Leap Wireless International Inc – ‘8-K/A’ for 4/19/99 – EX-10.21.2

On:  Tuesday, 7/6/99   ·   For:  4/19/99   ·   Accession #:  936392-99-780   ·   File #:  0-29752

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Amendment to Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K/A       Form 8-K Amendment No.1                               31    159K 
 2: EX-10.21.2  Material Contract                                     16     59K 
 3: EX-23.1     Consent of Experts or Counsel                          1      5K 

EX-10.21.2   —   Material Contract
Exhibit Table of Contents

EX-10.21.2
1st Page of 16
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
                                                                 Exhibit 10.21.2

NOVATION
 AND
ASSUMPTION OF PAYMENT OBLIGATION AGREEMENT

 +++++++++++++++++

 CHILESAT S.A.
INVERSIONES LEAP WIRELESS CHILE S.A.
 AND
CHILESAT TELEFONIA PERSONAL S.A.

IN SANTIAGO, CHILE, on the eleventh of May of nineteen ninety nine, appear      
before me, JOSE MUSALEM SAFFIE, Lawyer and Notary Public, Titular of the of the 
Forty Eighth Notary Public's Office of Santiago, with domicile in this city on  
Huerfanos number seven hundred and seventy, third floor: CHILESAT S.A. provider 
of telecommunications services, Taxpayer Number eighty eight million, three     
hundred and eighty one thousand, two hundred dash K, represented here by its    
General Manager, Mr. RAMON VALDIVIESO RIOS, Chilean, married, Lawyer, national  
identification number seven million nine hundred and five thousand four hundred 
and fifty dash K and by its President Mr. JUAN EDUARDO IBANEZ, Chilean, married,
Lawyer, national identification number six million sixty two thousand four      
hundred and sixteen dash K, all of them with domicile on Rinconada El Salto     
number two hundred and two, Huechuraba, Santiago, hereinafter "CHILESAT";       
INVERSIONES LEAP WIRELESS CHILE S.A., company with the line of business         
indicated by its name, taxpayer number ninety six million, eight hundred and    
nineteen thousand five hundred and twenty dash four, represented here by Mr.    
LUIS OCTAVIO BOFILL GENZSCH, Chilean, Married, Lawyer, national identification  
card number seven million three thousand six hundred and ninety nine dash one,  
both with domicile on Tenderini number one hundred and fifty three, borough and 
city of Santiago, hereinafter also called "LEAP"; and CHILESAT TELEFONIA        
PERSONAL S.A. company with the line of business indicated by its name, taxpayer 
number ninety six million seven hundred and ninety nine thousand two hundred and
fifty dash K, represented here by its General Manager Mr. RICHARD SUTHERLAND    
GANSKONSKY, Chilean, married, commercial engineer, national identification card 
number six million nine hundred and two thousand three hundred and seventeen    
dash seven, both with domicile on Rinconada El Salto number two hundred and two,
borough of Huechuraba, Santiago, hereinafter also called "CHILESAT PCS", all of 
those appearing before being of age, and having accredited their identity with  
the above mentioned identification cards and manifesting that: /i/ Chilesat and 
LEAP have been parties in a contract signed in the English language on April    
twelve nineteen ninety nine and called "Stock Purchase Agreement", hereinafter  
known as "Purchase and Sale of Shares", under whose terms the first company     
transferred to the second all the stock it owned in Chilesat PCS; /ii/ according
to the terms and conditions set forth in the Purchase and Sale of Shares, the   
price payable to Chilesat for the sale of its Shares would be paid partly in    
cash - and which was in fact paid to Chilesat's entire satisfaction and the     
balance, which amounted to twenty two million dollars, would be paid in pesos,  
local currency, according to the Observed Dollar Rate for the day immediately   
preceding the day of payment, in a period of three years counted                

EX-10.21.2
2nd Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 2nd
from the day the agreement for the Purchase and Sale of Shares was signed, that 
is, April nineteen of the year two thousand and two, accruing no interest; /iii/
Chilesat PCS owes LEAP the amount of thirty five million dollars - merely as    
capital, without taking into account the interest accrued until that date - as  
can be seen from the Deferred Payment Agreement and the LEAP Loan Agreement;    
/iv/ LEAP has suggested to Chilesat that the obligation to pay the balance of   
the price of the Purchase and Sale of Shares should be assumed by Chilesat PCS  
in the same terms and conditions existing for LEAP, in exchange for a partial   
remission of the debt indicated in number /iii/ above; /v/ Chilesat and Chilesat
PCS have irrevocably accepted this payment formula proposed by LEAP, because    
aside from being stipulated in Clause one.two c) of the Purchase and Sale of    
Shares agreement, and in clause two.two of this instrument, together with LEAP  
they signed on April nineteen of nineteen ninety nine, via a private instrument,
a contract for the novation and assumption of indebtedness called in English    
"Novation and Assumption of Payment Obligation Agreement", hereinafter known as 
"Novation Agreement." Section two.six of the Purchase and Sale of Shares        
agreement stipulates the obligation of the buying and selling parties -and the  
obligation that the latter has of causing the same action to be followed by     
Chilesat PCS -, to sign a Spanish version of the Novation Agreement, via        
notarized document containing a true translation of the Novation Agreement, plus
any amendments agreed upon by the parties themselves. It was also stipulated    
that once the corresponding notarized document had been granted, the Spanish    
language Novation would replace the Novation Agreement definitively.            
CONSEQUENTLY, considering the above, and the statements contained in this       
instrument, the Novation Agreement and the Purchase and Sale of Shares          
agreement, the parties hereto have agreed upon the following Novation and       
Assumption of Payment Obligation Agreement, hereinafter referred to as "the     
Novation."                                                                      

FIRST: DEFINITIONS. As used in this Agreement, the terms listed below shall have
the respective meanings set forth below.                                        

            "Acquisition" means the acquisition on the date hereof by Leap Chile
or its designee of all of the shares of common stock of the Debtor held by      
Telex-Chile and Chilesat S.A.                                                   

     "Additional Shares of Capital Stock" shall mean all shares of
capital stock (whether common or preferred) of the Debtor issued or sold (or,   
pursuant to Section 2.04 (b), deemed to be issued) by the Debtor after the date 
hereof.                                                                         

            "Affiliate" means, with respect to any Person, (i) each other Person
of which an economic interest of more than twenty-five percent (25%) is held by 
such Person, directly or indirectly, whether by ownership of capital stock,     
contract or otherwise and (ii) each other Person which, directly or indirectly, 
controls, is controlled by, or is under common control with, such Person        
(excluding any trustee under, or any committee with responsibility for          
administering, any pension plan or employee benefit plan). A Person shall be    
deemed to be "controlled by" another Person if such other Person possesses,     
directly or indirectly, power (i) to vote more than twenty-five percent (25%) or
more of the securities (on a fully diluted basis)                               

EX-10.21.2
3rd Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 3rd
having ordinary voting power for the election of directors, managing general    
partners or managing members or (ii) to direct or cause the direction of the    
management and policies of such Person, whether by contract or otherwise.       

          "Base Price" shall have the meaning set forth in Section 2.03 (d).

         "Business Day" means any day other than a Saturday or a Sunday or
other day on which commercial banks in New York City or Santiago, Chile are     
authorized or required by law to close.                                         

        "Chilean GAAP" means generally accepted accounting principles in
Chile as in effect from time to time.                                           

          "Chilesat S.A." means Chilesat S.A., a corporation organized under
the laws of Chile.                                                              

         "Debtor" shall have the meaning set forth in the headings hereto.

            "Deferred Payment Agreement" means the Amended and Restated Deferred
Payment Agreement, dated June 24, 1998, among the Debtor, Telex-Chile, QUALCOMM 
Incorporated and Leap Wireless (as assignee of Qualcomm Incorporated), as       
amended, modified or supplemented from time to time.                            

            "Dollar," "Dollars" and "$" shall mean dollars in lawful currency of
the United States of America.                                                   

       "Event of Default" means any of the events specified in Section
5.01, provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.                            

           "Financial Statements" means, with respect to any accounting period
for a Person, statements of income and cash flows of said Person for such       
period, and balance sheets of said Person as of the end of such period, setting 
forth in each case in comparative form figures for the corresponding period in  
the preceding fiscal year if such period is less than a full fiscal year or, if 
such period is a full fiscal year, corresponding figures from the preceding     
annual audit, all prepared in reasonable detail and in accordance with Chilean  
GAAP consistently applied and which shall fairly present the financial condition
of such Person.                                                                 

          "Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,    
legislative, judicial, regulatory or administrative functions of or pertaining  
to government.                                                                  

         "Holder" shall have the meaning set forth in the headings hereto.

       "Indebtedness" means as to any Person, (a) indebtedness of such
Person for borrowed money, (b) all capitalized leases of such Person, (c) all   
obligations of such Person for the deferred purchase price of property or       
services                                                                        

EX-10.21.2
4th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 4th
(other than trade or other accounts payable in the ordinary course of business  
in accordance with customary industry terms).                                   

  "Leap Chile" means Inversiones Leap Wireless Chile S.A., a
corporation organized under the laws of Chile.                                  

       "Leap Credit Agreement" means the Loan Agreement dated June 24,
1998, among the Debtor, Telex-Chile and Leap Chile, as amended, modified or     
supplemented from time to time.                                                 

  "Leap Wireless" means Leap Wireless International, Inc., a
corporation organized under the laws of Delaware.                               

         "Libor" applicable to any calendar month means the rate per annum
(rounded upward, if necessary, to the next higher 1/16 of 1%) equal to the rate 
reported on the Telerate Screen, page 3750, as the rate at which deposits in    
Dollars are offered by major banks in the London interbank market at            
approximately 11:00 a.m. (London time) two London Business Days before the first
day of such calendar month in an amount approximately equal to the aggregate    
principal amount of the outstanding principal due under this Agreement and      
subject to such Interest and for a one month period. Libor so determined shall  
apply to all principal outstanding under this Agreement and in default during   
the applicable calendar month regardless of changes in the Libor occurring      
during such month.                                                              

            "Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or 
other), or preference, priority or other security agreement or preferential     
agreement of any kind or nature whatsoever (including, without limitation, any  
conditional sale or other title retention agreement, or any financing lease     
having substantially the same economic effect as any of the foregoing).         

          "Material Adverse Effect" shall mean (a) a material adverse change
in, or a material adverse effect upon, the operations, business, assets,        
properties, condition (financial or otherwise) or prospects of the Debtor and   
its Subsidiaries taken as a whole that results in a material impairment of the  
ability of the Debtor to perform its obligations hereunder; or (b) a material   
adverse effect upon the legality, validity, binding effect or enforceability    
against the Debtor of this Agreement.                                           

         "Observed Exchange Rate" means, at any date of determination, the
rate of exchange of U.S. dollars and Chilean pesos calculated with reference to 
the "dolar observado," as published for such date by the Central Bank of Chile  
in accordance with paragraph 6 of Chapter I of Title 1 of the Compendium of     
Foreign Exchange Rules of the Central Bank of Chile, or if no such rate is      
published by the Central Bank or reported in Chile, then published or announced 
rate of Citibank (of if Citibank does not publish or announce such rate, the    
rate published or announced by Bank of America) or if neither such bank         
announces or publishes a rate than to the foreign exchange spot mid-rates for   
such day reported in The Wall Street Journal, or, if not so reported, to the    
mid-market foreign exchange spot closing rates for such day                     

EX-10.21.2
5th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 5th
reported in the Financial Times, or, if not so reported, to spot foreign        
exchange mid-market rates for trading among banks in amounts of US$1,000,000 or 
more.                                                                           

        "Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,   
limited liability company, Governmental Authority or other entity of whatever   
nature.                                                                         

      "Requirements of Law" means, as to any Person, the articles of
incorporation, bylaws, estatutos sociales or other organizational or governing  
documents of such Person, and any law, treaty, rule or regulation or            
determination of an arbitrator or a court or other Governmental Authority, in   
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.                            

        "Restricted Payment" shall mean (i) any payment of a dividend or
distribution (whether in cash, securities or other property) with respect to any
shares of any class of capital stock of the Debtor, or (ii) any payment (whether
in cash, securities or other property), on account of the purchase, redemption, 
retirement, acquisition, cancellation or termination of any such shares of      
capital stock of the Debtor, or (iii) any payment with respect to any option,   
warrant or other right to acquire any such shares of capital stock of the       
Debtor.                                                                         

            "Stock Purchase Agreement" means the Stock Purchase Agreement, dated
April 12, 1999, among Leap Chile, as Purchaser, and Telex-Chile and Chilesat    
S.A., as Sellers.                                                               

      "Subsidiary" means, as to any Person, an entity of which fifty
percent (50%) of the shares of stock (or similar equity interests) having       
ordinary voting power (other than stock having such power only by reason of the 
occurrence of a contingency) are at the time owned or controlled, directly or   
indirectly, through one or more intermediaries, or both, by such Person.        

           "Telex-Chile" means Telex-Chile S.A., a corporation organized under
the laws of Chile.                                                              

SECOND: NOVATION AND ASSUMPTION OF PAYMENT OBLIGATION                           

Two.one. As stipulated in Clause One.two /c/ of the Purchase and Sale of Shares 
agreement, the Original Debtor owes the Creditor a balance of twenty two million
dollars of the price. This sum is subject to a deduction or compensation        
according to the Right to Receive Compensation and must be paid in the terms and
under the conditions stipulated in the Purchase and Sale of Shares, hereinafter 
"the Obligation". Two.two. According to what is stipulated in the Purchase and  
sale of Shares, Chilesat and LEAP agreed that the obligation would be assigned  
by the latter company to Chilesat PCS, substituting it in such a way that the   
latter company would assume unconditionally and irrevocably the Obligation,     
releasing LEAP of the obligation of fulfilling the same. Two.three. LEAP hereby 
assigns and transfers to                                                        

EX-10.21.2
6th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 6th

Chilesat PCS the Obligation, which the latter company assumes. This assignment  
and transfer is accepted by Chilesat, all of which is done by the parties with  
the express purpose of novating by means of the change or substitution of the   
Original Debtor by the Delegated debtor and under the terms and conditions      
stipulated in the Novation. Two.four. The Delegated Debtor hereby expressly puts
on record that his consent has been given as a consideration and in compensation
for the liquidation, for the same amount of twenty two million dollars as of    
this date, of the Delegated Debtor's obligation to pay LEAP, which is included  
in the LEAP Loan Agreement. Two.five. For its part, the Creditor hereby declares
that it accepts what the Delegated Debtor says and acknowledges him as the new  
debtor in the Obligation, debtor that subrogates and replaces fully and         
definitively the Original Debtor in relation to the Obligation and consequently 
the latter is unconditionally and irrevocably freed of any responsibility to    
this respect. Two.six. The parties hereto manifest and acknowledge that what has
been said in the previous numerals is a novation involving the substitution of  
the debtor and, therefore, they declare the Original Debtor's Obligation        
extinguished, Likewise, the parties acknowledge that as a result of the         
Novation, each and every one of the terms and conditions of the Obligation will 
be fully valid and in force in relation to the Delegated Debtor. Finally, the   
parties hereby expressly put on record that the irrevocable and unconditional   
assumption of the Obligation by the Delegated Debtor is an element of the       
essence for the Creditor's consent to the Purchase and sale of Shares.          
Two.seven. By virtue of the Novation, the Delegated Debtor as new debtor in the 
Obligation assumes responsibility for all commitments incurred by the Original  
Debtor on occasion of that Obligation, undertaking to pay that obligation in the
terms and conditions indicated further on in this document.                     

THIRD: TERMS OF PAYMENT                                                         

          SECTION 3.1. Interest. All sums payable hereunder shall be without
interest, except for default interest in accordance with Section 3.6.           

            SECTION 3.2. Optional Prepayments. The Debtor may at any time prepay
this Agreement in whole or in part.                                             

            SECTION 3.3. Mandatory Prepayments. (a) If the Debtor shall (i) make
any Restricted Payment to Leap Chile, Leap Wireless or any of their respective  
Subsidiaries or (ii) make any Restricted Payment to a Person other than Leap    
Chile, Leap Wireless or any of their respective Subsidiaries, successors or     
assigns except out of retained earnings or profits, the Debtor shall on the date
of such Restricted Payment first prepay this Agreement in full.                 

            (b) If the Debtor shall make a payment, repurchase, or redemption of
any principal due under any Indebtedness of the Debtor held by Leap Chile, Leap 
Wireless, their respective Subsidiaries or, in the case of Indebtedness         
outstanding as of March 29, 1999, to Leap Chile and/or to Leap Wireless or to   
any of their respective successors, assigns or transferees, the Debtor shall on 
the date of such payment first prepay this Agreement in full.                   

EX-10.21.2
7th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 7th
       (c) After the Debtor shall have issued any Additional Shares of
Capital Stock or incurred any Indebtedness and received net proceeds (whether in
cash, securities, other property, but not including forgiveness of Indebtedness)
in an aggregate amount (in combination with all issuances of capital stock or   
incurrences of Indebtedness from the date hereof) in excess of U.S.$200,000,000,
the Debtor shall apply on the date of each such issuance or incurrence an amount
equal to 50% of the net proceeds thereof in excess of the amount of             
U.S.$200,000,000 toward the prepayment of this Agreement.                       

         (d) If at any time on or before March 19, 2000 the Debtor or Leap
Chile sells capital stock (whether common or preferred) of the Debtor to any    
Person for more than the Base Price per share (as defined and adjusted from time
to time as provided in Section 3.4 (the "Base Price")), the Debtor shall, on the
date of such sale, (i) if the sale occurs on or before June 30, 1999, apply an  
amount equal to 50% of the excess net proceeds over the Base Price per share    
realized in such sale multiplied by the number of shares sold toward the        
prepayment of this Agreement and (ii) if the sale occurs after June 30, 1999 and
on or before March 19, 2000, apply an amount equal to 25% of the excess net     
proceeds over the Base Price per share realized in such sale multiplied by the  
number of shares sold toward the prepayment of this Agreement. Any sale of      
shares of a holding company of Debtor established between Leap Chile and Debtor 
which does not have material assets and/or liabilities other than the shares of 
Debtor shall be treated as a sale of the underlying shares of Debtor (with      
appropriate proportional adjustments to the applicable Base Price to reflect any
differences in the number of shares outstanding in such holding company and the 
number of shares outstanding in Debtor (e.g. if the applicable Base Price is    
$5.00 per share and Debtor has 20 Million shares outstanding before the sale and
the holding company has 10 Million shares outstanding before such sale, the Base
Price applicable to the holding company shall be $10 per share)).               

         (e) Notwithstanding anything to the contrary in this Section 3.3,
the conversion of the loans under the Leap Credit Agreement or the Deferred     
Payment Agreement into equity of the Debtor shall not under any circumstances   
require the Debtor to prepay this Agreement or affect the Base Price.           

     SECTION 3.4 Adjustment of Base Price. (a) On the date of this
Agreement, the Base Price for common shares shall be U.S.$5.00 per share and the
Base Price for preferred shares shall be U.S.$5.00 plus such sum as determined  
by the board of directors of the Debtor in good faith to be the amount of the   
increased value of the preferred shares over common shares as a result of the   
rights, preferences and privileges of the preferred shares. Thereafter, in case 
the Debtor at any time or from time to time after the date hereof shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Capital  
Stock deemed to be issued pursuant to Section 3.4 (b)) for a consideration per  
share less than the Base Price in effect immediately prior to such issue or     
sale, then, and in each such case, such Base Price shall be adjusted,           
concurrently with such issue or sale to a price per share (calculated to the    
nearest .001 of a cent) determined by multiplying such Base Price by a fraction 

EX-10.21.2
8th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 8th

       (i) the numerator of which shall be (A) the number of shares of
capital stock of the Debtor outstanding immediately prior to such issue or sale,
plus (B) the number of shares of capital stock of the Debtor which the aggregate
consideration received by the Debtor for the total number of such Additional    
Shares of Capital Stock so issued or sold would purchase at such Base Price,    
plus (c) the number of shares of capital stock of the Debtor sold to a Person   
other than Leap Chile, Leap Wireless or any of their respective Affiliates, and 

      (ii) the denominator of which shall be the number of shares of
capital stock of the Debtor outstanding immediately after such issue or sale,   
provided that, for purposes of this Section 3.4, (X) immediately after any      
Additional Shares of Capital Stock are deemed to have been issued pursuant to   
Section 3.4(b), such Additional Shares shall be deemed to be outstanding, and   
(Y) treasury shares shall not be deemed to be outstanding.                      

         (b) In case the Debtor at any time or from time to time after the
date hereof shall declare or pay any dividend on its capital stock payable in   
capital stock, or shall effect a subdivision of the outstanding shares of its   
capital stock into a greater number of shares of capital stock (by              
reclassification or otherwise than by payment of a dividend in capital stock),  
then, and in each such case, Additional Shares of Capital Stock shall be deemed 
to have been issued (i) in the case of any such dividend, immediately after the 
close of business on the record date for the determination of holders of any    
class of securities entitled to receive such dividend, or (ii) in the case of   
any such subdivision, at the close of business on the day immediately prior to  
the day upon which such corporate action becomes effective.                     

(c) For the purposes of this Section 3.4,               

            (i) the consideration for the issue or sale of any Additional Shares
of Capital Stock shall, irrespective of the accounting treatment of such        
consideration,                                                                  

              (A) insofar as it consists of cash, be computed at the net
amount of cash received by the Debtor,                                          

                 (B) insofar as it consists of property (including securities)
other than cash, be computed at the fair market value thereof at the time of    
such issue or sale, as determined in good faith by the Board of Directors of the
Debtor, and                                                                     

                (C) in case Additional Shares of Capital Stock are issued or
sold together with other stock or securities or other assets for consideration  
which covers both, be the portion of such consideration so received, computed as
provided in clauses (A) and (B) above, allocable to such Additional Shares of   
Capital Stock, all as determined in good faith by the Board of Directors of the 
Debtor; and                                                                     

          (ii) Additional Shares of Capital Stock deemed to have been issued
pursuant to Section 3.4(b), relating to stock dividends, stock splits, etc.,    
shall be deemed to have been issued for no consideration.                       

EX-10.21.2
9th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 9th

         SECTION 3.5. Payments and Computations. (a) The Debtor shall make
each payment hereunder not later than 12:00 Noon (Santiago time) on the day when
due in the amount of Chilean Pesos (equivalent to the U.S. dollars due converted
at the Observed Exchange Rate on the day before the date of payment) in same day
funds to the Holder at its address referred to in Section 7.2 or to the account 
of the Holder designated in writhing by the Holder.                             

         (b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day.                                                                   

            SECTION 3.6. Default Interest. Any overdue principal or other amount
payable under this Agreement shall bear interest, payable on demand, for each   
day until paid at a rate per annum equal to Libor (as defined below) plus five  
percent (5%) on the basis of a year of 360 days for the actual number of days   
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.                                                 

          SECTION 3.7. Right of Set-off. The Debtor is hereby authorized, to
the fullest extent permitted by law, to set off and apply any amounts payable by
Telex-Chile or Chilesat S.A. to the Debtor and/or Leap Chile on account of the  
indemnities set forth in the Stock Purchase Agreement against any and all of the
obligations of the Debtor under this Agreement; provided, however, that if a    
right of set off is claimed in bad faith, damages shall be payable to Holder    
equivalent to fifty percent (50%) of the amount of the set off that is so       
asserted. Any such damages shall be in addition to any costs and expenses       
payable pursuant to Section 7.4 hereof.                                         

FOURTH: REPRESENTATIONS AND WARRANTIES                                          

      SECTION 4.1. Representations and Warranties of the Debtor. The
Debtor represents and warrants as follows:                                      

     (a) Corporate Existence. The Debtor (i) is a corporation duly
incorporated and validly existing under the laws of Chile and (ii) has the      
corporate power and authority to own its property and carry on its business as  
now being conducted.                                                            

       (b) Corporate Power; Authorization. The execution, delivery and
performance by the Debtor of this Agreement are within its corporate powers,    
have been duly authorized by all necessary corporate action, and do not (i)     
contravene the Debtor's estatutos sociales, (ii) violate any law or any         
contractual restriction binding on or affecting the Debtor, except where such   
violation may not reasonably be expected to have a Material Adverse Effect, or  
(iii) result in or require the creation of any Lien, security interest or other 
charge or encumbrance upon or with respect to any of its properties.            

EX-10.21.2
10th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 10th

            (c) Approvals. To the Debtor's best knowledge following consultation
with Grasty, Quintana, Majlis y Cia, no consent, order, authorization or        
approval or other action by, and no notice to or filing with, any Governmental  
Authority or regulatory body is required for (i) the due execution, delivery and
performance by the Debtor of this Agreement, or (ii) the legality, validity,    
binding effect or enforceability hereof.                                        

          (d) Enforceability. This Agreement is the legal, valid and binding
obligation of the Debtor, enforceable against the Debtor in accordance with its 
terms, except as enforceability may be limited by applicable bankruptcy,        
insolvency, reorganization, arrangement, moratorium or other similar laws       
relating to or affecting the enforcement of creditors' rights generally and by  
equitable principles.                                                           

FIFTH: COVENANTS OF THE DEBTOR                                                  

            SECTION 5.1. Affirmative Covenants. So long as any amount under this
Agreement shall remain unpaid, the Debtor shall, unless the Holder shall        
otherwise consent in writing:                                                   

           (a) Reporting Requirements. Furnish to the Holder copies of each of
the following:                                                                  

          (i) as prepared in the ordinary course of business (A)
quarterly Financial Statements of the Debtor and (B) audited annual Financial   
Statements of the Debtor and each of its Subsidiaries accompanied, in the case  
of (B) by an audit opinion letter by an accounting firm of recognized           
international standing;                                                         

            (ii) at the time of delivery of audited annual Financial
Statements Debtor shall deliver to Holder (x) a certificate from the Chief      
Financial Officer of the Debtor certifying (A) that the Financial Statements    
attached were prepared in accordance with Chilean GAAP and fairly present the   
financial condition of such Person, and (B) that such officer is familiar with  
the terms of this Agreement and that no Event of Default has occurred and is    
continuing under this Agreement, or if such an Event of Default has occurred and
is continuing, containing a statement as to the nature thereof and the steps    
being taken with respect thereto, and (y) a certificate of accountants of the   
Debtor stating that in making the examination necessary for their certification 
they have obtained no knowledge of any Event of Default which has occurred and  
is continuing, or if, in the opinion of such accountants, an Event of Default   
has occurred and is continuing, a statement as to the nature thereof; and       

                 (iii) promptly after the sending or filing thereof, copies of
all reports which the Debtor and its Subsidiaries send to any of their          
securities holders and any and all press releases issued by the Debtor and each 
of its Subsidiaries.                                                            

       (b) Insurance. Maintain, and cause each Subsidiary to maintain,
insurance with such insurance companies and associations, in such amounts and   
covering such risks as may be determined in good faith by the board of          
directors of                                                                    

EX-10.21.2
11th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 11th
the Debtor to be commercially reasonable. The Holder agrees that continuing     
existing insurance coverage shall be commercially reasonable.                   

       (c) Financial Records. Keep and maintain, and cause each of its
Subsidiaries to keep and maintain, accurate books and records of account in     
accordance with Chilean GAAP consistently applied. Upon reasonable request and  
with the consent of the Debtor, which consent will not be unreasonably withheld,
the Holder may request a certificate of accountants of Debtor stating that they 
have made a reasonable examination necessary for their certificate and that they
have obtained no knowledge of an event of default which has occurred and is     
continuing or, if in the opinion of such accountants, an event of default has   
occurred and is continuing, a statement as to the nature thereof. Upon receipt  
of such request, the Debtor, may at its option, either (i) provide such         
certificate of the Debtor or (ii) permit the Holder or its representatives      
during customary business hours to inspect and examine the Debtor's books and   
records and to discuss its affairs, finances and accounts with its principal    
officers. If the Debtor elects to provide the certificate as described in       
Subparagraph (i) above, and the auditors certify that no event of default has   
occurred which has not previously been disclosed to the Holder, the Holder shall
pay all costs and expenses associated with providing such certificate.          

         SECTION 5.2. Negative Covenants. So long as any amount under this
Agreement shall remain unpaid, the Debtor shall not, without the written consent
of the Holder enter into any transaction, including without limitation, the     
purchase, sale, lease or exchange of property, the rendering of any service or  
the payment of any management, advisory or similar fees, with any Affiliates,   
unless such transaction is (i) in the ordinary course, and (ii) upon fair and   
reasonable terms comparable to those obtainable in an arm's-length transaction  
with a Person not an Affiliate.                                                 

SIXTH: EVENTS OF DEFAULT                                                        

    SECTION 6.1. Events of Default. The occurrence of any of the
following events shall constitute an Event of Default hereunder:                

     (a) The Debtor shall fail to pay the principal amount of this
Agreement when the same becomes due and payable or shall fail to pay any other  
amounts payable under this Agreement when the same become due and payable and   
any such failure shall continue for five (5) Business Days; or                  

       (b) A representation or warranty made by the Debtor under or in
connection with this Agreement shall prove to have been incorrect in any        
material respect when made; or                                                  

     (c) The Debtor shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 6.2, or (ii) any other term, covenant
or agreement contained in this Agreement on its part to be performed or observed
and such failure shall continue for ten (10) Business Days after the Debtor has 
notice of such failure from Holder; or                                          

EX-10.21.2
12th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 12th

           (d) The Debtor shall (i) apply for or consent to the appointment of
a receiver, trustee, liquidator or custodian of itself or of all or a           
substantial part of its property, (ii) make a general assignment for the benefit
of its creditors, (iii) be dissolved or liquidated in full or in part, (iv)     
commence a voluntary case or other proceeding seeking liquidation,              
reorganization or other relief with respect to itself or its debts under any    
bankruptcy, insolvency or other similar law now or hereafter in effect or       
consent to any such relief or to the appointment of or taking possession of its 
property by any official in an involuntary case or other proceeding commenced   
against it; or                                                                  

   (e) Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of the Debtor or of all or a substantial part of its    
properties, or an involuntary case or other proceedings seeking liquidation,    
reorganization or other relief with respect to the Debtor, under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced   
and an order for relief entered or such proceeding shall not be dismissed or    
discharged within ninety (90) days after commencement thereof; or               

           (f) The Debtor and its Subsidiaries shall sell all or substantially
all its assets or property or shall otherwise cease to engage in a wireless     
telecommunication business.                                                     

         SECTION 6.2. Remedies. Upon the occurrence and continuance of any
Event of Default, the Holder may, upon the expiration of any applicable grace   
period, exercise all rights and remedies granted to it by this Agreement or by  
applicable law, in equity or otherwise.                                         

SEVENTH: MISCELLANEOUS                                                          

   SECTION 7.1. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Debtor         
herefrom, shall in any event be effective unless the same shall be in writing   
and signed by the Holder and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.          

       SECTION 7.2. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic and facsimile 
communication) and sent by reliable courier, telegraphed, facsimiled or         
delivered, and addressed to the Debtor or the Holder at its address shown below,
or at such other address as such party may, by written notice received by the   
other party, have designated as its address for such purposes.                  

EX-10.21.2
13th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 13th

Debtor: CHILESAT TELEFONIA PERSONAL S.A.                
Rinconada El Salto 202                  
Huechuraba                              
Santiago                                
CHILE                                   
Attention:  Chief Financial Officer     
Fax No.  011-562-382-5142               

With copy to:                           
LEAP WIRELESS INTERNATIONAL, INC.       
10307 Pacific Center Court              
San Diego, CA                           
USA                                     
Attention:  General Counsel             
Fax No.  1-619-882-6040                 

Holder: CHILESAT S.A.                                   
Rinconada El Salto 202                  
Huechuraba                              
Santiago                                
CHILE                                   
Attention:  Gerente General             
Fax No.  011-562-382-                   
With Copy to:  General Counsel          

All such notices and communications shall, when sent via courier, telexed,      
telegraphed or facsimiled, be effective, if sent via courier, five Business Days
after delivery to the courier, if sent by telex, upon confirmation of receipt,  
if telegraphed, upon delivery by the telegraph company, or if facsimiled, upon  
being telecopied, with receipt telephonically confirmed by sender, respectively,
addressed as aforesaid.                                                         

       SECTION 7.3. No Waiver; Remedies. No failure on the part of the
Holder to exercise, and no delay in exercising, any right hereunder shall       
operate as a waiver thereof; nor shall any single or partial exercise of any    
right hereunder preclude any other or further exercise thereof or the exercise  
of any other right. The remedies provided in this Agreement are cumulative and  
not exclusive of any remedies provided by law.                                  

            SECTION 7.4. Costs and Expenses. The Debtor agrees to pay the Holder
on demand all reasonable costs and expenses, if any (including, without         
limitation, reasonable attorneys' fees and expenses) incurred by the Holder in  
connection with the enforcement of this Agreement.                              

SECTION 7.5. Binding Effect; Assignments; Governing Law.

            (a) This Agreement shall be binding upon and inure to the benefit of
the Debtor, the Holder and their respective successors and assigns. The Debtor  
shall                                                                           

EX-10.21.2
14th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 14th
remain primarily liable under this Agreement notwithstanding any assignment or  
transfer of its assets or any purported delegation of duties under this         
Agreement.                                                                      

           (b) The Debtor and the Holder hereby agree that the Holder shall be
entitled to sell, transfer or assign, through the sale of participation         
interests or otherwise, all or any part of its rights, obligations and interests
that arise under this Agreement, in addition to this Agreement itself, without  
any limitation whatsoever. The Debtor hereby grants its unconditional           
authorization to the Holder to execute any such assignment, and agrees that it  
shall be sufficient that there exist only an agreement between the Holder and   
its assignee.The Holder shall notify the Debtor of the assignment in writing,   
pursuant to the provisions of Section 7.2. The Debtor and the Holder hereby     
agree that in the event of any such assignment, the rights and interests in and 
to the Debtor's payment and performance of its obligations under this Agreement 
shall be assigned in favor of the one or several assignees, to be shared jointly
with the Holder or such other assignees if the assignment is in part. The Holder
may disclose the Agreement and any financial or other information relating to   
Debtor to any potential assignee or participant provided that such potential    
assignee or participant agrees not to disclose the Agreement and such           
information to other third parties except (i) to its Affiliates and to those    
Persons with which a confidential relationship is maintained (including         
regulators, legal counsel, accountants, or designated agent(s); (ii) where      
required by law, regulation or legal process, provided that to the extent       
practicable such potential assignee or participant shall give the Holder and    
Debtor prior notice of any such legally required disclosure; (iii).with respect 
to any such information that has become generally available other than through  
any breach of this Agreement; or (iv) with the prior written consent of the     
Holder and the Debtor.                                                          

            (c) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE REPUBLIC OF CHILE WITHOUT REGARD TO THE CONFLICT OF LAW   
PRINCIPLES THEREOF.                                                             

           SECTION 7.6. Resolution of Disputes; Submission to Arbitration. The
parties hereto hereby agree that any legal action or proceeding brought by the  
Holder with respect to this Agreement may be brought, at the Holder's sole and  
exclusive option, in the ordinary courts of Chile, sitting in the Comuna de     
Santiago, or, in the form of arbitration, before the Camara de Comercio de      
Santiago. By execution hereof, the Debtor accepts and consents to, for itself   
and with respect to its property, generally and unconditionally, the            
non-exclusive jurisdiction of such courts and submission to such arbitral       
proceeding and form; provided, however, that upon the commencement and pendency 
of an arbitral proceeding pursuant to Article 6 of the Stock Purchase Agreement,
the Debtor's payment obligations hereunder shall be suspended in an amount up to
such amount as shall be contended in good faith in such arbitral proceeding by  
the Debtor or Assignor as subject to reduction in accordance with the right of  
set-off granted pursuant to Section 2.07 herein and Section 4.2 in the Stock    
Purchase Agreement. Subject to the right of set-off, all amounts owing shall be 
reinstated upon the resolution or termination of any such arbitral proceeding   
commenced pursuant to the Stock Purchase Agreement.                             

EX-10.21.2
15th Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 15th
          SECTION 7.7. Right of Suspension. If, following the closing of the
Acquisition, the validity of the Acquisition is challenged in any litigation,   
arbitration or other legal proceeding, by a party other than Leap Chile, Leap   
Wireless or any of their respective Affiliates, then until such proceeding is   
finally resolved or settled, the Debtor shall be entitled to suspend payments   
under this Agreement, and the due dates of any such payments shall be deferred  
accordingly until the date on which such proceeding is finally resolved or      
settled. All parties hereto agree not to take any action or position in any such
proceeding contrary to the validity of the Acquisition or this Agreement and    
agree to cooperate in any such proceeding in order to resolve the matters       
contested therein in favor of the validity of the Acquisition and this          
Agreement.                                                                      

           SECTION 7.8. Interpretation. A) Severability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to 
such jurisdiction, be ineffective to the extent of such prohibition or          
unenforceability without invalidating the remaining provisions hereof, and any  
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. B) Headings.     
Headings in this Agreement are for convenience of reference only and are not    
part of the substance hereof. C) Joint Preparation. This Agreement is to be     
deemed to have been prepared jointly by the Debtor and the Holder and any       
uncertainty or ambiguity existing herein, if any, shall not be interpreted      
against either party, but shall be interpreted according to the application of  
the rules of interpretation for arm's length agreements.                        

       SECTION 7.9. Survival. All indemnities herein shall survive the
execution and delivery of this Agreement and the repayment of the principal     
amount thereof.                                                                 

EX-10.21.2
Last Page of 16
TOC
1st
Previous
Next
↓Bottom
Just 16th
            SECTION 7.10 Special Domicile: The parties to this Novation agree to
establish as special domicile the city of Santiago for all legal purposes       
related to the same.                                                            

CHILESAT TELEFONIA PERSONAL S.A.                                                

By: /S/ RICHARD A. SUTHERLAND                                                   

Print Name: RICHARD A. SUTHERLAND                                               

Title: GENERAL MANAGER                                                          

As Holder:                                         As Assignor:                 

CHILESAT S.A.                                      INV. LEAP WIRELESS CHILE S.A.

By: /S/ JUAN EDUARDO IBANEZ                        By: /S/ OCTAVIO BOFILL       

Print Name: JUAN EDUARDO IBANEZ                    Print Name: OCTAVIO BOFILL   

Title: PRESIDENT                                   Title: GENERAL MANAGER       

By: /S/ RAMON VALDIVIESO                                                        

Name: RAMON VALDIVIESO                                                          

Title: GENERAL MANAGER                                                          

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K/A’ Filing		Date		First		Last			Other Filings
		3/19/00		7
Filed on:		7/6/99
		6/30/99		7
For Period End:		4/19/99							8-K
		4/12/99		5
		3/29/99		6
		6/24/98		3		4
									List all Filings