PURCHASE AGREEMENT
Reference is made to (i) that certain Service Agreement dated as
of September 30, 1997, by and between Pacwest Network, Inc. ("Pacwest") and GST
Telecom Hawaii, Inc. ("GSTH"); and (ii) that certain Management Agreement dated
as of September 30, 1997, by and between Pacwest and GSTH. This Purchase
Agreement supersedes the Letter Agreement entered into among Pacwest, GST
Pacwest Telecom Hawaii, Incorporated and GST Telecom Inc. ("Telecom"), dated
December 1, 1995.
The following constitutes our agreement:
1. If at any time after the date hereof, Xxxx Xxxxx ceases to be
a full time employee of Telecom, its parent corporations, GST USA, Inc. and GST
Telecommunications, Inc. ("GST") and/or their subsidiaries (collectively, the
"GST Companies"), the Service Agreement and the Management Agreement shall
remain in full force and effect in accordance with their terms, and the parties
thereto shall continue to perform their duties and obligations under such
Agreements in the same manner as they have theretofore been performed, for a
period ending not less than one year after such cessation of employment.
If, during such period, GSTH or GST shall determine that
its operations would be facilitated by the transfer of Licenses issued to
Pacwest by the Federal Communications Commission ("FCC") for point-to-point
microwave facilities ("the Licenses"), listed on Schedule 1 hereto, it shall
communicate such determination in writing to Pacwest. Pacwest shall promptly
file with the FCC applications to transfer or assign the Licenses to an
executive officer of one of the GST Companies or to one of the GST Companies or
to any other desginee, which executive officer, Company or other designee shall
be designated by the Board of Directors of GST and shall be eligible to hold the
Licenses pursuant to federal law and the FCC's Rules (the "Designated
Transferee"). Upon approval of such application, GST shall pay to Pacwest
reasonable consideration for the Licenses, and Pacwest shall promptly transfer
or assign the Licenses to the Designated Transferee. The reasonableness of the
consideration shall be determined by an appraisal by an independent party with
expertise in the evaluation of telecommunications facilities and licenses
mutually selected by Pacwest and GST. Pacwest shall also secure all other
required approval or authorization from the FCC to effectuate the transfer of
the Licenses, and assignment or termination of the Management Agreement and the
Service Agreement.
2. The parties will seek to effect the transfer of the Licenses
to the Designated Transferee in a manner that will minimize any operational
impact upon GSTH or any of the other GST Companies. The costs of any such
transfer shall be borne entirely by the GST Companies and the GST Companies
shall defend, indemnify and hold harmless Pacwest, its members and managers,
from and against any and all losses, damages, obligations, liabilities, costs
and expenses (including without limitation reasonable attorneys' fees) incident
to any suit, action, investigation, claim or proceeding relating to or arising
out of the transfer of the Licenses in the manner contemplated by this
Agreement.
3. The foregoing provisions of this Agreement are and are
intended to be subject to all applicable requirements of the Communications Act
of 1934, as amended, and the FCC's Rules, and shall be so effectuated and
construed.
4. In the event of a default by GSTH under the terms of the
Credit Agreement dated as of September 30, 1997 between GSTH and an affiliate of
Tomen America Inc. ("Tomen"), all of the rights of GST under this Agreement
shall be automatically transferred to Tomen, without further action by any
party, including, without limitation, that Tomen shall have the right to
transfer the Licenses to Tomen or any of its affiliates or designees in the
manner provided and subject to the conditions set forth in Section 1 hereof for
transfers by GST.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
GST TELECOM HAWAII, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx, Vice President
GST TELECOM INC.
By: /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx, Vice President
PACWEST NETWORK, INC.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
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The undersigned hereby agrees that the foregoing agreement supersedes
the Letter Agreement dated December 1, 1995 among the undersigned, GST Telecom
Inc. and Pacwest Network, Inc.
GST PACWEST TELECOM HAWAII,
INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx, Chief
Financial Officer, Vice President
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