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EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of August 8, 2005 (this
"Agreement"), by and between Gateway Access
Solutions, Inc. a Nevada corporation
("Seller"), and Pegasus Broadband
Communications, LLC, a Delaware limited
liability company ("Buyer").
WITNESSETH:
WHEREAS, Seller is party to those certain lease agreements for
excess capacity on the EBS channels and in
the markets identified in EXHIBIT A,
between Seller, as successor in interest to
Nucentrix Spectrum Resources, Inc.
("NSR"), and the FCC licensee of such
spectrum (the "Lease Agreements");
WHEREAS, Seller acquired NSR's rights under the Lease
Agreements through an assignment agreement
entered into between Seller and NSR
and approved by order of the United States
Bankruptcy Court for the Northern
District of Texas;
WHEREAS, Seller wishes to transfer to Buyer all of its rights
and certain of its obligations under the
Lease Agreements;
WHEREAS, Buyer wishes to acquire from Seller Seller's rights,
and to assume certain of Seller's
obligations (as specified herein), under the
Lease Agreements; and
WHEREAS, Seller wishes to issue to Buyer warrants to purchase
shares of Seller's common stock, par value
$.001 per share ("Common Stock").
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements hereinafter
set forth, the parties hereto agree
intending to be legally bound hereby, as
follows:
ARTICLE 1
PURCHASE OF RIGHTS UNDER LEASE AGREEMENT
1.1 Acquisition of Lease Agreement. On each Closing Date (as
hereinafter defined), subject to the
satisfaction of the terms and conditions
contained herein, Seller shall sell,
assign, transfer, convey and deliver to
Buyer, all of Seller's rights, title and
interest in, to and under the Lease
Agreements designated by Buyer for transfer
at that Closing, together with any
equipment used or useful in providing
services on the channels leased pursuant
to the Lease Agreements free and clear of
all liens, encumbrances, debts,
security interests, mortgages, trusts,
claims, pledges, charges, covenants,
conditions or restrictions of any kind
("Liens") for the consideration specified
in Section 3.1 below.
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1.2 Acquisition of Warrants. At the Closing at which the final
amount of the Deposit (as defined in
Section 3.2 below) is applied by Buyer in
accordance with the terms hereof, Seller
shall issue to Buyer, and Buyer shall
receive from Seller, a warrant in
substantially the form attached hereto as
EXHIBIT B (the "Warrant"). The Warrant
shall entitle Buyer to acquire a number
of shares of Seller's Common Stock such
that, immediately following the full
exercise of the Warrant in accordance with
its terms, Buyer shall own a number
of shares of Common Stock equal to 14% of
Seller's then outstanding Common
Stock, as determined on a fully diluted,
as-converted basis (assuming the
exercise of all outstanding options,
warrants and similar instruments) (the
"Warrant Shares"); provided, that if the
Buyer elects to exercise the Warrant
for less than the full number of Warrant
Shares subject thereto, the total
number of Warrant Shares issuable upon
exercise of the Warrant over the balance
of the term thereof shall equal a number of
shares of Seller's Common Stock such
that, following the full exercise of the
Warrant in accordance with its terms,
Buyer shall have acquired upon exercise of
the Warrant an aggregate number of
Warrant Shares that would have equaled 14%
of Seller's outstanding Common Stock,
as determined on a fully diluted,
as-converted basis (assuming the exercise of
all outstanding options, warrants and
similar instruments), immediately
following the issuance of such Warrant
Shares had such issuance occurred on the
date of the initial exercise of the
Warrant. The exercise price per Warrant
Share shall be three cents ($0.03), and the
Warrant shall have a term of ten
years from the date of issuance of the
Warrant.
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
2.1 Assumption of Liabilities and Obligations by Buyer. At
each Closing, subject to the satisfaction
of the terms and conditions contained
herein, Buyer shall assume, undertake and
agree to perform, pay or discharge
when and as due all of the obligations of
Seller under the Lease Agreements
designated by Buyer for transfer at that
Closing, insofar as such liabilities
and obligations arise on or after the
applicable Closing Date. Buyer shall not
assume or become liable for any obligations
or liabilities of Seller, actual or
contingent, known or unknown, including
without limitation, any Liens or
liabilities whether on account of, or
derived from, the Lease Agreements, or
otherwise, arising on or prior to the
applicable Closing Date.
ARTICLE 3
CONSIDERATION
3.1 Purchase Price. In consideration for the transfer of
Seller's rights under the Lease Agreements
and the issuance of the Warrants,
Buyer shall pay to Seller consideration
consisting of the total consideration
specified in EXHIBIT A attributable to the
Lease Agreements transferred at that
Closing, and, with respect to the Closing
at which the Warrants will be issued,
the Warrants (the "Purchase Price").
3.2 Deposit Credits. Seller acknowledges that it has
previously received from Buyer a purchase
price deposit in the amount of three
hundred fifty thousand dollars
($350,000.00) and a further deposit in the amount
of ten thousand dollars ($10,000.00) for a
total deposit of three hundred sixty
thousand dollars ($360,000.00) (the
"Deposit"). Buyer shall be entitled to apply
the Deposit as a credit against the
Purchase Price at one or more Closings in an
amount determined by Buyer in Buyer's
discretion, until the total amount of the
Deposit has been so applied.
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3.3 Payment of
Purchase Price.
(i) At each Closing, or at such time thereafter as
the conditions precedent to payment
contained in this Agreement have been
satisfied, the Buyer shall pay to the
Seller the Purchase Price associated with
the Lease Agreements transferred as part of
that Closing, less any portion of
the Deposit that Buyer elects to apply to
the payment of the Purchase Price. The
Purchase Price at any Closing shall be
payable at the election of Pegasus as
follows (x) fully in cash or (y) 75% in
cash and 25% in the Class A Common Stock
of Pegasus Communications Corporation (the
"Stock" with the aggregate of the
shares of Stock payable hereunder being the
"Stock Consideration"). Cash
payments shall be by wire transfer of
immediately available funds. The Stock
shall be valued at the "Market Price",
where the Market Price means the average
closing price of the Stock for the 30
consecutive trading days commencing 45
trading days before the applicable Closing
Date. By way of example, if Buyer
were to elect to close on the Ardmore, OK
(B&G Channel Groups) and Bartlesville,
OK Lease Agreements at the first Closing,
Buyer would pay a Purchase Price of
$128,367.85 for the three Lease Agreements
($36,452.25 for each of the two
Ardmore Lease Agreements and $55,463.35 for
the Bartlesville Lease Agreement).
The Purchase Price of $128,367.85 could, at
the election of Pegasus, be paid
either (x) $128,367.85 in cash (less any
portion of the Deposit that Buyer
elects to apply as a credit against the
cash consideration) or (y) $32,091.96 in
PCC Stock and $96,275.89 in cash (less any
portion of the Deposit that Buyer
elects to apply as a credit against the
cash consideration.)
(ii) Shares representing eighty percent (80%) of the
Stock Consideration issued at Closing
hereunder (the "Escrow Shares") shall be
held in escrow by Buyer and applied
according to the terms of Section 9.5.
Shares representing the remaining twenty
percent (20%) shall be issued to
Seller, subject to the restrictions on
transfer specified herein.
3.4 Buyers'
Right to Reacquire the PCC Stock. From the
date of issuance of any Stock Consideration
issued pursuant to this Agreement
until three years from the final Closing
pursuant to this Agreement, Buyer shall
have the right, exercisable in its sole
discretion, to buy back from Seller in
one or more transactions up to eighty
percent (80%) of the Stock Consideration
paid to Seller, if any. Buyer shall have
the right to buy back the Stock
Consideration at a buy back price
equivalent to one hundred twenty-two percent
(122%) of the Market Price attributable to
the shares at the time of the Closing
at which they were transferred. In the
event that Buyer buys back less than the
total number of shares that it is entitled
to buy back pursuant to this right,
Buyer shall, in its sole discretion, be
entitled to designate which shares it is
buying back for purposes of determining the
Market Price attributable to the
shares. Notwithstanding anything to the
contrary set forth in this Agreement
(including, without limitation, Section
6.6(vi) hereof), from the date of this
Agreement until the third anniversary of
the final Closing pursuant to this
Agreement, Seller shall not sell, transfer
or otherwise dispose of any of the
Stock Consideration or any interest
therein.
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ARTICLE 4
FCC CONSENT
4.1 FCC Consent. It is specifically understood and agreed by
Buyer and Seller that consummation of any
of the transactions contemplated
hereby is expressly conditioned on and is
subject to, where deemed necessary by
Buyer, the prior consent and approval of
the Federal Communications Commission
("FCC", with said consent hereinafter
referred to as the "FCC Consent") without
the imposition of any conditions which are
in Buyer's sole discretion
unacceptable to Buyer.
4.2 FCC Application. If deemed necessary by Buyer, the parties
shall cooperate to file with the FCC as
soon as is practicable an application
for assignment of the Lease Agreements and
approval of any newly negotiated
leases between Buyer and the lessors
thereof ("FCC Application"). The parties
shall thereafter use reasonable efforts to
obtain the grant of the FCC
Application as expeditiously as practicable
but Buyer shall have no obligation
to satisfy complainants or any conditions
to consent imposed by the FCC.
ARTICLE 5
CLOSING
5.1 Closing. Except as otherwise mutually agreed upon by
Seller and Buyer, the consummation of the
transactions contemplated herein shall
take place at a series of Closings (each a
"Closing") scheduled by the Buyer in
its discretion, upon satisfaction of all
conditions precedent. For each Closing,
Buyer shall provide written notice to
Seller of the Lease Agreement(s) that
Buyer proposes to acquire at such Closing
and shall indicate the date on which
the Closing shall occur (the "Closing
Date"). The parties acknowledge that the
Purchase Price shall not be payable until
the grant of the FCC Consent as
described in Article 4, if deemed
necessary, has become a final order. All
actions taken at the Closings will be
considered as having been taken
simultaneously and no such actions will be
considered to be completed until all
such actions have been completed. The
Closings shall be held at such place as
the parties hereto may agree, including
remotely by exchange of facsimile copies
of documents.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
6.1 Organization, Standing and Authority. Seller is a
corporation duly organized, validly
existing, and in good standing under the
laws of Nevada and each subsidiary of
Seller is a business organization of the
type identified in SECTION 6.1 OF EXHIBIT C
and is duly organized, validly
existing and in good standing under the
laws of the state identified in SECTION
6.1 OF EXHIBIT C. All of Seller's
subsidiaries are identified in SECTION 6.1 OF
EXHIBIT C. Seller has all requisite power
and authority to execute and deliver
this Agreement and the documents
contemplated hereby, and to perform and comply
with all of the terms, covenants, and
conditions to be performed and complied
with by it hereunder and thereunder.
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6.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this
Agreement, and the execution, delivery and
performance of any other documents to be
delivered or executed in connection
with this Agreement (including, without
limitation, the Warrant) and the
transactions contemplated by this Agreement
(including, without limitation, the
reservation of the Common Stock issuable
upon exercise of the Warrants) by
Seller have been (or will be prior to the
first Closing hereunder) duly
authorized by all necessary actions on the
part of Seller. This Agreement and
all other documents to be delivered or
executed in connection with this
Agreement, including, without limitation,
the Warrant, have been duly executed
and delivered by Seller and constitute the
legal, valid, and binding obligation
of Seller, enforceable in accordance with
their terms except as the
enforceability of this Agreement may be
affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights
generally, and by judicial discretion
in the enforcement of equitable
remedies.
6.3 Disclosure. The representations and warranties of Seller
herein or in any document, exhibit,
statement, certificate or schedule furnished
by or on behalf of Seller to Buyer as
required by this Agreement do not contain
nor will contain any untrue statement of a
material fact or omit or will omit to
state any material fact necessary in order
to make the statements herein or
therein, in light of the circumstances
under which they were made, not
misleading. There is no fact known to
Seller, which adversely affects, or may in
the future adversely affect, the lessee's
rights under the Lease Agreements or
the FCC licenses from which the rights
contained in the Lease Agreements are
derived.
6.4 Rights Under the Lease Agreements. On each Closing Date,
and with respect to the Lease Agreements to
be assigned and assumed at that
Closing, Seller will have exclusive good
and marketable title in and to the
Lease Agreements and the rights conveyed to
it therein, free and clear of any
encumbrances of any kind or nature.
6.5 Lease Agreement. Seller represents that it has provided
Buyer with full, true and exact copies of
each of the Lease Agreements and any
amendments thereto.
6.6 Securities Matters.
(i) Seller understands that the shares of Stock
Consideration have not been registered
under the Securities Act of
