EXHIBIT 10.2
July 12, 2013
 

AT&T Inc.
One AT&T Plaza
208 South Akard Street, Suite 3702
Dallas, Texas 75202

 
Ladies and Gentlemen:
 
 

 
 
Each of the stockholders listed on Schedule I to this letter agreement
(individually, a “Stockholder” and, together, the “Stockholders”) understands
that Leap Wireless International, Inc., a Delaware corporation (the “Company”),
AT&T Inc., a Delaware corporation (“Parent”), Laser, Inc., a Delaware
corporation, and Mariner Acquisition Sub Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent (“Merger Sub”), propose to enter into an
Agreement and Plan of Merger, dated as of July 12, 2013 (as it may be from time
to time amended, the “Merger Agreement”), providing for, among other things, a
merger of Merger Sub with and into the Company (the “Merger”), in which each of
the issued and outstanding shares of common stock, par value $0.0001 per share,
of the Company (the “Company Common Stock”) (other than Excluded Shares) will be
cancelled and converted into the right to receive the Per Share Merger
Consideration. Terms used without definition in this letter agreement shall have
the meanings ascribed thereto in the Merger Agreement.
 
 
Each of the Stockholders acknowledges that, as a condition to entering into the
Merger Agreement, Parent has required that each of the Stockholders enter into
this letter agreement and, in order to induce Parent to enter into the Merger
Agreement and incur the obligations set forth therein, each of the Stockholders
is willing to enter into this letter agreement.
 
 
Each of the Stockholders confirms such Stockholder’s agreement with Parent, and
Parent confirms its agreement with each of the Stockholders, as follows:
 
1. Each of the Stockholders represents and warrants that Schedule I to this
letter agreement sets forth the number of shares of Company Common Stock (the
“Shares”) of which such Stockholder is the beneficial owner as of the date of
this letter agreement and separately sets forth the number of Shares that are
owned of record and the Shares over which it has voting control as of the date
of this letter agreement. Other than 23,593,905 Shares which are held in
brokerage accounts (for which it maintains the right to vote) and which are
subject only to customary liens pursuant to the terms of the applicable custody
agreement generally applicable to all assets of the Stockholders held in
brokerage accounts, all shares of Company Common Stock are owned by the
Stockholders free and clear of all Encumbrances, voting arrangements and
commitments of every kind. Each Stockholder further represents and warrants that
such Stockholder has the power to vote or direct the vote of all shares of
Company Common Stock owned by it of record or beneficially without restriction
and that any proxies that have been given in respect of any or all of such
shares have been revoked. In addition, Dr. Rachesky represents and warrants that
he controls each of the Stockholders. Each of the Stockholders will use its best
efforts to have all of its Shares converted to certificated form as soon as
reasonably practicable and in any event prior to the record date for the
Stockholders Meeting.  No Stockholder has any knowledge of any matter that would
prevent this from being accomplished.  The Company shall cooperate with the
Stockholders and provide such assistance as is necessary to accomplish the
foregoing.  Without limiting the foregoing, each of the Stockholders and the
Company agrees to contact the transfer agent for the shares of Company Common
Stock as soon as practicable and no later than the open of business on the first
Business Day after the date of this letter agreement to request that all of the
Stockholders’ Shares be converted to certificated form and to take such other
actions as may be necessary or desirable to minimize any adverse impact on the
voting arrangements hereunder arising by virtue of the fact that the
Stockholders’ shares of Company Common Stock are held in brokerage accounts
instead of directly by the Stockholders.  If, notwithstanding the foregoing,
there are Shares which do not become certificated, whether or not such Shares
are collateral for loans, there cannot be absolute assurance that each and every
Share will be voted as directed by a Stockholder given the proration practices
by broker-dealers. Thus, all agreements herein with respect to the voting of all
Shares owned by all Stockholders are subject to the understanding contained in
the preceding sentence; provided, however, that the Stockholders will use their
reasonable best efforts to ensure that they are voted in the manner otherwise
required hereunder.
 
 
2. At every meeting of the stockholders of the Company called, and at every
postponement, recess or adjournment thereof, and on every action or approval by
written consent of the stockholders of the Company, each Stockholder agrees to
vote, or cause to be voted, such Stockholder’s shares of Company Common Stock
owned beneficially or of record and at such time over which it has voting
control to be voted in favor (a) of (i) adoption of the Merger Agreement and
(ii) any other matter that is required to be approved by the stockholders of the
Company to facilitate the transactions contemplated by the Merger Agreement, (b)
against (i) any proposal made in opposition to adoption of the Merger Agreement
or in competition with the Merger, (ii) any Acquisition Proposal, (iii) any
Alternative Acquisition Agreement, and (iv) to the extent that any of the
following actions require a stockholder vote pursuant to applicable Law, any
proposal, transaction, agreement, amendment of the Company’s certificate of
incorporation or by-laws or other action that is intended to or could reasonably
be expected to prevent, impede, interfere with, delay, postpone or discourage
consummation of the Merger or that Parent has advised it in writing at least
three Business Days prior to a vote, would result in a breach of any
representation, warranty, covenant, agreement or other obligation of the Company
in the Merger Agreement or facilitate an Acquisition Proposal or an Alternative
Acquisition Agreement and (c) as directed by Parent with respect to any
postponement, recess, adjournment or other procedural matter. Any such vote
shall be cast (or consent shall be given) by such Stockholder in accordance with
such  procedures relating thereto so as to ensure that it is duly counted,
including for purposes of determining that a quorum is present and for purposes
of recording the results of such vote (or consent). Each Stockholder understands
and agrees that, by voting its shares in favor of the adoption of the Merger
Agreement, it hereby irrevocably and unconditionally waives, and agrees not to
exercise any rights of appraisal, any dissenters’ rights and any similar rights
relating to the Merger that such Stockholder may directly or indirectly have by
virtue of the ownership of any shares of Company Common Stock.
 
3. Each Stockholder hereby revokes any and all previous proxies granted with
respect to its Shares. By entering into this letter agreement, subject to the
last sentence of this paragraph 3, each Stockholder hereby grants, or agrees to
cause the applicable record holder to grant, a proxy appointing Wayne Watts and
John Stephens, and each of them, but each with full power of substitution, as
such Stockholder’s attorney-in-fact and proxy, for and in such Stockholder’s
name, to be counted as present, vote, express consent or dissent with respect to
the shares of Company Common Stock owned of record or beneficially by it in the
manner contemplated by paragraph 2 as such proxies or their proxies or
substitutes shall, in their sole discretion, deem proper with respect to the
shares of Company Common Stock. The proxy granted by each Stockholder pursuant
to this paragraph 3 is, subject to the last sentence of this paragraph 3,
irrevocable and is coupled with an interest, in accordance with Section 212(e)
of the DGCL, and is granted in order to secure such Stockholder’s performance
under this letter agreement and also in consideration of Parent entering into
this letter agreement and the Merger Agreement and incurring the obligations
therein. If any Stockholder fails for any reason to be counted as present,
consent or vote its shares of Company Common Stock in accordance with the
requirements of paragraph 2 (or anticipatorily breaches such paragraph), then
Parent shall have the right to cause to be present, consent or vote such
Stockholder’s shares of Company Common Stock in accordance with the provisions
of paragraph 2. The proxy granted by the Stockholder shall be automatically
revoked upon termination of this letter agreement in accordance with its terms.
 
 
4. Subject to the provisions of paragraph 8, each Stockholder agrees that such
Stockholder will not, and will cause its respective Representatives not to,
directly or indirectly, (a) solicit, initiate, knowingly encourage, knowingly
facilitate or induce any inquiry with respect to, or the making, submission or
announcement of, any proposal or offer that constitutes, or could reasonably be
expected to lead to, an Acquisition Proposal or any Alternative Acquisition
Agreement, (b) participate in any discussions or negotiations with any Person
regarding, or provide to any Person any nonpublic information or data concerning
the Company or any of its Subsidiaries in connection with, any Acquisition
Proposal or potential Acquisition Proposal or any Alternative Acquisition
Agreement or in response to any inquiries or proposals that could reasonably be
expected to lead to any Acquisition Proposal or Alternative Acquisition
Agreement, or (c) otherwise knowingly facilitate any effort or attempt to make
any  Acquisition Proposal or enter into any Alternative Acquisition Agreement.
Each Stockholder shall immediately terminate, and shall cause its respective
Representatives to immediately terminate, all discussions or negotiations, if
any, that are ongoing as of the date hereof with any Person with respect to any
Acquisition Proposal, or proposal that could reasonably be expected to lead to
an Acquisition Proposal.
 
 
5. Each Stockholder represents and warrants (a) that such Stockholder has duly
authorized, executed and delivered this letter agreement and has all necessary
power and authority and full legal capacity to enter into this letter agreement;
and (b) that, assuming the due authorization, execution and delivery of this
letter agreement by Parent, this letter agreement is such Stockholder’s legal,
valid and binding agreement and is enforceable against such Stockholder in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and subject to the
general principles of equity.
 
 
6. Each Stockholder further represents and warrants that the execution and
delivery of this letter agreement by such Stockholder do not, and the
performance of its obligations under this letter agreement and the consummation
of the transactions to be consummated by it as contemplated hereby will not, (a)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to such Stockholder of which it is aware or by which its Shares are
bound or affected, (b) result in any breach of or violation of, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of an Encumbrance on
any of the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which such Stockholder is a party or by which such Stockholder or the Shares
are bound or affected, or (c) require any consent, approval, authorization or
permit of, or filing with or notification to, any court or arbitrator or any
governmental entity, agency or official except for (i) applicable requirements,
if any, of the Securities Exchange Act of 1934, as amended, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not to its knowledge prevent, impair,
delay or adversely affect the performance by such Stockholder of its obligations
under this letter agreement.
 
 
7. This letter agreement and all obligations of the parties hereunder shall
automatically terminate upon the earlier of (a) the Effective Time, (b) the
termination of the Merger Agreement in accordance with its terms and (c) the
effectiveness of any amendment, modification, supplement to, or waiver under,
the Merger Agreement which amendment, modification, supplement or waiver would
(1) reduce the amount or change the form or composition of the Per Share Merger
Consideration payable in the Merger, (2) extend the Termination Date (other than
pursuant to Section 8.2(a) of the Merger Agreement) or (3) materially and
adversely impact any Stockholder in its capacity as such; provided, however,
that (i) paragraphs 11, 12, 13 and 16 and hereof shall survive any such
termination and (ii) such termination shall not relieve any party of any
obligation for any breach of this letter agreement occurring prior to such
termination.
 
 
8. Each Stockholder is entering into this letter agreement solely in its
capacity as record or beneficial owner of such Stockholder’s Shares and nothing
herein is intended to or shall limit or affect any actions taken by such
Stockholder or any employee, officer, director, partner or other affiliate
(including, for this purpose, any appointee or representative of such
Stockholder to the board of directors of the Company) of such Stockholder,
solely in his or her capacity as a director or officer of the Company (or a
Subsidiary of the Company) or other fiduciary capacity for the Company’s
stockholders.
 
 
9. Each Stockholder hereby authorizes Parent and the Company to publish and
disclose in any announcement or disclosure in connection with the Merger,
including the Proxy Statement, such Stockholder’s identity and ownership of the
shares of Company Common Stock that are subject to this letter agreement and the
nature of such Stockholder’s obligations under this letter agreement.
 
 
10. Each Stockholder agrees that, prior to the termination of this letter
agreement, such Stockholder shall not take any action that would make any
representation or warranty of such Stockholder contained herein untrue or
incorrect or have the effect of preventing, impairing, delaying or adversely
affecting the performance by such Stockholder of its obligations under this
letter agreement other than to a de minimis extent. Each Stockholder agrees,
without further consideration, to execute and deliver such additional documents
and to take such further actions as necessary or reasonably requested by Parent
to confirm and assure the rights and obligations set forth in this letter
agreement.
 
11. THIS LETTER AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW
OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF TO THE EXTENT THAT SUCH PRINCIPLES WOULD DIRECT A MATTER TO ANOTHER
JURISDICTION.  The parties to this letter agreement hereby irrevocably submit to
the personal jurisdiction of the courts of the State of Delaware and the federal
courts of the United States of America located in the State of Delaware solely
in respect of the interpretation and enforcement of the provisions of this
letter agreement and of the documents referred to in this letter agreement, and
in respect of the transactions contemplated hereby, and hereby waive, and agree
not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement of this letter agreement or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this letter agreement or any such document may not be
enforced in or by such courts, and the parties hereto irrevocably agree that all
claims relating to such action, proceeding or transactions shall be heard and
determined in such a Delaware State or federal court.  The parties hereby
consent to and grant any such court jurisdiction over the person of such parties
and, to the extent permitted by Law, over the subject matter of such dispute and
agree that mailing of process or other papers in connection with any such action
or proceeding in the manner provided in paragraph 13 or in such other manner as
may be permitted by Law shall be valid and sufficient service thereof.
 
12. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT.  EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS LETTER AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH 12.
 
13. Any notice, request, instruction or other document to be given hereunder by
any party to the others shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, by facsimile, by email or
overnight courier addressed, if to a Stockholder, to the address, facsimile
number or email address, as applicable, set forth below its name in Schedule I
hereto, and, if to Parent or the Company, in accordance with Section 9.6 of the
Merger Agreement, or to such other persons or addresses as may be designated in
writing by the party to receive such notice as provided above.  Any notice,
request, instruction or other document given as provided above shall be deemed
given to the receiving party upon actual receipt, if delivered personally; three
(3) business days after deposit in the mail, if sent by registered or certified
mail; upon confirmation of successful transmission, if sent by facsimile
(provided that if given by facsimile such notice, request, instruction or other
document shall be followed up within one business day by dispatch pursuant to
one of the other methods described herein); upon transmission, if sent by email
on a business day prior to 5:00 p.m. (Pacific Time) and otherwise on the next
business day (unless the sender receives a reply email indicating that the sent
email was undeliverable, exceeded the memory or other limitations of the
recipient’s inbox or otherwise could not be delivered to the recipient); or on
the next business day after deposit with an overnight courier, if sent by an
overnight courier.
 
14. This letter agreement shall not be assignable by operation of Law or
otherwise.  Any purported assignment in violation of this Agreement is void.
 
15. Each party to this letter agreement recognizes and acknowledges that a
breach by it of any covenants or agreements contained in this letter agreement
will cause the other party to sustain damages for which it would not have an
adequate remedy at law for money damages, and therefore each party agrees that
in the event of any such breach, the aggrieved party shall be entitled to
specific performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which it may be entitled, at
law or in equity. It is accordingly agreed that the parties shall be entitled to
an injunction or injunctions to prevent breaches of this letter agreement and to
enforce specifically the terms and provisions of this letter agreement in any
federal or state court located in the State of Delaware. In the event that
Parent institutes any action, claim, complaint, lawsuit or proceeding pursuant
to this paragraph 15, the successful party shall be entitled to receive the
costs incurred thereby, including reasonable attorneys’ fees and expenses as may
be determined by the court.
 
16. The effectiveness of this letter agreement shall be conditioned upon the
execution and delivery of the Merger Agreement by the parties thereto.
 
17. From and after the date of this letter agreement until the Requisite Company
Vote is obtained, each of the Stockholders agrees not to, or to permit any
broker-dealer or other Person to, transfer, sell, offer, exchange, pledge or
otherwise dispose of or encumber any of such Stockholder’s shares of Company
Common Stock.
 
18. Parent acknowledges and agrees that nothing in this letter agreement shall
be deemed to vest in Parent any direct or indirect ownership or incidence of
ownership of or with respect to any Shares of any Stockholder. All rights,
ownership and economic benefits of and relating to the Shares of any Stockholder
shall remain vested in and belong to such Stockholder, and Parent shall have no
authority to manage, direct, superintend, restrict, regulate, govern or
administer any of the policies or operations of the Company or exercise any
power or authority to direct any Stockholder in the voting of any of such
Stockholder’s Shares, except as otherwise expressly provided herein.
 
19. Each Stockholder and the Company agree that, when converted into
certificated form, each certificate representing Shares owned, beneficially or
of record, by such Stockholder shall conspicuously bear the following legend
until such time the Shares represented thereby are no longer subject to the
provisions hereof:
 
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THE LETTER AGREEMENT, DATED AS OF JULY 12, 2013, AMONG THE COMPANY
AND THE PARTIES THERETO INCLUDING THE VOTING AND TRANSFER RESTRICTIONS CONTAINED
THEREIN.”
 

 

 
 
 

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Please confirm that the foregoing correctly states the understanding between
each Stockholder and you by signing and returning to us a counterpart hereof.
 
Very truly yours,

MHR CAPITAL PARTNERS MASTER ACCOUNT LP
   
By:
MHR Advisors LLC, its general partner
 
By:
 
Name:
 
Title:
 

MHR CAPITAL PARTNERS (100) LP
   
By:
MHR Advisors LLC, its general partner
 
By:
 
Name:
 
Title:
 

MHR ADVISORS LLC
         
By:
 
Name:
 
Title:
 

MHR INSTITUTIONAL PARTNERS II LP
   
By:
MHR Institutional Advisors II LLC, its general partner
 
By:
 
Name:
 
Title:
 

MHR INSTITUTIONAL PARTNERS IIA LP
   
By:
MHR Institutional Advisors II LLC, its general partner
 
By:
 
Name:
 
Title:
 

MHR INSTITUTIONAL ADVISORS II LLC
 
By:
 
Name:
 
Title:
 

MHR INSTITUTIONAL PARTNERS III LP
   
By:
MHR Institutional Advisors III LLC, its general partner
 
By:
 
Name:
 
Title:
 

MHR INSTITUTIONAL ADVISORS III LLC
         
By:
 
Name:
 
Title:
 

MHRC LLC
         
By:
 
Name:
 
Title:
 

MHRC II LLC
         
By:
 
Name:
 
Title:
 

MHR FUND MANAGEMENT LLC
         
By:
 
Name:
 
Title:
 

MHR HOLDINGS LLC
         
By:
 
Name:
 
Title:
 

MARK H. RACHESKY, M.D.
     
 
       

 
 

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Confirmed as of the date
first above written:
 
AT&T INC.
 
By:
 
 
Name:
 
 
Title
 

 
 

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Confirmed as of the date
first above written:
 
LEAP WIRELESS INTERNATIONAL, INC.
 
By:
 
 
Name:
 
 
Title
 

 
 

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SCHEDULE I
 
Stockholder Name and Address (1)
Shares Held Beneficially (2)
Shares Owned of Record
Shares Over Which Stockholder Has Voting Control
Shares in Margin Accounts and/or Are Collateral
         
MHR Capital Partners Master Account LP
353,420
353,420
353,420
353,420 (3)
MHR Capital Partners (100) LP
42,514
42,514
42,514
42,514 (3)
MHR Advisors LLC
395,934
0
395,934
0
MHR Institutional Partners II LP
3,340,378
3,340,378
3,340,378
3,340,378 (3)
MHR Institutional Partners IIA LP
8,415,428
8,415,428
8,415,428
8,415,428 (3)
MHR Institutional Advisors II LLC
11,755,806
0
11,755,806
0
MHR Institutional Partners III LP
11,382,129
11,382,129
11,382,129
11,382,129 (3)
MHR Institutional Advisors III LLC
11,382,129
0
11,382,129
0
MHRC LLC
395,934
0
395,934
0
MHRC II LLC
11,755,806
0
11,755,806
0
MHR Fund Management LLC
23,533,869
0
23,533,869
0
MHR Holdings LLC
23,533,869
0
23,533,869
0
Mark H. Rachesky, M.D.
23,598,857
64,988 (4)
23,598,857
60,036 (5)

(1)  
The address for each Stockholder is 40 West 57th Street, 24th Floor New York, NY
10019.  The facsimile number for each Stockholder is (212) 262-9356.  The email
address for each Stockholder is jyeung@mhrfund.com; copy to
mrachesky@mhrfund.com.

(2)  
Does not include securities or derivatives which are not Shares.

(3)  
All of the Shares owned of record are held in accounts at Goldman Sachs, over
which Goldman Sachs has a general lien, regardless of whether there are
obligations currently owed to Goldman Sachs.

(4)  
Represents 64,988 Shares directly owned by Dr. Rachesky, of which 60,036 are in
his brokerage account and 4,952 are restricted shares not yet released to him
but as to which he has the right to vote.

(5)  
The 60,036 Shares in Dr. Rachesky’s brokerage account are also subject to a
general lien in favor of the broker.

 
 
 

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