreement.
(b) Authority; Enforceability. Except for approval by its Board
of Directors which shall be forthcoming within five (5) business days, (i) The
Buyer has all requisite corporate power and authority to enter into this
Agreement, to purchase the Licenses, and to carry out its obligations hereunder;
(ii) the execution, delivery and performance of this Agreement by the Buyer has
been duly and validly authorized by all requisite corporate proceedings on the
part of the Buyer; and (iii) this Agreement is a valid and binding obligation of
the Buyer, enforceable against it in accordance with its terms, except that (A)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium rehabilitation, liquidation, conservatorship, receivership or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (B) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought.
(c) No Conflicts. The execution and delivery of this Agreement by
the Buyer does not, and the consummation by the Buyer of the transactions
contemplated hereby will not, result in or constitute: (i) a default, breach or
violation of or under the Certificate of Incorporation or the By-laws of the
Buyer or (ii) a default, breach or violation of or under any mortgage, deed of
trust, indenture, note, bond, license, lease agreement or other instrument or
obligation to watch the Buyer is a party or by which any of its properties or
assets are bound, or (iii) a violation of any statute, rule, regulation, order,
judgment or decree of any court, public body or authority by which the Buyer or
any of its properties of assets are bound, or (iv) an event which (with notice
or lapse of time or both) would permit any person to terminate, accelerate the
performance required by, or accelerate the maturity of an indebtedness or
obligation of the Buyer under, any agreement or commitment to which the Buyer is
a party or by which the Buyer is bound or by which any of its properties or
assets are bound, or (v) the creation or imposition of any lien, charge or
encumbrance on any property of the Buyer under any agreement or commitment to
which the Buyer is a party or by which the Buyer is bound or by which any of its
properties or assets are bound, or (vi) an event which would require any consent
under any agreement to which the Buyer is a party or by which the Buyer is bound
or by which any of its properties or assets are bound or any approval,
notification or other action or proceeding by, to or before any governmental
body other than as contemplated by this Agreement, except for any such default,
breach, violation, event or other enumerated circumstance which, individually or
in the aggregate, would not materially adversely affect the ability of the Buyer
to consummate the transactions contemplated by this Agreement.
(d) Actions Pending. There is no action, suit, claim,
investigation or
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proceeding pending or, to the knowledge of the Buyer, threatened, against the
Buyer, which could materially adversely affect its ability to perform under this
Agreement.
(f) FCC Rules. The Buyer is in compliance with all relevant FCC
rules and regulations except for any non-compliances which, individually or in
the aggregate, would not materially adversely affect the ability of the Buyer to
consummate the transactions contemplated by this Agreement, and the completion
Of the transactions contemplated hereby will not violate any FCC rules or
regulations. Buyer or its designated subsidiary is, or prior to Closing shall
use its best efforts to become an entity qualified to hold the Licenses pursuant
to Section 24.709 and 24.720 of the FCC's rules, or any successor rules as a
designated entity and a "very small business" as defined by appropriate FCC
rules and regulations.
(g) No Broker. Except for The Cascade Group, whose fees will be
paid by the Buyer, there is no investment banker, broker, finder or other
intermediary who has been retained by or on behalf of Buyer who might be
entitled to any fee or commission in connection with this Agreement.
4. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE SELLER.
The Seller represents, warrants and covenants to the Buyer as
follows:
(a) Organization of the Seller. The Seller is duly organized and
validly existing under the laws of Delaware. The Seller has all requisite L.L.C.
power and authority to conduct the business contemplated by it and to own, lease
and operate any properties or assets in connection therewith and has applied for
qualification or is duly qualified to do business as a foreign limited liability
company in good standing in those jurisdictions, other than the state of its
organization, in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing would not materially adversely affect the ability
of the Seller to consummate the transactions contemplated by this Agreement.
(b) Authority; Enforceability. Except for approval by its Board
of Managers, which shall be forthcoming within five (5) business days; (i) the
Seller has all requisite power and authority to enter into this Agreement and to
carry out its obligations hereunder; (ii) the execution, delivery and
performance of this Agreement by the Seller, and the consummation of the
transactions contemplated herein, have been duly and validly authorized by all
requisite proceedings on the part of the Seller; and (iii) this Agreement is a
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms, except that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, rehabilitation, liquidation,
conservatorship, receivership or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject co
equitable relief, may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
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(c) No Conflicts. The execution and delivery of this Agreement by
the Seller does not, and the consummation by the Seller of the transactions
contemplated hereby will not, result in or constitute: (i) a default, breach or
violation of or under the Certificate of Formation or the Limited Liability
Company Agreement of the Seller, or (ii) a default, breach or violation of or
under any mortgage, deed of trust, indenture, note, bond, license, lease
agreement of other instrument or obligation to which the Seller is a party or by
which any of its properties or assets are bound, or (iii) a violation of any
statute, rule, regulation, order, judgment or decree of any court, public body
or authority by which the Seller or any of its properties or assets are bound,
or (iv) an event which (with notice or lapse of time or both) would permit any
person to terminate, accelerate the performance required by, or accelerate the
maturity of any indebtedness or obligation of the Seller under, any agreement or
commitment to which the Seller is a party or by which the Seller is bound or by
which any of its properties or assets are bound, or (v) the creation or
imposition of any lien, charge or encumbrance or commitment to which the Seller
is a party or by which any of its properties or assets are bound, or (vi) an
event which would require any consent under any agreement to which the Seller is
a party or by which the Seller is bound or by which any of its properties or
assets are bound or any approval, notification or other action or proceeding by,
to or before any governmental body, other than as contemplated by this
Agreement, except for any such default, breach, violation, event or other
enumerated circumstances which, individual or in the aggregate, would not
materially adversely affect the ability of the Seller to consummate the
transactions contemplated by this Agreement.
(d) Actions Pending. Except as provided on Exhibit C, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge Of
the Seller, threatened, against the Seller, which would materially adversely
affect its ability to perform under this Agreement.
(e) FCC Authorization. Except for consents required prior to
assignment of Licenses that are included in existing lines of credit involving
Silicon Valley Bank and Nations Bank, which consents shall be obtained prior to
Closing, Seller holds the Licenses listed on Exhibit A, free and clear of all
liens, liabilities, claims, obligations, restrictions or other encumbrances
("Obligations") of any kind or nature, other than those obligations imposed on
personal communications service licensees by applicable law or regulation and
the Assumed FCC Debt. Such Licenses are valid and in full force and effect.
(f) FCC Rules. The Seller is, and has always been, in compliance
with all relevant FCC rules and regulations except for any non-compliances
which, individually or in the aggregate, would not materially adversely affect
the ability of the Seller to consummate the transactions contemplated by this
Agreement.
(g) FCC Licenses. Seller his not made any untrue statement of any
material fact, or omitted to disclose any material fact, to the FCC or taken or
failed to take any action, which misstatements or omissions, actions or failures
to act, individually or in the aggregate, would subject to revocation or failure
to renew. No event has occurred with respect to any License which permits, or
after notice or lapse of time or both would permit, revocation or termination
thereof or would result in any other material impairment of the rights of the
holder of the Licenses and Seller shall make any and all payments within the
applicable grace periods provided for under the FCC's rule for amounts due under
the FCC Notes. Seller has no reason to
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believe that the Licenses are not likely to be renewed in the ordinary course or
that the holder of such Licenses would not be entitled to a renewal expectancy
as contemplated by FCC rules and regulations.
(h) Compliance with Laws. The Seller is in material compliance
with the requirements of all federal, state, municipal or local laws, codes,
statutes, ordinances, orders, judgments, decrees, rules and regulations.
(i) No Broker. There is no investment banker, broker, finder or
other intermediary who has been retained by or on behalf of Seller who might be
entitled to any fee or commission in connection with this Agreement.
(j) Full Disclosure. No representation, warranty or statement
made by the Seller in this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein not misleading. There is no material fact, which materially
adversely affects the Licenses in any material respect, which has not been set
forth or referred to in this Agreement or the Exhibits hereto.
5. ADDITIONAL AGREEMENTS.
(a) Confidentiality. The Seller and the Buyer shall each ensure
that the terms of this Agreement and information concerning the business and
affairs of the other party ("Confidential Information") are kept confidential
unless the other party to this Agreement shall have consented to the disclosure
of such information; provided that the Seller or the Buyer may disclose any such
information (i) as has become generally available to the public (other than
through disclosure by any such party in contravention of this Agreement), (ii)
was generally available to the public at the time of disclosure or may be
required (x) by applicable law or stock exchange regulation, (y) in any report,
statement or testimony submitted to any governmental body having or claiming to
have jurisdiction over any such party or (z) in response to any summons or
subpoena or to comply with any law, order, regulation or ruling, in either case
after reasonable notice to the other party, of such party's intention to make
such disclosure, (iii) to the affiliates of such party and its and their
respective officers, directors, employees, agents and professional consultants
in connection with the purchase and sale of the Licenses, (iv) from the date of
execution of this Agreement until the Closing Date, to lenders, provided that
such lenders agree to become bound by the same terms and conditions of this
Section 5(a), and (v) as required for the FCC Applications.
(b) No Public Announcement. Except as may be required pursuant to
Section 5(a), no party shall make or cause to be made, any press release or
similar public announcement, statement or communication with respect to the
terms and conditions (or the existence of) this Agreement, unless approved in
advance by the other party (which approval may be withhold in such party's sole
discretion). In no event shall any press release or similar public
announcement, statement or communication disclose the Purchase Price.
(c) HSR Filing. As promptly as practicable, and in any event not
later than ten business days, following the execution and delivery of this
Agreement, Buyer and Seller will take
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such action as may be required to be taken by them under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act") in connection
with the transactions contemplated hereby. Each of Buyer and Seller will
cooperate in the preparation of, will file on a timely basis, complete and
accurate notification and report forms with respect to the transactions
contemplated hereby, pursuant to the HSR Act and the rules and regulations
promulgated thereunder, and will file on a timely basis such additional
information and documentary materials as may be requested by any governmental
authority pursuant to the HSR Act. Each of Buyer and Seller will request early
termination of the waiting period under the HSR Act. Each of Buyer and Seller
shall, promptly inform the other of any inquiries or communications from any
such governmental authority and provide copies of any written communication
relating thereto. Each of Buyer and Seller shall respond with reasonable
diligence and dispatch to any request for additional information made in
response to such filings.
(d) Reasonable Efforts. Subject to the terms and conditions
herein, each of the parties hereto agrees to use all commercially reasonably
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement as promptly as practicable. In case at any time after the
Closing any further action is reasonably necessary to carry out the purposes of
this Agreement, the proper agents, officers and directors of each party hereto
shall take such action.
(e) Disclosure to Parties. If either of the parties should become
aware, prior to Closing, that any of its representations, warranties or
covenants is inaccurate or incapable of being performed, such party shall
promptly give written notice of such inaccuracy or incapability to the other
party provided, however that nothing contained in this Section 5(e) shall
relieve the party bound by such representation, warranty or covenant from
complying with such representation, warranty or covenant.
(f) Non-Competition. Effective at and as of the Closing;
(1) Seller, its officers, directors and controlling
principals covenant and agree, for themselves and their respective affiliates,
that for a period of three (3) years after the Closing, such persons, and their
respective affiliates shall not, directly or indirectly, (i) engage in the
Business within the BTAs covered by the Licenses. For purposes of this
Agreement, Business shall mean a Commercial Mobile Radio Service ("CMRS")
provider, as defined by the FCC other than under the Sprint brand name affiliate
program; or (ii) act as an agent, representative, consultant, officer, director,
partner, employee or independent contractor of any entity or enterprise that
engages in an activity described in clause (i). If, in any judicial proceeding,
a court shall refuse to enforce any of the separate covenants deemed included in
this Section, then such unenforceable covenant shall be deemed eliminated from
these provisions to the extent necessary to permit the remaining separate
covenants to be enforced.
(2) The words "directly or indirectly" as they relate to
any activity prohibited by the terms of this Section mean (i) acting as an
agent, representative, consultant, officer, director, partner, employee or
independent contractor of any entity or enterprise that engages in any such
activity; or (ii) participating in any such entity or enterprise other than
Sprint
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and its related parties as an owner, partner, limited partner, joint venturer,
creditor or stockholder (except as a stockholder holding less than five percent
(5%) interest in a corporation whose shares are actively traded on a regional or
national securities exchange or in the over-the-counter market).
(g) Certain Prohibited Transactions. Without limiting the
generality of subsection (a) above, Seller shall not, without the prior written
approval of Buyer (which approval shall not be unreasonably withheld):
(1) Mortgage, pledge or otherwise encumber any of the
Licenses;
(2) Enter into any contract or commitment relating to the
Licenses;
(3) Enter into any agreement to make any commitment or
offer to provide telephone service to subscribers with
respect to the Licenses;
(4) Waive any material rights relating to the Licenses;
(5) Subject the Licenses to any rights of first refusal by
any third parties;
(6) Transfer or grant any right under, or enter into any
settlement regarding the breach or infringement of, any
intangibles or modify any existing right with respect to
the Licenses; or
(7) Do any other act that would cause any representation
or warranty of Setter to be or become untrue in any
material respect.
(h) Governmental Authorization. Seller shall not cause or permit,
by any act or failure to act, any of the governmental authorizations to expire
or to be surrendered or modified, or take any action that would cause any
governmental authority to institute proceedings for the suspension, revocation,
or material and adverse modification of any of the governmental authorizations
or fail to prosecute with due diligence any pending applications for any
governmental authority in connection with the licenses;
(i) Access to Information. Seller shall give to Buyer and its
counsel, accountants, engineers, and other representatives reasonable access to
all books and records relating to the licenses, and to the officers, employees,
and agents of Seller, and to all books and records, and will furnish or cause to
be furnished to Buyer and its representatives all information relating to the
licenses and Seller that they reasonably request.
(j) Compliance With Laws. Seller shall comply in all material
respects with all laws, rules and regulations in connection with the Licenses
and any of the other matters related to this Agreement. In the event that it
shall receive any notice of violation of any laws, rule or regulation, Seller
shall contest in good faith or cure the violation prior to the Closing Date to
the extent necessary to satisfy the covenant set forth in the first sentence of
this subsection. Seller shall also promptly notify Buyer of such notice.
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(k) No Inconsistent Action. Seller shall not take any action that
is inconsistent with Seller's obligations under this Agreement or that could
hinder or delay the consummation of the transactions contemplated by this
Agreement.
(l) Taxes. Seller shall file in a timely manner all federal,
state, and local tax and information returns hereafter required to be filed by
Seller relating to or in connection with the assets and the operation of the
system and will pay all taxes (and any other charges, duties, penalties,
interest, or fines) which become due pursuant to those returns or pursuant to
any assessment which becomes due and payable unless contested in good faith.
(m) No Shop. From the date of this Agreement, neither Seller (nor
any of its partners, representatives, employees, agents or affiliates) will,
directly or indirectly solicit, initiate, encourage or participate in
negotiations or discussions with respect to, or furnish or cause or permit to be
furnished any information to any person (other than such parties' respective
affiliates or their representatives) in connection with any inquiry or offer for
any purchase or sale of the system, the assets or any part thereof.
(n) Management Agreement. Within 30 calendar days of the
execution of this Agreement, the parties shall execute a management agreement
(the "Management Agreement") that shall include terms consistent with management
agreements entered into in the wireless industry and consistent with all
applicable FCC regulations.
(o) Conveyance of System Design and Planning Materials. Seller
has undertaken certain research and planning activities associated with the
build out and operation of the Licenses. All documents related to such
activities shall be provided to Buyer upon execution of the Management
Agreement, to the extent that Seller is not prohibited from so doing.
(p) FCC Applications. The Buyer shall prepare and with Seller's
consent and approval, not to be unreasonably withheld, file within three (3)
business days from the date of this Agreement, applications (the "FCC
Applications") with the Federal Communications Commission (the "FCC") requesting
its consent to the assignment of the Licenses by the Seller to the Buyer. Buyer
and Seller shall cooperate in the diligent submission of any additional
information requested by the FCC with respect to the FCC Applications, and will
take all commercially reasonable steps necessary and proper for the expeditious
prosecution of the FCC Application to a favorable conclusion.
(q) Within five (5) business days from execution of this
Agreement, (a) Buyer shall obtain approval from its Board of Directors regarding
its execution of this Agreement and (b) Seller shall obtain approval from its
Board of Members regarding its execution of this Agreement. In the event that
either party is unable to obtain such approval that party shall immediately so
notify the other party. Absent such notification, approval will be understood to
have been obtained and each party shall be deemed to be acting in reliance
thereof.
6. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER TO PURCHASE THE
LICENSES.
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The obligation of the Buyer hereunder to purchase the Licenses is
subject to the satisfaction, at or before the Closing, of each of the following
conditions set forth below, These conditions are for the Buyer's sole benefit
and may be waived by the Buyer at any time in its sole discretion.
(a) Accuracy of the Seller's Representations And Warranties. The
representations and warranties of the Seller (i) that are qualified as to
materiality shall be true and correct and (ii) that are not so qualified shall
be true and correct in all material respects, in each case as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date.
(b) Performance by the Seller. The Seller shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by it at or prior to the Closing.
(c) Certificate of the Seller. The Buyer shall have received a
certificate of a director or executive officer of the Seller, dated as of the
Closing Date, to the effect that (i) the representations and warranties of the
Seller (ii) that are qualified as to materiality shall be true and correct and
(ii) that are not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date and (ii) the Seller shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by it at or prior to the Closing.
(d) No Injunction. No statute, rule, regulation, order, decree,
ruling or preliminary or permanent injunction shall have been enacted, entered,
promulgated or enforced by any court or governmental authority of competent
jurisdiction which restrains or prevents the consummation of any of the
transactions contemplated by this Agreement or materially changes the
transactions contemplated hereby.
(e) FCC Applications. The FCC shall have given its consent in
writing to the FCC Applications, which consent shall have been granted by Final
Order.
(f) HSR Approval. The waiting period set forth in the HSR Act, if
applicable, shall have expired or been terminated.
(g) Records. The Seller shall have delivered to the Buyer all
records and files related to the Licenses.
(h) Corporate Approval. The execution and delivery of this
Agreement by Buyer and the performance of its covenants and obligations under it
shall have been duly authorized by all necessary corporate action.
(i) Consents. Seller shall have delivered all third party
consents required for Seller to consummate the transactions contemplated by this
Agreement.
7. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE SELLER TO SELL
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THE LICENSES.
The obligation of the Seller hereunder to sell the Licenses is
subject to the satisfaction, at or before the Closing, of each of the following
conditions set forth below. These conditions are for the Seller's sole benefit
and may be waived by the Seller at any time in its sole discretion.
(a) Accuracy of the Buyer's Representations and Warranties. The
representations and warranties of the Buyer (i) that are qualified as to
materiality shall be true and correct and (ii) that are not so qualified shall
be true and correct in a material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date.
(b) Performance by the Buyer. The Buyer shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by it at or prior to the Closing.
(c) Certificate of the Buyer. The Seller shall have received a
certificate of a director or executive officer of the Buyer, dated as of the
Closing Date, to the effect that: (i) the representations and warranties of the
Buyer that are qualified as to materiality shall be true and correct (ii) those
representations and warranties that are not so qualified shall be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the Closing Date as though made on and as of the Closing Date and
(iii) the Buyer shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by it at or prior to the
Closing.
(d) No Injunction. No statute, rule, regulation, order, decree,
ruling or preliminary or permanent injunction shall have been enacted, entered,
promulgated or enforced by any court or governmental authority of competent
jurisdiction which restrains and prevents the consummation of any of the
transactions contemplated by this Agreement or materially changes the
transactions contemplated hereby.
(e) FCC Application. The FCC shall have given its consent in
writing to the FCC Applications.
(f) HSR Approval. The waiting period set forth in the HSR Act, if
applicable, shall have expired or been terminated.
(g) Board of Managers Approval. The Board of Managers of the
Seller shall have approved and authorized the transactions contemplated by this
Agreement.
8. TERMINATION.
(a) Termination Before Closing. Notwithstanding anything to the
contrary set forth in this Agreement, this Agreement may be terminated and the
transactions contemplated herein abandoned at any time prior to the Closing:
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(1) Subject to the right of Buyer to extend this
Agreement, by either the Buyer or the Seller if the Closing shall not have
occurred by June 30, 1999; provided, however, that the right to terminate this
Agreement under this Section 8(a)(i) shall not be available to any party who has
failed to fulfill any obligation under this Agreement and has not cured such
failure;
(2) By the Buyer, if any of the conditions set forth in
Article 6 shall have become incapable of fulfillment (other than as a result of
a breach by the Buyer) and shall not have been waived by the Buyer;
(3) By the Seller, if any of the conditions set forth in
Article 7 shall have become incapable of fulfillment (other than as a result of
a breach by the Seller) and shall not have been waived by the Seller;
(4) By either the Buyer or Seller if a court of competent
jurisdiction shall have issued an order, decree or ruling permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable;
(5) By either the Buyer or Seller upon the other party
fling, or have filed against it and remain pending for more than 30 days, a
petition under Title 11 of the United States Code or similar state law provision
seeking protection from creditors or the appointment of a trustee, receiver or
debtor in possession; or
(6) By either Buyer or Seller in the event that such party
has not received all required corporate approval within five (5) business days
of the execution of this Agreement, and has timely advised the other party to
that effect.
(b) Effect of Termination. In the event of termination of this
Agreement by either party, such party shall promptly give the other written
notice and, except as otherwise provided herein, this Agreement shall become
void and have no further effect, other than the provisions of Sections 3(g),
4(j), 5(a), 5(b), 9(a) and 9(b). Nothing in this Section 8(b) shall be deemed to
release any party from any liability for breach by such party Of the terms and
provisions of this Agreement.
9. INDEMNIFICATION.
(a) Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Seller hereby agrees to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(1) Breach. Any and all losses, liabilities, or damages
(collectively, "Damages") resulting from any untrue representation, breach of
warranty, or nonfulfillment of any covenant by Seller contained herein or in any
certificate, document, or instrument delivered by Seller to Buyer hereunder; and
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(2) Legal Matters. Any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs and expenses,
including reasonable legal fees and expenses (collectively, "Claims"), incident
to any breach described in subparagraph (1) above or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity; provided, however, that Seller shall not be required
to indemnify and hold harmless Buyer under this Section 9(a) with respect to
any Damages or Claims (and no claim shall be made against Seller therefore)
unless and until the Damages and/or Claims for which such indemnification is
sought under this Section 9(a) shall exceed in the aggregate $25,000.00 (in
which case indemnification shall relate back to the first dollar of such claim),
and provided further, the aggregate amount for which Seller shall be required to
indemnify and hold harmless Buyer under this Section 9(a) with respect to
Damages and/or Claims shall not exceed the amount of the Purchase Price.
(b) Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(1) Breach. Any and all damages resulting from any untrue
representation, breach of warranty, or nonfulfillment of any covenant by Buyer
contained herein or in any certificate, document, or instrument delivered by
Buyer to Seller hereunder; and
(2) Legal Matters. Any and all Claims, incident to any
breach described in sub-paragraph (a) above or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity, provided, however, that Buyer shall not be required to
indemnify and hold harmless Seller under this Section 9(b) with respect to any
Damages or Claims (and no claim shall be made against Buyer therefore) unless
and until the Damages and/or Claims for which such indemnification is sought
under this Section 9(b) shall exceed in the aggregate $25,000.00 (in which case
indemnification shall relate back to the first dollar of such claim), and
provided further, the aggregate amount for which Buyer shall be required to
indemnify and hold harmless Seller under this Section 9(b) with respect to
Damages and/or Claims shall not exceed the amount of the Cash Payment.
(c) Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(1) Notice. The party claiming indemnification pursuant to
this Section 9 (the "Claimant") shall promptly give notice to the party from
whom indemnification is being claimed pursuant to this Section I (the
"Indemnitor").
(2) Investigation. With respect to claims between the
parties, following receipt of notice from the Claimant of a claim, the
Indemnitor shall have thirty days to make any investigation of the claim that
the Indemnitor deems necessary or desirable. For the purposes of this
investigation, the Claimant agrees to make available to the Indemnitor and/or
its authorized representatives the information relied upon by the Claimant to
substantiate the claim. If the Claimant and the Indemnitor cannot agree as to
the validity and amount of the claim within the
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thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate legal remedy.
(3) Control of Claim. With respect to any claim by a third
party as to which the Claimant is entitled to indemnification hereunder, the
Indemnitor shall have the right at its own expense to participate in or assume
control of the defense of the claim, and the Claimant shall cooperate fully with
the Indemnitor, subject to reimbursement for actual out-of-pocket expenses
incurred by the Claimant as a result of a request by the Indemnitor. If the
Indemnitor elects to assume control of the defense of any third-party claim, the
Claimant shall have the right to participate in the defense of the claim at its
own expense. If the Indemnitor does not elect to assume control or otherwise
participate in the defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to the claim.
10. MISCELLANEOUS.
(a) Arbitration. Any dispute controversy or claim between the
parties hereto arising out of or relating to this Agreement or the breach,
termination or invalidity of this Agreement shall be resolved by binding
arbitration. To the fullest extent permitted by law, the arbitration shall be
governed by the United States Arbitration Act (Title 9, U.S. Code) and the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
(the "Rules") and not the law of any state. The hearing shall be held in
California, unless all, parties to the arbitration agree to a different locale.
There shall be three arbitrators; one shall be selected by Buyer; another by
Seller; and the third by agreement of Buyer and Seller's selected arbitrators.
The arbitrator shall have the power to award specific performance and actual
damages, but shall not have the authority to award punitive damages. The award
of the arbitrators shall be final and binding, and judgment upon the arbitration
award may be entered in any court having jurisdiction. The arbitrators may
consolidate an arbitration under this Agreement with any other arbitration
between or among any of the parties to this Agreement if the subject of the
disputes arise out of or relate essentially to the same facts of the disputes
arise out of or relate essentially to the same facts or transaction(s). If the
arbitrators fail to make such an order, the parties may apply to any court of
competent jurisdiction for such an order.
(b) Expenses. Each parry hereto shall pay its own fees and
expenses incurred in connection with the preparation, execution and performance
of this Agreement.
(c) Survival of Representations, Warranties and Covenants.
Except for Articles 2 and 5 and Section 9(a), none of the
provisions of this Agreement shall survive the Closing; provided, however, that
the representations and warranties contained herein shall survive the Closing
Date for a period of one year.
(d) Successors, Assigns and Binding Effect.
(1) The rights of any party under this Agreement shall not
be assignable by such party hereto prior to the Closing without the written
consent of the other, except that the rights of the Buyer hereunder may be
assigned prior to the Closing, without the
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consent of the Seller, to any of its affiliates or subsidiaries ("Permitted
Assignees").
(2) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include without limitation, in
the case of the Buyer, any Permitted Assignees as well as the successors in
interest to such Permitted Assignee. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any Person other than
the parties and successors and Permitted Assignees, any right, remedy or claim
under or by reason of this Agreement.
(e) Headings. Subject headings are included for convenience only
and shall not affect the interpretation of any provisions of this Agreement.
(f) Notices. All notices, certifications, requests, demands,
payments and other communications hereunder shall be in writing and shall be
deemed to have been duly given and delivered if mailed, by certified mail, first
class postage prepaid, or delivered personally, or if sent by facsimile, with
transmission confirmed by telephone and simultaneously followed by the original
instructions by first class mail, postage prepaid:
If to the Seller:
000 Xxxxxxxxx XX, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxx Xxxxx,
Vice President of Business Development
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx
Airgate Wireless, L.L.C.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to Buyer:
Leap Wireless International, Inc.
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx Xxxx Xxxxxxxxx and Xxxxx, Chartered
0000 00xx Xxxxxx XX Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others. Notices given by United States
certified mail as aforesaid shall be effective on the third business day
following the day on which they were deposited in the mail. Notices delivered in
person shall be effective upon delivery. Notices given by facsimile shall be
effective when transmitted, provided facsimile notice is confirmed by telephone
and is transmitted on a business day during regular business hours.
(f) Governing Law. The Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to the choice of law principles.
(g) Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
(i) Entire Agreement, This Agreement, including the Exhibits and
Schedules hereto, sets forth the entire understanding and agreement of the
parties hereto relating to the matters set forth herein and supersedes all other
understandings, negotiations or agreements between the parties hereto relating
to the matters set forth herein.
(j) Specific Performance. The parties agree that notwithstanding
anything to
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the contrary contained herein, any party may seek a temporary restraining order
or a preliminary injunction from any court of competent jurisdiction in order to
prevent immediate and irreparable injury, loss or damage pending the selection
of an arbitrator to render a decision on the ultimate merits of any dispute,
controversy or claims. The arbitrator once appointed shall have the power to
modify or vacate such temporary restraining order or preliminary injunction.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
Buyer: Leap Wireless International, Inc.
By: /s/ S. D. Xxxxxxxxx
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Its: VP, North American Ops
-------------------------------------
Seller: Airgate Wireless, L.L.C.
By: /s/ Xxxxx Xxxxx
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Its: MANAGER
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