<PAGE>
As filed with the Securities and Exchange Commission on March 1, 2000
Registration No. 333-92271
333-92271-01
333-92271-02
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
Amendment No. 3
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
US Unwired Inc.*
(Exact name of registrant as specified in its charter)
Louisiana 4812 72-1457316
(State or other (Primary standard industrial (IRS employer
jurisdiction classification code number) identification number)
of incorporation or
organization)
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
(800) 673-2200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------
Thomas G. Henning
General Counsel and Secretary
US Unwired Inc.
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
(337) 436-9000
(Name, address, including zip code,
and telephone number, including area code, of agent for service)
Copies to:
Anthony J. Correro, III
Louis Y. Fishman
Correro Fishman Haygood Phelps
Walmsley & Casteix, L.L.P.
201 St. Charles Avenue, 46th Floor
New Orleans, Louisiana 70170-4600
(504) 586-5252
---------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this registration statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
---------------
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the SEC, acting pursuant to said
Section 8(a), may determine.
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* Some of the subsidiaries of US Unwired Inc. will guarantee the securities
being registered hereby and are therefore registrants also. Information about
these additional registrants appears on the following page.
<PAGE>
ADDITIONAL REGISTRANTS
Louisiana Unwired, LLC
(Exact name of registrant as specified in its charter)
Louisiana 4812 72-1407430
(State or other (Primary standard industrial (IRS employer
jurisdiction classification code number) identification number)
of incorporation or
organization)
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
(800) 673-2200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------
Thomas G. Henning
General Counsel and Secretary
US Unwired Inc.
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
(337) 436-9000
(Name, address, including zip code,
and telephone number, including area code, of agent for service)
Copies to:
Anthony J. Correro, III Louis Y. Fishman
Correro Fishman Haygood Phelps
Walmsley & Casteix, L.L.P.
201 St. Charles Avenue, 46th Floor
New Orleans, Louisiana 70170-4600
(504) 586-5252
----------------
Unwired Telecom Corp.
(Exact name of registrant as specified in its charter)
Louisiana 4812 72-0647424
(State or other (Primary standard industrial (IRS employer
jurisdiction classification code number) identification number)
of incorporation or
organization)
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
(800) 673-2200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------
Thomas G. Henning
General Counsel and Secretary
US Unwired Inc.
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
(337) 436-9000
(Name, address, including zip code,
and telephone number, including area code, of agent for service)
Copies to:
Anthony J. Correro, III Louis Y. Fishman
Correro Fishman Haygood Phelps
Walmsley & Casteix, L.L.P.
201 St. Charles Avenue, 46th Floor
New Orleans, Louisiana 70170-4600
(504) 586-5252
----------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Officers and Directors.
Section 83A(1) of the Louisiana Business Corporation Law permits a
corporation to indemnify any person who was or is a party or is threatened to
be made a party to any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, including any action by or in the right of
the corporation, by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another business,
foreign or nonprofit corporation, partnership, joint venture, or other
enterprise, against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 83A(2) provides that, in case of actions by or in the right of the
corporation, the indemnity shall be limited to expenses, including attorneys'
fees and amounts paid in settlement not exceeding, in the judgment of the board
of directors, the estimated expense of litigating the action to conclusion,
actually and reasonably incurred in connection with the defense or settlement
of such action, and that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable for willful or intentional misconduct in the performance of his duty
to the corporation, unless, and only to the extent that the court shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, he is fairly and reasonably entitled
to indemnity for such expenses which the court shall deem proper.
Section 83(B) provides that to the extent that a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in
defense of any such action, suit or proceeding, or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Any indemnification under Section 83A, unless ordered by the court, shall be
made by the corporation only as authorized in a specific case upon a
determination that the applicable standard of conduct has been met, and such
determination shall be made:
. By the board of directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit, or
proceeding, or
. If such a quorum is not obtainable and the board of directors so
directs, by independent legal counsel, or
. By the shareholders.
The indemnification provided for by Section 83 shall not be deemed exclusive
of any other rights to which the person indemnified is entitled under any
bylaw, agreement, authorization of shareholders or directors, regardless of
whether directors authorizing such indemnification are
II-1
<PAGE>
beneficiaries thereof, or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of his heirs and legal representative;
however, no such other indemnification measure shall permit indemnification of
any person for the results of such person's willful or intentional misconduct.
Section 24 of the Louisiana Business Corporation Law provides that the
articles of incorporation of a corporation may contain a provision eliminating
or limiting the personal liability of a director or officer to the corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director or officer, provided that such provision shall not eliminate or limit
the liability of a director or officer:
. For any breach of the director's or officer's duty of loyalty to the
corporation or its shareholders;
. For acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. Who knowingly or without the exercise of reasonable care and inquiry
votes in favor of a dividend paid in violation of Louisiana law, any
other unlawful distribution, payment or return of assets to be made to
the shareholders or stock purchases or redemptions in violation of
Louisiana law; or
. For any transaction from which the director or officer derived an
improper personal benefit.
Article VI of US Unwired's Articles of Incorporation contains the provisions
permitted by Section 24 of the Louisiana Business Corporation Law and permits
the Board of Directors to take further action to provide indemnification to,
and limit the liability of, to the full extent permitted by law, the directors
and officers of US Unwired by causing US Unwired to enter into contracts with
its directors and officers, adopting by-laws or resolutions, and causing US
Unwired to procure and maintain directors' and officers' liability insurance or
other similar arrangements, notwithstanding that some or all of the members of
the Board of Directors acting with respect to the foregoing may be parties to
such contracts or beneficiaries of such by-laws or resolutions or insurance or
arrangements.
Article VI permits the Board of Directors to cause US Unwired to approve for
its direct and indirect subsidiaries limitation of liability and
indemnification provisions comparable to the foregoing.
Section 11 of US Unwired's by-laws makes mandatory the indemnification of
any of its officers and directors against any expenses, costs, attorneys' fees,
judgments, punitive or exemplary damages, fines and amounts paid in settlement
actually and reasonably incurred by him (as they are incurred) by reason of his
position as director or officer of US Unwired or any subsidiary or other
specified positions if he is successful in his defense of the matter on the
merits or otherwise or has been found to have met the applicable standard of
conduct.
The standard of conduct is met when the director or officer is found to have
acted in good faith and in a manner that he reasonably believed to be in, or
not opposed to, the best interest of US
II-2
<PAGE>
Unwired, and, in the case of a criminal action or proceeding, with no
reasonable cause to believe that his conduct was unlawful. No indemnification
is permitted in respect of any matter as to which a director or officer shall
have been finally adjudged by a court of competent jurisdiction to be liable
for willful or intentional misconduct or to have obtained an improper personal
benefit, unless, and only to the extent that the court shall determine upon
application that, in view of all the circumstances of the case, he is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper.
Section 11 further provides that indemnification granted pursuant to this
section shall not be deemed exclusive of any other rights to which a director
or officer is or may become entitled under any statute, article of
incorporation, by-law, authorization of shareholders or directors, agreement or
otherwise; and that US Unwired intends by this section to indemnify and hold
harmless a director or officer to the fullest extent permitted by law.
US Unwired has issued $55 million of its convertible preferred stock to The
1818 Fund and affiliates of Trust Company of the West. The holders of this
preferred stock have designated two individuals as members of the Board of
Directors of US Unwired. These individuals are entitled to the foregoing
indemnification. In connection with the issuance of the preferred stock, US
Unwired entered into a registration rights agreement with the holders of its
preferred stock pursuant to which a seller of registrable securities may be
required to indemnify US Unwired and its officers and directors under specified
circumstances.
US Unwired maintains a directors' and officers' liability insurance policy.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
3.1+ Articles of Incorporation of US Unwired Inc. dated as of September 23,
1999.
3.2+ Articles of Amendment to Articles of Incorporation of US Unwired Inc.
dated as of October 25, 1999.
3.3+ By-laws of US Unwired Inc. adopted September 30, 1999.
3.4+ Articles of Organization of Louisiana Unwired, LLC dated as of January
2, 1998.
3.5+ Operating Agreement of Louisiana Unwired, LLC dated as of February 23,
1998.
3.6+ Articles of Incorporation of Unwired Telecom Corp., as amended.
3.7+ By-laws of Unwired Telecom Corp. dated as of January 16, 1997.
3.8+ Articles of Amendment to Articles of Incorporation of US Unwired Inc.
dated as of February 15, 2000.
4.1+ Indenture dated as of October 29, 1999 among US Unwired Inc., the
Guarantors (as defined therein) and State Street Bank and Trust
Company.
4.2+ Pledge and Security Agreement dated as of October 29, 1999 by and
between Louisiana Unwired, LLC and State Street Bank and Trust
Company.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
4.3+ Intercreditor Agreement dated as of October 29, 1999 between CoBank,
ACB and State Street Bank and Trust Company.
4.4+ A/B Exchange Registration Rights Agreement dated as of October 29,
1999 by and among US Unwired Inc.; Louisiana Unwired, LLC; Unwired
Telecom Corp.; Donaldson, Lufkin & Jenrette Securities Corporation;
First Union Securities, Inc. and BNY Capital Markets, Inc.
5.1* Opinion of Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P.
10.1+ Purchase Agreement dated as of October 26, 1999 among US Unwired Inc.;
Louisiana Unwired, LLC; Unwired Telecom Corp.; Donaldson, Lufkin &
Jenrette Securities Corporation; First Union Securities, Inc. and BNY
Capital Markets, Inc.
10.2+ Shareholders Agreement dated as of September 24, 1999 among US Unwired
Inc. and the shareholders of US Unwired Inc. who are signatories
thereto.
10.3+ US Unwired Inc. 1999 Equity Incentive Plan.
10.4 Sprint PCS Management Agreement dated February 8, 1999 among
Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana
Unwired, LLC, including Sprint Trademark and Service Mark License
Agreement and Sprint Spectrum Trademark and Service Mark License
Agreement.
10.5** Sprint PCS Management Agreement dated June 8, 1998 among Wirelessco,
L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired,
LLC, including Sprint Trademark and Service Mark License Agreement and
Sprint Spectrum Trademark and Service Mark License Agreement.
10.6+ Securities Purchase Agreement dated as of October 29, 1999 between US
Unwired Inc. and The 1818 Fund III, L.P.
10.7+ Registration Rights Agreement dated as of October 29, 1999 between US
Unwired Inc. and The 1818 Fund, L.P.
10.8+ Shareholders Agreement dated as of October 29, 1999 by and among US
Unwired Inc., The 1818 Fund III, L.P. and the shareholders of US
Unwired Inc. who are signatories thereto.
10.9+ Headquarters Building Lease between Calcasieu Marine National Bank of
Lake Charles and Mercury, Inc., as amended.
10.10+ Credit Agreement dated as of October 1, 1999 by and among US Unwired
Inc., as Borrower, and CoBank, ACB, as Administrative Agent and a
Lender, First Union Capital Markets Corp., as Syndication Agent and a
Co-Arranger, The Bank of New York, as Documentation Agent and a
Lender, BNY Capital Markets, Inc., as a Co-Arranger, First Union
National Bank, as a Lender, and the other Lenders referred to therein.
10.11+ Management and Construction Agreement dated as of January 1, 1999 by
and between US Unwired Inc. and Louisiana Unwired, LLC.
10.12+ Authorized Dealer Agreement dated as of May 13, 1998 by and between US
Unwired Inc. and Louisiana Unwired, LLC.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
10.13+ Agreement dated as of May 13, 1998 by and between US Unwired Inc. and
Louisiana Unwired, LLC for Louisiana Unwired, LLC to do business as US
Unwired Inc.
10.14+ Billing Agreement dated as of May 13, 1998 by and between Unibill,
Inc. and Louisiana Unwired, LLC.
10.15+ Long Distance Agreement dated as of June 10, 1998 by and between
Cameron Communications Corporation and US Unwired Inc.
10.16+ Omnibus Agreement dated as of September 7, 1999 by and among US
Unwired Inc., EATELCORP, Inc., Fort Bend Telephone Company, XIT
Leasing, Inc., Wireless Management Corporation, Meretel Communications
Limited Partnership and Meretel Wireless, Inc.
10.17+ Securities Purchase Agreement dated as of February 15, 2000 by and
among US Unwired Inc., TCW Leveraged Income Trust, L.P., TCW Leveraged
Income Trust II, L.P., TCW Shared Opportunity Fund II, L.P., TCW
Shared Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund III,
L.P., TCW/Crescent Mezzanine Partners II, L.P., TCW/Crescent Mezzanine
Trust II and Brown University Third Century Fund.
10.18+ First Amendment to Shareholders Agreement dated as of February 15,
2000 by and among US Unwired Inc., The 1818 Fund III, L.P., TCW
Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P., TCW
Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB,
LLC, TCW Shared Opportunity Fund III, L.P., TCW/Crescent Mezzanine
Trust II, TCW/Crescent Mezzanine Partners II, L.P. and Brown
University Third Century Fund.
10.19+ First Amendment to Registration Rights Agreement dated as of February
15, 2000 by and among US Unwired Inc., The 1818 Fund III, L.P., TCW
Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P., TCW
Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB,
LLC, TCW Shared Opportunity Fund III, L.P., TCW/Crescent Mezanine
Trust II, TCW/Crescent Mezzanine Partners II, L.P. and Brown
University Third Century Fund.
10.20** Sprint PCS Management Agreement dated as of January 7, 2000 among
Wirelessco, L.P. Sprint Spectrum L.P., SprintCom, Inc. and Texas
Unwired, including Sprint Trademark and Service Mark License Agreement
and Sprint Spectrum Trademark and Service Mark License Agreement.
10.21 Consent and Agreement dated as of June 23, 1999 between Sprint
Spectrum L.P., SprintCom, Inc., Sprint Communications Company, L.P.,
Wirelessco, L.P. and CoBank, ACB.
10.22 Consent and Agreement dated as of October 26, 1999 between Sprint
Spectrum L.P., SprintCom, Inc., Sprint Communications Company, L.P.,
Wirelessco, L.P. and CoBank, ACB.
</TABLE>
II-5
<PAGE>
<TABLE>
<C> <S>
10.23 First Amendment to Omnibus Agreement dated as of February 9, 2000 by and
among Unwired Telecom Corp., EATELCORP, Inc., Fort Bend Telephone
Company, XIT Leasing, Inc., Wireless Management Corporation, Meretel
Communications Limited Partnership and Meretel Wireless, Inc.
10.24 Telecom Distribution Agreement dated as of January 1, 2000 between
Unwired Telecom Corp., and US Unwired Inc.
10.25 Telecom Contribution Agreement dated as of January 1, 2000 between US
Unwired Inc. and Louisiana Unwired, LLC.
10.26 Loan Agreement dated as of January 1, 2000 by and between Texas Unwired
and Louisiana Unwired, LLC.
21.1+ Subsidiaries of US Unwired Inc.
23.1+ Consent of Ernst & Young LLP.
23.3* Consent of Correro, Fishman, Haygood, Phelps, Walmsley & Casteix, LLP
(included in Exhibit 5.1).
99.1+ Form of Letter of Transmittal.
99.2+ Form of Notice of Guaranteed Delivery.
99.3+ Form of Letter to Beneficial Owners.
99.4+ Form of Letter to Registered Holders and Book-Entry Transfer Facility
Participants.
99.5+ Form of Instruction to Registered Holder and Book-Entry Transfer
Facility Participant from Owner.
</TABLE>
- --------
* To be filed by amendment.
+ Previously filed.
** Confidential treatment requested pursuant to Rule 406 under the Securities
Act.
(b) Financial Statement Schedules
No financial statement schedules are filed because the required information
is not applicable or is included in the consolidated financial statements or
related notes.
Item 22. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the
registrants in the successful defense of any action, suit or proceeding) is
asserted by
II-6
<PAGE>
such director, officer or controlling person in connection with the securities
being registered, the registrants will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issues.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of Lake Charles,
State of Louisiana, on March 1, 2000.
US UNWIRED INC.
/s/ Robert W. Piper
By:
----------------------------------
Robert W. Piper
President and Chief Operating
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on March 1, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William L. Henning, Jr. Chairman of the Board of Directors,
______________________________________ Chief Executive Officer and Director
William L. Henning, Jr. (Principal Executive Officer)
/s/ Jerry E. Vaughn Chief Financial Officer (Principal
______________________________________ Financial Officer)
Jerry E. Vaughn
/s/ Don Loverich Controller (Principal Accounting
______________________________________ Officer)
Don Loverich
/s/ Robert W. Piper President, Chief Operating Officer and
______________________________________ Director
Robert W. Piper
/s/ William L. Henning, Sr. Director
______________________________________
William L. Henning, Sr.
/s/ Thomas G. Henning Director
______________________________________
Thomas G. Henning
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant set forth below has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Lake Charles, State of Louisiana, on March 1, 2000.
LOUISIANA UNWIRED, LLC
/s/ Robert W. Piper
By:
----------------------------------
Robert W. Piper
Manager/President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on March 1, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Robert W. Piper Manager/President (Principal Executive
______________________________________ Officer, Principal Financial Officer
Robert W. Piper and Principal Accounting Officer)
/s/ Thomas G. Henning Assistant Manager/Secretary
______________________________________
Thomas G. Henning
</TABLE>
UNWIRED TELECOM CORP. Member
/s/ Robert W. Piper
By:
-------------------------------
Robert W. Piper, President
CAMERON COMMUNICATIONS Member
CORPORATION
/s/ Thomas G. Henning
By:
-------------------------------
Thomas G. Henning, Vice
President
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant set forth below duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the city of
Lake Charles, State of Louisiana, on March 1, 2000.
UNWIRED TELECOM CORP.
/s/ Robert W. Piper
By:
----------------------------------
Robert W. Piper
President and Chief Operating
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on March 1, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William L. Henning, Jr. Chairman of the Board of Directors,
______________________________________ Chief Executive Officer and Director
William L. Henning, Jr. (Principal Executive Officer)
/s/ Jerry E. Vaughn Chief Financial Officer (Principal
______________________________________ Financial Officer)
Jerry E. Vaughn
/s/ Don Loverich Controller (Principal Accounting
______________________________________ Officer)
Don Loverich
/s/ Robert W. Piper President, Chief Operating Officer and
______________________________________ Director
Robert W. Piper
/s/ William L. Henning, Sr. Director
______________________________________
William L. Henning, Sr.
/s/ Thomas G. Henning Director
______________________________________
Thomas G. Henning
</TABLE>
II-10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Exhibit Pages
------- ---------------------- ------------
<C> <S> <C>
3.1+ Articles of Incorporation of US Unwired Inc. dated as
of September 23, 1999.
3.2+ Articles of Amendment to Articles of Incorporation of
US Unwired Inc. dated as of October 25, 1999.
3.3+ By-laws of US Unwired Inc. adopted September 30, 1999.
3.4+ Articles of Organization of Louisiana Unwired, LLC
dated as of January 2, 1998.
3.5+ Operating Agreement of Louisiana Unwired, LLC dated as
of February 23, 1998.
3.6+ Articles of Incorporation of Unwired Telecom Corp., as
amended.
3.7+ By-laws of Unwired Telecom Corp. dated as of January
16, 1997.
3.8+ Articles of Amendment to Articles of Incorporation of
US Unwired Inc. dated as of February 15, 2000.
4.1+ Indenture dated as of October 29, 1999 among US Unwired
Inc., the Guarantors (as defined therein) and State
Street Bank and Trust Company.
4.2+ Pledge and Security Agreement dated as of October 29,
1999 by and between Louisiana Unwired, LLC and State
Street Bank and Trust Company.
4.3+ Intercreditor Agreement dated as of October 29, 1999
between CoBank, ACB and State Street Bank and Trust
Company.
4.4+ A/B Exchange Registration Rights Agreement dated as of
October 29, 1999 by and among US Unwired Inc.;
Louisiana Unwired, LLC; Unwired Telecom Corp.;
Donaldson, Lufkin & Jenrette Securities Corporation;
First Union Securities, Inc. and BNY Capital Markets,
Inc.
5.1* Opinion of Correro Fishman Haygood Phelps Walmsley &
Casteix, L.L.P.
10.1+ Purchase Agreement dated as of October 26, 1999 among
US Unwired Inc.; Louisiana Unwired, LLC; Unwired
Telecom Corp.; Donaldson, Lufkin & Jenrette Securities
Corporation; First Union Securities, Inc. and BNY
Capital Markets, Inc.
10.2+ Shareholders Agreement dated as of September 24, 1999
among US Unwired Inc. and the shareholders of US
Unwired Inc. who are signatories thereto.
10.3+ US Unwired Inc. 1999 Equity Incentive Plan.
10.4 Sprint PCS Management Agreement dated February 8, 1999
among Wirelessco, L.P., Sprint Spectrum L.P.,
SprintCom, Inc. and Louisiana Unwired, LLC, including
Sprint Trademark and Service Mark License Agreement and
Sprint Spectrum Trademark and Service Mark License
Agreement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Exhibit Pages
------- ---------------------- ------------
<C> <S> <C>
10.5** Sprint PCS Management Agreement dated June 8, 1998
among Wirelessco, L.P., Sprint Spectrum L.P.,
SprintCom, Inc. and Louisiana Unwired, LLC, including
Sprint Trademark and Service Mark License Agreement and
Sprint Spectrum Trademark and Service Mark License
Agreement.
10.6+ Securities Purchase Agreement dated as of October 29,
1999 between US Unwired Inc. and The 1818 Fund III,
L.P.
10.7+ Registration Rights Agreement dated as of October 29,
1999 between US Unwired Inc. and The 1818 Fund, L.P.
10.8+ Shareholders Agreement dated as of October 29, 1999 by
and among US Unwired Inc., The 1818 Fund III, L.P. and
the shareholders of US Unwired Inc. who are signatories
thereto.
10.9+ Headquarters Building Lease between Calcasieu Marine
National Bank of Lake Charles and Mercury, Inc., as
amended.
10.10+ Credit Agreement dated as of October 1, 1999 by and
among US Unwired Inc., as Borrower, and CoBank, ACB, as
Administrative Agent and a Lender, First Union Capital
Markets Corp., as Syndication Agent and a Co-Arranger,
The Bank of New York, as Documentation Agent and a
Lender, BNY Capital Markets, Inc., as a Co-Arranger,
First Union National Bank, as a Lender, and the other
Lenders referred to therein.
10.11+ Management and Construction Agreement dated as of
January 1, 1999 by and between US Unwired Inc. and
Louisiana Unwired, LLC.
10.12+ Authorized Dealer Agreement dated as of May 13, 1998 by
and between US Unwired Inc. and Louisiana Unwired, LLC.
10.13+ Agreement dated as of May 13, 1998 by and between US
Unwired Inc. and Louisiana Unwired, LLC for Louisiana
Unwired, LLC to do business as US Unwired Inc.
10.14+ Billing Agreement dated as of May 13, 1998 by and
between Unibill, Inc. and Louisiana Unwired, LLC.
10.15+ Long Distance Agreement dated as of June 10, 1998 by
and between Cameron Communications Corporation and US
Unwired Inc.
10.16+ Omnibus Agreement dated as of September 7, 1999 by and
among US Unwired Inc., EATELCORP, Inc., Fort Bend
Telephone Company, XIT Leasing, Inc., Wireless
Management Corporation, Meretel Communications Limited
Partnership and Meretel Wireless, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Exhibit Pages
------- ---------------------- ------------
<C> <S> <C>
10.17+ Securities Purchase Agreement dated as of February 15,
2000 by and among US Unwired Inc., TCW Leveraged Income
Trust, L.P., TCW Leveraged Income Trust II, L.P., TCW
Shared Opportunity Fund II, L.P., TCW Shared
Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund
III, L.P., TCW/Crescent Mezzanine Partners II, L.P.,
TCW/Crescent Mezzanine Trust II and Brown University
Third Century Fund.
10.18+ First Amendment to Shareholders Agreement dated as of
February 15, 2000 by and among US Unwired Inc., The
1818 Fund III, L.P., TCW Leveraged Income Trust, L.P.,
TCW Leveraged Income Trust II, L.P., TCW Shared
Opportunity Fund II, L.P., TCW Shared Opportunity Fund
IIB, LLC, TCW Shared Opportunity Fund III, L.P.,
TCW/Crescent Mezzanine Trust II, TCW/Crescent Mezzanine
Partners II, L.P. and Brown University Third Century
Fund.
10.19+ First Amendment to Registration Rights Agreement dated
as of February 15, 2000 by and among US Unwired Inc.,
The 1818 Fund III, L.P., TCW Leveraged Income Trust,
L.P., TCW Leveraged Income Trust II, L.P., TCW Shared
Opportunity Fund II, L.P., TCW Shared Opportunity Fund
IIB, LLC, TCW Shared Opportunity Fund III, L.P.,
TCW/Crescent Mezanine Trust II, TCW/Crescent Mezzanine
Partners II, L.P. and Brown University Third Century
Fund.
10.20** Sprint PCS Management Agreement dated as of January 7,
2000 among Wirelessco, L.P. Sprint Spectrum L.P.,
SprintCom, Inc. and Texas Unwired, including Sprint
Trademark and Service Mark License Agreement and Sprint
Spectrum Trademark and Service Mark License Agreement.
10.21 Consent and Agreement dated as of June 23, 1999 between
Sprint Spectrum L.P., SprintCom, Inc., Sprint
Communications Company, L.P., Wirelessco, L.P. and
CoBank, ACB.
10.22 Consent and Agreement dated as of October 26, 1999
between Sprint Spectrum L.P., SprintCom, Inc., Sprint
Communications Company, L.P., Wirelessco, L.P. and
CoBank, ACB.
10.23 First Amendment to Omnibus Agreement dated as of
February 9, 2000 by and among Unwired Telecom Corp.,
EATELCORP, Inc., Fort Bend Telephone Company, XIT
Leasing, Inc., Wireless Management Corporation, Meretel
Communications Limited Partnership and Meretel
Wireless, Inc.
10.24 Telecom Distribution Agreement dated as of January 1,
2000 between Unwired Telecom Corp., and US Unwired Inc.
10.25 Telecom Contribution Agreement dated as of January 1,
2000 between US Unwired Inc. and Louisiana Unwired,
LLC.
10.26 Loan Agreement dated as of January 1, 2000 by and
between Texas Unwired and Louisiana Unwired, LLC.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Exhibit Pages
------- ---------------------- ------------
<C> <S> <C>
21.1+ Subsidiaries of US Unwired Inc.
23.1+ Consent of Ernst & Young LLP.
23.3* Consent of Correro, Fishman, Haygood, Phelps, Walmsley
& Casteix, LLP (included in Exhibit 5.1).
99.1+ Form of Letter of Transmittal.
99.2+ Form of Notice of Guaranteed Delivery.
99.3+ Form of Letter to Beneficial Owners.
99.4+ Form of Letter to Registered Holders and Book-Entry
Transfer Facility Participants.
99.5+ Form of Instruction to Registered Holder and Book-Entry
Transfer Facility Participant from Owner.
</TABLE>
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*To be filed by amendment.
+Previously filed.
**Confidential treatment requested pursuant to Rule 406 under the Securities
Act.
<PAGE>
EXHIBIT 10.4
SPRINT PCS
MANAGEMENT AGREEMENT
Between
WIRELESSCO, L.P.
SPRINT SPECTRUM L.P.
SPRINTCOM, INC.
and
LOUISIANA UNWIRED, L.L.C.
Dated as of February 8, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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1. MANAGER.................................................................................. 2
1.1 Hiring of Manager.............................................................. 2
1.2 Program Requirements........................................................... 3
1.3 Vendor Purchase Agreements..................................................... 3
1.4 Interconnection................................................................ 3
1.5 Seamlessness................................................................... 4
1.6 Forecasting.................................................................... 4
1.7 Financing...................................................................... 4
1.8 Ethical Conduct and Related Covenants.......................................... 4
2. BUILD-OUT OF NETWORK..................................................................... 4
2.1 Build-out Plan................................................................. 4
2.2 Compliance with Regulatory Rules............................................... 4
2.3 Exclusivity of Service Area.................................................... 5
2.4 Restriction.................................................................... 5
2.5 Coverage Enhancement........................................................... 6
2.6 Purchase of Assets by Manager.................................................. 7
2.7 Microwave Relocation........................................................... 8
2.8 Determination of pops.......................................................... 8
3. PRODUCTS AND SERVICES; IXC SERVICES...................................................... 8
3.1 Sprint PCS Products and Services............................................... 8
3.2 Other Products and Services.................................................... 8
3.3 Cross-selling with Sprint...................................................... 9
3.4 IXC Services................................................................... 9
3.5 Resale of Products and Services................................................ 10
3.5.1 Mandatory Resale of Products and Services............................... 10
3.5.2 Voluntary Resale of Products and Services............................... 10
3.6 Non-competition................................................................ 10
3.7 Right of Last Offer............................................................ 11
4. MARKETING AND SALES ACTIVITIES............................................................ 11
4.1 Sprint PCS National or Regional Distribution Program Requirements.............. 11
4.1.1 Territorial Limitations on Manager's Distribution Activities............ 12
4.1.2 Settlement of Equipment Sales........................................... 12
4.1.3 Use of Third-Party Distributors......................................... 12
4.2 Sprint PCS National Accounts Program Requirements.............................. 13
4.3 Sprint PCS Roaming and Inter Service Area Program Requirements................. 13
4.4 Pricing........................................................................ 13
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4.5 Home Service Area.............................................................. 14
5. USE OF BRANDS............................................................................ 14
5.1 Use of Brands.................................................................. 14
5.2 Conformance to Marketing Communications Guidelines............................. 15
5.3 Joint Marketing With Third Parties............................................. 15
5.4 Prior Approval of Use of Brands................................................ 16
5.5 Duration of Use of Brand....................................................... 16
6. ADVERTISING AND PROMOTION................................................................ 17
6.1 National Advertising and Promotion............................................. 17
6.2 In-Territory Advertising and Promotion......................................... 17
6.3 Review of Advertising and Promotion Campaigns.................................. 17
6.4 Public Relations............................................................... 18
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS................................................ 18
7.1 Conformance to Sprint PCS Technical Program Requirements....................... 18
7.2 Establishment of Sprint PCS Technical Program Requirements..................... 18
7.3 Handoff to Adjacent Networks................................................... 18
8. SPRINT PCS CUSTOMER SERVICE.............................................................. 19
8.1 Compliance With Sprint PCS Customer Service Program Requirements............... 19
9. SPRINT PCS PROGRAM REQUIREMENTS.......................................................... 19
9.1 Program Requirements Generally................................................ 19
9.2 Amendments to Program Requirements............................................. 19
9.3 Manager's Right to Request Review of Changes................................... 21
9.4 Sprint PCS' Right to Implement Changes......................................... 21
9.5 Rights of Inspection........................................................... 21
9.6 Manager's Responsibility to Interface with Sprint PCS.......................... 22
10. FEES..................................................................................... 22
10.1 Fees and Payments.............................................................. 22
10.1.1 Fee Based on Collected Revenues........................................ 22
10.1.2 Payment of Universal Service Funds..................................... 22
10.1.3 Inter Service Area Fees................................................ 22
10.1.4 Interconnect Fees...................................................... 23
10.1.5 Outbound Roaming Fees.................................................. 23
10.1.6 Reimbursements......................................................... 23
10.2 Monthly True Up................................................................ 23
10.3 Taxes.......................................................................... 24
10.4 Collected Revenues Definition.................................................. 24
</TABLE>
ii
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10.5 Late Payments.................................................................. 25
10.6 Setoff Right If Failure To Pay Amounts Due..................................... 25
11. TERM; TERMINATION; EFFECT OF TERMINATION................................................. 26
11.1 Initial Term................................................................... 26
11.2 Renewal Terms.................................................................. 26
11.2.1 Non-renewal Rights of Manager.......................................... 26
11.2.1.1 Manager's Put Right.......................................... 26
11.2.1.2 Manager's Purchase Right..................................... 27
11.2.2 Non-renewal Rights of Sprint PCS....................................... 27
11.2.2.1 Sprint PCS' Purchase Right................................... 28
11.2.2.2 Sprint PCS' Put Right........................................ 29
11.2.3 Extended Term Awaiting FCC Approval.................................... 29
11.3 Events of Termination.......................................................... 29
11.3.1 Termination of License................................................ 29
11.3.2 Breach of Agreement: Payment of Money Terms........................... 30
11.3.3 Breach of Agreement: Other Terms...................................... 30
11.3.4 Regulatory Considerations.............................................. 30
11.3.5 Termination of Trademark License Agreements............................ 30
11.3.6 Financing Considerations............................................... 31
11.3.7 Bankruptcy of a Party.................................................. 31
11.4 Effect of an Event of Termination.............................................. 32
11.5 Manager's Event of Termination Rights and Remedies............................. 33
11.5.1 Manager's Put Right.................................................... 34
11.5.2 Manager's Purchase Right............................................... 34
11.5.3 Manager's Action for Damages or Other Relief........................... 35
11.6 Sprint PCS' Event of Termination Rights and Remedies........................... 35
11.6.1 Sprint PCS' Purchase Right............................................. 35
11.6.2 Sprint PCS' Put Right.................................................. 36
11.6.3 Sprint PCS' Right to Cause A Cure...................................... 37
11.6.4 Sprint PCS' Action for Damages or Other Relief......................... 39
11.7 Determination of Entire Business Value......................................... 39
11.7.1 Appointment of Appraisers.............................................. 39
11.7.2 Manager's Operating Assets............................................. 39
11.7.3 Entire Business Value.................................................. 40
11.7.4 Calculation of Entire Business Value................................... 40
11.8 Closing Terms and Conditions................................................... 41
11.9 Contemporaneous and Identical Application...................................... 41
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE................................... 41
12.1 Books and Records.............................................................. 41
12.1.1 General................................................................ 41
12.1.2 Audit.................................................................. 41
</TABLE>
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<TABLE>
<S> <C>
12.1.3 Contesting an Audit.................................................... 42
12.2 Confidential Information....................................................... 43
12.3 Insurance...................................................................... 44
12.3.1 General................................................................ 44
12.3.2 Waiver of Subrogation.................................................. 44
12.3.3 Certificates of Insurance.............................................. 45
13. INDEMNIFICATION.......................................................................... 45
13.1 Indemnification by Sprint PCS.................................................. 45
13.2 Indemnification by Manager..................................................... 45
13.3 Procedure...................................................................... 46
13.3.1 Notice................................................................. 46
13.3.2 Defense by Indemnitor.................................................. 46
13.3.3 Defense by Indemnitee.................................................. 46
13.3.4 Costs.................................................................. 47
14. DISPUTE RESOLUTION....................................................................... 47
14.1 Negotiation.................................................................... 47
14.2 Unable to Resolve.............................................................. 47
14.3 Attorneys and Intent........................................................... 48
14.4 Tolling of Cure Periods........................................................ 48
15. REPRESENTATIONS AND WARRANTIES........................................................... 49
15.1 Due Incorporation or Formation; Authorization of Agreements.................... 49
15.2 Valid and Binding Obligation................................................... 49
15.3 No Conflict; No Default........................................................ 49
15.4 Litigation..................................................................... 49
16. REGULATORY COMPLIANCE.................................................................... 49
16.1 Regulatory Compliance.......................................................... 49
16.2 FCC Compliance................................................................. 50
16.3 Marking and Lighting........................................................... 52
16.4 Regulatory Notices............................................................. 52
16.5 Regulatory Policy-Setting Proceedings.......................................... 52
17. GENERAL PROVISIONS....................................................................... 53
17.1 Notices........................................................................ 53
17.2 Construction................................................................... 53
17.3 Headings....................................................................... 53
17.4 Further Action................................................................. 53
17.5 Counterpart Execution.......................................................... 53
17.6 Specific Performance........................................................... 53
17.7 Entire Agreement; Amendments................................................... 53
</TABLE>
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17.8 Limitation on Rights of Others................................................. 54
17.9 Waivers........................................................................ 54
17.9.1 Waivers--General....................................................... 54
17.9.2 Waivers--Manager....................................................... 54
17.9.3 Force Majeure.......................................................... 54
17.10 Waiver of Jury Trial........................................................... 55
17.11 Binding Effect................................................................. 55
17.12 Governing Law.................................................................. 55
17.13 Severability................................................................... 55
17.14 Limitation of Liability........................................................ 55
17.15 No Assignment; Exceptions...................................................... 56
17.15.1 General............................................................... 56
17.15.2 Assignment Right of Manager to Financial Lender....................... 56
17.15.3 Change of Control Rights.............................................. 57
17.15.4 Right of First Refusal................................................ 59
17.15.5 Transfer of Sprint PCS Network........................................ 59
17.16 Provision of Services by Sprint Spectrum....................................... 59
17.17 Number Portability............................................................. 59
17.18 Disclaimer of Agency........................................................... 60
17.19 Independent Contractors........................................................ 60
17.20 Expense........................................................................ 60
17.21 General Terms.................................................................. 60
17.22 Conflicts with Other Agreements................................................ 61
17.23 Survival Upon Termination...................................................... 61
17.24 Announced Transaction.......................................................... 61
17.25 Additional Terms and Provisions................................................ 61
17.26 Master Signature Page.......................................................... 61
17.27 Agent Authorization............................................................ 61
</TABLE>
v
<PAGE>
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made February 8th, 1998, between
WirelessCo, L.P., a Delaware limited partnership, Sprint Spectrum L.P., a
Delaware limited partnership, SprintCom, Inc., a Kansas corporation and
Louisiana Unwired, L.L.C., a Louisiana limited liability company (but not any
Related Party) ("Manager"). The definitions for this agreement are set forth on
the "Schedule of Definitions".
-----------------------
RECITALS
A. Sprint Spectrum L.P., a Delaware limited partnership, WirelessCo,
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation,
American PCS Communications, LLC, a Delaware limited liability company, APC PCS,
LLC, a Delaware limited liability company, PhillieCo Partners I, L.P., a
Delaware limited partnership, PhillieCo, L.P., a Delaware limited partnership,
Cox Communications PCS, L.P., a Delaware limited partnership, and Cox PCS
License, L.L.C., a Delaware limited liability company, hold and exercise,
directly or indirectly, control over licenses to operate wireless services
networks.
B. The entity or entities named in Recital A that execute this
agreement hold, directly or indirectly, the Licenses for the areas identified on
the Service Area Exhibit and are referred to in this agreement as "Sprint PCS."
--------------------
Because this agreement addresses the rights and obligations of each license
holder with respect to each of its Licenses, each reference in this agreement to
"Sprint PCS" refers to the entity that owns, directly or indirectly, the License
referred to in that particular instance or application of the provision of this
agreement. If Sprint Spectrum does not own the License, it will provide on
behalf of Sprint PCS most or all of the services required under this agreement
to be provided by Sprint PCS.
C. The Sprint PCS business was established to use the Sprint PCS
Network, a nationwide wireless services network, to offer seamless, integrated
voice and data services using wireless technology. The Sprint PCS Network offers
the services to customers under the Brands.
D. This agreement, therefore, includes provisions defining Manager's
obligations with respect to:
. The design, construction and management of the Service Area Network;
. Offering and promoting products and services designated by Sprint PCS
as the Sprint PCS Products and Services of the Sprint PCS Network;
<PAGE>
. Adherence to Program Requirements established by Sprint PCS to ensure
seamless interoperability throughout the Sprint PCS Network and
uniform and consistent quality of product and service offerings;
. Adherence to Customer Service Program Requirements established by
Sprint PCS to ensure consistency in interactions with customers
(including billing, customer care, etc.); and
. Adherence to Program Requirements relating to the marketing, promotion
and distribution of Sprint PCS Products and Services.
E. The Sprint PCS Network is expanding with the assistance of
"managers" (companies such as Manager that manage Service Area Networks that
offer Sprint PCS Products and Services under a license owned by Sprint PCS or
one of the entities named in Recital A) and "affiliates" (companies that manage
Service Area Networks that offer Sprint PCS Products and Services under a
license owned by the affiliate).
F. Manager wishes to enter into this agreement to help construct,
operate, manage and maintain for Sprint PCS a portion of the Sprint PCS Network
in the Service Area. Sprint PCS has determined that permitting Manager to manage
a portion of the Sprint PCS Network in accordance with the terms of this
agreement will facilitate Sprint PCS' expansion of fully digital, wireless
coverage under the License and will enhance the wireless service for customers
of Sprint PCS.
G. All managers of a portion of the business of Sprint PCS,
including Manager, must construct facilities and operate in accordance with
Program Requirements established by Sprint PCS with respect to certain aspects
of the development and offering of wireless products and services and the
presentation of the products and services to customers, to establish and operate
the Sprint PCS Network successfully by providing seamless, integrated voice and
data services, using wireless technology.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. MANAGER
1.1 Hiring of Manager. Sprint PCS hires Manager:
2
<PAGE>
(a) to construct and manage the Service Area Network in compliance
with the License and in accordance with the terms of this agreement;
(b) to distribute continuously during the Term the Sprint PCS
Products and Services and to establish distribution channels in the Service
Area;
(c) to conduct continually during the Term advertising and promotion
activities in the Service Area (including mutual decisions to "go dark", with
respect to advertising and promotion activities, for reasonable periods of
time); and
(d) to manage that portion of the customer base of Sprint PCS that
has the NPA-NXXs assigned to the Service Area Network.
Sprint PCS has the right to unfettered access to the Service Area Network
to be constructed by Manager under this agreement. The fee to be paid to
Manager by Sprint PCS under Section 10 is for all obligations of Manager under
this agreement.
1.2 Program Requirements. Manager must adhere to the Program Requirements
established by Sprint PCS and as modified from time to time, to ensure uniform
and consistent operation of all wireless systems within the Sprint PCS Network
and to present the Sprint PCS Products and Services to customers in a uniform
and consistent manner under the Brands.
1.3 Vendor Purchase Agreements. Manager may participate in discounted
volume-based pricing on wireless-related products and services and in the
warranties Sprint PCS receives from its vendors, as is commercially reasonable
and to the extent permitted by applicable procurement agreements (e.g.,
agreements related to network infrastructure equipment, subscriber equipment,
interconnection, and collocation). Sprint PCS will use commercially reasonable
efforts to obtain for managers the same price Sprint PCS receives from vendors;
this does not prohibit Sprint PCS from entering into procurement agreements that
do not provide managers with the Sprint PCS prices.
Manager must purchase subscriber and infrastructure equipment from a Sprint
PCS approved list of products, which will include a selection from a variety of
manufacturers. Where required, the products must include proprietary software
developed by the manufacturers for Sprint PCS or by Sprint PCS to allow seamless
interoperability in the Sprint PCS Network. Sprint PCS or the vendor may require
Manager to execute a separate license agreement for the software prior to
Manager's use of the software.
Manager may only make purchases under this Section 1.3 for items to be used
exclusively in the Service Area (e.g., Manager may not purchase base stations
under a Sprint PCS contract for use in a system not affiliated with Sprint PCS).
3
<PAGE>
1.4 Interconnection. If Manager desires to interconnect a portion of the
Service Area Network with another carrier and Sprint PCS can interconnect with
that carrier at a lower rate, then to the extent permitted by applicable laws,
tariffs and contracts, Sprint PCS may arrange for the interconnection under its
agreements with the carrier and if it does so, Sprint PCS will bill the
interconnection fees to Manager.
1.5 Seamlessness. Manager will design and operate its systems, platforms,
products and services in the Service Area and the Service Area Network so as to
seamlessly interface them into the Sprint PCS Network.
1.6 Forecasting. Manager and Sprint PCS will work cooperatively to
generate mutually acceptable forecasts of important business metrics including
traffic volumes, handset sales, subscribers and Collected Revenues for the
Sprint PCS Products and Services. The forecasts are for planning purposes only
and do not constitute Manager's obligation to meet the quantities forecast.
1.7 Financing. The construction and operation of the Service Area Network
requires a substantial financial commitment by Manager. The manner in which
Manager will finance the build-out of the Service Area Network and provide the
necessary working capital to operate the business is described in detail on
Exhibit 1.7. Manager will allow Sprint PCS an opportunity to review before
- -----------
filing any registration statement or prospectus or any amendment or supplement
thereto before distributing any offering memorandum or amendment or supplement
thereto, and agrees not to file or distribute any such document if Sprint PCS
reasonably objects in writing on a timely basis to any portion of the document
that refers to Sprint PCS, its Related Parties, their respective businesses,
this agreement or the Services Agreement.
1.8 Ethical Conduct and Related Covenants. Each party must perform its
obligations under this agreement in a diligent, legal, ethical, and professional
manner.
2. BUILD-OUT OF NETWORK
2.1 Build-out Plan. Manager will build-out the Service Area Network in
the Service Area in accordance with a Build-out Plan. Sprint PCS and Manager
will jointly develop each Build-out Plan, except the initial Build-out Plan and
any modifications, additions or expansions of the Build-out Plan will be subject
to prior written approval by Sprint PCS. Manager will report to Sprint PCS its
performance regarding the critical milestones included in the Build-out Plan on
a periodic basis as mutually agreed to by the parties, but no less frequently
than quarterly. The Build-out Plan and the Service Area Network as built must
comply with Sprint PCS Program Requirements and federal and local regulatory
requirements.
4
<PAGE>
Sprint PCS approves the Build-out Plan in effect as of the date of this
agreement, which Build-out Plan is attached as Exhibit 2.1. Each new or amended
-----------
Build-out Plan will also become part of Exhibit 2.1.
-----------
2.2 Compliance with Regulatory Rules. During the build-out of the Service
Area Network, Sprint PCS authorizes Manager to make all filings with regulatory
authorities regarding the build-out, including filings with the Federal Aviation
Administration, environmental authorities, and historical districts. Manager
may further delegate its duty under this Section 2.2 to a qualified site
acquisition company. Manager must ensure that a copy of every filing is given
to Sprint PCS. Manager must ensure that Sprint PCS is notified in writing of
any contact by a regulatory agency including the FCC with Manager or Manager's
site acquisition company regarding any filing. Sprint PCS has the right to
direct any proceeding, inquiry, dispute, appeal or other activity with a
regulatory or judicial authority regarding any filing made on behalf of Sprint
PCS. Manager will amend, modify, withdraw, refile and otherwise change any
filing as Sprint PCS requires. Notwithstanding the preceding sentences in this
Section 2.2, and in conjunction with Section 16, Sprint PCS is solely
responsible for making any and all filings with the FCC regarding the build-out.
Manager will notify Sprint PCS of any activity, event or condition related to
the build-out that might require an FCC filing.
2.3 Exclusivity of Service Area. Manager will be the only person or
entity that is a manager or operator for Sprint PCS with respect to the Service
Area and neither Sprint PCS nor any of its Related Parties will own, operate,
build or manage another wireless mobility communications network in the Service
Area so long as this agreement remains in full force and effect and there is no
Event of Termination that has occurred giving Sprint PCS the right to terminate
this agreement, except that:
(a) Sprint PCS may cause Sprint PCS Products and Services to be sold
in the Service Area through the Sprint PCS National Accounts Program
Requirements and Sprint PCS National or Regional Distribution Program
Requirements;
(b) A reseller of Sprint PCS Products and Services may sell its
products and services in the Service Area so long as such resale is not contrary
to the terms and conditions of this agreement; and
(c) Sprint PCS and its Related Parties may engage in the activities
described in Sections 2.4(a) and 2.4(b) with Manager in the geographic areas
within the Service Area in which Sprint PCS or any of its Related Parties owns
an incumbent local exchange carrier as of the date of this agreement.
2.4 Restriction. In geographic areas within the Service Area in which
Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier as of the date of this
5
<PAGE>
agreement, Manager must not offer any Sprint PCS Products or Services
specifically designed for the competitive local exchange market ("fixed wireless
local loop"), except that:
(a) Manager may designate the local exchange carrier that is a
Related Party of Sprint PCS to be the exclusive distributor of the fixed
wireless local loop product in the territory served by the local exchange
carrier, even if a portion of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product under the
terms and conditions specified by Sprint PCS (e.g., including designation by
Sprint PCS of an exclusive distribution agent for the territory).
This restriction exists with respect to a particular geographic area only so
long as Sprint PCS or its Related Party owns such incumbent local exchange
carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS
Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on
Exhibit 2.4.
- -----------
2.5 Coverage Enhancement. Sprint PCS and Manager agree that maintaining a
high standard of customer satisfaction regarding network capacity and footprint
is a required element of the manager and affiliate programs. Sprint PCS intends
to expand network coverage to build all cells that cover at least 5,000 pops and
all interstate and major highways in the areas not operated by Manager or Other
Managers. Accordingly, Manager agrees to build-out New Coverage when directed
by Sprint PCS as set forth in this Section 2.5. Sprint PCS agrees not to
require any New Coverage build-out during the first two years of this Agreement,
nor any New Coverage that exceeds the capacity and footprint parameters that
Sprint PCS has adopted for all of its comparable markets.
Sprint PCS will give to Manager a written notice of any New Coverage
within the Service Area that Sprint PCS decides should be built-out. Such
notice will include an analysis completed by Sprint PCS demonstrating that such
required build-out should be economically advantageous to Manager. Such
analysis will be generated in good faith and will be based on then-currently
available information, however Sprint PCS makes no warranties or representations
regarding the accuracy of, nor will Sprint PCS be bound by, or guarantee the
accuracy of, such analysis. Manager must confirm to Sprint PCS within 90 days
after receipt of the notice that Manager will build-out the New Coverage and
deliver to Sprint PCS with such confirmation Manager's proposed amendment to the
Build-out Plan and a description of the manner and timing in which it will
finance such build-out.
If Manager confirms, within such 90-day period, its intention to
build-out the New Coverage, then Manager and Sprint PCS will diligently finalize
an amendment to the Build-out Plan and proceed as set forth in Sections 2.1 and
2.2. The amended Build-out Plan
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will contain critical milestones that provide Manager a commercially reasonable
period in which to construct and implement the New Coverage. In determining what
constitutes a "commercially reasonable period" as used in this paragraph, the
parties will consider several factors, including local zoning processes and
other legal requirements, weather conditions, equipment delivery schedules, the
need to arrange additional financing, and other construction already in progress
by Manager. Manager will construct and operate the New Coverage in accordance
with the terms of this Agreement, and the New Coverage will be included in the
Service Area Network for purposes of this agreement.
If Manager fails to confirm, within such 90-day period, its intention
to build-out the New Coverage, declines to complete such build-out, or fails to
complete such build-out in accordance with the amended Build-out Plan, then an
Event of Termination will be deemed to have occurred under Section 11.3.3,
Manager will not have a right to cure such breach, and Sprint PCS may exercise
its rights and remedies under Section 11.2.2.1.
Notwithstanding the preceding paragraphs in this Section 2.5, the
capacity and footprint parameters contained in the amended Build-out Plan will
not be required to exceed the parameters adopted by Sprint PCS in building out
all of its comparable service areas, unless such build-out relates to an
obligation regarding the Service Area Network mandated by law. When necessary
for reasons related to new technical standards, new equipment or strategic
reasons, Sprint PCS can require Manager to build-out the New Coverage
concurrently with Sprint PCS' build-out, in which case Sprint PCS will reimburse
Manager for its costs and expenses if Sprint PCS discontinues its related build-
out.
If Sprint PCS requires build-out of New Coverage that will:
(a) cause the Manager to spend an additional amount greater than 5%
of Manager's shareholder's equity or capital account plus Manager's long-term
debt (i.e., notes that mature more than one year from the date issued), as
reflected on Manager's books; or
(b) cause the long-term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net present
value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the required New Coverage.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the New
Coverage. If after the review and decision by the Vice President or designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
still requires Manager to complete the New Coverage following the Chief
Officer's review, then if Manager and Sprint PCS fail to agree to an amended
Build-out Plan within 15
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days after completion of the reconsideration process described above in this
paragraph or the end of the 90-day period described in the second paragraph of
this Section 2.5, whichever occurs first, then an Event of Termination will be
deemed to have occurred under Section 11.3.3, Manager will not have a right to
cure such breach, and Sprint PCS may exercise its rights and remedies under
Section 11.2.2.1.
2.6 Purchase of Assets by Manager. If Sprint PCS has assets located in
the Service Area that Manager could reasonably use in its construction of the
Service Area Network and if Sprint PCS is willing to sell such assets, then
Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to
Manager the assets in accordance with the terms and conditions of the asset
purchase agreement attached as Exhibit 2.6.
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2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one
carrier at a time. The parties will share equally all costs associated with
clearing spectrum under this Section 2.7.
2.8 Determination of pops. If any provision in this agreement requires
the determination of pops in a given area, then the pops will be determined
using the census block group pop forecast then used by Sprint PCS, except that a
different forecast will be used for any FCC filing and in preparing the Build-
out Plan if required by the FCC. Sprint PCS presently uses the forecast of
Equifax/NDS, but it may choose in its sole discretion to use another service
that provides comparable data.
3. PRODUCTS AND SERVICES; IXC SERVICES
3.1 Sprint PCS Products and Services. Manager must offer for sale,
promote and support all Sprint PCS Products and Services within the Service
Area, unless the parties otherwise agree in advance in writing. Within the
Service Area, Manager may only sell, promote and support wireless products and
services that are Sprint PCS Products and Services or are other products and
services authorized under Section 3.2. The Sprint PCS Products and Services as
of the date of this agreement are attached as Exhibit 3.1. Sprint PCS may modify
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the Sprint PCS Products and Services from time to time in its sole discretion by
delivering to Manager a new Exhibit 3.1. If Sprint PCS begins offering
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nationally a Sprint PCS Product or Service that is a Manager's Product or
Service, such Manager's Product or Service will become a Sprint PCS Product or
Service under this agreement.
3.2 Other Products and Services. Manager may offer wireless products and
services that are not Sprint PCS Products and Services, on the terms Manager
determines, if the offer of the additional products and services:
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(a) does not violate the obligations of Manager under this agreement;
(b) does not cause distribution channel conflict with or consumer
confusion regarding Sprint PCS' regional and national offerings of Sprint PCS
Products and Services;
(c) complies with the Trademark License Agreements; and
(d) does not materially impede the development of the Sprint PCS
Network.
Manager will not offer any products or services under this Section 3.2 that
are confusingly similar to Sprint PCS Products and Services. Manager must
request that Sprint PCS determine whether Sprint PCS considers a product or
service to be confusingly similar to any Sprint PCS Products and Services by
providing advance written notice to Sprint PCS that describes those products and
services that could be interpreted to be confusingly similar to Sprint PCS
Products and Services. If Sprint PCS fails to provide a response to Manager
within 30 days after receiving the notice, then the products and services are
deemed to create confusion with the Sprint PCS Products and Services and the
request therefore rejected. In rejecting any request Sprint PCS must provide
the reasons for the rejection. If the rejection is based on Sprint PCS' failure
to respond within 30 days and Manager requests an explanation for the deemed
rejection, then Sprint PCS must provide within 30 days the reasons for the
rejection.
3.3 Cross-selling with Sprint. Manager and Sprint and Sprint's Related
Parties may enter into arrangements to sell Sprint's services, including long
distance service (except those long distance services governed by Section 3.4),
Internet access, customer premise equipment, prepaid phone cards, and any other
services that Sprint or its Related Parties make available from time to time.
Sprint's services may be packaged with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet access or
competitive local telephone services including prepaid phone cards, of third
parties (other than Manager's Related Parties), Manager will give Sprint the
right of last offer to provide those services on the same terms and conditions
as the offer to which Manager is prepared to agree, subject to the terms of any
existing agreements Manager was subject to prior to execution of this agreement.
If Sprint sells Sprint PCS Products and Services in the Service Area,
Manager will provide such Sprint PCS Products and Services to such customers in
accordance with the terms and conditions of the Sprint PCS National or Regional
Distribution Program Requirements.
3.4 IXC Services. Manager must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale rates.
Long distance telephone
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calls are those calls between the local calling area for the Service Area
Network and areas outside the local calling area. The local calling area will be
defined by mutual agreement of Sprint PCS and Manager. If the parties cannot
agree on the extent of the local calling area they will resolve the matter
through the dispute resolution process in Section 14. Any arrangement must have
terms at least as favorable to Manager (in all material respects) as those
offered by Sprint to any wholesale customer of Sprint in comparable
circumstances (taking into consideration volume, traffic patterns, etc.). If
Manager is bound by an agreement for these services and the agreement was not
made in anticipation of this agreement, then the requirements of this Section
3.4 do not apply during the term of the other agreement. If the other agreement
terminates for any reason then the requirements of this Section 3.4 do apply.
3.5 Resale of Products and Services
3.5.1 Mandatory Resale of Products and Services. Sprint PCS is
subject to FCC rules that require it to allow its service plans to be resold by
a purchaser of the service plan. Sprint PCS will not grant the purchaser of a
service plan the right to use any of the support services offered by Sprint PCS,
including customer care, billing, collection, and advertising, nor the right to
use the Brands. The reseller only has the right to use the service purchased.
Consequently, Manager agrees not to interfere with any purchaser of the Sprint
PCS Products or Services who resells the service plans in accordance with this
agreement and applicable law. Manager will notify purchaser that the purchaser
does not have a right to use the Brands or Sprint PCS' support services. In
addition, Manager will notify Sprint PCS if it reasonably believes a reseller of
retail service plans is using the support services or Brands.
3.5.2 Voluntary Resale of Products and Services. Sprint PCS may
choose to offer a resale product under which resellers will resell Sprint PCS
Products and Services under brand names other than the Brands, except Sprint PCS
may permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The resellers
may also provide their own support services (e.g., customer care and billing) or
may purchase the support services from Sprint PCS.
If Sprint PCS chooses to offer a voluntary resale product, it will adopt a
program that will be a Program Requirement under this agreement and that
addresses the manner in which Manager and Other Managers interact with the
resellers. Manager must agree to comply with the terms of the program,
including its pricing provisions, if Manager wants handsets of subscribers of
resellers with NPA-NXXs of Manager to be activated. Usage of telecommunications
services while in the Service Area by subscribers of resellers with NPA-NXXs
from outside the Service Area will be subject to the pricing provisions of the
Sprint PCS Roaming and Inter Service Area Program for roaming and inter service
area pricing between Manager and Sprint PCS unless Manager agrees in writing to
different pricing.
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Except as required under the regulations and rules concerning mandatory
resale, Manager may not sell Sprint PCS Products and Services for resale unless
Sprint PCS consents to such sales in advance in writing.
3.6 Non-competition. Neither Manager nor any of its Related Parties may
offer Sprint PCS Products and Services outside of the Service Area without the
prior written approval of Sprint PCS.
Within the Service Area, Manager and Manager's Related Parties may offer,
market or promote telecommunications products or services only under the
following brands:
(a) products or services with the Brands;
(b) other products and services approved under Section 3.2;
(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related
Parties,
except no brand of a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business may be used by Manager or Manager's Related
Parties on these products and services.
If Manager or any of its Related Parties has licenses to provide broadband
personal communication services outside the Service Area, neither Manager nor
such Related Party may utilize the spectrum to offer Sprint PCS Products and
Services without prior written consent from Sprint PCS. Additionally, when
Manager's customers from inside the Service Area travel or roam to other
geographic areas, Manager will route the customers' calls, both incoming and
outgoing, according to the Sprint PCS Network Roaming and Inter Service Area
Program Requirements, without regard to any wireless networks operated by
Manager or its Related Parties. For example, Manager will program the preferred
roaming list for handsets sold in the Service Area to match the Sprint PCS
preferred roaming list.
3.7 Right of Last Offer. Manager will offer to Sprint the right to make
to Manager the last offer to provide backhaul and transport services for call
transport for the Service Area Network, if Manager decides to use third parties
for backhaul and transport services rather than self-provisioning the services
or purchasing the services from Related Parties of Manager. Sprint will have a
reasonable time to respond to Manager's request for last offer to provide
backhaul and transport pricing and services, which will be no greater than 5
Business Days after receipt of the request for the services and pricing from
Manager.
If Manager has an agreement in effect as of the date of this agreement for
these services and the agreement was not made in anticipation of this agreement,
then the requirements of this
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Section 3.7 do not apply during the term of the other agreement. If the other
agreement terminates for any reason then the requirements of this Section 3.7 do
apply.
4. MARKETING AND SALES ACTIVITIES
4.1 Sprint PCS National or Regional Distribution Program Requirements.
During the term of this agreement, Manager must participate in any Sprint PCS
National or Regional Distribution Program (as in effect from time to time), and
will pay or receive compensation for its participation in accordance with the
terms and conditions of that program. The Sprint PCS National or Regional
Distribution Program Requirements in effect as of the date of this agreement are
attached as Exhibit 4.1.
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4.1.1 Territorial Limitations on Manager's Distribution
Activities. Neither Manager nor any of its Related Parties will market, sell or
distribute Sprint PCS Products and Services outside of the Service Area, except:
(a) as otherwise agreed upon by the parties in advance in
writing; or
(b) Manager may place advertising in media that has distribution
outside of the Service Area, so long as that advertising is intended by Manager
to reach primarily potential customers within the Service Area.
4.1.2 Settlement of Equipment Sales. Sprint PCS will establish a
settlement policy and process that will be included in the Sprint PCS National
or Regional Distribution Program Requirements to:
(a) reconcile sales of subscriber equipment made in the service
areas of Sprint PCS or Other Managers of Sprint PCS, that result in activations
in the Service Area; and
(b) reconcile sales of subscriber equipment made in the Service
Area that result in activations in service areas of Sprint PCS or Other
Managers.
In general, the policy will provide that the party in whose service area
the subscriber equipment is activated will be responsible for the payment of any
subsidy (i.e., the difference between the price paid to the manufacturer and the
suggested retail price for direct channels or the difference between the price
paid to the manufacturer and the wholesale price for third party retailers) and
for other costs associated with the sale, including logistics, inventory
carrying costs, direct channel commissions and other retailer compensation.
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4.1.3 Use of Third-Party Distributors.
(a) Manager may request that Sprint PCS and a local distributor enter
into Sprint PCS' standard distribution agreement regarding the purchase from
Sprint PCS of handsets and accessories. Sprint PCS will use commercially
reasonable efforts to reach agreement with the local distributor. Sprint PCS
may refuse to enter into a distribution agreement with a distributor for any
reasonable reason, including that the distributor fails to pass Sprint PCS' then
current credit and background checks or the distributor fails to agree to the
standard terms of the Sprint PCS distribution agreement. Any local distributor
will be subject to the terms of the Trademark License Agreements or their
equivalent. Manager will report to Sprint PCS the activities of any local
distributor that Manager believes to be in violation of the distribution
agreement.
(b) Manager may establish direct local distribution programs in
accordance with the Sprint PCS National or Regional Distribution Program
Requirements, subject to the terms and conditions of the Trademark License
Agreements and the non-competition and other provisions contained in this
agreement. If Manager sells Sprint PCS handsets and accessories directly to a
local distributor:
(i) Sprint PCS has the right to approve or disapprove a
particular distributor,
(ii) Manager is responsible for such distributor's compliance
with the terms of the Trademark License Agreements and the other provisions
contained in this agreement, and
(iii) Manager must retain the right to terminate the
distribution rights of the local distributor when so instructed by Sprint
PCS (even if Sprint PCS initially approved or did not exercise its right to
review the distributor).
4.2 Sprint PCS National Accounts Program Requirements. During the term of
this agreement, Manager must participate in the Sprint PCS National Accounts
Program (as in effect from time to time), and will be entitled to compensation
for its participation and will be required to pay the expenses of the program in
accordance with the terms and conditions of that program. The Sprint PCS
National Accounts Program Requirements in effect as of the date of this
agreement are attached as Exhibit 4.2.
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4.3 Sprint PCS Roaming and Inter Service Area Program Requirements.
Manager will participate in the Sprint PCS Roaming and Inter Service Area
Program established and implemented by Sprint PCS, including roaming price plans
and inter-carrier settlements. The Sprint PCS Roaming and Inter Service Area
Program Requirements in effect as of the date of this agreement are attached as
Exhibit 4.3.
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As part of the Sprint PCS Roaming and Inter Service Area Program
Requirements, Sprint PCS will establish a settlement policy and process to
equitably distribute between the members making up the Sprint PCS Network (i.e.,
Sprint PCS, Manager and all Other Managers) the revenues received by one member
for services used by its customers when they travel into other members' service
areas.
4.4 Pricing. Manager will offer and support all Sprint PCS pricing plans
designated for regional or national offerings of Sprint PCS Products and
Services (e.g., national inter service area rates, regional home rates, and
local price points). The Sprint PCS pricing plans as of the date of this
agreement are attached as Exhibit 4.4. Sprint PCS may modify the Sprint PCS
-----------
pricing plans from time to time in its sole discretion by delivering to Manager
a new Exhibit 4.4.
-----------
Additionally, with prior approval from Sprint PCS, which approval will not
be unreasonably withheld, Manager may establish price plans for Sprint PCS
Products and Services that are only offered in its local market, subject to:
(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area.
If Sprint PCS fails to respond to Manager within 10 Business Days after
receiving such notice, then the price proposed for those Sprint PCS Products or
Services is deemed approved.
At the time Sprint PCS approves a pricing proposal submitted by Manager,
Sprint PCS will provide Manager an estimate of the costs and expenses and
applicable time frames required for Sprint PCS to implement the proposed pricing
plan. Manager agrees to promptly reimburse Sprint PCS for any cost or expense
incurred by Sprint PCS to implement such a pricing plan, which will not exceed
the amount estimated by Sprint PCS if Manager waited for Sprint PCS' response to
Manager's proposal.
4.5 Home Service Area. Sprint PCS and Manager will agree to the initial
home service area for each base station in the Service Area Network prior to the
date the Service Area Network goes into commercial operation. If the parties
cannot agree to the home service area for each base station in the Service Area
Network, then the parties will use the dispute
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resolution process in Section 14 of this agreement to assign each base station
to a home service area.
5. USE OF BRANDS
5.1 Use of Brands.
(a) Manager must enter into the Trademark License Agreements on or
before the date of this agreement.
(b) Manager must use the Brands exclusively in the marketing,
promotion, advertisement, distribution, lease or sale of any Sprint PCS Products
and Services within the Service Area, except Manager may use other brands to the
extent permitted by the Trademark License Agreements and not inconsistent with
the terms of this agreement.
(c) Neither Manager nor any of its Related Parties may market,
promote, advertise, distribute, lease or sell any of the Sprint PCS Products and
Services or Manager's Products and Services on a non-branded, "private label"
basis or under any brand, trademark, trade name or trade dress other than the
Brands, except (i) for sales to resellers required under this agreement, or (ii)
as permitted under the Trademark License Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager from
including Sprint PCS Products and Services under the Brands within the Service
Area as part of a package with its other products and services that bear a
different brand or trademark. The provisions of this Section 5.1 do not apply
to the extent that they are inconsistent with applicable law or in conflict with
the Trademark License Agreements.
5.2 Conformance to Marketing Communications Guidelines. Manager must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of the
Sprint PCS Products and Services. The Marketing Communications Guidelines in
effect as of the date of this agreement are attached as Exhibit 5.2. Sprint and
-----------
Sprint Spectrum may amend the Marketing Communications Guidelines from time to
time in accordance with the terms of the Trademark License Agreements.
5.3 Joint Marketing With Third Parties.
(a) Manager may engage in various joint marketing activities (e.g.,
promotions with sports teams and entertainment providers or tournament
sponsorships) with third parties in the Service Area from time to time during
the term of this agreement with respect to the Sprint PCS Products and Services,
except that Manager may engage in the joint marketing activities only if the
joint marketing activities:
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(i) are conducted in accordance with the terms and conditions of
the Trademark License Agreements and the Marketing Communications
Guidelines;
(ii) do not violate the terms of this agreement;
(ii) are not likely (as determined by Sprint PCS, in its sole
discretion) to cause confusion between the Brands and any other trademark
or service mark used in connection with the activities;
(iv) are not likely (as determined by Sprint, in its sole
discretion) to cause confusion between the Sprint Brands and any other
trademark or service mark used in connection with the activities; and
(v) are not likely (as determined by Sprint PCS, in its sole
discretion) to give rise to the perception that the Sprint PCS Products and
Services are being advertised, marketed or promoted under any trademark or
service mark other than the Brands, except as provided in the Trademark
License Agreements. Manager will not engage in any activity that includes
co-branding involving use of the Brands (that is, the marketing, promotion,
advertisement, distribution, lease or sale of any of the Sprint PCS
Products and Services under the Brands and any other trademark or service
mark), except as provided in the Trademark License Agreements.
(b) Manager must provide advance written notice to Sprint PCS
describing any joint marketing activities that may:
(i) cause confusion between the Brands and any other trademark or
service mark used in connection with the proposed activities; or
(ii) give rise to the perception that the Sprint PCS Products and
Services are being advertised, marketed or promoted under any trademark or
service mark other than the Brands, except as provided in the Trademark
License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within 20
days after receiving such notice, then the proposed activities are deemed, as
the case may be:
(i) not to create confusion between the Brands and any other
trademark or service mark; or
(ii) not to give rise to the perception that Manager's products
and services are being advertised, marketed or promoted under any trademark
or service mark other than the Brands, except as provided in the Trademark
License Agreements.
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5.4 Prior Approval of Use of Brands. Manager must obtain advance written
approval from Sprint for use of the Sprint Brands to the extent required by the
Sprint Trademark and Service Mark License Agreement and from Sprint PCS for use
of the Sprint PCS Brands to the extent required by the Sprint Spectrum Trademark
and Service Mark License Agreement. Sprint PCS will use commercially reasonable
efforts to facilitate any review of Manager's use of the Brands, if Sprint PCS
is included in the review process.
5.5 Duration of Use of Brand. Manager is entitled to use the Brands only
during the term of the Trademark License Agreements and any transition period
during which Manager is authorized to use the Brands following the termination
of the Trademark License Agreements.
6. ADVERTISING AND PROMOTION
6.1 National Advertising and Promotion. Sprint PCS is responsible for (a)
all national advertising and promotion of the Sprint PCS Products and Services,
including the costs and expenses related to national advertising and promotions,
and (b) all advertising and promotion of the Sprint PCS Products and Services in
the markets where Sprint PCS operates without the use of an Other Manager.
6.2 In-Territory Advertising and Promotion. Manager must advertise and
promote the Sprint PCS Products and Services in the Service Area (and may do so
in the areas adjacent to the Service Area so long as Manager intends that such
advertising or promotion primarily reach potential customers within the Service
Area). Manager must advertise and promote the Sprint PCS Products and Services
in accordance with the terms and conditions of this agreement, the Trademark
License Agreements and the Marketing Communication Guidelines. Manager is
responsible for the costs and expenses incurred by Manager with respect to
Manager's advertising and promotion activities in the Service Area.
Manager will be responsible for a portion of the cost of any promotion or
advertising done by third party retailers in the Service Area (e.g., Best Buy)
in accordance with any cooperative advertising arrangements based on per unit
handset sales.
Sprint PCS has the right to use in any promotion or advertising done by
Sprint PCS any promotion or advertising materials developed by Manager from time
to time with respect to the Sprint PCS Products and Services. Sprint PCS will
reimburse Manager for the reproduction costs related to such use.
Sprint PCS will make available to Manager the promotion or advertising
materials developed by Sprint PCS from time to time with respect to Sprint PCS
Products and Services in current use by Sprint PCS (e.g., radio ads, television
ads, design of print ads, design of point of sale materials, retail store
concepts and designs, design of collateral). Manager will
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bear the cost of using such materials (e.g., cost of local radio and television
ad placements, cost of printing collateral in quantity, and building out and
finishing retail stores).
6.3 Review of Advertising and Promotion Campaigns. Sprint PCS and Manager
will jointly review the upcoming marketing and promotion campaigns of Manager
with respect to Sprint PCS Products and Services (including advertising and
promotion expense budgets) and will use good faith efforts to coordinate
Manager's campaign with Sprint PCS' campaign to maximize the market results of
both parties. Sprint PCS and Manager may engage in cooperative advertising or
promotional activities during the term of this agreement as the parties may
agree in writing.
6.4 Public Relations. If Manager conducts local public relations efforts,
then Manager must conduct the local public relations efforts consistent with the
Sprint PCS Communications Policies. The Sprint PCS Communications Policies as
of the date of this agreement are attached as Exhibit 6.4. Sprint PCS may
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modify the Sprint PCS Communications Policies from time to time by delivering to
Manager a new Exhibit 6.4.
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7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 Conformance to Sprint PCS Technical Program Requirements.
(a) Manager must meet or exceed the Sprint PCS Technical Program
Requirements established by Sprint PCS from time to time for the Sprint PCS
Network. Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a level equal to
or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Sprint PCS Technical Program
Requirements; or
(ii) Sprint PCS is responsible under the Services Agreement to
ensure the Service Area Network complies with the Sprint PCS Technical
Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has complied
with the Sprint PCS Technical Program Requirements prior to connecting the
Service Area Network to the rest of the Sprint PCS Network. Once the Service
Area Network is connected to the Sprint PCS Network, Manager must continue to
comply with the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the Sprint PCS Technical Program Requirements adopted for Manager will be
the same Sprint PCS Technical Program Requirements applied by Sprint PCS to the
Sprint PCS Network.
7.2 Establishment of Sprint PCS Technical Program Requirements. Sprint
PCS has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements,
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attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS Technical Program
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Requirements to ensure a minimum, base-line level of quality for the Sprint PCS
Network. The Sprint PCS Technical Program Requirements include standards
relating to voice quality, interoperability, consistency (seamlessness) of
coverage, RF design parameters, system design, capacity, and call blocking
ratio. Sprint PCS has selected code division multiple access as the initial air
interface technology for the Sprint PCS Network (subject to change in accordance
with Section 9.1).
7.3 Handoff to Adjacent Networks. If technically feasible and
commercially reasonable, Manager will operate the Service Area Network in a
manner that permits a seamless handoff of a call initiated on the Service Area
Network to any adjacent PCS network that is part of the Sprint PCS Network, as
specified in the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the terms and conditions for seamless handoffs adopted for the Service Area
Network will be the same as the terms Sprint PCS applies to the other parts of
the Sprint PCS Network for similar configurations of equipment.
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS
8.1 Compliance With Sprint PCS Customer Service Program Requirements.
Manager must comply with the Sprint PCS Customer Service Program Requirements in
providing the Sprint PCS Products and Services to any customer of Manager,
Sprint PCS or any Sprint PCS Related Party. Manager will be deemed to meet the
standards if:
(a) Manager operates the Service Area Network at a level equal to or
better than the lower of the Operational Level of Sprint PCS or the operational
level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services Agreement
responsibility to ensure the Service Area Network complies with the Sprint PCS
Customer Service Standards.
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit 8.1.
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9. SPRINT PCS PROGRAM REQUIREMENTS
9.1 Program Requirements Generally. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements. This
agreement also provides under Section 3.5.2 for the offering by Sprint PCS of a
voluntary resale product through a program, which
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program, if adopted, will be a Program Requirement under this agreement. Sprint
PCS may unilaterally amend from time to time in the manner described in Section
9.2 all Program Requirements mentioned in this agreement. The most current
version of the Program Requirements mentioned in the first sentence of this
Section 9.1 have been provided to Manager. Manager has reviewed the Program
Requirements and adopts them for application in the Service Area.
9.2 Amendments to Program Requirements. Sprint PCS may amend any of the
Program Requirements, subject to the following conditions:
(a) The applicable Program Requirements, as amended, will apply
equally to Manager, Sprint PCS and each Other Manager, except if Manager and
Sprint PCS agree otherwise or if Sprint PCS grants a waiver to Manager. Sprint
PCS may grant waivers to Other Managers without affecting Manager's obligation
to comply with the Program Requirements;
(b) Each amendment will be reasonably required to fulfill the purposes
set forth in Section 1.2 with respect to uniform and consistent operations of
the Sprint PCS Network and the presentation of Sprint PCS Products and Services
to customers in a uniform and consistent manner;
(c) Each amendment will otherwise be on terms and conditions that are
commercially reasonable with respect to the construction, operation and
management of the Sprint PCS Network. With respect to any amendment to the
Program Requirements, Sprint PCS will provide for reasonable transition periods
and, where appropriate, may provide for grandfathering provisions for existing
activities by Manager that were permitted under the applicable Program
Requirements before the amendment;
(d) Sprint PCS must give Manager reasonable, written notice of the
amendment, but in any event the notice will be given at least 30 days prior to
the effective date of the amendment; and
(e) Manager must implement any changes in the Program Requirements
within a commercially reasonable period of time unless otherwise consented to by
Sprint PCS. Sprint PCS will determine what constitutes a commercially reasonable
period of time taking into consideration relevant business factors, including
the strategic significance of the changes to the Sprint PCS Network, the
relationship of the changes to the yearly marketing cycle, and the financial
demands on and capacity generally of Other Managers. Notwithstanding the
preceding two sentences, Manager will not be required to implement any change in
the Service Area Network or the business of Manager required by an amendment to
a Program Requirement until Sprint PCS has implemented the required changes in
substantially all of that portion of the Sprint PCS Network that Sprint PCS
operates without the use of a manager or affiliate, unless the amendment to the
Program Requirement relates to an obligation regarding
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the Service Area Network mandated by law. When necessary for reasons related to
new technical standards, new equipment or strategic reasons, Sprint PCS can
require Manager to implement the changes in the Service Area Network or
Manager's business concurrently with Sprint PCS, in which case Sprint PCS will
reimburse Manager for its costs and expenses if Sprint PCS discontinues the
Program Requirement changes prior to implementation.
Sprint PCS may grant Manager appropriate waivers and variances from the
requirements of any Program Requirements. Sprint PCS has the right to adopt any
Program Requirements that implement any obligation regarding the Service Area
Network mandated by law.
Any costs and expenses incurred by Manager in connection with conforming to
any change to the Program Requirements during the term of this agreement are the
responsibility of Manager.
9.3 Manager's Right to Request Review of Changes. If Sprint PCS announces
a change to a Program Requirement that will:
(a) cause the Manager to spend an additional amount greater than 5% of
Manager's shareholder's equity or capital account plus Manager's long-term debt
(i.e., notes that mature more than one year from the date issued), as reflected
on Manager's books; or
(b) cause the long term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net present
value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the change.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the
change. If after the review and decision by the Vice President or designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
still requires Manager to implement the change to the Program Requirement
following the Chief Officer's review, then upon Manager's failure to implement
the change an Event of Termination will be deemed to have occurred under Section
11.3.3, Manager will not have a right to cure such breach, and Sprint PCS may
exercise its rights and remedies under Section 11.6.
9.4 Sprint PCS' Right to Implement Changes. If Manager requests Sprint
PCS to reconsider a change to a Program Requirement as permitted under Section
9.3 and Sprint PCS decides it will not require Manager to make the change,
Sprint PCS may, but is not required to, implement the change at Sprint PCS'
expense, in which event Manager will be required to
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operate the Service Area Network, as changed, but Sprint PCS will be entitled to
any revenue derived from the change.
9.5 Rights of Inspection. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility operated
by or for Manager at any time, with reasonable advance notice to Manager if
possible, to inspect, monitor and test in a reasonable manner the Service Area
Network, including the facilities, equipment, books and records of Manager, to
ensure that Manager has complied or is in compliance with all covenants and
obligations of Manager under this agreement, including Manager's obligation to
conform to the Program Requirements. The inspection, monitoring and testing may
not disrupt the operations of the office or facility, nor impede Manager's
access to the Service Area Network.
9.6 Manager's Responsibility to Interface with Sprint PCS. Manager will
use platforms fully capable of interfacing with the Sprint PCS platforms in
operating the Service Area Network and in providing Sprint PCS Products and
Services. Manager will pay the expense of making its platforms fully capable of
interfacing with Sprint PCS, including paying for the following:
(i) connectivity;
(ii) any changes that Manager requests Sprint PCS to make to
Sprint PCS systems to interconnect with Manager's systems that Sprint PCS,
in its sole discretion, agrees to make;
(iii) equipment to run Manager's software;
(iv) license fees for Manager's software; and
(v) Manager's upgrades or changes to its platforms.
10. FEES
10.1 Fees and Payments.
10.1.1 Fee Based on Collected Revenues. Sprint PCS will pay to
Manager a weekly fee equal to 92% of Collected Revenues for the week for all
obligations of Manager under this Agreement. The fee will be due on Thursday of
the week following the week for which the fee is calculated.
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10.1.2 Payment of Universal Service Funds. Sprint PCS and Manager
will share any federal and state subsidy funds (e.g., payments by a state of
universal service fund subsidies to Sprint PCS or Manager), if any, received by
Sprint PCS or Manager for customers who reside in the portion of the Service
Area served by the Service Area Network. Manager is entitled to 92% of any
amount received by either party and Sprint PCS is entitled to 8% of such
amounts.
10.1.3 Inter Service Area Fees. Sprint PCS will pay to Manager
monthly a fee as set out in the Sprint PCS Roaming and Inter Service Area
Program, for each minute of use that a customer of Sprint PCS or one of the
Other Managers whose NPA-NXX is not assigned to the Service Area Network uses
the Service Area Network. Manager will pay to Sprint PCS a fee, as set out in
the Sprint PCS Roaming and Inter Service Area Program, for each minute of use
that a customer whose NPA-NXX is assigned to the Service Area Network uses a
portion of the Sprint PCS Network other than the Service Area Network. Manager
acknowledges that the manner in which the NPA-NXX is utilized could change,
which will require a modification in the manner in which the inter service area
fees, if any, will be calculated.
10.1.4 Interconnect Fees. Manager will pay to Sprint PCS (or to
other carriers as appropriate) monthly the interconnect fees, if any, as
provided under Section 1.4.
10.1.5 Outbound Roaming Fees. If not otherwise provided under
any Program Requirement:
(a) Sprint PCS will pay to Manager monthly the amount of Outbound
Roaming fees that Sprint PCS collects for the month from end users whose NPA-NXX
is assigned to the Service Area; and
(b) Manager will pay to Sprint PCS (or to a clearinghouse or other
carrier as appropriate) the direct cost of providing the capability for the
Outbound Roaming, including any amounts payable to the carrier that handled the
roaming call and the clearinghouse operator.
10.1.6 Reimbursements. Manager will pay to or reimburse Sprint
PCS for any amounts that Sprint PCS is required to pay to a third party (e.g., a
telecommunications carrier) to the extent Sprint PCS already paid such amount to
Manager under this Section 10.
10.2 Monthly True Up. Manager will report to Sprint PCS monthly the amount
of Collected Revenues received directly by the Manager (e.g., customer mails
payment to the business address of Manager rather than to the lockbox or a
customer pays a direct sales force representative in cash). Sprint PCS will on a
monthly basis true up the fees and payments due under Section 10.1 against the
actual payments made by Sprint PCS to Manager. Sprint PCS will provide to
Manager a true up report each month showing the true up and the net amount
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due from one party to the other, if any. If the weekly payments made to Manager
exceed the actual fees and payments due to Manager, then Manager will remit the
amount of the overpayment to Sprint PCS within 5 Business Days after receiving
the true up report from Sprint PCS. If the weekly payments made to Manager are
less than the actual fees and payments due to Manager, then Sprint PCS will
remit the shortfall to Manager within 5 Business Days after sending the true up
report to Manager.
If a party disputes any amount on the true up report, the disputing party
must give the other party written notice of the disputed amount and the reason
for the dispute within 90 days after it receives the true up report. The dispute
will be resolved through the dispute resolution process in Section 14. The
parties must continue to pay to the other party any undisputed amounts owed
under this agreement during the dispute resolution process. The dispute of an
item does not stay or diminish a party's other rights and remedies under this
agreement.
10.3 Taxes. Manager will pay or reimburse Sprint PCS for any sales, use,
gross receipts or similar tax, administrative fee, telecommunications fee or
surcharge for taxes or fees levied by a governmental authority on the fees and
charges payable by Sprint PCS to Manager.
Manager will report all taxable property to the appropriate taxing
authority for ad valorem tax purposes. Manager will pay as and when due all
taxes, assessments, liens, encumbrances, levies, and other charges against the
real estate and personal property owned by Manager or used by Manager in
fulfilling its obligations under this agreement.
Manager is responsible for paying all sales, use, or similar taxes on the
purchase and use of its equipment, advertising, and other goods or services in
connection with this agreement.
10.4 Collected Revenues Definition. "Collected Revenues" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others, including the customers, whose NPA-NXX is the
same as that for the portion of the Service Area served by the Service Area
Network. In determining Collected Revenues the following principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from federal
and state subsidy funds; they are handled separately as noted in Section
10.1.2;
(ii) Collected Revenues do include any amounts received for
the payment of Inbound Roaming charges and interconnect fees when calls are
carried on the Service Area Network; and
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(iii) Collected Revenues do not include any amounts received
with respect to any changes made by Sprint PCS under Section 9.4.
(b) The following items are not Collected Revenues; Sprint PCS is
obligated to remit the amounts received with respect to such items, if any, to
Manager, as follows:
(i) inter service area payments will be paid as provided
under Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as
provided under Section 10.1.5;
(iii) proceeds from the sale or lease of subscriber equipment
and accessories will be paid to Manager, subject to the equipment
settlement process in Section 4.1.2;
(iv) proceeds from sales not in the ordinary course of
business (e.g., sales of switches, cell sites, computers, vehicles or other
fixed assets);
(v) any amounts collected with respect to sales and use
taxes, gross receipts taxes, transfer taxes, and similar taxes,
administrative fees, telecommunications fees, and surcharges for taxes and
fees that are collected by a carrier for the benefit of a governmental
authority, subject to Manager's obligation under Section 10.3; and
(vi) Manager will be entitled to 100% of all revenues received
by Sprint PCS with respect to sales of Manager's Products and Services.
(c) The following items are not Collected Revenues; neither party
is obligated to remit any amounts respecting such items:
(i) reasonable adjustments of a customer's account (e.g., if
Sprint PCS or Manager reduces a customer's bill, then the amount of the
adjustment is not Collected Revenues); and
(ii) amount of bad debt and fraud associated with customers
whose NPA-NXX is assigned to the Service Area (e.g., if Sprint PCS or
Manager writes off a customer's bill as a bad debt, there are no Collected
Revenues on which a fee is due to Manager).
10.5 Late Payments. Any amount due under this Section 10 that is not paid
by one party to the other party in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 3rd day
after the due date until (and including) the date paid.
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10.6 Setoff Right If Failure To Pay Amounts Due. If Manager fails to pay
any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this
agreement, the Services Agreement, or any other agreement with Sprint PCS or a
Related Party of Sprint PCS, then Sprint PCS may setoff against its payments to
Manager under this Section 10, the following amounts:
(a) any amount that Manager owes to Sprint PCS or a Related Party
of Sprint PCS, including amounts due under the Services Agreement; and
(b) any amount that Sprint PCS reasonably estimates will be due to
Sprint PCS for the current month under the Services Agreement (e.g., if under
the Services Agreement customer care calls are billed monthly, Sprint PCS can
deduct from the weekly payment to Manager an amount Sprint PCS reasonably
estimates will be due Sprint PCS on account of such customer care calls under
the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts deducted
against the actual amounts due Sprint PCS and Sprint PCS' Related Parties. If
the estimated amounts deducted by Sprint PCS exceed the actual amounts due to
Sprint PCS and Sprint PCS' Related Parties, then Sprint PCS will remit the
excess to Manager with the next weekly payment. If the estimated amounts
deducted are less than the actual amounts due to Sprint PCS and its Related
Parties, then Sprint PCS may continue to setoff the payments to Manager against
the amounts due to Sprint PCS and Sprint PCS' Related Parties. This right of
setoff is in addition to any other right that Sprint PCS may have under this
agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
11.1 Initial Term. This agreement commences on the date of execution and,
unless terminated earlier in accordance with the provisions of this Section 11,
continues for a period of 20 years (the "Initial Term").
11.2 Renewal Terms. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods (for
a maximum of 50 years including the Initial Term), unless at least 2 years prior
to the commencement of any renewal period either party notifies the other party
in writing that it does not wish to renew this agreement.
11.2.1 Non-renewal Rights of Manager. If this agreement will
terminate because Sprint PCS gives Manager timely written notice of non-renewal
of this agreement, then Manager may exercise its rights under Section 11.2.1.1
or, if applicable, its rights under Section 11.2.1.2.
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11.2.1.1 Manager's Put Right. Manager may within 30 days
after the date Sprint PCS gives notice of non-renewal put to Sprint PCS all
of the Operating Assets. Sprint PCS will pay to Manager for the Operating
Assets an amount equal to 80% of the Entire Business Value. The closing of
the purchase of the Operating Assets will occur within 20 days after the
later of (a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value provided by the appraisers under
Section 11.7 or (b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8. Upon closing the purchase of the
Operating Assets this agreement will be deemed terminated. The exercise of
the put, the determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and the
business, and the process for closing the purchase will be subject to the
terms and conditions set forth in Section 11.8.
11.2.1.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS
spectrum in the Service Area under the License on the date this
agreement is executed, then Manager may within 30 days after the date
Sprint PCS gives notice of non-renewal declare its intent to purchase
the Disaggregated License. Subject to receipt of FCC approval of the
necessary disaggregation and partition, Manager may purchase from
Sprint PCS the Disaggregated License for an amount equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the spectrum this
agreement will be deemed terminated. The closing of the purchase of
the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of
the written notice of determination of the Entire Business
Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of
the Disaggregated License by the FCC.
(c) The exercise of the purchase right, the
determination of the geographic extent of the Disaggregated License
coverage, the representations and warranties made by Sprint PCS with
respect to the Disaggregated License, and the process for closing the
purchase will be subject to the terms and conditions set forth in
Section 11.8.
(d) After the closing of the purchase Manager will
allow:
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(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products
and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 Non-renewal Rights of Sprint PCS. If this agreement will
terminate because of any of the following five (5) events, then Sprint PCS may
exercise its rights under Section 11.2.2.1 or, if applicable, its rights under
Section 11.2.2.2:
(a) Manager gives Sprint PCS timely written notice
of non-renewal of this agreement;
(b) both parties give timely written notices of
non-renewal;
(c) this agreement expires with neither party
giving a written notice of non-renewal;
(d) either party elects to terminate this agreement
under Section 11.3.4(a); or
(e) Manager elects to terminate this agreement
under Section 11.3.4(b).
11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may
purchase from Manager all of the Operating Assets. Sprint PCS will pay to
Manager an amount equal to 80% of the Entire Business Value. The closing of
the purchase of the Operating Assets will occur within 20 days after the
later of (a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value provided by the appraisers under
Section 11.7 or (b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8. Upon closing the purchase of the
Operating Assets this agreement will be deemed terminated. The exercise of
the purchase right, the determination of the Operating Assets, the
representations and warranties made by Manager with respect to the
Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
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11.2.2.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC
approval, put to Manager the Disaggregated License for a purchase
price equal to the greater of (1) the original cost of the License to
Sprint PCS (pro rated on a pops and spectrum basis) plus the
microwave relocation costs paid by Sprint PCS or (2) 10% of the
Entire Business Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing of the
purchase of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of
the written notice of determination of the Entire Business
Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of
the Disaggregated License by the FCC.
(c) The exercise of the put, the determination of
the geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives
notice of Sprint PCS' exercise of its put, advise Sprint PCS of the
amount of spectrum (not to exceed 10 MHz) it wishes to purchase.
After the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products
and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.3 Extended Term Awaiting FCC Approval. If Manager is buying
the Disaggregated License as permitted or required under Sections 11.2.1.2 or
11.2.2.2, then the Term of this agreement will extend beyond the original
expiration date until the closing of the purchase of the Disaggregated License.
The parties agree to exercise their respective commercially reasonable efforts
to obtain FCC approval of the transfer of the Disaggregated License.
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11.3 Events of Termination. An "Event of Termination" is deemed to occur
when a party gives written notice to the other party of the Event of Termination
as permitted below:
11.3.1 Termination of License.
(a) At the election of either party this agreement
may be terminated at the time the FCC revokes or fails to renew the
License. Unless Manager has the right to terminate this agreement
under Section 11.3.1(b), neither party has any claim against the
other party if the FCC revokes or fails to renew the License, even if
circumstances would otherwise permit one party to terminate this
agreement based on a different Event of Termination, except that the
parties will have the right to pursue claims against each other as
permitted under Section 11.4(b).
(b) If the FCC revokes or fails to renew the
License because of a breach of this agreement by Sprint PCS, then
Manager has the right to terminate this agreement under Section
11.3.3 and not this Section 11.3.1.
11.3.2 Breach of Agreement: Payment of Money Terms. At the election
of the non-breaching party this agreement may be terminated upon the failure by
the breaching party to pay any amount due under this agreement or any other
agreement between the parties or their respective Related Parties, if the breach
is not cured within 30 days after the breaching party's receipt of written
notice of the nonpayment from the non-breaching party.
11.3.3 Breach of Agreement: Other Terms. At the election of the
non-breaching party this agreement may be terminated upon the material breach by
the breaching party of any material term contained in this agreement that does
not regard the payment of money, if the breach is not cured within 30 days after
the breaching party's receipt of written notice of the breach from the non-
breaching party, except the cure period will continue for a reasonable period
beyond the 30-day period, but will under no circumstances exceed 180 days after
the breaching party's receipt of written notice of the breach, if it is
unreasonable to cure the breach within the 30-day period, and the breaching
party takes action prior to the end of the 30-day period that is reasonably
likely to cure the breach and continues to diligently take action necessary to
cure the breach.
11.3.4 Regulatory Considerations.
(a) At the election of either party this agreement
may be terminated if this agreement violates any applicable law in
any material respect where such violation (i) is classified as a
felony or (ii) subjects either party to substantial monetary fines or
other substantial damages, except that before causing any termination
the parties must use best efforts to modify this agreement, as
necessary to cause this agreement (as modified) to comply with
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applicable law and to preserve to the extent possible the economic
arrangements set forth in this agreement.
(b) At the election of Manager this agreement may
be terminated if the regulatory action described under 11.3.4(a) is
the result of a deemed change of control of the License and the
parties are unable to agree upon a satisfactory resolution of the
matter with the regulatory authority without a complete termination
of this agreement.
11.3.5 Termination of Trademark License Agreements. If either
Trademark License Agreement terminates under its terms, then:
(a) Manager may terminate this agreement if the
Trademark License Agreement terminated because of a breach of the
Trademark License Agreement by Sprint PCS or Sprint; and
(b) Sprint PCS may terminate this agreement if the
Trademark License Agreement terminated because of a breach of the
Trademark License Agreement by Manager.
11.3.6 Financing Considerations. At the election of Sprint PCS this
agreement may be terminated upon the failure of Manager to obtain the financing
described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit.
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11.3.7 Bankruptcy of a Party. At the election of the non-bankrupt
party, this agreement may be terminated upon the occurrence of a Voluntary
Bankruptcy or an Involuntary Bankruptcy of the other party.
"Voluntary Bankruptcy" means:
(a) the inability of a party generally to pay its
debts as the debts become due, or an admission in writing by a party
of its inability to pay its debts generally or a general assignment
by a party for the benefit of creditors;
(b) the filing of any petition or answer by a party
seeking to adjudicate itself a bankrupt or insolvent, or seeking any
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition for itself or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian
or other similar official for itself or for substantially all of its
property; or
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(c) any action taken by a party to authorize any of
the actions set forth above.
"Involuntary Bankruptcy" means, without the consent or acquiescence
of a party:
(a) the entering of an order for relief or
approving a petition for relief or reorganization;
(b) any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
other similar relief under any present or future bankruptcy,
insolvency or similar statute, law or regulation;
(c) the filing of any petition against a party,
which petition is not dismissed within 90 days; or
(d) without the consent or acquiescence of a party,
the entering of an order appointing a trustee, custodian, receiver or
liquidator of party or of all or any substantial part of the property
of the party, which order is not dismissed within 90 days.
11.4 Effect of an Event of Termination.
(a) Upon the occurrence of an Event of Termination, the party
with the right to terminate this agreement or to elect the remedy upon the Event
of Termination, as the case may be, may:
(i) in the case of an Event of Termination under Sections
11.3.1(a) or 11.3.7, give the other party written notice that the agreement
is terminated effective as of the date of the notice, in which case neither
party will have any other remedy or claim for damages (except any claim the
non-bankrupt party has against the bankrupt party and any claims permitted
under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than under
Section 11.3.1(a), give the other party written notice that the party is
exercising one of its rights, if any, under Section 11.5 or Section 11.6.
(b) If the party terminates this agreement under Section
11.4(a)(i) then all rights and obligations of each party under this agreement
will immediately cease, except that:
(i) any rights arising out of a breach of any terms of this
agreement will survive any termination of this agreement;
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(ii) the provisions described in Section 17.23 will survive
any termination of this agreement;
(iii) the payment obligations under Section 10 will survive
any termination of this agreement if, and to the extent, any costs or fees
have accrued or are otherwise due and owing as of the date of termination
of this agreement from Manager to Sprint PCS or any Sprint PCS Related
Party or from Sprint PCS to Manager or any Manager Related Party;
(iv) either party may terminate this agreement in
accordance with the terms of this agreement without any liability for any
loss or damage arising out of or related to such termination, including any
loss or damage arising out of the exercise by Sprint PCS of its rights
under Section 11.6.3;
(v) Manager will use all commercially reasonable efforts
to cease immediately all of their respective efforts to market, sell,
promote or distribute the Sprint PCS Products and Services;
(vi) Sprint PCS has the option to buy from Manager any new
unsold subscriber equipment and accessories, at the prices charged to
Manager;
(vii) the parties will immediately stop making any
statements or taking any action that might cause third parties to infer
that any business relationship continues to exist between the parties, and
where necessary or advisable, the parties will inform third parties that
the parties no longer have a business relationship; and
(viii) if subscriber equipment and accessories are in transit
when this agreement is terminated, Sprint PCS may, but does not have the
obligation to, cause the freight carrier to not deliver the subscriber
equipment and accessories to Manager but rather to deliver the subscriber
equipment and accessories to Sprint PCS.
(c) If the party exercises its rights under Section 11.4(a)(ii),
this agreement will continue in full force and effect until otherwise
terminated.
(d) If this agreement terminates for any reason other than
Manager's purchase of the Disaggregated License, Manager will not, for 3 years
after the date of termination compile, create, or use for the purpose of selling
merchandise or services similar to any Sprint PCS Products and Services, or
sell, transfer or otherwise convey to a third party, a list of customers who
purchased, leased or used any Sprint PCS Products and Services. Manager may use
such a list for its own internal analysis of its business practices and
operations. If this agreement terminates because of Manager's purchase of the
Disaggregated License, then Sprint PCS will transfer to Manager the Sprint PCS
customers with a MIN
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assigned to the Service Area covered by the Disaggregated License, but Sprint
PCS retains the customers of a national account and any resellers who have
entered into a resale agreement with Sprint PCS. Manager agrees not to solicit,
directly or indirectly, any customers of Sprint PCS not transferred to Manager
under this Section 11.4(d) for 2 years after the termination of this agreement,
except that Manager's advertising through mass media will not be considered a
solicitation of Sprint PCS customers.
11.5 Manager's Event of Termination Rights and Remedies. In addition to
any other right or remedy that Manager may have under this agreement, the
parties agree that Manager will have the rights and remedies set forth in this
Section 11.5 and that such rights and remedies will survive the termination of
this agreement. If Manager has a right to terminate this agreement as the result
of the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3,
11.3.5 or 11.3.7 (if Manager is the non-bankrupt party), then Manager has the
right to elect one of the following three (3) remedies, except Manager cannot
elect its remedies under Sections 11.5.1 or 11.5.2 during the first 2 years of
the Initial Term with respect to an Event of Termination under Section 11.3.3.
11.5.1 Manager's Put Right. Manager may put to Sprint PCS within 30
days after the Event of Termination all of the Operating Assets. Sprint PCS will
pay to Manager an amount equal to 80% of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice
of determination of the Entire Business Value by the appraisers under
Section 11.7; or
(b) the receipt of all materials required to be
delivered to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the put, the determination of the Operating
Assets, the representations and warranties made by the Manager with respect to
the Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.5.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS
spectrum in the Service Area under the License on the date this
agreement is executed, then Manager may, subject to receipt of FCC
approval, purchase from Sprint PCS the Disaggregated License for the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave
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relocation costs paid by Sprint PCS or (2) 9% (10% minus a 10%
penalty) of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(c) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Product and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 Manager's Action for Damages or Other Relief. Manager, in
accordance with the dispute resolution process in Section 14, may seek damages
or other appropriate relief.
11.6 Sprint PCS' Event of Termination Rights and Remedies. In addition to
any other right or remedy that Sprint PCS may have under this agreement, the
parties agree that Sprint PCS will have the rights and remedies set forth in
this Section 11.6 and that such rights and remedies will survive the termination
of this agreement. If Sprint PCS has a right to terminate this agreement as the
result of the occurrence of an Event of Termination under Sections 11.3.2,
11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if Sprint PCS is the non-bankrupt party), then
Sprint PCS has the right to elect one of the following four (4) remedies, except
that (i) if Sprint PCS elects the remedies under Sections 11.6.1, 11.6.2 or
11.6.4, Sprint PCS may pursue its rights under Section 11.6.3 concurrently with
its pursuit of one of the other three
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remedies, (ii) Sprint PCS cannot elect its remedies under Sections 11.6.1 or
11.6.2 during the first 2 years of the Initial Term with respect to an Event of
Termination under Section 11.3.3 (unless the Event of Termination is caused by a
breach related to the Build-out Plan or the build-out of the Service Area
Network), and (iii) Sprint PCS cannot elect its remedy under Section 11.6.2
during the first 2 years of the Initial Term with respect to an Event of
Termination under Section 11.3.6.
11.6.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount
equal to 72% (80% minus a 10% penalty) of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers pursuant
to Section 11.7; or
(b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.6.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval,
put to Manager the Disaggregated License for a purchase price equal to
the greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
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(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice
of Sprint PCS' exercise of its put, advise Sprint PCS of the amount of
spectrum (not to exceed 10 MHz) it wishes to purchase. After the
closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 Sprint PCS' Right to Cause A Cure.
(a) Sprint PCS' Right. Sprint PCS may, but is not
obligated to, take such action as it deems necessary to cure Manager's
breach of this agreement, including assuming operational
responsibility for the Service Area Network to complete construction,
continue operation, complete any necessary repairs, implement changes
necessary to comply with the Program Requirements and terms of this
agreement, or take such other steps as are appropriate under the
circumstances, or Sprint PCS may designate a third party or parties to
do the same, to assure uninterrupted availability and deliverability
of Sprint PCS Products and Services in the Service Area, or to
complete the build-out of the Service Area Network in accordance with
the terms of this agreement. In the event that Sprint PCS elects to
exercise its right under this Section 11.6.3, Sprint PCS will give
Manager written notice of such election. Upon giving such notice:
(1) Manager will collect and make available at a
convenient, central location at its principal place of business,
all documents, books, manuals, reports and records related to the
Build-out Plan and required to operate and maintain the Service
Area Network; and
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(2) Sprint PCS, its employees, contractors and
designated third parties will have the unrestricted right to
enter the facilities and offices of Manager for the purpose of
curing the breach and, if Sprint PCS deems necessary, operate the
Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the extent
requested by Sprint PCS to enable Sprint PCS to exercise its rights
under this Section 11.6.3.
(b) Liability. Sprint PCS' exercise of its rights under
this Section 11.6.3 will not be deemed an assumption by Sprint PCS of
any liability attributable to Manager or any other party, except that,
without limiting the provisions of Section 13, during the period that
Sprint PCS is curing a breach under this agreement or operating any
portion of the Service Area Network pursuant to this Section 11.6.3,
Sprint PCS will indemnify and defend Manager and its directors,
partners, officers, employees and agents from and against, and
reimburse and pay for, all claims, demands, damages, losses,
judgments, awards, liabilities, costs and expenses (including
reasonable attorneys' fees, court costs and other expenses of
litigation), whether or not arising out of third party claims, in
connection with any suit, claim, action or other legal proceeding
relating to the bodily injury, sickness or death of persons or the
damage to or destruction of property, real or personal, resulting from
or arising out of Sprint PCS' negligence or willful misconduct in
curing the breach or in the operation of the Service Area Network.
Sprint PCS' obligation under this Section 11.6.3(b) will not apply to
the extent of any claims, demands, damages, losses, judgments, awards,
liabilities, costs and expenses resulting from the negligence or
willful misconduct of Manager or arising from any contractual
obligation of Manager.
(c) Costs and Payments. During the period that Sprint PCS
is curing a breach or operating the Service Area Network under this
Section 11.6.3, Sprint PCS and Manager will continue to make any and
all payments due to the other party and to third parties under this
agreement, the Services Agreement and any other agreements to which
such party is bound, except that Sprint PCS may deduct from its
payments to Manager all reasonable costs and expenses incurred by
Sprint PCS in connection with the exercise of its right under this
Section 11.6.3. Sprint PCS' operation of the Service Area Network
pursuant to this Section 11.6.3 is not a substitution for Manager's
performance of its obligations under this agreement and does not
relieve Manager of its other obligations under this agreement.
(d) Length of Right. Sprint PCS may continue to operate
the Service Area Network in accordance with Section 11.6.3 until (i)
Sprint PCS
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cures all breaches by Manager under this agreement; (ii) Manager cures
all breaches and demonstrates to Sprint PCS' satisfaction that it is
financially and operationally willing, ready and able to perform in
accordance with this agreement and resumes such performance; (iii)
Sprint PCS consummates the purchase of the Operating Assets under
Section 11.6.1 or the sale of the Disaggregated License under Section
11.6.2; or (iv) Sprint PCS terminates this agreement.
(e) Not Under Services Agreement. The exercise by Sprint
PCS of its right under this Section 11.6.3 does not represent services
rendered under the Services Agreement, and therefore it does not allow
Manager to be deemed in compliance with the Program Requirements under
Sections 7.1(a)(ii), 8.1(b).
11.6.4 Sprint PCS' Action for Damages or Other Relief. Sprint PCS,
in accordance with the dispute resolution process in Section 14, may seek
damages or other appropriate relief.
11.7 Determination of Entire Business Value.
11.7.1 Appointment of Appraisers. Sprint PCS and Manager must each
designate an independent appraiser within 30 days after giving the Purchase
Notice under Exhibit 11.8. Sprint PCS and Manager will direct the two appraisers
------------
to jointly select a third appraiser within 15 days after the day the last of
them is appointed. Each appraiser must be an expert in the valuation of
wireless telecommunications businesses. Sprint PCS and Manager must direct the
three appraisers to each determine, within 45 days after the appointment of the
last appraiser, the Entire Business Value. Sprint PCS and Manager will each
bear the costs of the appraiser appointed by it, and they will share equally the
costs of the third appraiser.
11.7.2 Manager's Operating Assets. The following assets are
included in the Operating Assets (as defined in the Schedule of Definitions):
-----------------------
(a) network assets, including all personal property, real
property interests in cell sites and switch sites, leasehold
interests, collocation agreements, easements, and rights-of-way;
(b) all of the real, personal, tangible and intangible
property and contract rights that Manager owns and uses in conducting
the business of providing the Sprint PCS Products and Services,
including the goodwill resulting from Manager's customer base;
(c) sale and distribution assets primarily dedicated
(i.e., at least 80% of their revenue is derived from the sale of
Sprint PCS Products and
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Services) to the sale by Manager of Sprint PCS Products and Services.
For example, a retail store that derives at least 80% of its revenue
from the sale of Sprint PCS Products and Services is an Operating
Asset. A store that derives 65% of its revenue from Sprint PCS
Products and Services is not an Operating Asset;
(d) customers, if any, that use both the other products
and services approved under Section 3.2 and the Sprint PCS Products
and Services;
(e) handset inventory;
(f) books and records of the wireless business, including
all engineering drawings and designs and financial records; and
(g) all contracts used by Manager in operating the
wireless business including T1 service agreements, service contracts,
interconnection agreements, distribution agreements, software license
agreements, equipment maintenance agreements, sales agency agreements
and contracts with all equipment suppliers.
11.7.3 Entire Business Value. Utilizing the valuation principles
set forth below and in Section 11.7.4, "Entire Business Value" means the fair
market value of Manager's wireless business in the Service Area, valued on a
going concern basis.
(a) The fair market value is based on the price a willing
buyer would pay a willing seller for the entire on-going business.
(b) The appraisers will use the then-current customary
means of valuing a wireless telecommunications business.
(c) The business is conducted under the Brands and
existing agreements between the parties and their respective Related
Parties.
(d) Manager owns the Disaggregated License (in the case
where Manager will be buying the Disaggregated License under Sections
11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2) or Manager owns the spectrum and
the frequencies actually used by Manager under this agreement (in the
case where Sprint PCS will be buying the Operating Assets under
Sections 11.2.1.1, 11.2.2.1, 11.5.1 or 11.6.1).
(e) The valuation will not include any value for the
business represented by Manager's Products and Services or any
business not directly related to Sprint PCS Products and Services.
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11.7.4 Calculation of Entire Business Value. The Entire Business
Value to be used to determine the purchase price of the Operating Assets or the
Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by the
appraisers is within 10% of the lowest fair market value, then the
Entire Business Value used to determine the purchase price under this
agreement will be the arithmetic mean of the three appraised fair
market values.
(b) If two of the fair market values determined by the
appraisers are within 10% of one another, and the third value is not
within 10% of the other fair market values, then the Entire Business
Value used to determine the purchase price under this agreement will
be the arithmetic mean of the two more closely aligned fair market
values.
(c) If none of the fair market values is within 10% of the
other two fair market values, then the Entire Business Value used to
determine the purchase price under this agreement will be the middle
value of the three fair market values.
11.8 Closing Terms and Conditions. The closing terms and conditions for the
transactions contemplated in this Section 11 are attached as Exhibit 11.8.
------------
11.9 Contemporaneous and Identical Application. The parties agree that any
action regarding renewal or non-renewal and any Event of Termination will occur
contemporaneously and identically with respect to all Licenses. For example, if
Manager exercises its purchase right under Section 11.5.2, it must exercise such
right with respect to all of the Licenses under this agreement. The Term of this
agreement will be the same for all Licenses; Manager will not be permitted to
operate a portion of the Service Area Network with fewer than all of the
Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 Books and Records.
12.1.1 General. Each party must keep and maintain books and records
to support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
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12.1.2 Audit. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for purposes of auditing the amount of fees, costs, expenses or other
charges payable in connection with the Service Area with respect to the period
audited. The auditing party will conduct the audit no more frequently than
annually. If the audit shows that Sprint PCS was underpaid then, unless the
amount is contested, Manager will pay to Sprint PCS the amount of the
underpayment within 10 Business Days after Sprint PCS gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint PCS was overpaid then, unless the amount is contested, Sprint PCS will
pay to Manager the amount of the overpayment within 10 Business Days after
Sprint PCS determines Sprint PCS was overpaid. The auditing party will pay all
costs and expenses related to the audit unless the amount owed to the audited
party is reduced by more than 10% or the amount owed by the audited party is
increased by more than 10%, in which case the costs and expenses related to the
audit will be paid by the audited party.
Notwithstanding the above provisions of this Section 12.1.2, rather than
allow Manager's independent auditors access to Sprint PCS' records, Sprint PCS
may provide a report issued in conformity with Statement of Auditing Standard
No. 70 "Reports on the Processing of Transactions by Service Organizations"
("Type II Report" or "Manager Management Report"). Such report will be prepared
by independent auditors and will provide an opinion on the controls placed in
operation and tests of operating effectiveness of those controls in effect at
Sprint PCS over the Manager Management Processes. "Manager Management Processes"
include those services generally provided within the Management Agreement,
primarily billing and collection of Collected Revenues.
12.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report
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of its determination in reasonable detail and will deliver a copy of the report
to the parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction. The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the non-
contesting party will pay the costs and expenses of the Arbiter, otherwise the
contesting party will pay the costs and expenses of the Arbiter.
12.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the Term and 3 years after the date of termination of this
agreement, keep confidential, not disclose to others and use only for the
purposes authorized in this agreement, all Confidential Information disclosed by
the other party to the party in connection with this agreement, except that the
foregoing obligation will not apply to the extent that any Confidential
Information:
(i) is or becomes, after disclosure to a party, publicly known
by any means other than through unauthorized acts or omissions of the party
or its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
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(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
(v) is required by the receiving party to be produced under
order of a court of competent jurisdiction or other similar requirements of
a governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or associa tion on which the
receiving party's securiti es (or those of its Relate d Parties ) are
or may becom e listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 12.2.
(c) Notwithstanding the foregoing, Manager and Sprint PCS authorize
each other to disclose to the public in regulatory filings the other's identity
and the Service Area to be developed and managed by Manager, and Manager
authorizes Sprint PCS to mention Manager and the Service Area in public
relations announcements.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as is
reasonably necessary to enable the disclosing party to take action to, and use
the party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(e) Manager will not except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different license area, Manager may not use any
of the Confidential Information received under or in connection with this
agreement in operating the other wireless business.
12.3 Insurance
12.3.1 General. During the term of this agreement, Manager must
obtain and maintain, and will cause any subcontractors to obtain and maintain,
with financially reputable insurers licensed to do business in all jurisdictions
where any work is performed under this agreement and who are reasonably
acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance
Requirements. The Sprint PCS Insurance Requirements as of the date of this
agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS
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Insurance
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Requirements as is commercially reasonable from time to time by
delivering to Manager a new Exhibit 12.3.
------------
12.3.2 Waiver of Subrogation. Manager must look first to any
insurance in its favor before making any claim against Sprint PCS or Sprint, and
their respective directors, officers, employees, agents or representatives for
recovery resulting from injury to any person (including Manager's or its
subcontractor's employees) or damage to any property arising from any cause,
regardless of negligence. Manager does hereby release and waive to the fullest
extent permitted by law, and will cause its respective insurers to waive, all
rights of recovery by subrogation against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives.
12.3.3 Certificates of Insurance. Manager and all of its
subcontractors, if any, must, as a material condition of this agreement and
prior to the commencement of any work under and any renewal of this agreement,
deliver to Sprint PCS a certificate of insurance, satisfactory in form and
content to Sprint PCS, evidencing that the above insurance, including waiver of
subrogation, is in force and will not be canceled or materially altered without
first giving Sprint PCS at least 30 days prior written notice and that all
coverages are primary to any insurance carried by Sprint PCS, its directors,
officers, employees, agents or representatives.
Nothing contained in this Section 12.3.3 will limit Manager's liability to
Sprint PCS, its directors, officers, employees, agents or representatives to the
limits of insurance certified or carried.
13. INDEMNIFICATION
13.1 Indemnification by Sprint PCS. Sprint PCS agrees to indemnify, defend
and hold harmless Manager, its directors, managers, officers, employees, agents
and representatives from and against any and all claims, demands, causes of
action, losses, actions, damages, liability and expense, including costs and
reasonable attorneys' fees, against Manager, its directors, managers, officers,
employees, agents and representatives arising from or relating to the violation
by Sprint PCS of any law, regulation or ordinance applicable to Sprint PCS or by
Sprint PCS' breach of any representation, warranty or covenant contained in this
agreement or any other agreement between Sprint PCS or Sprint PCS' Related
Parties and Manager or Manager's Related Parties except where and to the extent
the claim, demand, cause of action, loss, action, damage, liability and/or
expense results solely from the negligence or willful misconduct of Manager.
13.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint PCS and Sprint, and their respective directors, managers,
officers, employees, agents and representatives from and against any and all
claims, demands, causes of action, losses, actions, damages, liability and
expense, including costs and reasonable attorneys' fees, against Sprint PCS or
Sprint, and their respective directors, managers, officers, employees,
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agents and representatives arising from or relating to Manager's violation of
any law, regulation or ordinance applicable to Manager, Manager's breach of any
representation, warranty or covenant contained in this agreement or any other
agreement between Manager or Manager's Related Parties and Sprint PCS and Sprint
PCS' Related Parties, Manager's ownership of the Operating Assets or the
operation of the Service Area Network, or the actions or failure to act of any
of Manager's contractors, subcontractors, agents, directors, managers, officers,
employees and representatives of any of them in the performance of any work
under this agreement, except where and to the extent the claim, demand, cause of
action, loss, action, damage, liability and expense results solely from the
negligence or willful misconduct of Sprint PCS or Sprint, as the case may be.
13.3 Procedure.
13.3.1 Notice. Any party being indemnified ("Indemnitee") will give
the party making the indemnification ("Indemnitor") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(a) any claim or demand is made or liability is asserted
against Indemnitee; or
(b) any suit, action, or administrative or legal proceeding
is instituted or commenced in which Indemnitee is involved or is named
as a defendant either individually or with others.
Failure to give notice as described in this Section 13.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
13.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
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13.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section
13.3.3. Indemnitee is not permitted to settle the dispute or claim without the
prior written approval of Indemnitor, which approval will not be unreasonably
withheld.
13.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
14. DISPUTE RESOLUTION
14.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers
will meet in the manner described in the preceding paragraph. If the matter has
not been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 14.1.
14.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, either party may continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement. If, and only if, this agreement does not
provide a remedy (as in the case of Sections 3.4 and 4.5, where the parties are
supposed to reach an agreement), then either party may give the other party
written notice that it wishes to resolve the dispute or claim arising out of the
parties' inability to agree under such Sections of this agreement by using the
arbitration procedure set
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forth in this Section 14.2. Such arbitration will occur in Kansas City,
Missouri, unless the parties otherwise mutually agree, with the precise location
being as agreed upon by the parties or, absent such agreement, at a location in
Kansas City, Missouri selected by Sprint PCS. Such arbitration will be conducted
pursuant to the procedures prescribed by the Missouri Uniform Arbitration Act,
as amended from time to time, or, if none, pursuant to the rules then in effect
of the American Arbitration Association (or at any other place and by any other
form of arbitration mutually acceptable to the parties). Any award rendered in
such arbitration will be confidential and will be final and conclusive upon the
parties, and a judgment on the award may be entered in any court of the forum,
state or federal, having jurisdiction. The expenses of the arbitration will be
borne equally by the parties to the arbitration, except that each party must pay
for and bear the cost of its own experts, evidence, and attorneys' fees.
The parties must each, within 30 days after either party gives notice to
the other party of the notifying party's desire to resolve a dispute or claim
under the arbitration procedure in this Section 14.2, designate an independent
arbitrator, who is knowledgeable with regard to the wireless telecommunications
industry, to participate in the arbitration hearing. The two arbitrators thus
selected will select a third independent arbitrator, who is knowledgeable with
regard to the wireless telecommunications industry, who will act as chairperson
of the board of arbitration. If, within 15 days after the day the last of the
two named arbitrators is appointed, the two named arbitrators fail to agree upon
the third, then at the request of either party, the third arbitrator shall be
selected pursuant to the rules then in effect of the American Arbitration
Association. The three independent arbitrators will comprise the board of
arbitration, which will preside over the arbitration hearing and will render all
decisions by majority vote. If either party refuses or neglects to appoint an
independent arbitrator within such 30-day period, the independent arbitrator who
has been appointed as of the 31st day after the notifying party's notice will be
the sole independent arbitrator and will solely preside over the arbitration
hearing. The arbitration hearing will commence no sooner than 30 days after the
date the last arbitrator is appointed and no later than 60 days after such date.
The arbitration hearing will be conducted during normal working hours on
Business Days without interruption or adjournment of more than 2 Business Days
at any one time or 6 Business Days in the aggregate.
The arbitrators will deliver their decision to the parties in writing
within 10 days after the conclusion of the arbitration hearing. The arbitration
award will be accompanied by findings of fact and a statement of reasons for the
decision. There will be no appeal from the written decision, except as
permitted by applicable law. The arbitration proceedings, the arbitrators'
decision, the arbitration award, and any other aspect, matter, or issue of or
relating to the arbitration are confidential, and disclosure of such
confidential information is an actionable breach of this agreement.
Notwithstanding any other provision of this agreement, arbitration will not
be required of any issue for which injunctive relief is properly sought by
either party.
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14.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under Section 14.1 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
14.4 Tolling of Cure Periods. Any cure period under Section 11.3 that is
less than 90 days will be tolled during the pendency of the dispute resolution
process. Any cure period under Section 11.3 that is 90 days or longer will not
be tolled during the pendency of the dispute resolution process.
15. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
15.1 Due Incorporation or Formation; Authorization of Agreements. The
party is either a corporation, limited liability company, or limited partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
15.2 Valid and Binding Obligation. This agreement constitutes the valid
and binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
15.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, (b) any term, condition or provision of the articles
of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
15.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
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effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
16. REGULATORY COMPLIANCE
16.1 Regulatory Compliance. Manager will construct, operate, and manage
the Service Area Network in compliance with applicable federal, state, and local
laws and regulations, including Siting Regulations. Nothing in this Section
16.1 will limit Manager's obligations under Section 2.2 and the remainder of
this Section 16. Manager acknowledges that failure to comply with applicable
federal, state, and local laws and regulations in its construction, operation,
and management of the Service Area Network may subject the parties and the
License to legal and administrative agency actions, including forfeiture
penalties and actions that affect the License, such as license suspension and
revocation, and accordingly, Manager agrees that it will cooperate with Sprint
PCS to maintain the License in full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those Siting
Regulations practices and procedures as may be requested by Sprint PCS. Every
six months, and at the request of Sprint PCS, Manager will provide a written
certification from one of Manager's chief officers that Manager's Service Area
Network complies with Siting Regulations. Manager's first certification of
compliance with Siting Regulations will be provided to Sprint PCS six months
after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service Area
Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear
the cost of Siting Regulations compliance audits and physical inspections
requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records. Manager
will make those records available upon request to Sprint PCS for production,
inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will
bear the cost of production, inspection, and copying.
16.2 FCC Compliance. The parties agree to comply with all applicable FCC
rules governing the License or the Service Area Network and specifically agree
as follows:
(a) The party billing a customer will advise the customer that service
is provided over spectrum licensed to Sprint PCS. Neither Manager nor Sprint
PCS will
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represent itself as the legal representative of the other before the FCC or any
other third party, but will cooperate with each other with respect to FCC
matters concerning the License or the Service Area Network.
(b) Sprint PCS will use commercially reasonable efforts to maintain
the License in accordance with the terms of the License and all applicable laws,
policies and regulations and to comply in all material respects with all other
legal requirements applicable to the operation of the Sprint PCS Network and its
business. Sprint PCS has sole responsibility, except as specifically provided
otherwise in Section 2.2, for keeping the License in full force and effect and
for preparing submissions to the FCC or any other relevant federal, state or
local authority of all reports, applications, interconnection agreements,
renewals, or other filings or documents. Manager must cooperate and coordinate
with Sprint PCS' actions to comply with regulatory requirements, which
cooperation and coordination must include, without limitation, the provision to
Sprint PCS of all information that Sprint PCS deems necessary to comply with the
regulatory requirements. Manager must refrain from taking any action that could
impede Sprint PCS from fulfilling its obligations under the preceding sentence,
and must not take any action that could cause Sprint PCS to forfeit or cancel
the License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and applicable
FCC rules. Nothing in this agreement is intended to diminish or restrict Sprint
PCS' obligations as an FCC Licensee and both parties desire that this agreement
and each party's obligations under this agreement be in compliance with the FCC
rules.
(d) Nothing in this agreement will preclude Sprint PCS from permitting
or facilitating resale of Sprint PCS Products and Services to the extent
required or elected under applicable FCC regulations. Manager will take the
actions necessary to facilitate Sprint PCS' compliance with FCC regulations. To
the extent permitted by applicable regulations, Sprint PCS will not authorize a
reseller that desires to sell services and products in only the Service Area to
resell Sprint PCS wholesale products and services, unless Manager agrees in
advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to obtain
FCC consent for the implementation, continuation or further effectuation of any
term or provision of this agreement, Sprint PCS will use all commercially
reasonable efforts diligently to prepare, file and prosecute before the FCC all
petitions, waivers, applications, amendments, rule-making comments and other
related documents necessary to secure and/or retain FCC approval of all aspects
of this agreement. Manager will use commercially reasonable efforts to provide
to Sprint PCS any information that Sprint PCS may request from Manager with
respect to any matter involving Sprint PCS, the FCC, the License, the Sprint PCS
Products and Services or any other products and services approved under Section
3.2. Each party will bear its own costs of preparation of the documents and
prosecution of the actions.
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(f) If the FCC determines that this agreement is inconsistent with the
terms and conditions of the License or is otherwise contrary to FCC policies,
rules and regulations, or if regulatory or legislative action subsequent to the
date of this agreement alters the permissibility of this agreement under the
FCC's rules or other applicable law, rules or regulations, then the parties must
use best efforts to modify this agreement as necessary to cause this agreement
(as modified) to comply with the FCC policies, rules, regulations and applicable
law and to preserve to the extent possible the economic arrangements set forth
in this agreement.
(g) Manager warrants and represents to Sprint PCS that Manager is and
at all times during the Term of this agreement will be in compliance with FCC
rules and regulations regarding limits on classes and amounts of spectrum that
may be owned by Manager. Manager agrees that in the event that Manager is or at
any time becomes in violation of such rules and regulations, Manager will
promptly take all action necessary and appropriate (other than terminating this
agreement) to cure such violation and comply with such rules and regulations,
including without limitation disposing of its direct or indirect interests in
cellular licenses.
16.3 Marking and Lighting. Manager will conform to applicable FAA
standards when Siting Regulations require marking and lighting of Manager's
Service Area Network cell sites. Manager will cooperate with Sprint PCS in
reporting lighting malfunctions as required by Siting Regulations.
16.4 Regulatory Notices. Manager will, within 2 Business Days after its
receipt, give Sprint PCS written notice of all oral and written communications
it receives from regulatory authorities (including but not limited to the FCC,
the FAA, state public service commissions, environmental authorities, and
historic preservation authorities) and complaints respecting Manager's
construction, operation, and management of the Service Area Network that could
result in actions affecting the License as well as written notice of the details
respecting such communications and complaints, including a copy of any written
material received in connection with such communications and complaints.
Manager will cooperate with Sprint PCS in responding to such communications and
complaints received by Manager. Sprint PCS has the right to respond to all such
communications and complaints, with counsel and consultants of its own choice.
If Sprint PCS chooses to respond to such communications and complaints, Manager
will not respond to them without the consent of Sprint PCS, and Manager will pay
the costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs, and
all other reasonable costs and expenses incurred by Sprint PCS.
16.5 Regulatory Policy-Setting Proceedings. Manager will not intervene in
or otherwise participate in a rulemaking, investigation, inquiry, contested
case, or similar regulatory policy setting proceedings before a regulatory
authority concerning the License or
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construction, operation, and management of the Service Area Network and the
Sprint PCS business operated using the Service Area Network.
17. GENERAL PROVISIONS
17.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed as described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
17.2 Construction. This agreement will be construed simply according to
its fair meaning and not strictly for or against either party.
17.3 Headings. The table of contents, section and other headings contained
in this agreement are for reference purposes only and are not intended to
describe, interpret, define, limit or expand the scope, extent or intent of this
agreement.
17.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
17.5 Counterpart Execution. This agreement will be executed by affixing
the parties' signatures to the Master Signature Page, which Master Signature
Page, and thus this agreement, may be executed in any number of counterparts
with the same effect as if both parties had signed the same document. All
counterparts will be construed together and will constitute one agreement.
17.6 Specific Performance. Each party agrees with the other party that the
party would be irreparably damaged if any of the provisions of this agreement
were not performed in accordance with their specific terms and that monetary
damages alone would not provide an adequate remedy. Accordingly, in addition to
any other remedy to which the non-breaching party may be entitled, at law or in
equity, the non-breaching party will be entitled to injunctive relief to prevent
breaches of this agreement and specifically to enforce the terms and provisions
of this agreement.
17.7 Entire Agreement; Amendments. The provisions of this agreement, the
Services Agreement and the Trademark License Agreements (including the exhibits
to those
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agreements) set forth the entire agreement and understanding between the parties
as to the subject matter of this agreement and supersede all prior agreements,
oral or written, and other communications between the parties relating to the
subject matter of this agreement. Except for Sprint PCS' right to amend the
Program Requirements in accordance with Section 9.2 and its right to
unilaterally modify and amend certain other provisions as expressly provided in
this agreement, this agreement may be modified or amended only by a written
amendment signed by persons or entities authorized to bind each party and, with
respect to the sections set forth for Sprint on the Master Signature Page, the
persons or entities authorized to bind Sprint.
17.8 Limitation on Rights of Others. Except as set forth on the Master
Signature Page for Sprint, nothing in this agreement, whether express or
implied, will be construed to give any person or entity other than the parties
any legal or equitable right, remedy or claim under or in respect of this
agreement.
17.9 Waivers.
17.9.1 Waivers--General. The observance of any term of this agreement
may be waived (whether generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce the term, but
any waiver is effective only if in a writing signed by the party against which
the waiver is to be asserted. Except as otherwise provided in this agreement, no
failure or delay of either party in exercising any power or right under this
agreement will operate as a waiver of the power or right, nor will any single or
partial exercise of any right or power preclude any other or further exercise of
the right or power or the exercise of any other right or power.
17.9.2 Waivers--Manager. Manager is not in breach of any covenant in
this agreement and no Event of Termination will have occurred as a result of the
occurrence of any event, if Manager had delegated to Sprint Spectrum under the
Services Agreement (or any successor to that agreement) responsibility for
taking any action necessary to ensure compliance with the covenant or to prevent
the occurrence of the event.
17.9.3 Force Majeure. Neither Manager nor Sprint PCS, as the case may
be, is in breach of any covenant in this agreement and no Event of Termination
will occur as a result of the failure of such party to comply with such
covenant, if such party's non-compliance with the covenant results primarily
from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the party's ability to comply with the
covenant;
(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part of any
governmental authority in granting any consent, approval, waiver or
authorization;
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(iii) the failure of any vendor to deliver in a timely manner
any equipment or services; or
(iv) any act of God, act of war or insurrection, riot, fire,
accident, explosion, labor unrest, strike, civil unrest, work stoppage,
condemnation or any similar cause or event not reasonably within the
control of such party.
17.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.11 Binding Effect. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Service Area Network or of
the License. The parties intend that this agreement bind only the party signing
this agreement and that the agreement is not binding on the Related Parties of a
party unless the agreement expressly provides that Related Parties are bound.
17.12 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
17.13 Severability. The parties intend every provision of this agreement
to be severable. If any provision of this agreement is held to be illegal,
invalid, or unenforceable for any reason, the parties intend that a court
enforce the provision to the maximum extent permissible so as to effect the
intent of the parties (including the enforcement of the remaining provisions).
If necessary to effect the intent of the parties, the parties will negotiate in
good faith to amend this agreement to replace the unenforceable provision with
an enforceable provision that reflects the original intent of the parties.
17.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT
OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR
LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION
AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY
ANOTHER PARTY TO THIS AGREEMENT.
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17.15 No Assignment; Exceptions.
17.15.1 General. Neither party will, directly or indirectly, assign
this agreement or any of the party's rights or obligations under this agreement
without the prior written consent of the other party, except as otherwise
specifically provided in this Section 17.15. Sprint PCS may deny its consent to
any assignment or transfer in its sole discretion except as otherwise provided
in this Section 17.15.
Any attempted assignment of this agreement in violation of this Section
17.15 will be void and of no effect.
A party may assign this agreement to a Related Party of the party, except
that Manager cannot assign this agreement to a Related Party that is a
significant competitor of Sprint, Sprint PCS or their respective Related Parties
in the telecommunications business. Except as provided in Section 17.15.5, an
assignment does not release the assignor from its obligations under this
agreement unless the other party to this agreement consents in writing in
advance to the assignment and expressly grants a release to the assignor.
Except as provided in Section 17.15.5, Sprint PCS must not assign this
agreement to any entity that does not also own the License covering the Service
Area directly or indirectly through a Related Party. Manager must not assign
this agreement to any entity (including a Related Party), unless such entity
assumes all rights and obligations under the Services Agreement, the Trademark
License Agreements and any related agreements.
17.15.2 Assignment Right of Manager to Financial Lender. If Manager
is no longer able to satisfy its financial obligations and other duties, then
Manager has the right to assign its obligations and rights under this agreement
to its Financial Lender, if:
(a) Manager or Financial Lender provides Sprint PCS at least 10 days
advance written notice of such assignment;
(b) Financial Lender cures or commits to cure any outstanding material
breach of this agreement by Manager prior to the end of any applicable cure
period. If Financial Lender fails to make a timely cure then Sprint PCS may
exercise its rights under Section 11;
(c) Financial Lender agrees to serve as an interim trustee for the
obligations and duties of Manager under this agreement for a period not to
exceed 180 days. During this interim period, Financial Lender must identify a
proposed successor to assume the obligations and rights of Manager under this
agreement;
(d) Financial Lender assumes all of Manager's rights and obligations
under the Services Agreement, the Trademark License Agreements and any related
agreements; and
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(e) Financial Lender provides to Sprint PCS advance written notice of
the proposed successor to Manager that Financial Lender has identified
("Successor Notice"). Sprint PCS may give to Financial Lender written notice of
Sprint PCS' decision whether to consent to such proposed successor within 30
days after Sprint PCS' receipt of the Successor Notice. Sprint PCS may not
unreasonably withhold such consent, except that Sprint PCS is not required to
consent to a proposed successor that:
(i) has, in the past, materially breached prior agreements with
Sprint PCS or its Related Parties;
(ii) is a significant competitor of Sprint PCS or its Related
Parties in the telecommunications business;
(iii) does not meet Sprint PCS' reasonable credit criteria;
(iv) fails to execute an assignment of all relevant documents
related to this agreement including the Services Agreement and the
Trademark License Agreements; or
(v) refuses to assume the obligations of Manager under this
Agreement, the Services Agreement, the Trademark License Agreements and any
related agreements.
If Sprint PCS fails to provide a response to Financial Lender within 30
days after receiving the Successor Notice, then the proposed successor is deemed
rejected. Any Financial Lender disclosed on the Build-out Plan on Exhibit 2.1 is
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deemed acceptable to Sprint PCS.
17.15.3 Change of Control Rights. If there is a Change of Control
of Manager, then:
(a) Manager must provide to Sprint PCS advance written notice
detailing relevant and appropriate information about the new ownership interests
effecting the Change of Control of Manager.
(b) Sprint PCS must provide to Manager written notice of its decision
whether to consent to or reject the proposed Change of Control within 30 days
after its receipt of such notice. Sprint PCS may not unreasonably withhold such
consent, except that Sprint PCS is not required to consent to a Change of
Control in which:
(i) the final controlling entity or any of its Related Parties
has in the past materially breached prior agreements with Sprint PCS or its
Related Parties;
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(ii) the final controlling entity or any of its Related Parties
is a significant competitor of Sprint PCS or its Related Parties in the
telecommunications business;
(iii) the final controlling entity does not meet Sprint PCS'
reasonable credit criteria;
(iv) the final controlling entity fails to execute an assignment
of all relevant documents related to this agreement including the Services
Agreement and the Trademark License Agreements; or
(v) the final controlling entity or its Related Parties refuse
to assume the obligations of Manager under this agreement.
(c) In the event that Sprint PCS provides notice that it does not
consent to the Change of Control, Manager is entitled to either:
(i) contest such determination pursuant to the dispute
resolution procedure in Section 14; or
(ii) abandon the proposed Change of Control.
(d) Nothing in this agreement requires Sprint PCS' consent to:
(i) a public offering of Manager that does not result in a
Change of Control (i.e., a shift from one party being in control to no
party being in control is not a Change of Control); or
(ii) a recapitalization or restructuring of the ownership
interests of Manager that Manager determines is necessary to:
(A) facilitate the acquisition of commercial financing and
lending arrangements that will support Manager's operations and
efforts to fulfill its obligations under this agreement; and
(B) that does not constitute a Change of Control.
(e) "Change of Control" means a situation where in any one transaction
or series of related transactions occurring during any 365-day period, the
ultimate parent entity of the Manager changes. The ultimate parent entity is to
be determined using the Hart-Scott-Rodino Antitrust Improvements Act of 1976
rules. A Change of Control does not occur if:
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(i) a party changes the form of its organization without
materially changing their ultimate ownership (e.g., converting from a
limited partnership to a limited liability company); or
(ii) one of the owners of the party on the date of this
agreement or on the date of the closing of Manager's initial equity
offering for purposes of financing its obligations under this agreement
ultimately gains control over the party, unless such party is a significant
competitor of Sprint PCS or Sprint PCS' Related Parties in the
telecommunications business.
17.15.4 Right of First Refusal. Notwithstanding any other provision
in this agreement, Manager grants Sprint PCS the right of first refusal
described below. If Manager determines it wishes to sell an Offered Interest,
upon receiving any Offer to purchase an Offered Interest, Manager agrees to
promptly deliver to Sprint PCS an Offer Notice. The Offer Notice is deemed to
constitute an offer to sell to Sprint PCS, on the terms set forth in the Offer,
all but not less than all of the Offered Interest. Sprint PCS will have a period
of 60 days from the date of the Offer Notice to notify Manager that it agrees to
purchase the Offered Interest on such terms. If Sprint PCS timely agrees in
writing to purchase the Offered Interest, the parties will proceed to consummate
such purchase not later than the 180th day after the date of the Offer Notice.
If Sprint PCS does not agree within the 60-day period to purchase the Offered
Interest, Manager will have the right, for a period of 120 days after such 60th
day, subject to the restrictions set forth in this Section 17, to sell to the
person or entity identified in the Offer Notice all of the Offered Interest on
terms and conditions no less favorable to Manager than those set forth in the
Offer. If Manager fails to sell the Offered Interest to such person or entity on
such terms and conditions within such 120-day period, Manager will again be
subject to the provisions of this Section 17.15.4 with respect to the Offered
Interest.
17.15.5 Transfer of Sprint PCS Network. Sprint PCS may sell, transfer
or assign the Sprint PCS Network or any of the Licenses, including its rights
and obligations under this agreement, the Services Agreement and any related
agreements, to a third party without Manager's consent so long as the third
party assumes the rights and obligations under this agreement and the Services
Agreement. Manager agrees that Sprint PCS and Sprint PCS' Related Parties will
be released from any and all obligations under and with respect to any and all
such agreements upon such sale, transfer or assignment in accordance with this
Section 17.15.5, without the need for Manager to execute any document to effect
such release.
17.6 Provision of Services by Sprint Spectrum. As described in the
Recitals, the party or parties to this agreement that own the Licenses are
referred to in this agreement as "Sprint PCS." Sprint Spectrum will provide most
or all of the services required to be provided by Sprint PCS under this
agreement on behalf of Sprint PCS, other than the services to be rendered by
Manager. For example, Sprint Spectrum is the party to the contracts relating to
the national distribution network, the roaming and long distance services, and
the
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procurement arrangements. Accordingly, Sprint PCS and Manager will deal with
Sprint Spectrum to provide many of the attributes of the Sprint PCS Network.
17.17 Number Portability. Manager understands that the manner in which
customers are assigned to the Service Area Network could change as telephone
numbers become portable without any relation to the service area in which they
are initially activated. To the extent the relationship between NPA-NXX and the
Service Area changes, Sprint PCS will develop an alternative system to attempt
to assign customers who primarily live and work in the Service Area to the
Service Area. The terms of this agreement will be deemed to be amended to
reflect the new system that Sprint PCS develops.
17.18 Disclaimer of Agency. Neither party by this agreement makes the
other party a legal representative or agent of the party, nor does either party
have the right to obligate the other party in any manner, except if the other
party expressly permits the obligation by the party or except for provisions in
this agreement expressly authorizing one party to obligate the other.
17.19 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither
party to this agreement has any fiduciary duty to the other party.
17.20 Expense. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The parties
must not allocate any employee cost or other cost to the other party, except as
otherwise provided in the Program Requirements or to the extent the parties
expressly agree in advance to the allocation.
17.21 General Terms. (a) This agreement is to be interpreted in accordance
with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires.
(ii) The words "include," "includes" and "including" are deemed to
be followed by the phrase "without limitation".
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless otherwise
specified; and
(iv) All references to any agreement or other instrument or statute
or regulation are to it as amended and supplemented from time to time (and, in
the case of a statute or regulation, to any corresponding provisions of
successor statutes or regulations), unless the context otherwise requires.
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(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
17.22 Conflicts with Other Agreements. The provisions of this Management
Agreement govern over those of the Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Services
Agreement. The provisions of each Trademark License Agreement governs over
those of this agreement if the provisions contained in this agreement conflict
with analogous provisions in a Trademark License Agreement.
17.23 Survival Upon Termination. The provisions of Sections 10, 11.4,
11.5, 11.6, 12.2, 13, 14, 16 and 17 of this agreement will survive any
termination of this agreement.
17.24 Announced Transaction. Sprint Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership have
executed a Restructuring and Merger Agreement and related agreements that
provide for restructuring the ownership of Sprint Spectrum L.P., SprintCom,
Inc., PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. Upon
consummation of the transactions contemplated by those agreements, Sprint would
control each of the four entities. While Sprint and Sprint PCS anticipate the
proposed transactions will be consummated, there can be no assurances.
17.25 Additional Terms and Provisions. Certain additional and supplemental
terms and provisions of this agreement, if any, are set forth in the Addendum to
Sprint PCS Management Agreement attached hereto and incorporated herein by this
reference. Manager represents and warrants that the Addendum also describes all
existing contracts and arrangements (written or verbal) that relate to or affect
the rights of Sprint PCS or Sprint under this agreement (e.g., agreements
relating to long distance telephone services (Section 3.4) or backhaul and
transport services (Section 3.7)).
17.26 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
17.27 Agent Authorization. Because of the close operational relationship
between the parties listed together below, each entity authorizes the other
entity to act on its behalf in every capacity under this agreement: (a)
WirelessCo, L.P. and Sprint Spectrum L.P.; (b) Cox PCS License, L.L.C. and Cox
Communications PCS, L.P.; (c) APC PCS, LLC and American PCS Communications, LLC;
and (d) PhillieCo, L.P. and PhillieCo Partners I, L.P.
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ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
MANAGER: LOUISIANA UNWIRED, L.L.C.
SERVICE AREA:
#302 MOBILE AL,
#450 TUSCALOOSA AL,
#193 HOT SPRINGS AR,
#257 LITTLE ROCK AR (CLARK, DALLAS, GRANT AND NEVADA COUNTIES IN ARKANSAS ONLY),
#343 PENSACOLA FL,
#42 BILOXI MS,
#94 COLUMBUS MS,
#175 GREENVILLE MS,
#186 HATTIESBURG MS,
#210 JACKSON MS,
#246 LAUREL MS,
#269 MCCOMB MS,
#290 MEMPHIS TN (GRENADA, MONTGOMERY, TALLAHATCHIE AND YALOBUSHA COUNTIES IN
MISSISSIPPI ONLY)
#292 MERIDIAN MS,
#315 NATCHEZ MS,
#449 TUPELO MS,
#455 VICKSBURG MS
This Addendum contain additional and supplemental terms and provisions
of that certain Sprint PCS Management Agreement (the "MANAGEMENT AGREEMENT")
entered into contemporaneously with and by the same parties as this Addendum.
The terms and provisions of this Addendum control, supersede and amend any
conflicting terms and provisions contained in the Management Agreement. Except
for express modifications made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have
the meanings ascribed to them in the Management Agreement. Section and Exhibit
references are to Sections and Exhibits of the Management Agreement unless
otherwise noted.
The Management Agreement is modified as follows:
1. REVIEW OF OFFERING DOCUMENTS. The following sentence is added to the
end of Section 1.7 of the agreement: "Sprint PCS agrees to review and provide a
response regarding any such statement, prospectus or memorandum or any amendment
or supplement thereto in a commercially reasonable period of time."
<PAGE>
2. CONTINGENT APPROVAL OF BUILD-OUT PLAN. The following paragraph replaces
the second paragraph of Section 2.1 of the agreement in its entirety:
Sprint PCS' approval of the Build-out Plan, as set forth in Exhibit
2.1, is contingent upon its review and approval of the construction and
design of the Service Area Network. Sprint PCS will notify Manager of any
noncompliance with the Sprint PCS Technical Program Requirements, and
Manager agrees to take all necessary actions to bring the Service Area
Network into compliance with the Sprint PCS Technical Program Requirements.
Each new or amended Build-out Plan will also become part of Exhibit 2.1.
3. IXC SERVICES. The following paragraph replaces Section 3.4 of the
agreement in its entirety:
3.4 SERVICES. Management must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale rates,
except that Manager may purchase long distance telephony services that utilize
the networks of one or more of AT&T or MCI/WorldCom (or their successors) if
Sprint fails to exercise a right of last offer within 30 days after Manager
gives Sprint a copy of the wholesale rate proposal. Manager may also purchase
long distance telephony services that utilize the network of another inter-
exchange carrier (IXC) (or its successors) (alone or in conjunction with AT&T or
MCI/WorldCom networks) under the circumstances described in the preceding
sentence, so long as such IXC (or its successors) substantially meets Sprint's
network reliability and voice quality standards in force at the time Sprint
receives the proposal. Manager agrees it will not submit a wholesale rate
proposal to Sprint more often than once during any twelve month period.
4. ADVERTISING INDEMNITY. The following Section 6.5 is added to the
agreement:
"SECTION 6.5 ADVERTISING INDEMNITY. Should Manager utilize the
promotion or advertising materials developed by Sprint PCS (a)
unchanged from their original form as received from Sprint PCS or its
advertising agency(ies), and (b) only utilizes such materials within
the time frame that such materials are being used by Sprint PCS, then
Sprint PCS agrees to indemnify, defend and hold harmless Manager, its
directors, managers, officers, employees, agents and representatives
from and against any and all claims, demands, causes of action, losses,
actions, damages, liability and expense, including costs and reasonable
attorneys' fees, against Manager, its directors, managers, officers,
employees, agents and representatives arising from or relating to the
promotion or advertising materials, except where and to the extent the
claim, demand, cause of action, loss, action, damage, liability and/or
expense results solely from the negligence or willful misconduct of
Manager. If Sprint PCS is obligated to indemnify Manager under this
Section 6.5, then Manager agrees that Sprint PCS shall have sole
control over any litigation or settlement."
5. AMENDMENTS TO PROGRAM REQUIREMENTS. Section 9.2 is modified by
replacing the period after subsection (e) with ";and", and by adding the
following sentence as a new subsection (f): "(f) Prior to Sprint PCS
unilaterally amending the Inter Service Fee, Sprint PCS will consult and discuss
with Manager any changes in the Inter Service Area Program Requirements, prior
to amending the Inter Service Area Program Requirements."
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6. SETOFF RIGHTS. Sprint PCS' setoff rights under Section 10.6 will not
apply to any amounts collected by Sprint PCS from Service Area customers with
respect to products and services (other than Sprint PCS Products and Services
and Manager's Products and Services) that are bundled with Sprint PCS Products
and Services for billing purposes, or to amounts collected by Sprint PCS for
cellular, paging, local exchange and other services that are not provided by
Sprint PCS or a Related Party of Sprint PCS.
7. FAILURE TO OBTAIN FINANCING. If, after using good faith efforts for
six months after the effective date of the Management Agreement, Manager is
unable to obtain its financing described in Exhibit 1.7 on commercially
reasonable terms, the Management Agreement may be terminated by Sprint PCS, but
Sprint PCS agrees it will not exercise any of its rights set forth in Section
11.6 as a result of such termination. Sprint PCS, in its sole discretion, may
extend the six-month period.
8. RIGHT OF FIRST REFUSAL. Sprint PCS' right of first refusal under
Section 17.15.4 will not apply to Manager's sale of an Offered Interest. The
other provisions of Section 17.15 remain in full force and effect.
9. FEDERAL CONTRACTOR COMPLIANCE. A new Section 17.28 is added in the
form attached hereto as Exhibit A and incorporated be reference.
10. YEAR 2000. COMPLIANCE. The following Section 17.29 is added to the
agreement:
SECTION 17.29 YEAR 2000 COMPLIANCE. Manager represents and warrants
that its Service Area Network and any system used to support its Service
Area Network, including without limitation billing, ordering and customer
service (for purposes of this Section "Service Area Network"), will be
capable of correctly processing, providing and receiving date data, as well
as properly exchanging date data with all products (for example hardware,
software and firmware) with which its Service Area Network is designed to be
used and will not malfunction or fail to function due to an inability to
correctly process date data in conformance with Sprint PCS' requirements for
"Year 2000 Compliance". If the Service Area Network fails to operate as
warranted, Manager will, at its own expense, make the necessary repairs,
replacements or upgrades to properly correct the failure and provide a Year
2000 Complaint Service Area Network.
"Year 2000 Compliance" mean the functions, calculations, and other
computing processes Service Area Network (collectively "Processes") perform
and otherwise process, date arithmetic, display, print or pass date/time
data in a consistent manner, regardless of the date in time on which the
Processes are actually performed or the dates used in such data or the
nature of the date/time data input, whether before, during or after January
1, 2000 and whether or not the date/time data is affected by leap years. To
the extent any part of the Service Area Network is intended to be used in
combination with other software, hardware or firmware, it will properly
exchange date/time data with such software, hardware or firmware. The
Service Area Network will accept and respond to two-digit year-date input,
correcting or supplementing as necessary, and store, print, display or pass
date/time data in a manner that is unambiguous as to century. No date/time
data will cause any part of the Service Area Network to perform an
abnormally ending routine or function within the Processes or generate
incorrect final values or invalid results.
1l. FINANCING ARRANGEMENTS. Sprint PCS agrees to postpone modifications to
the Management Agreement, and perhaps to the Schedule of Definitions, the
Services Agreement, the Sprint
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Trademark and Service Mark License Agreement, and the Sprint Spectrum Trademark
and Service Mark License Agreement, that will enhance Manager's ability to
obtain financing for the Service Area Network. Sprint PCS will not be required
to offer the Manager subsequent modifications offered or agreed to with Other
Managers subsequent to the initial set of modifications.
12. CHANGE REGARDING PAYMENT FEES IN SERVICE AGREEMENT. The second
sentence of Section 3.1 of the Services Agreement is deleted in its entirety and
replaced by the following two sentences: "Except with respect to fees paid for
billing-related services, the monthly charge for any fees based on the number of
subscribers of the Service Area Network will be determined based on the number
of subscribers as of the 15th day of the month for which the charge is being
calculated. With respect to fees paid for billing-related services, the monthly
charge for any fees based on the number of subscribers will be based on the
number of gross activations in the month for which the charge is being
calculated plus the number of subscribers of the Service Area Network on the
last day of the prior calendar month.
13. COLUMBUS, NATCHEZ, AND TUPELO BTAs. The parties agree to investigate
the manner in which Manager can build-out the Sprint PCS Network in the
Columbus, MS (BTA #93), Natchez, MS (BTA #315) and Tupelo, MS (BTA #449) BTAs to
enable both Sprint PCS and Manager to perfect their respective licenses in those
BTAs. If any commercially reasonable strategy is discovered, the parties will
negotiate in good faith to implement a plan intended to accomplish such goal.
Nothing in the paragraph will be construed as imposing any obligation or duty
upon Sprint PCS or Manager to implement any plan or take any action, and neither
party in its sole discretion can elect no to agree to implement such a plan.
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ADDENDUM II
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: LOUISIANA UNWIRED, L.L.C.
Service Area: BTA #302 Mobile, AL
BTA #450 Tuscaloosa, AL
BTA #193 Hot Springs, AR
BTA #257 Little Rock, AR (Clark, Dallas, Grant and Nevada
counties in Arkansas only)
BTA #343 Pensacola, FL
BTA #94 Columbus, MS
BTA #175 Greenville, MS
BTA #186 Hattiesburg, MS
BTA #210 Jackson, MS
BTA #246 Laurel, MS
BTA #269 McComb, MS
BTA #290 Memphis, TN (Grenada, Montgomery, Tallahatchie and
Yalobusha counties in Mississippi only)
BTA #292 Meridian, MS
BTA #315 Natchez, MS
BTA #449 Tupelo, MS
BTA #455 Vicksburg, MS
The following markets, which are included in the Service
Area and are collectively referred to as the "Type II
Markets"):
BTA #146 Florence, AL
BTA #158 Gadsden, AL
BTA #340 Panama City, FL
BTA #439 Tallahassee, FL (Jackson County only)
BTA #108 Decatur, AL
BTA #154 Ft. Walton Beach, FL
BTA #17 Anniston, AL
BTA #198 Huntsville, AL
BTA #415 Selma, AL
BTA #305 Montgomery, AL
BTA #459 Birmingham, AL (Chilton, Cullman, Talladega,
Coosa and Tallapoosa counties only)
BTA # 314 Nashville, TN (Maury and Giles county only)
This Addendum II contains certain additional and supplemental terms and
provisions to that certain Sprint PCS Management Agreement entered into as of
February 8, 1999, by the same parties as this Addendum (the "Management
Agreement"), which Management Agreement was further amended
<PAGE>
by that certain Addendum I, dated February 8, 1999 ("Addendum I") The terms and
provisions of this Addendum both (i) replace in their entirety and supersede the
terms and provisions of Addendum I and (ii) control, supersede and amend any
conflicting terms and provisions contained in the Management Agreement. Except
for express modifications made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have the
meanings ascribed to them in the Management Agreement. Section and Exhibit
references are to Sections and Exhibits of the Management Agreement unless
otherwise noted.
The Management Agreement is modified as follows:
1. REVIEW OF OFFERING DOCUMENTS. The following sentence is added to the
end of Section 1.7 of the agreement: "Sprint PCS agrees to review and provide a
response regarding any such statement, prospectus or memorandum or any amendment
or supplement thereto in a commercially reasonable period of time."
2. NETWORK CERTIFICATION COSTS. Network Certification Costs, as
contemplated in Exhibit 2.1.1, will be limited to reasonable travel,
transportation, food, lodging and out-of-pocket expenses incurred by Sprint PCS.
3. CONTINGENT APPROVAL OF BUILD-OUT PLAN. The following paragraph replaces
the second paragraph of Section 2.1 of the agreement in its entirety:
Sprint PCS' approval of the Build-out Plan, as set forth in Exhibit
2.1, is contingent upon its review and approval of the construction and
design of the Service Area Network. Sprint PCS will notify Manager of any
noncompliance with the Sprint PCS Technical Program Requirements, and
Manager agrees to take all necessary actions to bring the Service Area
Network into compliance with the Sprint PCS Technical Program Requirements.
Each new or amended Build-out Plan will also become part of Exhibit 2.1.
4. SERVICES IN TYPE II MARKETS. In the Type II Markets, Manager will
utilize, and pay the designated fee for, all of the services that are designated
as Type II services in Exhibit 2.1.1, as amended from time to time in accordance
with the terms of the Services Agreement.
5. LONG-DISTANCE PRICING. (a) Until Manager purchases long-distances
services from Sprint, the first sentence of Section 3.4 is deleted in its
entirety and replaced, in its place, the following sentence is inserted:
"Manager must purchase from Sprint long distance telephony services for
the Sprint PCS Products and Services at wholesale rates, except that
Manager may purchase long distance telephony services that utilize the
networks of another long-distance provider if Sprint fails to exercise a
right of last offer within 30 days after Manager gives Sprint a copy of the
wholesale rate proposal. Manager may also purchase long distance telephony
services that utilize the network of another long-distance provider under
the circumstances described in the preceding sentence, so long as the long-
distance telephony service of such provider substantially meets Sprint's
network reliability and voice quality standards in force at the time Sprint
receives the proposal. Manager agrees it will not submit a wholesale rate
proposal to Sprint more often than once during any twelve month period."
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(b) Except as set forth in (c) below, at all times after Manager purchases
long-distance services from Sprint,
(i) the first sentence of Section 3.4 is deleted in its entirety and
replaced by the following language:
Manager must purchase long-distance telephony services from Sprint
through Sprint PCS both (i) to provide long-distance telephony service
to users of the Sprint PCS Network and (ii) to connect the Service
Area Network with the national platforms used by Sprint PCS to provide
services to Manager under the agreement and/or the Services Agreement.
Sprint will bill Sprint PCS for such services rendered to Sprint PCS,
Manager and all Other Managers, and in turn, Sprint PCS will bill
Manager for the services used by Manager. Manager will be charged the
same price for such long-distance service as Sprint PCS is charged by
Sprint plus an additional administrative fee to cover Sprint PCS'
processing costs.
(ii) The following sentence is added as a second paragraph in Section
3.4: "Manager may not resell the long-distance telephony services acquired
from Sprint under this Section 3.4."; and
(iii) Section 3.7 is modified by adding the following language:
"(other than backhaul services relating to national platform and IT
application connections, which Manager must purchase from Sprint if Manager
is a Type I or Type II affiliate as described on Exhibit 2.1.1)" both
between (A) "Service Area Network" and "if Manager decides to use" in the
first sentence of the first paragraph and (B) "for these services" and "and
the agreement was not made" in the first sentence of the second paragraph.
(c) If, after Manager has commenced purchasing long-distance services from
Sprint, Manager delivers to Sprint PCS a copy of a competitive bid
from one of the companies identified in (a) above (certified by the
chief executive officer of Manager as an accurate and complete
description of such bid) to provide long-distance services to Manager,
and such bid is for a period not less than two years and includes
transport charges that are at least 15% less than the transport
charges and administrative fee charged by Sprint, the language in (a)
above governs until the underlying contract resulting from the
certified bid terminates, at which time the language in (b) above
governs.
6. ADVERTISING INDEMNITY. The following Section 6.5 is added to the
agreement:
"SECTION 6.5 ADVERTISING INDEMNITY. Should Manager utilize the
promotion or advertising materials developed by Sprint PCS (a)
unchanged from their original form as received from Sprint PCS or its
advertising agency(ies), and (b) only utilizes such materials within
the time frame that such materials are being used by Sprint PCS, then
Sprint PCS agrees to indemnify, defend and hold harmless Manager, its
directors, managers, officers, employees, agents and representatives
from and against any and all claims, demands, causes of action, losses,
actions, damages, liability and expense, including costs and reasonable
attorneys' fees, against Manager, its directors, managers, officers,
employees, agents and representatives arising from or relating to the
promotion or advertising materials, except where and to the extent the
claim, demand, cause of action, loss, action, damage, liability and/or
expense results solely from the negligence or
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willful misconduct of Manager. If Sprint PCS is obligated to indemnify
Manager under this Section 6.5, then Manager agrees that Sprint PCS
shall have sole control over any litigation or settlement."
7. AMENDMENTS TO PROGRAM REQUIREMENTS. Section 9.2 is modified by
replacing the period after subsection (e) with "; and ", and by adding the
following sentence as a new subsection (f): "(f) Prior to Sprint PCS
unilaterally amending the Inter Service Fee, Sprint PCS will consult and discuss
with Manager any changes in the Inter Service Area Program Requirements, prior
to amending the Inter Service Area Program Requirements."
8. SETOFF RIGHTS. Sprint PCS' setoff rights under Section 10.6 will not
apply to any amounts collected by Sprint PCS from Service Area customers with
respect to products and services (other than Sprint PCS Products and Services
and Manager's Products and Services) that are bundled with Sprint PCS Products
and Services for billing purposes, or to amounts collected by Sprint PCS for
cellular, paging, local exchange and other services that are not provided by
Sprint PCS or a Related Party of Sprint PCS.
9. FAILURE TO OBTAIN FINANCING. If, after using good faith efforts,
Manager is unable, by October 30, 1999, to obtain its financing described in
Exhibit 1.7 on commercially reasonable terms, the Management Agreement may be
terminated by Sprint PCS, but Sprint PCS agrees it will not exercise any of its
rights set forth in Section 11.6 as a result of such termination. Sprint PCS, in
its sole discretion, may extend this deadline.
10. RIGHT OF FIRST REFUSAL ON TRANSFER OF EQUITY. Prior to any sale,
assignment or other transfer of any ownership interest in Manager to any party
other than a Related Party of Manager (other than an underwritten public
offering of ownership interests in Manager made pursuant to a registration
statement filed with, and declared effective by, the Securities and Exchange
Commission), the transferring party shall notify Sprint PCS of such transferring
party's intention to transfer and give Sprint PCS a right of first offer to
acquire the interest to be transferred.
11. COLUMBUS, NATCHEZ AND TUPELO BTAS. Manager will build-out the Sprint
PCS Network in the Columbus, MS (BTA #93), Natchez, MS (BTA #315) and Tupelo,
MS (BTA #449) BTAs to enable both Sprint PCS and Manager to perfect their
respective licenses in those BTAs. The parties will negotiate in good faith to
implement a plan intended to accomplish such goal.
12. REVISED FINANCING PLAN. Exhibit 1.7 attached to this Addendum
supersedes and replaces in its entirety Exhibit 1.7 attached to the Management
Agreement.
13. REVISED BUILD-OUT PLAN. Exhibit 2.1 attached to this Addendum
supersedes and replaces in its entirety Exhibit 2.1 attached to the Management
Agreement.
14. FINANCING. (a) The word "and" is inserted between the words "thereto"
and "before" in the last sentence of Section 1.7.
(b) The following paragraph is added at the end of Section 1.7:
Sprint PCS agrees to propose modifications to the Management
Agreement, and perhaps to the Schedule of Definitions, the
Services Agreement, the Sprint Trademark and Service Mark License
Agreement, and the Sprint Spectrum Trademark and Service Mark
License Agreement, that will enhance Manager's
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ability to obtain financing for the Service Area Network. Sprint
PCS will not be required to offer the Manager subsequent
modifications offered or agreed to with Other Managers subsequent
to the initial set of modifications.
15. VOLUNTARY RESALE OF PRODUCTS AND SERVICES. Section 3.5.2 is modified
by amending the second sentence of the second paragraph in its entirety to read
as follows: "If Manager wants handsets of subscribers of resellers with NPA-NXXs
of Manager to be activated, Manager must agree to comply with the terms of the
program, including its pricing provisions."
16. NON-TERMINATION OF AGREEMENT. The following language is added at the
end of Section 11.5.3 and Section 11.6.4: "but such action does not terminate
this agreement."
17. ANNOUNCED TRANSACTIONS. Section 17.24 is deleted in its entirety.
18. ADDITIONAL TERMS AND PROVISIONS. The phrase "the Addendum also
describes" is deleted from the second sentence of Section 17.25, and the
following language is inserted at the end of that second sentence: "are
described on Exhibit 17.25, and photocopies of any such written agreements have
been delivered to Sprint PCS".
19. FEDERAL CONTRACTOR COMPLIANCE. A new Section 17.28, the text of which
is attached as Exhibit A, is added and incorporated by this reference.
20. YEAR 2000 COMPLIANCE. The following Section 17.29 is added:
17.29 YEAR 2000 COMPLIANCE. Sprint PCS and Manager each separately
represents and warrants that any system or equipment acquired, operated or
designated by it for use in the Service Area Network or for use to support
the Service Area Network, including (without limitation) billing, ordering
and customer service systems, will be capable of correctly processing and
receiving date data, as well as properly exchanging date data with all
products (for example, hardware, software and firmware) with which the
Service Area Network is designed to be used, and will not malfunction or
fail to function due to an inability to process correctly date data in
conformance with Sprint PCS requirements for "Year 2000 Compliance." If the
Service Area Network or any system used to support the Service Area Network
fails to operate as warranted due to defects or failures in any system or
equipment selected by Manager (including systems or equipment of third
party vendors and subcontractors selected by Manager rather than by Sprint
PCS) Manager will, at its own expense, make the repairs, replacements or
upgrades necessary to correct the failure and provide a Year 2000 Compliant
Service Area Network. If the Service Area Network or any system used to
support the Service Area Network fails to operate as warranted due to
defects or failures in any systems or equipment selected by Sprint PCS
(including systems or equipment of third party vendors and subcontractors
that Sprint PCS selects and requires Manager to use), Sprint PCS will, at
its own expense, make the repairs, replacements or upgrades necessary to
correct the failure and provide a Year 2000 Compliant Service Area Network.
"Year 2000 Compliance" means the functions, calculations, and other
computing processes of the Service Area Network (collectively "Processes")
that perform and otherwise process, date-arithmetic, display, print or pass
date/time data in a consistent manner, regardless of the date in time on
which the Processes are actually performed or the dates used in such data
or the nature of the date/time data input, whether before, during or after
January 1, 2000 and whether or not the date/time data is affected by leap
years. To the extent any part of the Service
5
<PAGE>
Area Network is intended to be used in combination with other software,
hardware or firmware, it will properly exchange date/time data with such
software, hardware or firmware. The Service Area Network will accept and
respond to two-digit year-date input, correcting or supplementing as
necessary, and store, print, display or pass date/time data in a manner
that is unambiguous as to century. No date/time data will cause any part of
the Service Area Network to perform an abnormally ending routine or
function within the Processes or generate incorrect final values or invalid
results.
21. PAYMENT OF FEES UNDER SERVICES AGREEMENT. The second sentence of
Section 3.1 of the Services Agreement is deleted in its entirety and replaced by
the following two sentences:
Except with respect to fees paid for billing-related services, the monthly
charge for any fees based on the number of subscribers of the Service Area
Network will be determined based on the number of subscribers as of the
15th day of the month for which the charge is being calculated. With
respect to fees paid for billing-related services, the monthly charge for
any fees based on the number of subscribers will be based on the number of
gross activations in the month for which the charge is being calculated
plus the number of subscribers of the Service Area Network on the last day
of the prior calendar month.
22. POST-TERMINATION NON-COMPETE. The following language is added as
Section 1.17 to the Exhibit 11.8:
Notwithstanding anything in the agreement to the contrary, if the agreement
terminates because of Manager's purchase of the Disaggregated License,
Sprint PCS will not, for three years after the date of the termination
compile, create or use for the purpose of selling merchandise or services,
or sell, transfer or otherwise convey to a third party, a list of
customers, who have been transferred to Manager under Section 11.4(d), who
purchased, leased or used any Sprint PCS Products and Services. Sprint PCS
may use such a list for its own internal analysis of its business practices
and operations and Sprint PCS agrees not to solicit such customers directly
for 2 years after the termination of this agreement, except that Sprint
PCS' advertising through mass media or bulk mailings will not be considered
a solicitation of Manager's customers.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to
be executed this 31st day of August, 1999.
LOUISIANA UNWIRED, LLC
By: /s/ Robert Piper
----------------------------
Name: Robert Piper
Title: President
SPRINTCOM, INC.
By: /s/ B. A. Bianchino
----------------------------
Name: B. A. Bianchino
Title: Senior VP
6
<PAGE>
SPRINT SPECTRUM L.P.
By: /s/ Bernie Bianchino
----------------------------
Name: Bernie Bianchino
Title: Chief Business Development
Officer
WIRELESSCO, L.P.
By: /s/ Bernie Bianchino
----------------------------
Name: Bernie Bianchino
Title: Chief Business Development
Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Thomas E. Weigman
----------------------------
Name: Thomas E. Weigman
Title: Senior Vice President -
Consumer Market Strategy
and Communications
7
<PAGE>
Schedule of Definitions
This Schedule of Definitions is the "Schedule of Definitions" referred to
-----------------------
in and incorporated by reference under the Management Agreement, Services
Agreement, and Trademark License Agreements (as such agreements are defined
below). Whenever the phrase "this agreement" is used below, such phrase refers
to the particular agreement under whose terms this Schedule of Definitions is
being applied in that instance. If citations to sections or exhibits of
different agreements are included in a definition, the citation to the
particular agreement under whose terms this Schedule of Definitions is being
applied controls to the exclusion of the citations to different agreements.
The following words and phrases used in this agreement have the following
meanings:
"Addendum" means any addendum attached to this agreement that contains the
amendments to this agreement; such Addendum is expressly incorporated as a part
of this agreement.
"Affiliation Agreement" means any and all of the agreements, known as
Sprint PCS Affiliation Agreements, whereby an affiliate and Sprint PCS and/or
one or more of Sprint PCS' Related Parties agree to the terms and conditions
under which such affiliate will manage the Service Area Network identified in
such agreement, using such Affiliate's own PCS license issued by the FCC and any
documents incorporated by reference in such agreement.
"Agent" has the meaning set forth in Section 3.1 of the Sprint Spectrum
Trademark and Service Mark License Agreement or Section 3.1 of the Sprint
Trademark and Service Mark License Agreement.
"Arbiter" has the meaning set forth in Section 12.1.3 of the Management
Agreement or Section 5.1.3 of the Services Agreement.
"Available Services" means those categories of services listed on Exhibit
-------
2.1.1 to the Services Agreement (as the same may be amended from time to time by
- -----
Sprint Spectrum and made available to Manager under the terms of the Services
Agreement).
"Available Services and Fees Schedule" means that schedule set forth on
Exhibit 2.1.1 to the Services Agreement, which sets forth the Available Services
- -------------
offered from time to time and the fees charged for such Available Services.
"Bankruptcy" means, for the purposes of the Trademark License Agreements,
either a Voluntary Bankruptcy or an Involuntary Bankruptcy.
<PAGE>
"Brands" means the Sprint PCS Brands and the Sprint Brands.
"BTA" means a Basic Trading Area for which a Basic Trading Area (BTA)
license is issued by the FCC.
"Build-out Plan" means the plan agreed upon by Manager and Sprint PCS,
along with any modifications and updates to the plan, respecting the
construction and design of the Service Area Network, a copy of which is attached
as Exhibit 2.1 to the Management Agreement.
-----------
"Business Day" means a day of the year that banks are not required or
authorized to close in the State of New York.
"Cancelled Service" has the meaning set forth in Section 3.2 of the
Services Agreement.
"CDMA" means code division multiple access.
"Change of Control" has the meaning set forth in Section 17.15.3 of the
Management Agreement.
"Collected Revenues" has the meaning set forth in Section 10.4 of the
Management Agreement.
"Confidential Information" means all Program Requirements, guidelines,
standards, and programs, the technical, marketing, financial, strategic and
other information provided by each party under the Management Agreement,
Services Agreement, and Trademark License Agreements, and any other information
disclosed by one party to the other party pursuant to the Management Agreement,
Services Agreement, and Trademark License Agreements that is not specifically
excluded by Section 12.2 of the Management Agreement. In addition to the
preceding sentence, "Confidential Information" has the meaning set forth in
Section 3.1 of the Sprint Spectrum Trademark and Service Mark License Agreement
or Section 3.1 of the Sprint Trademark and Service Mark License Agreement.
"Controlled Related Party" means the Parent of any Person and each
Subsidiary of such Parent. As used in Section 1.2 and Article 3 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 1.2 and Article
3 of the Sprint Trademark and Service Mark License Agreement, the term
"Controlled Related Party" will also include any Related Party of a Person that
such Person or its Parent can directly or indirectly unilaterally cause to take
or refrain from taking any of the actions required, prohibited or otherwise
restricted by such Section, whether through ownership of voting securities,
contractually or otherwise.
2
<PAGE>
"Default Rate" means the rate per annum (computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as applicable),
compounded monthly, equal to the Prime Rate (adjusted as and when changes in the
Prime Rate occur) plus five percent (5%).
"Disaggregated License" means that portion of the License that Manager may
or is required to purchase under Section 11 of the Management Agreement from
Sprint PCS under certain circumstances, after Sprint PCS' receipt of FCC
approval of the necessary disaggregation and partition, which portion comprises
no less than the amount of spectrum sufficient to operate one duplex CDMA
carrier (including the required guard bands) within the PCS Spectrum, and no
more than 10 MHz of the Spectrum (at Manager's designation) covering the Service
Area, and which includes the frequencies then in use in the Service Area Network
and, if applicable, adjacent frequencies, so long as such frequencies in the
aggregate do not exceed 10 MHz.
"Dispute Notice" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"Dispute Notice Date" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"Encumbrances" has the meaning set forth in Section 5.1(a) of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 5.1(a) of the
Sprint Trademark and Service Mark License Agreement.
"Entire Business Value" has the meaning set forth in Section 11.7.3 of the
Management Agreement.
"Event of Termination" means any of the events described in Section 11.3 of
the Management Agreement. For the purposes of the Sprint Spectrum Trademark and
Service Mark License Agreement only, "Event of Termination" has the meaning set
forth in Section 13.2 of that agreement. For the purposes of the Sprint
Trademark and Service Mark License Agreement only, "Event of Termination" has
the meaning set forth in Section 13.2 of that agreement.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"Financial Lender" means any and all of those commercial and financial
institutions that provide material credit to Manager for the purpose of
assisting Manager with the fulfillment of its obligations and duties under this
agreement.
3
<PAGE>
"fixed wireless local loop" has the meaning set forth in Section 2.4 of the
Management Agreement.
"home service area" means the geographic area within which a customer can
make a local call on the customer's PCS phone (i.e., the customer does not incur
an extra charge).
"Inbound Roaming" means calls placed by a non-Sprint PCS Network customer
on the Sprint PCS Network.
"Indemnitee" and "Indemnitor" have the meanings set forth in Section 13.3.1
of the Management Agreement or Section 6.3.1 of the Services Agreement.
"Initial Term" has the meaning set forth in Section 11.1 of the Management
Agreement.
"Involuntary Bankruptcy" has the meaning set forth in Section 11.3.7 of the
Management Agreement.
"Law" means all laws (statutory or otherwise), ordinances, rules,
regulations, bylaws, Orders and codes of all governmental and regulatory
authorities, whether United States Federal, state or local, which are applicable
to the Sprint PCS Products and Services.
"License" means the PCS license(s) issued by the FCC described on the
Service Area Exhibit to the Management Agreement.
- --------------------
"Licensed Marks" means the trademarks and service marks referred to in the
Recitals section of the Trademark License Agreement under whose terms this
definition is being applied, and such other marks as may be adopted and
established under said agreement from time to time.
"Licensee" has the meaning set forth in the introductory paragraph to the
particular agreement under whose terms this definition is being applied.
"Licensor" has the meaning set forth in the introductory paragraph to the
particular agreement under whose terms this definition is being applied.
"local calling area" means the geographic area within which a customer can
make a local call on the customer's PCS handset without incurring a long
distance charge.
4
<PAGE>
"Loss" means any and all damage, loss, liability, claim, out-of-pocket cost
and expense, including reasonable expenses of investigation and reasonable
attorneys' fees and expenses, but excluding consequential or special damages.
"Management Agreement" means that certain Sprint PCS Management Agreement
executed by Manager and Sprint PCS and any documents incorporated by reference
in said agreement.
"Manager" means the party to this agreement as indicated in the
introductory paragraph of this agreement.
"Manager Management Report" has the meaning set forth in Section 12.1.2 of
the Management Agreement.
"Manager's Products and Services" means all types and categories of
wireless communications services and associated products that are offered by
Manager in the Service Area under Section 3.2 of the Management Agreement.
"Marketing Communications Guidelines" means the guidelines issued by Sprint
or Sprint PCS in accordance with Section 5.2 of the Management Agreement with
respect to the marketing, promotion, advertising, distribution, lease and sale
of Sprint PCS Products and Services, as they may be amended from time to time by
Sprint or Sprint PCS in accordance with the terms of the Trademark License
Agreements.
"Master Signature Page" means the document that the parties to the
Management Agreement, Services Agreement and/or one or more of the Trademark
License Agreements sign to evidence their agreement to execute, become a party
to and be bound by each of the agreements, or parts thereof, listed above the
particular party's signature on such Master Signature Page.
"MFN price" or "Most Favored Nation price" means, with respect to resale,
the best local market price offered to any third party for the purchase of air
time on Manager's network including but not limited to any third party who may
use the air time for its own wireless communications services or resell the air
time, and, with respect to roaming, the lowest roaming charge of Manager to
other wireless carriers when their customers roam on the Service Area Network.
"MIN" means the 24-bit mobile identification number corresponding to the 7-
digit telephone number assigned to the handset, used for both billing and
receiving calls.
"MTA" means a Major Trading Area for which a MTA license is issued by the
FCC.
5
<PAGE>
"New Coverage" means the build-out in the Service Area that is in addition
to the build-out required under the then-existing Build-out Plan, which build-
out Sprint PCS or Manager decides should be built-out.
"Notice Address Schedule" means the schedule attached to the Master
Signature Page that provides the mailing and courier delivery addresses, and the
facsimile number, for giving notices to each of the parties signing the Master
Signature Page. The Notice Address Schedule may include supplemental addresses
that serve as additional or alternate notice addresses for use by the parties in
specifically prescribed situations.
"NPA-NXX" means as follows: "NPA" means numbering plan area, which is the
area code for a telephone number. "NXX" refers to the first three digits of a
telephone number, which identify the specific telephone company central office
that serves that number.
"Offer" means an offer received by Manager to sell substantially all of the
assets comprising or used in connection with the operation and management of the
Service Area Network or any portion of the Service Area Network.
"Offer Notice" means a written notice given by Manager to Sprint PCS that
sets forth in detail the terms and conditions of an Offer and the name and
address of the person or entity making the Offer.
"Offered Interest" means the assets that Manager proposes to sell pursuant
to an Offer.
"Operating Assets" means the assets Manager or its Related Parties owns and
uses in connection with the operation of the Service Area Network, at the time
of termination, to provide the Sprint PCS Products and Services. Operating
Assets does not include items such as furniture, fixtures and buildings that
Manager or its Related Parties use in connection with other businesses. Examples
of Operating Assets include without limitation: switches, towers, cell sites,
systems, records and retail stores.
"Operational Level of Sprint PCS" means the average operational level of
all the service area networks operated by Sprint PCS and its Related Parties
without the use of a manager or affiliate, as measured by Sprint PCS, unless the
operational level, as measured by Sprint PCS, of all of the service area
networks operated by Sprint PCS and its Related Parties without the use of a
manager or affiliate that are contiguous to the Service Area are below the
national average, in which case "Operational Level of Sprint PCS" means the
average operational level of those contiguous service area networks.
6
<PAGE>
"Order" means any order, writ, injunction, decree, judgment, award or
determination of any court or governmental or regulatory authority.
"Other Managers" means any person or entity with which Sprint PCS has
entered into an agreement similar to this agreement or an Affiliation Agreement,
including without limitation an affiliate under an Affiliation Agreement or a
manager under another Management Agreement, under which the person or entity
designs, constructs and manages a service area network and offers and promotes
Sprint PCS Products or Services.
"Outbound Roaming" means calls placed by a Sprint PCS Network customer on a
non-Sprint PCS network.
"Parent" means, with respect to any Person, the ultimate parent entity (as
determined in accordance with the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and the rules and regulations promulgated thereunder) of such Person;
except that if such ultimate parent entity is an individual, the Parent will be
the highest entity in the ownership chain from the ultimate parent entity to and
including such Person that is not an individual.
"parties" means, with respect to the Management Agreement, Sprint PCS and
Manager. For the purpose of the services Agreement only, "parties" means Sprint
Spectrum and Manager. Sprint is not a party to the Management Agreement, except
to the limited extent described on the signature page executed on behalf of
Sprint. For the purpose of the Trademark License Agreements only, "parties"
means Licensor and Licensee.
"PCS" means a radio communication system authorized under the rules for
broadband personal communications services designated as Subpart E of Part 24 of
the FCC's rules, including the network, marketing, distribution, sales, customer
interface and operations functions relating thereto.
"PCS Spectrum" means the range of frequencies that Sprint PCS is authorized
to use under the License.
"Permitted Assignee" means any assignee of the rights and obligations of
Licensee pursuant to an assignment consented to in writing by Licensor, in its
sole discretion, in accordance with Section 14.1 of the Sprint Spectrum
Trademark and Service Mark License Agreement or Section 14.1 of the Sprint
Trademark and Service Mark License Agreement, or any subsequent permitted
assignee of any such permitted assignee.
7
<PAGE>
"Person" means any individual, partnership, limited partnership, limited
liability company, corporation, trust, other business association or business
entity, estate, or other entity.
"pops" means the population covered by a license or group of licenses.
Unless otherwise noted, as used in the Management Agreement, pops means the most
recent Rand-McNally Population Survey estimate of the population of a geographic
area.
"Premium and Promotional Items" means all items, including clothing,
memorabilia and novelties, used to display the Licensed Marks for the purpose of
promoting the awareness, sale or image of the Sprint PCS Products and Services;
provided, however, that Premium and Promotional Items does not include marketing
and advertising materials prepared by Licensee that are subject to the Marketing
Communications Guidelines (e.g. printed materials such as bill stuffers,
brochures and similar materials).
"Prime Rate" means the rate announced from time to time by The Chase
Manhattan Bank, or its successor(s), as its prime rate.
"Program Requirements" means the standards, guidelines, plans, policies and
programs established by Sprint PCS from time to time regarding the operation and
management of the Service Area Network and the Sprint PCS business operated
using the Service Area Network, including the Program Requirements set forth in
Sections 4.1, 4.2, 4.3, 7.2 and 8.1 of the Management Agreement. Sprint PCS may
also implement Program Requirements respecting a voluntary resale program, as
defined in Section 3.5.2 of the Management Agreement.
"Purchase Notice" has the meaning set forth in Section 1.2 of Exhibit 11.8
------------
to the Management Agreement.
"Quality Standards" has the meaning set forth in Section 2.1(a) of the
Sprint Spectrum Trademark and Service Mark License Agreement or Section 2.1(a)
of the Sprint Trademark and Service Mark License Agreement.
"Rand-McNally Population Survey" means the most recent population survey
published by Rand-McNally or, if Rand-McNally no longer publishes the surveys,
then the most recent population survey published by any successor organization
to Rand-McNally or, if no such organization exists, an organization selected by
Sprint PCS that provides surveys similar to the Rand-McNally surveys.
"Receiving Party" has the meaning set forth in Section 3.1 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 3.1 of the
Sprint Trademark and Service Mark License Agreement.
8
<PAGE>
"Related Equipment" means customer-controlled equipment for use in
connection with the Sprint PCS Products and Services including telephones,
wireless handsets and related accessories, PCMCIA cards, "smart" cards, PDA's,
PBX's, set-top boxes and data terminals.
"Related Party" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the Person. For purposes of the
Management Agreement, Sprint Spectrum, SprintCom, American PCS Communications,
LLC, PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. will be deemed
to be Related Parties. For purposes of this definition, the term "controls"
(including its correlative meanings "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Restricted Party" has the meaning set forth in Section 3.1 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 3.1 of the
Sprint Trademark and Service Mark License Agreement.
"Selected Services" means those Available Services selected by Manager to
be provided by Sprint Spectrum under Section 2.1 of the Services Agreement. An
Available Service will not be treated as a Selected Service until Sprint
Spectrum begins providing that service.
"Service Area" means the geographic area described on the Service Area
------------
Exhibit to the Management Agreement.
- -------
"Service Area Network" means the network and business activities managed by
Manager under the Management Agreement in the Service Area under the License.
"Services Agreement" means that certain Sprint PCS Services Agreement
executed by Manager and Sprint Spectrum and any documents incorporated by
reference in said agreement, whereby Manager may delegate the performance of
certain services to Sprint PCS for fees that represent an adjustment of the fees
paid by Sprint PCS to Manager under Section 10 of the Management Agreement.
"Siting Regulations" means:
(1) FCC regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 47 CFR
(S)(S)17.1 through 17.58, and as may be amended;
9
<PAGE>
(2) FAA regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 14 CFR
(S)(S)77.1 through 77.75, and as may be amended;
(3) FCC land use regulations as set forth in 47 CFR (S)(S)1.1301
through 1.1319, and as may be amended; and
(4) FCC radio frequency exposure regulations as set forth in 47 CFR
(S)(S)1.1301 through 1.1319, and as may be amended.
"spectrum" has the same meaning as PCS Spectrum.
"Sprint" means Sprint Communications Company, L.P., a Delaware limited
partnership.
"Sprint Brands" means the "Licensed Marks" as that term is defined under
the Sprint Trademark and Service Mark License Agreement.
"Sprint PCS" means any or all of the following Related Parties who are
License holders and signatories to the Management Agreement: Sprint Spectrum
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation,
PhillieCo Partners I, L.P., a Delaware limited partnership, Cox Communications
PCS, L.P., a Delaware limited partnership, and American PCS Communications, LLC,
a Delaware limited liability company. Each entity listed above is a Related
Party to each of the other listed entities.
"Sprint PCS Affiliation Agreement" has the same meaning as Affiliation
Agreement.
"Sprint PCS Brands" means the "Licensed Marks" as that term is defined
under the Sprint Spectrum Trademark and Service Mark License Agreement.
"Sprint PCS Communications Policies" means the policies established in
accordance with Section 6.4 of the Management Agreement with respect to public
relations development, maintenance and management, as they may be amended from
time to time by Sprint PCS in accordance with the terms of the Management
Agreement.
"Sprint PCS Customer Service Program Requirements" means the program and
requirements established in accordance with Section 8.1 of the Management
Agreement with respect to customer service development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
10
<PAGE>
"Sprint PCS Customer Service Standards" means those customer service
standards developed by Sprint PCS with respect to customer service and
maintenance as described in Section 81 of the Management Agreement, as it may be
amended from time to time by Sprint PCS in accordance with the terms of the
Management Agreement.
"Sprint PCS Insurance Requirements" means the insurance requirements
developed by Sprint PCS as described in Section 12.3 of the Management
Agreement, as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS Management Agreement" has the same meaning as Management
Agreement.
"Sprint PCS National Accounts Program Requirements" means the program and
requirements established in accordance with Section 42 of the Management
Agreement with respect to national accounts development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS National or Regional Distribution Program Requirements" means
any distribution program and requirements established in accordance with Section
4.1 of the Management Agreement, as it may be amended from time to time by
Sprint PCS in accordance with the terms of the Management Agreement, and entered
into by Sprint PCS or its Related Parties and a third-party distributor (for
example, a national chain of retail electronics stores) from time to time, under
which the third party will distribute, lease, or sell Sprint PCS Products and
Services on a national or regional basis. The term "distributor" means a
reseller of Sprint PCS Products and Services, or an agent of Sprint PCS
authorized to sell Sprint PCS Products and Services on behalf of Sprint PCS, or
a person engaged in any other means of wholesale or retail distribution of
Sprint PCS Products and Services.
"Sprint PCS Network" means the national wireless network and business
activities to be developed by Sprint PCS, Manager and Other Managers in the
United States and certain of its territories and possessions, which network
includes the Service Area Network.
"Sprint PCS Products and Services" means all types and categories of
wireless communications services and associated products that are designated by
Sprint PCS (whether now existing or developed and implemented in the future) as
products and services to be offered by Sprint PCS, Manager and all Other
Managers as the products and services of the Sprint PCS Network for fixed and
mobile voice, short message and other data services under the FCC's rules for
broadband personal
11
<PAGE>
communications services, including all local area service plans. Sprint PCS
Products and Services do not include wireline products or services, including
local exchange service, wireline long distance service, and wireline based
Internet access.
"Sprint PCS Roaming and Inter Service Area Program Requirements" means:
(i) the roaming program and requirements established in accordance
with Section 43 of the Management Agreement, as amended from time to time by
Sprint PCS in accordance with the terms of the Management Agreement, to provide
for customers from a carrier not associated with the Sprint PCS Network to
operate the customer's handset on the Sprint PCS Network and for customers from
the Sprint PCS Network (whether customers of Sprint PCS, Manager or an Other
Manager) to operate the customer's handset on a network of a carrier not
associated with the Sprint PCS Network, and
(ii) the program established in accordance with Section 43 of the
Management Agreement, as amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement, to provide for customers from one
Service Area on the Sprint PCS Network, whether managed by Sprint PCS, Manager,
or an Other Manager, to operate the customer's handsets and otherwise receive
seamless service, regardless of whether the customer makes its call to or from
the Sprint PCS Network and regardless of whether the customer is a customer of
Sprint PCS, Manager or an Other Manager.
"Sprint PCS Technical Program Requirements" means the operating and
technical performance standards established by Sprint PCS, in accordance with
Section 7.2 of the Management Agreement, as amended from time to time by Sprint
PCS in accordance with the terms of the Management Agreement, for the Sprint PCS
Network as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint Spectrum" means Sprint Spectrum L.P., a Delaware limited
partnership.
"Sprint Spectrum Brands" means the "Licensed Marks" as that term is defined
under the Sprint Spectrum Trademark and Service Mark License Agreement.
"Sprint Spectrum Trademark and Service Mark License Agreement" means that
certain Sprint Spectrum Trademark and Service Mark License Agreement executed by
Manager and Sprint Spectrum and any documents incorporated by reference in said
agreement.
12
<PAGE>
"Sprint Trademark and Service Mark License Agreement" means that certain
Sprint Trademark and Service Mark License Agreement executed by Manager and
Sprint and any documents incorporated by reference in said agreement.
"SprintCom" means SprintCom, Inc., a Kansas corporation.
"Subsidiary" of any Person as of any relevant date means a corporation,
company or other entity (i) more than 50% of whose outstanding shares or equity
securities are, as of such date, owned or controlled, directly or indirectly
through one or more Subsidiaries, by such Person, and the shares or securities
so owned entitle such Person and/or Subsidiaries to elect at least a majority of
the members of the board of directors or other managing authority of such
corporation, company or other entity notwithstanding the vote of the holders of
the remaining shares or equity securities so entitled to vote or (ii) which does
not have outstanding shares or securities, as may be the case in a partnership,
joint venture or unincorporated association, but more than 50% of whose
ownership interest is, as of such date, owned or controlled, directly or
indirectly through one or more Subsidiaries, by such Person, and in which the
ownership interest so owned entitles such Person and/or Subsidiaries to make the
decisions for such corporation, company or other entity.
"Successor Notice" has the meaning set forth in Section 17.15.2(e) of the
Management Agreement.
"Term" means during the term of the Management Agreement, including the
Initial Term and any renewal terms.
"Trademark and Service Mark Usage Guidelines" means the rules governing the
depiction and presentation of the Licensed Marks then generally in use by
Licensor, to be furnished by Licensor to Licensee, as the same may be amended
and updated from time to time by Licensor.
"Trademark License Agreements" means the Sprint Trademark and Service Mark
License Agreement and the Sprint Spectrum Trademark and Service Mark License
Agreement.
"Type II Report" has the meaning set forth in Section 12.1.2 of the
Management Agreement.
"Voluntary Bankruptcy" has the meaning set forth in Section 11.3.7 of the
Management Agreement.
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"wireless mobility communications network" means a radio communications
system operating in the 1900 MHz spectrum range under the rules designated as
Subpart E of Part 24 of the FCC's rules.
14
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SPRINT PCS
SERVICES AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
_______________________
FEBRUARY 8, 1999
<PAGE>
TABLE OF CONTENTS
Page
------
1. ENGAGEMENT OF SPRINT SPECTRUM................................... 1
1.1 ENGAGEMENT OF SPRINT SPECTRUM.............................. 1
1.2 RELIANCE ON MANAGER........................................ 2
1.3 NON-EXCLUSIVE SERVICE...................................... 2
1.4 MANAGER'S USE OF SERVICES.................................. 2
2. SERVICES........................................................ 2
2.1 AVAILABLE SERVICES; SELECTED SERVICES...................... 2
2.1.1 AVAILABLE SERVICES................................. 2
2.1.2 SELECTED SERVICES.................................. 3
2.1.3 CHANGES TO SELECTED SERVICES....................... 3
2.1.4 PERFORMANCE OF SELECTED SERVICES................... 3
2.2 THIRD PARTY VENDORS........................................ 3
2.3 CONTRACTS.................................................. 4
3. FEES FOR SELECTED SERVICES...................................... 4
3.1 PAYMENT OF FEES............................................ 4
3.2 ADJUSTMENT OF FEES......................................... 4
3.3 LATE PAYMENTS.............................................. 4
3.4 TAXES...................................................... 5
4. TERM; TERMINATION; EFFECT OF TERMINATION........................ 5
4.1 TERM....................................................... 5
4.2 EFFECT OF TERMINATION...................................... 5
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION..................... 5
5.1 BOOKS AND RECORDS.......................................... 5
5.1.1 GENERAL............................................ 5
5.1.2 AUDIT.............................................. 6
5.1.3 CONTESTING AN AUDIT................................ 6
5.2 CONFIDENTIAL INFORMATION................................... 7
6. INDEMNIFICATION................................................. 8
6.1 INDEMNIFICATION BY SPRINT SPECTRUM......................... 8
6.2 INDEMNIFICATION BY MANAGER................................. 9
6.3 PROCEDURE.................................................. 9
6.3.1 NOTICE............................................. 9
6.3.2 DEFENSE BY INDEMNITOR.............................. 10
6.3.3 DEFENSE BY INDEMNITEE.............................. 10
6.3.4 COSTS.............................................. 10
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7. DISPUTE RESOLUTION.............................................. 10
7.1 NEGOTIATION................................................ 10
7.2 UNABLE TO RESOLVE.......................................... 11
7.3 ATTORNEYS AND INTENT....................................... 11
8. REPRESENTATIONS AND WARRANTIES.................................. 11
8.1 DUE INCORPORATION OR FORMATION; AUTHORIZATION OF
AGREEMENTS................................................ 11
8.2 VALID AND BINDING OBLIGATION............................... 11
8.3 NO CONFLICT; NO DEFAULT.................................... 12
8.4 LITIGATION................................................. 12
9. GENERAL PROVISIONS.............................................. 12
9.1 NOTICES.................................................... 12
9.2 CONSTRUCTION............................................... 12
9.3 HEADINGS................................................... 12
9.4 FURTHER ACTION............................................. 13
9.5 SPECIFIC PERFORMANCE....................................... 13
9.6 ENTIRE AGREEMENT; AMENDMENTS............................... 13
9.7 LIMITATION ON RIGHTS OF OTHERS............................. 13
9.8 WAIVERS; REMEDIES.......................................... 13
9.9 WAIVER OF JURY TRIAL....................................... 14
9.10 BINDING EFFECT............................................. 14
9.11 GOVERNING LAW.............................................. 14
9.12 SEVERABILITY............................................... 14
9.13 LIMITATION OF LIABILITY.................................... 14
9.14 NO ASSIGNMENT; EXCEPTIONS.................................. 15
9.15 DISCLAIMER OF AGENCY....................................... 15
9.16 INDEPENDENT CONTRACTORS.................................... 15
9.17 EXPENSE.................................................... 15
9.18 GENERAL TERMS.............................................. 15
9.19 CONFLICTS WITH MANAGEMENT AGREEMENT........................ 16
9.20 MASTER SIGNATURE PAGE...................................... 16
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SPRINT PCS SERVICES AGREEMENT
This SERVICES AGREEMENT is made February 8, 1998, by and between Sprint
Spectrum L.P., a Delaware limited partnership ("SPRINT SPECTRUM"), and
____________, a ____________ (but not any Related Party) ("MANAGER"). THE
DEFINITIONS FOR THIS AGREEMENT ARE SET FORTH ON THE "SCHEDULE OF DEFINITIONS".
RECITALS
A. Manager and the holder of the License ("Sprint PCS") are entering into
a Management Agreement contemporaneously with the execution of this agreement,
under which Manager will design, construct, operate, manage and maintain a
wireless services network in the Service Area in accordance with Sprint PCS
standards and will offer and promote Sprint PCS Products and Services that
operate on the Sprint PCS Network.
B. Manager desires to enter into this agreement with Sprint Spectrum,
under which Sprint Spectrum may furnish certain services to Manager to assist
Manager to build out, operate, manage and maintain the Service Area Network
under the License.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. ENGAGEMENT OF SPRINT SPECTRUM
1.1 Engagement of Sprint SPECTRUM. Manager engages Sprint Spectrum to
assist Manager with certain specified services in connection with the operations
of Manager and in building out, operating, managing and maintaining the Service
Area Network, subject to the terms and conditions of this agreement. Sprint
Spectrum accepts the engagement and will use the same effort and demonstrate the
same care in performing its obligations under this agreement as it uses in
conducting its own business. Manager will use the efforts and demonstrate the
care necessary for Sprint Spectrum to meet its obligations under this agreement.
When providing the Selected Services, Sprint Spectrum will provide those
services to Manager in the same manner it provides those services to its own
business, including the use of third party vendors to provide certain Selected
Services.
<PAGE>
1.2 Reliance on Manager. Manager understands that Sprint Spectrum's
ability to provide the Selected Services will depend largely on Manager's
compliance with the Sprint PCS Program Requirements under the Management
Agreement and cooperation with Sprint Spectrum. Manager agrees to comply with
such requirements and to cooperate with Sprint Spectrum to enable Sprint
Spectrum to perform its obligations under this agreement.
1.3 Non-exclusive Service. Nothing contained in this agreement confers
upon Manager an exclusive right to any of the Available Services. Sprint
Spectrum may contract with others to provide expertise and services identical or
similar to those to be made available or provided to Manager under this
agreement.
1.4 Manager's Use of Services. Manager agrees it will only use the
Selected Services in connection with its Service Area Network. Manager will not
use the Selected Services outside the Service Area or in connection with any
other business.
2. SERVICES
2.1 Available Services; Selected Services.
2.1.1 Available Services. Subject to the terms of this agreement,
Manager may obtain any of the Available Services from Sprint Spectrum in
accordance with the provisions of this Section 2.1. The Available Services
offered from time to time and the fees charged for such Available Services will
be set forth on the then-current Exhibit 2.1.1 (the "Available Services and Fees
Schedule"). If Sprint Spectrum offers any new Available Service, it will
deliver a new Exhibit 2.1.1 indicating the new service and the fee for the new
service.
Manager may select one or more of the categories of Available
Services. If Manager selects a particular category of services it must take and
pay for all of the services under the category selected; Manager may not select
only particular services within that category.
If Sprint Spectrum determines to no longer offer an Available Service
and the service is not a Selected Service, then Sprint Spectrum may give Manager
written notice at any time during the term of this agreement that Sprint
Spectrum no longer offers the Available Service.
Sprint Spectrum may modify Exhibit 2.1.1 from time to time. Exhibit
2.1.1 will be deemed amended upon delivery of the new Exhibit 2.1.1 to Manager.
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2.1.2 Selected Services. During the term of this agreement, and
subject to the terms of this agreement, Manager has selected, and Sprint
Spectrum has agreed to furnish or cause to be furnished to Manager, the
Available Services listed on Exhibit 2.1.2 (which listed services will be the
Selected Services). Sprint Spectrum may require from time to time that certain
Available Services be Selected Services where necessary to comply with legal or
regulatory requirements (e.g., mandatory provision of emergency 911 service) or
applicable operating constraints (e.g., delivery of merchandise to the regional
distribution centers of national retail distributors).
2.1.3 Changes to Selected Services. If Manager determines it no longer
requires a Selected Service, then Manager must give Sprint Spectrum written
notice at least 3 months prior to the date on which Manager wishes to
discontinue its use of such Selected Service.
If Sprint Spectrum determines to no longer offer an Available Service
and such service is one of Manager's Selected Services, then Sprint Spectrum
must give Manager written notice at least 9 months prior to its discontinuance
of such Available Service that Sprint Spectrum will no longer offer such
Available Service. If the Available Service to be discontinued is required by
Sprint Spectrum to be a Selected Service, then Sprint Spectrum will use
commercially reasonable efforts to (a) help Manager provide the service itself
or find another vendor to provide the service, and (b) facilitate Manager's
transition to the new service provider.
2.1.4 Performance of Selected Services. Sprint Spectrum may select the
method, location and means of providing the Selected Services. If Sprint
Spectrum wishes to use Manager's facilities to provide the Selected Services,
Sprint Spectrum must obtain Manager's prior written consent.
2.2 Third Party Vendors. Some of the Available Services might be
provided by third party vendors under arrangements between Sprint Spectrum and
the third party vendors. In some instances, Manager may receive Available
Services from a third party vendor under the same terms and conditions that
Sprint Spectrum receives such services. In other instances, Manager may receive
Available Services under the terms and conditions set forth in an agreement
between Manager and the third party vendor. If Manager wishes to engage a third
party vendor to provide Available Services, Selected Services, or Available
Services that Sprint Spectrum will no longer offer, Manager must first obtain
Sprint Spectrum's prior written consent, which consent will not be unreasonably
withheld. Before Manager may obtain from the third party vendor any Available
Services, Selected Services, or Available Services that Sprint Spectrum will no
longer offer, such vendor must execute an agreement prepared by Sprint Spectrum
that obligates the vendor to maintain the confidentiality of any proprietary
information and that prohibits the vendor from using any proprietary technology,
information or methods for its benefit or the benefit of any other person or
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<PAGE>
entity. Manager's use of a third party vendor that is not providing Available
Services to Manager on behalf of Sprint PCS under the Management Agreement will
not qualify for assumed compliance with the Program Requirements under Sections
7.1(a)(ii) or 8.1(b) of the Management Agreement.
2.3 Contracts. Manager will notify Sprint Spectrum of any contract or
other arrangement Manager has with any other party that will affect how Sprint
Spectrum is to provide the Selected Services.
3. FEES FOR SELECTED SERVICES
3.1 Payment of Fees. Sprint Spectrum and Manager agree that the fees for
the Available Services will initially be those set forth on Exhibit 2.1.1, which
fees represent an adjustment to any fees paid by Sprint PCS to Manager under
Section 10 of the Management Agreement. The monthly charge for any fees based
on the number of subscribers of the Service Area Network will be determined
based on the number of subscribers as of the 15th day of the month for which the
charge is being calculated. Manager agrees to pay the fees to Sprint Spectrum
within 20 days after the date of the invoice. If Manager enters into an
agreement with a third party vendor under Section 2.2, Manager agrees to pay the
fees for the services rendered by the third party vendor in accordance with the
terms and conditions of such agreement.
3.2 Adjustment of Fees. Sprint Spectrum may change the fee for any
service it provides once during any 12-month period by delivering a new Exhibit
2.1.1 to Manager. Exhibit 2.1.1 will be deemed amended on the effective date
noted on the new Exhibit 2.1.1, which will be at least 30 days after delivering
the new Exhibit 2.1.1. Manager must notify Sprint Spectrum in writing before
the effective date of the new Exhibit 2.1.1 if Manager wishes to discontinue a
Selected Service for which the price is being increased (a "CANCELLED SERVICE").
If Manager discontinues a Selected Service under this Section 3.2, Sprint
Spectrum will, at Manager's option, continue to provide the Cancelled Service
and to charge Manager the current fee (i.e., the fee under the Exhibit 2.1.1 in
effect on the date Manager gives its cancellation notice to Sprint Spectrum) for
the Cancelled Service for up to 9 months from the date Sprint Spectrum gives
Manager notice of the price change or until Manager no longer needs the
Cancelled Service, whichever occurs first. If Sprint Spectrum continues to
provide the Cancelled Service after the 9-month period, Sprint Spectrum will
apply the new fee, under the new Exhibit 2.1.1, and such fee will be applied
retroactively as of the effective date of the new schedule. Manager agrees to
pay such retroactive charge within 10 days after the date of the invoice for
such charge.
3.3 Late Payments. Any payment due under this Section 3 that is not paid
by Manager to Sprint Spectrum in accordance with the terms of this agreement
will
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<PAGE>
bear interest at the Default Rate beginning (and including) the 6th day
after the due date until (and including) the date on which such payment is made.
3.4 Taxes. Manager will pay or reimburse Sprint Spectrum for any sales,
use, gross receipts or similar tax, administrative fee, telecommunications fee
or surcharge for taxes or fees levied by a governmental authority on the fees
and charges payable to Sprint Spectrum by Manager.
4. TERM; TERMINATION; EFFECT OF TERMINATION
4.1 Term. This agreement commences on the date of execution and continues
until the Management Agreement terminates. This agreement automatically
terminates upon termination of the Management Agreement. Neither party may
terminate this agreement for any reason other than the termination of the
Management Agreement.
4.2 Effect of Termination. Upon the termination of this agreement, all
rights and obligations of each party under this agreement will immediately
cease, except that:
(a) Any rights arising out of a breach of any terms of this agreement
will survive any termination of this agreement;
(b) The provisions of this Section 4.2 and Sections 5.2, 6, 7, and 9
will survive any termination of this agreement; and
(c) The payment obligations under Section 3 will survive any
termination of this agreement if, and to the extent, any fees have accrued or
are otherwise due and owing from Manager to Sprint Spectrum or any Sprint
Spectrum Related Party as of the date of termination of this agreement.
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION
5.1 BOOKS AND RECORDS.
5.1.1 General. Each party must keep and maintain books and records to
support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
5
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5.1.2 Audit. On reasonable advance written notice by the Manager, but
no more frequently than annually, Sprint PCS will provide a report issued in
conformity with Statement of Auditing Standard No. 70 "Reports on the Processing
of Transactions by Service Organizations" ("TYPE II REPORT" or "MANAGER
MANAGEMENT REPORT"). Such report will be prepared by independent auditors and
will provide an opinion on the controls placed in operation and tests of
operating effectiveness of those controls in effect at Sprint PCS over the
Manager Management Processes. "Manager Management Processes" include those
services generally provided within the Management Agreement, primarily billing
and collection of Collected Revenues. The Manager is responsible for costs
incurred attributable to such requested procedures with respect to the services
provided under this agreement, including without limitation discussion of the
billing and collection of Collected Revenues. This report will be made
available to the other party upon such other party's request.
5.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "DISPUTE NOTICE"). The date of delivery of such notice is the
"DISPUTE NOTICE DATE." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "ARBITER")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days
after its selection and engagement all information reasonably requested by the
Arbiter to enable the Arbiter to independently resolve the issue that is the
subject of the Dispute Notice. The Arbiter will make its own determination of
the amount of fees, costs, expenses or other charges payable under this
agreement with respect to the period audited. The Arbiter will issue a written
report of its determination in reasonable detail and will deliver a copy of the
report to the parties within 10 Business Days after the Arbiter receives all of
the information reasonably requested. The determination made by the Arbiter
will be final and binding and may be enforced by any court having jurisdiction.
The parties will cooperate fully in assisting the Arbiter and will take such
actions as are necessary to expedite the completion of and to cause the Arbiter
to expedite its assignment.
6
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If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the non-
contesting party will pay the costs and expenses of the Arbiter, otherwise the
contesting party will pay the costs and expenses of the Arbiter.
5.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the term of this agreement and 3 years after the date of
termination of this agreement, keep confidential, not disclose to others and use
only for the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this agreement,
except that the foregoing obligation will not apply to the extent that any
Confidential Information:
(i) is or becomes, after disclosure to a party, publicly known by
any means other than through unauthorized acts or omissions of the party or
its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
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(v) is required by the receiving party to be produced under order
of a court of competent jurisdiction or other similar requirements of a
governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 5.
(c) The party making a disclosure under Sections 5.2(b)(v), 5.2(b)(vi)
or 5.2(b)(vii) must inform the non-disclosing party as promptly as is reasonably
necessary to enable the non-disclosing party to take action to, and use the
disclosing party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(d) Manager will not, except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different licensed area, Manager may not use
any of the Confidential Information received under or in connection with this
agreement in operating its other wireless business.
6. INDEMNIFICATION
6.1 Indemnification by Sprint Spectrum. Sprint Spectrum agrees to
indemnify, defend and hold harmless Manager, its directors, managers, officers
and employees from and against any and all claims, demands, causes of action,
losses, actions, damages, liability and expense, including costs and reasonable
attorneys' fees, against Manager, its directors, managers, officers and
employees arising from or relating to the violation by Sprint Spectrum, its
directors, officers, employees, contractors, subcontractors, agents or
representatives of any law, regulation or ordinance applicable to Sprint
Spectrum in its performance of the Selected Services, or by Sprint Spectrum's,
or its directors', officers', employees', contractors', subcontractors', agents'
or representatives' breach of any representation, warranty or
8
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covenant contained in this agreement, except where and to the extent the claim,
demand, cause of action, loss, action, damage, liability and expense results
from the negligence or willful misconduct of Manager, its directors, managers,
officers, employees, agents or representatives. Sprint Spectrum's
indemnification obligations under this Section 6.1 do not apply to any third
party vendors that provide services (including Selected Services) directly to
Manager or Manager's Related Parties under a separate agreement.
6.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint Spectrum, its directors, officers and employees from and
against any and all claims, demands, causes of action, losses, actions, damages,
liability and expense, including costs and reasonable attorneys' fees, against
Sprint Spectrum, its directors, officers and employees arising from or relating
to Manager's, or its directors', managers', officers', employees', contractors',
subcontractors', agents' or representatives' violation of any law, regulation or
ordinance applicable to Manager, or by Manager's, or its directors', managers',
officers', employees', contractors', subcontractors', agents' or
representatives' breach of any representation, warranty or covenant contained in
this agreement, Manager's ownership of the Operating Assets or the operation of
the Service Area Network, except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and expense results from the
negligence or willful misconduct of Sprint Spectrum, its directors, officers,
employees, contractors, subcontractors, agents or representatives.
6.3 Procedure.
6.3.1 Notice. Any party being indemnified ("INDEMNITEE") will give the
party making the indemnification ("INDEMNITOR") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(1) any claim or demand is made or liability is asserted against
Indemnitee; or
(2) any suit, action, or administrative or legal proceeding is
instituted or commenced in which Indemnitee is involved or is named as a
defendant either individually or with others.
Failure to give notice as described in this Section 6.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitor is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
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6.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
6.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section 6.
Indemnitee is not permitted to settle the dispute or claim without the prior
written approval of Indemnitor, which approval will not be unreasonably
withheld.
6.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
7. DISPUTE RESOLUTION
7.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as
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they deem reasonably necessary, to exchange relevant information and to attempt
to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 5.1.2 and 5.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers
will meet in the manner described in the preceding paragraph. If the matter has
not been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 7.1.
7.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, the parties will continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement, except neither party may bring a suit
for damages based on an event that occurs during the first two years of this
agreement.
7.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under this Section 7 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
8. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
8.1 Due Incorporation or Formation; Authorization of Agreements. The
party is either a corporation, limited liability company, or limited partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
8.2 Valid and Binding Obligation. This agreement constitutes the valid
and binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization,
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moratorium or other similar laws affecting the enforcement of creditors' rights
generally.
8.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, or (b) any term, condition or provision of the
articles of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
8.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
9. GENERAL PROVISIONS
9.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
9.2 Construction. This agreement will be construed simply according to
its fair meaning and not strictly for or against either party.
9.3 Headings. The table of contents, section and other headings contained
in this agreement are for reference purposes only and are not intended to
describe, interpret, define, limit or expand the scope, extent or intent of this
agreement.
12
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9.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
9.5 Specific Performance. Each party agrees with the other party that the
party would be irreparably damaged if any of the provisions of this agreement
were not performed in accordance with their specific terms and that monetary
damages alone would not provide an adequate remedy. Accordingly, in addition to
any other remedy to which the non-breaching party may be entitled, at law or in
equity, the non-breaching party will be entitled to injunctive relief to prevent
breaches of this agreement and specifically to enforce the terms and provisions
of this agreement.
9.6 Entire Agreement; Amendments. The provisions of this agreement and
the Management Agreement (if Sprint Spectrum is a party to that agreement)
(including the exhibits to those agreements) set forth the entire agreement and
understanding between the parties as to the subject matter of this agreement and
supersede all prior agreements, oral or written, and other communications
between the parties relating to the subject matter of this agreement. Except
for Sprint Spectrum's right to amend the Available Services and the fees charged
for such services as shown on Exhibit 2.1.1, and Manager's right to amend the
Selected Services listed on Exhibit 2.1.2, this agreement may be modified or
amended only by a written amendment signed by persons or entities authorized to
bind each party.
9.7 Limitation on Rights of Others. Nothing in this agreement, whether
express or implied, will be construed to give any person or entity other than
the parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
9.8 Waivers; Remedies. The observance of any term of this agreement may
be waived (whether generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce the term, but
any waiver is effective only if in a writing signed by the party against which
the waiver is to be asserted. Except as otherwise provided in this agreement,
no failure or delay of either party in exercising any power or right under this
agreement will operate as a waiver of the power or right, nor will any single or
partial exercise of any right or power preclude any other or further exercise of
the right or power or the exercise of any other right or power.
Sprint Spectrum is not in breach of any covenant in this agreement, if
failure of such party to comply with such covenant or Sprint Spectrum's non-
compliance with the covenant results primarily from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the ability to comply with the covenant;
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(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part of any
governmental authority in granting any consent, approval, waiver or
authorization;
(iii) the failure of any vendor to deliver in a timely manner any
equipment or service; or
(iv) any act of God, act of war or insurrection, riot, fire,
accident, explosion, labor unrest, strike, civil unrest, work stoppage,
condemnation or any similar cause or event not reasonably within the
control of Sprint Spectrum.
9.9 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
9.10 Binding Effect. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Management Agreement. The
parties intend that this agreement bind only the party signing this agreement
and that the agreement is not binding on the Related Parties of a party unless
the agreement provides that Related Parties are bound.
9.11 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
9.12 Severability. The parties intend every provision of this agreement to
be severable. If any provision of this agreement is held to be illegal, invalid,
or unenforceable for any reason, the parties intend that a court enforce the
provision to the maximum extent permissible so as to effect the intent of the
parties (including the enforcement of the remaining provisions). If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable provision with an enforceable
provision that reflects the original intent of the parties.
9.13 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING
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FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT OF BUSINESS UNDER, OR BREACH
OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR LOSS OF PROFITS ARE CLAIMED BY
OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION AGAINST WHICH A PARTY TO THIS
AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY ANOTHER PARTY TO THIS
AGREEMENT.
9.14 No Assignment; Exceptions. This agreement may only be assigned in
conjunction with and to the same party or parties to whom the Management
Agreement has been validly assigned under the Management Agreement's terms and
conditions.
9.15 Disclaimer of Agency. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
9.16 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither
party to this agreement has any fiduciary duty to the other party.
9.17 Expense. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement.
9.18 General Terms.
(a) This agreement, including the attached Schedule of Definitions, is
to be interpreted in accordance with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires;
(ii) The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation";
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless
otherwise specified; and
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(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to
time (and, in the case of a statute or regulation, to any corresponding
provisions of successor statutes or regulations), unless the context
otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "BUSINESS") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
9.19 Conflicts with Management Agreement. The provisions of the Management
Agreement govern over those of this Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Management
Agreement.
9.20 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
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SPRINT TRADEMARK
AND SERVICE MARK
LICENSE AGREEMENT
BETWEEN
SPRINT COMMUNICATIONS COMPANY, L.P.
AND
LOUISIANA UNWIRED, L.L.C.
Dated as of February 8, 1999
<PAGE>
SPRINT TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
THIS AGREEMENT is made as of the 8th day of February, 1999, by and between
Sprint Communications Company, L.P., a limited partnership organized under the
laws of the State of Delaware, as licensor ("Licensor"), and Louisiana Unwired,
L.L.C. a Louisiana limited liability company as licensee ("Licensee"). THE
DEFINITIONS FOR THIS AGREEMENT ARE SET FORTH ON THE "SCHEDULE OF DEFINITIONS".
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"Sprint", together with related "Diamond" logo, "Sprint PCS", "Sprint Personal
Communications Services" and the goodwill of the business symbolized thereby;
and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE MARK RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor, for
the term of this agreement, a non-transferable, royalty-free license to use
the Licensed Marks solely for and in connection with the marketing,
promotion, advertisement, distribution, lease or sale of Sprint PCS
Products and Services and Premium and Promotional Items in the Service
Area.
(b) Related Equipment. The rights granted hereunder to Licensee shall not
include the right to manufacture equipment under the Licensed Marks.
However, subject to the terms and conditions hereof, Licensor hereby grants
to Licensee, and Licensee hereby accepts from Licensor, for the term of
this agreement, a non-transferable, royalty-free license to market,
promote, advertise, distribute and resell and lease Related Equipment in
connection with the marketing, promotion, advertisement, distribution,
lease or sale by Licensee of Sprint PCS Products and Services, and to
furnish services relating to such Related Equipment (including
installation, repair and maintenance of Related Equipment), under the
Licensed Marks.
<PAGE>
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law. Such
Quality Standards are designed to ensure that the quality of the Sprint PCS
Products and Services and Premium and Promotional Items marketed, promoted,
advertised, distributed, leased and sold under the Licensed Marks are
consistent with the high reputation of the Licensed Marks and are in
conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Affiliation Agreement as
Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall (i) be
consistent with the reputation for quality associated with the Licensed
Marks and (ii) be commensurate with a high level of quality (taking into
account Licensee's fundamental underlying technology and standards),
consistent with the level of quality being offered in the market for
products and services of the same kind as the Sprint PCS Products and
Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to change
the Quality Standards, it will notify Licensee in writing of such proposed
amendments, and will afford Licensee a reasonable time period in which to
adopt such changes as may be required in order for Licensee to conform to
the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking; Compliance with Trademark Laws. Licensee shall
cause the appropriate designation "/TM/" or "/SM/" or the registration symbol
"(R)" to be placed adjacent to the Licensed Marks in connection with the use
thereof and to indicate such additional information as
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Licensor shall reasonably specify from time to time concerning the license
rights under which Licensee uses the Licensed Marks. Licensee shall place the
following notice on all printed or electronic materials on which the Licensed
Marks appear: "SPRINT", the "DIAMOND" logo and "Sprint PCS", "Sprint Personal
Communications Services" are trademarks and/or service marks of Sprint
Communications Company, L.P., "used under license" or such other notice as
Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the
Licensed Marks in any manner that would reflect adversely on the image of
quality symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and
Licensee and their respective Controlled Related Parties (each a "Restricted
Party") shall cause their respective officers and directors (in their capacity
as such) to, and shall take all reasonable measures to cause their respective
employees, attorneys, accountants, consultants and other agents and advisors
(collectively, and together with their respective officers and directors,
"Agents") to, keep secret and maintain in confidence the terms of this agreement
and all confidential and proprietary information and data of the other party or
its Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently comes
into the public domain, through no fault of the receiving party;
(ii) prior to receipt hereunder was property within the legitimate possession of
the Receiving Party or, subsequent to receipt hereunder is lawfully
received from a third party having rights therein without restriction of
the third party's right to disseminate
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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<PAGE>
the Confidential Information and without notice of any restriction against
its further disclosure.
(iii) is independently developed by the Receiving Party through Persons who have
not had, either directly or indirectly, access to or knowledge of such
Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such Confidential
Information shall cease to be confidential and proprietary information
covered by this agreement only to the extent of the disclosure so
consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be produced under order of a court of competent jurisdiction or
other similar requirements of a governmental agency, provided that such
Confidential Information to the extent covered by a protective order or its
equivalent shall otherwise continue to be Confidential Information required
to be held confidential for purpose of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of its
Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of a
protective
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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<PAGE>
order or other appropriate remedy or receipt of a waiver hereunder,
the Receiving Party shall furnish only that portion of the Confidential
Information which it is advised by opinion of its counsel is legally required to
be furnished and shall exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment shall be accorded such
Confidential Information, it being understood that such reasonable efforts shall
be at the cost and expense of the disclosing party whose Confidential
Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall
survive, as to any party, until two (2) years following the date of termination
of this agreement, and, as to any Controlled Related Party of a party, until two
(2) years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i)
Licensee will not at any time challenge Licensor's rights, title or interest in
the Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and
warrants that:
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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<PAGE>
(a) Licensor has good title to the Licensed Marks and has the right to grant
the licenses provided for hereunder in accordance with the terms and
conditions hereof, free of any liabilities, charges, liens, pledges,
mortgages, restrictions, adverse claims, security interests, rights of
others, and encumbrances of any kind (collectively, "Encumbrances"), other
than Encumbrances which will not restrict or interfere in any material
respect with the exercise by Licensee of the rights granted to Licensee
hereunder.
(b) There is no claim, action, proceeding or other litigation pending or, to
the knowledge of Licensor, threatened with respect to Licensor's ownership
of the Licensed Marks or which, if adversely determined, would restrict or
otherwise interfere in any material respect with the exercise by Licensee
of the rights purported to be granted to Licensee hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby
represents and warrants to the other party as follows:
(a) Due Incorporation or Formation; Authorization of Agreement. Such party is
a corporation duly organized, a limited liability company duly organized or
a partnership duly formed, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its incorporation or
formation and has the corporate, company or partnership power and authority
to own its property and carry on its business as owned and carried on at
the date hereof and as contemplated hereby. Such party is duly licensed or
qualified to do business and, if applicable, is in good standing in each of
the jurisdictions in which the failure to be so licensed or qualified
SPRINT PROPRIETARY INFORMATION - RESTRICTED
6
<PAGE>
would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder. Such party has the corporate,
company or partnership power and authority to execute and deliver this
agreement and to perform its obligations hereunder and the execution,
delivery and performance of this agreement have been duly authorized by all
necessary corporate, company or partnership action. Assuming the due
execution and delivery by the other party hereto, this agreement
constitutes the legal, valid and binding obligation of such party
enforceable against such party in accordance with its terms, subject as to
enforceability to limits imposed by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and the availability of equitable
remedies.
(b) No Conflict with Restrictions; No Default. Neither the execution, delivery
and performance of this agreement nor the consummation by such party of the
transactions contemplated hereby (i) will conflict with, violate or result
in a breach of any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator, applicable to such party or any of
its Controlled Related Parties, (ii) will conflict with, violate, result in
a breach of or constitute a default under any of the terms, conditions or
provisions of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited liability
company agreement, or partnership agreement of such party or any of its
Controlled Related Parties or of any material agreement or instrument to
which such party or any of its Controlled Related Parties is a party or by
which such party or any of its Controlled Related Parties is or may be
bound or to which any of its material properties or assets is subject
(other than any such conflict, violation, breach or default that has been
validly and unconditionally waived), (iii) will conflict with, violate,
result in a breach of, constitute a default under (whether with notice or
lapse of time or both), accelerate or permit the acceleration of the
performance required by, give to others any material interests or rights or
require any consent, authorization or approval under any indenture,
mortgage, lease agreement or instrument to which such party or any of its
Controlled Related Parties is a party or by which such party or any of its
Controlled Related Parties is or may be bound, or (iv) will result in the
creation or imposition of any lien upon any of the material properties or
assets of such party or any of its Controlled Related Parties, which in any
such case could reasonably be expected to materially impair such party's
ability to perform its obligations under this agreement or to have a
material adverse effect on the consolidated financial condition of each
party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing with,
or consent, approval, license, permit or other authorization or order by,
any governmental or regulatory authority, domestic or foreign, that is
required to be obtained by such party in connection with the valid
execution, delivery, acceptance and performance by such party under this
agreement or the consummation by such
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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<PAGE>
party of any transaction contemplated hereby has been completed, made or
obtained, as the case may be.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or affecting
such party or any of its Controlled Related Parties or any of their
properties, assets or businesses in any court or before or by any
governmental department, board, agency or instrumentality, domestic or
foreign, or any arbitrator which could, if adversely determined (or, in the
case of an investigation could lead to any action, suit or proceeding,
which if adversely determined could), reasonably be expected to materially
impair such party's ability to perform its obligations under this agreement
or to have a material adverse effect on the consolidated financial
condition of such party or its parent; and such party or any of its
Controlled Related Parties has not received any currently effective notice
of any default, and such party or any of its Controlled Related Parties is
not in default, under any applicable order, writ, injunction, decree,
permit, determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator,
which default could reasonably be expected to materially impair such
party's ability to perform its obligations under this agreement or to have
a material adverse effect on the consolidated financial condition of such
party or its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify
the other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
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<PAGE>
(i) the material breach of any representation or warranty made by such
party in this agreement; and
(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
(b) In addition to the indemnification provided for in Section 8.1(a), Licensee
agrees to indemnify Licensor against and hold it harmless from any Loss
suffered or incurred by Licensor or its Controlled Related Parties by
reason of a third party claim arising out of or relating to (i) the use of
the Licensed Marks by Licensee; or (ii) the marketing, promotion,
advertisement, distribution, lease or sale by Licensee ( or any permitted
sublicensee) or by any additional Licensee (or any permitted sublicensee)
of any Sprint PCS Products and Services, Related Equipment or Premium and
Promotional Items under the Licensed Marks pursuant to this agreement,
including unfair or fraudulent advertising claims, warranty claims and
product defect or liability claims, pertaining to the Sprint PCS Products
and Services, Related Equipment or Premium and Promotional Items.
Notwithstanding the foregoing, Licensee will not be required under this
paragraph (b) to indemnify any Loss arising solely out of Licensee's use of
the Licensed Marks in compliance with the terms of the Trademark and
Service Mark Usage Guidelines; provided that Licensor shall have no
obligation to indemnify for third-party claims alleged to arise from the
specifics of uses of third-party trademarks or service marks, or the
specifics of claims made, in marketing materials prepared by or for
Licensee, which marketing materials have not been approved by Licensor
prior to the publication out of which such claims are alleged to have
arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as set
forth in this agreement shall be unconditional and irrevocable, and shall not be
subject to any defense or be released, discharged or otherwise affected by any
matter, including impossibility, illegality, impracticality, frustration of
purpose, force majeure, act of government, the bankruptcy or insolvency of any
party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make any
use of the Licensed Marks in connection with products or services other than the
Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related
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Equipment and Premium and Promotional Items, nor to make any use of the Licensed
Marks directed outside of the Service Area.
Section 10.2 Adherence to Trademark and Service Mark Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Mark Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed
Marks on any type of marketing, advertising or promotional materials, Licensee
agrees to submit samples of such materials to Licensor for approval. Licensor
shall have fourteen (14) days from the date Licensor receives such materials to
approve or object to any such materials submitted to Licensor for review. In
the event Licensor does not object to such materials within such fourteen (14)
day period, such materials shall be deemed approved by Licensor. Thereafter,
Licensee shall not be obligated to submit to Licensor materials prepared in
accordance with the samples previously approved by Licensor and the Trademark
and Service Mark Usage Guidelines; provided, however, Licensee shall, at the
reasonable request of Licensor, continue to furnish samples of such marketing,
advertising and promotional materials to Licensor from time to time during the
term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee
agrees not to use (a) any trademark or service mark which is confusingly similar
to, or a colorable imitation of, the Licensed Marks or any part thereof, or (b)
any work, symbol, character, or set of words, symbols, or characters, which in
any language would be identified as the equivalent of the Licensed Marks or that
are otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1 Exclusive Use of Licensed Marks. The Sprint PCS Products
and Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee shall
use the Licensed Marks in a manner that is consistent with the brand image and
principles established by Licensor, and mechanics to ensure consistency will be
included in the Marketing Communications Guidelines.
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Section 11.3 Management of Brand Image. Licensor shall be responsible
for the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing
Communications Guidelines shall establish reasonable principles to be followed
in the development of advertising, marketing and promotional campaigns in order
to ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns conducted by Licensee shall be conducted in a manner
consistent with the Marketing Communications Guidelines.
Section 11.4. Advertising Agencies; Promotions. Licensee may select its
own advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall
conduct ongoing reviews of upcoming advertising, marketing and promotional
campaigns of each party and shall use good faith efforts to coordinate their
respective campaigns in a manner that will maximize the advertising, marketing
and promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition, Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5 Ownership of Advertising Materials. All agreements entered
into by Licensee with advertising agencies shall provide that Licensor shall own
all advertising materials (including concepts, themes, characters and the like)
created or developed thereunder. Subject to the terms and conditions set
forth herein, Licensee shall receive a perpetual, non-exclusive, royalty-free
license to use such materials in connection with advertising and promotional
materials developed by Licensee; provided, however, that the rights granted
under such perpetual license shall be limited solely to the use of such
materials and shall not extend the term of the license with respect to the
Licensed Marks provided for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of the
parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
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provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee
agrees, and shall require its permitted sublicensees to agree, not to incur or
contract any debt or obligation on behalf of Licensor, or commit any act, make
any representation, or advertise in any manner that may adversely affect any
right of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution and
continues until the Affiliation Agreement terminates, unless earlier terminated
in accordance with the terms set forth in this Article 13. This agreement
automatically terminates upon termination of the Affiliation Agreement.
Section 13.2. Events of Termination. If any of the following events shall
occur with respect to Licensee, each such occurrence shall be deemed an "Event
of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with any of
the material terms and conditions contained herein in any material respect.
(c) Material Misrepresentation. Licensee breaches any material representation
or warranty of Licensee made in Section 4.2 or Article 6 in any material
respect.
(d) Termination of Affiliation Agreement. The termination of the Affiliation
Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4 Licensee's Right to Terminate. Licensee may, at its option,
without prejudice to any other remedies it may have, terminate this agreement by
giving written notice of
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such termination to Licensor as follows: (a) immediately, in the event that
Licensor abandons the Licensed Marks or otherwise ceases to support the Licensed
Marks in Licensor's business; or (b) immediately in the event of the occurrence
of a Bankruptcy with respect to Licensor; or (c) immediately in the event of an
occurrence of termination pursuant to Section 13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within thirty (30) days following the date on which
this agreement terminates (except in the case of a termination resulting from an
Event of Termination described in Section 13.2(b), (c) or (d), in which case
such rights to use the Licensed Marks will terminate immediately upon the date
of termination); provided, however, that Licensee may thereafter sell, transfer
or otherwise dispose of any Related Equipment and Premium and Promotional Items
that are then in Licensee's inventory (or which Licensee has purchased or is
then legally obligated to purchase) for an additional reasonable period not to
exceed three (3) months. Licensee's right of disposal under this Section 13.5
shall not prohibit Licensor from granting to third parties during the disposal
period licenses and other rights with respect to the Licensed Marks. The
provisions of Articles 3, 4, 5, 6 and 8 will survive any termination of this
agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior
written consent of Licensor (in its sole discretion), shall have no right to
assign any of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing herein
shall be construed to limit the right of the Licensor to transfer or assign its
interests in the Licensed Marks, subject to the agreement of the assignee to be
bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees; Sublicenses; Licenses to
Additional Licensees. Licensee shall not sublicense (or attempt to sublicense)
any of its rights hereunder without the prior written consent of Licensor, in
the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written notice
to the other party. All notices and other communications given to a party in
accordance with the provisions of this
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agreement shall be deemed to have been given and received (i) four (4) Business
Days after the same are sent by certified or registered mail, postage prepaid,
return receipt requested, (ii) when delivered by hand or transmitted by
facsimile (with acknowledgment received and, in the case of a facsimile only, a
copy of such notice is sent no later than the next Business Day by a reliable
overnight courier service, with acknowledgment of receipt) or (iii) one (1)
Business Day after the same are sent by a reliable overnight courier service,
with acknowledgment of receipt .
Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this
agreement.
Section 15.5. Table of Contents; Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is intended
to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this agreement. If necessary to effect the intent
of the parties, the parties will negotiate in good faith to amend this agreement
to replace the unenforceable language with enforceable language which as closely
as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request of
the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of Missouri
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other
party that the other party would be irreparably damaged if any of the provisions
of this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled
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to injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.10. Entire Agreement. The provisions of this agreement set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and supersede all prior agreements, oral or written, and
other communications between the parties relating to the subject matter hereof.
Section 15.11. Limitation on Rights of Others. Nothing in this agreement,
whether express or implied, shall be construed to give any party other than the
parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
Section 15.12. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction; Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any Missouri State court
sitting in the County of Jackson or any Federal court of the United States
of America sitting in the Western District of Missouri, and any appellate
court from any such court, in any suit action or proceeding arising out of
or relating to this agreement, or for recognition or enforcement of any
judgment, and each party hereby irrevocably and unconditionally agrees that
all claims in respect of any such suit, action or proceeding may be heard
and determined in such Missouri State Court or, to the extent permitted by
law, in such Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the fullest
extent it may legally do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out
of or relating to this agreement in Missouri State court sitting in the
County of Jackson or any Federal court sitting in the Western District of
Missouri. Each party hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance
of such suit, action or proceeding in any such court and further waives the
right to object, with respect to such suit, action or proceeding, that such
court does not have jurisdiction over such party.
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(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement, provided
that such service shall be deemed to have been given only when actually
received by such party. Nothing in this agreement shall affect the right
of a party to serve process in another manner permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
agreement.
Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Section 15.16. Master Signature Page. Each party agrees that it will
execute the Master Signature Page that evidences such party's agreement to
execute, become a party to and be bound by this agreement, which document is
incorporated herein by this reference.
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SPRINT SPECTRUM
TRADEMARK AND SERVICE MARK
LICENSE AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
LOUISIANA UNWIRED, L.L.C.
Dated as of February 8, 1999
<PAGE>
SPRINT SPECTRUM TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
------------------------------
THIS AGREEMENT is made as of the 8th day of February, 1999, by and between
Sprint Spectrum L.P., a Delaware limited partnership, as licensor ("Licensor"),
and Louisiana Unwired, L.L.C., a Louisiana limited liability company, as
licensee ("Licensee"). THE DEFINITIONS FOR THIS AGREEMENT ARE SET FORTH ON THE
"SCHEDULE OF DEFINITIONS".
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"THE CLEAR ALTERNATIVE TO CELLULAR" and "EXPERIENCE THE CLEAR ALTERNATIVE TO
CELLULAR TODAY" and such other marks as may be adopted and established from time
to time and the goodwill of the business symbolized thereby; and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE MARK RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor, for
the term of this agreement, a non-transferable, royalty-free license to use
the Licensed Marks solely for and in connection with the marketing,
promotion, advertisement, distribution, lease or sale of Sprint PCS
Products and Services and Premium and Promotional Items in the Service
Area.
(b) Related Equipment. The rights granted hereunder to Licensee shall not
include the right to manufacture equipment under the Licensed Marks.
However, subject to the terms and conditions hereof, Licensor hereby grants
to Licensee, and Licensee hereby accepts from Licensor, for the term of
this agreement, a non-transferable, royalty-free license to market,
promote, advertise, distribute and resell and lease Related Equipment in
connection with the marketing, promotion, advertisement, distribution,
lease or sale by Licensee of Sprint PCS Products and Services, and to
furnish services relating to such Related Equipment (including
installation, repair and maintenance of Related Equipment), under the
Licensed Marks.
<PAGE>
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law. Such
Quality Standards are designed to ensure that the quality of the Sprint PCS
Products and Services and Premium and Promotional Items marketed, promoted,
advertised, distributed, leased and sold under the Licensed Marks are
consistent with the high reputation of the Licensed Marks and are in
conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Management Agreement as
Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall (i) be
consistent with the reputation for quality associated with the Licensed
Marks and (ii) be commensurate with a high level of quality (taking into
account Licensee's fundamental underlying technology and standards),
consistent with the level of quality being offered in the market for
products and services of the same kind as the Sprint PCS Products and
Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to change
the Quality Standards, it will notify Licensee in writing of such proposed
amendments, and will afford Licensee a reasonable time period in which to
adopt such changes as may be required in order for Licensee to conform to
the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking; Compliance with Trademark Laws. Licensee shall
cause the appropriate designation "(TM)" or "(SM)" or the registration symbol
"(R)" to be placed adjacent to the Licensed Marks in connection with the use
thereof and to indicate such additional information as Licensor shall reasonably
specify from time to time concerning the license rights under which
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Licensee uses the Licensed Marks. Licensee shall place the following notice on
all printed or electronic materials on which the Licensed Marks appear: "THE
CLEAR ALTERNATIVE TO CELLULAR", "EXPERIENCE THE CLEAR ALTERNATIVE TO CELLULAR
TODAY", and such other marks as may be adopted and established from time to
time, are trademarks and/or service marks of Sprint Spectrum L.P., "used under
license" or such other notice as Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the Licensed
Marks in any manner that would reflect adversely on the image of quality
symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and
Licensee and their respective Controlled Related Parties (each a "Restricted
Party") shall cause their respective officers and directors (in their capacity
as such) to, and shall take all reasonable measures to cause their respective
employees, attorneys, accountants, consultants and other agents and advisors
(collectively, and together with their respective officers and directors,
"Agents") to, keep secret and maintain in confidence the terms of this agreement
and all confidential and proprietary information and data of the other party or
its Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently comes
into the public domain, through no fault of the receiving party;
(ii) prior to receipt hereunder was property within the legitimate possession
of the Receiving Party or, subsequent to receipt hereunder is lawfully
received from a third party having rights therein without restriction of
the third party's right to disseminate
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the Confidential Information and without notice of any restriction against
its further disclosure.
(iii) is independently developed by the Receiving Party through Persons who have
not had, either directly or indirectly, access to or knowledge of such
Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such Confidential
Information shall cease to be confidential and proprietary information
covered by this agreement only to the extent of the disclosure so
consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be produced under order of a court of competent jurisdiction
or other similar requirements of a governmental agency, provided that such
Confidential Information to the extent covered by a protective order or
its equivalent shall otherwise continue to be Confidential Information
required to be held confidential for purpose of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of its
Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of a
protective order or other appropriate remedy or receipt of a waiver hereunder,
the Receiving Party shall
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furnish only that portion of the Confidential Information which it is advised by
opinion of its counsel is legally required to be furnished and shall exercise
all commercially reasonable efforts to obtain reliable assurance that
confidential treatment shall be accorded such Confidential Information, it being
understood that such reasonable efforts shall be at the cost and expense of the
disclosing party whose Confidential Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall
survive, as to any party, until two (2) years following the date of termination
of this agreement, and, as to any Controlled Related Party of a party, until two
(2) years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i)
Licensee will not at any time challenge Licensor's rights, title or interest in
the Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and
warrants that:
(a) Licensor has good title to the Licensed Marks and has the right to grant
the licenses provided for hereunder in accordance with the terms and
conditions hereof, free of any liabilities, charges, liens, pledges,
mortgages, restrictions, adverse claims,
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security interests, rights of others, and encumbrances of any kind
(collectively, "Encumbrances"), other than Encumbrances which will not
restrict or interfere in any material respect with the exercise by Licensee
of the rights granted to Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending or, to
the knowledge of Licensor, threatened with respect to Licensor's ownership
of the Licensed Marks or which, if adversely determined, would restrict or
otherwise interfere in any material respect with the exercise by Licensee
of the rights purported to be granted to Licensee hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation; Authorization of Agreement. Such party is
a corporation duly organized, a limited liability company duly organized or
a partnership duly formed, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its incorporation or
formation and has the corporate, company or partnership power and authority
to own its property and carry on its business as owned and carried on at
the date hereof and as contemplated hereby. Such party is duly licensed or
qualified to do business and, if applicable, is in good standing in each of
the jurisdictions in which the failure to be so licensed or qualified would
have a material adverse effect on its financial condition or its ability to
perform its obligations hereunder. Such party has the corporate, company
or partnership power and authority to execute and deliver this agreement
and to perform its obligations hereunder and the execution, delivery and
performance of this agreement
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have been duly authorized by all necessary corporate, company or
partnership action. Assuming the due execution and delivery by the other
party hereto, this agreement constitutes the legal, valid and binding
obligation of such party enforceable against such party in accordance with
its terms, subject as to enforceability to limits imposed by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and the
availability of equitable remedies.
(b) No Conflict with Restrictions; No Default. Neither the execution, delivery
and performance of this agreement nor the consummation by such party of the
transactions contemplated hereby (i) will conflict with, violate or result
in a breach of any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator, applicable to such party or any of
its Controlled Related Parties, (ii) will conflict with, violate, result in
a breach of or constitute a default under any of the terms, conditions or
provisions of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited liability
company agreement, or partnership agreement of such party or any of its
Controlled Related Parties or of any material agreement or instrument to
which such party or any of its Controlled Related Parties is a party or by
which such party or any of its Controlled Related Parties is or may be
bound or to which any of its material properties or assets is subject
(other than any such conflict, violation, breach or default that has been
validly and unconditionally waived), (iii) will conflict with, violate,
result in a breach of, constitute a default under (whether with notice or
lapse of time or both), accelerate or permit the acceleration of the
performance required by, give to others any material interests or rights or
require any consent, authorization or approval under any indenture,
mortgage, lease agreement or instrument to which such party or any of its
Controlled Related Parties is a party or by which such party or any of its
Controlled Related Parties is or may be bound, or (iv) will result in the
creation or imposition of any lien upon any of the material properties or
assets of such party or any of its Controlled Related Parties, which in any
such case could reasonably be expected to materially impair such party's
ability to perform its obligations under this agreement or to have a
material adverse effect on the consolidated financial condition of each
party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing with,
or consent, approval, license, permit or other authorization or order by,
any governmental or regulatory authority, domestic or foreign, that is
required to be obtained by such party in connection with the valid
execution, delivery, acceptance and performance by such party under this
agreement or the consummation by such party of any transaction contemplated
hereby has been completed, made or obtained, as the case may be.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or affecting
such party or any of its
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Controlled Related Parties or any of their properties, assets or businesses
in any court or before or by any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could, if
adversely determined (or, in the case of an investigation could lead to any
action, suit or proceeding, which if adversely determined could),
reasonably be expected to materially impair such party's ability to perform
its obligations under this agreement or to have a material adverse effect
on the consolidated financial condition of such party or its parent; and
such party or any of its Controlled Related Parties has not received any
currently effective notice of any default, and such party or any of its
Controlled Related Parties is not in default, under any applicable order,
writ, injunction, decree, permit, determination or award of any court, any
governmental department, board, agency or instrumentality, domestic or
foreign, or any arbitrator, which default could reasonably be expected to
materially impair such party's ability to perform its obligations under
this agreement or to have a material adverse effect on the consolidated
financial condition of such party or its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify
the other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
(i) the material breach of any representation or warranty made by such party in
this agreement; and
(ii) the material breach of any covenant or agreement by such party contained
in this agreement.
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(b) In addition to the indemnification provided for in Section 8.1(a), Licensee
agrees to indemnify Licensor against and hold it harmless from any Loss
suffered or incurred by Licensor or its Controlled Related Parties by
reason of a third party claim arising out of or relating to (i) the use of
the Licensed Marks by Licensee; or (ii) the marketing, promotion,
advertisement, distribution, lease or sale by Licensee ( or any permitted
sublicensee) or by any additional Licensee (or any permitted sublicensee)
of any Sprint PCS Products and Services, Related Equipment or Premium and
Promotional Items under the Licensed Marks pursuant to this agreement,
including unfair or fraudulent advertising claims, warranty claims and
product defect or liability claims, pertaining to the Sprint PCS Products
and Services, Related Equipment or Premium and Promotional Items.
Notwithstanding the foregoing, Licensee will not be required under this
paragraph (b) to indemnify any Loss arising solely out of Licensee's use of
the Licensed Marks in compliance with the terms of the Trademark and
Service Mark Usage Guidelines; provided that Licensor shall have no
obligation to indemnify for third-party claims alleged to arise from the
specifics of uses of third-party trademarks or service marks, or the
specifics of claims made, in marketing materials prepared by or for
Licensee, which marketing materials have not been approved by Licensor
prior to the publication out of which such claims are alleged to have
arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as
set forth in this agreement shall be unconditional and irrevocable, and shall
not be subject to any defense or be released, discharged or otherwise affected
by any matter, including impossibility, illegality, impracticality, frustration
of purpose, force majeure, act of government, the bankruptcy or insolvency of
any party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make
any use of the Licensed Marks in connection with products or services other than
the Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related Equipment and Premium and Promotional
Items, nor to make any use of the Licensed Marks directed outside of the Service
Area.
Section 10.2 Adherence to Trademark and Service Mark Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Mark Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed
Marks on any type of marketing, advertising or promotional materials, Licensee
agrees to submit samples of such materials to Licensor for
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approval. Licensor shall have fourteen (14) days from the date Licensor receives
such materials to approve or object to any such materials submitted to Licensor
for review. In the event Licensor does not object to such materials within such
fourteen (14) day period, such materials shall be deemed approved by Licensor.
Thereafter, Licensee shall not be obligated to submit to Licensor materials
prepared in accordance with the samples previously approved by Licensor and the
Trademark and Service Mark Usage Guidelines; provided, however, Licensee shall,
at the reasonable request of Licensor, continue to furnish samples of such
marketing, advertising and promotional materials to Licensor from time to time
during the term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee
agrees not to use (a) any trademark or service mark which is confusingly similar
to, or a colorable imitation of, the Licensed Marks or any part thereof, or (b)
any work, symbol, character, or set of words, symbols, or characters, which in
any language would be identified as the equivalent of the Licensed Marks or that
are otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1. Exclusive Use of Licensed Marks. The Sprint PCS Products
and Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee
shall use the Licensed Marks in a manner that is consistent with the brand image
and principles established by Licensor, and mechanics to ensure consistency will
be included in the Marketing Communications Guidelines.
Section 11.3 Management of Brand Image. Licensor shall be responsible
for the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing
Communications Guidelines shall establish reasonable principles to be followed
in the development of advertising, marketing and promotional campaigns in order
to ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns
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conducted by Licensee shall be conducted in a manner consistent with the
Marketing Communications Guidelines.
Section 11.4. Advertising Agencies; Promotions. Licensee may select
its own advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall
conduct ongoing reviews of upcoming advertising, marketing and promotional
campaigns of each party and shall use good faith efforts to coordinate their
respective campaigns in a manner that will maximize the advertising, marketing
and promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition, Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5. Ownership of Advertising Materials. All agreements
entered into by Licensee with advertising agencies shall provide that Licensor
shall own all advertising materials (including concepts, themes, characters and
the like) created or developed thereunder. Subject to the terms and
conditions set forth herein, Licensee shall receive a perpetual, non-exclusive,
royalty-free license to use such materials in connection with advertising and
promotional materials developed by Licensee; provided, however, that the rights
granted under such perpetual license shall be limited solely to the use of such
materials and shall not extend the term of the license with respect to the
Licensed Marks provided for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of
the parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee
agrees, and shall require its permitted sublicensees to agree, not to incur or
contract any debt or obligation on behalf of Licensor, or commit any act, make
any representation, or advertise in any manner that may adversely affect any
right of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
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ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution
and continues until the Management Agreement terminates, unless earlier
terminated in accordance with the terms set forth in this Article 13. This
agreement automatically terminates upon termination of the Management Agreement.
Section 13.2. Events of Termination. If any of the following events
shall occur with respect to Licensee, each such occurrence shall be deemed an
"Event of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with any of
the material terms and conditions contained herein in any material respect.
(c) Material Misrepresentation. Licensee breaches any material representation
or warranty of Licensee made in Section 4.2 or Article 6 in any material
respect.
(d) Termination of Management Agreement. The termination of the Management
Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4. Licensee's Right to Terminate. Licensee may, at its
option, without prejudice to any other remedies it may have, terminate this
agreement by giving written notice of such termination to Licensor as follows:
(a) immediately, in the event that Licensor abandons the Licensed Marks or
otherwise ceases to support the Licensed Marks in Licensor's business; or (b)
immediately in the event of the occurrence of a Bankruptcy with respect to
Licensor; or (c) immediately in the event of an occurrence of termination
pursuant to Section 13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within
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thirty (30) days following the date on which this agreement terminates (except
in the case of a termination resulting from an Event of Termination described in
Section 13.2(b), (c) or (d), in which case such rights to use the Licensed Marks
will terminate immediately upon the date of termination); provided, however,
that Licensee may thereafter sell, transfer or otherwise dispose of any Related
Equipment and Premium and Promotional Items that are then in Licensee's
inventory (or which Licensee has purchased or is then legally obligated to
purchase) for an additional reasonable period not to exceed three (3) months.
Licensee's right of disposal under this Section 13.5 shall not prohibit Licensor
from granting to third parties during the disposal period licenses and other
rights with respect to the Licensed Marks. The provisions of Articles 3, 4, 5, 6
and 8 will survive any termination of this agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior
written consent of Licensor (in its sole discretion), shall have no right to
assign any of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing
herein shall be construed to limit the right of the Licensor to transfer or
assign its interests in the Licensed Marks, subject to the agreement of the
assignee to be bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees; Sublicenses; Licenses
to Additional Licensees. Licensee shall not sublicense (or attempt to
sublicense) any of its rights hereunder without the prior written consent of
Licensor, in the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written notice
to the other party in accordance with the provisions of this Section 15.1. All
notices and other communications given to a party in accordance with the
provisions of this agreement shall be deemed to have been given and received (i)
four (4) Business Days after the same are sent by certified or registered mail,
postage prepaid, return receipt requested, (ii) when delivered by hand or
transmitted by facsimile (with acknowledgment received and, in the case of a
facsimile only, a copy of such notice is sent no later than the next Business
Day by a reliable overnight courier service, with acknowledgment of receipt) or
(iii) one (1) Business Day after the same are sent by a reliable overnight
courier service, with acknowledgment of receipt.
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Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this
agreement.
Section 15.5. Table of Contents; Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is
intended to be severable. If any term or provision hereof is illegal, invalid
or unenforceable for any reason whatsoever, that term or provision will be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and such illegality, invalidity or unenforceability shall not affect
the validity or legality of the remainder of this agreement. If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable language with enforceable
language which as closely as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request
of the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of
Missouri (without regard to principles of conflict of law) shall govern the
validity of this agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other
party that the other party would be irreparably damaged if any of the provisions
of this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled to
injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.10. Entire Agreement. The provisions of this agreement set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and supersede all prior agreements, oral or written, and
other communications between the parties relating to the subject matter hereof.
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Section 15.11. Limitation on Rights of Others. Nothing in this
agreement, whether express or implied, shall be construed to give any party
other than the parties any legal or equitable right, remedy or claim under or in
respect of this agreement.
Section 15.12. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction; Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any Missouri State court
sitting in the County of Jackson or any Federal court of the United States
of America sitting in the Western District of Missouri, and any appellate
court from any such court, in any suit action or proceeding arising out of
or relating to this agreement, or for recognition or enforcement of any
judgment, and each party hereby irrevocably and unconditionally agrees that
all claims in respect of any such suit, action or proceeding may be heard
and determined in such Missouri State Court or, to the extent permitted by
law, in such Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the fullest
extent it may legally do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out
of or relating to this agreement in Missouri State court sitting in the
County of Jackson or any Federal court sitting in the Western District of
Missouri. Each party hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance
of such suit, action or proceeding in any such court and further waives the
right to object, with respect to such suit, action or proceeding, that such
court does not have jurisdiction over such party.
(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement, provided
that such service shall be deemed to have been given only when actually
received by such party. Nothing in this agreement shall affect the right
of a party to serve process in another manner permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any action, suit or proceeding arising out of or relating to
this agreement.
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Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Section 15.16. Master Signature Page. Each party agrees that it will
execute the Master Signature Page that evidences such party's agreement to
execute, become a party to and be bound by this agreement, which document in
incorporated herein by this reference.
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SPRINT PCS/LOUISIANA UNWIRED, L.L.C.
MASTER SIGNATURE PAGE
This Master Signature Page is dated and effective as of February 8, 1999
(the "Effective Date"). This document provides the means by which each of the
undersigned entities executes and becomes a party to and bound by, to the extent
set forth above such party's signature, the Management Agreement, Services
Agreement, Sprint Trademark and Service Mark License Agreement, Sprint Spectrum
Trademark and Service Mark License Agreement, and Addendum I to the Management
Agreement. This document may be executed in one or more counterparts. The Notice
Address Schedule attached to this document sets forth the addresses to which
notices should be sent under the agreements.
THE MANAGEMENT AGREEMENT AND THE SERVICES AGREEMENT
CONTAIN BINDING ARBITRATION PROVISIONS THAT MAY BE
ENFORCED BY THE PARTIES TO THOSE AGREEMENTS.
SPRINT SPECTRUM L.P.
For and in consideration of the covenants contained in the Management
Agreement, Services Agreement, Sprint Spectrum Trademark and Service Mark
License Agreement, and Addendum I to the Management Agreement (collectively, the
"Executed Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sprint Spectrum L.P. executes,
becomes a party to, and agrees to be bound by and to perform its obligations
under each of the Executed Agreements as of the Effective Date. The execution by
Sprint Spectrum L.P. of this Master Signature Page has the same force and effect
as if Sprint Spectrum L.P. executed individually each of the Executed
Agreements.
SPRINT SPECTRUM L.P.
By: /s/ Bernard A. Bianchino
------------------------------
Bernard A. Bianchino
Chief Business Development Officer
<PAGE>
SPRINTCOM, INC.
For and in consideration of the covenants contained in the Management
Agreement and Addendum I to the Management Agreement (collectively, the
"Executed Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SprintCom, Inc. executes, becomes
a party to, and agrees to be bound by and to perform its obligations under each
of the Executed Agreements as of the Effective Date. The execution by SprintCom,
Inc. of this Master Signature Page has the same force and effect as if
SprintCom, Inc. executed individually each of the Executed Agreements.
SPRINTCOM, INC.
/s/ WILLIAM R. BLESSING
By: ____________________________
Name: William R. Blessing
Title: _____________________
SPRINT COMMUNICATIONS COMPANY, L.P.
For and in consideration of the covenants contained in the Management
Agreement, Sprint Trademark and Service Mark License Agreement, and Addendum I
to the Management Agreement (collectively, the "Executed Agreements"), and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sprint Communications Company, L.P. executes, becomes a party to,
and agrees to be bound by and to perform its obligations under each of the
Executed Agreements as of the Effective Date; provided, that Sprint
Communications Company, L.P. only agrees to be bound by and perform its
obligations under, and will enjoy the benefits given to it under the with
respect to only those provisions that expressly apply to Sprint Communications
Company, L.P., including its obligations and benefits under Sections 2, 3, and
10. The execution by Sprint Communications Company, L.P. of this Master
Signature Page has the same force and effect as if Sprint Communications
Company, L.P. executed individually each of the Executed Agreements.
SPRINT COMMUNICATIONS COMPANY, L.P.
/s/ WILLIAM R. BLESSING
By: __________________________________
Name: William R. Blessing
Title: ___________________________
<PAGE>
LOUISIANA UNWIRED, L.L.C.
For and in consideration of the covenants contained in the Management
Agreement, Services Agreement, Sprint Trademark and Service Mark License
Agreement, Sprint Spectrum Trademark and Service Mark License Agreement, and
Addendum I to the Management Agreement (collectively, the "Executed
Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Louisiana Unwired, L.L.C.
executes, becomes a party to, and agrees to be bound by and to perform its
obligations under each of the Executed Agreements as of the Effective Date. The
execution by Louisiana Unwired, L.L.C. of this Master Signature Page has the
same force and effect as if Louisiana Unwired, L.L.C. executed individually each
of the Executed Agreements.
LOUISIANA UNWIRED, L.L.C.
THOMAS G. HENNING
By: ____________________________
Name: Thomas G. Henning
Title: Assistant Manager
<PAGE>
NOTICE ADDRESS SCHEDULE
The addresses to which notice is to be sent pursuant to Section 17.1 of
the Management Agreement, Section 9.1 of the Services Agreement, Section 15.1 of
the Sprint Trademark and Service Mark License Agreement, or Section 15.1 of the
Sprint Spectrum Trademark and Service Mark License Agreement are as follows:
SPRINT SPECTRUM L.P.
4900 Main, 12th Floor with a copy to: 4900 Main, 11th Floor
Kansas City, Missouri 64112 Kansas City, Missouri 64112
Telephone: (816) 559-1000 Telephone: (816) 559-1000
Telecopier: (816) 559-1290 Telecopier: (816) 559-2591
Attention: Chief Executive Officer Attention: General Counsel
SPRINTCOM, INC. and
SPRINT COMMUNICATIONS COMPANY, L.P. (and notices regarding the Sprint Brands)
c/o Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
Telephone: 913-624-3326
Telecopier: 913-624-8233
Attention: Corporate Secretary
Mail Stop: KSWESA0110
LOUISIANA UNWIRED, L.L.C.
One Lakeshore Drive
Lake Charles, LA 70629
Telephone: (318) 436-9000
Telecopier: (318) 497-3479
Attention: President
<PAGE>
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT
EXHIBIT 10.5
Sprint PCS
Management Agreement
between
Sprint Spectrum L.P.
SprintCom, INC.
and
Louisiana Unwired, LLC
June 8, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
1. MANAGER........................................................................... 2
1.1 Hiring of Manager....................................................... 2
1.2 Program Requirements.................................................... 3
1.3 Vendor Purchase Agreements.............................................. 3
1.4 Interconnection......................................................... 3
1.5 Seamlessness............................................................ 4
1.6 Forecasting............................................................. 4
1.7 Financing............................................................... 4
1.8 Ethical Conduct and Related Covenants................................... 4
2. BUILD-OUT OF NETWORK.............................................................. 4
2.1 Build-out Plan.......................................................... 4
2.2 Compliance with Regulatory Rules........................................ 5
2.3 Exclusivity of Service Area............................................. 5
2.4 Restriction............................................................. 6
2.5 Manager's Right of First Refusal for New Area Build-out................. 6
2.6 Purchase of Assets by Manager........................................... 7
2.7 Microwave Relocation.................................................... 7
2.8 Determination of pops................................................... 7
3. PRODUCTS AND SERVICES; IXC SERVICES............................................... 7
3.1 Sprint PCS Products and Services........................................ 7
3.2 Other Products and Services............................................. 8
3.3 Cross-selling with Sprint............................................... 8
3.4 IXC Services............................................................ 9
3.5 Resale of Products and Services......................................... 9
3.5.1 Mandatory Resale of Products and Services......................... 9
3.5.2 Voluntary Resale of Products and Services......................... 9
3.6 Non-competition......................................................... 10
3.7 Right of Last Offer..................................................... 10
4. MARKETING AND SALES ACTIVITIES.................................................... 11
4.1 Sprint PCS National or Regional Distribution Program Requirements....... 11
4.1.1 Territorial Limitations on Manager's Distribution Activities...... 11
4.1.2 Settlement of Equipment Sales..................................... 11
4.1.3 Use of Third-Party Distributors................................... 12
</TABLE>
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<TABLE>
<S> <C>
4.2 Sprint PCS National Accounts Program Requirements.......................... 12
4.3 Sprint PCS Roaming and Inter Service Area.................................. 12
4.4 Pricing.................................................................... 12
4.5 Home Service Area.......................................................... 13
5. USE OF BRANDS......................................................................... 13
5.1 Use of Brands.............................................................. 13
5.2 Conformance to Marketing Communications Guidelines......................... 14
5.3 Joint Marketing With Third Parties......................................... 14
5.4 Prior Approval of Use of Brands............................................ 15
5.5 Duration of Use of Brand................................................... 15
6. ADVERTISING AND PROMOTION............................................................. 16
6.1 National Advertising and Promotion......................................... 16
6.2 In-Territory Advertising and Promotion..................................... 16
6.3 Review of Advertising and Promotion Campaigns.............................. 16
6.4 Public Relations........................................................... 17
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS............................................. 17
7.1 Conformance to Sprint PCS Technical Program Requirements................... 17
7.2 Establishment of Sprint PCS Technical Program Requirements................. 17
7.3 Handoff to Adjacent Networks............................................... 18
8. SPRINT PCS CUSTOMER SERVICE PROGRAM................................................... 18
8.1 Compliance With Sprint PCS Customer Service Program Requirements........... 18
9. SPRINT PCS PROGRAM REQUIREMENTS....................................................... 18
9.1 Program Requirements Generally............................................. 18
9.2 Amendments to Program Requirements......................................... 19
9.3 Manager's Right to Request Review of Changes............................... 20
9.4 Sprint PCS' Right to Implement Changes..................................... 20
9.5 Rights of Inspection....................................................... 21
9.6 Manager's Responsibility to Interface with Sprint PCS...................... 21
10. FEES.................................................................................. 21
10.1 Fees and Payments.......................................................... 21
10.1.1 Fee Based on Collected Revenue..................................... 21
10.1.2 Payment of Universal Service Funds................................. 21
10.1.3 Inter Service Area Fees............................................ 22
10.1.4 Interconnect Fees.................................................. 22
10.1.5 Outbound Roaming Fees.............................................. 22
10.1.6 Reimbursements..................................................... 22
</TABLE>
ii
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<TABLE>
<S> <C>
10.2 Monthly True Up............................................................ 22
10.3 Taxes...................................................................... 23
10.4 Collected Revenues Definition.............................................. 23
10.5 Late Payments.............................................................. 24
10.6 Setoff Right If Failure To Pay Amounts Due................................. 24
11. TERM; TERMINATION; EFFECT OF TERMINATION.............................................. 25
11.1 Initial Term............................................................... 25
11.2 Renewal Terms.............................................................. 25
11.2.1 Non-renewal Rights of Manager...................................... 25
11.2.1.1 Manager's Put Right...................................... 25
11.2.1.2 Manager's Purchase Right................................. 26
11.2.2 Non-renewal Rights of Sprint PCS................................... 26
11.2.2.1 Sprint PCS' Purchase Right............................... 27
11.2.2.2 Sprint PCS' Put Right.................................... 27
11.2.2.3 Extended Term Awaiting FCC Approval...................... 28
11.3 Events of Termination...................................................... 28
11.3.1 Termination of License............................................. 28
11.3.2 Breach of Agreement: Payment of Money Terms....................... 29
11.3.3 Breach of Agreement: Other Terms.................................. 29
11.3.4 Regulatory Considerations.......................................... 29
11.3.5 Termination of Trademark License Agreements........................ 29
11.3.6 Financing Considerations........................................... 30
11.3.7 Bankruptcy of a Party.............................................. 30
11.4 Effect of an Event of Termination.......................................... 31
11.5 Manager's Event of Termination Rights and Remedies......................... 33
11.5.1 Manager's Put Right................................................ 33
11.5.2 Manager's Purchase Right........................................... 33
11.5.3 Manager's Action for Damages or Other Relief....................... 34
11.6 Sprint PCS' Event of Termination Rights and Remedies....................... 34
11.6.1 Sprint PCS' Purchase Right......................................... 35
11.6.2 Sprint PCS' Put Right.............................................. 35
11.6.3 Sprint PCS' Right to Cause A Cure.................................. 36
11.6.4 Sprint PCS' Action for Damages or Other Relief..................... 38
11.7 Determination of Entire Business Value..................................... 38
11.7.1 Appointment of Appraisers.......................................... 38
11.7.2 Manager's Operating Assets......................................... 38
11.7.3 Entire Business Value.............................................. 39
11.7.4 Calculation of Entire Business Value............................... 39
11.8 Closing Terms and Conditions............................................... 40
11.9 Contemporaneous and Identical Application.................................. 40
</TABLE>
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<TABLE>
<S> <C>
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE................................ 40
12.1 Books and Records.......................................................... 40
12.1.1 General............................................................ 40
12.1.2 Audit.............................................................. 40
12.1.3 Contesting an Audit................................................ 41
12.2 Confidential Information................................................... 42
12.3 Insurance.................................................................. 43
12.3.1 General............................................................ 43
12.3.2 Waiver of Subrogation.............................................. 43
12.3.3 Certificates of Insurance.......................................... 44
13. INDEMNIFICATION....................................................................... 44
13.1 Indemnification by Sprint PCS.............................................. 44
13.2 Indemnification by Manager................................................. 44
13.3 Procedure.................................................................. 45
13.3.1 Notice............................................................. 45
13.3.2 Defense by Indemnitor.............................................. 45
13.3.3 Defense by Indemnitee.............................................. 45
13.3.4 Costs.............................................................. 46
14. DISPUTE RESOLUTION.................................................................... 46
14.1 Negotiation................................................................ 46
14.2 Unable to Resolve.......................................................... 46
14.3 Attorneys and Intent....................................................... 47
14.4 Tolling of Cure Periods.................................................... 48
15. REPRESENTATIONS AND WARRANTIES........................................................ 48
15.1 Due Incorporation or Formation; Authorization of Agreements................ 48
15.2 Valid and Binding Obligation............................................... 48
15.3 No Conflict; No Default.................................................... 48
15.4 Litigation................................................................. 48
16. REGULATORY COMPLIANCE................................................................. 49
16.1 Regulatory Compliance...................................................... 49
16.2 FCC Compliance............................................................. 49
16.3 Marking and Lighting....................................................... 51
16.4 Regulatory Notices......................................................... 51
16.5 Regulatory Policy-Setting Proceedings...................................... 51
17. GENERAL PROVISIONS.................................................................... 51
17.1 Notices.................................................................... 51
17.2 Construction............................................................... 52
17.3 Headings................................................................... 52
</TABLE>
iv
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<TABLE>
<S> <C>
17.4 Further Action............................................................. 52
17.5 Counterpart Execution...................................................... 52
17.6 Specific Performance....................................................... 52
17.7 Entire Agreement; Amendments............................................... 52
17.8 Limitation on Rights of Others............................................. 53
17.9 Waivers.................................................................... 53
17.9.1 Waivers--General................................................... 53
17.9.2 Waivers--Managers.................................................. 53
17.9.3 Force Majeure...................................................... 53
17.10 Waiver of Jury Trial....................................................... 54
17.11 Binding Effect............................................................. 54
17.12 Governing Law.............................................................. 54
17.13 Severability............................................................... 54
17.14 Limitation of Liability.................................................... 54
17.15 No Assignment; Exceptions.................................................. 54
17.15.1 General........................................................... 54
17.15.2 Assignment Right of Manager to Financial Lender................... 55
17.15.3 Change of Control Rights.......................................... 56
17.15.4 Right of First Refusal............................................ 58
17.15.5 Transfer of Sprint PCS Network.................................... 58
17.16 Provision of Services by Sprint Spectrum................................... 58
17.17 Number Portability......................................................... 58
17.18 Disclaimer of Agency....................................................... 59
17.19 Independent Contractors.................................................... 59
17.20 Expense.................................................................... 59
17.21 General Terms.............................................................. 59
17.22 Conflicts with Other Agreements............................................ 60
17.23 Announced Transaction...................................................... 60
17.24 Additional Terms and Provisions............................................ 60
17.25 Master Signature Page...................................................... 60
</TABLE>
v
<PAGE>
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made June 8, 1998, between Sprint
Spectrum L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas
corporation, and Louisiana Unwired, LLC, a Louisiana limited liability
corporation (but not any Related Party) ("Manager"). The definitions for this
agreement are set forth on the attached "Schedule of Definitions."
------------------------
RECITALS
A. Sprint Spectrum L.P., a Delaware limited partnership, SprintCom,
Inc., a Kansas corporation, American PCS Communications, LLC, a Delaware limited
liability company, PhillieCo Partners I, L.P., a Delaware limited partnership,
and Cox Communications PCS, L.P., a Delaware limited partnership, hold and
exercise, directly or indirectly, control over licenses to operate wireless
services networks.
B. The entity or entities named in Recital A that execute this agreement
hold, directly or indirectly, the Licenses for the areas identified on the
Service Area Exhibit and are referred to in this agreement as "Sprint PCS."
- --------------------
Because this agreement addresses the rights and obligations of each license
holder with respect to each of its Licenses, each reference in this agreement to
"Sprint PCS" refers to the entity that owns, directly or indirectly, the License
referred to in that particular instance or application of the provision of this
agreement. If Sprint Spectrum does not own the License, it will provide on
behalf of Sprint PCS most or all of the services required under this agreement
to be provided by Sprint PCS.
C. The Sprint PCS business was established to use the Sprint PCS
Network, a nationwide wireless services network, to offer seamless, integrated
voice and data services using wireless technology. Sprint PCS offers the
services to customers under a single national brand.
D. This agreement, therefore, includes provisions defining Manager's
obligations with respect to:
. The design, construction and management of the Service Area Network;
. Offering and promoting products and services designated by Sprint PCS as
the Sprint PCS Products and Services of the Sprint PCS Network;
. Adherence to Program Requirements established by Sprint PCS to ensure
seamless interoperability throughout the Sprint PCS Network and uniform
and consistent quality of product and service offerings;
. Adherence to Customer Service Program Requirements established by Sprint
PCS to ensure consistency in interactions with customers (including
billing, customer care, etc.); and
<PAGE>
. Adherence to Program Requirements relating to the marketing, promotion
and distribution of Sprint PCS Products and Services.
E. Manager wishes to enter into this agreement to help construct,
operate, manage and maintain for Sprint PCS a portion of the Sprint PCS Network
in the Service Area. Sprint PCS has determined that permitting Manager to manage
a portion of the Sprint PCS Network in accordance with the terms of this
agreement will facilitate Sprint PCS' expansion of fully digital, wireless
coverage under the License and will enhance the wireless service for customers
of Sprint PCS.
F. All managers of a portion of the business of Sprint PCS, including
Manager, must construct facilities and operate in accordance with Program
Requirements established by Sprint PCS with respect to certain aspects of the
development and offering of wireless products and services and the presentation
of the products and services to customers, to establish and operate the Sprint
PCS Network successfully by providing seamless, integrated voice and data
services, using wireless technology.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. MANAGER
1.1 Hiring of Manager. Sprint PCS hires Manager:
(a) to construct and manage the Service Area Network in compliance
with the License and in accordance with the terms of this agreement;
(b) to distribute continuously during the Term the Sprint PCS
Products and Services and to establish distribution channels in the Service
Area;
(c) to conduct continually during the Term advertising and
promotion activities in the Service Area (including mutual decisions to "go
dark", with respect to advertising and promotion activities, for reasonable
periods of time); and
(d) to manage that portion of the customer base of Sprint PCS that
has the NPA-NXX assigned to the Service Area Network.
2
<PAGE>
Sprint PCS has the right to unfettered access to the Service Area Network
to be constructed by Manager under this agreement. The fee to be paid to Manager
by Sprint PCS under Section 10 is for Manager's utilization of the Service Area
Network, sales and marketing costs, management of the Service Area Network, and
for all other obligations of Manager under this agreement.
1.2 Program Requirements. Manager must adhere to the Program Requirements
established by Sprint PCS and as modified from time to time to ensure uniform
and consistent operation of all wireless systems within the Sprint PCS Network
and to present the Sprint PCS Products and Services to customers in a uniform
and consistent manner under the Brands.
1.3 Vendor Purchase Agreements. Manager may participate in discounted
volume-based pricing on wireless-related products and services and in the
warranties Sprint PCS receives from its vendors, as is commercially reasonable
and to the extent permitted by applicable procurement agreements (e.g.,
agreements related to network infrastructure equipment, subscriber equipment,
interconnection, and collocation). Sprint PCS will use commercially reasonable
efforts to obtain for managers the same price Sprint PCS receives from vendors;
this does not prohibit Sprint PCS from entering into procurement agreements that
do not provide managers with the Sprint PCS prices.
Manager must purchase subscriber and infrastructure equipment from a Sprint
PCS approved list of products, which will include a selection from a variety of
manufacturers. Where required, the products must include proprietary software
developed by the manufacturers for Sprint PCS to allow seamless interoperability
in the Sprint PCS Network. Sprint PCS or the vendor may require Manager to
execute a separate license agreement for the software prior to Manager's use of
the software.
Manager may only make purchases under this Section 1.3 for items to be used
exclusively in the Service Area (e.g., Manager may not purchase base stations
under a Sprint PCS contract for use in a system not affiliated with Sprint PCS).
1.4 Interconnection. If Manager desires to interconnect a portion of the
Service Area Network with another carrier and Sprint PCS can interconnect with
that carrier at a lower rate, then to the extent permitted by applicable laws,
tariffs and contracts, Sprint PCS may arrange for the interconnection under its
agreements with the carrier and if it does so, Sprint PCS will bill the
interconnection fees to Manager.
3
<PAGE>
1.5 Seamlessness. Manager will design and operate its systems, platforms,
products and services in the Service Area and the Service Area Network so as to
seamlessly interface them into the Sprint PCS Network.
1.6 Forecasting. Manager and Sprint PCS will work cooperatively to
generate mutually acceptable forecasts of important business metrics including
traffic volumes, handset sales, subscribers and Collected Revenue for the Sprint
PCS Products and Services. The forecasts are for planning purposes only and do
not constitute Manager's obligation to meet the quantities forecast.
1.7 Financing. The construction and operation of the Service Area Network
requires a substantial financial commitment by Manager. The manner in which
Manager will finance the build-out of the Service Area Network and provide the
necessary working capital to operate the business is described in detail on
Exhibit 1.7. Manager will allow Sprint PCS an opportunity to review before
- -----------
filing any registration statement or prospectus or any amendment or supplement
thereto before distributing any offering memorandum or amendment or supplement
thereto, and agrees not to file or distribute any such document if Sprint PCS
reasonably objects in writing on a timely basis to any portion of the document
that refers to Sprint PCS, its Related Parties, their respective businesses,
this agreement or the Services Agreement.
1.8 Ethical Conduct and Related Covenants. Each party must perform its
obligations under this agreement in a diligent, legal, ethical, and professional
manner.
2. BUILD-OUT OF NETWORK
2.1 Build-out Plan. Manager will build-out the Service Area Network in
the Service Area in accordance with a Build-out Plan. Sprint PCS and Manager
will jointly develop each Build-out Plan, except Sprint PCS must approve the
final Build-out Plan. Manager will report to Sprint PCS its performance
regarding the critical milestones included in the Build-out Plan on a periodic
basis as mutually agreed to by the parties, but no less frequently than
quarterly. The Build-out Plan and the Service Area Network as built must comply
with Sprint PCS Program Requirements and federal and local regulatory
requirements.
Any modifications, additions or expansions to a Build-out Plan will be
subject to prior written approval by Sprint PCS. The Build-out Plan in effect as
of the date of this agreement is attached as Exhibit 2.1. Each new or amended
-----------
Build-out Plan will also become part of Exhibit 2.1.
-----------
4
<PAGE>
2.2 Compliance with Regulatory Rules. During the build-out of the Service
Area Network, Sprint PCS authorizes Manager to make all filings with regulatory
authorities regarding the build-out, including filings with the Federal Aviation
Administration, environmental authorities, and historical districts. Manager may
further delegate its duty under this Section 2.2 to a qualified site acquisition
company. Manager must ensure that a copy of every filing is given to Sprint PCS.
Manager must ensure that Sprint PCS is notified in writing of any contact by a
regulatory agency including the FCC with Manager or Manager's site acquisition
company regarding any filing. Sprint PCS has the right to direct any proceeding,
inquiry, dispute, appeal or other activity with a regulatory or judicial
authority regarding any filing made on behalf of Sprint PCS. Manager will amend,
modify, withdraw, refile and otherwise change any filing as Sprint PCS requires.
Notwithstanding the preceding sentences in this Section 2.2, and in conjunction
with Section 16, Sprint PCS is solely responsible for making any and all filings
with the FCC regarding the build-out. Manager will notify Sprint PCS of any
activity, event or condition related to the build-out that might require an FCC
filing.
2.3 Exclusivity of Service Area. Manager will be the only person or
entity that is a manager or operator for Sprint PCS with respect to the Service
Area and neither Sprint PCS nor any of its Related Parties will own, operate,
build or manage another wireless mobility communications network in the Service
Area so long as this agreement remains in full force and effect and there is no
Event of Termination that has occurred giving Sprint PCS the right to terminate
this agreement, except that:
(a) Sprint PCS may cause Sprint PCS Products and Services to be
sold in the Service Area through the Sprint PCS National Accounts Program
Requirements and Sprint PCS National or Regional Distribution Program
Requirements;
(b) A reseller of Sprint PCS Products and Services may sell its
products and services in the Service Area;
(c) Sprint PCS may build-out and sell Sprint PCS Products and
Services in a New Area, or permit a third party to do so, if Manager has chosen
not to build-out the New Area; and
(d) Sprint PCS and its Related Parties may engage in the
activities described in Sections 2.4(a) and 2.4(b) with Manager in the
geographic areas within the Service Area in which one of them owns an incumbent
local exchange carrier as of the date of this agreement.
5
<PAGE>
2.4 Restriction. In geographic areas within the Service Area in which
Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier as of the date of this agreement, Manager must not offer any Sprint PCS
Products or Services specifically designed for the competitive local exchange
market ("fixed wireless local loop"), except that:
(a) Manager may designate the local exchange carrier that is a
Related Party of Sprint to be the exclusive distributor of the fixed wireless
local loop product in the territory served by the local exchange carrier, even
if a portion of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product under
the terms and conditions specified by Sprint PCS (e.g., including designation by
Sprint PCS of an exclusive distribution agent for the territory).
This restriction exists with respect to a particular geographic area only so
long as Sprint PCS or its Related Party owns such incumbent local exchange
carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS
Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on Exhibit
-------
2.4.
- ----
2.5 Manager's Right of First Refusal for New Area Build-out'. Sprint PCS
grants to Manager the right of first refusal to build-out New Areas. Sprint PCS
will give to Manager a written notice of a New Area within the Service Area that
Sprint PCS decides should be built-out. Manager must communicate to Sprint PCS
within 90 days after receipt of the notice whether it will build-out the New
Area, otherwise Manager's right of first refusal terminates with regard to the
New Area described in the notice.
If Manager decides to build-out the New Area then Manager and Sprint PCS
will diligently negotiate and execute an amendment to the Build-out Plan and
proceed as set forth in Sections 2.1 and 2.2. The amended Build-out Plan will
contain critical milestones that provide Manager a commercially reasonable
period in which to implement coverage in the New Area. In determining what
constitutes a "commercially reasonable period" as used in this paragraph, the
parties will consider several factors, including local zoning processes and
other legal requirements, weather conditions, equipment delivery schedules, the
need to arrange additional financing, and other construction already in progress
by the Manager. Manager will construct and operate the network in the New Area
in accordance with the terms of this agreement.
If Manager declines to exercise its right of first refusal or Manager fails
to build-out the New Area in accordance with the amended Build-out Plan then
Sprint PCS may construct the New Area itself or allow a Sprint PCS Related Party
or an Other Manager to construct the New Area. Sprint PCS has the right, in a
New Area that it constructs or that is constructed by a third party, to manage
the network, allow a Sprint PCS Related Party to manage the network,
6
<PAGE>
or hire a manager to operate the network in the New Area. Any New Area that
Sprint PCS or a third party builds-out is deemed removed from the Service Area
and the Service Area Exhibit is deemed amended to reflect the change in the
--------------------
Service Area. If Manager does not exercise its right of first refusal with
respect to a New Area, Manager's right of first refusal does not terminate with
respect to the remainder of the Service Area.
2.6 Purchase of Assets by Manager. If Sprint PCS has assets located in
the Service Area that Manager could reasonably use in its construction of the
Service Area Network and if Sprint PCS is willing to sell such assets, then
Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to
Manager the assets in accordance with the terms and conditions of the asset
purchase agreement attached as Exhibit 2.6.
-----------
2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one carrier
at a time. The parties will share equally all costs associated with clearing
spectrum under this Section 2.7.
2.8 Determination of pops. If any provision in this agreement requires
the determination of pops in a given area, then the pops will be determined
using the census block group pop forecast then used by Sprint PCS, except that a
different forecast will be used for any FCC filing and in preparing the Build-
out Plan if required by the FCC. Sprint PCS presently uses the forecast of
Equifax/NDS, but it may choose in its sole discretion to use another service
that provides comparable data.
3. PRODUCTS AND SERVICES; IXC SERVICES
3.1 Sprint PCS Products and Services. Manager must offer for sale,
promote and support all Sprint PCS Products and Services within the Service
Area, unless the parties otherwise agree in advance in writing. Within the
Service Area, Manager may only sell, promote and support wireless products and
services that are Sprint PCS Products and Services or are other products and
services authorized under Section 3.2. The Sprint PCS Products and Services as
of the date of this agreement are attached as Exhibit 3.1. Sprint PCS may modify
-----------
the Sprint PCS Products and Services from time to time in its sole discretion by
delivering to Manager a new Exhibit 3.1.
-----------
7
<PAGE>
3.2 Other Products and Services. Manager may offer wireless products and
services that are not Sprint PCS Products and Services, on the terms Manager
determines, if the offer of the additional products and services:
(a) does not violate the obligations of Manager under this
agreement;
(b) does not cause distribution channel conflict with or consumer
confusion regarding Sprint PCS' regional and national offerings of Sprint PCS
Products and Services;
(c) complies with the Trademark License Agreements; and
(d) does not materially impede the development of the Sprint PCS
Network.
Manager will not offer any products or services under this Section 3.2 that
are confusingly similar to Sprint PCS Products and Services. Manager must
request that Sprint PCS determine whether Sprint PCS considers a product or
service to be confusingly similar to any Sprint PCS Products and Services by
providing advance written notice to Sprint PCS that describes those products and
services that could be interpreted to be confusingly similar to Sprint PCS
Products and Services. If Sprint PCS fails to provide a response to Manager
within 30 days after receiving the notice, then the products and services are
deemed to create confusion with the Sprint PCS Products and Services and the
request therefore rejected. In rejecting any request Sprint PCS must provide the
reasons for the rejection. If the rejection is based on Sprint PCS' failure to
respond within 30 days and Manager requests an explanation for the deemed
rejection, then Sprint PCS must provide within 30 days the reasons for the
rejection.
3.3 Cross-selling with Sprint. Manager and Sprint and Sprint's Related
Parties may enter into arrangements to sell Sprint's services, including long
distance service (except those long distance services governed by Section 3.4),
Internet access, customer premise equipment, prepaid phone cards, and any other
services that Sprint or its Related Parties make available from time to time.
Sprint's services may be packaged with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet access or
competitive local telephony services including prepaid phone cards, of third
parties (other than Manager's Related Parties), Manager will give Sprint the
right of last offer to provide those services on the same terms and conditions
as the offer to which Manager is prepared to agree, subject to the terms of any
existing agreements Manager was subject to prior to execution of this agreement.
Within the Service Area, Manager will facilitate sales by Sprint of the
Sprint PCS Products and Services, including the packaging of wireless, local
exchange and other products and services with Sprint products and services.
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3.4 IXC Services. Manager must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale rates.
Long distance telephone calls are those calls between the local calling area for
the Service Area Network and areas outside the local calling area. The local
calling area will be defined by mutual agreement of Sprint PCS and Manager. If
the parties cannot agree on the extent of the local calling area they will
resolve the matter through the dispute resolution process in Section 14. Any
arrangement must have terms at least as favorable to Manager (in all material
respects) as those offered by Sprint to any wholesale customer of Sprint in
comparable circumstances (taking into consideration volume, traffic patterns,
etc.). If Manager is bound by an agreement for these services and the agreement
was not made in anticipation of this agreement, then the requirements of this
Section 3.4 do not apply during the term of the other agreement. If the other
agreement terminates for any reason then the requirements of this Section 3.4 do
apply.
3.5 Resale of Products and Services
3.5.1 Mandatory Resale of Products and Services. Sprint PCS must,
under FCC rules, permit Sprint PCS' service plans to be resold by a purchaser of
the service plan. Sprint PCS will not grant the purchaser of a service plan the
right to use any of the support services offered by Sprint PCS, including
customer care, billing, collection, and advertising, nor the right to use the
Brands. The reseller only has the right to use the service purchased.
Consequently, Manager agrees not to interfere with any purchaser of the Sprint
PCS Products or Services who resells the service plans in accordance with this
agreement and applicable law. Manager will notify purchaser that the purchaser
does not have a right to use the Brands or Sprint PCS' support services. In
addition, Manager will notify Sprint PCS if it reasonably believes a reseller of
retail service plans is using the support services or Brands.
3.5.2 Voluntary Resale of Products and Services. Sprint PCS may
choose to offer a resale product under which resellers will resell Sprint PCS
Products and Services under brand names other than the Brands, except Sprint PCS
may permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The resellers
may also provide their own support services (e.g., customer care and billing) or
may purchase the support services from Sprint PCS. If Sprint PCS chooses to
offer a voluntary resale product, it will adopt a program that will be a Program
Requirement under this agreement and that addresses the manner in which Manager
and Other Managers interact with the resellers. Sprint PCS will discuss such
program with Manager during development.
Manager must not sell Sprint PCS Products and Services for resale unless
Sprint PCS consents to such sales in advance in writing, except as required
under the regulations and rules concerning mandatory resale.
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3.6 Non-competition. Neither Manager nor any of its Related Parties may
offer Sprint PCS Products and Services outside of the Service Area without the
prior written approval of Sprint PCS.
Within the Service Area, Manager and Related Parties may offer, market or
promote telecommunications products or services only under the following brands:
(a) products or services with the Brands;
(b) other products and services approved under Section 3.2, except
no brand of a significant competitor of Sprint PCS or its Related Parties in the
telecommunications business may be used by Manager's Related Parties on these
products and services;
(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related
Parties,
except no brand of a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business may be used by Manager's Related Parties on
these products and services.
If Manager or any of its Related Parties has licenses to provide broadband
personal communication services outside the Service Area, neither Manager nor
such Related Party may utilize the spectrum to offer Sprint PCS Products and
Services without prior written consent from Sprint PCS. Additionally, when
Manager's customers from inside the Service Area travel or roam to other
geographic areas, Manager will route the customers' calls, both incoming and
outgoing, according to the Sprint PCS Network Roaming and Inter Service Area
Program Requirements, without regard to any wireless networks operated by
Manager or its Related Parties. For example, Manager will program the preferred
roaming list for handsets sold in the Service Area to match the Sprint PCS
preferred roaming list.
3.7 Right of Last Offer. Manager will offer to Sprint the right to make
to Manager the last offer to provide backhaul and transport services for call
transport for the Service Area Network, if Manager decides to use third parties
for backhaul and transport services rather than self-provisioning the services
or purchasing the services from Related Parties of Manager. Sprint will have a
reasonable time to respond to Manager's request for last offer to provide
backhaul and transport pricing and services, which will be no greater than 5
Business Days after receipt of the request for the services and pricing from
Manager.
If Manager has an agreement in effect as of the date of this agreement for
these services and the agreement was not made in anticipation of this agreement,
then the requirements of this Section 3.7 do not apply during the term of the
other agreement. If the other agreement terminates for any reason then the
requirements of this Section 3.7 do apply.
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4. MARKETING AND SALES ACTIVITIES
4.1 Sprint PCS National or Regional Distribution Program Requirements.
During the term of this agreement, Manager must participate in any Sprint PCS
National or Regional Distribution Program (as in effect from time to time), and
will pay or receive compensation for its participation in accordance with the
terms and conditions of that program. The Sprint PCS National or Regional
Distribution Program Requirements in effect as of the date of this agreement are
attached as Exhibit 4.1.
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4.1.1 Territorial Limitations on Manager's Distribution Activities.
Neither Manager nor any of its Related Parties will market, sell or distribute
Sprint PCS Products and Services outside of the Service Area, except:
(a) as otherwise agreed upon by the parties in advance in writing;
or
(b) Manager may place advertising in media that has distribution
outside of the Service Area, so long as that advertising is intended by Manager
to reach primarily potential customers within the Service Area.
Manager may establish direct local distribution programs in accordance with
the Sprint PCS Distribution Program Requirements, subject to the terms and
conditions of the Trademark License Agreements and the non-competition and other
provisions contained in this agreement.
4.1.2 Settlement of Equipment Sales. Sprint PCS will establish a
settlement policy and process that will be included in the Sprint PCS National
or Regional Distribution Program Requirements to:
(a) reconcile sales of subscriber equipment made in the service
areas of Sprint PCS or Other Managers of Sprint PCS, that result in activations
in the Service Area; and
(b) reconcile sales of subscriber equipment made in the Service
Area that result in activations in service areas of Sprint PCS or Other
Managers.
In general, the policy will provide that the party in whose service area
the subscriber equipment is activated will be responsible for the payment of any
subsidy (i.e., the difference between the price paid to the manufacturer and the
suggested retail price for direct channels and the difference between the price
paid to the manufacturer and the wholesale price for third party retailers) and
for other costs associated with the sale, including logistics, inventory
carrying costs, direct channel commissions and other retailer compensation.
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4.1.3 Use of Third-Party Distributors. Manager may request that Sprint
PCS and a local distributor enter into Sprint PCS' standard distribution
agreement regarding the purchase from Sprint PCS of handsets and accessories.
Sprint PCS will use commercially reasonable efforts to reach agreement with the
local distributor. Sprint PCS may refuse to enter into a distribution agreement
with a distributor for any reasonable reason, including that the distributor
fails to pass Sprint PCS' then current credit and background checks or the
distributor fails to agree to the standard terms of the Sprint PCS distribution
agreement. Any local distributor will be subject to the terms of the Trademark
License Agreements or their equivalent. Manager will report to Sprint PCS the
activities of any local distributor that Manager believes to be in violation of
the distribution agreement.
4.2 Sprint PCS National Accounts Program Requirements. During the term of
this agreement, Manager must participate in the Sprint PCS National Accounts
Program (as in effect from time to time), and will be entitled to compensation
for its participation and will be required to pay the expenses of the program in
accordance with the terms and conditions of that program. The Sprint PCS
National Accounts Program Requirements in effect as of the date of this
agreement are attached as Exhibit 4.2.
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4.3 Sprint PCS Roaming and Inter Service Area Program Requirements.
Manager will participate in the Sprint PCS Roaming and Inter Service Area
Program established and implemented by Sprint PCS, including roaming price plans
and inter-carrier settlements. The Sprint PCS Roaming and Inter Service Area
Program Requirements in effect as of the date of this agreement are attached as
Exhibit 4.3.
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As part of the Sprint PCS Roaming and Inter Service Area Program
Requirements, Sprint PCS will establish a settlement policy and process to
equitably distribute between the members making up the Sprint PCS Network (i.e.,
Sprint PCS, Manager and all Other Managers) the revenues received by one member
for services used by its customers when they travel into other members' service
areas.
4.4 Pricing. Manager will offer and support all Sprint PCS pricing plans
designated for regional or national offerings of Sprint PCS Products and
Services (e.g., national inter service area rates, regional home rates, and
local price points). The Sprint PCS pricing plans as of the date of this
agreement are attached as Exhibit 4.4. Sprint PCS may modify the Sprint PCS
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pricing plans from time to time in its sole discretion by delivering to Manager
a new Exhibit 4.4.
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Additionally, with prior approval from Sprint PCS, which approval will not
be unreasonably withheld, Manager may establish price plans for Sprint PCS
Products and Services that are only offered in its local market, subject to:
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(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area. If
Sprint PCS fails to respond to Manager within 20 days after receiving such
notice, then the price proposed for those Sprint PCS Products or Services is
deemed approved.
At the time Sprint PCS approves a pricing proposal submitted by Manager,
Sprint PCS will provide Manager an estimate of the costs and expenses Sprint PCS
will incur to implement the proposed pricing plan. Manager agrees to promptly
reimburse Sprint PCS for any cost or expense incurred by Sprint PCS to implement
such a pricing plan, which will not exceed the amount estimated by Sprint PCS if
Manager waited for Sprint PCS' response to Manager's proposal.
4.5 Home Service Area. Sprint PCS and Manager will agree to the initial
home service area for each base station in the Service Area Network prior to the
date the Service Area Network goes into commercial operation. If the parties
cannot agree to the home service area for each base station in the Service Area
Network, then the parties will use the dispute resolution process in Section 14
of this agreement to assign each base station to a home service area.
5. USE OF BRANDS
5.1 Use of Brands.
(a) Manager must enter into the Trademark License Agreements on or
before the date of this agreement.
(b) Manager must use the Brands exclusively in the marketing,
promotion, advertisement, distribution, lease or sale of any Sprint PCS Products
and Services within the Service Area, except Manager may use other brands to the
extent permitted by the Trademark License Agreements and not inconsistent with
the terms of this agreement.
(c) Neither Manager nor any of its Related Parties may market,
promote, advertise, distribute, lease or sell any of the Sprint PCS Products and
Services or Manager's Products and Services on a non-branded, "private label"
basis or under any brand, trademark,
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trade name or trade dress other than the Brands, except (i) for sales to
resellers required under this agreement, or (ii) as permitted under the
Trademark License Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager
from including Sprint PCS Products and Services under the Brands within the
Service Area as part of a package with its other products and services that bear
a different brand or trademark. The provisions of this Section 5.1 do not apply
to the extent that they are inconsistent with applicable law or in conflict with
the Trademark License Agreements.
5.2 Conformance to Marketing Communications Guidelines. Manager must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of the
Sprint PCS Products and Services. The Marketing Communications Guidelines in
effect as of the date of this agreement have been provided to Manager. Sprint
and Sprint Spectrum may amend the Marketing Communications Guidelines from time
to time in accordance with the terms of the Trademark License Agreements.
5.3 Joint Marketing With Third Parties.
(a) Manager may engage in various joint marketing activities
(e.g., promotions with sports teams and entertainment providers or tournament
sponsorships) with third parties in the Service Area from time to time during
the term of this agreement with respect to the Sprint PCS Products and Services,
except that Manager may engage in the joint marketing activities only if the
joint marketing activities:
(i) Are conducted in accordance with the terms and
conditions of the Trademark License Agreements and the Marketing
Communications Guidelines;
(ii) Do not violate the terms of this agreement;
(iii) Are not likely (as determined by Sprint PCS, in its
sole discretion) to cause confusion between the Brands and any other
trademark or service mark used in connection with the activities;
(iv) Are not likely (as determined by Sprint, in its sole
discretion) to cause confusion between the Sprint Brands and any other
trademark or service mark used in connection with the activities; and
(v) Are not likely (as determined by Sprint PCS, in its
sole discretion) to give rise to the perception that the Sprint PCS
Products and Services are being advertised, marketed or promoted under any
trademark or service mark other than the Brands, except as provided in the
Trademark License Agreements. Manager will not engage in any activity that
includes co-branding involving use of the Brands
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(that is, the marketing, promotion, advertisement, distribution, lease or
sale of any of the Sprint PCS Products and Services under the Brands and
any other trademark or service mark), except as provided in the Trademark
License Agreements.
(b) Manager must provide advance written notice to Sprint PCS
describing those joint marketing activities that may:
(i) cause confusion between the Brands and any other
trademark or service mark used in connection with the proposed activities;
or
(ii) give rise to the perception that the Sprint PCS
Products and Services are being advertised, marketed or promoted under any
trademark or service mark other than the Brands, except as provided in the
Trademark License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within 20
days after receiving such notice, then the proposed activities are deemed, as
the case may be:
(i) not to create confusion between the Brands and any
other trademark or service mark; or
(ii) not to give rise to the perception that Manager's
products and services are being advertised, marketed or promoted under any
trademark or service mark other than the Brands, except as provided in the
Trademark License Agreements.
5.4 Prior Approval of Use of Brands. Manager must obtain advance written
approval from Sprint for use of the Sprint Brands to the extent required by the
Sprint Trademark License Agreement and from Sprint PCS for use of the Sprint PCS
Brands to the extent required by the Sprint PCS Trademark License Agreement.
Sprint PCS will use commercially reasonable efforts to facilitate any review of
Manager's use of the Brands, if Sprint PCS is included in the review process.
5.5 Duration of Use of Brand. Manager is entitled to use the Brands only
during the term of the Trademark License Agreements and any transition period
during which Manager is authorized to use the Brands following their
termination.
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6. ADVERTISING AND PROMOTION
6.1 National Advertising and Promotion. Sprint PCS is responsible for (a)
all national advertising and promotion of the Sprint PCS Products and Services,
including the costs and expenses related to national advertising and promotions,
and (b) all advertising and promotion of the Sprint PCS Products and Services in
the markets where Sprint PCS operates without the use of a Manager.
6.2 In-Territory Advertising and Promotion. Manager must advertise and
promote the Sprint PCS Products and Services in the Service Area (and may do so
in the areas adjacent to the Service Area so long as Manager intends that such
advertising or promotion primarily reach potential customers within the Service
Area). Manager must advertise and promote the Sprint PCS Products and Services
in accordance with the terms and conditions of this agreement, the Trademark
License Agreements and the Marketing Communication Guidelines. Manager is
responsible for the costs and expenses incurred by Manager with respect to
Manager's advertising and promotion activities in the Service Area.
Manager will be responsible for a portion of the cost of any promotion or
advertising done by third party retailers in the Service Area (e.g., Best Buy)
in accordance with any cooperative advertising arrangements based on per unit
handset sales.
Sprint PCS has the right to use in any promotion or advertising done by
Sprint PCS any promotion or advertising materials developed by Manager from time
to time with respect to the Sprint PCS Products and Services. Sprint PCS will
reimburse Manager for the reproduction costs related to such use.
Sprint PCS will make available to Manager the promotion or advertising
materials developed by Sprint PCS from time to time with respect to Sprint PCS
Products and Services in current use by Sprint PCS (e.g., radio ads, television
ads, design of print ads, design of point of sale materials, retail store
concepts and designs, design of collateral). Manager will bear the cost of using
such materials (e.g., cost of local radio and television ad placements, cost of
printing collateral in quantity, and building out and finishing retail stores).
6.3 Review of Advertising and Promotion Campaigns. Sprint PCS and Manager
will jointly review the upcoming marketing and promotion campaigns of Manager
with respect to Sprint PCS Products and Services (including advertising and
promotion expense budgets) and will use good faith efforts to coordinate
Manager's campaign with Sprint PCS' campaign to maximize the market results of
both parties. Sprint PCS and Manager may engage in cooperative advertising or
promotional activities during the term of this agreement as the parties may
agree in writing.
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6.4 Public Relations. If Manager conducts local public relations efforts,
then Manager must conduct the local public relations efforts consistent with the
Sprint PCS Communications Policies. The Sprint PCS Communications Policies as of
the date of this agreement are attached as Exhibit 6.4. Sprint PCS may modify
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the Sprint PCS Communications Policies from time to time by delivering to
Manager a new Exhibit 6.4.
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7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 Conformance to Sprint PCS Technical Program Requirements.
(a) Manager must meet or exceed the Sprint PCS Technical Program
Requirements established by Sprint PCS from time to time for the Sprint PCS
Network. Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a level
equal to or better than the lower of the Operational Level of Sprint PCS or
the operational level contemplated by the Sprint PCS Technical Program
Requirements; or
(ii) Sprint PCS is responsible under the Services Agreement
to ensure the Service Area Network complies with the Sprint PCS Technical
Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has
complied with the Sprint PCS Technical Program Requirements prior to connecting
the Service Area Network to the rest of the Sprint PCS Network. Once the Service
Area Network is connected to the Sprint PCS Network, Manager must continue to
comply with the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the Sprint PCS Technical Program Requirements adopted for Manager will be
the same Sprint PCS Technical Program Requirements applied by Sprint PCS to the
Sprint PCS Network.
7.2 Establishment of Sprint PCS Technical Program Requirements. Sprint
PCS has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements, attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS
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Technical Program Requirements to ensure a minimum, base-line level of quality
for the Sprint PCS Network. The Sprint PCS Technical Program Requirements
include standards relating to voice quality, interoperability, consistency
(seamlessness) of coverage, RF design parameters, system design, capacity, and
call blocking ratio. Sprint PCS has selected code division multiple access as
the initial air interface technology for the Sprint PCS Network (subject to
change in accordance with Section 7.3).
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7.3 Handoff to Adjacent Networks. If technically feasible and
commercially reasonable, Manager will operate the Service Area Network in a
manner that permits a seamless handoff of a call initiated on the Service Area
Network to any adjacent PCS network that is part of the Sprint PCS Network, as
specified in the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the terms and conditions for seamless handoffs adopted for the Service Area
Network will be the same as the terms Sprint PCS applies to the other parts of
the Sprint PCS Network for similar configurations of equipment.
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS
8.1 Compliance With Sprint PCS Customer Service Program Requirements.
Manager must comply with the Sprint PCS Customer Service Program Requirements in
providing the Sprint PCS Products and Services to any customer of Manager,
Sprint PCS or any Sprint PCS Affiliate. Manager will be deemed to meet the
standards if:
(a) Manager operates the Service Area Network at a level equal to
or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services
Agreement responsibility to ensure the Service Area Network complies with the
Sprint PCS Customer Service Standards.
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit 8.1.
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9. SPRINT PCS PROGRAM REQUIREMENTS
9.1 Program Requirements Generally. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements.
Sprint PCS may unilaterally amend from time to time in the manner described in
Section 9.2 all Program Requirements, guidelines and policies mentioned in this
agreement. The most current version of the requirements programs, guidelines and
policies mentioned in the first sentence of this Section 9.1 have been provided
to Manager.
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9.2 Amendments to Program Requirements. Sprint PCS may amend any of the
Sprint PCS Program Requirements, subject to the following conditions:
(a) The applicable Program Requirements, as amended, will apply
equally to Manager, Sprint PCS and each Other Manager, except if Manager and
Sprint PCS agree otherwise or if Sprint PCS grants a waiver to Manager. Sprint
PCS may grant waivers to Other Managers without affecting Manager's obligation
to comply with the Program Requirements;
(b) Each amendment will be reasonably required to fulfill the
purposes set forth in Section 1.2 with respect to uniform and consistent
operations of the Sprint PCS Network and the presentation of Sprint PCS Products
and Services to customers in a uniform and consistent manner;
(c) Each amendment will otherwise be on terms and conditions that
are commercially reasonable with respect to the construction, operation and
management of the Sprint PCS Network. With respect to any amendment to Program
Requirements, Sprint PCS may provide for reasonable transition periods and,
where appropriate, grandfathering provisions for existing activities by Manager
that were permitted under the applicable Program Requirements before the
amendment;
(d) Sprint PCS must give Manager reasonable, written notice of the
amendment, but in any event the notice will be given at least 30 days prior to
the effective date of the amendment; and
(e) Manager must implement any changes in the Program Requirements
within a commercially reasonable period of time unless otherwise consented to by
Sprint PCS. Sprint PCS will determine what constitutes a commercially reasonable
period of time taking into consideration relevant business factors, including
the strategic significance of the changes to the Sprint PCS Network, the
relationship of the changes to the yearly marketing cycle, and the financial
demands on and capacity generally of Other Managers. Notwithstanding the
preceding two sentences, Manager will not be required to implement any change in
the Service Area Network or the business of Manager required by an amendment to
a Program Requirement until Sprint PCS has implemented the required changes in
substantially all of that portion of the Sprint PCS Network that Sprint PCS
operates without the use of a manager, unless the amendment to the Program
Requirement relates to an obligation regarding the Service Area Network mandated
by law. When necessary for reasons related to new technical standards, new
equipment or strategic reasons, Sprint PCS can require Manager to implement the
changes in the Service Area Network or Manager's business concurrently with
Sprint PCS, in which case Sprint PCS will reimburse Manager for its costs and
expenses if Sprint PCS discontinues the Program Requirement changes prior to
implementation.
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Sprint PCS may grant Manager appropriate waivers and variances from the
requirements of any Program Requirements. Sprint PCS has the right to adopt any
Program Requirements that implement any obligation regarding the Service Area
Network mandated by law.
Any costs and expenses incurred by Manager in connection with conforming to
any change to the Program Requirements during the term of this agreement are the
responsibility of Manager.
9.3 Manager's Right to Request Review of Changes. If Sprint PCS announces
a change to a Program Requirement that will:
(a) cause the Manager to spend an additional amount greater than
5% of Manager's shareholder's equity or capital account plus Manager's long-term
debt (i.e., notes that mature more than one year from the date issued), as
reflected on Manager's books; or
(b) cause the long term operating expenses of Manager on a per
unit basis using a 10-year time frame to increase by more than 10% on a net
present value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the change.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request. If after the review and decision by the
Vice President, Manager is still dissatisfied, then Manager may ask that the
Chief Officer to whom the Vice President reports review the matter. If Sprint
PCS still requires Manager to implement the change to the Program Requirement,
then upon Manager's failure to implement the change Sprint PCS will have the
rights under Section 11.
9.4 Sprint PCS' Right to Implement Changes. If Manager requests Sprint
PCS to reconsider a change to a Program Requirement as permitted under Section
9.3 and Sprint PCS decides it will not require Manager to make the change,
Sprint PCS may, but is not required to, implement the change at Sprint PCS'
expense, in which event Manager will be required to operate the Service Area
Network, as changed, but Sprint PCS will be entitled to any revenue derived from
the change.
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9.5 Rights of Inspection. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility operated
by or for Manager at any time, with reasonable advance notice to Manager if
possible, to inspect, monitor and test in a reasonable manner the Service Area
Network, including the facilities, equipment, books and records of Manager, to
ensure that Manager has complied or is in compliance with all covenants and
obligations of Manager under this agreement, including Manager's obligation to
conform to the Program Requirements. The inspection, monitoring and testing may
not disrupt the operations of the office or facility, nor impede Manager's
access to the Service Area Network.
9.6 Manager's Responsibility to Interface with Sprint PCS. Manager will
use platforms fully capable of interfacing with the Sprint PCS platforms in
operating the Service Area Network and in providing Sprint PCS Products and
Services. Manager will pay the expense of making its platforms fully capable of
interfacing with Sprint PCS, including paying for the following:
(i) Connectivity;
(ii) Any changes that Manager requests Sprint PCS to make to
Sprint PCS systems to interconnect with Manager's systems that Sprint PCS,
in its sole discretion, agrees to make;
(iii) Equipment to run Manager's software;
(iv) License fees for Manager's software; and
(v) Manager upgrades or changes to its platforms.
10. FEES
10.1 Fees and Payments.
10.1.1 Fee Based on Collected Revenue. Sprint PCS will pay to Manager
a weekly fee equal to 92% of Collected Revenues for the week for: (a)
utilization of the Service Area Network; (b) sales and marketing costs; (c)
Manager's management of the Service Area Network; and (d) all other obligations
of Manager under this Agreement. The fee will be due on Thursday of the week
following the week for which the fee is calculated.
10.1.2 Payment of Universal Service Funds. Sprint PCS and Manager
will share any federal and state subsidy funds (e.g., payments by a state of
universal service fund subsidies to Sprint PCS or Manager), if any, received by
Sprint PCS or Manager for customers who reside in the portion of the Service
Area served by the Service Area Network. Manager is
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entitled to 92% of any amount received by either party and Sprint PCS is
entitled to 8% of such amounts.
10.1.3 Inter Service Area Fees. Sprint PCS will pay to Manager
monthly a fee as set out in the Sprint PCS Roaming and Inter Service Area
Program, for each minute of use that a customer of Sprint PCS or one of the
Other Managers whose NPA-NXX is not assigned to the Service Area Network uses
the Service Area Network. Manager will pay to Sprint PCS a fee, as set out in
the Sprint PCS Roaming and Inter Service Area Program, for each minute of use
that a customer whose NPA-NXX is assigned to the Service Area Network uses a
portion of the Sprint PCS Network other than the Service Area Network. Manager
acknowledges that the manner in which the NPA-NXX is utilized could change,
which will require a modification in the manner in which the inter service area
fees, if any, will be calculated.
10.1.4 Interconnect Fees. Manager will pay to Sprint PCS (or to other
carriers as appropriate) monthly the interconnect fees, if any, as provided
under Section 1.4.
10.1.5 Outbound Roaming Fees. If not otherwise provided under any
Program Requirement:
(a) Sprint PCS will pay to Manager monthly the amount of Outbound
Roaming fees that Sprint PCS collects for the month from end users whose NPA-NXX
is assigned to the Service Area; and
(b) Manager will pay to Sprint PCS (or to a clearinghouse or other
carrier as appropriate) the direct cost of providing the capability for the
Outbound Roaming, including any amounts payable to the carrier that handled the
roaming call and the clearinghouse operator.
10.1.6 Reimbursements. Manager will pay to or reimburse Sprint PCS
for any amounts that Sprint PCS is required to pay to a third party (e.g., a
telecommunications carrier) to the extent Sprint PCS already paid such amount to
Manager under this Section 10.
10.2 Monthly True Up. Manager will report to Sprint PCS monthly the amount
of Collected Revenue received directly by the Manager (e.g., customer mails
payment to the business address of Manager rather than to the lockbox or a
customer pays a direct sales force representative in cash). Sprint PCS will on a
monthly basis true up the fees and payments due under Section 10.1 against the
actual payments made by Sprint PCS to Manager. Sprint PCS will provide to
Manager a true up report each month showing the true up and the net amount due
from one party to the other, if any. If the weekly payments made to Manager
exceed the actual fees and payments due to Manager, then Manager will remit the
amount of the overpayment to Sprint PCS within 5 Business Days after receiving
the true up report from Sprint PCS. If the weekly payments made to Manager are
less than the actual fees and
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payments due to Manager, then Sprint PCS will remit the shortfall to Manager
within 5 Business Days after sending the true up report to Manager.
If a party disputes any amount on the true up report, the disputing party
must give the other party written notice of the disputed amount and the reason
for the dispute within 90 days after it receives the true up report. The dispute
will be resolved through the dispute resolution process in Section 14. The
parties must continue to pay to the other party any undisputed amounts owed
under this agreement during the dispute resolution process. The dispute of an
item does not stay or diminish a party's other rights and remedies under this
agreement.
10.3 Taxes. Manager will pay or reimburse Sprint PCS for any sales, use,
gross receipts or similar tax, administrative fee, telecommunications fee or
surcharge for taxes or fees levied by a governmental authority on the fees and
charges payable by Sprint PCS to Manager.
10.4 Collected Revenues Definition. "Collected Revenues" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others including the customers whose NPA-NXX is the
same as that for the portion of the Service Area served by the Service Area
Network. In determining Collected Revenues the following principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from federal
and state subsidy funds; they are handled separately as noted in Section
10.1.2;
(ii) Collected Revenues do include any amounts received for
the payment of Inbound Roaming charges and interconnect fees when calls are
carried on the Service Area Network; and
(iii) Collected Revenues do not include any amounts received
with respect to any changes made by Sprint PCS under Section 9.4.
(b) The following items are not Collected Revenues; Sprint PCS is
obligated to remit the amounts received with respect to such items, if any, to
Manager, as follows:
(i) Inter service area payments will be paid as provided
under Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as
provided under Section 10.1.5;
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(iii) Proceeds from the sale or lease of subscriber equipment
and accessories will be paid to Manager, subject to the equipment
settlement process in Section 4.1.2;
(iv) Proceeds from sales not in the ordinary course of
business (e.g., sales of switches, cell sites, computers, vehicles or other
fixed assets); and
(v) Any amounts collected with respect to sales and use
taxes, gross receipts taxes, transfer taxes, and similar taxes,
administrative fees, telecommunications fees, and surcharges for taxes and
fees that are collected by a carrier for the benefit of a governmental
authority, subject to Manager's obligation under Section 10.3.
(c) The following items are not Collected Revenues; neither party
will collect any amounts respecting such items:
(i) Reasonable adjustments of a customer's account (e.g.,
if Sprint PCS or Manager reduces a customer's bill, then the amount of the
adjustment is not Collected Revenue); and
(ii) Amount of bad debt and fraud associated with customers
whose NPA-NXX is assigned to the Service Area (e.g., if Sprint PCS or
Manager writes off a customer's bill as a bad debt, there is no Collected
Revenue on which a fee is due to Manager).
10.5 Late Payments. Any amount due under this Section 10 that is not paid
by one party to the other party in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 3rd day
after the due date until (and including) the date paid.
10.6 Setoff Right If Failure To Pay Amounts Due. If Manager fails to pay
any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this
agreement, the Services Agreement, or any other agreement with Sprint PCS or a
Related Party, then Sprint PCS may setoff against standard payment intervals
(e.g. weekly) against the amounts paid to Manager under Section 10.1 until such
time as Manager pays any such unpaid amounts.
Sprint PCS may setoff the following amounts:
(a) any amount that Manager owes to Sprint PCS or a Related Party
of Sprint PCS, including amounts due under the Services Agreement; and
(b) any amount that Sprint PCS reasonably estimates will be due to
Sprint PCS for the current month under the Services Agreement (e.g., if under
the Services Agreement customer care calls are billed monthly, Sprint PCS can
deduct from the weekly
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payment to Manager an amount Sprint PCS reasonably estimates will be due Sprint
PCS under the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts deducted
against the actual amounts due Sprint PCS. If the estimated amounts deducted by
Sprint PCS exceed the actual amounts due to Sprint PCS, then Sprint PCS will
remit the excess to Manager with the next weekly payment. If the estimated
amounts deducted are less than the actual amounts due to Sprint PCS and its
Related Parties, then Sprint PCS may continue to setoff the payments to Manager
against the amounts due to Sprint PCS. This right of setoff is in addition to
any other right that Sprint PCS may have under this agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
11.1 Initial Term. This agreement commences on the date of execution and,
unless terminated earlier in accordance with the provisions of this Section 11,
continues for a period of 20 years (the "Initial Term").
11.2 Renewal Terms. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods (for
a maximum of 50 years including the Initial Term), unless at least 2 years prior
to the commencement of any renewal period either party notifies the other party
in writing that it does not wish to renew this agreement.
11.2.1 Non-renewal Rights of Manager. If this agreement will terminate
because Sprint PCS gives Manager timely written notice of non-renewal of this
agreement, then Manager may exercise its rights under Section 11.2.1.1 or, if
applicable, its rights under Section 11.2.1.2.
11.2.1.1 Manager's Put Right. Manager may within 30 days after
the date Sprint PCS gives notice of non-renewal put to Sprint PCS all of the
Operating Assets. Sprint PCS will pay to Manager for the Operating Assets an
amount equal to 80% of the Entire Business Value. The closing of the purchase of
the Operating Assets will occur within 20 days after the later of (a) the
receipt by Sprint PCS of the written notice of determination of the Entire
Business Value provided by the appraisers under Section 11.7 or (b) the receipt
of all materials required to be delivered to Sprint PCS under Section 11.8. Upon
closing the purchase of the Operating Assets this agreement will be deemed
terminated. The exercise of the put, the determination of the Operating Assets,
the representations and warranties made by Manager with respect to the Operating
Assets and the business, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11.8.
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11.2.1.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in
the Service Area under the License on the date this agreement is executed,
then Manager may, subject to receipt of FCC approval of the necessary
disaggregation and partition, purchase from Sprint PCS the Disaggregated
License for an amount equal to the greater of (1) the original cost of the
License to Sprint PCS (pro rated on a pops and spectrum basis) plus the
microwave relocation costs paid by Sprint PCS or (2) 10% of the Entire
Business Value.
(b) Upon closing the purchase of the spectrum this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the purchase right, the determination
of the geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 Non-renewal Rights of Sprint PCS. If this agreement will
terminate because of any of the following five (5) events, then Sprint PCS may
exercise its rights under Section 11.2.2.1 or, if applicable, its rights under
Section 11.2.2.2:
(a) Manager gives Sprint PCS timely written notice of
non-renewal of this agreement;
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(b) both parties give timely written notices of non-
renewal;
(c) this agreement expires with neither party giving a
written notice of non-renewal;
(d) either party elects to terminate this agreement under
Section 11.3.4(a); or
(e) Manager elects to terminate this agreement under
Section 11.3.4(b).
11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may purchase
from Manager all of the Operating Assets. Sprint PCS will pay to Manager an
amount equal to 80% of the Entire Business Value. The closing of the
purchase of the Operating Assets will occur within 20 days after the later
of (a) the receipt by Sprint PCS of the written notice of determination of
the Entire Business Value provided by the appraisers under Section 11.7 or
(b) the receipt of all materials required to be delivered to Sprint PCS
under Section 11.8. Upon closing the purchase of the Operating Assets this
agreement will be deemed terminated. The exercise of the purchase right,
the determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and the
business, and the process for closing the purchase will be subject to the
terms and conditions set forth in Section 11.8.
11.2.2.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval,
put to Manager the Disaggregated License for a purchase price equal to
the greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing of the
purchase of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of
the written notice of determination of the Entire Business Value
by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
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(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice
of Sprint PCS' exercise of its put, advise Sprint PCS of the amount of
spectrum (not to exceed 10 MHz) it wishes to purchase. After the
purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2.3 Extended Term Awaiting FCC Approval. If Manager is buying
the Disaggregated License as permitted or required under Sections 11.2.1.2
or 11.2.2.2, then the Term of this agreement will extend beyond the
original expiration date until the closing of the purchase of the
Disaggregated License. The parties agree to exercise their respective
commercially reasonable efforts to obtain FCC approval of the transfer of
the Disaggregated License.
11.3 Events of Termination. An "Event of Termination" is deemed to occur
when a party gives written notice to the other party of the Event of Termination
as permitted below:
11.3.1 Termination of License.
(a) At the election of either party this agreement may be
terminated at the time the FCC revokes or fails to renew the License.
Unless Manager has the right to terminate this agreement under Section
11.3.1(b), neither party has any claim against the other party if the
FCC revokes or fails to renew the License, even if circumstances would
otherwise permit one party to terminate this agreement based on a
different Event of Termination, except that the parties will have the
right to pursue claims against each other as permitted under Section
11.4(b).
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(b) If the FCC revokes or fails to renew the License
because of a breach of this agreement by Sprint PCS, then Manager has
the right to terminate this agreement under Section 11.3.3 and not
this Section 11.3.1.
11.3.2 Breach of Agreement: Payment of Money Terms. At the election
of the non-breaching party this agreement may be terminated upon the failure by
the breaching party to pay any amount due under this agreement or any other
agreement between the parties or their respective Related Parties, if the breach
is not cured within 30 days after the breaching party's receipt of written
notice of the nonpayment from the non-breaching party.
11.3.3 Breach of Agreement: Other Terms. At the election of the non-
breaching party this agreement may be terminated upon the material breach by the
breaching party of any material term contained in this agreement that does not
regard the payment of money, if the breach is not cured within 30 days after the
breaching party's receipt of written notice of the breach from the non-breaching
party, except the cure period will continue for a reasonable period beyond the
30-day period, but will under no circumstances exceed 180 days after the
breaching party's receipt of written notice of the breach, if it is unreasonable
to cure the breach within the 30-day period, and the breaching party takes
action prior to the end of the 30-day period that is reasonably likely to cure
the breach and continues to diligently take action necessary to cure the breach.
11.3.4 Regulatory Considerations.
(a) At the election of either party this agreement may be
terminated if this agreement violates any applicable law in any
material respect where such violation (i) is classified as a felony or
(ii) subjects either party to substantial monetary fines or other
substantial damages, except that before causing any termination the
parties must use best efforts to modify this agreement, as necessary
to cause this agreement (as modified) to comply with applicable law
and to preserve to the extent possible the economic arrangements set
forth in this agreement.
(b) At the election of Manager this agreement may be
terminated if the regulatory action described under 11.3.4(a) is the
result of a deemed change of control of the License and the parties
are unable to agree upon a satisfactory resolution of the matter with
the regulatory authority without a complete termination of this
agreement.
11.3.5 Termination of Trademark License Agreements. If either
Trademark License Agreement terminates under its terms, then:
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(a) Manager may terminate this agreement if the Trademark
License Agreement terminated because of a breach of the Trademark
License Agreement by Sprint PCS or Sprint; and
(b) Sprint PCS may terminate this agreement if the
Trademark License Agreement terminated because of a breach of the
Trademark License Agreement by Manager.
11.3.6 Financing Considerations. At the election of Sprint PCS this
agreement may be terminated upon the failure of Manager to obtain the financing
described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit.
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11.3.7 Bankruptcy of a Party. At the election of the non-bankrupt
party, this agreement may be terminated upon the occurrence of a Voluntary
Bankruptcy or an Involuntary Bankruptcy of the other party.
"Voluntary Bankruptcy" means:
(a) The inability of a party generally to pay its debts
as the debts become due, or an admission in writing by a party of its
inability to pay its debts generally or a general assignment by a
party for the benefit of creditors;
(b) The filing of any petition or answer by a party
seeking to adjudicate itself a bankrupt or insolvent, or seeking any
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition for itself or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian
or other similar official for itself or for substantially all of its
property; or
(c) Any action taken by a party to authorize any of the
actions set forth above.
"Involuntary Bankruptcy" means, without the consent or acquiescence of
a party:
(a) The entering of an order for relief or approving a
petition for relief or reorganization;
(b) Any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar
relief under
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any present or future bankruptcy, insolvency or similar statute, law
or regulation;
(c) The filing of any petition against a party, which
petition is not dismissed within 90 days; or
(d) Without the consent or acquiescence of a party, the
entering of an order appointing a trustee, custodian, receiver or
liquidator of party or of all or any substantial part of the property
of the party, which order is not dismissed within 90 days.
11.4 Effect of an Event of Termination.
(a) Upon the occurrence of an Event of Termination, the party with
the right to terminate this agreement or to elect the remedy upon the Event of
Termination, as the case may be, may:
(i) in the case of an Event of Termination under Sections
11.3.1(a) or 11.3.7, give the other party written notice that the agreement
is terminated effective as of the date of the notice, in which case neither
party will have any other remedy or claim for damages (except any claim the
non-bankrupt party has against the bankrupt party and any claims permitted
under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than under
Section 11.3.1(a), give the other party written notice that the party is
exercising one of its rights, if any, under Section 11.5 or Section 11.6.
(b) If the party terminates this agreement under Section 11.4(a)(i)
then all rights and obligations of each party under this agreement will
immediately cease, except that:
(i) Any rights arising out of a breach of any terms of this
agreement will survive any termination of this agreement;
(ii) The provisions of this Section 11.4 and of Sections 12.2,
13, 14 and 16 will survive any termination of this agreement;
(iii) The payment obligations under Section 10 will survive any
termination of this agreement if, and to the extent, any costs or fees have
accrued or are otherwise due and owing as of the date of termination of
this agreement from Manager to Sprint PCS or any Sprint PCS Related Party
or from Sprint PCS to Manager or any Manager Related Party;
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(iv) Either party may terminate this agreement in
accordance with the terms of this agreement without any liability for any
loss or damage arising out of or related to such termination, including any
loss or damage arising out of the exercise by Sprint PCS of its rights
under Section 11.6.3;
(v) The parties will use all commercially reasonable
efforts to cease immediately all of their respective efforts to market,
sell, promote or distribute the Sprint PCS Products and Services;
(vi) Sprint PCS has the option to buy from Manager any
new unsold subscriber equipment and accessories, at the prices charged to
Manager;
(vii) The parties will immediately stop making any
statements or taking any action that might cause third parties to infer
that any business relationship continues to exist between the parties, and
where necessary or advisable, the parties will inform third parties that
the parties no longer have a business relationship; and
(viii) If subscriber equipment and accessories are in
transit when this agreement is terminated, Sprint PCS may, but does not
have the obligation to, cause the freight carrier to not deliver the
subscriber equipment and accessories to Manager but rather to deliver the
subscriber equipment and accessories to Sprint PCS.
(c) If the party exercises its rights under Section 11.4(a)(ii), this
agreement will continue in full force and effect until otherwise
terminated.
(d) If this agreement terminates for any reason other than Manager's
purchase of the Disaggregated License, Manager will not, for 3 years after
the date of termination compile, create, or use for the purpose of selling
merchandise or services similar to the Sprint PCS Products or Services, or
sell, transfer or otherwise convey to a third party, a list of customers
who purchased, leased or used Sprint PCS Products or Services. Manager may
use such a list for its own internal analysis of its business practices and
operations. If this agreement terminates because of Manager's purchase of
the Disaggregated License, then Sprint PCS will transfer to Manager the
Sprint PCS customers with a MIN assigned to the Service Area covered by the
Disaggregated License, but Sprint PCS retains the customers of a national
account and any resellers who have entered into a resale agreement with
Sprint PCS. Manager agrees not to solicit, directly or indirectly, any
customers of Sprint PCS not transferred to Manager under this Section
11.4(d) for 2 years after the termination of this agreement.
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11.5 Manager's Event of Termination Rights and Remedies. In addition to
any other right or remedy that Manager may have under this agreement, the
parties agree that Manager will have the rights and remedies set forth in this
Section 11.5 and that such rights and remedies will survive the termination of
this agreement. If Manager has a right to terminate this agreement as the result
of the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3,
11.3.5 or 11.3.7 (if Manager is the non-bankrupt party), then Manager has the
right to elect one of the following three (3) remedies, except Manager cannot
elect its remedies under Sections 11.5.1 or 11.5.2 during the first 2 years of
the Initial Term with respect to an Event of Termination under Section 11.3.3.
11.5.1 Manager's Put Right. Manager may put to Sprint PCS within 30
days after the Event of Termination all of the Operating Assets. Sprint PCS will
pay to Manager an amount equal to 80% of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers under
Section 11.7; or
(b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the put, the determination of the Operating
Assets, the representations and warranties made by the Manager with respect to
the Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.5.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in
the Service Area under the License on the date this agreement is
executed, then Manager may, subject to receipt of FCC approval,
purchase from Sprint PCS the Disaggregated License for the greater of
(1) the original cost of the License to Sprint PCS (pro rated on a
pops and spectrum basis) plus the microwave relocation costs paid by
Sprint PCS or (2) 9% (10% minus a 10% penalty) of the Entire Business
Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing of the
purchase of the Disaggregated License will occur within the later of:
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(1) 20 days after the receipt by Manager of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(c) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Product and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 Manager's Action for Damages or Other Relief. Manager may seek
damages or other appropriate relief in accordance with the dispute resolution
process in Section 14.
11.6 Sprint PCS' Event of Termination Rights and Remedies. In addition to
any other right or remedy that Sprint PCS may have under this agreement, the
parties agree that Sprint PCS will have the rights and remedies set forth in
this Section 11.6 and that such rights and remedies will survive the termination
of this agreement. If Sprint PCS has a right to terminate this agreement as the
result of the occurrence of an Event of Termination under Sections 11.3.2,
11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if Sprint PCS is the non-bankrupt party), then
Sprint PCS has the right to elect one of the following four (4) remedies, except
that (i) if Sprint PCS elects the remedies under Sections 11.6.1, 11.6.2 or
11.6.4, Sprint PCS may pursue its rights under Section 11.6.3 concurrently with
its pursuit of one of the other three remedies, (ii) Sprint PCS cannot elect its
remedies under Sections 11.6.1 or 11.6.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11.3.3 (unless the
Event of Termination is caused by a breach related to the Build-out Plan or the
build-out of the Service Area Network), and (iii) Sprint PCS cannot elect its
remedy under Section 11.6.2 during the first 2 years of the Initial Term with
respect to an Event of Termination under Section 11.3.6.
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11.6.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount
equal to 72% (80% minus a 10% penalty) of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers pursuant
to Section 11.7; or
(b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.6.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval, put
to Manager the Disaggregated License for a purchase price equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
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(d) Manager may, within 10 days after it receives notice of
Sprint PCS' exercise of its put, advise Sprint PCS of the amount of
spectrum (not to exceed 10 MHz) it wishes to purchase. After the
closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 Sprint PCS' Right to Cause A Cure.
(a) Sprint PCS' Right. Sprint PCS may, but is not obligated
to, take such action as it deems necessary to cure Manager's breach of
this agreement, including assuming operational responsibility for the
Service Area Network to complete construction, continue operation,
complete any necessary repairs, implement changes necessary to comply
with the Program Requirements and terms of this agreement, or take
such other steps as are appropriate under the circumstances, or Sprint
PCS may designate a third party or parties to do the same, to assure
uninterrupted availability and deliverability of Sprint PCS Products
and Services in the Service Area, or to complete the build-out of the
Service Area Network in accordance with the terms of this agreement.
In the event that Sprint PCS elects to exercise its right under this
Section 11.6.3, Sprint PCS will give Manager written notice of such
election. Upon giving such notice:
(1) Manager will collect and make available at a
convenient, central location at its principal place of business,
all documents, books, manuals, reports and records related to the
Build-out Plan and required to operate and maintain the Service
Area Network; and
(2) Sprint PCS, its employees, contractors and
designated third parties will have the unrestricted right to
enter the facilities and offices of Manager for the purpose of
curing the breach and, if Sprint PCS deems necessary, operate the
Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the extent
requested by Sprint PCS to enable Sprint PCS to exercise its rights
under this Section 11.6.3.
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(b) Liability. Sprint PCS' exercise of its rights under
this Section 11.6.3 will not be deemed an assumption by Sprint PCS of
any liability attributable to Manager or any other party, except that,
without limiting the provisions of Section 13, during the period that
Sprint PCS is curing a breach under this agreement or operating any
portion of the Service Area Network pursuant to this Section 11.6.3,
Sprint PCS will indemnify and defend Manager and its directors,
partners, officers, employees and agents from and against, and
reimburse and pay for, all claims, demands, damages, losses,
judgments, awards, liabilities, costs and expenses (including
reasonable attorneys' fees, court costs and other expenses of
litigation), whether or not arising out of third party claims, in
connection with any suit, claim, action or other legal proceeding
relating to the bodily injury, sickness or death of persons or the
damage to or destruction of property, real or personal, resulting from
or arising out of Sprint PCS' negligence or willful misconduct in
curing the breach or in the operation of the Service Area Network.
Sprint PCS' obligation under this Section 11.6.3(b) will not apply to
the extent of any claims, demands, damages, losses, judgments, awards,
liabilities, costs and expenses resulting from the negligence or
willful misconduct of Manager or arising from any contractual
obligation of Manager.
(c) Costs and Payments. During the period that Sprint
PCS is curing a breach or operating the Service Area Network under
this Section 11.6.3, Sprint PCS and Manager will continue to make any
and all payments due to the other party and to third parties under
this agreement, the Services Agreement and any other agreements to
which such party is bound, except that Sprint PCS may deduct from its
payments to Manager all reasonable costs and expenses incurred by
Sprint PCS in connection with the exercise of its right under this
Section 11.6.3. Sprint PCS' operation of the Service Area Network
pursuant to this Section 11.6.3 is not a substitution for Manager's
performance of its obligations under this agreement and does not
relieve Manager of its other obligations under this agreement.
(d) Length of Right. Sprint PCS may continue to operate
the Service Area Network in accordance with Section 11.6.3 until (i)
Sprint PCS cures all breaches by Manager under this agreement; (ii)
Manager cures all breaches and demonstrates to Sprint PCS'
satisfaction that it is financially and operationally willing, ready
and able to perform in accordance with this agreement and resumes such
performance; (iii) Sprint PCS consummates the purchase of the
Operating Assets under Section 11.6.1 or the sale of the Disaggregated
License under Section 11.6.2; or (iv) Sprint PCS terminates this
agreement.
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(e) Not Under Services Agreement. The exercise by Sprint
PCS of its right under this Section 11.6.3 does not represent services
rendered under the Services Agreement, and therefore it does not allow
Manager to be deemed in compliance with the Program Requirements under
Sections 7.1(a)(ii), 8.1(b).
11.6.4 Sprint PCS' Action for Damages or Other Relief. Sprint PCS
may seek damages or other appropriate relief in accordance with the dispute
resolution process in Section 14.
11.7 Determination of Entire Business Value.
11.7.1 Appointment of Appraisers. Sprint PCS and Manager must each
designate an independent appraiser within 30 days after giving the Purchase
Notice under Exhibit 11.8. Sprint PCS and Manager will direct the two appraisers
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to jointly select a third appraiser within 15 days after the day the last of
them is appointed. Each appraiser must be an expert in the valuation of wireless
telecommunications businesses. Sprint PCS and Manager must direct the three
appraisers to each determine, within 45 days after the appointment of the last
appraiser, the Entire Business Value. Sprint PCS and Manager will each bear the
costs of the appraiser appointed by it, and they will share equally the costs of
the third appraiser.
11.7.2 Manager's Operating Assets. The following assets are included
in the Operating Assets (as defined in the Schedule of Definitions):
-----------------------
(a) network assets, including all personal property,
real property interests in cell sites and switch sites, leasehold
interests, collocation agreements, easements, and rights of way;
(b) all of the real, personal, tangible and intangible
property and contract rights that Manager owns and uses in conducting
the business of providing the Sprint PCS Products and Services,
including the goodwill resulting from Manager's customer base;
(c) sale and distribution assets primarily dedicated
(i.e., at least 80% of their revenue is derived from the sale of
Sprint PCS Products and Services) to the sale by Manager of Sprint PCS
Products and Services. For example, a retail store that derives at
least 80% of its revenue from the sale of Sprint PCS Products and
Services is an operating asset. A store that derives 65% of its
revenue from Sprint PCS Products and Services is not an operating
asset;
(d) customers, if any, that use both the other products
and services approved under Section 3.2 and the Sprint PCS Products
and Services;
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(e) handset inventory;
(f) books and records of the wireless business,
including all engineering drawings and designs and financial records;
(g) all contracts used by Manager in operating the
wireless business including T1 service agreements, service contracts,
interconnection agreements, distribution agreements, software license
agreements, equipment maintenance agreements, sales agency agreements
and contracts with all equipment suppliers.
11.7.3 Entire Business Value. Utilizing the valuation principles set
forth below and in Section 11.7.4, "Entire Business Value" means the fair market
value of Manager's wireless business in the Service Area, valued on a going
concern basis.
(a) The fair market value is based on the price a
willing buyer would pay a willing seller for the entire on-going
business.
(b) The appraisers will use the then-current customary
means of valuing a wireless telecommunications business.
(c) The business is conducted under the Brands and
existing agreements between the parties and their respective Related
Parties.
(d) Manager owns the Disaggregated License (in the case
where Manager will be buying the Disaggregated License under Sections
11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2) or Manager owns the spectrum and
the frequencies actually used by Manager under this agreement (in the
case where Sprint PCS will be buying the Operating Assets under
Sections 11.2.1.1, 11.2.2.1, 11.5.1 or 11.6.1).
(e) The valuation will not include any value for the
business represented by Manager's Products and Services or any
business not directly related to Sprint PCS Products and Services.
11.7.4 Calculation of Entire Business Value. The Entire Business
Value to be used to determine the purchase price of the Operating Assets or the
Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by the
appraisers is within 10% of the lowest fair market value, then the
Entire
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Business Value used to determine the purchase price under this
agreement will be the arithmetic mean of the three appraised fair
market values.
(b) If two of the fair market values determined by the
appraisers are within 10% of one another, and the third value is not
within 10% of the other fair market values, then the Entire Business
Value used to determine the purchase price under this agreement will
be the arithmetic mean of the two more closely aligned fair market
values.
(c) If none of the fair market values is within 10% of
the other two fair market values, then the Entire Business Value used
to determine the purchase price under this agreement will be the
middle value of the three fair market values.
11.8 Closing Terms and Conditions. The closing terms and conditions for the
transactions contemplated in this Section 11 are attached as Exhibit 11.8.
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11.9 Contemporaneous and Identical Application. The parties agree that any
action regarding renewal or non-renewal and any Event of Termination will occur
contemporaneously and identically with respect to all Licenses. For example, if
Manager exercises its purchase right under Section 11.5.2, it must exercise such
right with respect to all of the Licenses under this agreement. The Term of this
agreement will be the same for all Licenses; Manager will not be permitted to
operate a portion of the Service Area Network with fewer than all of the
Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 Books and Records.
12.1.1 General. Each party must keep and maintain books and records
to support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
12.1.2 Audit. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for purposes of auditing the amount of fees, costs, expenses or other
charges payable in connection with the Service Area with respect to the period
audited. The auditing party will conduct the audit no more frequently than
annually. If the audit shows that Sprint PCS was underpaid then, unless the
amount is contested, Manager will pay to Sprint PCS the amount of the
underpayment within 10 Business Days after Sprint PCS gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint PCS was overpaid then, unless the
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amount is contested, Sprint PCS will pay to Manager the amount of the
overpayment within 10 Business Days after Sprint PCS determines Sprint PCS was
overpaid.
Notwithstanding the above provisions of this Section 12.1.2, Sprint PCS may
elect to have its own independent auditors certify to the accuracy of the
charges with respect to Manager, rather than allow Manager's independent
auditors access to Sprint PCS' records.
12.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction. The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the non-
contesting party will pay the costs and expenses of the Arbiter, otherwise the
contesting party will pay the costs and expenses of the Arbiter.
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12.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the Term and 3 years after the date of termination of this
agreement, keep confidential, not disclose to others and use only for the
purposes authorized in this agreement, all Confidential Information disclosed by
the other party to the party in connection with this agreement, except that the
foregoing obligation will not apply to the extent that any Confidential
Information:
(i) is or becomes, after disclosure to a party, publicly known
by any means other than through unauthorized acts or omissions of the party
or its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
(v) is required by the receiving party to be produced under
order of a court of competent jurisdiction or other similar requirements of
a governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
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(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 12.
(c) Notwithstanding the foregoing, Manager authorizes Sprint PCS to
disclose to the public in public relations announcements and regulatory filings
Manager's identity and the Service Area to be developed and managed by Manager.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as is
reasonably necessary to enable the disclosing party to take action to, and use
the party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(e) Manager will not except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different license area, Manager may not use any
of the Confidential Information received under or in connection with this
agreement in operating the other wireless business.
12.3 Insurance
12.3.1 General. During the term of this agreement, Manager must
obtain and maintain, and will cause any subcontractors to obtain and maintain,
with financially reputable insurers licensed to do business in all jurisdictions
where any work is performed under this agreement and who are reasonably
acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance
Requirements. The Sprint PCS Insurance Requirements as of the date of this
agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS
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Insurance Requirements as is commercially reasonable from time to time by
delivering to Manager a new Exhibit 12.3.
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12.3.2 Waiver of Subrogation. Manager must look first to any
insurance in its favor before making any claim against Sprint PCS or Sprint, and
their respective directors, officers, employees, agents or representatives for
recovery resulting from injury to any person (including Manager's or its
subcontractor's employees) or damage to any property arising from any cause,
regardless of negligence. Manager does hereby release and waive to the fullest
extent permitted by law, and will cause its respective insurers to waive, all
rights of recovery by subrogation against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives.
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12.3.3 Certificates of Insurance. Manager and all of its
subcontractors, if any, must, as a material condition of this agreement and
prior to the commencement of any work under and any renewal of this agreement,
deliver to Sprint PCS a certificate of insurance, satisfactory in form and
content to Sprint PCS, evidencing that the above insurance, including waiver of
subrogation, is in force and will not be canceled or materially altered without
first giving Sprint PCS at least 30 days prior written notice and that all
coverages are primary to any insurance carried by Sprint PCS, its directors,
officers, employees, agents or representatives.
Nothing contained in this Section 12.3.3 will limit Manager's liability to
Sprint PCS, its directors, officers, employees, agents or representatives to the
limits of insurance certified or carried.
13. INDEMNIFICATION
13.1 Indemnification by Sprint PCS. Sprint PCS agrees to indemnify, defend
and hold harmless Manager, its directors, managers, officers, employees, agents
and representatives from and against any and all claims, demands, causes of
action, losses, actions, damages, liability and expense, including costs and
reasonable attorneys' fees, against Manager, its directors, managers, officers,
employees, agents and representatives arising from or relating to the violation
by Sprint PCS of any law, regulation or ordinance applicable to Sprint PCS or by
Sprint PCS' breach of any representation, warranty or covenant contained in this
agreement or any other agreement between Sprint PCS or its Related Parties and
Manager or its Related Parties except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and/or expense results solely
from the negligence or willful misconduct of Manager.
13.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint PCS and Sprint, and their respective directors, managers,
officers, employees, agents and representatives from and against any and all
claims, demands, causes of action, losses, actions, damages, liability and
expense, including costs and reasonable attorneys' fees, against Sprint PCS or
Sprint, and their respective directors, managers, officers, employees, agents
and representatives arising from or relating to Manager's violation of any law,
regulation or ordinance applicable to Manager, Manager's breach of any
representation, warranty or covenant contained in this agreement or any other
agreement between Manager or its Related Parties and Sprint PCS and its Related
Parties, Manager's ownership of the operating assets or the operation of the
Service Area Network, or the actions or failure to act of any of Manager's
contractors, subcontractors, agents, directors, managers, officers, employees
and representatives of any of them in the performance of any work under this
agreement, except where and to the extent the claim, demand, cause of action,
loss, action, damage, liability and expense results solely from the negligence
or willful misconduct of Sprint PCS or Sprint, as the case may be.
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13.3 Procedure.
13.3.1 Notice. Any party being indemnified ("Indemnitee") will give
the party making the indemnification ("Indemnitor") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(a) Any claim or demand is made or liability is asserted
against Indemnitee; or
(b) Any suit, action, or administrative or legal
proceeding is instituted or commenced in which Indemnitee is involved
or is named as a defendant either individually or with others.
Failure to give notice as described in this Section 13.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
13.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
13.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section
13.3.3. Indemnitee is not permitted to settle the dispute or claim without the
prior written approval of Indemnitor, which approval will not be unreasonably
withheld.
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13.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
14. DISPUTE RESOLUTION
14.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 14.1.
14.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, either party may continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement. If, and only if, this agreement does not
provide a remedy (as in the case of Sections 3.4 and 4.5, where the parties are
supposed to reach an agreement), then either party may give the other party
written notice that it wishes to resolve the dispute or claim arising out of the
parties' inability to agree under such Sections of this agreement by using the
arbitration procedure set forth in this Section 14.2. Such arbitration will
occur in Kansas City, Missouri, unless the parties otherwise mutually agree,
with the precise location being as agreed upon by the parties or, absent such
agreement, at a location in Kansas City, Missouri selected by Sprint PCS. Such
arbitration will be conducted pursuant to the procedures prescribed by the
Missouri Uniform Arbitration Act, as amended from time to time, or, if none,
pursuant to the rules then in effect of the American Arbitration Association (or
at any other place and by any other form of arbitration mutually acceptable to
the parties). Any award rendered in such arbitration will be confidential
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and will be final and conclusive upon the parties, and a judgment on the award
may be entered in any court of the forum, state or federal, having jurisdiction.
The expenses of the arbitration will be borne equally by the parties to the
arbitration, except that each party must pay for and bear the cost of its own
experts, evidence, and attorneys' fees.
The parties must each, within 30 days after either party gives notice to
the other party of the notifying party's desire to resolve a dispute or claim
under the arbitration procedure in this Section 14.2, designate an independent
arbitrator, who is knowledgeable with regard to the wireless telecommunications
industry, to participate in the arbitration hearing. The two arbitrators thus
selected will select a third independent arbitrator, who is knowledgeable with
regard to the wireless telecommunications industry, who will act as chairperson
of the board of arbitration. If, within 15 days after the day the last of the
two named arbitrators is appointed, the two named arbitrators fail to agree upon
the third, then at the request of either party, the third arbitrator shall be
selected pursuant to the rules then in effect of the American Arbitration
Association. The three independent arbitrators will comprise the board of
arbitration, which will preside over the arbitration hearing and will render all
decisions by majority vote. If either party refuses or neglects to appoint an
independent arbitrator within such 30-day period, the independent arbitrator who
has been appointed as of the 31st day after the notifying party's notice will be
the sole independent arbitrator and will solely preside over the arbitration
hearing. The arbitration hearing will commence no sooner than 30 days after the
date the last arbitrator is appointed and no later than 60 days after such date.
The arbitration hearing will be conducted during normal working hours on
Business Days without interruption or adjournment of more than 2 Business Days
at any one time or 6 Business Days in the aggregate.
The arbitrators will deliver their decision to the parties in writing
within 10 days after the conclusion of the arbitration hearing. The arbitration
award will be accompanied by findings of fact and a statement of reasons for the
decision. There will be no appeal from the written decision, except as permitted
by applicable law. The arbitration proceedings, the arbitrators' decision, the
arbitration award, and any other aspect, matter, or issue of or relating to the
arbitration are confidential, and disclosure of such confidential information is
an actionable breach of this agreement.
Notwithstanding any other provision of this agreement, arbitration will not
be required of any issue for which injunctive relief is properly sought by
either party.
14.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under Section 14.1 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
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14.4 Tolling of Cure Periods. Any cure period under Section 11.3 that is
less than 90 days will be tolled during the pendency of the dispute resolution
process. Any cure period under Section 11.3 that is 90 days or longer will not
be tolled during the pendency of the dispute resolution process.
15. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
15.1 Due Incorporation or Formation; Authorization of Agreements. The party
is either a corporation, limited liability company, or limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
15.2 Valid and Binding Obligation. This agreement constitutes the valid and
binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
15.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, (b) any term, condition or provision of the articles
of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
15.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
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16. REGULATORY COMPLIANCE
16.1 Regulatory Compliance. Manager will construct, operate, and manage the
Service Area Network in compliance with applicable federal, state, and local
laws and regulations, including Siting Regulations. Nothing in this Section 16.1
will limit Manager's obligations under Section 2.2 and the remainder of this
Section 16. Manager acknowledges that failure to comply with applicable federal,
state, and local laws and regulations in its construction, operation, and
management of the Service Area Network may subject the parties and the License
to legal and administrative agency actions, including forfeiture penalties and
actions that affect the License, such as license suspension and revocation, and
accordingly, Manager agrees that it will cooperate with Sprint PCS to maintain
the License in full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those Siting
Regulations practices and procedures as may be requested by Sprint PCS. Every
six months, and at the request of Sprint PCS, Manager will provide a written
certification from one of Manager's chief officers that Manager's Service Area
Network complies with Siting Regulations. Manager's first certification of
compliance with Siting Regulations will be provided to Sprint PCS six months
after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service Area
Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear
the cost of Siting Regulations compliance audits and physical inspections
requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records. Manager
will make those records available upon request to Sprint PCS for production,
inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will
bear the cost of production, inspection, and copying.
16.2 FCC Compliance. The parties agree to comply with all applicable FCC
rules governing the License or the Service Area Network and specifically agree
as follows:
(a) The party billing a customer will advise the customer that
service is provided over spectrum licensed to Sprint PCS. Neither Manager nor
Sprint PCS will represent itself as the legal representative of the other before
the FCC or any other third party, but will cooperate with each other with
respect to FCC matters concerning the License or the Service Area Network.
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(b) Sprint PCS will use commercially reasonable efforts to maintain
the License in accordance with the terms of the License and all applicable laws,
policies and regulations and to comply in all material respects with all other
legal requirements applicable to the operation of the Sprint PCS Network and its
business. Sprint PCS has sole responsibility, except as specifically provided
otherwise in Section 2.2, for keeping the License in full force and effect and
for preparing submissions to the FCC or any other relevant federal, state or
local authority of all reports, applications, interconnection agreements,
renewals, or other filings or documents. Manager must cooperate and coordinate
with Sprint PCS' actions to comply with regulatory requirements, which
cooperation and coordination must include, without limitation, the provision to
Sprint PCS of all information that Sprint PCS deems necessary to comply with the
regulatory requirements. Manager must refrain from taking any action that could
impede Sprint PCS from fulfilling its obligations under the preceding sentence,
and must not take any action that could cause Sprint PCS to forfeit or cancel
the License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and applicable
FCC rules. Nothing in this agreement is intended to diminish or restrict Sprint
PCS' obligations as an FCC Licensee and both parties desire that this agreement
and each party's obligations under this agreement be in compliance with the FCC
rules. (d)
(d) Nothing in this agreement will preclude Sprint PCS from
permitting or facilitating resale of Sprint PCS Products and Services to the
extent required or elected under applicable FCC regulations. Manager will take
the actions necessary to facilitate Sprint PCS' compliance with FCC regulations.
To the extent permitted by applicable regulations, Sprint PCS will not authorize
a reseller that desires to sell services and products in only the Service Area
to resell Sprint PCS wholesale products and services, unless Manager agrees in
advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to obtain
FCC consent for the implementation, continuation or further effectuation of any
term or provision of this agreement, Sprint PCS will use all commercially
reasonable efforts diligently to prepare, file and prosecute before the FCC all
petitions, waivers, applications, amendments, rule-making comments and other
related documents necessary to secure and/or retain FCC approval of all aspects
of this agreement. Manager will use commercially reasonable efforts to provide
to Sprint PCS any information that Sprint PCS may request from Manager with
respect to any matter involving Sprint PCS, the FCC, the License, the Sprint PCS
Products and Services or any other products and services approved under Section
3.2. Each party will bear its own costs of preparation of the documents and
prosecution of the actions.
(f) If the FCC determines that this agreement is inconsistent with
the terms and conditions of the License or is otherwise contrary to FCC
policies, rules and regulations,
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or if regulatory or legislative action subsequent to the date of this agreement
alters the permissibility of this agreement under the FCC's rules or other
applicable law, rules or regulations, then the parties must use best efforts to
modify this agreement as necessary to cause this agreement (as modified) to
comply with the FCC policies, rules, regulations and applicable law and to
preserve to the extent possible the economic arrangements set forth in this
agreement.
16.3 Marking and Lighting. Manager will conform to applicable FAA standards
when Siting Regulations require marking and lighting of Manager's Service Area
Network cell sites. Manager will cooperate with Sprint PCS in reporting lighting
malfunctions as required by Siting Regulations.
16.4 Regulatory Notices. Manager will, within 2 Business Days after its
receipt, give Sprint PCS written notice of all oral and written communications
it receives from regulatory authorities (including but not limited to the FCC,
the FAA, state public service commissions, environmental authorities, and
historic preservation authorities) and complaints respecting Manager's
construction, operation, and management of the Service Area Network that could
result in actions affecting the License as well as written notice of the details
respecting such communications and complaints, including a copy of any written
material received in connection with such communications and complaints. Manager
will cooperate with Sprint PCS in responding to such communications and
complaints received by Manager. Sprint PCS has the right to respond to all such
communications and complaints, with counsel and consultants of its own choice.
If Sprint PCS chooses to respond to such communications and complaints, Manager
will not respond to them without the consent of Sprint PCS, and Manager will pay
the costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs, and
all other reasonable costs and expenses incurred by Sprint PCS.
16.5 Regulatory Policy-Setting Proceedings. Manager will not intervene in
or otherwise participate in a rulemaking, investigation, inquiry, contested
case, or similar regulatory policy setting proceedings before a regulatory
authority concerning the License or construction, operation, and management of
the Service Area Network and the Sprint PCS business operated using the Service
Area Network.
17. GENERAL PROVISIONS
17.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed as described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
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All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
17.2 Construction. This agreement will be construed simply according to its
fair meaning and not strictly for or against either party.
17.3 Headings. The table of contents, section and other headings contained
in this agreement are for reference purposes only and are not intended to
describe, interpret, define, limit or expand the scope, extent or intent of this
agreement.
17.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
17.5 Counterpart Execution. This agreement may be executed in any number of
counterparts with the same effect as if both parties had signed the same
document. All counterparts will be construed together and will constitute one
agreement.
17.6 Specific Performance. Each party agrees with the other party that the
party would be irreparably damaged if any of the provisions of this agreement
were not performed in accordance with their specific terms and that monetary
damages alone would not provide an adequate remedy. Accordingly, in addition to
any other remedy to which the non-breaching party may be entitled, at law or in
equity, the non-breaching party will be entitled to injunctive relief to prevent
breaches of this agreement and specifically to enforce the terms and provisions
of this agreement.
17.7 Entire Agreement; Amendments. The provisions of this agreement, the
Services Agreement and the Trademark License Agreements (including the exhibits
to those agreements) set forth the entire agreement and understanding between
the parties as to the subject matter of this agreement and supersede all prior
agreements, oral or written, and other communications between the parties
relating to the subject matter of this agreement. Except for Sprint PCS' right
to amend the Program Requirements in accordance with Section 9.2 and its right
to unilaterally modify and amend certain other provisions as expressly provided
in this agreement, this agreement may be modified or amended only by a written
amendment signed by persons or entities authorized to bind each party and, with
respect to the sections set forth on the signature page for Sprint, the persons
or entities authorized to bind Sprint.
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17.8 Limitation on Rights of Others. Except as set forth on the signature
page for Sprint, nothing in this agreement, whether express or implied, will be
construed to give any person or entity other than the parties any legal or
equitable right, remedy or claim under or in respect of this agreement.
17.9 Waivers.
17.9.1 Waivers--General. The observance of any term of this
agreement may be waived (whether generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce the
term, but any waiver is effective only if in a writing signed by the party
against which the waiver is to be asserted. Except as otherwise provided in this
agreement, no failure or delay of either party in exercising any power or right
under this agreement will operate as a waiver of the power or right, nor will
any single or partial exercise of any right or power preclude any other or
further exercise of the right or power or the exercise of any other right or
power.
17.9.2 Waivers--Managers. Manager is not in breach of any covenant
in this agreement and no Event of Termination will have occurred as a result of
the occurrence of any event, if Manager had delegated to Sprint Spectrum under
the Services Agreement (or any successor to that agreement) responsibility for
taking any action necessary to ensure compliance with the covenant or to prevent
the occurrence of the event.
17.9.3 Force Majeure. Neither Manager nor Sprint PCS, as the case
may be, is in breach of any covenant in this agreement and no Event of
Termination will have occurred as a result of the occurrence of the event, if
such party's non-compliance with the covenant results primarily from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the party's ability to comply with the
covenant;
(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part of any
governmental authority in granting any consent, approval, waiver or
authorization;
(iii) the failure of any vendor to deliver in a timely
manner any equipment or services; or
(iv) any act of God, act of war or insurrection, riot,
fire, accident, explosion, labor unrest, strike, civil unrest, work
stoppage, condemnation or any similar cause or event not reasonably within
the control of such party.
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17.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.11 Binding Effect. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Service Area Network or of
the License. The parties intend that this agreement bind only the party signing
this agreement and that the agreement is not binding on the Related Parties of a
party unless the agreement expressly provides that Related Parties are bound.
17.12 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
17.13 Severability. The parties intend every provision of this agreement to
be severable. If any provision of this agreement is held to be illegal, invalid,
or unenforceable for any reason, the parties intend that a court enforce the
provision to the maximum extent permissible so as to effect the intent of the
parties (including the enforcement of the remaining provisions). If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable provision with an enforceable
provision that reflects the original intent of the parties.
17.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT
OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR
LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION
AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY
ANOTHER PARTY TO THIS AGREEMENT.
17.15 No Assignment; Exceptions.
17.15.1 General. Neither party will, directly or indirectly, assign
this agreement or any of the party's rights or obligations under this agreement
without the prior written consent of the other party, except as otherwise
specifically provided in this Section 17. Sprint PCS may deny its consent to any
assignment or transfer in its sole discretion except as otherwise provided in
this Section 17.
Any attempted assignment of this agreement in violation of this Section
17.15 will be void and of no effect.
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A party may assign this agreement to a Related Party of the party, except
that Manager cannot assign this agreement to a Related Party that is a
significant competitor of Sprint, Sprint PCS or their respective Related Parties
in the telecommunications business. Except as provided in Section 17.15.5, an
assignment does not release the assignor from its obligations under this
agreement unless the other party to this agreement consents in writing in
advance to the assignment and expressly grants a release to the assignor.
Except as provided in Section 17.15.5, Sprint PCS must not assign this
agreement to any entity that does not also own the License covering the Service
Area directly or indirectly through a Related Party. Manager must not assign
this agreement to any entity (including a Related Party), unless such entity
assumes all rights and obligations under the Services Agreement, the Trademark
License Agreements and any related agreements.
17.15.2 Assignment Right of Manager to Financial Lender . If Manager
is no longer able to satisfy its financial obligations and other duties, then
Manager has the right to assign its obligations and rights under this agreement
to its Financial Lender, if:
(a) Manager or Financial Lender provides Sprint PCS at least 10 days
advance written notice of such assignment;
(b) Financial Lender cures or commits to cure any outstanding
material breach of this agreement by Manager prior to the end of any applicable
cure period. If Financial Lender fails to make a timely cure then Sprint PCS may
exercise its rights under Section 11;
(c) Financial Lender agrees to serve as an interim trustee for the
obligations and duties of Manager under this agreement for a period not to
exceed 180 days. During this interim period, Financial Lender must identify a
proposed successor to assume the obligations and rights of Manager under this
agreement;
(d) Financial Lender assumes all of Manager's rights and obligations
under the Services Agreement, the Trademark License Agreements and any related
agreements; and
(e) Financial Lender provides to Sprint PCS advance written notice of
the proposed successor to Manager that Financial Lender has identified
("Successor Notice"). Sprint PCS may give to Financial Lender written notice of
Sprint PCS' decision whether to consent to such proposed successor within 30
days after Sprint PCS' receipt of the Successor Notice. Sprint PCS may not
unreasonably withhold such consent, except that Sprint PCS is not required to
consent to a proposed successor that:
(i) has, in the past, materially breached prior agreements with
Sprint PCS or its Related Parties;
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(ii) is a significant competitor of Sprint PCS or its Related
Parties in the telecommunications business;
(iii) does not meet Sprint PCS' reasonable credit criteria;
(iv) fails to execute an assignment of all relevant documents
related to this agreement including the Services Agreement and the
Trademark License Agreements; or
(v) refuses to assume the obligations of Manager under this
Agreement, the Services Agreement, the Trademark License Agreements and any
related agreements.
If Sprint PCS fails to provide a response to Financial Lender within 30
days after receiving the Successor Notice, then the proposed successor is deemed
rejected. Any Financial Lender disclosed on the Build-out Plan on Exhibit 2.1 is
-----------
deemed acceptable to Sprint PCS.
17.15.3 Change of Control Rights. If there is a Change of Control of
Manager, then:
(a) Manager must provide to Sprint PCS advance written notice
detailing relevant and appropriate information about the new ownership interests
effecting the Change of Control of Manager.
(b) Sprint PCS must provide to Manager written notice of its decision
whether to consent to or reject the proposed Change of Control within 30 days
after its receipt of such notice. Sprint PCS may not unreasonably withhold such
consent, except that Sprint PCS is not required to consent to a Change of
Control in which:
(i) the final controlling entity or any of its Related Parties
has in the past materially breached prior agreements with Sprint PCS or its
Related Parties;
(ii) the final controlling entity or any of its Related Parties
is a significant competitor of Sprint PCS or its Related Parties in the
telecommunications business;
(iii) the final controlling entity does not meet Sprint PCS'
reasonable credit criteria;
(iv) the final controlling entity fails to execute an assignment
of all relevant documents related to this agreement including the Services
Agreement and the Trademark License Agreements; or
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(v) the final controlling entity or its Related Parties refuse
to assume the obligations of Manager under this agreement.
(c) In the event that Sprint PCS provides notice that it does not
consent to the Change of Control, Manager is entitled to either:
(i) contest such determination pursuant to the dispute
resolution procedure in Section 14; or
(ii) abandon the proposed Change of Control.
(d) Nothing in this agreement requires Sprint PCS' consent to:
(i) a public offering of Manager that does not result in a
Change of Control (i.e., a shift from one party being in control to no
party being in control is not a Change of Control); or
(ii) a recapitalization or restructuring of the ownership
interests of Manager that Manager determines is necessary to:
(A) facilitate the acquisition of commercial financing and
lending arrangements that will support Manager's operations and
efforts to fulfill its obligations under this agreement; and
(B) does not constitute a Change of Control.
(e) "Change of Control" means that in any one transaction or series
of related transactions occurring during any 365-day period, the ultimate parent
entity of the Manager changes. The ultimate parent entity is to be determined
using the Hart-Scott-Rodino Antitrust Improvements Act of 1976 rules. A Change
of Control does not occur if:
(i) a party changes the form of its organization without
materially changing their ultimate ownership (e.g., converting from a
limited partnership to a limited liability company); or
(ii) one of the owners of the party on the date of this agreement
or on the date of the closing of Manager's initial equity offering for
purposes of financing its obligations under this agreement ultimately gains
control over the party, unless such party is a significant competitor of
Sprint PCS or its Related Parties in the telecommunications business.
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Exhibit 10.5A
17.15.4 Right of First Refusal. Notwithstanding any other provision in
this agreement, Manager grants Sprint PCS the right of first refusal described
below. If Manager determines it wishes to sell an Offered Interest, upon
receiving any Offer to purchase an Offered Interest, Manager agrees to promptly
deliver to Sprint PCS an Offer Notice. The Offer Notice is deemed to constitute
an offer to sell to Sprint PCS, on the terms set forth in the Offer, all but not
less than all of the Offered Interest. Sprint PCS will have a period of 60 days
from the date of the Offer Notice to notify Manager that it agrees to purchase
the Offered Interest on such terms. If Sprint PCS timely agrees in writing to
purchase the Offered Interest, the parties will proceed to consummate such
purchase not later than the 180th day after the date of the Offer Notice. If
Sprint PCS does not agree within the 60-day period to purchase the Offered
Interest, Manager will have the right, for a period of 120 days after such 60th
day, subject to the restrictions set forth in this Section 17, to sell to the
person or entity identified in the offer Notice all of the Offered Interest on
terms and conditions no less favorable to Manager than those set forth in the
Offer. If Manager fails to sell the Offered Interest to such person or entity on
such terms and conditions within such 120-period, Manager will again be subject
to the provisions of this Section 17.15.4 with respect to the Offered Interest.
17.15.5 Transfer of Sprint PCS Network. Sprint PCS may sell,
transfer or assign the Sprint PCS Network, including its rights and obligations
under this agreement, the Services Agreement and any related agreements, to a
third party without Manager's consent so long as the third party assumes the
rights and obligations under this agreement and the Services Agreement. Manager
agrees that Sprint PCS and its Related Parties will be released from any and all
obligations under and with respect to any and all such agreements upon such
sale, transfer or assignment in accordance with this Section 17.15.5, without
the need for Manager to execute any document to effect such release.
17.16 Provision of Services by Sprint Spectrum. As described in the
Recitals, the party or parties to this agreement that own the Licenses are
referred to in this agreement as "Sprint PCS." Sprint Spectrum will provide most
or all of the services required to be provided by Sprint PCS under this
agreement on behalf of Sprint PCS, other than the services to be rendered by
Manager. For example, Sprint Spectrum is the party to the contracts relating to
the national distribution network, the roaming and long distance services, and
the procurement arrangements. Accordingly, Sprint PCS and Manager will deal with
Sprint Spectrum to provide many of the attributes of the Sprint PCS Network.
17.17 Number Portability. Manager understands that the manner in which
customers are assigned to the Service Area Network could change as telephone
numbers become portable without any relation to the service area in which they
are initially activated. To the extent the relationship between NPA-NXX and the
Service Area changes, Sprint PCS will develop an alternative system to attempt
to assign customers who primarily live and work in the Service Area to the
Service Area. The terms of this agreement will be deemed to be amended to
reflect the new system that Sprint PCS develops.
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17.18 Disclaimer of Agency. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
17.19 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither party
to this agreement has any fiduciary duty to the other party.
17.20 Expense. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The parties
must not allocate any employee cost or other cost to the other party, except as
otherwise provided in the Program Requirements or to the extent the parties
expressly agree in advance to the allocation.
17.21 General Terms. (a) This agreement is to be interpreted in accordance
with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires.
(ii) The words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation".
(iii) All references in this agreement to Sections and Exhibits are
references to Sections of, and Exhibits to, this agreement, unless otherwise
specified; and
(iv) All references to any agreement or other instrument or statute
or regulation are to it as amended and supplemented from time to time (and, in
the case of a statute or regulation, to any corresponding provisions of
successor statutes or regulations), unless the context otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
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17.22 Conflicts with Other Agreements. The provisions of the Management
Agreement govern over those of the Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Services
Agreement. The provisions of each Trademark License Agreement governs over those
of this agreement if the provisions contained in this agreement conflict with
analogous provisions in a Trademark License Agreement.
17.23 Announced Transaction. Sprint Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership have
executed a Restructuring and Merger Agreement and related agreements that
provide for restructuring the ownership of Sprint Spectrum L.P., SprintCom,
Inc., PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. Upon
consummation of the transactions contemplated by those agreements, Sprint would
control each of the four entities. While Sprint and Sprint PCS anticipate the
proposed transactions will be consummated, there can be no assurances.
17.24 Additional Terms and Provisions. Certain additional and supplemental
terms and provisions of this agreement, if any, are set forth in the Addendum to
Sprint PCS Management Agreement attached hereto and incorporated herein by this
reference. Manager represents and warrants that the Addendum also describes all
existing contracts and arrangements (written or verbal) that relate to or affect
the rights of Sprint PCS or Sprint under this agreement (e.g., agreements
relating to long distance telephone services (Section 3.4) or backhaul and
transport services (Section 3.7)).
17.25 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
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ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Louisiana Unwired, LLC
Service Area: Lake Charles, LA BTA
Houma-Thibodaux, LA BTA
Shreveport, LA BTA
Alexandria, LA BTA
Monroe, LA BTA
Contingent
Service Area: El Dorado-Magnolia-Camden, AR BTA
Longview-Marshall, TX BTA
Paris, TX BTA
Pine Bluff, AR BTA
Texarkana, TX BTA
Tyler, TX BTA
This Addendum contains certain additional and supplemental terms and
provisions of that certain Sprint PCS Management Agreement (the "Management
Agreement") entered into contemporaneously with and by the same parties as this
Addendum. The terms and provisions of this Addendum control, supersede and amend
any conflicting terms and provisions contained in the Management Agreement.
Except for express modifications made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum
have the meanings ascribed to them in the Management Agreement. Section and
Exhibit references are to Sections and Exhibits of the Management Agreement
unless otherwise noted.
The parties entered into the Management Agreement to enable Manager
to offer Sprint PCS Products and Services using the Sprint Brands. The
Management Agreement at this time applies to both the Licenses that Sprint PCS
owns, as well as the licenses that Manager owns. To address issues relating to
the licenses that Manager owns, the parties are entering into Addendum II to
Sprint PCS Management Agreement contemporaneously with the Management Agreement
and this Addendum. With respect to the three BTAs in which Manager will offer
Sprint PCS Products and Services using its own licenses, the Management
Agreement and Addendum II will be replaced by an Affiliation Agreement between
the parties that sets forth the terms and conditions of the affiliation
relationship between Sprint PCS and Manager. The Management Agreement will
continue to control the relationship between the parties in those BTAs in which
Manager offers Sprint PCS Products and Services utilizing the Licenses.
The Management Agreement is modified as follows:
1. Commencement Date. The fees and payments under Section 10 will commence
on December 1, 1998.
2. *pertaining to services provided or to be provided in the Service Area,
if any, will be retained if received by Manager or paid 100% to Manager if
received by Sprint PCS.
3. Setoff Rights. Sprint PCS' setoff rights under Section 10.6 will not
apply to any amounts collected by Sprint PCS from Service Area customers with
respect to products and services (other than Sprint PCS Products and Services
and Manager's Products and Services) that are bundled with Sprint PCS Products
and Services for billing purposes, or to amounts collected by Sprint PCS for
cellular, paging, local exchange and other services that are not provided by
Sprint PCS or a Related Party of Sprint PCS.
4. Term. Section 11.1 is modified to provide for a 10 year Initial Term.
Section 11.2 is modified to provide for 4 successive 10-year automatic renewal
periods, unless at least 2 years prior to the commencement of any renewal period
either party notifies the other party in writing that it does not wish to renew
the Management Agreement.
5. Microwave Relocation. At Manager's option, Sprint PCS will advance
Manager's share of the microwave relocation costs under Section 2.7. If so
advanced, Manager agrees to repay Sprint PCS as follows:
(a) The amounts advanced by Sprint PCS will be amortized monthly
over the remainder of the 10 year Initial Term. The unpaid balance will
bear interest at a rate equal to the Prime Rate plus 2% per annum
(computed on the basis of the actual number of days elapsed in a year of
365 or 366 days, as applicable, compounded monthly).
(b) The principal payments and the accrued interest on the unpaid
balance will be paid by reducing the amount that Sprint PCS pays to
Manager under Section 10.1.1. Upon an Event of Termination, Sprint PCS may
accelerate the unpaid balance owed by Manager under Section 2.7 and may
also cause it to be repaid by exercising setoff rights under Section 10.6.
Manager may prepay such amounts at any time without penalty.
6. Right of First Refusal. Sprint PCS' right of first refusal under
Section 17.15.4 will not apply to Manager's sale of *. The
other provisions of Section 17.15 remain in full force and effect.
7. Deployment of Digital Cellular. Manager will not substantially convert
(as defined below) any owned cellular businesses to digital wireless technology
unless there is total separation (as defined below) of such business from the
PCS business conducted in the Service Area pursuant to the Management Agreement.
As used in this paragraph, "substantially convert" means to offer, sell or
distribute any wireless service that uses a digital or dual mode handset that
utilizes digital technology deployed on cellular licenses and frequencies within
the Service Area. Also as used in this paragraph, there is "total separation" of
such business only if the digital wireless technology business is conducted in a
separate legal entity with its own management, employees, facilities, financing
and business operations, and in no event may such business be marketed using the
terms "PCS", "personal communication services" or derivatives thereof. The
prohibition contained in this paragraph does not prohibit the use of digital
technology for the delivery or provisioning of analog cellular services that use
analog handsets, nor does it prohibit Manager from offering dual mode handsets
to cellular customers that offer analog cellular products and services utilizing
cellular licenses and frequencies and digital Sprint PCS Products and Services
and Manager's Products and Services.
__________
* Confidential portion omitted and filed separately with the SEC with a request
for confidential treatment pursuant to Rule 406 under the Securities Act.
2
<PAGE>
8. Contingent Service Area. Sprint PCS acknowledges Manager's interest in
developing the El Dorado-Magnolia-Camden, AR BTA, the Longview-Marshall, TX BTA,
the Paris, TX BTA, the Pine Bluff, AR BTA, the Texarkana, TX BTA and the Tyler,
TX BTA (collectively, the "Contingent Service Area"). Manager and Sprint PCS
agree that Manager has the exclusive right from the date hereof until December
15, 1998 to negotiate in good faith to amend Exhibits 1.7, 2.1, 2.4 and 2.7 to
expand the Service Area to include all (but not less than all) of the Contingent
Service Area. If such amendments arc not adopted prior to December 15, 1998,
thereafter Sprint PCS may develop the Contingent Service Area itself or allow an
Other Manager to develop all or any part of the Contingent Service Area. If the
Contingent Service Area becomes part of the Service Area, Manager agrees that it
will offer Sprint PCS Products and Services under the Sprint Brands beginning
with the initial launches of wireless service in the Contingent Service Area and
as stipulated in the Trademark License Agreements.
9. Transition Period. Because Manager is already operating a wireless
communications business in the Lake Charles, LA BTA under the "US Unwired" brand
name, the parties agree to a "Transition Period" for the Lake Charles, LA BTA
under the following terms:
(a) The Transition Period will commence upon the execution of the
Management Agreement by the parties and will continue until November 1,
1998, unless on or before that date the parties agree in writing that
Manager is meeting all Program Requirements or the parties extend the
Transition Period. In either case, the Transition Period ends on the date
set forth above or in such written instrument.
(b) Manager will transition its business activities (including its
PCS subscribers) during the Transition Period to the Service Area Network
and to the Sprint PCS Products and Services under the Sprint Brands as
soon as practicable consistent with FCC requirements, but in any event no
later than November 1, 1998 (or such later date as is consistent with FCC
requirements for clearing spectrum).
(c) During the Transition Period the network seamlessness required
in the Management Agreement is limited to a roaming relationship between
the parties. The terms of such roaming relationship will be consistent
with the terms of the roaming agreement that currently exists between the
parties, except that the reciprocal rate will be 25 cents ($O.25) per
minute. During the Transition Period, Manager will not be required to meet
the Program Requirements contained in the Management Agreement; however,
Manager will, during the Transition Period, exercise commercially
reasonable efforts to prepare its operations to become compliant with the
Program Requirements.
(d) During the Transition Period, Manager will continue to operate
the Lake Charles, LA BTA Service Area Network under the "US Unwired" brand
name, utilizing the transitional branding guidelines set forth as Model 1
of the Sprint PCS Manager Guideline in the Trademark License Agreements
(i.e. a tag-line of "A Sprint PCS Network Member").
(e) Upon termination of the Transition Period, any roaming
agreements or other agreements entered into by the parties to facilitate
Manager's transition during the Transition Period will automatically
terminate, and the terms and conditions of the Management Agreement will
become effective in those situations.
(f) After the Transition Period, Manager must utilize the
co-branding conventions set forth as Model 2A of the Sprint PCS Manager
Guideline in the Trademark License Agreements for Manager's brand for the
Term of the Management Agreement (i.e., a tag-line of "A Sprint
3
<PAGE>
PCS Network Partner", using the US Unwired logo), except that Manager may
continue to utilize the Model I transitional branding guidelines (i.e., a
tag-line of "A Sprint PCS Network Member") with respect to Manager's
retail store fronts in the Lake Charles, LA BTA.
The Transition Period will not apply to the Contingent Service Area, the
Houma-Thibodaux, LA BTA or the Manager License Area (as defined below), and the
Sprint PCS Products and Services under the Sprint Brands will be offered
beginning with the initial launches of wireless service in such BTAs as
stipulated in the Trademark License Agreements.
10. Manager Non-Renewal - Contingent Service Area. This paragraph 10
modifies certain provisions related to the Contingent Service Area if it becomes
part of the Service Area pursuant to paragraph 8. If Manager gives Sprint PCS
notice of its election not to renew the Management Agreement pursuant to Section
11.2, then Sprint PCS may elect its options in accordance with Section 11.2.2;
provided, that if Sprint PCS purchases the Operating Assets, (i) it will allow
Manager to resell Sprint PCS Products and Services within the Contingent Service
Area at MFN prices and Manager's subscribers to roam at MFN prices, and (ii) the
following phrase will be added to the last sentence of Section 11.4(d):
", provided, however, that Manager's advertising through mass media or bulk
mailings will not be considered a solicitation of Sprint PCS customers."
11. Manager Non-Renewal - Houma-Thibodaux. This paragraph 11 modifies
certain provisions related to the Houma-Thibodaux, LA BTA.
(a) If Manager gives Sprint PCS notice of its election not to renew
the Management Agreement pursuant to Section 11.2, then, notwithstanding
Sections 11.2.2(a) and 12.2.2(b), Manager will have the right to exercise
a purchase right in accordance with Section 11.2.1.2 for a Disaggregated
License applicable to such BTA, in which case Manager is required to allow
Sprint PCS to resell Manager Products and Services within such BTAs at MFN
prices and Sprint PCS' subscribers to roam at MFN prices.
(b) If Manager fails to timely exercise its purchase right under
paragraph 11(a), then Sprint PCS may elect its options in accordance with
Section 11.2.2; provided, that if Sprint PCS purchases the Operating
Assets, (i) it will allow Manager to resell Sprint PCS Products and
Services within such BTAs at MFN prices and Manager's subscribers to roam
at MFN prices, and (ii) the following phrase will be added to the last
sentence of Section 11.4(d): ", provided, however, that Manager's
advertising through mass media or bulk mailings will not be considered a
solicitation of Sprint PCS customers."
12. Manager Non-Renewal - Lake Charles. This paragraph 12 modifies certain
provisions related to the Lake Charles, LA BTA.
If Manager gives Sprint PCS notice of its election not to renew the
Management Agreement pursuant to Section 11.2, then, notwithstanding
Sections 11.2.2(a) and 11.2.2(b):
(a) Manager will have the right to transition to its own spectrum,
customers with an MIN assigned to such BTA, but Sprint PCS retains the
customers of a national account and any resellers who have entered into a
reseller agreement with Sprint PCS, in which case Manager is required to
allow Sprint PCS to resell Manager Products and Services within such BTAs
at MFN prices and Sprint PCS' subscribers to roam at MFN prices.
4
<PAGE>
(b) If Manager cannot transition the subscribers with an MIN
assigned to such BTA to its own spectrum because there is no available
spectrum or its is commercially unreasonable to do so, then Sprint PCS may
elect its options in accordance with Section 11.2.2; provided, that if
Sprint PCS purchases the Operating Assets, (i) it will allow Manager to
resell Sprint PCS Products and Services within such BTAs at MFN prices and
Manager's subscribers to roam at MFN prices, and (ii) the following phrase
will be added to the last sentence of Section 11.4(d): ", provided,
however, that Manager's advertising through mass media or bulk mailings
will not be considered a solicitation of Sprint PCS customers."
(c) Notwithstanding the provisions of Section 11.2.2.1 related to
Sprint PCS' purchase of the Operating Assets, (A) the Operating Assets
will not include that portion of the customer base consisting of customers
whose MINs are assigned to the Lake Charles BTA (but Sprint PCS retains
the customers of a national account and any resellers who have entered
into a reseller agreement with Sprint PCS), (B) when determining the
Entire Business Value the appraisers will assume that the customers
excluded in (A) above arc not customers of the business, and (C) the
valuation method to be used in determining the value of such customer base
will be the generally accepted method within the wireless industry for
valuing a customer base at the time the valuation is made, which method
takes into account net present value of the customer base, churn and
expected changes in average revenue per user.
13. IXC Services. The first sentence of Section 34 is deleted and, in its
place, the following sentence is inserted:
"Manager must purchase from Sprint long distance telephony services
for the Sprint PCS Products and Services at wholesale rates, except that
Manager may purchase long distance telephony services that utilize the
networks of one or more of AT&T, MCI or WorldCom (or their successors) if
Sprint fails to exercise a right of last offer within 30 days after
Manager gives Sprint a copy of the wholesale rate proposal. Manager may
also purchase long distance telephony services that utilize the network of
IXC (or its successors) (alone or in conjunction with AT&T, MCI or
WorldCom networks) under circumstances described in the preceding
sentence, so long as IXC (or such successors) substantially meets Sprint's
network reliability and voice quality standards in force at the time
Sprint receives the proposal. Manager agrees it will not submit a
wholesale rate proposal to Sprint more often than once during any twelve
month period."
14. Network Certification Costs. Network Certification Costs, as
contemplated in Exhibit 2.1.1, will be limited to reasonable travel,
transportation, food, lodging and out of pocket expenses incurred by Sprint PCS.
15. Termination - Purchase of Operating Assets or Sale of Disaggregated
License; Payment of Purchase Price. Notwithstanding anything in the Management
Agreement to the contrary, the parties agree that in the event of any
termination of the Management Agreement other than pursuant to Section 11.3.1(a)
or 11.3.4, if Sprint PCS does not put or sell the Disaggregated License
for such BTA to Manager under Sections 11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2, as
the case may be (and transfer to Manager the Sprint PCS customers with a MIN
assigned to the Service Area covered by the Disaggregated License as and to the
extent provided in Section 11.4(d)), then Sprint PCS agrees to purchase prior to
such termination all Operating Assets in the manner provided in Sections
11.2.2.1, 11.2.1.1, 11.5.1 or 11.6.1, as the case may be; provided, that this
paragraph 15 does not apply to the Shreveport, LA BTA, Alexandria, LA BTA or
Monroe, LA BTA.
5
<PAGE>
Sprint PCS agrees, and Manager hereby consents and directs Sprint PCS,
that if Sprint PCS should purchase Manager's Operating Assets for any reason,
Sprint PCS will pay the purchase price over to the Financial Institution for the
account of Manager.
16. Entire Business Value - Additional Valuation Principle.
Notwithstanding anything in the Management Agreement to the contrary, the
parties agree that, for purposes of any determination of the "Entire Business
Value," the deemed ownership of the Disaggregated License under Section
11.7.3(d) will assume the transfer of the Sprint PCS customers under Section
11.4(d).
17. Additional Event of Termination. Notwithstanding anything in the
Management Agreement to the contrary, the parties agree that an "Event of
Termination" is deemed to occur if the Financial Institution gives Sprint PCS
and Manager a written notice that Manager has defaulted because Manager failed
to make a regularly scheduled principal or interest payment to the Financial
Institution stating that such default has continued unremedied for at least 90
days, provided, that the Financial Institution has promptly given Sprint PCS
written notice of Manager's nonpayment. Upon such an Event of Termination.
Sprint PCS will have 30 days to elect between purchasing Manager's Operating
Assets or putting to Manager the Disaggregated License under the terms of either
Section 11 .6.1 or Section 11.6.2, as the case may be.
18. Lake Charles, LA BTA. The parties agree to investigate manners in
which Manager can build-out the Sprint PCS Network in the Lake Charles, LA BTA
to enable both Sprint PCS and Manager to perfect their respective licenses in
that BTA. If any commercially reasonable strategy is discovered, the parties
will negotiate in good faith to implement a plan intended to accomplish that
goal. Nothing in this paragraph 18 will be construed as imposing any obligation
or duty upon Sprint PCS or Manager to implement any plan or to take any action,
and either party in its sole discretion can elect to not agree to implement a
plan.
19. Sprint PCS' FCC License Requirements. Manager agrees to deploy network
facilities that utilize the Licenses covering the Service Area and to actively
market Sprint PCS Products and Services in the Service Area, at Manager's
expense, if such deployment and marketing will cause Sprint PCS to comply with
its FCC license requirements with respect to the Licenses. If Sprint PCS
purchases the Operating Assets subject to this paragraph 19, (a) it will allow
Manager to resell Sprint PCS Products and Services within the Service Area at
MFN prices and Manager's subscribers to roam at MFN prices, and (b) the
following phrase will be added to the last sentence of Section 11.4(d) when
applied under these circumstances: ", provided, however, that Manager's
advertising through mass media or bulk mailings will not be considered a
solicitation of Sprint PCS customers."
6
<PAGE>
ADDENDUM II
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Louisiana Unwired, LLC
Service Area: Lake Charles, LA BTA
Houma-Thibodaux, LA BTA
Shreveport, LA BTA
Alexandria, LA BTA
Monroe, LA BTA
Contingent
Service Area: El Dorado-Magnolia-Camuden, AR BTA
Longview-Marshall, TX BTA
Paris, TX BTA
Pine Bluff, AR BTA
Texarkana, TX BTA
Tyler, TX BTA
This Addendum contains certain additional and supplemental terms and
provisions of that certain Sprint PCS Management Agreement entered into
contemporaneously with and by the same parties as this Addendum, as amended by
that certain Addendum I to Sprint PCS Management Agreement ("Addendum I") (such
agreement, as amended by Addendum I, being the "Management Agreement"). The
terms and provisions of this Addendum control, supersede and amend any
conflicting terms and provisions contained in the Management Agreement. Except
for express modifications made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum
have the meanings ascribed to them in the Management Agreement. Section and
Exhibit references are to Sections and Exhibits of the Management Agreement
unless otherwise noted.
Manager wishes to offer Sprint PCS Products and Services in the
Service Area using the Sprint Brands. Manager will offer such products and
services using Licenses owned by Sprint PCS in two BTAs, and using licenses it
owns in three BTAs. In the BTAs in which Manager operates under its own
licenses, Manager will be an "affiliate" of Sprint PCS. In the other BTAs,
Manager will be a "manager." As mentioned above, the parties executed a
Management Agreement and Addendum I to set forth the terms and conditions of
their relationship. The parties are also entering into this Addendum to set
forth the terms and conditions of the relationship in those BTAs in which
Manager will operate under its own licenses. As soon as practicable, Sprint PCS
and Manager will enter into an Affiliation
7
<PAGE>
Agreement that will replace the terms and conditions of the Management Agreement
and this Addendum with respect to Manager's operations in those BTAs in which it
will operate under its own Licenses. Manager will be referred to as an
"affiliate" in the Affiliation Agreement, but will be referred to as "Manager"
in this Addendum to be consistent with the terminology in the Management
Agreement.
To reflect Manager's role as an affiliate of Sprint PCS (rather than
a manager) in those BTAs in which Manager will offer Sprint PCS Products and
Services using the licenses Manager owns, the Management Agreement is modified
as follows:
1. Manager License Area. Manager holds a License (the "Manager License")
to operate a PCS wireless communications system (the "Manager License Area
Network") in each of the following BTAs (collectively, the "Manager License
Area"): Shreveport, LA BTA, Alexandria, LA BTA and Monroe, LA BTA. Each Manager
License is described on Schedule 1 to this Addendum. The Manager License Area is
part of and included in the Service Area and the Manager License Area Network is
part of and included in the Service Area Network for all purposes of the
Management Agreement, except as otherwise expressly provided in this Addendum.
2. Limited Purpose of this Addendum. This Addendum applies only with
respect to the Manager License Area.
3. Microwave Relocation. Manager will be responsible, at its sole cost,
for clearing spectrum in the Manager License Area (as set forth on Schedule 1 to
this Addendum) in accordance with Section 2.7.
4. Fees and Payments. Section 10.1.1 is amended so that, as amended, such
Section reads in its entirety as follows:
"10.1.1 Fee Based on Collected Revenue. Manager will pay to Sprint PCS a
monthly fee equal to 8% of Collected Revenues for: (a) utilizing the
Brands; (b) national and regional sales and marketing costs; (c)
participating in discounted volume-based pricing arrangements with Sprint
PCS vendors; (d) utilizing the roaming arrangements implemented by Sprint
PCS; and (e) all other rights and benefits inuring to Manager under this
agreement. The fee will be due on the fifth (5th) Business Day of the
month following the month for which the fee is calculated."
5. Regulatory Compliance. Manager will be responsible for all regulatory
compliance obligations under Sections 2.2 and 16 with respect to the Manager
License Area Network.
6. Remedies Upon Termination. Any termination of the Management Agreement
terminates the entire Management Agreement regarding both the Service Area
Network and the Manager License Service Area. However, the remedies available
with respect to the Manager License Service Area are modified as follows:
2
<PAGE>
(a) The put options or purchase rights respecting the Disaggregated
Licenses, as applicable, contained in Sections 11.2.1.2, 11.2.2.2. 11.5.2
and 11.6.2 are not available. The right of Sprint PCS to cure Manager's
defaults under Section 11.6.3 is also not available.
(b) Section 11.9 is modified such that any action regarding renewal
or non-renewal and any Event of Termination will occur contemporaneously and
identically as a single group with respect to all Licenses (Lake Charles, LA
BTA, Houma-Thibadaux LA BTA and the Contingent Service Area) and with respect to
all Manager Licenses (Shreveport, LA BTA, Alexandria, LA BTA, and Monroe, LA
BTA), but the appropriate party need not act contemporaneously and identically
in selecting the rights and remedies available to such party.
(c) After termination of the Management Agreement for any reason,
Manager will allow subscribers of Sprint PCS to roam on the Manager
License Area Network and Sprint PCS to resell Manager's Products and
Services, in either case at MFN prices.
(d) If Sprint PCS purchases the Operating Assets as permitted under
Sections 11.2.2.1, 11.5.1 or 11.6.1, (i) it will allow Manager to resell
Sprint PCS Products and Services within the Manager License Area at MFN
prices and Manager's subscribers to roam at MFN prices, and (ii) the
following phrase will be added to the last sentence of Section 11.4(d)
when applied under these circumstances: ", provided, however, that
Manager's advertising through mass media or bulk mailings will not be
considered a solicitation of Sprint PCS customers."
3
<PAGE>
Schedule 1 to Addendum II
Manager's Licenses
BTA PCS License
--- -----------
Shreveport, LA F Block
Alexandria, LA F Block
Monroe LA F Block
4
<PAGE>
ADDENDUM III
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Louisiana Unwired, LLC
Service Area BTAs: Lake Charles, LA BTA
Houma-Thibodaux, LA BTA
Shreveport, LA BTA
Alexandria, LA BTA
Monroe, LA BTA
El Dorado-Magnolia-Camden, AR BTA
Longview-Marshall, TX BTA
Paris, TX BTA
Pine Bluff, AR BTA
Texarkana, TX BTA
Tyler, TX BTA
This Addendum III ("this Addendum"), dated as of June 18, 1999,
contains certain additional and supplemental terms and provisions of that
certain Sprint PCS Management Agreement entered into as of June 8, 1998, by the
same parties as this Addendum, which Management Agreement was amended by that
certain Addendum I entered into as of June 8, 1998 and that certain Addendum II
entered into as of June 8, 1998 (The Management Agreement, as amended by
Addendum I and Addendum II, being the "Management Agreement"). The terms and
provisions of this Addendum control, supersede and amend any conflicting terms
and provisions contained in the Management Agreement. Except for express
modifications made in this Addendum, the Management Agreement continues in full
force and effect.
Capitalized terms used and not otherwise defined in this Addendum
have the meanings ascribed to them in the Management Agreement. Section and
Exhibit references are to Sections and Exhibits of the Management Agreement
unless otherwise noted.
The Management Agreement is modified as follows:
1. Use of Loan Proceeds. Sprint PCS is entering into that certain
Consent and Agreement between Sprint Spectrum L.P., Sprint Communications
Company, L.P., WirelessCo, L.P., and CoBank, ACB, as administrative agent
(together with any successors thereof in accordance with the Credit
Agreement hereinafter described, the "Administrative Agent") (which
Consent and Agreement, as amended and modified from time to time, is
referred to as the "Consent and Agreement") to enable Manager to obtain
loans from the Lenders (as defined in the Consent and Agreement) (the
"Lenders"). Manager agrees that notwithstanding the permitted uses of the
proceeds from the loans made to Manager to which the Consent and Agreement
relates or from any other loan or extension of credit to which the Consent
and Agreement relates, Managers will not use the proceeds from any such
loan or extension of credit for any purpose other than to construct and
operate the wireless service within the Service
<PAGE>
Area (as amended from time to time) as contemplated under the Management
Agreement.
2. Consent and Agreement Not Assignable. Except as expressly
required or permitted in the Consent and Agreement, Manager may not assign
the Consent and Agreement.
3. Notices. Manager agrees to promptly give Sprint PCS a copy of any
notice Manager receives from any Agent or any Lender, and a copy of any
notice Manager gives to any Agent or any Lender. Sprint PCS agrees to
promptly give Manager a copy of any notice Sprint PCS receives from any
Agent or any Lender, and a copy of any notice that Sprint PCS gives to any
Agent or any Lender.
4. No Default Under Credit Documents or Management Agreement.
Manager warrants and represents that as of the date hereof, no Default or
Event of Default under any of the Credit Documents or the Subordinated
Credit Documents has occurred, and no Event of Termination under the
Management Agreement or event that if not cured, or if notice were to be
provided, would constitute an Event of Termination under the Management
Agreement, has occurred, except as described in the document delivered by
Sprint PCS to Manager and the Administrative Agent titled "Louisiana
Unwired, L.L.C. Management Agreement Non-Compliance Summary," which
describes events that, if not cured, will become Events of Termination.
This Addendum III may be executed in two more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one contract.
[The remainder of this page is intentionally left blank]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum III to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Chief Business Development
WIRELESSCO, L.P.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By:
-----------------------------------------
Thomas E. Weigman, Senior Vice President
Consumer Market Strategy and
Communication
SPRINTCOM, INC.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Vice President
LOUISIANA UNWIRED, L.L.C.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum III to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development
WIRELESSCO, L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Thomas E. Weigman
-----------------------------------------
Thomas E. Weigman, Senior Vice President
Consumer Market Strategy and
Communication
SPRINTCOM, INC.
By:
-----------------------------------------
Bernard A. Bianchino
Vice President
LOUISIANA UNWIRED, L.L.C.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum III to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development
WIRELESSCO, L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By:
-----------------------------------------
Thomas E. Weigman,
Senior Vice President
Consumer Market Strategy and
Communications
SPRINT COM, INC.
By:
-----------------------------------------
Bernard A. Bianchino
Vice President
LOUISIANA UNWIRED, L.L.C.
By: /s/ Thomas G. Henning
-----------------------------------------
Name: Thomas G. Henning
-----------------------------------
Title: Assistant Manager
----------------------------------
3
<PAGE>
ADDENDUM IV
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Louisiana Unwired, LLC
Service Area BTAs: Lake Charles, LA BTA
Houma-Thibodaux, LA BTA
Shreveport, LA BTA
Alexandria, LA BTA
Monroe, LA BTA
El Dorado-Magnolia-Camden, AR BTA
Longview-Marshall, TX BTA
Paris, TX BTA
Pine Bluff, AR BTA
Texarkana, TX BTA
Tyler, TX BTA
This Addendum IV ("this Addendum"), dated as of October 26, 1999,
contains certain additional and supplemental terms and provisions of that
certain Sprint PCS Management Agreement entered into as of June 8, 1998, by the
same parties as this Addendum, which Management Agreement was amended by that
certain Addendum I entered into as of June 8, 1998, that certain Addendum II
entered into as of June 8, 1998 and that certain Addendum III entered into as of
June 18, 1999 (the Management Agreement, as amended by Addendum I, Addendum II
and Addendum III, being the "Management Agreement"). The terms and provisions of
this Addendum control, supersede and amend any conflicting terms and provisions
contained in the Management Agreement. Except for express modifications made in
this Addendum, the Management Agreement continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum
have the meanings ascribed to them in the Management Agreement. Section and
Exhibit references are to Sections and Exhibits of the Management Agreement
unless otherwise noted.
The Management Agreement is modified as follows:
I. Use of Loss Proceeds. Sprint PCS is entering into that certain
Consent and Agreement, effective October 26, 1999, between Sprint Spectrum
L.P., Sprint Communications Company, L.P., WirelessCo, L.P., and CoBank,
ACB, as administrative agent (together with any successors thereof in
accordance with the Credit Agreement hereinafter described, the
"Administrative Agent") (which Consent and Agreement, as amended and
modified from time to time, is referred to as the "Consent and Agreement")
to enable U.S. Unwired, Inc., the parent company of Manager, to obtain
loans from the Lenders (as defined agrees that notwithstanding the
permitted uses of the proceeds from the loans made to U.S. Unwired, Inc.
to which the Consent and Agreement relates or form any other loan or
extension of credit to which the Consent and Agreement relates, Manager
will not use the proceeds from any such loan or extension of credit for
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum IV to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Chief Business Development
WIRELESSCO, L.P.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By:
-----------------------------------------
Thomas E. Weigman,
Senior Vice President,
Consumer Market Strategy and
Communications
SPRINTCOM, INC.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Vice President
LOUISIANA UNWIRED, L.L.C.
By:
-----------------------------------------
Thomas G. Henning
Assistant Manager
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum IV to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
WIRELESS CO. L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Thomas E. Weigman
-----------------------------------------
Thomas E. Weigman
Senior Vice President
Consumer Market Strategy and
Communications
SPRINT.COM, INC.
By:
-----------------------------------------
Bernard A. Bianchino
Vice President
LOUISIANA UNWIRED, L.L.C.
By:
-----------------------------------------
Thomas G. Henning
Assistant Manager
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IN WITNESS WHEREOF, the parties hereto have caused this Addendum IV to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
WIRELESS CO. L.P.
By:
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/
-----------------------------------------
Thomas E. Weigman
Senior Vice President
Consumer Market Strategy and
Communications
SPRINT.COM, INC.
By:
-----------------------------------------
Bernard A. Bianchino
Vice President
LOUISIANA UNWIRED, L.L.C.
By: /s/ Thomas G. Henning
-----------------------------------------
Thomas G. Henning
Assistant Manager
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Sprint PCS
Services Agreement
between
Sprint Spectrum L.P.
& Louisiana Unwired LLC
_______________________
June 8, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
1. ENGAGEMENT OF SPRINT SPECTRUM........................................ 1
1.1 Engagement of Sprint Spectrum................................. 1
1.2 Reliance on Manager........................................... 2
1.3 Non-exclusive Service......................................... 2
2. SERVICES............................................................. 2
2.1 Available Services; Selected Services......................... 2
2.1.1 Available Services..................................... 2
2.1.2 Selected Services...................................... 3
2.1.3 Changes to Selected Services........................... 3
2.1.4 Performance of Selected Services....................... 3
2.2 Third Party Vendors........................................... 3
2.3 Contracts..................................................... 4
3. FEES FOR SELECTED SERVICES........................................... 4
3.1 Payment of Fees............................................... 4
3.2 Adjustment of Fees............................................ 4
3.3 Late Payments................................................. 5
4. TERM; TERMINATION; EFFECT OF TERMINATION............................. 5
4.1 Term.......................................................... 5
4.2 Effect of Termination......................................... 5
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION.......................... 5
5.1 Books and Records............................................. 5
5.1.1 General................................................ 5
5.1.2 Audit.................................................. 6
5.1.3 Contesting an Audit.................................... 6
5.2 Confidential Information...................................... 7
6. INDEMNIFICATION...................................................... 8
6.1 Indemnification by Sprint Spectrum............................ 8
6.2 Indemnification by Manager.................................... 9
6.3 Procedure..................................................... 9
6.3.1 Notice................................................. 9
6.3.2 Defense by Indemnitor.................................. 10
6.3.3 Defense by Indemnitee.................................. 10
6.3.4 Costs.................................................. 10
</TABLE>
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<TABLE>
<S> <C>
7. DISPUTE RESOLUTION................................................... 10
7.1 Negotiation................................................... 10
7.2 Unable to Resolve............................................. 11
7.3 Attorneys and Intent.......................................... 11
8. REPRESENTATIONS AND WARRANTIES........................................ 11
8.1 Due Incorporation or Formation; Authorization of Agreements... 11
8.2 Valid and Binding Obligation.................................. 12
8.3 No Conflict; No Default....................................... 12
8.4 Litigation.................................................... 12
9. GENERAL PROVISIONS.................................................... 12
9.1 Notices....................................................... 12
9.2 Construction.................................................. 13
9.3 Headings...................................................... 13
9.4 Further Action................................................ 13
9.5 Specific Performance.......................................... 13
9.6 Entire Agreement; Amendments.................................. 13
9.7 Limitation on Rights of Others................................ 13
9.8 Waivers; Remedies............................................. 13
9.9 Waiver of Jury Trial.......................................... 14
9.10 Binding Effect................................................ 14
9.11 Governing Law................................................. 14
9.12 Severability.................................................. 14
9.13 Limitation of Liability....................................... 15
9.14 No Assignment; Exceptions..................................... 15
9.15 Disclaimer of Agency.......................................... 15
9.16 Independent Contractors....................................... 15
9.17 Expense....................................................... 15
9.18 General Terms................................................. 15
9.19 Conflicts with Management Agreement........................... 16
9.20 Master Signature Page......................................... 16
</TABLE>
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SPRINT PCS SERVICES AGREEMENT
This SERVICES AGREEMENT is made June 8, 1998, by and between Sprint
Spectrum L.P., a Delaware limited partnership ("Sprint Spectrum"), and
____________, a ____________ (but not any Related Party) ("Manager"). The
definitions for this agreement are set forth on the attached "Schedule of
-----------
Definitions."
- -----------
RECITALS
A. Manager and the holder of the License ("Sprint PCS") are entering into a
Management Agreement contemporaneously with the execution of this agreement,
under which Manager will design, construct, operate, manage and maintain a
wireless services network in the Service Area in accordance with Sprint PCS
standards and will offer and promote Sprint PCS Products and Services that
operate on the Sprint PCS Network.
B. Manager desires to enter into this agreement with Sprint Spectrum, under
which Sprint Spectrum may furnish certain services to Manager to assist Manager
to build out, operate, manage and maintain the Service Area Network under the
License.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. ENGAGEMENT OF SPRINT SPECTRUM
1.1 Engagement of Sprint Spectrum. Manager engages Sprint Spectrum to
assist Manager with certain specified services in connection with the operations
of Manager and in building out, operating, managing and maintaining the Service
Area Network, subject to the terms and conditions of this agreement. Sprint
Spectrum accepts the engagement and will use the same effort and demonstrate the
same care in performing its obligations under this agreement as it uses in
conducting its own business. Manager will use the efforts and demonstrate the
care necessary for Sprint Spectrum to meet its obligations under this agreement.
When providing the Selected Services, Sprint Spectrum will provide those
services to Manager in the same manner it provides those services to its own
business, including the use of third party vendors to provide certain Selected
Services.
<PAGE>
1.2 Reliance on Manager. Manager understands that Sprint Spectrum's ability
to provide the Selected Services will depend largely on Manager's compliance
with the Sprint PCS Program Requirements under the Management Agreement and
cooperation with Sprint Spectrum. Manager agrees to comply with such
requirements and to cooperate with Sprint Spectrum to enable Sprint Spectrum to
perform its obligations under this agreement.
1.3 Non-exclusive Service. Nothing contained in this agreement confers upon
Manager an exclusive right to any of the Available Services. Sprint Spectrum may
contract with others to provide expertise and services identical or similar to
those to be made available or provided to Manager under this agreement.
1.4 Manager's Use of Services. Manager agrees it will only use the Selected
Services in connection with its Service Area Network. Manager will not use the
Selected Services in connection with any other business or outside the Service
Area.
2. SERVICES
2.1 Available Services; Selected Services.
2.1.1 Available Services. Subject to the terms of this agreement,
Manager may obtain any of the Available Services from Sprint Spectrum in
accordance with the provisions of this Section 2.1. The Available Services
offered from time to time and the fees charged for such Available Services will
be set forth on the then-current Exhibit 2.1.1 (the "Available Services and Fees
-------------
Schedule"). If Sprint Spectrum offers any new Available Service, it will
deliver a new Exhibit 2.1.1 indicating the new service and the fee for the new
-------------
service.
Manager may select one or more of the categories of Available
Services. If Manager selects a particular category of services it must take and
pay for all of the services under the category selected; Manager may not select
only particular services within that category.
If Sprint Spectrum determines to no longer offer an Available Service
and the service is not a Selected Service, then Sprint Spectrum may give Manager
written notice at any time during the term of this agreement that Sprint
Spectrum no longer offers the Available Service.
Sprint Spectrum may modify Exhibit 2.1.1 from time to time. Exhibit
------------- -------
2.1.1 will be deemed amended upon delivery of the new Exhibit 2.1.1 to Manager.
- ----- -------------
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2.1.2 Selected Services. During the term of this agreement, and
subject to the terms of this agreement, Manager has selected, and Sprint
Spectrum has agreed to furnish or cause to be furnished to Manager, the
Available Services listed on Exhibit 2.1.2 (which listed services will be the
-------------
Selected Services). Sprint Spectrum may require from time to time that certain
Available Services be Selected Services where necessary to comply with legal or
regulatory requirements (e.g., mandatory provision of emergency 911 service) or
applicable operating constraints (e.g., delivery of merchandise to the regional
distribution centers of national retail distributors).
2.1.3 Changes to Selected Services. If Manager determines it no longer
requires a Selected Service, then Manager must give Sprint Spectrum written
notice at least 3 months prior to the date on which Manager wishes to
discontinue its use of such Selected Service.
If Sprint Spectrum determines to no longer offer an Available Service
and such service is one of Manager's Selected Services, then Sprint Spectrum
must give Manager written notice at least 9 months prior to its discontinuance
of such Available Service that Sprint Spectrum will no longer offer such
Available Service. If the Available Service to be discontinued is required by
Sprint Spectrum to be a Selected Service, then Sprint Spectrum will use
commercially reasonable efforts to (a) help Manager provide the service itself
or find another vendor to provide the service, and (b) facilitate Manager's
transition to the new service provider.
2.1.4 Performance of Selected Services. Sprint Spectrum may select
the method, location and means of providing the Selected Services. If Sprint
Spectrum wishes to use Manager's facilities to provide the Selected Services,
Sprint Spectrum must obtain Manager's prior written consent.
2.2 Third Party Vendors. Some of the Available Services might be provided
by third party vendors under arrangements between Sprint Spectrum and the third
party vendors. In some instances, Manager may receive Available Services from a
third party vendor under the same terms and conditions that Sprint Spectrum
receives such services. In other instances, Manager may receive Available
Services under the terms and conditions set forth in an agreement between
Manager and the third party vendor. If Manager wishes to engage a third party
vendor to provide Available Services, Selected Services, or Available Services
that Sprint Spectrum will no longer offer, Manager must first obtain Sprint
Spectrum's prior written consent, which consent will not be unreasonably
withheld. Before Manager may obtain from the third party vendor any Available
Services, Selected Services, or Available Services that Sprint Spectrum will no
longer offer, such vendor must execute an agreement prepared by Sprint Spectrum
that obligates the vendor to maintain the confidentiality of any proprietary
information and that prohibits the vendor from using any proprietary
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technology, information or methods for its benefit or the benefit of any other
person or entity. Manager's use of a third party vendor that is not providing
Available Services to Manager on behalf of Sprint PCS under the Management
Agreement will not qualify for assumed compliance with the Program Requirements
unde Sections 7.1(a)(ii) or 8.1(b) of the Management Agreement.
2.3 Contracts. Manager will notify Sprint Spectrum of any contract or
other arrangement Manager has with any other party that will affect how Sprint
Spectrum is to provide the Selected Services.
3. FEES FOR SELECTED SERVICES
3.1 Payment of Fees. Sprint Spectrum and Manager agree that the fees for
the Available Services will initially be those set forth on Exhibit 2.1.1. The
-------------
monthly charge for any fees based on the number of subscribers of the Service
Area Network will be determined based on the number of subscribers as of the
15th day of the month for which the charge is being calculated. Manager agrees
to pay the fees to Sprint Spectrum within 20 days after the date of the invoice.
If Manager enters into an agreement with a third party vendor under Section 2.2,
Manager agrees to pay the fees for the services rendered by the third party
vendor in accordance with the terms and conditions of such agreement.
3.2 Adjustment of Fees. Sprint Spectrum may change the fee for any service
it provides once during any 12-month period by delivering a new Exhibit 2.1.1 to
-------------
manager. Exhibit 2.1.1 will be deemed amended on the effective date noted on the
-------------
new Exhibit 2.1.1, which will be at least 30 days after delivering the new
-------------
Exhibit 2.1.1. Manager must notify Sprint Spectrum in writing before the
- -------------
effective date of the new Exhibit 2.1.1 if Manager wishes to discontinue a
-------------
Selected Service for which the price is being increased (a "Cancelled Service").
If Manager discontinues a Selected Service under this Section 3.2, Sprint
Spectrum will, at Manager's option, continue to provide the Cancelled Service
and to charge Manager the current fee (i.e., the fee under the Exhibit 2.1.1 in
-------------
effect on the date Manager gives its cancellation notice to Sprint Spectrum) for
the Cancelled Service for up to 9 months from the date Sprint Spectrum gives
Manager notice of the price change or until Manager no longer needs the
Cancelled Service, whichever occurs first. If Sprint Spectrum continues to
provide the Cancelled Service after the 9-month period, Sprint Spectrum will
apply the new fee, under the new Exhibit 2.1.1, and such fee will be applied
-------------
retroactively as of the effective date of the new schedule. Manager agrees to
pay such retroactive charge within 10 days after the date of the invoice for
such charge.
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3.3 Late Payments. Any payment due under this Section 3 that is not paid
by Manager to Sprint Spectrum in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 6th day
after the due date until (and including) the date on which such payment is made.
4. TERM; TERMINATION; EFFECT OF TERMINATION
4.1 Term. This agreement commences on the date of execution and continues
until the Management Agreement terminates. This agreement automatically
terminates upon termination of the Management Agreement. Neither party may
terminate this agreement for any reason other than the termination of the
Management Agreement.
4.2 Effect of Termination. Upon the termination of this agreement, all
rights and obligations of each party under this agreement will immediately
cease, except that:
(a) Any rights arising out of a breach of any terms of this agreement
will survive any termination of this agreement;
(b) The provisions of this Section 4.2 and Sections 5.2, 6, 7, and 9
will survive any termination of this agreement; and
(c) The payment obligations under Section 3 will survive any
termination of otherwise due and owing from Manager to Sprint Spectrum or any
Sprint Spectrum Related Party as of the date of termination of this agreement.
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION
5.1 Books and Records.
5.1.1 General. Each party must keep and maintain books and records
to support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
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5.1.2 Audit. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for purposes of auditing the amount of fees, costs, expenses or other
charges payable in connection with the Selected Services with respect to the
period audited. The auditing party will conduct the audit no more frequently
than annually. If the audit shows that Sprint Spectrum was underpaid then,
unless the amount is contested, Manager will pay to Sprint Spectrum the amount
of the underpayment within 10 Business Days after Sprint Spectrum gives Manager
written notice of the determination of the underpayment. If the audit determines
that Sprint Spectrum was overpaid then, unless the amount is contested, Sprint
Spectrum will pay to Manager the amount of the overpayment within 10 Business
Days after Sprint Spectrum determines Sprint Spectrum was overpaid.
Notwithstanding the above provisions of this Section 5.1.2, Sprint Spectrum
may elect to have its own independent auditors certify to the accuracy of the
charges with respect to Manager, rather than allow Manager's independent
auditors access to Sprint Spectrum's records.
5.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction. The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
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If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the non-
contesting party will pay the costs and expenses of the Arbiter, otherwise the
contesting party will pay the costs and expenses of the Arbiter.
5.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the term of this agreement and 3 years after the date of
termination of this agreement, keep confidential, not disclose to others and use
only for the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this agreement,
except that the foregoing obligation will not apply to the extent that any
Confidential Information:
(i) is or becomes, after disclosure to a party, publicly known
by any means other than through unauthorized acts or omissions of the party
or its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
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(v) is required by the receiving party to be produced under
order of a court of competent jurisdiction or other similar requirements of
a governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 5.
(c) The party making a disclosure under Sections 5.2(b)(v), 5.2(b)(vi)
or 5.2(b)(vii) must inform the non-disclosing party as promptly as is reasonably
necessary to enable the non-disclosing party to take action to, and use the
disclosing party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(d) Manager will not, except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different licensed area, Manager may not use
any of the Confidential Information received under or in connection with this
agreement in operating its other wireless business.
6. INDEMNIFICATION
6.1 Indemnification by Sprint Spectrum. Sprint Spectrum agrees to
indemnify, defend and hold harmless Manager, its directors, managers, officers
and employees from and against any and all claims, demands, causes of action,
losses, actions, damages, liability and expense, including costs and reasonable
attorneys' fees, against Manager, its directors, managers, officers and
employees arising from or relating to the violation by Sprint Spectrum, its
directors, officers, employees, contractors, subcontractors, agents or
representatives of any law, regulation or ordinance applicable to Sprint
Spectrum in its performance of the Selected Services, or by Sprint Spectrum's,
or its directors', officers', employees', contractors', subcontractors', agents'
or representatives' breach of any representation, warranty or covenant contained
in this agreement, except where and to the extent the claim,
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demand, cause of action, loss, action, damage, liability and expense results
from the negligence or willful misconduct of Manager, its directors, managers,
officers, employees, agents or representatives. Sprint Spectrum's
indemnification obligations under this Section 6.1 do not apply to any third
party vendors that provide services (including Selected Services) directly to
Manager or its Related Parties under a separate agreement.
6.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint Spectrum, its directors, officers and employees from and
against any and all claims, demands, causes of action, losses, actions, damages,
liability and expense, including costs and reasonable attorneys' fees, against
Sprint Spectrum, its directors, officers and employees arising from or relating
to Manager's, or its directors', managers', officers', employees', contractors',
subcontractors', agents' or representatives' violation of any law, regulation or
ordinance applicable to Manager, or by Manager's, or its directors', managers',
officers', employees', contractors', subcontractors', agents' or
representatives' breach of any representation, warranty or covenant contained in
this agreement, Manager's ownership of the Operating Assets or the operation of
the Service Area Network, except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and expense results from the
negligence or willful misconduct of Sprint Spectrum, its directors, officers,
employees, contractors, subcontractors, agents or representatives.
6.3 Procedure.
6.3.1 Notice. Any party being indemnified ("Indemnitee") will give the
party making the indemnification ("Indemnitor") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(a) Any claim or demand is made or liability is asserted against
Indemnitee; or
(b) Any suit, action, or administrative or legal proceeding is
instituted or commenced in which Indemnitee is involved or is named as a
defendant either individually or with others.
Failure to give notice as described in this Section 6.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
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6.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or
defense so long as Indemnitor is conducting the dispute or defense diligently
and in good faith. Indemnitor is not permitted to settle the dispute or claim
without the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
6.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section 6.
Indemnitee is not permitted to settle the dispute or claim without the prior
written approval of Indemnitor, which approval will not be unreasonably
withheld.
6.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
7. DISPUTE RESOLUTION
7.1 Negotiation. The parties will attempt in good faith to resolve
any dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
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Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 5.1.2 and 5.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 7.1.
7.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, the parties will continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement, except neither party may bring a suit
for damages based on an event that occurs during the first two years of this
agreement.
7.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under this Section 7 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
8. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
8.1 Due Incorporation or Formation; Authorization of Agreements. The party
is either a corporation, limited liability company, or limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
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8.2 Valid and Binding Obligation. This agreement constitutes the valid and
binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
8.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, or (b) any term, condition or provision of the
articles of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
8.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
9. GENERAL PROVISIONS
9.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed as follows described on the Notice Address Schedule attached to
the Master Signature Page, or to any other address or number as the person or
entity may from time to time specify by written notice to the other parties:
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If to Sprint Spectrum:
Sprint Spectrum L.P.
4900 Main, 12/th/ Floor
Kansas City, Missouri 64112
Telephone: (816) 559-1000
Telecopier: (816) 559-1290
Attention: Chief Executive Officer
with a copy to:
Sprint Spectrum L.P.
4900 Main, 12/th/ Floor
Kansas City, Missouri 64112
Telephone: (816) 559-1000
Telecopier: (816) 559-2591
Attention: General Counsel
If to Manager:
___________________________________
___________________________________
___________________________________
___________________________________
All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
9.2 Construction. This agreement will be construed simply according to its
fair meaning and not strictly for or against either party.
9.3 Headings. The table of contents, section and other headings contained
in this agreement are for reference purposes only and are not intended to
describe, interpret, define, limit or expand the scope, extent or intent of this
agreement.
9.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
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9.5 Counterpart Execution. This agreement may be executed in any number of
counterparts with the same effect as if both parties had signed the same
document. All counterparts will be construed together and will constitute one
agreement.
9.6 Specific Performance. Each party agrees with the other party that the
party would be irreparably damaged if any of the provisions of this agreement
were not performed in accordance with their specific terms and that monetary
damages alone would not provide an adequate remedy. Accordingly, in addition to
any other remedy to which the non-breaching party may be entitled, at law or in
equity, the non-breaching party will be entitled to injunctive relief to prevent
breaches of this agreement and specifically to enforce the terms and provisions
of this agreement.
9.7 Entire Agreement; Amendments. The provisions of this agreement and the
Management Agreement (if Sprint Spectrum is a party to that agreement)
(including the exhibits to those agreements) set forth the entire agreement and
understanding between the parties as to the subject matter of this agreement and
supersede all prior agreements, oral or written, and other communications
between the parties relating to the subject matter of this agreement. Except for
Sprint Spectrum's right to amend the Available Services and the fees charged for
such services as shown on Exhibit 2.1.1, and Manager's right to amend the
-------------
Selected Services listed on Exhibit 2.1.2, this agreement may be modified or
-------------
amended only by a written amendment signed by persons or entities authorized to
bind each party.
9.8 Limitation on Rights of Others. Nothing in this agreement, whether
express or implied, will be construed to give any person or entity other than
the parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
9.9 Waivers; Remedies. The observance of any term of this agreement may be
waived (whether generally or in a particular instance and either retroactively
or prospectively) by the party entitled to enforce the term, but any waiver is
effective only if in a writing signed by the party against which the waiver is
to be asserted. Except as otherwise provided in this agreement, no failure or
delay of either party in exercising any power or right under this agreement will
operate as a waiver of the power or right, nor will any single or partial
exercise of any right or power preclude any other or further exercise of the
right or power or the exercise of any other right or power.
Sprint Spectrum is not in breach of any covenant in this agreement, if the
occurrence of the event or Sprint Spectrum's non-compliance with the covenant
results primarily from:
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(i) any FCC order or any other injunction issued by any
governmental authority impeding the ability to comply with the covenant;
(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part of any
governmental authority in granting any consent, approval, waiver or
authorization;
(iii) the failure of any vendor to deliver in a timely manner any
equipment or service; or
(iv) any act of God, act of war or insurrection, riot, fire,
accident, explosion, labor unrest, strike, civil unrest, work stoppage,
condemnation or any similar cause or event not reasonably within the
control of Sprint Spectrum.
9.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
9.11 Binding Effect. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Management Agreement. The
parties intend that this agreement bind only the party signing this agreement
and that the agreement is not binding on the Related Parties of a party unless
the agreement provides that Related Parties are bound.
9.12 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
9.13 Severability. The parties intend every provision of this agreement to
be severable. If any provision of this agreement is held to be illegal, invalid,
or unenforceable for any reason, the parties intend that a court enforce the
provision to the maximum extent permissible so as to effect the intent of the
parties (including the enforcement of the remaining provisions). If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable provision with an enforceable
provision that reflects the original intent of the parties.
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9.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT
OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR
LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION
AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY
ANOTHER PARTY TO THIS AGREEMENT.
9.15 No Assignment; Exceptions. This agreement may only be assigned in
conjunction with and to the same party or parties to whom the Management
Agreement has been validly assigned under the Management Agreement's terms and
conditions.
9.16 Disclaimer of Agency. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
9.17 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither party
to this agreement has any fiduciary duty to the other party.
9.18 Expense. Each party bears the expense of complying with this agreement
except as otherwise expressly provided in this agreement.
9.19 General Terms.
(a) This agreement, including the attached Schedule of Definitions,
is to be interpreted in accordance with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires;
(ii) The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation";
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(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless otherwise
specified; and
(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to time
(and, in the case of a statute or regulation, to any corresponding provisions of
successor statutes or regulations), unless the context otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
9.20 Conflicts with Management Agreement. The provisions of the Management
Agreement govern over those of this Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Management
Agreement.
IN WITNESS WHEREOF, the parties have caused this agreement to be entered
into as of the day first above set forth.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
Sprint Spectrum L.P.
By: ______________________________
Name: ____________________________
Title: ___________________________
(Name of Manager)
By: ______________________________
Name: ____________________________
Title: ___________________________
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SPRINT TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
THIS AGREEMENT is made as of the 8th day of June, 1998, by and between
Sprint Communications Company, L.P., a limited partnership organized under the
laws of the State of Delaware, as licensor ("Licensor"), and Louisiana Unwired,
LLC, a Louisiana limited liability corporation as licensee ("Licensee"). THE
DEFINITIONS FOR THIS AGREEMENT ARE SET FORTH ON THE ATTACHED "SCHEDULE OF
DEFINITIONS."
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"Sprint", together with related "Diamond" logo, "Sprint PCS", "Sprint Personal
Communications Services" and the goodwill of the business symbolized thereby;
and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE MARK RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor, for
the term of this agreement, a non-transferable, royalty-free license to use
the Licensed Marks solely for and in connection with the marketing,
promotion, advertisement, distribution, lease or sale of Sprint PCS
Products and Services and Premium and Promotional Items in the Service
Area.
(b) Related Equipment. The rights granted hereunder to Licensee shall not
include the right to manufacture equipment under the Licensed Marks.
However, subject to the terms and conditions hereof, Licensor hereby grants
to Licensee, and Licensee hereby accepts from Licensor, for the term of
this agreement, a non-transferable, royalty-free license to market,
promote, advertise, distribute and resell and lease Related Equipment in
connection with the marketing, promotion, advertisement, distribution,
lease or sale by Licensee of Sprint PCS Products and Services, and to
furnish services relating to such Related Equipment (including
installation, repair and maintenance of Related Equipment), under the
Licensed Marks.
<PAGE>
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law. Such
Quality Standards are designed to ensure that the quality of the Sprint PCS
Products and Services and Premium and Promotional Items marketed, promoted,
advertised, distributed, leased and sold under the Licensed Marks are
consistent with the high reputation of the Licensed Marks and are in
conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Affiliation Agreement as
Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall (i) be
consistent with the reputation for quality associated with the Licensed
Marks and (ii) be commensurate with a high level of quality (taking into
account Licensee's fundamental underlying technology and standards),
consistent with the level of quality being offered in the market for
products and services of the same kind as the Sprint PCS Products and
Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to change
the Quality Standards, it will notify Licensee in writing of such proposed
amendments, and will afford Licensee a reasonable time period in which to
adopt such changes as may be required in order for Licensee to conform to
the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking; Compliance with Trademark Laws. Licensee shall
cause the appropriate designation "(TM)" or "(SM)" or the registration symbol
"(R)" to be placed adjacent to the Licensed Marks in connection with the use
thereof and to indicate such additional information as
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Licensor shall reasonably specify from time to time concerning the license
rights under which Licensee uses the Licensed Marks. Licensee shall place the
following notice on all printed or electronic materials on which the Licensed
Marks appear: "SPRINT", the "DIAMOND" logo and "Sprint PCS", "Sprint Personal
Communications Services" are trademarks and/or service marks of Sprint
Communications Company, L.P., "used under license" or such other notice as
Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the Licensed
Marks in any manner that would reflect adversely on the image of quality
symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and
Licensee and their respective Controlled Related Parties (each a "Restricted
Party") shall cause their respective officers and directors (in their capacity
as such) to, and shall take all reasonable measures to cause their respective
employees, attorneys, accountants, consultants and other agents and advisors
(collectively, and together with their respective officers and directors,
"Agents") to, keep secret and maintain in confidence the terms of this agreement
and all confidential and proprietary information and data of the other party or
its Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently
comes into the public domain, through no fault of the receiving
party;
(ii) prior to receipt hereunder was property within the legitimate
possession of the Receiving Party or, subsequent to receipt hereunder
is lawfully received from a third party having rights therein without
restriction of the third party's right to disseminate the
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Confidential Information and without notice of any restriction
against its further disclosure.
(iii) is independently developed by the Receiving Party through Persons who
have not had, either directly or indirectly, access to or knowledge
of such Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such
Confidential Information shall cease to be confidential and
proprietary information covered by this agreement only to the extent
of the disclosure so consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below,
is required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by
a protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for purpose
of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below,
is required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of
its Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of a
protective order or other appropriate remedy or receipt of a waiver hereunder,
the Receiving Party shall
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furnish only that portion of the Confidential Information which it is advised by
opinion of its counsel is legally required to be furnished and shall exercise
all commercially reasonable efforts to obtain reliable assurance that
confidential treatment shall be accorded such Confidential Information, it being
understood that such reasonable efforts shall be at the cost and expense of the
disclosing party whose Confidential Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall
survive, as to any party, until two (2) years following the date of termination
of this agreement, and, as to any Controlled Related Party of a party, until two
(2) years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i)
Licensee will not at any time challenge Licensor's rights, title or interest in
the Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and
warrants that:
(a) Licensor has good title to the Licensed Marks and has the right to
grant the licenses provided for hereunder in accordance with the
terms and conditions hereof, free of
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any liabilities, charges, liens, pledges, mortgages, restrictions,
adverse claims, security interests, rights of others, and
encumbrances of any kind (collectively, "Encumbrances"), other than
Encumbrances which will not restrict or interfere in any material
respect with the exercise by Licensee of the rights granted to
Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending or,
to the knowledge of Licensor, threatened with respect to Licensor's
ownership of the Licensed Marks or which, if adversely determined,
would restrict or otherwise interfere in any material respect with the
exercise by Licensee of the rights purported to be granted to Licensee
hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation; Authorization of Agreement. Such party
is a corporation duly organized, a limited liability company duly
organized or a partnership duly formed, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate, company or
partnership power and authority to own its property and carry on its
business as owned and carried on at the date hereof and as
contemplated hereby. Such party is duly licensed or qualified to do
business and, if applicable, is in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder. Such party has the
corporate, company or partnership
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power and authority to execute and deliver this agreement and to
perform its obligations hereunder and the execution, delivery and
performance of this agreement have been duly authorized by all
necessary corporate, company or partnership action. Assuming the due
execution and delivery by the other party hereto, this agreement
constitutes the legal, valid and binding obligation of such party
enforceable against such party in accordance with its terms, subject
as to enforceability to limits imposed by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and the
availability of equitable remedies.
(b) No Conflict with Restrictions; No Default. Neither the execution,
delivery and performance of this agreement nor the consummation by
such party of the transactions contemplated hereby (i) will conflict
with, violate or result in a breach of any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree,
determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any
arbitrator, applicable to such party or any of its Controlled Related
Parties, (ii) will conflict with, violate, result in a breach of or
constitute a default under any of the terms, conditions or provisions
of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited
liability company agreement, or partnership agreement of such party or
any of its Controlled Related Parties or of any material agreement or
instrument to which such party or any of its Controlled Related
Parties is a party or by which such party or any of its Controlled
Related Parties is or may be bound or to which any of its material
properties or assets is subject (other than any such conflict,
violation, breach or default that has been validly and unconditionally
waived), (iii) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or
both), accelerate or permit the acceleration of the performance
required by, give to others any material interests or rights or
require any consent, authorization or approval under any indenture,
mortgage, lease agreement or instrument to which such party or any of
its Controlled Related Parties is a party or by which such party or
any of its Controlled Related Parties is or may be bound, or (iv) will
result in the creation or imposition of any lien upon any of the
material properties or assets of such party or any of its Controlled
Related Parties, which in any such case could reasonably be expected
to materially impair such party's ability to perform its obligations
under this agreement or to have a material adverse effect on the
consolidated financial condition of each party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing
with, or consent, approval, license, permit or other authorization or
order by, any governmental or regulatory authority, domestic or
foreign, that is required to be obtained by such party in connection
with the valid execution, delivery, acceptance and performance by such
party under this agreement or the consummation by such party of any
transaction contemplated hereby has been completed, made or obtained,
as the case may be.
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(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or
affecting such party or any of its Controlled Related Parties or any
of their properties, assets or businesses in any court or before or by
any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely
determined (or, in the case of an investigation could lead to any
action, suit or proceeding, which if adversely determined could),
reasonably be expected to materially impair such party's ability to
perform its obligations under this agreement or to have a material
adverse effect on the consolidated financial condition of such party
or its parent; and such party or any of its Controlled Related Parties
has not received any currently effective notice of any default, and
such party or any of its Controlled Related Parties is not in default,
under any applicable order, writ, injunction, decree, permit,
determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any
arbitrator, which default could reasonably be expected to materially
impair such party's ability to perform its obligations under this
agreement or to have a material adverse effect on the consolidated
financial condition of such party or its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify
the other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
(i) the material breach of any representation or warranty made by
such party in this agreement; and
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(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
(b) In addition to the indemnification provided for in Section 8.1(a),
Licensee agrees to indemnify Licensor against and hold it harmless
from any Loss suffered or incurred by Licensor or its Controlled
Related Parties by reason of a third party claim arising out of or
relating to (i) the use of the Licensed Marks by Licensee; or (ii) the
marketing, promotion, advertisement, distribution, lease or sale by
Licensee (or any permitted sublicensee) or by any additional Licensee
(or any permitted sublicensee) of any Sprint PCS Products and
Services, Related Equipment or Premium and Promotional Items under the
Licensed Marks pursuant to this agreement, including unfair or
fraudulent advertising claims, warranty claims and product defect or
liability claims, pertaining to the Sprint PCS Products and Services,
Related Equipment or Premium and Promotional Items. Notwithstanding
the foregoing, Licensee will not be required under this paragraph (b)
to indemnify any Loss arising solely out of Licensee's use of the
Licensed Marks in compliance with the terms of the Trademark and
Service Mark Usage Guidelines; provided that Licensor shall have no
obligation to indemnify for third-party claims alleged to arise from
the specifics of uses of third-party trademarks or service marks, or
the specifics of claims made, in marketing materials prepared by or
for Licensee, which marketing materials have not been approved by
Licensor prior to the publication out of which such claims are alleged
to have arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as
set forth in this agreement shall be unconditional and irrevocable, and shall
not be subject to any defense or be released, discharged or otherwise affected
by any matter, including impossibility, illegality, impracticality, frustration
of purpose, force majeure, act of government, the bankruptcy or insolvency of
any party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make
any use of the Licensed Marks in connection with products or services other than
the Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related Equipment and Premium and Promotional
Items, nor to make any use of the Licensed Marks directed outside of the Service
Area.
Section 10.2 Adherence to Trademark and Service Mark Usage Guidelines.
Licensee
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agrees to comply with and adhere to Trademark and Service Mark Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed
Marks on any type of marketing, advertising or promotional materials, Licensee
agrees to submit samples of such materials to Licensor for approval. Licensor
shall have fourteen (14) days from the date Licensor receives such materials to
approve or object to any such materials submitted to Licensor for review. In
the event Licensor does not object to such materials within such fourteen (14)
day period, such materials shall be deemed approved by Licensor. Thereafter,
Licensee shall not be obligated to submit to Licensor materials prepared in
accordance with the samples previously approved by Licensor and the Trademark
and Service Mark Usage Guidelines; provided, however, Licensee shall, at the
reasonable request of Licensor, continue to furnish samples of such marketing,
advertising and promotional materials to Licensor from time to time during the
term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee
agrees not to use (a) any trademark or service mark which is confusingly
similar to, or a colorable imitation of, the Licensed Marks or any part
thereof, or (b) any work, symbol, character, or set of words, symbols, or
characters, which in any language would be identified as the equivalent of
the Licensed Marks or that are otherwise confusingly similar to, or a
colorable imitation of, the Licensed Marks, whether during the term of this
agreement or at any time following termination of this agreement. Licensee
shall not knowingly engage in any conduct which may place the Sprint PCS
Products and Services, the Licensed Marks or Licensor in a negative light
or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1 Exclusive Use of Licensed Marks. The Sprint PCS Products
and Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee
shall use the Licensed Marks in a manner that is consistent with the brand image
and principles established by Licensor, and mechanics to ensure consistency will
be included in the Marketing Communications Guidelines.
Section 11.3 Management of Brand Image. Licensor shall be responsible
for the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications
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Guidelines to be furnished by Licensor to Licensee as such Marketing
Communications Guidelines may be amended and updated by Licensor from time to
time. Such Marketing Communications Guidelines shall establish reasonable
principles to be followed in the development of advertising, marketing and
promotional campaigns in order to ensure a consistent and coherent brand image.
All advertising, marketing and promotional campaigns conducted by Licensee shall
be conducted in a manner consistent with the Marketing Communications
Guidelines.
Section 11.4. Advertising Agencies; Promotions. Licensee may select
its own advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall
conduct ongoing reviews of upcoming advertising, marketing and promotional
campaigns of each party and shall use good faith efforts to coordinate their
respective campaigns in a manner that will maximize the advertising, marketing
and promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition, Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5 Ownership of Advertising Materials. All agreements
entered into by Licensee with advertising agencies shall provide that Licensor
shall own all advertising materials (including concepts, themes, characters and
the like) created or developed thereunder. Subject to the terms and
conditions set forth herein, Licensee shall receive a perpetual, non-exclusive,
royalty-free license to use such materials in connection with advertising and
promotional materials developed by Licensee; provided, however, that the rights
granted under such perpetual license shall be limited solely to the use of such
materials and shall not extend the term of the license with respect to the
Licensed Marks provided for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of
the parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee
agrees, and shall require its permitted sublicensees to agree, not to incur or
contract any debt or obligation on behalf of Licensor, or commit any act, make
any
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representation, or advertise in any manner that may adversely affect any
right of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution
and continues until the Affiliation Agreement terminates, unless earlier
terminated in accordance with the terms set forth in this Article 13. This
agreement automatically terminates upon termination of the Affiliation
Agreement.
Section 13.2. Events of Termination. If any of the following events
shall occur with respect to Licensee, each such occurrence shall be deemed an
"Event of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect
to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with
any of the material terms and conditions contained herein in any
material respect.
(c) Material Misrepresentation. Licensee breaches any material
representation or warranty of Licensee made in Section 4.2 or
Article 6 in any material respect.
(d) Termination of Affiliation Agreement. The termination of the
Affiliation Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4 Licensee's Right to Terminate. Licensee may, at its
option, without prejudice to any other remedies it may have, terminate this
agreement by giving written notice of such termination to Licensor as follows:
(a) immediately, in the event that Licensor abandons the Licensed Marks or
otherwise ceases to support the Licensed Marks in Licensor's business; or (b)
immediately in the event of the occurrence of a Bankruptcy with respect to
Licensor; or (c) immediately in the event of an occurrence of termination
pursuant to Section 13.2(d).
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Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within thirty (30) days following the date on which
this agreement terminates (except in the case of a termination resulting from an
Event of Termination described in Section 13.2(b), (c) or (d), in which case
such rights to use the Licensed Marks will terminate immediately upon the date
of termination); provided, however, that Licensee may thereafter sell, transfer
or otherwise dispose of any Related Equipment and Premium and Promotional Items
that are then in Licensee's inventory (or which Licensee has purchased or is
then legally obligated to purchase) for an additional reasonable period not to
exceed three (3) months. Licensee's right of disposal under this Section 13.5
shall not prohibit Licensor from granting to third parties during the disposal
period licenses and other rights with respect to the Licensed Marks. The
provisions of Articles 3, 4, 5, 6 and 8 will survive any termination of this
agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior
written consent of Licensor (in its sole discretion), shall have no right to
assign any of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing
herein shall be construed to limit the right of the Licensor to transfer or
assign its interests in the Licensed Marks, subject to the agreement of the
assignee to be bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees; Sublicenses; Licenses
to Additional Licensees. Licensee shall not sublicense (or attempt to
sublicense) any of its rights hereunder without the prior written consent of
Licensor, in the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written notice
to the other party. All notices and other communications given to a party in
accordance with the provisions of this agreement shall be deemed to have been
given and received (i) four (4) Business Days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile (with acknowledgment received
and, in the case of a facsimile only, a copy of such notice is sent no later
than the next Business Day by a reliable
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overnight courier service, with acknowledgment of receipt) or (iii) one (1)
Business Day after the same are sent by a reliable overnight courier service,
with acknowledgment of receipt.
Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this
agreement.
Section 15.5. Table of Contents; Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is
intended to be severable. If any term or provision hereof is illegal, invalid
or unenforceable for any reason whatsoever, that term or provision will be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and such illegality, invalidity or unenforceability shall not affect
the validity or legality of the remainder of this agreement. If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable language with enforceable
language which as closely as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request
of the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of
Missouri (without regard to principles of conflict of law) shall govern the
validity of this agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other
party that the other party would be irreparably damaged if any of the provisions
of this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled to
injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
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Section 15.10. Entire Agreement. The provisions of this agreement set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and supersede all prior agreements, oral or written, and
other communications between the parties relating to the subject matter hereof.
Section 15.11. Limitation on Rights of Others. Nothing in this
agreement, whether express or implied, shall be construed to give any party
other than the parties any legal or equitable right, remedy or claim under or in
respect of this agreement.
Section 15.12. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction; Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any
Missouri State court sitting in the County of Jackson or any
Federal court of the United States of America sitting in the
Western District of Missouri, and any appellate court from any
such court, in any suit action or proceeding arising out of or
relating to this agreement, or for recognition or enforcement of
any judgment, and each party hereby irrevocably and
unconditionally agrees that all claims in respect of any such
suit, action or proceeding may be heard and determined in such
Missouri State Court or, to the extent permitted by law, in such
Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this agreement in
Missouri State court sitting in the County of Jackson or any
Federal court sitting in the Western District of Missouri. Each
party hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court and further
waives the right to object, with respect to such suit, action or
proceeding, that such court does not have jurisdiction over such
party.
(c) Each party irrevocably consents to service of process in the
manner provided for the giving of notices pursuant to this
agreement, provided that such service shall be deemed to have been
given only when actually received by such party. Nothing in this
agreement shall affect the right of a party to serve process in
another manner
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permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any action, suit or proceeding arising out of or relating to
this agreement.
Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Section 15.16. Master Signature Page. Each party agrees that it will
execute the Master Signature Page that evidences such party's agreement to
execute, become a party to and be bound by this agreement, which document is
incorporated herein by this reference.
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#: 29449 v.2
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SPRINT
TRADEMARK AND SERVICE MARK
LICENSE AGREEMENT
BETWEEN
SPRINT COMMUNICATIONS COMPANY, L.P.
AND
LOUISIANA UNWIRED, LLC
____________________
JUNE 8, 1998
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FIRST ADDENDUM TO
SPRINT TRADEMARK AND SERVICE MARK
LICENSE AGREEMENT
This FIRST ADDENDUM to the SPRINT TRADEMARK AND SERVICE MARK LICENSE
AGREEMENT is made as of the 8th day of June, 1998, by and between Sprint
Communications Company. L.P., a limited partnership organized under the Laws of
the State of Delaware, as licensor ("LICENSOR"), and Louisiana Unwired, LLC, a
Louisiana limited liability company as licensee ("LICENSEE").
This First Addendum contains certain additional and supplemental
terms and provisions of that certain Sprint Trademark and Service Mark License
Agreement entered into contemporaneously with and by the same parties as this
First Addendum. The terms and provisions of this First Addendum control,
supersede and amend any conflicting terms and provisions contained in the Sprint
Trademark and Service Mark License Agreement. Except for express modifications
made in this First Addendum, the Sprint Trademark and Service Mark License
Agreement continues in full force and effect.
Capitalized terms used and not otherwise defined in this First
Addendum have the meanings ascribed to them in that certain Schedule of
Definitions executed contemporaneously with and by the same parties as this
First Addendum. Section and Exhibit references are to Sections and Exhibits of
the Sprint Trademark and Service Mark License Agreement unless otherwise noted.
The Sprint Trademark and Service Mark License Agreement is modified
as follows:
1. Section 11.1 is hereby amended to read as follows:
Section 11.1. Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed solely under the Licensed Marks, except that during
the Transition Period (as described in Addendum I to the Management Agreement),
Licensee may use the "US Unwired" trademark, a depiction of which is attached
as Exhibit A hereto, in combination with the Licensed Marks on marketing
materials to market the Sprint PCS Products and Services, such use to be in
strict compliance with Model 1 of the Sprint PCS Manager Guidelines, the current
version of which is attached hereto as Exhibit B, such guidelines to be amended
from time to time by Licensor in its sole discretion. During the Term of the
Sprint Trademark and Service Mark License Agreement after the Transition Period,
Licensee may use the "US Unwired" trademark in combination with the Licensed
Marks on marketing materials to market the Sprint PCS Products and Services,
such use to be in strict compliance with Model 2A of the Sprint PCS Manager
Guidelines.
<PAGE>
SPRINT COMMUNICATIONS COMPANY. L.P.
For and in consideration of the covenants contained in this First
Addendum to the Sprint Trademark and Service Mark License Agreement, and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sprint Communications Company, L.P. executes, becomes a party to,
and agrees to be bound by and to perform its obligations under this First
Addendum to the Sprint Trademark and Service Mark License Agreement as of the
8th day of June, 1998.
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ William R. Blessing
-----------------------------------------
William R. Blessing
Vice President, Wireless
LOUISIANA UNWIRED, LLC
For and in consideration of the covenants contained in this First
Addendum to the Sprint Trademark and Service Mark License Agreement, and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Louisiana Unwired, LLC executes, becomes a party to, and agrees to
be bound by and to perform its obligations under this First Addendum to the
Sprint Trademark and Service Mark License Agreement as of the 8th day of June,
1998.
LOUISIANA UNWIRED, LLC
By: /s/ Robert Piper
-----------------------------------------
Robert Piper
President
2
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Exhibit A
(depiction of "US Unwired" trademark shown here)
<PAGE>
Exhibit B
Sprint PCS Manager Guidelines: Model 1
(Horizontal and vertical configurations shown here)
<PAGE>
(Business Card Shown here)
<PAGE>
(Letterhead shown here)
<PAGE>
(Ad shown here)
<PAGE>
(Brochure shown here)
<PAGE>
(Signage shown here)
<PAGE>
(Radio or television Sign-off shown here)
<PAGE>
(Endorsement line and Managers logo configuration shown here)
<PAGE>
(Business Card Shown here)
<PAGE>
(Letterhead shown here)
<PAGE>
(Ad shown here)
<PAGE>
(Brochure shown here)
<PAGE>
(Signage shown here)
<PAGE>
(Radio or television Sign-off shown here)
<PAGE>
SPRINT SPECTRUM
TRADEMARK AND SERVICE MARK
LICENSE AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
LOUISIANA UNWIRED, LLC
JUNE 8, 1998
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<PAGE>
SPRINT SPECTRUM TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
THIS AGREEMENT is made as of the 8th day of June, 1998, by and between
Sprint Spectrum L.P., a limited partnership organized under the laws of the
State of Delaware, as licensor ("Licensor"), and Louisiana Unwired, LLC, a
Louisiana limited liability corporation as licensee ("Licensee"). The
definitions for this agreement are set forth on the attached "Schedule of
Definitions"
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"THE CLEAR ALTERNATIVE TO CELLULAR" and "EXPERIENCE THE CLEAR ALTERNATIVE TO
CELLULAR TODAY" and such other marks as may be adopted and established from time
to time and the goodwill of the business symbolized thereby; and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE MARK RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof,
Licensor hereby grants to Licensee, and Licensee hereby accepts from
Licensor, for the term of this agreement, a non-transferable,
royalty-free license to use the Licensed Marks solely for and in
connection with the marketing, promotion, advertisement,
distribution, lease or sale of Sprint PCS Products and Services and
Premium and Promotional Items in the Service Area.
(b) Related Equipment. The rights granted hereunder to Licensee shall
not include the right to manufacture equipment under the Licensed
Marks. However, subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from
Licensor, for the term of this agreement, a non-transferable,
royalty-free license to market, promote, advertise, distribute and
resell and lease Related Equipment in connection with the marketing,
promotion, advertisement, distribution, lease or sale by Licensee of
Sprint PCS Products and Services, and to furnish services relating
to such Related Equipment (including installation, repair and
maintenance of Related Equipment), under the Licensed Marks.
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<PAGE>
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing,
promoting, advertising, distributing, leasing and selling Sprint PCS
Products and Services and Premium and Promotional Items under the
Licensed Marks, Licensee shall maintain and adhere to standards of
quality and specifications that conform to or exceed those quality
standards and technical and operational specifications adopted
and/or amended in the manner provided below ("Quality Standards")
and those imposed by Law. Such Quality Standards are designed to
ensure that the quality of the Sprint PCS Products and Services and
Premium and Promotional Items marketed, promoted, advertised,
distributed, leased and sold under the Licensed Marks are consistent
with the high reputation of the Licensed Marks and are in conformity
with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services
and Premium and Promotional Items are attached to the Management
Agreement as Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality
Standards shall (i) be consistent with the reputation for quality
associated with the Licensed Marks and (ii) be commensurate with a
high level of quality (taking into account Licensee's fundamental
underlying technology and standards), consistent with the level of
quality being offered in the market for products and services of
the same kind as the Sprint PCS Products and Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to
change the Quality Standards, it will notify Licensee in writing of
such proposed amendments, and will afford Licensee a reasonable time
period in which to adopt such changes as may be required in order
for Licensee to conform to the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking: Compliance with Trademark Laws. Licensee shall cause
the appropriate designation "(TM)" or "(SM)"the registration symbol "(R)" to be
placed adjacent to the Licensed Marks in connection with the use thereof and to
indicate such additional information as Licensor shall reasonably specify from
time to time concerning the license rights under which
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Licensee uses the Licensed Marks. Licensee shall place the following notice on
all printed or electronic materials on which the Licensed Marks appear: "THE
CLEAR ALTERNATIVE TO CELLULAR", "EXPERIENCE THE CLEAR ALTERNATIVE TO CELLULAR
TODAY", and such other marks as may be adopted and established from time to
time, are trademarks and/or service marks of Sprint Spectrum L.P., "used under
license" or such other notice as Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the
Licensed Marks in any manner that would reflect adversely on the image of
quality symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and Licensee
and their respective Controlled Related Parties (each a "Restricted Party")
shall cause their respective officers and directors (in their capacity as such)
to, and shall take all reasonable measures to cause their respective employees,
attorneys, accountants, consultants and other agents and advisors (collectively,
and together with their respective officers and directors, "Agents") to, keep
secret and maintain in confidence the terms of this agreement and all
confidential and proprietary information and data of the other party or its
Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently
comes into the public domain, through no fault of the receiving
party;
(ii) prior to receipt hereunder was property within the legitimate
possession of the Receiving Party or, subsequent to receipt
hereunder is lawfully received from a third party having rights
therein without restriction of the third party's right to
disseminate the Confidential Information and without notice of any
restriction against its further
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disclosure.
(iii) is independently developed by the Receiving Party through Persons
who have not had, either directly or indirectly, access to or
knowledge of such Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such
Confidential Information shall cease to be confidential and
proprietary information covered by this agreement only to the extent
of the disclosure so consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below,
is required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by
a protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for
purpose of this agreement: or
(vi) subject to the Receiving Party's compliance with Section 3.4 below,
is required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of
its Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) falling the entry of a
protective order or other appropriate remedy or receipt of a waiver hereunder,
the Receiving Party shall furnish only that portion of the Confidential
Information which it is advised by opinion of its
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counsel is legally required to be furnished and shall exercise all commercially
reasonable efforts to obtain reliable assurance that confidential treatment
shall be accorded such Confidential Information, it being understood that such
reasonable efforts shall be at the cost and expense of the disclosing party
whose Confidential Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall survive,
as to any party, until two (2) years following the date of termination of this
agreement, and, as to any Controlled Related Party of a party, until two (2)
years following the earlier to occur of(A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i)
Licensee will not at any time challenge Licensor's rights, title or interest in
the Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and warrants
that:
(a) Licensor has good title to the Licensed Marks and has the right to
grant the licenses provided for hereunder in accordance with the
terms and conditions hereof, free of any liabilities, charges,
liens, pledges, mortgages, restrictions, adverse claims, security
interests, rights of others, and encumbrances of any kind
(collectively,
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"Encumbrances"), other than Encumbrances which will not restrict or
interfere in any material respect with the exercise by Licensee of
the rights granted to Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending
or, to the knowledge of Licensor, threatened with respect to
Licensor's ownership of the Licensed Marks or which, if adversely
determined, would restrict or otherwise interfere in any material
respect with the exercise by Licensee of the rights purported to be
granted to Licensee hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation: Authorization of Agreement. Such
party is a corporation duly organized, a limited liability company
duly organized or a partnership duly formed, validly existing and,
if applicable, in good standing under the laws of the jurisdiction
of its incorporation or formation and has the corporate, company or
partnership power and authority to own its property and carry on its
business as owned and carried on at the date hereof and as
contemplated hereby. Such party is duly licensed or qualified to do
business and, if applicable, is in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its financial condition or
its ability to perform its obligations hereunder. Such party has the
corporate, company or partnership power and authority to execute and
deliver this agreement and to perform its obligations hereunder and
the execution, delivery and performance of this agreement have been
duly authorized by all necessary corporate, company or partnership
action.
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Assuming the due execution and delivery by the other party hereto,
this agreement constitutes the legal, valid and binding obligation
of such party enforceable against such party in accordance with its
terms, subject as to enforceability to limits imposed by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
the availability of equitable remedies.
(b) No Conflict with Restrictions. No Default. Neither the execution,
delivery and performance of this agreement nor the consummation by
such party of the transactions contemplated hereby (i) will conflict
with, violate or result in a breach of any of the terms, conditions
or provisions of any law, regulation, order, writ, injunction,
decree, determination or award of any court, any governmental
department, board, agency or instrumentality, domestic or foreign,
or any arbitrator, applicable to such party or any of its Controlled
Related Parties, (ii) will conflict with, violate, result in a
breach of or constitute a default under any of the terms, conditions
or provisions of the articles of incorporation, articles of
organization or certificate of formation, bylaws, operating
agreement or limited liability company agreement, or partnership
agreement of such party or any of its Controlled Related Parties or
of any material agreement or instrument to which such party or any
of its Controlled Related Parties is a party or by which such party
or any of its Controlled Related Parties is or may be bound or to
which any of its material properties or assets is subject (other
than any such conflict, violation, breach or default that has been
validly and unconditionally waived), (iii) will conflict with,
violate, result in a breach of, constitute a default under (whether
with notice or lapse of time or both), accelerate or permit the
acceleration of the performance required by, give to others any
material interests or rights or require any consent, authorization
or approval under any indenture, mortgage, lease agreement or
instrument to which such party or any of its Controlled Related
Parties is a party or by which such party or any of its Controlled
Related Parties is or may be bound, or (iv) will result in the
creation or imposition of any lien upon any of the material
properties or assets of such party or any of its Controlled Related
Parties, which in any such case could reasonably be expected to
materially impair such party's ability to perform its obligations
under this agreement or to have a material adverse effect on the
consolidated financial condition of each party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing
with, or consent, approval, license, permit or other authorization
or order by, any governmental or regulatory authority, domestic or
foreign, that is required to be obtained by such party in connection
with the valid execution, delivery, acceptance and performance by
such party under this agreement or the consummation by such party of
any transaction contemplated hereby has been completed, made or
obtained, as the case may be.
(d) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of such party,
threatened against or affecting such party or any of its Controlled
Related Parties or any of their properties, assets or businesses in
any court
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or before or by any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could,
if adversely determined (or, in the case of an investigation could
lead to any action, suit or proceeding, which if adversely
determined could), reasonably be expected to materially impair such
party's ability to perform its obligations under this agreement or
to have a material adverse effect on the consolidated financial
condition of such party or its parent; and such party or any of its
Controlled Related Parties has not received any currently effective
notice of any default, and such party or any of its Controlled
Related Parties is not in default, under any applicable order, writ,
injunction, decree, permit, determination or award of any court, any
governmental department, board, agency or instrumentality, domestic
or foreign, or any arbitrator, which default could reasonably be
expected to materially impair such party's ability to perform its
obligations under this agreement or to have a material adverse
effect on the consolidated financial condition of such party or its
Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify
the other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
(i) the material breach of any representation or warranty made by
such party in this agreement; and
(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
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(b) In addition to the indemnification provided for in Section 8.1(a),
Licensee agrees to indemnify Licensor against and hold it harmless
from any Loss suffered or incurred by Licensor or its Controlled
Related Parties by reason of a third party claim arising out of or
relating to (i) the use of the Licensed Marks by Licensee; or (ii)
the marketing, promotion, advertisement, distribution, lease or sale
by Licensee (or any permitted sublicensee) or by any additional
Licensee (or any permitted sublicensee) of any Sprint PCS Products
and Services, Related Equipment or Premium and Promotional Items
under the Licensed Marks pursuant to this agreement, including
unfair or fraudulent advertising claims, warranty claims and product
defect or liability claims, pertaining to the Sprint PCS Products
and Services, Related Equipment or Premium and Promotional Items.
Notwithstanding the foregoing, Licensee will not be required under
this paragraph (b) to indemnify any Loss arising solely out of
Licensee's use of the Licensed Marks in compliance with the terms of
the Trademark and Service Mark Usage Guidelines.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as set
forth in this agreement shall be unconditional and irrevocable, and shall not be
subject to any defense or be released, discharged or otherwise affected by any
matter, including impossibility, illegality, impracticality, frustration of
purpose, force majeure, act of government, the bankruptcy or insolvency of any
party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make any
use of the Licensed Marks in connection with products or services other than the
Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related Equipment and Premium and Promotional
Items, nor to make any use of the Licensed Marks directed outside of the Service
Area.
Section 10.2 Adherence to Trademark and Service Mark Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Mark Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed Marks
on any type of marketing, advertising or promotional materials, Licensee agrees
to submit samples of such materials to Licensor for approval. Licensor shall
have fourteen (14) days from the date Licensor receives such materials to
approve or object to any such materials submitted to Licensor for review. In the
event Licensee does not object to such materials within such fourteen (14) day
period, such materials shall be deemed approved by Licensor. Thereafter,
Licensee shall not be obligated to submit to Licensor materials prepared in
accordance with the samples previously approved by Licensor and
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the Trademark and Service Mark Usage Guidelines; provided, however, Licensee
shall, at the reasonable request of Licensor, continue to furnish samples of
such marketing, advertising and promotional materials to Licensor from time to
time during the term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee agrees
not to use (a) any trademark or service mark which is confusingly similar to, or
a colorable imitation of, the Licensed Marks or any part thereof, or (b) any
work, symbol, character, or set of words, symbols, or characters, which in any
language would be identified as the equivalent of the Licensed Marks or that are
otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1 Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee shall
use the Licensed Marks in a manner that is consistent with the brand image and
principles established by Licensor, and mechanics to ensure consistency will be
included in the Marketing Communications Guidelines.
Section 11.3 Management of Brand Image. Licensor shall be responsible for
the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing Communications
Guidelines shall establish reasonable principles to be followed in the
development of advertising, marketing and promotional campaigns in order to
ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns conducted by Licensee shall be conducted in a manner
consistent with the Marketing Communications Guidelines.
Section 11.4. Advertising Agencies: Promotions. Licensee may select its
own advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of
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Licensor. Licensee and Licensor shall conduct ongoing reviews of upcoming
advertising, marketing and promotional campaigns of each party and shall use
good faith efforts to coordinate their respective campaigns in a manner that
will maximize the advertising, marketing and promotional efforts of the parties
and be consistent with the Marketing Communications Guidelines. Licensee shall
not initiate any products or promotions under names which are confusingly
similar to any names of national product offerings or promotions by Licensor.
Neither Licensor nor any of its Controlled Related Parties shall initiate any
products or promotions under names which are confusingly similar to any names of
national product offerings or promotions by Licensee. In addition, Licensor will
use its commercially reasonable efforts to ensure that no third party licensee
under the Licensed Marks initiates any products or promotions in the Service
Area under names which are confusingly similar to any names of national product
offerings or promotions by Licensee.
Section 11.5 Ownership of Advertising Materials. All agreements entered
into by Licensee with advertising agencies shall provide that Licensor shall own
all advertising materials (including concepts, themes, characters and the like)
created or developed thereunder. Subject to the terms and conditions set forth
herein, Licensee shall receive a perpetual, non-exclusive, royalty-free license
to use such materials in connection with advertising and promotional materials
developed by Licensee; provided, however, that the rights granted under such
perpetual license shall be limited solely to the use of such materials and shall
not extend the term of the license with respect to the Licensed Marks provided
for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of the
parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee agrees,
and shall require its permitted sublicensees to agree, not to incur or Contract
any debt or obligation on behalf of Licensor, or commit any act, make any
representation, or advertise in any manner that may adversely affect any right
of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution and
continues until the Management Agreement terminates, unless earlier terminated
in accordance with the terms set forth in this Article 13. This agreement
automatically terminates upon termination of the Management Agreement.
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Section 13.2. Events of Termination. If any of the following events shall
occur with respect to Licensee, each such occurrence shall be deemed an "Event
of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to
Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with
any of the material terms and conditions contained herein in any
material respect.
(c) Material Misrepresentation. Licensee breaches any material
representation or warranty of Licensee made in Section 4.2 or
Article 6 in any material respect.
(d) Termination of Management Agreement. The termination of the
Management Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4 Licensee's Right to Terminate. Licensee may, at its option,
without prejudice to any other remedies it may have, terminate this agreement by
giving written notice of such termination to Licensor as follows: (a)
immediately, in the event that Licensor abandons the Licensed Marks or otherwise
ceases to support the Licensed Marks in Licensor's business; or (b) immediately
in the event of the occurrence of a Bankruptcy with respect to Licensor; or (c)
immediately in the event of an occurrence of termination pursuant to Section
13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within thirty (30) days following the date on
which this agreement terminates (except in the case of a termination resulting
from an Event of Termination described in Section 13.2(b), (c) or (d), in which
case such rights to use the Licensed Marks will terminate immediately upon the
date of termination); provided, however, that Licensee may thereafter sell,
transfer or otherwise dispose of any Related Equipment and Premium and
Promotional Items that are then in Licensee's inventory (or which Licensee has
purchased or is then legally obligated to purchase) for an additional reasonable
period not to exceed three (3) months, Licensee's right of disposal under this
section 13.5 shall not prohibit Licensor from granting to third parties during
the disposal
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period licenses and other rights with respect to the Licensed Marks. The
provisions of Articles 3, 4, 5, 6 and 8 will survive any termination of this
agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior
written consent of Licensor (in its sole discretion), shall have no right to
assign any of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing herein
shall be construed to limit the right of the Licensor to transfer or assign its
interests in the Licensed Marks, subject to the agreement of the assignee to be
bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees; Sublicenses; Licenses to
Additional Licensees. Licensee shall not sublicense (or attempt to sublicense)
any of its rights hereunder without the prior written consent of Licensor, in
the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as follows, or to such
other address or number as such party may from time to time specify by written
notice to the other party in accordance with the provisions of this Section
15.1:
If to Sprint Spectrum:
Sprint Spectrum L.P.
4900 Main, 12th Floor
Kansas City, Missouri 64112
Telephone:(816) 559-1000
Telecopier: (816) 559-1290
Attention: Chief Executive Officer
with a copy to:
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Sprint Spectrum L.P.
4900 Main, 12th Floor
Kansas City, Missouri 64112
Telephone: (816) 559-1000
Telecopier:(816) 559-2591
Attention: General Counsel
If to Manager:
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All notices and other communications given to a party in accordance with the
provisions of this agreement shall be deemed to have been given and received (i)
four (4) Business Days after the same are sent by certified or registered mail,
postage prepaid, return receipt requested, (ii) when delivered by hand or
transmitted by facsimile (with acknowledgment received and, in the case of a
facsimile only, a copy of such notice is sent no later than the next Business
Day by a reliable overnight courier service, with acknowledgment of receipt) or
(iii) one (1) Business Day after the same are sent by a reliable overnight
courier service, with acknowledgment of receipt.
Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this agreement.
Section 15.5. Table of Contents; Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is intended
to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect
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the validity or legality of the remainder of this agreement. If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable language with enforceable
language which as closely as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request of
the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of Missouri
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
Section 15.9. Counterpart Execution. This agreement may be executed in any
number of counterparts with the same effect as if all the parties had signed the
same document. All counterparts shall be construed together and shall constitute
on agreement.
Section 15.10. Specific Performance. Each party agrees with the other
party that the other party would be irreparably damaged if any of the provisions
of this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled to
injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.11. Entire Agreement. The provisions of this agreement set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and supersede all prior agreements, oral or written, and
other communications between the parties relating to the subject matter hereof.
Section 15.12. Limitation on Rights of Others. Nothing in this agreement,
whether expressed or implied, shall be construed to give any party other than
the parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
Section 15.13. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.14. Jurisdiction; Consent to Service of Process.
Sprint Spectrum Proprietary Information - RESTRICTED
<PAGE>
(a) Each parry hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any
Missouri State court sitting in the County of Jackson or any Federal
court of the United States of America sitting in the Western
District of Missouri, and any appellate court from any such court,
in any suit action or proceeding arising out of or relating to this
agreement, or for recognition or enforcement of any judgment, and
each party hereby irrevocably and unconditionally agrees that all
claims in respect of any such suit, action or proceeding may be
heard and determined in such Missouri State Court or, to the extent
permitted by law, in such Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally do so, any objection which it may now
or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement in Missouri
State court sitting in the County of Jackson or any Federal court
sitting in the Western District of Missouri. Each party hereby
irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court and further waives the right
to object, with respect to such suit, action or proceeding, that
such court does not have jurisdiction over such party.
(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement,
provided that such service shall be deemed to have been given only
when actually received by such party. Nothing in this agreement
shall affect the right of a party to serve process in another manner
permitted by law.
Section 15.15. Waiver of Jury Trial. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
agreement.
Section 15.16. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Sprint Spectrum Proprietary Information - RESTRICTED
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed under seal and
delivered this Sprint Spectrum Trademark and Service Mark License Agreement, as
of the day and year first above written.
LICENSOR:
SPRINT SPECTRUM L.P.
By: ______________________________________
Name:
Title:
LICENSEE:
___________________________
By: ______________________________________
Name:
Title:
Sprint Spectrum Proprietary Information - RESTRICTED
<PAGE>
FIRST ADDENDUM TO
SPRINT TRADEMARK AND SERVICE MARK
LICENSE AGREEMENT
This FIRST ADDENDUM to the SPRINT TRADEMARK AND SERVICE MARK LICENSE
AGREEMENT is made as of the 8th day of June, 1998, by and between Sprint
Communications Company, L.P., a limited partnership organized under the laws of
the State of Delaware, as licensor ("LICENSOR"), and Louisiana Unwired, LLC, a
Louisiana limited liability company, as licensee ("LICENSEE").
This First Addendum contains certain additional and supplemental
terms and provisions of that certain Sprint Trademark and Service Mark License
Agreement entered into contemporaneously with and by the same parties as this
First Addendum. The terms and provisions of this First Addendum control,
supersede and amend any conflicting terms and provisions contained in the Sprint
Trademark and Service Mark License Agreement. Except for express modifications
made in this First Addendum, the Sprint Trademark and Service Mark License
Agreement continues in full force and effect.
Capitalized terms used and not otherwise defined in this First
Addendum have the meanings ascribed to them in that certain Schedule of
Definitions executed contemporaneously with and by the same parties as this
First Addendum. Section and Exhibit references are to Sections and Exhibits of
the Sprint Trademark and Service Mark License Agreement unless otherwise noted.
The Sprint Trademark and Service Mark License Agreement is modified
as follows:
1. Section 11.1 is hereby amended to read as follows:
Section 11.1. Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed solely under the Licensed Marks, except that during
the Transition Period (as described in Addendum I to the Management Agreement),
Licensee may use the "US Unwired" trademark, a depiction of which is attached as
Exhibit A hereto, in combination with the Licensed Marks on marketing materials
to market the Sprint PCS Products and Services, such use to be in strict
compliance with Model 1 of the Sprint PCS Manager Guidelines, the current
version of which is attached hereto as Exhibit B, such guidelines to be amended
from time to time by Licensor in its sole discretion. During the Term of the
Sprint Trademark and Service Mark License Agreement after the Transition Period,
Licensee may use the "US Unwired" trademark in combination with the Licensed
Marks on marketing materials to market the Sprint PCS Products and Services,
such use to be in strict compliance with Model 2A of the Sprint PCS Manager
Guidelines.
Sprint Spectrum Proprietary Information - RESTRICTED
<PAGE>
SPRINT COMMUNICATIONS COMPANY, L.P.
For and in consideration of the covenants contained in this First Addendum
to the Sprint Trademark and Service Mark License Agreement, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sprint Communications Company. L.P. executes, becomes a party to,
and agrees to be bound by and to perform its obligations under this First
Addendum to the Sprint Trademark and Service Mark License Agreement as of the
8th day of June, 1998.
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ William R. Blessing
----------------------------
William R. Blessing
Vice President, Wireless
LOUISIANA UNWIRED, LLC
For and in consideration of the covenants contained in this First
Addendum to the Sprint Trademark and Service Mark License Agreement, and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Louisiana Unwired, LLC executes, becomes a party to, and agrees to
be bound by and to perform its obligations under this First Addendum to the
Sprint Trademark and Service Mark License Agreement as of the 8th day of June,
1998.
LOUISIANA UNWIRED, LLC
By: /s/ Robert Piper
----------------------------
Name: Robert Piper
Title: President
2
<PAGE>
Sprint PCS/Louisiana Unwired, LLC
Master Signature Page
---------------------
This Master Signature Page is dated and effective as of June 8, 1998
(the "Effective Date"). This document provides the means by which each of the
undersigned entities executes and becomes a party to and bound by, to the extent
set forth above such party's signature, the Management Agreement, Services
Agreement, Sprint Trademark and Service Mark License Agreement, Sprint Spectrum
Trademark and Service Mark License Agreement, and Addendum I and Addendum II to
the Management Agreement. This document may be executed in one or more
counterparts. The Notice Address Schedule attached to this documents sets forth
the addresses to which notices should be sent under the agreements.
THE MANAGEMENT AGREEMENT AND THE SERVICES AGREEMENT
CONTAIN BINDING ARBITRATION PROVISIONS THAT MAY BE
ENFORCED BY THE PARTIES TO THOSE AGREEMENTS
Sprint Spectrum L.P.
--------------------
For and in consideration of the covenants contained in the Management
Agreement, Services Agreement, Sprint Spectrum Trademark and Service Mark
License Agreement, and Addendum I and Addendum II to the Management Agreement
(collectively, the "Executed Agreements"), and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Sprint Spectrum L.P. executes, becomes a party to, and agrees to be bound by and
to perform its obligations under each of the Executed Agreements as of the
Effective Date. The execution by Sprint Spectrum L.P. of this Master Signature
Page has the same force and effect as if Sprint Spectrum L.P. executed
individually each of the Executed Agreements.
Sprint Spectrum L.P.
By: /s/ Bernard A. Bianchino
--------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
1
<PAGE>
SprintCom, Inc.
---------------
For and in consideration of the covenants contained in the Management
Agreement and Addendum I and Addendum II to the Management Agreement
(collectively, the "Executed Agreements"), and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
SprintCom, Inc. executes, becomes a party to, and agrees to be bound by and to
perform its obligations under each of the Executed Agreements as of the
Effective Date. The execution by SprintCom, Inc. of this Master Signature Page
has the same force and effect as if SprintCom, Inc. executed individually each
of the Executed Agreements.
SprintCom, Inc.
By: /s/ William R. Blessing
----------------------------
William R. Blessing
Vice President, Wireless
Sprint Communications Company, L.P.
-----------------------------------
For and in consideration of the covenants contained in the Management
Agreement, Sprint Trademark and Service Mark License Agreement, and Addendum I
and Addendum II to the Management Agreement (collectively, the "Executed
Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sprint Communications Company,
L.P. executes, becomes a party to, and agrees to be bound by and to perform its
obligations under each of the Executed Agreements as of the Effective Date;
provided, that Sprint Communications Company, L.P. only agrees to be bound by
and perform its obligations under, and will enjoy the benefits given to it under
the Management Agreement, with respect to only those provisions that expressly
apply to Sprint Communications Company, L.P., including its obligations and
benefits under Sections 2.3 and 10. The execution by Sprint Communications
Company, L.P. of this Master Signature Page has the same force and effect as if
Sprint Communications Company, L.P. executed individually each of the Executed
Agreements.
Sprint Communications Company, L.P.
By: /s/ William R. Blessing
--------------------------------
William R. Blessing
Vice President, Wireless
2
<PAGE>
Louisiana Unwired, LLC
----------------------
For and in consideration of the covenants contained in the
Management Agreement, Services Agreement, Sprint Trademark and Service Mark
License Agreement, Sprint Spectrum Trademark and Service Mark License Agreement,
and Addendum I and Addendum II to the Management Agreement (collectively, the
"Executed Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Louisiana Unwired, LLC executes,
becomes a party to, and agrees to be bound by and to perform its obligations
under each of the Executed Agreements as of the Effective Date. The execution by
Louisiana Unwired, LLC of this Master Signature Page has the same force and
effect as if Louisiana Unwired, LLC executed individually each of the Executed
Agreements.
Louisiana Unwired, LLC
By: /s/ Robert Piper
-------------------
Name: Robert Piper
Title: President
3
<PAGE>
Notice Address Schedule
-----------------------
The addresses to which notice is to be sent pursuant to Section 17.1
of the Management Agreement, Section 9.1 of the Services Agreement, Section 15.1
of the Sprint Trademark and Service Mark License Agreement, or Section 15.1 of
the Sprint Spectrum Trademark and Service Mark License Agreement are as follows:
Sprint Spectrum L.P.
- --------------------
4900 Main, 12/th/ Floor with a copy to: 4900 Main, 12/th/ Floor
Kansas City, Missouri 64112 Kansas City, Missouri 64112
Telephone: (816) 559-1000 Telephone: (816) 559-1000
Telecopier: (816) 559-1290 Telecopier: (816) 559-2591
Attention: Chief Executive Officer Attention: General Counsel
SprintCom, Inc. And
- ---------------
Sprint Communications Company, L.P. (and notices regarding the Sprint Brands)
- -----------------------------------
c/o Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
Telephone: 913-624-3326
Telecopier: 913-624-8233
Attention: Corporate Secretary
Mail Stop: KSWESA0110
Louisiana Unwired, LLC
- ----------------------
One Lakeshore Drive with a copy to:
Hibernia Tower, Suite 1900 PO Box 3709
Lake Charles, Louisiana 70629 Lake Charles, LA 70602
Telephone: (318) 436-9000 Telephone: (318) 436-9000
Telecopier: (318) 439-0769 Telecopier: (318) 439-3479
Attention: Robert Piper, General Manager Attn: Thomas G. Henning
Assistant Manager
4
<PAGE>
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THE EXHIBIT PURSUANT
TO RULE 406 UNDER THE SECURITIES ACT
EXHIBIT 10.20
Sprint PCS
Management Agreement
Between
Sprint Spectrum L.P.
SprintCom, Inc.
And
Texas Unwired
January 7, 2000
<PAGE>
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made January 7, 2000, between
Sprint Spectrum L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas
corporation, and Texas Unwired, a Louisiana general partnership (but not any
Related Party) ("Manager"). The definitions for this agreement are set forth on
the attached "Schedule of Definitions."
-----------------------
RECITALS
A. Sprint Spectrum L.P., a Delaware limited partnership, SprintCom, Inc.,
a Kansas corporation, American PCS Communications, LLC, a Delaware limited
liability company, PhillieCo Partners I, L.P., a Delaware limited partnership,
and Cox Communications PCS, L.P., a Delaware limited partnership, hold and
exercise, directly or indirectly, control over licenses to operate wireless
services networks.
B. The entity or entities named in Recital A that execute this agreement
hold, directly or indirectly, the Licenses for the areas identified on the
Service Area Exhibit and are referred to in this agreement as "Sprint PCS."
- --------------------
Because this agreement addresses the rights and obligations of each license
holder with respect to each of its Licenses, each reference in this agreement to
"Sprint PCS" refers to the entity that owns, directly or indirectly, the License
referred to in that particular instance or application of the provision of this
agreement. If Sprint Spectrum does not own the License, it will provide on
behalf of Sprint PCS most or all of the services required under this agreement
to be provided by Sprint PCS.
C. The Sprint PCS business was established to use the Sprint PCS Network,
a nationwide wireless services network, to offer seamless, integrated voice and
data services using wireless technology. Sprint PCS offers the services to
customers under a single national brand.
D. This agreement, therefore, includes provisions defining Manager's
obligations with respect to:
. The design, construction and management of the Service Area Network;
. Offering and promoting products and services designated by Sprint PCS as
the Sprint PCS Products and Services of the Sprint PCS Network;
<PAGE>
. Adherence to Program Requirements established by Sprint PCS to ensure
seamless interoperability throughout the Sprint PCS Network and uniform
and consistent quality of product and service offerings;
. Adherence to Customer Service Program Requirements established by Sprint
PCS to ensure consistency in interactions with customers (including
billing, customer care, etc.); and
. Adherence to Program Requirements relating to the marketing, promotion
and distribution of Sprint PCS Products and Services.
E. The Sprint PCS Network is expanding with the assistance of "managers"
(companies such as Manager that manage Service Area Networks that offer Sprint
PCS Products and Services under a license owned by Sprint PCS or one of the
entities named in Recital A) and "affiliates" (companies that manage Service
Area Networks that offer Sprint PCS Products and Services under a license owned
by the affiliate).
F. Manager wishes to enter into this agreement to help construct,
operate, manage and maintain for Sprint PCS a portion of the Sprint PCS Network
in the Service Area. Sprint PCS has determined that permitting Manager to
manage a portion of the Sprint PCS Network in accordance with the terms of this
agreement will facilitate Sprint PCS' expansion of fully digital, wireless
coverage under the License and will enhance the wireless service for customers
of Sprint PCS.
G. All managers of a portion of the business of Sprint PCS, including
Manager, must construct facilities and operate in accordance with Program
Requirements established by Sprint PCS with respect to certain aspects of the
development and offering of wireless products and services and the presentation
of the products and services to customers, to establish and operate the Sprint
PCS Network successfully by providing seamless, integrated voice and data
services, using wireless technology.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. MANAGER
1.1 Hiring of Manager. Sprint PCS hires Manager:
2
<PAGE>
(a) to construct and manage the Service Area Network in compliance
with the License and in accordance with the terms of this agreement;
(b) to distribute continuously during the Term the Sprint PCS
Products and Services and to establish distribution channels in the Service
Area;
(c) to conduct continually during the Term advertising and promotion
activities in the Service Area (including mutual decisions to "go dark", with
respect to advertising and promotion activities, for reasonable periods of
time); and
(d) to manage that portion of the customer base of Sprint PCS that
has the NPA-NXXs assigned to the Service Area Network.
Sprint PCS has the right to unfettered access to the Service Area Network
to be constructed by Manager under this agreement. The fee to be paid to
Manager by Sprint PCS under Section 10 is for all obligations of Manager under
this agreement.
1.2 Program Requirements. Manager must adhere to the Program Requirements
established by Sprint PCS and as modified from time to time, to ensure uniform
and consistent operation of all wireless systems within the Sprint PCS Network
and to present the Sprint PCS Products and Services to customers in a uniform
and consistent manner under the Brands.
1.3 Vendor Purchase Agreements. Manager may participate in discounted
volume-based pricing on wireless-related products and services and in the
warranties Sprint PCS receives from its vendors, as is commercially reasonable
and to the extent permitted by applicable procurement agreements (e.g.,
agreements related to network infrastructure equipment, subscriber equipment,
interconnection, and collocation). Sprint PCS will use commercially reasonable
efforts to obtain for managers the same price Sprint PCS receives from vendors;
this does not prohibit Sprint PCS from entering into procurement agreements that
do not provide managers with the Sprint PCS prices.
Manager must purchase subscriber and infrastructure equipment from a Sprint
PCS approved list of products, which will include a selection from a variety of
manufacturers. Where required, the products must include proprietary software
developed by the manufacturers for Sprint PCS or by Sprint PCS to allow seamless
interoperability in the Sprint PCS Network. Sprint PCS or the vendor may
require Manager to execute a separate license agreement for the software prior
to Manager's use of the software.
Manager may only make purchases under this Section 1.3 for items to be used
exclusively in the Service Area (e.g., Manager may not purchase base stations
under a Sprint PCS contract for use in a system not affiliated with Sprint PCS).
3
<PAGE>
1.4 Interconnection. If Manager desires to interconnect a portion of the
Service Area Network with another carrier and Sprint PCS can interconnect with
that carrier at a lower rate, then to the extent permitted by applicable laws,
tariffs and contracts, Sprint PCS may arrange for the interconnection under its
agreements with the carrier and if it does so, Sprint PCS will bill the
interconnection fees to Manager.
1.5 Seamlessness. Manager will design and operate its systems, platforms,
products and services in the Service Area and the Service Area Network so as to
seamlessly interface them into the Sprint PCS Network.
1.6 Forecasting. Manager and Sprint PCS will work cooperatively to
generate mutually acceptable forecasts of important business metrics including
traffic volumes, handset sales, subscribers and Collected Revenues for the
Sprint PCS Products and Services. The forecasts are for planning purposes only
and do not constitute Manager's obligation to meet the quantities forecast.
1.7 Financing. The construction and operation of the Service Area Network
requires a substantial financial commitment by Manager. The manner in which
Manager will finance the build-out of the Service Area Network and provide the
necessary working capital to operate the business is described in detail on
Exhibit 1.7. Manager will allow Sprint PCS an opportunity to review before
- -----------
filing any registration statement or prospectus or any amendment or supplement
thereto before distributing any offering memorandum or amendment or supplement
thereto, and agrees not to file or distribute any such document if Sprint PCs
reasonably objects in writing on a timely basis to any portion of the document
that refers to Sprint PCS, its Related Parties, their respective businesses,
this agreement or the Services Agreement.
1.8 Ethical Conduct and Related Covenants. Each party must perform its
obligations under this agreement in a diligent, legal, ethical, and professional
manner.
2. BUILD-OUT OF NETWORK
2.1 Build-out Plan. Manager will build-out the Service Area Network in the
Service Area in accordance with a Build-out Plan. Sprint PCS and Manager will
jointly develop each Build-out Plan, except the initial Build-out Plan and any
modifications, additions or expansions of the Build-out Plan will be subject to
prior written approval by Sprint PCS. Manager will report to Sprint PCS its
performance regarding the critical milestones included in the Build-out Plan on
a periodic basis as mutually agreed to by the parties, but no less frequently
than quarterly. The Build-out Plan and the Service Area Network as built must
comply with Sprint PCS Program Requirements and federal and local regulatory
requirements.
4
<PAGE>
Sprint PCS approves the Build-out Plan in effect as of the date of this
agreement, which Build-out Plan is attached as Exhibit 2.1. Each new or amended
-----------
Build-Out Plan will also become part of Exhibit 2.1.
-----------
2.2 Compliance with Regulatory Rules. During the Build-out of the Service
Area Network, Sprint PCS authorizes Manager to make all filings with regulatory
authorities regarding the build-out, including filings with the Federal Aviation
Administration, environmental authorities, and historical districts. Manager may
further delegate its duty under this Section 2.2 to a qualified site acquisition
company. Manager must ensure that a copy of every filing is given to Sprint PCS.
Manager must ensure that Sprint PCS is notified in writing of any contact by a
regulatory agency including the FCC with Manager or Manager's site acquisition
company regarding any filing. Sprint PCS has the right to direct any proceeding,
inquiry, dispute, appeal or other activity with a regulatory or judicial
authority regarding any filing made of behalf of Sprint PCS. Manager will amend,
modify, withdraw, refile and otherwise change any filing as Sprint PCS requires.
Notwithstanding the preceding sentences in the Section 2.2, and in conjunction
with Section 16, Sprint PCS is solely responsible for making any and all filings
with the FCC regarding the build-out. Manager will notify Sprint PCS of any
activity, event or condition related to the build-out that might require an FCC
filing.
2.3 Exclusivity of Service Area. Manager will be the only person or
entity that is a manager or operator for Sprint PCS with respect to the Service
Area and neither Sprint PCS nor any of its Related Parties will own, operate,
build or manage another wireless mobility communications network in the Service
Area so long as this agreement remains in full force and effect and there is no
Event of Termination that has occurred giving Sprint PCS the right to terminate
this agreement, except that:
(a) Sprint PCS may cause Sprint PCS Products and Services to be sold
in the Service Area through the Sprint PCS National Accounts Program
Requirements and Sprint PCS National or Regional Distribution Program
Requirements;
(b) A reseller of Sprint PCS Products and Services may sell its
products and services in the Service Area so long as such resale is not contrary
to the terms and conditions of this agreement; and
(c) Sprint PCS and its Related Parties may engage in the activities
described in Sections 2.4(a) and 2.4(b) with Manager in the geographic areas
within the Service Area in which Sprint PCS or any of its Related Parties owns
an incumbent local exchange carrier as of the date of this agreement.
2.4 Restriction. In geographic areas within the Service Area in which
Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier as of the date of this
5
<PAGE>
agreement, Manager must not offer any Sprint PCS Products or Services
specifically designed for the competitive local exchange market ("fixed wireless
local loop"), except that:
(a) Manager may designate the local exchange carrier that is a
Related Party of Sprint PCS to be the exclusive distributor of the fixed
wireless local loop product in the territory served by the local exchange
carrier, even if a portion of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product under the
terms and conditions specified by Sprint PCS (e.g., including designation by
Sprint PCS of an exclusive distribution agent for the territory).
This restriction exists with respect to a particular geographic area only so
long as Sprint PCS or its Related Party owns such incumbent local exchange
carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS
Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on Exhibit
-------
2.4.
- ---
2.5 Coverage Enhancement. Sprint PCS and Manager agree that maintaining a
high standard of customer satisfaction regarding network capacity and footprint
is a required element of the manager and affiliate programs. Sprint PCS intends
to expand network coverage to build all cells that cover at least 5,000 pops and
all interstate and major highways in the areas not operated by Manager or Other
Managers. Accordingly, Manager agrees to build-out New Coverage when directed
by Sprint PCS as set forth in this Section 2.5. Sprint PCS agrees not to
require any New Coverage build-out during the first two years of this Agreement,
nor any New Coverage that exceeds the capacity and footprint parameters that
Sprint PCS has adopted for all of its comparable markets.
Sprint PCS will give to Manager a written notice of any New Coverage
within the Service Area that Sprint PCS decides should be built-out. Such
notice will include an analysis completed by Sprint PCS demonstrating that such
required build-out should be economically advantageous to Manager. Such
analysis will be generated in good faith and will be based on then-currently
available information, however Sprint PCS makes no warranties or representations
regarding the accuracy of, nor will Sprint PCS be bound by, or guarantee the
accuracy of, such analysis. Manager must confirm to Sprint PCS within 90 days
after receipt of the notice that Manager will build-out the New Coverage and
deliver to Sprint PCS with such confirmation Manager's proposed amendment to the
Build-out Plan and a description of the manner and timing in which it will
finance such build-out.
If Manager confirms, within such 90-day period, its intention to
build-out the New Coverage, then Manager and Sprint PCS will diligently finalize
an amendment to the Build-out Plan and proceed as set forth in Sections 2.1 and
2.2. The amended Build-out Plan
6
<PAGE>
will contain critical milestones that provide Manager a commercially reasonable
period in which to construct and implement the New Coverage. In determining what
constitutes a "commercially reasonable period" as used in this paragraph, the
parties will consider several factors, including local zoning process and other
legal requirements, weather conditions, equipment delivery schedules, the need
to arrange additional financing, and other construction already in progress by
Manager. Manager will construct and operate the New Coverage in accordance with
the terms of this Agreement, and the New Coverage will be included in the
Service Area Network for purposes of this agreement.
If Manager fails to confirm, within such 90-day period, its intention
to build-out the New Coverage, declines to complete such build-out, or fails to
complete such build-out in accordance with the amended Build-out Plan, then an
Event of Termination will be deemed to have occurred under Section 11.3.3,
Manager will not have a right to cure such breach, and Sprint PCS may exercise
its rights and remedies under Section 11.2.2.1.
Notwithstanding the preceding paragraphs in this Section 2.5, the
capacity and footprint parameters contained in the amended Build-out Plan will
not be required to exceed the parameters adopted by Sprint PCS in building out
all of its comparable service areas, unless such build-out relates to an
obligation regarding the Service Area Network mandated by law. When necessary
for reasons related to new technical standards, new equipment or strategic
reasons, Sprint PCS can require Manager to build-out the New Coverage
concurrently with Sprint PCS' build-out, in which case Sprint PCS will reimburse
Manager for its costs and expenses if Sprint PCS discontinues its related
build-out.
If Sprint PCS requires build-out of New Coverage that will:
(a) cause the Manager to spend an additional amount greater than 5%
of Manager's shareholder's equity or capital account plus Manager's long-term
debt (i.e., notes that mature more than one year from the date issued), as
reflected on Manager's books; or
(b) cause the long-term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net present
value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the required New Coverage.
The Sprint PCS Vice President or the designee of the Sprint PCS
Chief Officer in charge of the group that manages the Sprint PCS relationship
with Manager will review Manager's request and render a decision regarding the
New Coverage. If after the review and decision by the Vice President or
designee, Manager is still dissatisfied, then Manager may ask that the Chief
Officer to whom the Vice President or designee reports review the matter. If
Sprint PCS still requires Manager to complete the New Coverage following the
Chief Officer's review, then if Manager and Sprint PCS fail to agree to an
amended Build-out Plan within 15
7
<PAGE>
days after completion of the reconsideration process described above in this
paragraph or the end of the 90-day period described in the second paragraph of
this Section 2.5, whichever occurs first, then an Event of Termination will be
deemed to have occurred under Section 11.3.3, Manager will not have the right to
cure such breach, and Sprint PCS may exercise its rights and remedies under
Section 11.2.2.1.
2.6 Purchase of Assets by Manager. If Sprint PCS has assets located in
the Service Area that Manager could reasonably use in its construction of the
Service Area Network and if Sprint PCS is willing to sell such assets, then
Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to
Manager the assets in accordance with the terms and conditions of the asset
purchase agreement attached as Exhibit 2.6.
-----------
2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-Out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one
carrier at a time. The parties will share equally all costs associated with
clearing spectrum under this Section 2.7.
2.8 Determination of pops. If any provision in this agreement requires
the determination of pops in a given area, then the pops will be determined
using the census block group pop forecast then used by Sprint PCS, except that a
different forecast will be used for any FCC filing and in preparing the
Build-out Plan if required by the FCC. Sprint PCS presently uses the forecast
of Equifax/NDS, but it may choose in its sole discretion to use another service
that provides comparable data.
3. PRODUCTS AND SERVICES; IXC SERVICES
3.1 Sprint PCS Products and Services. Manager must offer for sale,
promote and support all Sprint PCS Products and Services within the Service
Area, unless the parties otherwise agree in advance in writing. Within the
Service Area, Manager may only sell, promote and support wireless products and
services that are Sprint PCS Products and Services or are other products and
services authorized under Section 3.2. The Sprint PCS Products and Services as
of the date of this agreement are attached as Exhibit 3.1. Sprint PCS may
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modify the Sprint PCS Products and Services from time to time in its sole
discretion by delivering to Manager a new Exhibit 3.1. If Sprint PCS begins
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offering nationally a Sprint PCS Product or Service that is a Manager's Product
or Service, such Manager's Product or Service will become a Sprint PCS Product
or Service under this agreement.
3.2 Other Products and Services. Manager may offer wireless products and
services that are not Sprint PCS Products and Services, on the terms Manager
determines, if the offer of the additional products and services:
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(a) does not violate the obligations of Manager under this agreement;
(b) does not cause distribution channel conflict with or consumer
confusion regarding Sprint PCS' regional and national offerings of Sprint PCS
Products and Services;
(c) complies with the Trademark License Agreements; and
(d) does not materially impede the development of the Sprint PCS
Network.
Manager will not offer any products or services under this Section 3.2 that
are confusingly similar to Sprint PCS Products and Services. Manager must
request that Sprint PCS determine whether Sprint PCS considers a product or
service to be confusingly similar to any Sprint PCS Products and Services by
providing advance written notice to Sprint PCS that describes those products and
services that could be interpreted to be confusingly similar to Sprint PCS
Products and Services. If Sprint PCS fails to provide a response to Manager
within 30 days after receiving the notice, then the products and services are
deemed to create confusion with the Sprint PCS Products and Services and the
request therefore rejected. In rejecting any request Sprint PCS must provide the
reasons for the rejection. If the rejection is based on Sprint PCS' failure to
respond within 30 days and Manager requests an explanation for the deemed
rejection, then Sprint PCS must provide within 30 days the reasons for the
rejection.
3.3 Cross-selling with Sprint. Manager and Sprint and Sprint's Related
Parties may enter into arrangements to sell Sprint's services, including long
distance service (except those long distance services governed by Section 3.4),
Internet access, customer premise equipment, prepaid phone cards, and any other
services that Sprint or its Related Parties make available from time to time.
Sprint's services may be packaged with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet access or
competitive local telephone services including prepaid phone cards, of third
parties (other than Manager's Related Parties), Manager will give Sprint the
right of last offer to provide those services on the same terms and conditions
as the offer to which Manager is prepared to agree, subject to the terms of any
existing agreements Manager was subject to prior to execution of this agreement.
If Sprint sells Sprint PCS Products and Services in the Service Area,
Manager will provide such Sprint PCS Products and Services to such customers in
accordance with the terms and conditions of the Sprint PCS National or Regional
Distribution Program Requirements.
3.4 IXC Services. Manager must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale rates.
Long distance telephone
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calls are those calls between the local calling area for the Service Area
Network and areas outside the local calling area. The local calling area will be
defined by mutual agreement of Sprint PCS and Manager. If the parties cannot
agree on the extent of the local calling area they will resolve the matter
through the dispute resolution process in Section 14. Any arrangement must have
terms at least as favorable to Manager (in all material respects) as those
offered by Sprint to any wholesale customer of Sprint in comparable
circumstances (taking into consideration volume, traffic patterns, etc.). If
Manager is bound by an agreement for these services and the agreement was not
made in anticipation of this agreement, then the requirements of this Section
3.4 do not apply during the term of the other agreement. If the other agreement
terminates for any reason then the requirements of this Section 3.4 do apply.
3.5 Resale of Products and Services
3.5.1 Mandatory Resale of Products and Services. Sprint PCS is
subject to FCC rules that require it to allow its service plans to be resold by
a purchaser of the service plan. Sprint PCS will not grant the purchaser of a
service plan the right to use any of the support services offered by Sprint PCS,
including customer care, billing, collection, and advertising, nor the right to
use the Brands. The reseller only has the right to use the service purchased.
Consequently, Manager agrees not to interfere with any purchaser of the Sprint
PCS Products or Services who resells the service plans in accordance with this
agreement and applicable law. Manager will notify purchaser that the purchaser
does not have a right to use the Brands or Sprint PCS' support services. In
addition, Manager will notify Sprint PCS if it reasonably believes a reseller of
retail service plans is using the support services or Brands.
3.5.2 Voluntary Resale of Products and Services. Sprint PCS may
choose to offer a resale product under which resellers will resell Sprint PCS
Products and Services under brand names other than the Brands, except Sprint
PCS may permit the resellers to use the Brands for limited purposes related to
the resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The
resellers may also provide their own support services (e.g., customer care and
billing) or may purchase the support services from Sprint PCS.
If Sprint PCS chooses to offer a voluntary resale product, it will adopt a
program that will be a Program Requirement under this agreement and that
addresses the manner in which Manager and Other Managers interact with the
resellers. Manager must agree to comply with the terms of the program,
including its pricing provisions, if Manager wants handsets of subscribers of
resellers with NPA-NXXs of Manager to be activated. Usage of telecommunications
services while in the Service Area by subscribers of resellers with NPA-NXXs
from outside the Service Area will be subject to the pricing provisions of the
Sprint PCS Roaming and Inter Service Area Program for roaming and inter service
area pricing between Manager and Sprint PCS unless Manager agrees in writing to
different pricing.
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Except as required under the regulations and rules concerning mandatory
resale, Manager may not sell Sprint PCS Products and Services for resale unless
Sprint PCS consents to such sales in advance in writing.
3.6 Non-competition. Neither Manager nor any of its Related Parties may
offer Sprint PCS Products and Services outside of the Service Area without the
prior written approval of Sprint PCS.
Within the Service Area, Manager and Manager's Related Parties may offer,
market or promote telecommunications products or services only under the
following brands:
(a) products or services with the Brands;
(b) other products and services approved under Section 3.2;
(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related
Parties,
except no brand of a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business may be used by Manager or Manager's Related
Parties on these products and services.
If Manager or any of its Related Parties has licenses to provide broadband
personal communication services outside the Service Area, neither Manager nor
such Related Party may utilize spectrum to offer Sprint PCS Products and
Services without prior written consent from Sprint PCS. Additionally, when
Manager's customers from inside the Service Area travel or roam to other
geographic areas, Manager will route the customers' calls, both incoming and
outgoing, according to the Sprint PCS Network Roaming and Inter Service Area
Program Requirements, without regard to any wireless networks operated by
Manager or its Related Parties. For example, Manager will program the preferred
roaming list for handsets sold in the Service Area to match the Sprint PCS
preferred roaming list.
3.7 Right of Last Offer. Manager will offer to Sprint the right to make
to Manager the last offer to provide backhaul and transport Services for call
transport for the Service Area Network, if Manager decides to use third parties
for backhaul and transport services rather than self-provisioning the services
or purchasing the services from Related Parties of Manager, Sprint will have a
reasonable time to respond to Manager's request for last offer to provide
backhaul and transport pricing and services, which will be no greater than 5
Business Days after receipt of the request for the services and pricing from
Manager.
If Manager has an agreement in effect as of the date of this agreement for
these services and the agreement was not made in anticipation of this agreement,
then the requirements of this
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Section 3.7 do not apply during the term of the other agreement. If the other
agreement terminates for any reason then the requirements of this Section 3.7 do
apply.
4. MARKETING AND SALES ACTIVITIES
4.1 Sprint PCS National or Regional Distribution Program Requirements.
During the term of this agreement, Manager must participate in any Sprint PCS
National or Regional Distribution Program (as in effect from time to time), and
will pay or receive compensation for its participation in accordance with the
terms and conditions of that program. The Sprint PCS National or Regional
Distribution Program Requirements in effect as of the date of this agreement
are attached as Exhibit 4.1.
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4.1.1 Territorial Limitations on Manager's Distribution Activities.
Neither Manager nor any of its Related Parties will market, sell or distribute
Sprint PCS Products and Services outside of the Service Area, except;
(a) as otherwise agreed upon by the parties in advance in writing;
or
(b) Manager may place advertising in media that has distribution
outside of the Service Area, so long as that advertising is intended by Manager
to reach primarily potential customers within the Service Area.
4.1.2 Settlement of Equipment Sales. Sprint PCS will establish a
settlement policy and process that will be included in the Sprint PCS National
or Regional Distribution Program Requirements to:
(a) reconcile sales of subscriber equipment made in the service
areas of Sprint PCs or Other Managers of Sprint PCS, that result in activations
in the Service Area; and
(b) reconcile sales of subscriber equipment made in the Service Area
that result in activations in service areas of Sprint PCS or Other Managers.
In general, the policy will provide that the party in whose service area
the subscriber equipment is activated will be responsible for the payment of any
subsidy (i.e., the difference between the price paid to the manufacturer and the
suggested retail price for direct channels for the difference between the price
paid to the manufacturer and the wholesale price for third party retailers) and
for other costs associated with the sale, including logistics, inventor carrying
costs, direct channel commissions and other retailer compensation.
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4.1.3 Use of Third-Party Distributors.
(a) Manager may request that Sprint PCS and a local distributor
enter into Sprint PCS' standard distribution agreement regarding the purchase
from Sprint PCS of handsets and accessories. Sprint PCS will use commercially
reasonable efforts to reach agreement with the local distributor. Sprint PCS
may refuse to enter into a distribution agreement with a distributor for any
reasonable reason, including that the distributor fails to pass Sprint PCS' then
current credit and background checks or the distributor fails to agree to the
standard terms of the Sprint PCS distribution agreement. Any local distributor
will be subject to the terms of the Trademark License Agreements or their
equivalent. Manager will report to Sprint PCS the activities of any local
distributor that Manager believes to be in violation of the distribution
agreement.
(b) Manager may establish direct local distribution programs in
accordance with the Sprint PCS National or Regional Distribution Program
Requirements, subject to the terms and conditions of the Trademark License
Agreements and the non-competition and other provisions contained in this
agreement. If Manager sells Sprint PCS handsets and accessories directly to a
local distributor:
(i) Sprint PCS has the right to approve or disapprove a
particular distributor,
(ii) Manager is responsible for such distributor's compliance
with the terms of the Trademark License Agreements and the other provisions
contained in this agreement, and
(iii) Manager must retain the right to terminate the
distribution rights of the local distributor when so instructed by Sprint
PCS (even if Sprint PCS initially approved or did not exercise its right to
review the distributor).
4.2 Sprint PCS National Accounts Program Requirements. During the term of
this agreement, Manager must participate in the Sprint PCS National Accounts
Program (as in effect from time to time), and will be entitled to compensation
for its participation and will be required to pay the expenses of the program in
accordance with the terms and conditions of that program. The Sprint PCS
National Accounts Program Requirements in effect as of the date of this
agreement are attached as Exhibit 4.2.
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4.3 Sprint PCS Roaming and Inter Service Area Program Requirements.
Manager will participate in the Sprint PCS Roaming and Inter Service Area
Program established and implemented by Sprint PCS, including roaming price plans
and inter-carrier settlements. The Sprint PCS Roaming and Inter Service Area
Program Requirements in effect as of the date of this agreement are attached as
Exhibit 4.3.
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As part of the Sprint PCS Roaming and Inter Service Area Program
Requirements, Sprint PCS will establish a settlement policy and process to
equitably distribute between the members making up the Sprint PCS Network (i.e.,
Sprint PCS, Manager and all Other Managers) the revenues received by one
member for services used by its customers when they travel into other members'
service areas.
4.4 Pricing. Manager will offer and support all Sprint PCS pricing plans
designated for regional or national offerings of Sprint PCS Products and
Services (e.g., national inter service area rates, regional home rates, and
local price points). The Sprint PCS pricing plans as of the date of this
agreement are attached as Exhibit 4.4. Sprint PCS may modify the Sprint PCS
-----------
pricing plans from time to time in its sole discretion by delivering to Manager
a new Exhibit 4.4.
-----------
Additionally, with prior approval from Sprint PCS, which approval will not
be unreasonably withheld. Manager may establish price plans for Sprint PCS
Products and Services that are only offered in its local market, subject to:
(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area. If
Sprint PCS fails to respond to Manager within 10 Business Days after receiving
such notice, then the price proposed for those Sprint PCS Products or Services
is deemed approved.
At the time Sprint PCS approves a pricing proposal submitted by Manager,
Sprint PCS will provide Manager an estimate of the costs and expenses and
applicable time frames required for Sprint PCS to implement the proposed pricing
plan. Manager agrees to promptly reimburse Sprint PCS for any cost or expense
incurred by Sprint PCS to implement such a pricing plan, which will not exceed
the amount estimated by Sprint PCS if Manager waited for Sprint PCS' response to
Manager's proposal.
4.5 Home Service Area. Sprint PCS and Manager will agree to the initial
home service area for each base station in the Service Area Network prior to the
date the Service Area Network goes into commercial operation. If the parties
cannot agree to the home service area for each base station in the Service Area
Network, then the parties will use the dispute
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resolution process in Section 14 of this agreement to assign each base station
to a home service area.
5. USE OF BRANDS
5.1 Use of Brands.
(a) Manager must enter into the Trademark License AGreements on or
before the date of this agreement.
(b) Manager must use the Brands exclusively in the marketing,
promotion, advertisement, distribution, lease or sale of any Sprint PCS Products
and Services within the Service Area, except Manager may use other brands to the
extent permitted by the Trademark License Agreements and not inconsistent with
the terms of this agreement.
(c) Neither Manager nor any of its Related Parties may market,
promote, advertise, distribute, lease or sell any of the Sprint PCS Products and
Services or Manager's Products and Services on a non-branded, "private label"
basis or under any brand, trademark, trade name or trade dress other than the
Brands, except (i) for sales to resellers required under this agreement, or (ii)
as permitted under the Trademark License Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager from
including Sprint PCS Products and Services under the Brands within the Service
Area as part of a package with its other products and services that bear a
different brand or trademark. The provisions of this Section 5.1 do not apply
to the extent that they are inconsistent with applicable law or in conflict with
the Trademark License Agreements.
5.2 Conformance to Marketing Communications Guidelines. Manger must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of the
Sprint PCS Products and Services. The Marketing Communications Guidelines in
effect as of the date of this agreement are attached as Exhibit 5.2. Sprint and
-----------
Sprint Spectrum may amend the Marketing Communications Guidelines from time to
time in accordance with the terms of the Trademark License Agreements.
5.3 Joint Marketing With Third Parties.
(a) Manager may engage in various joint marketing activities (e.g.,
promotions with sports teams and entertainment providers or tournament
sponsorships) with third parties in the Service Area from time to time during
the term of this agreement with respect to the Sprint PCS Products and Services,
except that Manager may engage in the joint marketing activities only if the
joint marketing activities:
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(i) are conducted in accordance with the terms and conditions
of the Trademark License Agreements and the Marketing Communications
Guidelines;
(ii) do not violate the terms of this agreement;
(iii) are not likely (as determined by Sprint PCS, in its sole
discretion) to cause confusion between the Brands and any other trademark
or service mark used in connection with the activities;
(iv) are not likely (as determined by Sprint, in its sole
discretion) to cause confusion between the Sprint Brands and any other
trademark or service mark used in connection with the activities; and
(v) are not likely (as determined by Sprint PCS, in its sole
discretion) to give rise to the perception that the Sprint PCS Products and
Services are being advertised, marketed or promoted under any trademark or
service mark other than the Brands, except as provided in the Trademark
License Agreements. Manager will not engage in any activity that includes
co-branding involving use of the Brands (that is, the marketing, promotion,
advertisement, distribution, lease or sale of any of the Sprint PCS
Products and Services under the Brands and any other trademark or service
mark), except as provided in the Trademark License Agreements.
(b) Manager must provide advance written notice to Sprint PCS
describing any joint marketing activities that may:
(i) cause confusion between the Brands and any other trademark
or service mark used in connection with the proposed activities; or
(ii) give rise to the perception that the Sprint PCS Products
and Services are being advertised, marketed or promoted under any trademark
or service mark other than the Brands, except as provided in the Trademark
License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within 20
days after receiving such notice, then the proposed activities are deemed, as
the case may be:
(i) not to create confusion between the Brands and any other
trademark or service mark; or
(ii) not to give rise to the perception that Manager's products
and services are being advertised, marketed or promoted under any trademark
or service mark other than the Brands, except as provided in the Trademark
License Agreements.
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5.4 Prior Approval of Use of Brands. Manager must obtain advance written
approval from Sprint for use of the Sprint Brands to the extent required by the
Sprint Trademark and Service Mark License Agreement and from Sprint PCS for use
of the Sprint PCS Brands to the extent required by the Sprint Spectrum Trademark
and Service Mark License Agreement. Sprint PCS will use commercially reasonable
efforts to facilitate any review of Manager's use of the Brands, if Sprint PCS
is included in the review process.
5.5 Duration of Use of Brand. Manager is entitled to use the Brands only
during the term of the Trademark License Agreements and any transition period
during which Manager is authorized to use the Brands following the termination
of the Trademark License Agreements.
6. ADVERTISING AND PROMOTION
6.1 National Advertising and Promotion. Sprint PCS is responsible for (a)
all national advertising and promotion of the Sprint PCS Products and Services,
including the costs and expenses related to national advertising and promotions,
and (b) all advertising and promotion of the Sprint PCS Products and Services in
the markets where Sprint PCS operates without the use of an Other Manager.
6.2 In-Territory Advertising and Promotion. Manager must advertise and
promote the Sprint PCS Products and Services in the Service Area (and may do so
in the areas adjacent to the Service Area so long as Manager intends that such
advertising or promotion primarily reach potential customers within the Service
Area). Manager must advertise and promote the Sprint PCS Products and Services
in accordance with the terms and conditions of this agreement, the Trademark
License Agreements and the Marketing Communication Guidelines. Manager is
responsible for the costs and expenses incurred by Manager with respect to
Manager's advertising and promotion activities in the Service Area.
Manager will be responsible for a portion of the cost of any promotion or
advertising done by third party retailers in the Service Area (e.g., Best Buy)
in accordance with any cooperative advertising arrangements based on per unit
handset sales.
Sprint PCS has the right to use in any promotion or advertising done by
Sprint PCS any promotion or advertising materials developed by Manager from time
to time with respect to the Sprint PCS Products and Services. Sprint PCS will
reimburse Manager for the reproduction costs related to such use.
Sprint PCS will make available to Manager the promotion or advertising
materials developed by Sprint PCS from time to time with respect to Sprint PCS
Products and Services in current use by Sprint PCS (e.g., radio ads, television
ads, design of print ads, design of point of sale materials, retail store
concepts and designs, design of collateral). Manager will
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bear the cost of using such materials (e.g., cost of local radio and television
ad placements, cost of printing collateral in quantity, and building out and
finishing retail stores).
6.3 Review of Advertising and Promotion Campaigns. Sprint PCS and Manager
will jointly review the upcoming marketing and promotion campaigns of Manager
with respect to Sprint PCS Products and Services (including advertising and
promotion expense budgets) and will use good faith efforts to coordinate
Manager's campaign with Sprint PCS' campaign to maximize the market results of
both parties. Sprint PCS and Manager may engage in cooperative advertising or
promotional activities during the term of this agreement as the parties may
agree in writing.
6.4 Public Relations. If Manager conducts local public relations efforts,
then Manager must conduct the local public relations efforts consistent with the
Sprint PCS Communications Policies. The Sprint PCS Communications Policies as of
the date of this agreement are attached as Exhibit 6.4. Sprint PCS may modify
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the Sprint PCS Communications Policies from time to time by delivering to
Manager a new Exhibit 6.4.
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7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 Conformance to Sprint PCS Technical Program Requirements.
(a) Manager must meet or exceed the Sprint PCS Technical Program
Requirements established by Sprint PCS from time to time for the Sprint PCS
Network. Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a level equal
to or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Sprint PCS Technical Program
Requirements; or
(ii) Sprint PCS is responsible under the Services Agreement to
ensure the Service Area Network complies with the Sprint PCS Technical
Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has complied
with the Sprint PCS Technical Program Requirements prior to connecting the
Service Area Network to the rest of the Sprint PCS Network. Once the Service
Area Network is connected to the Sprint PCS Network, Manager must continue to
comply with the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the Sprint PCS Technical Program Requirements adopted for Manager will be
the same Sprint PCS Technical Program Requirements applied by Sprint PCS to the
Sprint PCS Network.
7.2 Establishment of Sprint PCS Technical Program Requirements. Sprint PCS
has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements,
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attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS Technical Program
-----------
Requirements to ensure a minimum, base-line level of quality for the Sprint PCS
Network. The Sprint PCS Technical Program Requirements include standards
relating to voice quality, interoperability, consistency (seamlessness) of
coverage, RF design parameters, system design, capacity, and call blocking
ratio. Sprint PCS has selected code division multiple access as the initial air
interface technology for the Sprint PCS Network (subject to change in accordance
with Section 9.1).
7.3 Handoff to Adjacent Networks. If technically feasible and commercially
reasonable, Manager will operate the Service Area Network in a manner that
permits a seamless handoff of a call initiated on the Service Area Network to
any adjacent PCS network that is part of the Sprint PCS Network, as specified in
the Sprint PCS Technical Program Requirements. Sprint PCS agrees that the terms
and conditions for seamless handoffs adopted for the Service Area Network will
be the same as the terms Sprint PCS applies to the other parts of the Sprint PCS
Network for similar configurations of equipment.
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS
8.1 Compliance With Sprint PCS Customer Service Program Requirements.
Manager must comply with the Sprint PCS Customer Service Program Requirements in
providing the Sprint PCS Products and Services to any customer of Manager,
Sprint PCS or any Sprint PCS Related Party. Manager will be deemed to meet the
standards if:
(a) Manager operates the Service Area Network at a level equal to or
better than the lower of the Operational Level of Sprint PCS or the operational
level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services Agreement
responsibility to ensure the Service Area Network complies with the Sprint PCS
Customer Service Standards.
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit 8.1.
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9. SPRINT PCS PROGRAM REQUIREMENTS
9.1 Program Requirements Generally. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements. This
agreement also provides under Section 3.5.2 for the offering by Sprint PCS of a
voluntary resale product through a program, which
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program, if adopted, will be a Program Requirement under this agreement. Sprint
PCS may unilaterally amend from time to time in the manner described in Section
9.1 all Program Requirements mentioned in this agreement. The most current
version of the Program Requirements mentioned in the first sentence of this
Section 9.1 have been provided to Manager. Manager has reviewed the Program
Requirements and adopts them for application in the Service Area.
9.2 Amendments to Program Requirements. Sprint PCS may amend any of the
Program Requirements, subject to the following conditions:
(a) The applicable Program Requirements, as amended, will apply
equally to Manager, Sprint PCS and each Other Manager, except if Manager and
Sprint PCS agree otherwise or if Sprint PCS grants a waiver to Manager. Sprint
PCS may grant waivers to Other Managers without affecting Manager's obligation
to comply with the Program Requirements;
(b) Each amendment will be reasonably required to fulfill the
purposes set forth in Section 1.2 with respect to uniform and consistent
operations of the Sprint PCS Network and the presentation of Sprint PCS Products
and Services to customers in a uniform and consistent manner;
(c) Each amendment will otherwise be on terms and conditions that are
commercially reasonable with respect to the construction, operation and
management of the Sprint PCS Network. With respect to any amendment to the
Program Requirements, Sprint PCS will provide for reasonable transition periods
and, where appropriate, may provide for grandfathering provisions for existing
activities by Manager that were permitted under the applicable Program
Requirements before the amendment;
(d) Sprint PCS must give Manager reasonable, written notice of the
amendment, but in any event the notice will be given at least 30 days prior to
the effective date of the amendment; and
(e) Manager must implement any changes in the Program Requirements
within a commercially reasonable period of time unless otherwise consented to by
Sprint PCS. Sprint PCS will determine what constitutes a commercially reasonable
period of time taking into consideration relevant business factors, including
the strategic significance of the changes to the Sprint PCS Network, the
relationship of the changes to the yearly marketing cycle, and the financial
demands on and capacity generally of Other Managers. Notwithstanding the
preceding two sentences, Manager will not be required to implement any change in
the Service Area Network or the business of Manager required by an amendment to
a Program Requirement until Sprint PCS has implemented the required changes in
substantially all of that portion of the Sprint PCS Network that Sprint PCS
operates without the use of a manager or affiliate, unless the amendment to the
Program Requirement relates to an obligation regarding
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the Service Area Network mandated by law. When necessary for reasons related to
new technical standards, new equipment or strategic reasons, Sprint PCS can
require Manager to implement the changes in the Service Area Network or
Manager's business concurrently with Sprint PCS, in which case Sprint PCS will
reimburse Manager for its costs and expenses if Sprint PCS discontinues the
Program Requirement changes prior to implementation.
Sprint PCS may grant Manager appropriate waivers and variances from the
requirements of any Program Requirements. Sprint PCS has the right to adopt any
Program Requirements that implement any obligation regarding the Service Area
Network mandated by law.
Any costs and expenses incurred by Manager in connection with conforming to
any change to the Program Requirements during the term of this agreement are the
responsibility of Manager.
9.3 Manager's Right to Request Review of Changes. If Sprint PCS announces
a change to a Program Requirement that will:
(a) cause the Manager to spend an additional amount greater than 5%
of Manager's shareholder's equity or capital account plus Manager's long-term
debt (i.e., notes that mature more than one year from the date issued), as
reflected on Manager's books; or
(b) cause the long term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net present
value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the change.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the
change. If after the review and decision by the Vice President or the designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
still requires Manager to implement the change to the Program Requirement
following the Chief Officer's review, then upon Manager's failure to implement
the change an Event of Termination will be deemed to have occurred under Section
11.3.3, Manager will not have a right to cure such breach, and Sprint PCS may
exercise its rights and remedies under Section 11.6.
9.4 Sprint PCS' Right to Implement Changes. If Manager requests Sprint PCS
to reconsider a change to a Program Requirement as permitted under Section 9.3
and Sprint PCS decides it will not require Manager to make the change, Sprint
PCS may, but is not required to, implement the change at Sprint PCS' expense, in
which event Manager will be required to
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operate the Service Area Network, as changed, but Sprint PCS will be entitled to
any revenue derived from the change.
9.5 Rights of Inspection. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility operated
by or for Manager at any time, with reasonable advance notice to Manager if
possible, to inspect, monitor and test in a reasonable manner the Service Area
Network, including the facilities, equipment, books and records of Manager, to
ensure that Manager has complied or is in compliance with all covenants and
obligations of Manager under this agreement, including Manager's obligation to
conform to the Program Requirements. The inspection, monitoring and testing may
not disrupt the operations of the office or facility, nor impede Manager's
access to the Service Area Network.
9.6 Manager's Responsibility to Interface with Sprint PCS. Manager will
use platforms fully capable of interfacing with the Sprint PCS platforms in
operating the Service Area Network and in providing Sprint PCS Products and
Services. Manager will pay the expense of making its platforms fully capable of
interfacing with Sprint PCS, including paying for the following:
(i) connectivity;
(ii) any changes that Manager requests Sprint PCS to make to
Sprint PCS systems to interconnect with Manager's systems that Sprint PCS,
in its sole discretion, agrees to make;
(iii) equipment to run Manager's software;
(iv) license fees for Manager's software; and
(v) Manager's upgrades or changes to its platforms.
10. FEES
10.1 Fees and Payments.
10.1.1 Fee Based on Collected Revenues. Sprint PCS will pay to Manager
a weekly fee equal to 92% of Collected Revenues for the week for all obligations
of Manager under this Agreement. The fee will be due on Thursday of the week
following the week for which the fee is calculated.
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10.1.2 Payment of Universal Service Funds. Sprint PCS and Manager will
share any federal and state subsidy funds (e.g., payments by a state of
universal service fund subsidies to Sprint PCS or Manager), if any, received by
Sprint PCS or Manager for customers who reside in the portion of the Service
Area served by the Service Area Network. Manager is entitled to 92% of any
amount received by either party and Sprint PCS is entitled to 8% of such
amounts.
10.1.3 Inter Service Area Fees. Sprint PCS will pay to Manager monthly
a fee as set out in the Sprint PCS Roaming and Inter Service Area Program, for
each minute of use that a customer of Sprint PCS or one of the Other Managers
whose NPA-NXX is not assigned to the Service Area Network uses the Service Area
Network. Manager will pay to Sprint PCS a fee, as set out in the Sprint PCS
Roaming and Inter Service Area Program, for each minute of use that a customer
whose NPA-NXX is assigned to the Service Area Network uses a portion of the
Sprint PCS Network other than the Service Area Network. Manager acknowledges
that the manner in which the NPA-NXX is utilized could change, which will
require a modification in the manner in which the inter service area fees, if
any, will be calculated.
10.1.4 Interconnect Fees. Manager will pay to Sprint PCS (or to other
carriers as appropriate) monthly the interconnect fees, if any, as provided
under Section 1.4.
10.1.5 Outbound Roaming Fees. If not otherwise provided under any
Program Requirement:
(a) Sprint PCS will pay to Manager monthly the amount of Outbound
Roaming fees that Sprint PCS collects for the month from end users whose NPA-NXX
is assigned to the Service Area; and
(b) Manager will pay to Sprint PCS (or to a clearinghouse or other
carrier as appropriate) the direct cost of providing the capability for the
Outbound Roaming, including any amounts payable to the carrier that handled the
roaming call and the clearinghouse operator.
10.1.6 Reimbursements. Manager will pay to or reimburse Sprint PCS for
any amounts that Sprint PCS is required to pay to a third party (e.g., a
telecommunications carrier) to the extent Sprint PCS already paid such amount to
Manager under this Section 10.
10.2 Monthly True Up. Manager will report to Sprint PCS monthly the amount
of Collected Revenues received directly by the Manager (e.g., customer mails
payment to the business address of Manager rather than to the lockbox or a
customer pays a direct sales force representative in cash). Sprint PCS will on a
monthly basis true up the fees and payments due under Section 10.1 against the
actual payments made by Sprint PCS to Manager. Sprint PCS will provide to
Manager a true up report each month showing the true up and the net amount
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due from one party to the other, if any. If the weekly payments made to Manager
exceed the actual fees and payments due to Manager, then Manager will remit the
amount of the overpayment to Sprint PCS within 5 Business Days after receiving
the true up report from Sprint PCS. If the weekly payments made to Manager are
less than the actual fees and payments due to Manager, then Sprint PCS will
remit the shortfall to Manager within 5 Business Days after sending the true up
report to Manager.
If a party disputes any amount on the true up report, the disputing party
must give the other party written notice of the disputed amount and the reason
for the dispute within 90 days after it receives the true up report. The dispute
will be resolved through the dispute resolution process in Section 14. The
parties must continue to pay to the other party any undisputed amounts owed
under this agreement during the dispute resolution process. The dispute of an
item does not stay or diminish a party's other rights and remedies under this
agreement.
10.3 Taxes. Manager will pay or reimburse Sprint PCS for any sales, use,
gross receipts or similar tax, administrative fee, telecommunications fee or
surcharge for taxes or fees levied by a governmental authority on the fees and
charges payable by Sprint PCS to Manager.
Manager will report all taxable property to the appropriate taxing
authority for ad valorem tax purposes. Manager will pay as and when due all
taxes, assessments, liens, encumbrances, levies, and other charges against the
real estate and personal property owned by Manager or used by Manager in
fulfilling its obligations under this agreement.
Manager is responsible for paying all sales, use, or similar taxes on the
purchase and use of its equipment, advertising, and other goods or services in
connection with this agreement.
10.4 Collected Revenues Definition. "Collected Revenues" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others, including the customers, whose NPA-NXX is the
same as that for the portion of the Service Area served by the Service Area
Network. In determining Collected Revenues the following principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from federal and
state subsidy funds; they are handled separately as noted in Section
10.1.2;
(ii) Collected Revenues do not include any amounts received for
the payment of Inbound Roaming charges and interconnect fees when calls are
carried on the Service Area Network; and
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(iii) Collected Revenues do not include any amounts received with
respect to any changes made by Sprint PCS under Section 9.4.
(b) The following items are not Collected Revenues; Sprint PCS is
obligated to remit the amounts received with respect to such items, if any, to
Manager, as follows:
(i) inter service area payments will be paid as provided under
Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as
provided under Section 10.1.5;
(iii) proceeds from the sale or lease of subscriber equipment and
accessories will be paid to Manager, subject to the equipment settlement
process in Section 4.1.2;
(iv) proceeds from sales not in the ordinary course of business
(e.g., sales of switches, cell sites, computers, vehicles or other fixed
assets);
(v) any amounts collected with respect to sales and use taxes,
gross receipts taxes, transfer taxes, and similar taxes, administrative
fees, telecommunications fees, and surcharges for taxes and fees that are
collected by a carrier for the benefit of a governmental authority, subject
to Manager's obligation under Section 10.3; and
(vi) Manager will be entitled to 100% of all revenues received
by Sprint PCS with respect to sales of Manager's Products and Services.
(c) The following items are not Collected Revenues; neither party is
obligated to remit any amounts respecting such items:
(i) reasonable adjustments of a customer's account (e.g., if
Sprint PCS or Manager reduces a customer's bill, then the amount of the
adjustment is not Collected Revenues); and
(ii) amount of bad debt and fraud associated with customers
whose NPA-NXX is assigned to the Service Area (e.g., if Sprint PCS or
Manager writes off a customer's bill as a bad debt, there are no Collected
Revenues on which a fee is due to Manager).
10.5 Late Payments. Any amount due under this Section 10 that is not paid
by one party to the other party in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 3rd day
after the due date until (and including) the date paid.
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10.6 Setoff Right If Failure To Pay Amounts Due. If Manager fails to pay
any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this
agreement, the Services Agreement, or any other agreement with Sprint PCS or a
Related Party of Sprint PCS, then Sprint PCS may setoff against its payments to
Manager under this Section 10, the following amounts:
(a) any amount that Manager owes to Sprint PCS or a Related Party of
Sprint PCS, including amounts due under the Services Agreement; and
(b) any amount that Sprint PCS reasonably estimates will be due to
Sprint PCS for the current month under the Services Agreement (e.g., if under
the Services Agreement customer care calls are billed monthly, Sprint PCS can
deduct from the weekly payment to Manager an amount Sprint PCS reasonably
estimates will be due Sprint PCS on account of such customer care calls under
the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts deducted
against the actual amounts due Sprint PCS and Sprint PCS' Related Parties. If
the estimated amounts deducted by Sprint PCS exceed the actual amounts due to
Sprint PCS and Sprint PCS' Related Parties, then Sprint PCS will remit the
excess to Manager with the next weekly payment. If the estimated amounts
deducted are less than the actual amounts due to Sprint PCS and its Related
Parties, then Sprint PCS may continue to setoff the payments to Manager against
the amounts due to Sprint PCS and Sprint PCS' Related Parties. This right of
setoff is in addition to any other right that Sprint PCS may have under this
agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
11.1 Initial Term. This agreement commences on the date of execution and,
unless terminated earlier in accordance with the provisions of this Section 11,
continues for a period of 20 years (the "Initial Term").
11.2 Renewal Terms. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods (for
a maximum of 50 years including the Initial Term), unless at least 2 years prior
to the commencement of any renewal period either party notifies the other party
in writing that it does not wish to renew this agreement.
11.2.1 Non-renewal Rights of Manager. If this agreement will
terminate because Sprint PCS gives Manager timely written notice of non-renewal
of this agreement, then Manager may exercise its rights under Section 11.2.1.1
or, if applicable, its rights under Section 11.2.1.2.
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11.2.1.1 Manager's Put Right. Manager may within 30 days after
the date Sprint PCS gives notice of non-renewal put to Sprint PCS all of
the Operating Assets. Sprint PCS will pay to Manager for the Operating
Assets an amount equal to 80% of the Entire Business Value. The closing of
the purchase of the Operating Assets will occur within 20 days after the
later of (a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value provided by the appraisers under
Section 11.7 or (b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8. Upon closing the purchase of the
Operating Assets this agreement will be deemed terminated. The exercise of
the put, the determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and the
business, and the process for closing the purchase will be subject to the
terms and conditions set forth in Section 11.8.
11.2.1.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in
the Service Area under the License on the date this agreement is
executed, then Manager may within 30 days after the date Sprint PCS
gives notice of non-renewal declare its intent to purchase the
Disaggregated License. Subject to receipt of FCC approval of the
necessary disaggregation and partition, Manager may purchase from
Sprint PCS the Disaggregated License for an amount equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the spectrum this
agreement will be deemed terminated. The closing of the purchase of
the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the purchase right, the determination
of the geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) After the closing of the purchase Manager will allow:
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(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 Non-renewal Rights of Sprint PCS. If this agreement will
terminate because of any of the following five (5) events, then Sprint PCS may
exercise its rights under Section 11.2.2.1 or, if applicable, its rights under
Section 11.2.2.2:
(a) Manager gives Sprint PCS timely written notice of
non-renewal of this agreement;
(b) both parties give timely written notices of
non-renewal;
(c) this agreement expires with neither party giving a
written notice of non-renewal;
(d) either party elects to terminate this agreement under
Section 11.3.4(a); or
(e) Manager elects to terminate this agreement under
Section 11.3.4(b).
11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an
amount equal to 80% of the Entire Business Value. The closing of the
purchase of the Operating Assets will occur within 20 days after the later
of (a) the receipt by Sprint PCS of the written notice of determination of
the Entire Business Value provided by the appraisers under Section 11.7 or
(b) the receipt of all materials required to be delivered to Sprint PCS
under Section 11.8. Upon closing the purchase of the Operating Assets this
agreement will be deemed terminated. The exercise of the purchase right,
the determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and the
business, and the process for closing the purchase will be subject to the
terms and conditions set forth in Section 11.8.
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11.2.2.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval, put
to Manager the Disaggregated License for a purchase price equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice of
Sprint PCS' exercise of its put, advise Sprint PCS of the amount of
spectrum (not to exceed 10 MHz) it wishes to purchase. After the
purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.3 Extended Term Awaiting FCC Approval. If Manager is buying the
Disaggregated License as permitted or required under Sections 11.2.1.2 or
11.2.2.2, then the Term of this agreement will extend beyond the original
expiration date until the closing of the purchase of the Disaggregated License.
The parties agree to exercise their respective commercially reasonable efforts
to obtain FCC approval of the transfer of the Disaggregated License.
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11.3 Events of Termination. An "Event of Termination" is deemed to occur
when a party gives written notice to the other party of the Event of Termination
as permitted below:
11.3.1 Termination of License.
(a) At the election of either party this agreement may be
terminated at the time the FCC revokes or fails to renew the License.
Unless Manager has the right to terminate this agreement under Section
11.3.1(b), neither party has any claim against the other party if the
FCC revokes or fails to renew the License, even if circumstances would
otherwise permit one party to terminate this agreement based on a
different Event of Termination, except that the parties will have the
right to pursue claims against each other as permitted under Section
11.4(b).
(b) If the FCC revokes or fails to renew the License
because of a breach of this agreement by Sprint PCS, then Manager has
the right to terminate this agreement under Section 11.3.3 and not
this Section 11.3.1.
11.3.2 Breach of Agreement: Payment of Money Terms. At the election of
the non-breaching party this agreement may be terminated upon the failure by the
breaching party to pay any amount due under this agreement or any other
agreement between the parties or their respective Related Parties, if the breach
is not cured within 30 days after the breaching party's receipt of written
notice of the nonpayment from the non-breaching party.
11.3.3 Breach of Agreement: Other Terms. At the election of the
non-breaching party this agreement may be terminated upon the material breach by
the breaching party of any material term contained in this agreement that does
not regard the payment of money, if the breach is not cured within 30 days
after the breaching party's receipt of written notice of the breach from the
non-breaching party, except the cure period will continue for a reasonable
period beyond the 30-day period, but will under no circumstances exceed 180 days
after the breaching party's receipt of written notice of the breach, if it is
unreasonable to cure the breach within the 30-day period, and the breaching
party takes action prior to the end of the 30-day period that is reasonably
likely to cure the breach and continues to diligently take action necessary to
cure the breach.
11.3.4 Regulatory Considerations.
(a) At the election of either party this agreement may be
terminated if this agreement violates any applicable law in any
material respect where such violation (i) is classified as a felony or
(ii) subjects either party to substantial monetary fines or other
substantial damages, except that before causing any termination the
parties must use best efforts to modify this agreement, as necessary
to cause this agreement (as modified) to comply with
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applicable law and to preserve to the extent possible the economic
arrangements set forth in this agreement.
(b) At the election of Manager this agreement may be terminated
if the regulatory action described under 11.3.4(a) is the result of a
deemed change of control of the License and the parties are unable to
agree upon a satisfactory resolution of the matter with the regulatory
authority without a complete termination of this agreement.
11.3.5 Termination of Trademark License Agreements. If either Trademark
License Agreement terminates under its terms, then:
(a) Manager may terminate this agreement if the Trademark
License Agreement terminated because of a breach of the Trademark
License Agreement by Sprint PCS or Sprint; and
(b) Sprint PCS may terminate this agreement if the Trademark
License Agreement terminated because of a breach of the Trademark
License Agreement by Manager.
11.3.6 Financing Considerations. At the election of Sprint PCS this
agreement may be terminated upon the failure of Manager to obtain the financing
described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit.
11.3.7 Bankruptcy of a Party. At the election of the non-bankrupt party,
this agreement may be terminated upon the occurrence of a Voluntary Bankruptcy
or an Involuntary Bankruptcy of the other party.
"Voluntary Bankruptcy" means:
(a) the inability of a party generally to pay its debts as the
debts become due, or an admission in writing by a party of its inability
to pay its debts generally or a general assignment by a party for the
benefit of creditors;
(b) the filing of any petition or answer by a party seeking to
adjudicate itself a bankrupt or insolvent, or seeking any liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief,
or composition for itself or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
seeking, consenting to, or acquiescing in the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for itself or for substantially all of its property; or
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(c) any action taken by a party to authorize any of the actions
set forth above.
"Involuntary Bankruptcy" means, without the consent or acquiescence of a
party:
(a) the entering of an order for relief or approving a petition
for relief or reorganization;
(b) any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(c) the filing of any petition against a party, which petition
is not dismissed within 90 days; or
(d) without the consent or acquiescence of a party, the
entering of an order appointing a trustee, custodian, receiver or
liquidator of party or of all or any substantial part of the property of
the party, which order is not dismissed within 90 days.
11.4 Effect of an Event of Termination.
(a) Upon the occurrence of an Event of Termination, the party with
the right terminate this agreement or to elect the remedy upon the Event of
Termination, as the case may be, may:
(i) in the case of an Event of Termination under Sections
11.3.1(a) or 11.3.7, give the other party written notice that the
agreement is terminated effective as of the date of the notice, in which
case neither party will have any other remedy or claim for damages
(except any claim the non-bankrupt party has against the bankrupt party
and any claims permitted under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than under
Section 11.3.1(a), give the other party written notice that the party is
exercising one of its rights, if any, under Section 11.5 or Section
11.6.
(b) If the party terminates this agreement under Section
11.4(a)(i) then all rights and obligations of each party under this agreement
will immediately cease, except that;
(i) any rights arising out ot a breach of any terms of this
agreement will survive any termination ot this agreement;
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(ii) the provisions described in Section 17.23 will survive any
termination of this agreement;
(iii) the payment obligations under Section 10 will survive any
termination of this agreement if, and to the extent, any costs or fees
have accrued or are otherwise due and owing as of the date of
termination of this agreement from Manager to Sprint PCS or any Sprint
PCS Related Party or from Sprint PCS to Manager or any Manager Related
Party;
(iv) either party may terminate this agreement in accordance
with the terms of this agreement without any liability for any loss or
damage arising out of or related to such termination, including any loss
or damage arising out of the exercise by Sprint PCS of its rights under
Section 11.6.3;
(v) Manager will use all commercially reasonable efforts to
cease immediately all of their respective efforts to market, sell,
promote or distribute the Sprint PCS Products and Services;
(vi) Sprint PCS has the option to buy from Manager any new
unsold subscriber equipment and accessories, at the prices charged to
Manager;
(vii) the parties will immediately stop making any statements
or taking any action that might cause third parties to infer that any
business relationship continues to exist between the parties, and where
necessary or advisable, the parties will inform third parties that the
parties no longer have a business relationship; and
(viii) if subscriber equipment and accessories are in transit
when this agreement is terminated, Sprint PCS may, but does not have the
obligation to, cause the freight carrier to not deliver the subscriber equipment
and accessories to Manager but rather to deliver the subscriber equipment and
accessories to Sprint PCS.
(c) If the party exercises its rights under Section 11.4(a)(ii), this
agreement will continue in full force and effect until otherwise terminated.
(d) If this agreement terminates for any reason other than Manager's
purchase of the Disaggregated License, Manager will not, for 3 years after the
date of termination compile, create, or use for the purpose of selling
merchandise or services similar to any Sprint PCS Products and Services, or
sell, transfer or otherwise convey to a third party, a list of customers who
purchased, leased or used any Sprint PCS Products and Services. Manager may use
such a list for its own internal analysis of its business practices and
operations. If this agreement terminates because of Manager's purchase of the
Disaggregated License, then Sprint PCS will transfer to Manager the Sprint PCS
customers with a MIN
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assigned to the Service Area covered by the Disaggregated License, but Sprint
PCS retains the customers of a national account and nay resellers who have
entered into a resale agreement with Sprint PCS. Manager agrees not to solicit,
directly or indirectly, any customers of Sprint PCS not transferred to Manager
under this Section 11.4(d) for 2 years after the termination of this agreement,
except that Manager's advertising through mass media will not be considered a
solicitation of Sprint PCS customers.
11.5 Manager's Event of Termination Rights and Remedies. In addition to any
other right or remedy that Manager may have under this agreement, the parties
agree that Manager will have the rights and remedies set forth in this Section
11.5 and that such rights and remedies will survive the termination of this
agreement. If Manager has a right to terminate this agreement as the result of
the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3, 11.3.5
or 11.3.7 (if Manager is the non-bankrupt party), then Manager has the right to
elect one of the following three (3) remedies, except Manager cannot elect its
remedies under Sections 11.5.1 or 11.5.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11.3.3.
11.5.1 Manager's Put Right. Manager may put to Sprint PCS within 30
days after the Event of Termination all of the Operating Assets. Sprint PCS will
pay to Manager an amount equal to 80% of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers under
Section 11.7; or
(b) the receipt of all materials required to be delivered to
Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the put, the determination of the Operating
Assets, the representations and warranties made by the Manager with respect to
the Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.5.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz of more of PCS spectrum in the
Service Area under the License on the date this agreement is executed,
then Manager may, subject to receipt of FCC approval, purchase from
Sprint PCS the Disaggregated License for the greater of (1) the original
cost of the License to Sprint PCS (pro rated on a pops and spectrum
basis) plus the microwave
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relocation costs paid by Sprint PCS or (2) 9% (10% minus a 10% penalty)
of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the written
notice of determination of the Entire Business Value by the
appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11.8.
(c) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Product and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 Manager's Action for Damages or Other Relief. Manager, in
accordance with the dispute resolution process in Section 14, may seek damages
or other appropriate relief.
11.6 Sprint PCS' Event of Termination Rights and Remedies. In addition to
any other right or remedy that Sprint PCS may have under this agreement, the
parties agree that Sprint PCS will have the rights and remedies set forth in
this Section 11.6 and that such rights and remedies will survive the termination
of this agreement. If Sprint PCS has a right to terminate this agreement as the
result of the occurrence of an Event of Termination under Sections 11.3.2,
11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if Sprint PCS is the non-bankrupt party), then
Sprint PCS has the right to elect one of the following four (4) remedies, except
that (i) if Sprint PCS elects the remedies under Sections 11.6.1, 11.6.2 or
11.6.4, Sprint PCS may pursue its rights under Section 11.6.3 concurrently with
its pursuit of one of the other three
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remedies, (ii) Sprint PCS cannot elect its remedies under Sections 11.6.1 or
11.6.2 during the first 2 years of the Initial Term with respect to an Event of
Termination under Section 11.3.3 (unless the Event of Termination is caused by a
breach related to the Build-out Plan or the build-out of the Service Area
Network), and (iii) Sprint PCS cannot elect its remedy under Section 11.6.2
during the first 2 years of the Initial Term with respect to an Event of
Termination under Section 11.3.6.
11.6.1 Sprint PCS's Purchase Right. Sprint PCS may purchase from Manager
all of the Operating Assets. Sprint PCS will pay to Manager an amount equal to
72% (80% minus a 10% penalty) of the Entire Business Value. The closing of the
purchase of the Operating Assets will occur within 20 days after the later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraiser pursuant to
Section 11.7; or
(b) the receipt of all materials required to be delivered to
Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.6.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval, put to
Manager the Disaggregated License for a purchase price equal to the
greater of (1) the original cost of the License to Sprint PCS (pro rated
on a pops and spectrum basis) plus the microwave relocation costs paid
by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
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(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice of
Sprint PCS' exercise of its put, advise Sprint PCS of the amount of
spectrum (not to exceed 10 MHz) it wishes to purchase. After the closing
of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 Sprint PCS' Right to Cause A Cure.
(a) Sprint PCS' Right. Sprint PCS may, but is not obligated to,
take such action as it deems necessary to cure Manager's breach of this
agreement, including assuming operational responsibility for the Service
Area Network to complete construction, continue operation, complete any
necessary repairs, implement changes necessary to comply with the
Program Requirements and terms of this agreement, or take such other
steps as are appropriate under the circumstances, or Sprint PCS may
designate a third party or parties to do the same, to assure
uninterrupted availability and deliverability of Sprint PCS Products and
Services in the Service Area, or to complete the build-out of the
Service Area Network in accordance with the terms of this agreement. In
the event that Sprint PCS elects to exercise its right under this
Section 11.6.3, Sprint PCS will give Manager written notice of such
election. Upon giving such notice:
(1) Manager will collect and make available at a
convenient, central location at its principal place of
business, all documents, books, manuals, reports and records
related to the Build-out Plan and required to operate and
maintain the Service Area Network; and
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(2) Sprint PCS, its employees, contractors and
designated third parties will have the unrestricted right to
enter the facilities and offices of Manager for the purpose of
curing the breach and, if Sprint PCS deems necessary, operate
the Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the extent requested
by Sprint PCS to enable Sprint PCS to exercise its rights under this Section
11.6.3.
(b) Liability. Sprint PCS' exercise of its rights under this Section
11.6.3 will not be deemed an assumption by Sprint PCS of any liability
attributable to Manager or any other party, except that, without limiting the
provisions of Section 13, during the period that Sprint PCS is curing a breach
under this agreement or operating any portion of the Service Area Network
pursuant to this Section 11.6.3, Sprint PCS will indemnify and defend Manager
and its directors, partners, officers, employees and agents from and against,
and reimburse and pay for, all claims, demands, damages, losses, judgements,
awards, liabilities, costs and expenses (including reasonable attorneys' fees,
court costs and other expenses of litigation), whether or not arising out of
third party claims, in connection with any suit, claim, action or other legal
proceeding relating to the bodily injury, sickness or death of persons or the
damage to or destruction of property, real or personal, resulting from or
arising out of Sprint PCS' negligence or willful misconduct in curing the breach
or in the operation of the Service Area Network. Sprint PCS' obligation under
this Section 11.6.39b) will not apply to the extent of any claims, demands,
damages, losses, judgements, awards, liabilities, costs and expenses resulting
from the negligence or willful misconduct of Manager or arising from any
contractual obligation of Manager.
(c) Costs and Payments. During the period that Sprint PCS is curing a
breach or operating the Service Area Network under this Section 11.6.3, Sprint
PCS and Manager will continue to make any and all payments due to the other
party and to third parties under this agreement, the Services Agreement and any
other agreements to which such party is bound, except that Sprint PCS may deduct
from its payments to Manager all reasonable costs and expenses incurred by
Sprint PCS in connection with the exercise of its right under this Section
11.6.3. Sprint PCS' operation of the Service Area Network pursuant to this
Section 11.6.3 is not a substitution for Manager's performance of its
obligations under this agreement and does not relieve Manager of its other
obligations under this agreement.
(d) Length of Right. Sprint PCS may continue to operate the Service
Area Network in accordance with Section 11.6.3 until (i) Sprint PCS
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cures all breaches by Manager under this agreement; (ii) Manager cures
all breaches and demonstrates to Sprint PCS' satisfaction that is
financially and operationally willing, ready and able to perform in
accordance with this agreement and resumes such performance; (iii)
Sprint PCS consummates the purchase of the Operating Assets under
Section 11.6.1 or the sale of the Disaggregated License under Section
11.6.2; or (iv) Sprint PCS terminates this agreement.
(e) Not Under Services Agreement. The exercise by Sprint PCS of
its right under this Section 11.6.3 does not represent services rendered
under the Services Agreement, and therefore it does not allow Manager to
be deemed in compliance with the Program Requirements under Section
7.1(a)(ii), 8.1(b).
11.6.4 Sprint PCS' Action for Damages or Other Relief. Sprint PCS, in
accordance with the dispute resolution process in Section 14, may seek damages
or other appropriate relief.
11.7 Determination of Entire Business Value.
11.7.1 Appointment of Appraisers. Sprint PCS and Manager must each
designate an independent appraiser within 30 days after giving the Purchase
Notice under Exhibit 11.8. Sprint PCS and Manager will direct the two appraisers
to jointly select a third appraiser within 15 days after the day the last of
them is appointed. Each appraiser must be an expert in the valuation of wireless
telecommunications business. Sprint PCS and Manager must direct the three
appraisers to each determine, within 45 days after the appointment of the last
appraiser, the Entire Business Value. Sprint PCS and Manager will each bear the
costs of the appraiser appointed by it, and they will share equally the costs of
the third appraiser.
11.7.2 Manager's Operating Assets. The following assets are included in
the Operating Assets (as defined in the Schedule of Definitions):
(a) network assets, including all personal property, real
property interests in cell sites and switch sites, leasehold interests,
collocation agreements, easements, and rights-of-way;
(b) all of the real, personal, tangible and intangible property
and contract rights that Manager owns and uses in conducting the
business of providing the Sprint PCS Products and Services, including
the goodwill resulting from Manager's customer base;
(c) sale and distribution assets primarily dedicated (i.e., at
least 80% of their revenue is derived from the sale of Sprint PCS
Products and
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Services)to the sale by Manager of Sprint PCS Products and Services. For
example, a retail store that derives at least 80% of its revenue from
the sale of Sprint PCS Products and Services is an Operating Asset. A
store that derives 65% of its revenue from Sprint PCS Products and
Services is not an Operating Asset;
(d) customers, if any, that use both the other products and
services approved under Section 3.2 and the Sprint PCS Products and
Services;
(e) handset inventory;
(f) books and records of the wireless business, including all
engineering drawings and designs and financial records; and
(g) all contracts used by Manager in operating the wireless
business including T1 service agreements, service contracts,
interconnection agreements, distribution agreements, software license
agreements, equipment maintenance agreements, sales agency agreements
and contracts with all equipment suppliers.
11.7.3 Entire Business Value. Utilizing the valuation principles set
forth below and in Section 11.7.4, "Entire Business Value" means the fair market
value of Manager's wireless business in the Service Area, valued on a going
concern basis.
(a) The fair market value is based on the price a willing buyer
would pay a willing seller for the entire on-going business.
(b) The appraisers will use the then-current customary means
of valuing a wireless telecommunications business.
(c) The business is conducted under the Brands and existing
agreements between the parties and their respective Related Parties.
(d) Manager owns the Disaggregated License (in the case where
Manager will be buying the Disaggregated License under Sections
11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2) or Manager owns the spectrum and
the frequencies actually used by Manager under this agreement (in the
case where Sprint PCS will be buying the Operating Assets under Sections
11.2.1, 11.2.2.1, 11.5.1 or 11.6.1).
(e) The valuation will not include any value for the business
represented by Manager's Products and Services or any business not
directly related to Sprint PCS Products and Services.
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11.7.4 Calculation of Entire Business Value. The Entire Business Value
to be used to determine the purchase price of the Operating Assets or the
Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by the
appraisers is within 10% of the lowest fair market value, then the
Entire Business Value used to determine the purchase price under this
agreement will be the arithmetic means of the three appraised fair
market values.
(b) If two of the fair market values determined by the
appraisers are within 10% of one another, and the third value is not
within 10% of the other fair market values, then the Entire Business
Value used to determine the purchase price under this agreement will be
the arithmetic mean of the two more closely aligned fair market values.
(c) If none of the fair market values is within 10% of the
other two fair market values, then the Entire Business Value used to
determine the purchase price under this agreement will be the middle
value of the three fair market values.
11.8 Closing Terms and Conditions. The closing terms and conditions for
the transactions contemplated in this Section 11 are attached as Exhibit 11.8.
11.9 Contemporaneous and Identical Application. The parties agree that
any action regarding renewal or non-renewal and any Event of Termination will
occur contemporaneously and identically with respect to all Licenses. For
example, if Manager exercises its purchase right under Section 11.5.2, it must
exercise such right with respect to all of the Licenses under this agreement.
The Term of this agreement will be the same for all Licenses; Manager will not
be permitted to operate a portion of the Service Area Network with fewer than
all of the Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 Books and Records.
12.1.1 General. Each party must keep and maintain books and
records to support and document any fees, costs, expenses or other charges due
in connection with the provisions set forth in this agreement. The records must
be retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
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12.1.2 Audit. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for purposes of auditing the amount of fees, costs, expenses or other
charges payable in connection with the Service Area with respect to the period
audited. The auditing party will conduct the audit no more frequently than
annually. If the audit shows that Sprint PCS was underpaid then, unless the
amount is contested, Manager will pay to Sprint PCS the amount of the
underpayment within 10 Business Days after Sprint PCS gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint PCS was overpaid then, unless the amount is contested, Sprint PCS will
pay to Manager the amount of the overpayment within 10 Business Days after
Sprint PCS determines Sprint PCS was overpaid. The auditing party will pay all
costs and expenses related to the audit unless the amount owed to the audited
party is reduced by more than 10% or the amount owed by the audited party is
increased by more than 10%, in which case the costs and expenses related to the
audit will be paid by the audited party.
Notwithstanding the above provisions of this Section 12.1.2, rather than
allow Manager's independent auditors access to Sprint PCS' records, Sprint PCS
may provide a report issued in conformity with Statement of Auditing Standard
No. 70 "Reports on the Processing of Transactions by Service Organizations"
("Type II Report" or "Manager Management Report"). Such report will be prepared
by independent auditors and will provide an opinion on the controls placed in
operation and tests of operating effectiveness of those controls in effect at
Sprint PCS over the Manager Management Processes. "Manager Management Processes"
include those services generally provided within the Management Agreement,
primarily billing and collection of Collected Revenues.
12.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree
on an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report
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of its determination in reasonable detail and will deliver a copy of the report
to the parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction. The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
If the amount owed by a contesting party is reduced by more than 10% or
the amount owed to a contesting party is increased by more than 10% then the
non-contesting party will pay the costs and expenses of the Arbiter, otherwise
the contesting party will pay the costs and expenses of the Arbiter.
12.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the Term and 3 years after the date of termination of this
agreement, keep confidential, not disclose to others and use only for the
purposes authorized in this agreement, all Confidential Information disclosed by
the other party to the party in connection with this agreement, except that the
foregoing obligation will not apply to the extent that any Confidential
Information:
(i) is or becomes, after disclosure to a party, publicly known
by any means other than through unauthorized acts or omissions of the
party or its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent
to the effective date of this agreement, is lawfully received from a
third party having rights to publicly disseminate the Confidential
Information without any restriction and without notice to the recipient
of any restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly,
access to or knowledge of the Confidential Information;
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(iv) is disclosed to a third party consistent with the terms
of the written approval of the party originally disclosing the information;
(v) is required by the receiving party to be produced under
order of a court of competent jurisdiction or other similar requirements of
a governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 12.2.
(c) Notwithstanding the foregoing, Manager and Sprint PCS authorize
each other to disclose to the public in regulatory filings the other's identity
and the Service Area to be developed and managed by Manager, and Manager
authorizes Sprint PCS to mention Manager and the Service Area in public
relations announcements.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as is
reasonably necessary to enable the disclosing party to take action to, and use
the party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(e) Manager will not except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different license area, Manager may not use any
of the Confidential Information received under or in connection with this
agreement in operating the other wireless business.
12.3 INSURANCE
12.3.1 General. During the term of this agreement, Manager must obtain
and maintain, and will cause any subcontractors to obtain and maintain, with
financially reputable insurers licensed to do business in all jurisdictions
where any work is performed under this agreement and who are reasonably
acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance
Requirements. The Sprint PCS Insurance Requirements as of the date of this
agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS
Insurance
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Requirements as is commercially reasonable from time to time by delivering to
Manager a new Exhibit 12.3.
12.3.2 Waiver of Subrogation. Manager must look first to any insurance in
its favor before making any claim against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives for
recovery resulting from injury to any person (including Manager's or its
subcontractor's employees) or damage to any property arising from any cause,
regardless of negligence. Manager does hereby release and waive to the fullest
extent permitted by law, and will cause its respective insurers to waive, all
rights of recovery by subrogation against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives.
12.3.3. Certificates of Insurance. Manager and all of its subcontractors, if
any, must, as a material condition of this agreement and prior to the
commencement of any work under and any renewal of this agreement, deliver to
Sprint PCS a certificate of insurance, satisfactory in form and content to
Sprint PCS, evidencing that the above insurance, including waiver of
subrogation, is in force and will not be canceled or materially altered without
first giving Sprint PCS at least 30 days prior written notice and that all
coverages are primary to any insurance carried by Sprint PCS, its directors,
officers, employees, agents or representatives.
Nothing contained in this Section 12.3.3 will limit Manager's liability to
Sprint PCS, its directors, officers, employees, agents or representatives to the
limits of insurance certified or carried.
13. INDEMNIFICATION
13.1 Indemnification by Sprint PCS. Sprint PCS agrees to indemnify, defend
and hold harmless Manager, its directors, managers, officers, employees, agents
and representatives from and against any and all claims, demands, causes of
action, losses, actions, damages, liability and expense, including costs and
reasonable attorneys' fees, against Manager, its directors, managers, officers,
employees, agents and representatives arising from or relating to the violation
by Sprint PCS of any law, regulation or ordinance applicable to Sprint PCS or by
Sprint PCS' breach of any representation, warranty or covenant contained in
this agreement or any other agreement between Sprint PCS or Sprint PCS' Related
Parties and Manager or Manager's Related Parties except where and to the extent
the claim, demand, cause of action, loss, action, damage, liability and/or
expense results solely from the negligence or willful misconduct of Manager.
13.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint PCS and Sprint, and their respective directors, managers,
officers, employees, agents and representatives from and against any and all
claims, demands, causes of action, losses, actions, damages, liability and
expense, including costs and reasonable attorneys' fees, against Sprint PCS or
Sprint, and their respective directors, managers, officers, employees,
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agents and representatives arising from or relating to Manager's violation of
any law, regulation or ordinance applicable to Manager, Manager's breach of any
representation, warranty or covenant contained in this agreement or any other
agreement between Manager or Manager's Related Parties and Sprint PCS and Sprint
PCS' Related Parties, Manager's ownership of the Operating Assets or the
operation of the Service Area Network, or the actions or failure to act of any
of Manager's contractors, subcontractors, agents, directors, managers, officers,
employees and representatives of any of them in the performance of any work
under this agreement, except where and to the extent the claim, demand, cause of
action, loss, action, damage, liability and expense results solely from the
negligence or willful misconduct of Sprint PCS or Sprint, as the case may be.
13.3 Procedure
13.3.1 Notice. Any party being indemnified ("Indemnitee") will give the
party making the indemnification ("Indemnitor") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(a) any claim or demand is made or liability is asserted
against Indemnitee; or
(b) any suit, action, or administrative or legal proceeding is
instituted or commenced in which Indemnitee is involved or is named as a
defendant either individually or with others.
Failure to give notice as described in this Section 13.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to Indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
13.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit,
action or proceeding, the Indemnitor will have the right to select counsel of
its choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute for defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
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13.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section
13.3.3. Indemnitee is not permitted to settle the dispute or claim without the
prior written approval of Indemnitor, which approval will not be unreasonably
withheld.
13.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation
on the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
14. DISPUTE RESOLUTION
14.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or
accounting officers to be designed by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 14.1.
14.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, either party may continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement. If, and only if, this agreement does not
provide a remedy (as in the case of Sections 3.4 and 4.5, where the parties are
supposed to reach an agreement), then either party may give the other party
written notice that it wishes to resolve the dispute or claim arising out of the
parties' inability to agree under such Sections of this agreement by using the
arbitration procedure set
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forth in this Section 14.2. Such arbitration will occur in Kansas City,
Missouri, unless the parties otherwise mutually agree, with the precise location
being as agreed upon by the parties or, absent such agreement, at a location in
Kansas City, Missouri selected by Sprint PCS. Such arbitration will be conducted
pursuant to the procedures prescribed by the Missouri Uniform Arbitration Act,
as amended from time to time, or, if none, pursuant to the rules then in effect
of the American Arbitration Association (or at any other place and by any other
form of arbitration mutually acceptable to the parties). Any award rendered in
such arbitration will be confidential and will be final and conclusive upon the
parties, and a judgment on the award may be entered in any court of the forum,
state or federal, having jurisdiction. The expenses of the arbitration will be
borne equally by the parties to the arbitration, except that each party must pay
for and bear the cost of its own experts, evidence, and attorneys' fees.
The parties must each, within 30 days after either party gives notice to
the other party of the notifying party's desire to resolve a dispute or claim
under the arbitration procedure in this Section 14.2, designate an independent
arbitrator, who is knowledgeable with regard to the wireless telecommunications
industry, to participate in the arbitration hearing. The two arbitrators thus
selected will select a third independent arbitrator, who is knowledgeable with
regard to the wireless telecommunications industry, who will act as chairperson
of the board of arbitration. If, within 15 days after the day the last of the
two named arbitrators is appointed, the two named arbitrators fail to agree upon
the third, then at the request of either party, the third arbitrator shall be
selected pursuant to the rules then in effect of the American Arbitration
Association. The three independent arbitrators will comprise the board of
arbitration, which will preside over the arbitration hearing and will render all
decisions by majority vote. If either party refuses or neglects to appoint an
independent arbitrator within such 30-day period, the independent arbitrator who
has been appointed as of the 31st day after the notifying party's notice will be
the sole independent arbitrator and will solely preside over the arbitration
hearing. The arbitration hearing will commence no sooner than 30 days after the
date the last arbitrator is appointed and no later than 60 days after such date.
The arbitration hearing will be conducted during normal working hours on
Business Days without interruption or adjournment of more than 2 Business Days
at any one time or 6 Business Days in the aggregate.
The arbitrators will deliver their decision to the parties in writing
within 10 days after the conclusion of the arbitration hearing. The arbitration
award will be accompanied by findings of fact and a statement of reasons for the
decision. There will be no appeal from the written decision, except as permitted
by applicable law. The arbitration proceedings, the arbitrators' decision, the
arbitration award, and any other aspect, matter, or issue of or relating to the
arbitration are confidential, and disclosure of such confidential information is
an actionable breach of this agreement.
Notwithstanding any other provision of this agreement, arbitration will not
be required of any issue for which injunctive relief is properly sought by
either party.
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14.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under Section 14.1 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
14.4 Tolling of Cure Periods. Any cure period under Section 11.3 that is
less than 90 days will be tolled during the pendency of the dispute resolution
process. Any cure period under Section 11.3 that is 90 days or longer will not
be tolled during the pendency of the dispute resolution process.
15. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
15.1 Due Incorporation or Formation; Authorization of Agreements. The
party is either a corporation, limited liability company, or limited partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
15.2 Valid and Binding Obligation. This agreement constitutes the valid
and binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
15.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ; injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, (b) any term, condition or provision of the articles
of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
15.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
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effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
15. REGULATORY COMPLIANCE
16.1 Regulatory Compliance. Manager will construct, operate, and manage
the Service Area Network in compliance with applicable federal, state, and local
laws and regulations, including Siting Regulations. Nothing in this Section 16.1
will limit Manager's obligations under Section 2.2 and the remainder of this
Section 16. Manager acknowledges that failure to comply with applicable federal,
state, and local laws and regulations in its construction, operation, and
management of the Service Area Network may subject the parties and the License
to legal and administrative agency actions, including forfeiture penalties and
actions that affect the License, such as license suspension and revocation, and
accordingly, Manager agrees that it will cooperate with Sprint PCS to maintain
the License in full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those Siting
Regulations practices and procedures as may be requested by Sprint PCS. Every
six months, and at the request of Sprint PCS, Manager will provide a written
certification from one of Manager's chief officers that Manager's Service Area
Network complies with Siting Regulations. Manager's first certification of
compliance with Siting Regulations will be provided to Sprint PCS six months
after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service
Area Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear
the cost of Siting Regulations compliance audits and physical inspections
requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records. Manager
will make those records available upon request to Sprint PCS for production,
inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will
bear the cost of production, inspection, and copying.
16.2 FCC Compliance. The parties agree to comply with all applicable FCC
rules governing the License or the Service Area Network and specifically agree
as follows:
(a) The party billing a customer will advise the customer that
service is provided over spectrum licensed to Sprint PCS. Neither
Manager nor Sprint PCS will
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represent itself as the legal representative of the other before the FCC or any
other third party, but will cooperate with each other with respect to FCC
matters concerning the License or the Service Area Network.
(b) Sprint PCS will use commercially reasonable efforts to
maintain the License in accordance with the terms of the License and all
applicable laws, policies and regulations and to comply in all material respects
with all other legal requirements applicable to the operation of the Sprint PCS
Network and its business. Sprint PCS has sole responsibility, except as
specifically provided otherwise in Section 2.2, for keeping the License in full
force and effect and for preparing submissions to the FCC or any other
relevant federal, state or local authority of all reports, applications,
interconnection agreements, renewals, or other filings or documents. Manager
must cooperate and coordinate with Sprint PCS' actions to comply with regulatory
requirements, which cooperation and coordination must include, without
limitation, the provision to Sprint PCS of all information that Sprint PCS deems
necessary to comply with the regulatory requirements. Manager must refrain from
taking any action that could impede Sprint PCS from fulfilling its obligations
under the preceding sentence, and must not take any action that could cause
Sprint PCS to forfeit or cancel the License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and applicable
FCC rules. Nothing in this agreement is intended to diminish or restrict Sprint
PCS' obligations as an FCC Licensee and both parties desire that this agreement
and each party's obligations under this agreement be in compliance with the FCC
rules.
(d) Nothing in this agreement will preclude Sprint PCS from
permitting or facilitating resale of Sprint PCS Products and Services to the
extent required or elected under applicable FCC regulations. Manager will take
the actions necessary to facilitate Sprint PCS' compliance with FCC regulations.
To the extent permitted by applicable regulations, Sprint PCS will not authorize
a reseller that desires to sell services and products in only the Service Area
to resell Sprint PCS wholesale products and services, unless Manager agrees in
advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to
obtain FCC consent for the implementation, continuation or further effectuation
of any term or provision of this agreement, Sprint PCS will use all commercially
reasonable efforts diligently to prepare, file and prosecute before the FCC all
petitions, waivers, applications, amendments, rule-making comments and other
related documents necessary to secure and/or retain FCC approval of all aspects
of this agreement. Manager will use commercially reasonable efforts to provide
to Sprint PCS any information that Sprint PCS may request from Manager with
respect to any matter involving Sprint PCS, the FCC, the License, the Sprint PCS
Products and Services or any other products and services approved under Section
3.2. Each party will bear its own costs of preparation of the documents and
prosecution of the actions.
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(f) If the FCC determines that this agreement is inconsistent with the
terms and conditions of the License or is otherwise contrary to FCC policies,
rules and regulations, or if regulatory or legislative action subsequent to the
date of this agreement alters the permissibility of this agreement under the
FCC's rules or other applicable law, rules or regulations, then the parties must
use best efforts to modify this agreement as necessary to cause this agreement
(as modified) to comply with the FCC policies, rules, regulations and applicable
law and to preserve to the extent possible the economic arrangements set forth
in this agreement.
(g) Manager warrants and represents to Sprint PCS that Manager is and at
all times during the Term of this agreement will be in compliance with FCC rules
and regulations regarding limits on classes and amounts of spectrum that may be
owned by Manager. Manager agrees that in the event Manager is or at any time
becomes in violation of such rules and regulations, Manager will promptly take
all action necessary and appropriate (other than terminating this agreement)
to cure such violation and comply with such rules and regulations, including
without limitation disposing of its direct or indirect interests in cellular
licenses.
16.3 Marking and Lighting. Manager will conform to applicable FAA
standards when Siting Regulations require marking and lighting of Manager's
Service Area Network cell sites. Manager will cooperate with Sprint PCS in
reporting lighting malfunctions as required by Siting Regulations.
16.4 Regulatory Notices. Manager will, within 2 Business Days after its
receipt, give Sprint PCS written notice of all oral and written communications
it receives from regulatory authorities (including but not limited to the FCC,
the FAA, state public service commissions, environmental authorities, and
historic preservation authorities) and complaints respecting Manager's
construction, operation, and management of the Service Area Network that could
results in actions affecting the License as well as written notice of the
details respecting such communications and complaints, including a copy of any
written material received in connection with such communications and complaints.
Manager will cooperate with Sprint PCS in responding to such communications and
complaints received by Manager. Sprint PCS has the right to respond to all such
communications and complaints, with counsel and consultants of its own choice.
If Sprint PCS chooses to respond to such communications and complaints, Manager
will not respond to them without the consent of Sprint PCS, and Manager will pay
the costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs, and
all other reasonable costs and expenses incurred by Sprint PCS.
16.5 Regulatory Policy-Setting Proceedings. Manager will not intervene
in or otherwise participate in a rulemaking, investigation, inquiry, contested
case, or similar regulatory policy setting proceedings before a regulatory
authority concerning the License or
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construction, operation, and management of the Service Area Network and the
Spring PCS business operated using the Service Area Network.
17. GENERAL PROVISIONS
17.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed as described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
17.2 Construction. This agreement will be construed simply according to
its fair meaning and not strictly for or against either party.
17.3 Headings. The table of contents, section and other headings
contained in this agreement are for reference purposes only and are not intended
to describe, interpret, define, limit or expand the scope, extent or intent of
this agreement.
17.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
17.5 Counterpart Execution. This agreement will be executed by affixing
the parties' signatures to the Master Signature Page, which Master Signature
Page, and thus this agreement, may be executed in any number of counterparts
with the same effect as if both parties had signed the same document. All
counterparts will be construed together and will constitute one agreement.
17.6 Specific Performance. Each party agrees with the other party that
the party would be irreparably damaged if any of the provisions of this
agreement were not performed in accordance with their specific terms and that
monetary damages alone would not provide an adequate remedy. Accordingly, in
addition to any other remedy to which the non-breaching party may be entitled,
at law or in equity, the non-breaching party will be entitled to injunctive
relief to prevent breaches of this agreement and specifically to enforce the
terms and provisions of this agreement.
17.7 Entire Agreement; Amendments. The provisions of this agreement, the
Services Agreement and the Trademark License Agreements (including the exhibits
to those
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agreements) set forth the entire agreement and understanding between the parties
as to the subject matter of this agreement and supersede all prior agreements,
oral or written, and other communications between the parties relating to the
subject matter of this agreement. Except for Sprint PCS' right to amend the
Program Requirements in accordance with Section 9.2 and its right to
unilaterally modify and amend certain other provisions as expressly provided in
this agreement, this agreement may be modified or amended only by a written
amendment signed by persons or entities authorized to bind each party and, with
respect to the sections set forth for Sprint on the Master Signature Page, the
persons or entities authorized to bind Sprint.
17.8 Limitation on Rights of Others. Except as set forth on the Master
Signature Page for Sprint, nothing in this agreement, whether express or
implied, will be construed to give any person or entity other than the parties
any legal or equitable right, remedy or claim under or in respect of this
agreement.
17.9 Waivers.
17.9.1 Waivers--General. The observance of any return of this
agreement may be waived (whether generally or in a particular instance
and either retroactively or prospectively) by the party entitled to
enforce the term, but any waiver is effective only if in a writing
signed by the party against which the waiver is to be asserted. Except
as otherwise provided in this agreement, no failure or delay of either
party in exercising any power or right under this agreement will operate
as a waiver of the power or right, nor will any single or partial
exercise of any right or power preclude any other or further exercise of
the right or power or the exercise of any other right or power.
17.9.2 Waivers--Manager. Manager is not in breach of any
covenant in this agreement and no Event of Termination will have
occurred as a result of the occurrence of any event, if Manager had
delegated to Sprint Spectrum under the Services Agreement (or any
successor to that agreement) responsibility for taking any action
necessary to ensure compliance with the covenant or to prevent the
occurrence of the event.
17.9.3 Force Majeure. Neither Manager nor Spring PCS, as the
case may be, is in breach of any covenant in this agreement and no Event
of Termination will occur as a result of the failure of such party to
comply with such covenant, if such party's non-compliance with the
covenant results primarily from:
(i) any FCC or any other injunction issued by any
governmental authority impeding the party's ability to comply
with the covenant;
(ii) the failure of any governmental authority to grant
any consent, approval, waiver, or authorization or any delay on
the part of any governmental authority in granting any consent,
approval, waiver or authorization;
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(iii) the failure of any vendor to deliver in a timely manner
any equipment or services; or
(iv) any act of God, act of war or insurrection, riot, fire,
accident, explosion, labor unrest, strike, civil unrest, work stoppage,
condemnation or any similar cause or event not reasonably within the
control of such party.
17.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.11 Binding Effect. Except as otherwise provided in this agreement,
this agreement is binding upon and inures to the benefit of the parties and
their respective and permitted successors, transferees, and assigns, including
any permitted successor, transferee or assignee of the Service Area Network or
of the License. The parties intend that this agreement bind only the party
signing this agreement and that the agreement is not binding on the Related
Parties of a party unless the agreement expressly provides that Related Parties
are bound.
17.12 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
17.13 Severability. The parties intend every provision of this agreement
to be severable. If any provision of this agreement is held to be illegal,
invalid, or unenforceable for any reason, the parties intend that a court
enforce the provision to the maximum extent permissible so as to effect the
intent of the parties (including the enforcement of the remaining
provisions). If necessary to effect the intent of the parties, the parties will
negotiate in good faith to amend this agreement to replace the unenforceable
provision with an enforceable provision that reflects the original intent of the
parties.
17.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER
PARTY FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE
DAMAGES, OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE
CONDUCT OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH
DAMAGES OR LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM
OR ACTION AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO
INDEMNIFY ANOTHER PARTY TO THIS AGREEMENT.
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17.15 No Assignment; Exceptions.
17.15.1 General. Neither party will, directly or indirectly, assign
this agreement or any of the party's rights or obligations under this agreement
without the prior written consent of the other party, except as otherwise
specifically provided in this Section 17.15. Sprint PCS may deny its consent to
any assignment or transfer in its sole discretion except as otherwise provided
in this Section 17.15.
Any attempted assignment of this agreement in violation of this Section
17.15 will be void and of no effect.
A party may assign this agreement to a Related Party of the party, except
that Manager cannot assign this agreement to a Related Party that is a
significant competitor of Sprint, Sprint PCS or their respective Related Parties
in the telecommunications business. Except as provided in Section 17.15.5, an
assignment does not release the assignor from its obligations under this
agreement unless the other party to this agreement consents in writing in
advance to the assignment and expressly grants a release to the assignor.
Except as provided in Section 17.15.5, Sprint PCS must not assign this
agreement to any entity that does not also own the License covering the Service
Area directly or indirectly through a Related Party. Manager must not assign
this agreement to any entity (including a Related Party), unless such entity
assumes all rights and obligations under the Services Agreement, the Trademark
License Agreements and any related agreements.
17.15.2 Assignment Right of Manager to Financial Lender. If Manager
is no longer able to satisfy its financial obligations and other duties, then
Manager has the right to assign its obligations and rights under this agreement
to its Financial Lender, if:
(a) Manager or Financial Lender provides Sprint PCS at least 10 days
advance written notice of such assignment;
(b) Financial Lender cures or commits to cure any outstanding
material breach of this agreement by Manager prior to the end of any applicable
cure period. If Financial Lender fails to make a timely cure then Sprint PCS
may exercise its rights under Section 11;
(c) Financial Lender agrees to serve as an interim trustee for the
obligations and duties of Manager under this agreement for a period not to
exceed 180 days. During this interim period, Financial Lender must identify a
proposed successor to assume the obligations and rights of Manager under this
agreement;
(d) Financial Lender assumes all of Manager's rights and obligations
under the Services Agreement, the Trademark License Agreements and any related
agreements; and
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(e) Financial Lender provides to Sprint PCS advance written notice of
the proposed successor to Manager that Financial Lender has identified
("Successor Notice"). Sprint PCS may give to Financial Lender written notice of
Sprint PCS' decision whether to consent to such proposed successor within 30
days after Sprint PCS' receipt of the Successor Notice. Sprint PCS may not
unreasonably withhold such consent, except that Sprint PCS is not required to
consent to a proposed successor that:
(i) has, in the past, materially breached prior agreements with
Sprint PCS or its Related Parties;
(ii) is a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business;
(iii) does not meet Sprint PCS' reasonable credit criteria;
(iv) fails to execute an assignment of all relevant documents related
to this agreement including the Services Agreement and the Trademark License
Agreements; or
(v) refuses to assume the obligations of Manager under this
Agreement, the Services Agreement, the Trademark License Agreements and any
related agreements.
If Sprint PCS fails to provide a response to Financial Lender within 30
days after receiving the Successor Notice, then the proposed successor is deemed
rejected. Any Financial Lender disclosed on the Build-Out Plan on Exhibit 2.1 is
deemed acceptable to Sprint PCS.
17.15.3 Change of Control Rights. If there is a Change of Control of
Manager, then:
(a) Manager must provide to Sprint PCS advance written notice detailing
relevant and appropriate information about the new ownership interests effecting
the Change of Control of Manager.
(b) Sprint PCS must provide to Manager written notice of its decision
whether to consent to or reject the proposed Change of Control within 30 days
after its receipt of such notice. Sprint PCS may not unreasonably withhold such
consent, except that Sprint PCS is not required to consent to a Change of
Control in which:
(i) the final controlling entity or any of its Related Parties has
in the past materially breached prior agreements with Sprint PCS or its Related
Parties;
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(ii) the final controlling entity or any of its Related Parties
is a significant competitor of Sprint PCS or its Related Parties in the
telecommunications business;
(iii) the final controlling entity does not meet Sprint PCS'
reasonable credit criteria;
(iv) the final controlling entity fails to execute an assignment
of all relevant documents related to this agreement including the
Services Agreement and the Trademark License Agreements; or
(v) the final controlling entity or its Related Parties refuse
to assume the obligations of Manager under this agreement.
(c) In the event that Sprint PCS provides notice that it does not
consent to the Change of Control, Manager is entitled to either:
(i) contest such determination pursuant to the dispute
resolution procedure in Section 14; or
(ii) abandon the proposed Change of Control.
(d) Nothing in this agreement requires Sprint PCS' consent to:
(i) a public offering of Manager that does not result in a
Change of Control (i.e., a shift from one party being in control to no
party being in control is not a Change of Control); or
(ii) a recapitalization or restructuring of the ownership
interests of Manager that Manager determines is necessary to:
(A) facilitate the acquisition of commercial financing
and lending arrangements that will support Manager's operations
and efforts to fulfill its obligations under this agreement; and
(B) that does not constitute a Change of Control.
(e) "Change of Control" means a situation where in any one transaction
or series of related transactions occurring during any 365-day period, the
ultimate parent entity of the Manager changes. The ultimate parent entity is to
be determined using the Hart-Scott-Rodino Antitrust Improvements Act of 1976
rules. A Change of Control does not occur if:
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(i) a party changes the form of its organization without
materially changing their ultimate ownership (e.g., converting from a
limited partnership to a limited liability company); or
(ii) one of the owners of the party on the date of this
agreement or on the date of the closing of Manager's initial equity
offering for purposes of financing its obligations under this agreement
ultimately gains control over the party, unless such party is
significant competitor of Sprint PCS or Sprint PCS' Related Parties
in the telecommunications business.
17.15.4 Right of First Refusal. Notwithstanding any other provision in
this agreement, Manager grants Sprint PCS the right of first refusal described
below. If Manager determines it wishes to sell an Offered Interest, upon
receiving any Offer to purchase an Offered Interest, Manager agrees to promptly
deliver to Sprint PCS an Offer Notice. The Offer Notice is deemed to constitute
an offer to sell to Sprint PCS, on the terms set forth in the Offer, all but not
less than all of the Offered Interest. Sprint PCS will have a period of 60 days
from the date of the Offer Notice to notify Manager that it agrees to purchase
the Offered Interest on such terms. If Sprint PCS timely agrees in writing to
purchase the Offered Interest, the parties will proceed to consummate such
purchase not later than the 180th day after the date of the Offer Notice. If
Sprint PCS does not agree within the 60-day period to purchase the Offered
Interest, Manager will have the right, for a period of 120 days after such 60th
day, subject to the restrictions set forth in this Section 17, to sell to the
person or entity identified in the Offer Notice all of the Offered Interest on
terms and conditions no less favorable to Manager than those set forth in the
Offer. If Manager fails to sell the Offered Interest to such person or entity on
such terms and conditions within such 120-day period, Manager will again be
subject to the provisions of this Section 17.15.4 with respect to the Offered
Interest.
17.15.5 Transfer of Sprint PCS Network. Sprint PCS may sell, transfer or
assign the Sprint PCS Network or any of the Licenses, including its rights and
obligations under this agreement, the Services Agreement and any related
agreements, to a third party without Manager's consent so long as the third
party assumes the rights and obligations under this agreement and the Services
Agreement. Manager agrees that Sprint PCS and Sprint PCS' Related Parties will
be released from any and all obligations under and with respect to any and all
such agreements upon such sale, transfer or assignment in accordance with this
Section 17.15.5, without the need for Manager to execute any document to effect
such release.
17.16 Provision of Services by Sprint Spectrum. As described in the
Recitals, the party or parties to this agreement that own the Licenses are
referred to in this agreement as "Sprint PCS." Sprint Spectrum will provide most
or all of the services required to be provided by Sprint PCS under this
agreement on behalf of Sprint PCS, other than the services to be rendered by
Manager. For example, Sprint Spectrum is the party to the contracts relating to
the national distribution network, the roaming and long distance services, and
the
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procurement arrangements. Accordingly, Sprint PCS and Manager will deal with
Sprint Spectrum to provide many of the attributes of the Sprint PCS Network.
17.17 Number Portability. Manager understands that the manner in which
customers are assigned to the Service Area Network could change as telephone
numbers become portable without any relation to the service area in which they
are initially activated. To the extent the relationship between NPA-NXX and the
Service Area changes, Sprint PCS will develop an alternative system to attempt
to assign customers who primarily live and work in the Service Area to the
Service Area. The terms of this agreement will be deemed to be amended to
reflect the new system that Sprint PCS develops.
17.18 Disclaimer of Agency. Neither party by this agreement makes the
other party a legal representative or agent of the party, nor does either party
have the right to obligate the other party in any manner, except if the other
party expressly permits the obligation by the party or except for provisions in
this agreement expressly authorizing one party to obligate the other.
17.19 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither
party to this agreement has any fiduciary duty to the other party.
17.20 Expense. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The parties
must not allocate any employee cost or other cost to the other party, except as
otherwise provided in the Program Requirements or to the extent the parties
expressly agree in advance to the allocation.
17.21 General Terms. (a) This agreement is to be interpreted in
accordance with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires.
(ii) The words "include," "includes" and "including" are deemed to
be followed by the phrase "without limitation".
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless otherwise
specified; and
(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to time
(and, in the case of a statute or regulation, to any corresponding provisions of
successor statutes or regulations), unless the context otherwise requires.
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(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
17.22 Conflicts with Other Agreements. The provisions of this Management
Agreement govern over those of the Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Services
Agreement. The provisions of each Trademark License Agreement governs over
those of this agreement if the provisions contained in this agreement conflict
with analogous provisions in a Trademark License Agreement.
17.23 Survival Upon Termination. The provisions of Sections 10, 11.4,
11.5, 11.6, 12.2, 13, 14,16 and 17 of this agreement will survive any
termination of this agreement.
17.24 Announced Transaction. Sprint Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership have
executed a Restructuring and Merger Agreement and related agreements that
provide for restructuring the ownership of Sprint Spectrum L.P., SprintCom,
Inc., PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. Upon
consummation of the transactions contemplated by those agreements, Sprint would
control each of the four entities. While Sprint and Sprint PCS anticipate the
proposed transactions will be consummated, there can be no assurances.
17.25 Additional Terms and Provisions. Certain additional and supplemental
terms and provisions of this agreement, if any, are set forth in the Addendum to
Sprint PCS Management Agreement attached hereto and incorporated herein by this
reference. Manager represents and warrants that the Addendum also describes all
existing contracts and arrangements (written or verbal) that relate to or affect
the rights of Sprint PCS or Sprint under this agreement (e.g., agreements
relating to long distance telephone services (Section 3.4) or backhaul and
transport services (Section 3.7)).
17.26 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
17.27 Agent Authorization. Because of the close operational relationship
between the parties listed together below, each entity authorizes the other
entity to act on its behalf in every capacity under this agreement: (a)
WirelessCo, L.P. and Sprint Spectrum L.P.; (b) Cox PCS License, L.L.C. and Cox
Communications PCS, L.P.; (c) APC PCS, LLC and American PCS Communications, LLC;
and (d) PhillieCo, L.P. and PhillieCo Partners I, L.P.
61
<PAGE>
ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Texas Unwired, a Louisiana general partnership
Service Area: Beaumont-Port Arthur, TX BTA
Lufkin -- Nacogdoches, TX, BTA
This Addendum contains certain additional and supplemental terms and
provisions of that certain Sprint PCS Management Agreement (the "Management
Agreement") entered into contemporaneously with and by the same parties as this
Addendum. The terms and provisions of the Addendum control, supersede and amend
any conflicting terms and provisions contained in the Management Agreement.
Except for express modification made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have
the meaning ascribed to them in the Schedule of Definitions. Section and
Exhibit references are to Sections and Exhibits of the Management Agreement
unless otherwise noted.
The Management Agreement is modified as follows:
1. Financing. The word "and" is inserted between the words "thereto"
and "before" in the last sentence of Section 1.7.
2. Network Certification Costs. Network Certification Costs, as
contemplated in Exhibit 2.1.1 to the Management Agreement, will be limited to
reasonable travel, transportation, food, lodging and out-of-pocket expenses
incurred by Sprint PCS.
3. Right of First Refusal on Transfer of Equity. Prior to any sale,
assignment or other transfer of any ownership interest in Manager to any party
other than a Related Party of Manager (other than an underwritten public
offering of ownership interests in Manager made pursuant to a registration
statement filed with, and declared effective by, the Securities and Exchange
Commission), the transferring party shall notify Sprint PCS of such transferring
party's intention to transfer and give Sprint PCS a right of first offer to
acquire the interest to be transferred.
4. Long-Distance Pricing. (a) Until Manager purchases long-distances
services from Sprint, the first sentence of Section 3.4 is deleted in its
entirety and replaced with the following provision:
"Manager must purchase from Sprint long distance telephony
services for the Sprint PCS Products and Services at wholesale rates,
except that Manager may purchase long distance telephony services that
utilize the networks of another long-distance provider if Sprint fails
to exercise a right of last offer within 30 days after Manager gives
Sprint a copy of the wholesale rate proposal. Manager may also purchase
long distance
<PAGE>
telephony services that utilize the network of another long-distance provider
under the circumstances described in the preceding sentence so long as the long-
distance telephony service of such provider substantially meets Sprint's network
reliability and voice quality standards in force at the time Sprint receives the
proposal. Manager agrees it will not submit a wholesale rate proposal to Sprint
more often than once during any twelve month period."
(b) Except as set forth in (c) below, at all times after Manager
purchases long-distance services from Sprint,
(i) the first sentence of Section 3.4 is deleted in its entirety
and replaced by the following language:
Manager must purchase long-distance telephony services from
Sprint through Sprint PCS both (i) to provide long-distance
telephony service to users of the Sprint PCS Network and (ii) to
connect the Service Area Network with the national platforms
used by Sprint PCS to provide services to Manager under the
agreement and/or the Services Agreement. Sprint will bill Sprint
PCS for such services rendered to Sprint PCS, Manager and all
Other Managers, and in turn, Sprint PCS will bill Manager for
the services used by Manager. Manager will be charged the same
price for such long-distance service as Sprint PCS is charged by
Sprint plus an additional administrative fee to cover Sprint
PCS' processing costs.
(ii) The following sentence is added as a second paragraph in
Section 3.4: "Manager may not resell the long-distance telephony
services acquired from Sprint under this Section 3.4."; and
(iii) Section 3.7 is modified by adding the following language:
"(other than backhaul services relating to national platform and IT
application connections, which Manager must purchase from Sprint if
Manager is a Type I or Type II affiliate as described on Exhibit 2.1.1)"
both between (A) "Service Area Network" and "if Manager decides to use"
in the first sentence of the first paragraph and (B) "for these
services" and "and the agreement was not made" in the first sentence of
the second paragraph.
(c) If, after Manager has commenced purchasing long-distance services
from Sprint, Manager delivers to Sprint PCS a copy of a competitive bid from one
of the companies identified in (a) above (certified by the chief executive
officer of Manager as an accurate and complete description of such bid) to
provide long-distance services to Manager, and such bid is for a period not less
than two years and includes transport charges that are at least 15% less than
the transport charges and administrative fee charged by Sprint, the language in
(a) above governs until the underlying contract resulting from the certified bid
terminates, at which time the language in (b) above governs.
<PAGE>
5. Voluntary Resale of Products and Services. Section 3.5.2 is modified
by amending the second sentence of the second paragraph in its entirety to read
as follows: "If Manager wants handsets of subscribers of resellers with NPA-NXXs
of Manager to be activated, Manager must agree to comply with the terms of the
program, including its pricing provisions."
6. Right of Last Offer. Section 3.7 is modified by adding the following
language: "(other than backhaul services relating to national platform and IT
application connections, which Manager must purchase from Sprint)" both between
(i) "Service Area Network" and "if Manager decides to use" in the first sentence
of the first paragraph and (ii) "for these services" and "and the agreement was
not made" in the first sentence of the second paragraph.
7. Advertising Indemnity. The following Section 6.5 is added to the
agreement:
"Section 6.5 Advertising Indemnity. Should Manager utilize the
promotion or advertising materials developed by Sprint PCS (a) unchanged
from their original form as received from Sprint PCS or its advertising
agency(ies), and (b) only utilizes such materials within the time frame
that such materials are being used by Sprint PCS, then Sprint PCS agrees
to indemnify, defend and hold harmless Manager, its directors, managers,
officers, employees, agents and representatives from and against any and
all claims, demands, causes of action, losses, actions, damages,
liability and expense, including costs and reasonable attorneys' fees,
against Manager, its directors, managers, officers, employees, agents
and representatives arising from or relating to the promotion or
advertising materials, except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and/or expense results
solely from the negligence or willful misconduct of Manager. If Sprint
PCS is obligated to indemnify Manager under this Section 6.5, then
Manager agrees that Sprint PCS shall have sole control over any
litigation or settlement."
8. Amendments to Program Requirements. Section 9.2 is modified by
replacing the period after subsection (e) with "; and", and by adding the
following sentence as a new subsection (f): "(f) Prior to Spring PCS
unilaterally amending the Inter Service Fee, Sprint PCS will consult and discuss
with Manager any changes in the Inter Service Area Program Requirements, prior
to amending the Inter Service Area Program Requirements."
9. Inter Area Service Fee. Inter area service fee will apply in
accordance with the Management Agreement, except that a * per minute inter
area service fee under Section 10.1.3 will apply in the following instances:
(a) Sprint PCS subscribers traveling to the Beaumont-Port
Arthur, TX BTA; and
(b) Manager's subscribers traveling to the Houston, TX BTA.
10. Setoff Rights. Sprint PCS' setoff rights under Section 10.6 will not
apply to any amounts collected by Sprint PCS from Service Area customers with
respect to products and services (other than Sprint PCS Products and Services
and Manager's Products and Services) that are bundled with Sprint PCS Products
and Services for billing
_____________
* Confidential portion omitted and filed separately with the SEC with a request
for confidential treatment pursuant to Rule 406 under the Securities Act.
<PAGE>
purposes, or to amounts collected by Sprint PCS for cellular, paging, local
exchange and other services that are not provided by Sprint PCS or a Related
Party of Sprint PCS.
11. Manager Non-Renewal. If Sprint PCS purchases the Operating Assets,
in accordance with Section 11.2.2, (i) it will allow Manager to resell Sprint
PCS Products and Services within such BTAs at MFN prices and Manager's
subscribers to roam at MFN prices, and (ii) the following phrase will be added
to the last sentence of Section 11.4(d): ", provided, however, that Manager's
advertising through mass media or bulk mailings will not be considered a
solicitation of Sprint PCS customers."
12. Non-termination of Agreement. The following language is added at the
end of Section 11.5.3 and Section 11.6.4: "but such action does not terminate
this agreement."
13. Announced Transactions. Section 17.24 is deleted in its entirety.
14. Additional Terms and Provisions. The phrase "the Addendum also
describes" is deleted from the second sentence of Section 17.25, and the
following language is inserted at the end of that second sentence: "are
described on Exhibit 17.25, and photocopies of any such written agreements have
been delivered to Sprint PCS".
15. Federal Contractor Compliance. A new Section 17.28, the text of
which is attached as Exhibit A, is added and incorporated by this reference.
16. Year 2000 Compliance. The following Section 17.29 is added:
17.29 Year 2000 Compliance. Sprint PCS and Manager each
separately represents and warrants that any system or equipment
acquired, operated or designated by it for use in the Service Area
Network or for use to support the Service Area Network, including
(without limitation) billing, ordering and customer service systems,
will be capable of correctly processing and receiving date data, as well
as properly exchanging date data with all products (for example,
hardware, software and firmware) with which the Service Area Network is
designed to be used, and will not malfunction or fail to function due to
an inability to process correctly date data in conformance with Sprint
PCS requirements for "Year 2000 Compliance." If the Service Area Network
or any system used to support the Service Area Network fails to operate
as warranted due to defects or failures in any system or equipment
selected by Manager (including systems or equipment of third party
vendors and subcontractors selected by Manager rather than by Sprint
PCS) Manager will, at its own expense, make the repairs, replacements or
upgrades necessary to correct the failure and provide a Year 2000
Compliant Service Area Network. If the Service Area Network or any
system used to support the Service Area Network fails to operate as
warranted due to defects or failures in any systems or equipment
selected by Sprint PCS (including systems or equipment of third party
vendors and subcontractors that Sprint PCS selects and requires Manager
to use), Sprint PCS will, at its own expense, make the repairs,
replacements or upgrades necessary to correct the failure and provide a
Year 2000 Compliant Service Area Network.
"Year 2000 Compliance" means the functions, calculations, and
other computing processes of the Service Area Network (collectively
"Processes") that perform and
<PAGE>
otherwise process, date-arithmetic, display, print or pass date/time
data in a consistent manner, regardless of the date in time on which the
Processes are actually performed or the dates used in such data or the
nature of the date/time data input, whether before, during or after
January 1, 2000 and whether or not the date/time data is affected by
leap years. To the extent any part of the Service Area Network is
intended to be used in combination with other software, hardware or
firmware, it will properly exchange date/time data with such software,
hardware or firmware. The Service Area Network will accept and respond
to two-digit year-date input, correcting or supplementing as necessary,
and store, print, display or pass date/time data in a manner that is
unambiguous as to century. No date/time data will cause any part of the
Service Area Network to perform an abnormally ending routine or function
within the Processes or generate incorrect final values or invalid
results.
17. Payment of Fees Under Services Agreement. The second sentence of
Section 3.1 of the Services Agreement is deleted in its entirety and replaced by
the following two sentences:
Except with respect to fees paid for billing-related services, the
monthly charge for any fees based on the number of subscribers of the
Service Area Network will be determined based on the number of
subscribers as of the 15th day of the month for which the charge is
being calculated. With respect to fees paid for billing-related
services, the monthly charge for any fees based on the number of
subscribers will be based on the number of gross activations in the
month for which the charge is being calculated plus the number of
subscribers of the Service Area Network on the last day of the prior
calendar month.
18. Post-Termination Non-Compete. The following language is added as
Section 1.17 to the Exhibit 11.8:
Notwithstanding anything in the agreement to the contrary, if the
agreement terminates because of Manager's purchase of the Disaggregated
License, Sprint PCS will not, for three years after the date of the
termination compile, create or use for the purpose of selling
merchandise or services, or sell, transfer or otherwise convey to a
third party, a list of customers, who have been transferred to Manager
under Section 11.4(d), who purchased, leased or used any Sprint PCS
Products and Services. Sprint PCS may use such a list for its own
internal analysis of its business practices and operations and Sprint
PCS agrees not to solicit such customers directly for 2 years after the
termination of this agreement, except that Spring PCS' advertising
through mass media or bulk mailings will not be considered a
solicitation of Manager's customers.
19. Termination--Purchase of Operating Assets or Sale of Disaggregated
License; Payment of Purchase Price. Notwithstanding anything in the Management
Agreement to the contrary, the parties agree that in the event of any
termination of the Management Agreement other than pursuant to Section 11.3.1(a)
or 11.3.4, if Sprint PCS does not put or sell the Disaggregated License for such
BTA to Manager under Sections 11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2, as the case
may be (and transfer to Manager the Spring PCS customers with a MIN assigned to
the Service Area covered by the Disaggregated License as and to the extent
provided in Section 11.4(d)), then Sprint PCS agrees to purchase prior to such
termination all Operating Assets in the manner provided in Sections 11.2.2.1,
11.2.1.1, 11.5.1 or 11.6.1, as the case may be.
<PAGE>
Sprint PCS agrees, and Manager hereby consents and directs Sprint PCS,
that if Sprint PCS should purchase Manager's Operating Assets for any reason,
Sprint PCS will pay the purchase price over to the Financial Institution for the
account of Manager.
20. Entire Business Value--Additional Valuation Principle.
Notwithstanding anything in the Management Agreement to the contrary, the
parties agree that, for purposes of any determination of the "Entire Business
Value," the deemed ownership of the Disaggregated License under Section
11.7.3(d) will assume the transfer of the Sprint PCS customers under Section
11.4(d).
21. Additional Event of Termination. Notwithstanding anything in the
Management Agreement to the contrary, the parties agree that an "Event of
Termination" is deemed to occur if the Financial Institution gives Sprint PCS
and Manager a written notice that Manager has defaulted because Manager failed
to make a regularly scheduled principal or interest payment to the Financial
Institution stating that such default has continued unremedied for at least 90
days, provided, that the Financial Institution has promptly given Sprint PCS
written notice of Manager's nonpayment. Upon such an Event of Termination,
Sprint PCS will have 30 days to elect between purchasing Manager's Operating
Assets or putting to Manager the Disaggregated License under the terms of either
Section 11.6.1 or Section 11.6.2, as the case may be.
22. Exclusion from Offered Interest. The definition of "Offered
Interest" shall exclude the Manager's sale of its existing or new towers
pursuant to sale/leaseback or similar transactions.
<PAGE>
Exhibit A
Section 17.28. Federal Contractor Compliance. (1) The Manager will not
discriminate against any employee or applicant for employment because of race,
color, religion, sex, or national origin. The Manager will take affirmative
action to ensure that applicants are employed, and that employees are treated
during employment without regard to their race, color, religion, sex, or
national origin. Such action shall include, but not be limited to the following:
Employment, upgrading, demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of compensation;
and selection for training, including apprenticeship. The Manager agrees to post
in conspicuous places, available to employees and applicants for employment,
notices to be provided setting forth the provisions of this nondiscrimination
clause.
(2) The Manager will, in all solicitations or advertisements for
employees placed by or on behalf of the Manager, state that all qualified
applicants will receive considerations for employment without regard to race,
color, religion, sex, or national origin.
(3) The Manager will send to each labor union or representative of
workers with which he has a collective bargaining agreement or other contract
or understanding, a notice to be provided advising the said labor union or
workers' representatives of the Manager's commitments under this section, and
shall post copies of the notice in conspicuous places available to employees and
applicants for employment.
(4) The Manager will comply with all provisions of Executive Order
11246 of September 24, 1965, and of the rules, regulations, and relevant orders
of the Secretary of Labor.
(5) The Manager will furnish all information and reports required by
Executive Order 11246 of September 24, 1965, and by rules, regulations, and
orders of the Secretary of Labor, or pursuant thereto, and will permit access to
his books, records, and accounts by the administering agency and the Secretary
of Labor for purposes of investigation to ascertain compliance with such rules,
regulations, and orders.
(6) In the event of the Manager's noncompliance with the
nondiscrimination clauses of this contract or with any of the said rules,
regulations, or orders, this contract may be canceled, terminated, or suspended
in whole or in part and the Manager may be declared ineligible for further
Government contracts or federally assisted construction contracts in accordance
with procedures authorized in Executive Order 11246 of September 24, 1965, and
such other sanctions may be imposed and remedies invoked as provided in
Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of
the Secretary of Labor, or as otherwise provided by law.
(7) The Manager will include the portion of the sentence immediately
preceding paragraph (1) and the provisions of paragraphs (1) through (7) in
every subcontract or purchase order unless exempted by rules, regulations, or
orders of the Secretary of Labor issued pursuant to section 204 of Executive
Order 11246 of September 24, 1965, so that such provisions will be binding upon
each subcontractor or vendor. The Manager will take such action with respect to
any subcontract or purchase order as the administering agency may direct as a
means of
<PAGE>
enforcing such provisions, including sanctions for noncompliance. Provided,
however, that in the event a Manager becomes involved in, or is threatened with,
litigation with a subcontractor or vendor as a result of such direction by the
administering agency the Manager may request the United States to enter into
such litigation to protect the interests of the United States.
(8) In consideration of contracts with Sprint PCS, the Manager agrees
to execute the Certificate of Compliance attached hereto as Attachment I and
further agrees that this certification shall be part of each contract between
Sprint PCS and Manager. The Manager will include Attachment I in every
subcontract or purchase order, so that such provisions will be binding upon each
subcontractor.
<PAGE>
Attachment I
CERTIFICATE OF COMPLIANCE WITH
FEDERAL REGULATIONS
In consideration of contracts with SPRINT SPECTRUM L.P., the undersigned
"contractor", "vendor" or "consultant" agrees to the following and further
agrees that this Certification shall be a part of each purchase order, supply
agreement, or contract between SPRINT SPECTRUM L.P. and the undersigned.
1. Equal Opportunity
Executive Order 11246 is herein incorporated by reference.
2. Affirmative Action Compliance
If undersigned Contractor has 50 or more employees and if this contract is
for $50,000 or more, Contractor shall develop a written Affirmative Action
Compliance Program for each of its establishments, as required by rules and
regulations of the Secretary of Labor (41 CFR 60-1 and 60-2).
3. Affirmative Action for Special Disabled and Vietnam Era Veterans
If this contract exceeds $10,000, the undersigned Contractor certifies that
the Contractor does not discriminate against any employee or applicant
because the person is a Special Disabled or Vietnam Veteran and complies
with the rules, regulations and relevant orders of the Secretary of Labor
issued pursuant to the Vietnam Veterans Readjustment Assistance Act of
1972, as amended.
Contractor hereby represents that it has developed and has on file, at each
establishment, affirmative action programs for Special Disabled and Vietnam
Era Veterans required by the rules and regulations of the Secretary of Labor
(41 CFR 60-250).
4. Affirmative Action for Handicapped Workers
If this contract exceeds $2,500, the undersigned Contractor certifies that
the Contractor does not discriminate against any employee or applicant
because of physical or mental handicap and complies with the rules,
regulations and relevant orders of the Secretary of Labor issued under the
Rehabilitation Act of 1973, as amended.
Contractor hereby represents that it has developed and has on file, at each
establishment, affirmative action programs for Handicapped Workers required
by the rules and regulations of the Secretary of Labor (41 CFR 60-741).
5. Employer Information Report (EE0-1 Standard Form 100)
If undersigned Contractor has 50 or more employees and if this contract is
for $10,000 or more, Contractor shall complete and file government Standard
Form 100, Equal Employment Opportunity Employer Information Report EEO-1, in
accordance with instructions contained therein.
<PAGE>
6. Compliance Review
The undersigned Contractor certifies that it has not been subject to a
Government equal opportunity compliance review. If the Contractor has been
reviewed, that review occurred on ____________________ (date).
7. Utilization of Small Businesses, Small Disadvantaged Businesses, and
Women-Owned Small Business
It is the policy of SPRINT SPECTRUM L.P., consistent with Federal
Acquisition Regulations (FAR 52.219-8 and FAR 52.219-13), that small
business concerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals, and women-owned businesses shall
have the maximum practicable opportunity to participate in performing
subcontracts under Government contracts for which SPRINT SPECTRUM L.P. is
the Government's Prime Contractor. SPRINT SPECTRUM L.P. awards contracts to
small businesses to the fullest extent consistent with efficient prime
contract performance. The Contractor agrees to use its best efforts to carry
out this policy in the award of its subcontract to the fullest extent
consistent with the efficient performance of this contract.
Contractor hereby represents that ____ is ____ is not a small business, ____
is ____ is not a small business owned and controlled by socially and
economically disadvantaged individuals, and ____ is ____ is not a small
business controlled and operated as a women-owned small business as defined
by the regulations implementing the Small Business Act.
If the answer to any of the above is in the affirmative, Contractor will
complete SPRINT SPECTRUM L.P. Small/Minority/Women Owned Business Self
Certification Form. This form is available from Mr. Ron Gier, Sprint PCS,
4900 Main Street, Kansas City, Missouri 64112.
8. Certification of Nonsegregated Facilities
If this contract is expected to exceed $10,000, the undersigned Contractor
certifies as follows:
The Contractor certifies that the Contractor does not or will not maintain
or provide for its employees any segregated facilities at any of its
establishments, and that it does not and will not permit its employees to
perform services at any location, under its control, where segregated
facilities are maintained. The Contractor agrees that a breach of this
Certification is a violation of the Equal Opportunity provisions of this
contract. As used in this Certification, the term "segregated facilities"
means any waiting rooms, work areas, rest rooms and wash rooms, restaurants
and other eating areas, time clocks, locker rooms and other storage or
dressing areas, parking lots, drinking fountains, recreation or
entertainment areas, transportation, and housing facilities provided for
employees that are segregated by explicit directive or are in fact
segregated on the basis of race, color, religion, or national origin,
because of habit, local custom, or otherwise. Contractor further agrees that
(except where it has obtained identical certifications from proposed
subcontracts for specific time periods) it will obtain identical
certifications from proposed subcontractors prior to the award of
subcontracts exceeding $10,000 that are not exempt from the provisions of
the Equal Opportunity Clause; and that it will retain such certification in
its files.
<PAGE>
9. Clean Air and Water
The undersigned Contractor certifies that any facility to be used in the
performance of this contract ___ is ___ is not listed on the
Environmental Protection Agency List of Violating Facilities.
The undersigned Contractor agrees to immediately notify SPRINT SPECTRUM
L.P., immediately upon the receipt of any communication from the
Administrator or a designee of the Environmental Protection Agency
indicating that any facility that the Contractor proposes to use for the
performance of the contract is under consideration to be listed on the
EPA List of Violating Facilities. SPRINT SPECTRUM L.P. includes this
certification and agreement pursuant to FAR 52-223-1(c) which requires
including such paragraph (c) in every nonexempt subcontract.
Contractor:
TEXAS UNWIRED
________________________________
Company Name
ONE LAKESHORE DR., SUITE 1900
________________________________
Address
LAKE CHARLES LA 70629
________________________________
City State Zip
/s/ THOMAS G. HENNING
By _____________________________
Name: Thomas G. Henning
Title: Assistant Manager
Louisiana Unwired, LLC
Managing Partner
<PAGE>
EXHIBIT 1.7
ATTESTATION OF FINANCING
Date: December 16, 1999
To: Jim Milsech
From: Kris Hickingbottom
Subject: Attestation of Financing (Beaumont-Port Arthur, Texas STA,
Lufkin-Nacogdoches, STA)
Jim:
Below is a chart displaying the anticipated financing for Texas Unwired.
I have also included the projected funding date. This facility will be financed
by a loan from Louisiana Unwired, L.L.C.
Louisiana Unwired, L.L.C. Jan-00 520-822 million
Sincerely,
/s/ Kris Hickingbottom
- -----------------------------
Kris Hickingbottom
<PAGE>
EXHIBIT 2.1 BUILD-OUT PLAN DESCRIPTION
Lufkin-Nacogdoches, TX: The network build-out coverage comprises approx. 259
sq. miles in and around Lufkin and Nacogdoches and covers approx. 88,144 pops.
Major roads include US Hwy. 69 and 59, State Hwys. 21, 7, 103, 94 and 287.
Cities and towns include Lufkin, Nacogdoches, Diboll and Burke.
Beaumont-Port Arthur, TX: The network build-out coverage comprises approximately
860 sq. miles in and around Beaumont, TX and covers approx. 320,242 pops. Major
roads include I-10, US Hwy 69, 90, and 90 business, state hwys. 105, 69 and 62.
Cities and towns in this coverage area include China, Sour Lake, Port Arthur,
Nederland, Port Neches, Bridge City, Groves, Orange, W. Orange, Silsbee, Nome,
Winnie and Pinehurst.
<PAGE>
EXHIBIT 2.1 BUILD-OUT TABLE
<TABLE>
<CAPTION>
Build-Out Plan
--------------------------------- Covered % Sprint
Covered Commercial % Covered Total Sprint Sprint LTD LTD Lines
BTA Name BTA# Total BTA Pages Pops Launch Date Pops LTD Access Lines Lines Covered
-------- ---- --------------- ------- ----------- --------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lufkin-Nacogdoches 265 158,283 88,144 4Q1999 56%
Beaumont-Port Arthur 34 452,391 320,242 Launched 71%
Total 610,674 408,386 67%
</TABLE>
<PAGE>
EXHIBIT 2.1
BUILD-OUT PLAN
TEXAS UNWIRED, A LOUISIANA PARTNERSHIP
[Map appears here]
<PAGE>
EXHIBIT 2.1
BUILD-OUT PLAN
TEXAS UNWIRED, A LOUISIANA PARTNERSHIP
[Map appears here]
<PAGE>
EXHIBIT 2.1.1
SERVICES ELECTION
Texas Unwired will elect Option 3 for the following BTAs: Beaumont-Port Arthur
and Lufkin-Nacogdoches.
<PAGE>
EXHIBIT 2.1.2
DESIGNATION OF SELECTED SERVICES
Each party to this agreement must initial one of the following options for
designation of Selected Services. The options below reference those options
outlined in Exhibit 2.1.1.
_____/_____ Option 1 - Sprint PCS Provided
_____/_____ Option 2 - Sprint PCS Provided but Manager provides switching
signature
appears here
_____/_____ Option 3 - Manager provides all services (exceptions noted in
Exhibit 2.1.1)
<PAGE>
SCHEDULE OF DEFINITIONS
The Schedule of Definitions is the "Schedule of Definitions" referred to
in and incorporated by reference under the Management Agreement, Services
Agreement, and Trademark License Agreements (as such agreements are defined
below). Whenever the phrase "this agreement" is used below, such phrase refers
to the particular agreement under whose terms this Schedule of Definitions is
being applied in that instance. If citations to sections or exhibits of
different agreements are included in a definition, the citation to the
particular agreement under whose terms this Schedule of Definitions is being
applied controls to the exclusion of the citations to different agreements.
The following words and phrases used in this agreement have the
following meanings:
"Addendum" means any addendum attached to this agreement that contains
the amendments to this agreement; such Addendum is expressly incorporated as a
part of this agreement.
"Affiliation Agreement" means any and all of the agreements, known as
Sprint PCS Affiliation Agreements, whereby an affiliate and Sprint PCS and/or
one or more of Sprint PCS' Related Parties agree to the terms and conditions
under which such affiliate will manage the Service Area Network identified in
such agreement, using such Affiliate's own PCS license issued by the FCC and any
documents incorporated by reference in such agreement.
"Agent" has the meaning set forth in Section 3.1 of the Sprint Spectrum
Trademark and Service Mark License Agreement or Section 3.1 of the Sprint
Trademark and Service Mark License Agreement.
"Arbiter" has the meaning set forth in Section 12.1.3 of the Management
Agreement or Section 5.1.3 of the Services Agreement.
"Available Services" means those categories of services listed on
Exhibit 2.1.1 to the Services Agreement (as the same may be amended from time to
time by Sprint Spectrum and made available to Manager under the terms of the
Services Agreement).
"Available Services and Fees Schedule" means that schedule set forth on
Exhibit 2.1.1 to the Services Agreement, which sets forth the Available Services
offered from time to time and the fees charged for such Available Services.
"Bankruptcy" means, for the purposes of the Trademark License
Agreements, either a Voluntary Bankruptcy or an Involuntary Bankruptcy.
<PAGE>
"Brands" means the Sprint PCS Brands and the Sprint Brands.
"BTA" means a Basic Trading Area for which a Basic Trading Area (BTA)
license is issued by the FCC.
"Build-Out Plan" means the plan agreed upon by Manager and Sprint PCS,
along with any modifications and updates to the plan, respecting the
construction and design of the Service Area Network, a copy of which is attached
as Exhibit 2.1 to the Management Agreement.
"Business Day" means a day of the year that banks are not required or
authorized to close in the State of New York.
"Cancelled Service" has the meaning set forth in Section 3.2 of the
Services Agreement.
"CDMA" means code division multiple access.
"Change of Control" has the meaning set forth in Section 17.15.3 of the
Management Agreement.
"Collected Revenues" has the meaning set forth in Section 10.4 of the
Management Agreement.
"Confidential Information" means all Program Requirements, guidelines,
standards, and programs, the technical, marketing, financial, strategic and
other information provided by each party under the Management Agreement,
Services Agreement, and Trademark License Agreements, and any other information
disclosed by one party to the other party pursuant to the Management Agreement,
Services Agreement, and Trademark License Agreements that is not specifically
excluded by Section 12.2 of the Management Agreement. In addition to the
preceding sentence, "Confidential Information" has the meaning set forth in
Section 3.1 of the Sprint Spectrum Trademark and Service Mark License Agreement
of Section 3.1 of the Sprint Trademark and Service Mark License Agreement.
"Controlled Related Party" means the Parent of any Person and each
Subsidiary of such Parent. As used in Section 1.2 and Article 3 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 1.2 and Article
3 of the Sprint Trademark and Service Mark License Agreement, the term
"Controlled Related Party" will also include any Related Party of a Person that
such Person or its Parent can directly or indirectly unilaterally cause to take
or refrain from taking any of the actions required, prohibited or otherwise
restricted by such Section, whether through ownership of voting securities,
contractually or otherwise.
2
<PAGE>
"Default Rate" means the rate per annum (computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as applicable),
compounded monthly, equal to the Prime Rate (adjusted as and when changes in the
Prime Rate occur) plus five percent (5%).
"Disaggregated License" means that portion of the License that Manager may
or is required to purchase under Section 11 of the Management Agreement from
Sprint PCS under certain circumstances, after Sprint PCS' receipt of FCC
approval of the necessary disaggregation and partition, which portion comprises
no less than the amount of spectrum sufficient to operate one duplex CDMA
carrier (including the required guard bands) within the PCS Spectrum, and no
more than 10 MHz of the Spectrum (at Manager's designation) covering the Service
Area, and which includes the frequencies then in use in the Service Area Network
and, if applicable, adjacent frequencies, so long as such frequencies in the
aggregate do not exceed 10 MHz.
"Dispute Notice" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"Dispute Notice Date" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"Encumbrances" has the meaning set forth in Section 5.1(a) of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 5.1(a) of the
Sprint Trademark and Service Mark License Agreement.
"Entire Business Value" has the meaning set forth in Section 11.7.3 of the
Management Agreement.
"Event of Termination" means any of the events described in Section 11.3 of
the Management Agreement. For the purposes of the Sprint Spectrum Trademark and
Service Mark License Agreement only, "Event of Termination" has the meaning set
forth in Section 13.2 of that agreement. For the purpose of the Sprint Trademark
and Service Mark License Agreement only. "Event of Termination" has the meaning
set forth in Section 13.2 of that agreement.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"Financial Lender" means any and all of those commercial and financial
institutions that provide material credit to Manager for the purpose of
assisting Manager with the fulfillment of its obligations and duties under this
agreement.
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<PAGE>
"fixed wireless local loop" has the meaning set forth in Section 2.4 of the
Management Agreement.
"home service area" means the geographic area within which a customer can
make a local call on the customer's PCS phone (i.e., the customer does not incur
an extra charge).
"Inbound Roaming" means calls placed by a non-Sprint PCS Network customer
on the Sprint PCS Network.
"Indemnitee" and "Indemnitor" have the meanings set forth in Section 13.3.1
of the Management Agreement or Section 6.3.1 of the Services Agreement.
"Initial Term" has the meaning set forth in Section 11.1 of the Management
Agreement.
"Involuntary Bankruptcy" has the meaning set forth in Section 11.3.7 of the
Management Agreement.
"Law" means all laws (statutory or otherwise), ordinances, rules,
regulations, bylaws, Orders and codes of all governmental and regulatory
authorities, whether United States Federal, state or local, which are applicable
to the Sprint PCS Products and Services.
"License" means the PCS license(s) issued by the FCC described on the
Service Area Exhibit to the Management Agreement.
"Licensed Marks" means the trademarks and service marks referred to in the
Recitals section of the Trademark License Agreement under whose terms this
definition is being applied, and such other marks as may be adopted and
established under said agreement from time to time.
"Licensee" has the meaning set forth in the introductory paragraph to the
particular agreement under whose terms this definition is being applied.
"Licensor" has the meaning set forth in the introductory paragraph to the
particular agreement under whose terms this definition is being applied.
"local calling area" means the geographic area within which a customer can
make a local call on the customer's PCS handset without incurring a long
distance charge.
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<PAGE>
"Loss" means any and all damage, loss, liability, claim, out-of-pocket cost
and expense, including reasonable expenses of investigation and reasonable
attorneys' fees and expenses, but excluding consequential or special damages.
"Management Agreement" means that certain Sprint PCS Management Agreement
executed by Manager and Sprint PCS and any documents incorporated by reference
in said agreement.
"Manager" means the party to this agreement as indicated in the
introductory paragraph of this agreement.
"Manager Management Report" has the meaning set forth in Section 12.1.2 of
the Management Agreement.
"Manager's Products and Services" means all types and categories of
wireless communications services and associated products that are offered by
Manager in the Service Area under Section 3.2 of the Management Agreement.
"Marketing Communications Guidelines" means the guidelines issued by Sprint
or Sprint PCS in accordance with Section 5.2 of the Management Agreement with
respect to the marketing, promotion, advertising, distribution, lease and sale
of Sprint PCS Products and Services, as they may be amended from time to time by
Sprint or Sprint PCS in accordance with the terms of the Trade Mark Agreements.
"Master Signature Page" means the document that the parties to the
Management Agreement, Services Agreement and/or one or more of the Trademark
License Agreement sign to evidence their agreement to execute, become a party to
and be bound by each of the agreements, or parts therof, listed above the
particular party's signature on such Master Signature Page.
"MFN price" or Most Favored Nation price" means, with respect to resale,
the best local market price offered to any third party for the purchase of air
time on Manager's network including but not limited to any third party who may
use the air time for its own wireless communications services or resell the air
time, and, with respect to roaming, the lowest roaming charge of Manager to
other wireless carriers when their customers roam on the Service Area Network.
"MIN" means the 24-bit mobile identification number corresponding to the
7-digit telephone number assigned to the handset, used for both billing and
receiving calls.
"MTA" means a Major Trading Area for which a MTA license is issued by the
FCC.
5
<PAGE>
"New Coverage" means the build-out in the Service Area that is in addition
to the build-out required under the then-existing Build-out Plan, which build-
out Sprint PCS or Manager decides should be built-out.
"Notice Address Schedule" means the schedule attached to the Master
Signature Page that provides the mailing and courier delivery addresses, and the
facsimile number, for giving notices to each of the parties signing the Master
Signature Page. The Notice Address Schedule may include supplemental addresses
that serve as additional or alternate notice addresses for use by the parties in
specifically prescribed situations.
"NPA-NXX" means as follows: "NPA" means numbering plan area, which is the
area code for a telephone number. "NXX" refers to the first three digits of a
telephone number, which identify the specific telephone company central office
that serves that number.
"Offer" means an offer received by Manager to sell substantially all of the
assets comprising or used in connection with the operation and management of the
Service Area Network or any portion of the Service Area Network.
"Offer Notice" means a written notice given by Manager to Sprint PCS that
sets forth in detail the terms and conditions of an Offer and the name and
address of the person or entity making the Offer.
"Offered Interest" means the assets that Manager proposes to sell pursuant
to an Offer.
"Operating Assets" means the assets Manager or its Related Parties owns and
uses in connection with the operation of the Service Area Network, at the time
of termination, to provide the Sprint PCS Products and Services. Operating
Assets does not include items such as furniture, fixtures and buildings that
Manager or its Related Parties use in connection with other businesses. Examples
of Operating Assets include without limitation: switches, towers, cell sites,
systems, records and retail stores.
"Operational Level of Sprint PCS" means the average operational level of
all the service area networks operated by Sprint PCS and its Related Parties
without the use of a manager or affiliate, as measured by Sprint PCS, unless the
operational level, as measured by Sprint PCS, of all of the service area
networks operated by Sprint PCS and its Related Patties without the use of a
manager or affiliate that are contiguous to the Service Area are below the
national average, in which case "Operational Level of Sprint PCS" means the
average operational level of those contiguous service area networks.
6
<PAGE>
"Order" means any order, writ, injunction, decree, judgment, award or
determination of any court or governmental or regulatory authority.
"Other Managers" means any person or entity with which Sprint PCS has
entered into an agreement similar to this agreement or an Affiliation Agreement,
including without limitation an affiliate under an Affiliation Agreement or a
manager under another Management Agreement, under which the person or entity
designs, constructs and manages a service area network and offers and promotes
Sprint PCS Products or Services.
"Outbound Roaming" means calls placed by a Sprint PCS Network customer on a
non-Sprint PCS network.
"Parent" means, with respect to any Person, the ultimate parent entity (as
determined in accordance with the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and the rules and regulations promulgated thereunder) of such Person;
except that if such ultimate parent entity is an individual, the Parent will be
the highest entity in the ownership chain from the ultimate parent entity to and
including such Person that is not an individual.
"Parties" means, with respect to the Management Agreement, Sprint PCS and
Manager. For the purpose of the services Agreement only, "parties" means Sprint
Spectrum and Manager. Sprint is not a party to the Management Agreement, except
to the limited extent described on the signature page executed on behalf of
Sprint. For the purpose of the Trademark License Agreements only, "parties"
means Licensor and Licensee.
"PCS" means a radio communication system authorized under the rules for
broadband personal communications services designated as Subpart E of Part 24 of
the FCC's rules, including the network, marketing, distribution, sales, customer
interface and operations functions relating thereto.
"PCS Spectrum" means the range of frequencies that Sprint PCS is authorized
to use under the License.
"Permitted Assignee" means any assignee of the rights and obligations of
Licensee pursuant to an assignment consented to in writing by Licensor, in its
sole discretion, in accordance with Section 14.1 of the Sprint Spectrum
Trademark and Service Mark License Agreement or Section 14.1 of the Sprint
Trademark and Service Mark License Agreement, or any subsequent permitted
assignee of any such permitted assignee.
7
<PAGE>
"Person" means any individual, partnership, limited partnership, limited
liability company, corporation, trust, other business association or business
entity, estate, or other entity.
"Pops" means the population covered by a license or group of licenses.
Unless otherwise noted, as used in the Management Agreement, pops means the most
recent Rand-McNally Population Survey estimate of the population of a geographic
area.
"Premium and Promotional Items" means all items, including clothing,
memorabilia and novelties, used to display the Licensed Marks for the purpose of
promoting the awareness, sale or image of the Sprint PCS Products and Services;
provided, however, that Premium and Promotional Items does not include marketing
and advertising materials prepared by Licensee that are subject to the Marketing
Communications Guidelines (e.g. printed materials such as bill stuffers,
brochures and similar materials).
"Prime Rate" means the rate announced from time to time by The Chase
Manhattan Bank, or its successor(s), as its prime rate.
"Program Requirements" means the standards, guidelines, plans, policies and
programs established by Sprint PCS from time to time regarding the operation and
management of the Service Area Network and the Sprint PCS business operated
using the Service Area Network, including the Program Requirements set forth in
Sections 4.1, 4.2, 4.3, 7.2 and 8.1 of the Management Agreement. Sprint PCS may
also implement Program Requirements respecting a voluntary resale program, as
defined in Section 3.5.2 of the Management Agreement.
"Purchase Notice" has the meaning set forth in Section 1.2 of Exhibit 11.8
to the Management Agreement.
"Quality Standards" has the meaning set forth in Section 2.1 (a) of the
Sprint Spectrum Trademark and Service Mark License Agreement or Section 2.1 (a)
of the Sprint Trademark and Service Mark License Agreement.
"Rand-McNally Population Survey" means the most recent population survey
published by Rand-McNally or, if Rand-McNally no longer publishes the surveys,
then the most recent population survey published by any successor organization
to Rand-McNally or, if no such organization exists, an organization selected by
Sprint PCS that provides surveys similar to the Rand-McNally surveys.
"Receiving Party" has the meaning set forth in Section 3.1 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 3.1 of the
Sprint Trademark and Service Mark License Agreement.
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<PAGE>
"Related Equipment" means customer-controlled equipment for use in
connection with the Sprint PCS Products and Services including telephones,
wireless handsets and related accessories, PCMCIA cards, "smart" cards, PDA's,
PBX's, settop boxes and data terminals.
"Related Party" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the Person. For purposes of the
Management Agreement, Sprint Spectrum, SprintCom, American PCS Communications,
LLC, PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. will be deemed
to be Related Parties. For purposes of this definition, the term "controls"
(including its correlative meanings "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Restricted Party" has the meaning set forth in Section 3.1 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 3.1 of the
Sprint Trademark and Service Mark License Agreement.
"Selected Services" means those Available Services selected by Manager to
be provided by Sprint Spectrum under Section 2.1 of the Services Agreement. An
Available Service will not be treated as a Selected Service until Sprint
Spectrum begins providing that service.
"Service Area" means the geographic area described on the Service Area
Exhibit to the Management Agreement.
"Service Area Network" means the network and business activities managed by
Manager under the Management Agreement in the Service Area under the License.
"Services Agreement" means that certain Sprint PCS Services Agreement
executed by Manager and Sprint Spectrum and any documents incorporated by
reference in said agreement, whereby Manager may delegate the performance of
certain services to Sprint PCS for fees that represent an adjustment of the fees
paid by Sprint PCS to Manager under Section 10 of the Management Agreement.
"Siting Regulations" means:
(1) FCC regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 47 CFR
(S)(S)17.1 through 17.58, and as may be amended;
9
<PAGE>
(2) FAA regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 14 CFR
(S)(S)77.1 through 77.75, and as may be amended;
(3) FCC land use regulations as set forth in 47 CFR (S) (S) 1.1301
through 1.1319, and as may be amended; and
(4) FCC radio frequency exposure regulations as set forth in 47 CFR
(S) (S) 1.1301 through 1.1319, and as may be amended.
"spectrum" has the same meaning as PCS Spectrum.
"Sprint" means Sprint Communications Company, L.P., a Delaware limited
partnership.
"Sprint Brands" means the "Licensed Marks" as that term is defined under
the Sprint Trademark and Service Mark License Agreement.
"Sprint PCS" means any or all of the following Related Parties who are
License holders and signatories to the Management Agreement: Sprint Spectrum
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation,
PhillieCo Partners I, L.P., a Delaware limited partnership, Cox Communications
PCS, L.P., a Delaware limited partnership, and American PCS Communications, LLC,
a Delaware limited liability company. Each entity listed above is a Related
Party to each of the other listed entities.
"Sprint PCS Affiliation Agreement" has the same meaning as Affiliation
Agreement.
"Sprint PCS Brands" means the "Licensed Marks" as that term is defined
under the Sprint Spectrum Trademark and Service Mark License Agreement.
"Sprint PCS Communications Policies" means the policies established in
accordance with Section 6.4 of the Management Agreement with respect to public
relations development, maintenance and management, as they may be amended from
time to time by Sprint PCS in accordance with the terms of the Management
Agreement.
"Sprint PCS Customer Service Program Requirements" means the program and
requirements established in accordance with Section 8.1 of the Management
Agreement with respect to customer service development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
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<PAGE>
"Sprint PCS Customer Service Standards" means those customer service
standards developed by Sprint PCS with respect to customer service and
maintenance as described in Section 8.1 of the Management Agreement, as it may
be amended from time to time by Sprint PCS in accordance with the terms of the
Management Agreement.
"Sprint PCS Insurance Requirements" means the insurance requirements
developed by Sprint PCS as described in Section 12.3 of the Management
Agreement, as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS Management Agreement" has the same meaning as Management
Agreement.
"Sprint PCS NationaL Accounts Program Requirements" means the program and
requirements established in accordance with Section 4.2 of the Management
Agreement with respect to national accounts development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS National or Regional Distribution Program Requirements"
means any distribution program and requirements established in accordance with
Section 4.1 of the Management Agreement, as it may be amended from time to time
by Sprint PCS in accordance with the terms of the Management Agreement, and
entered into by Sprint PCS or its Related Parties and a third-party distributor
(for example, a national chain of retail electronics stores) from time to time,
under which the third party will distribute, lease, or sell Sprint PCS Products
and Services on a national or regional basis. The term "distributor" means a
reseller of Sprint PCS Products and Services, or an agent of Sprint PCS
authorized to sell Sprint PCS Products and Services on behalf of Sprint PCS, or
a person engaged in any other means of wholesale or retail distribution of
Sprint PCS Products and Services.
"Sprint PCS Network" means the national wireless network and business
activities to be developed by Sprint PCS, Manager and Other Managers in the
United States and certain of its territories and possessions, which network
includes the Service Area Network.
"Sprint PCS Products and Services" means all types and categories of
wireless communications services and associated products that are designated by
Sprint PCS (whether now existing or developed and implemented in the future) as
products and services to be offered by Sprint PCS, Manager and all Other
Managers as the products and services of the Sprint PCS Network for fixed and
mobile voice, short message and other data services under the FCC's rules for
broadband personal
11
<PAGE>
communications services, including all local area service plans. Sprint PCS
Products and Services do not include wireline products or services, including
local exchange service, wireline long distance service, and wireline based
Internet access.
"Sprint PCS Roaming and Inter Service Area Program Requirements"
means:
(i) the roaming program and requirements established in accordance
with Section 4.3 of the Management Agreement, as amended from time to time by
Sprint PCS in accordance with the terms of the Management Agreement, to provide
for customers from a carrier not associated with the Sprint PCS Network to
operate the customer's handset on the Sprint PCS Network and for customers from
the Sprint PCS Network (whether customers of Sprint PCS, Manager or an Other
Manager) to operate the customer's handset on a network of a carrier not
associated with the Sprint PCS Network, and
(ii) the program established in accordance with Section 4.3 of the
Management Agreement, as amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement, to provide for customers from one
Service Area on the Sprint PCS Network, whether managed by Sprint PCS, Manager
or an Other Manager, to operate the customer's handsets and otherwise receive
seamless service, regardless of whether the customer makes its call to or from
the Sprint PCS Network and regardless of whether the customer is a customer of
Sprint PCS, Manager or an Other Manager.
"Sprint PCS Technical Program Requirements" means the operating and
technical performance standards established by Sprint PCS, in accordance with
Section 7.2 of the Management Agreement, as amended from time to time by Sprint
PCS in accordance with the terms of the Management Agreement, for the Sprint PCS
Network as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint Spectrum" means Sprint Spectrum L.P., a Delaware limited
partnership.
"Sprint Spectrum Brands" means the "Licensed Marks" as that term is defined
under the Sprint Spectrum Trademark and Service Mark License Agreement.
"Sprint Spectrum Trademark and Service Mark License Agreement" means that
certain Sprint Spectrum Trademark and Service Mark License Agreement executed by
Manager and Sprint Spectrum and any documents incorporated by reference in said
agreement.
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<PAGE>
"Sprint Trademark and Service Mark License Agreement" means that certain
Sprint Trademark and Service Mark License Agreement executed by Manager and
Sprint and any documents incorporated by reference in said agreement.
"Sprintcom" means SprintCom, Inc., a Kansas corporation.
"Subsidiary" of any Person as of any relevant date means a corporation,
company or other entity (i) more than 50% of whose outstanding shares or equity
securities are, as of such date, owned or controlled, directly or indirectly
through one or more Subsidiaries, by such Person, and the shares or securities
so owned entitle such Person and/or Subsidiaries to elect at least a majority of
the members of the board of directors or other managing authority of such
corporation, company or other entity notwithstanding the vote of the holders of
the remaining shares or equity securities so entitled to vote or (ii) which does
not have outstanding shares or securities, as may be the case in a partnership,
joint venture or unincorporated association, but more than 50 % of whose
ownership interest is, as of such date, owned or controlled, directly or
indirectly through one or more Subsidiaries, by such Person, and in which the
ownership interest so owned entitles such Person and/or Subsidiaries to make the
decisions for such corporation, company or other entity.
"Successor Notice" has the meaning set forth in Section 17.15.2(e) of the
Management Agreement.
"Term" means during the term of the Management Agreement, including the
Initial Term and any renewal terms.
"Trademark and Service Mark Usage Guidelines" means the rules governing the
depiction and presentation of the Licensed Marks then generally in use by
Licensor, to be furnished by Licensor to Licensee, as the same may be amended
and updated from time to time by Licensor.
"Trademark License Agreements" means the Sprint Trademark and Service Mark
License Agreement and the Sprint Spectrum Trademark and Service Mark License
Agreement.
"Type II Report" has the meaning set forth in Section 12.1.2 of the
Management Agreement.
"Voluntary Bankruptcy" has the meaning set forth in Section 11.3.7 of the
Management Agreement.
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"wireless mobility communications network" means a radio communications
system operating in the 1900 MHz spectrum range under the rules designated as
Subpart E of Part 24 of the FCC's rules.
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<PAGE>
SPRINT
TRADEMARK AND SERVICE MARK LICENSE
AGREEMENT
BETWEEN
SPRINT COMMUNICATIONS COMPANY, L.P.
AND
TEXAS UNWIRED
JANUARY 7, 2000
<PAGE>
SPRINT TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
THIS AGREEMENT is made as of the 7th day of January, 2000, by and between
Sprint Communications Company, L.P., a Delaware limited partnership, as licensor
("Licensor"), and Texas Unwired, a Louisiana general partnership, as licensee
("Licensee"). The definitions for this agreement are set forth on the "Schedule
OF Definitions."
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"Sprint", together with related "Diamond" logo, "Sprint PCS", "Sprint Personal
Communications Services" and the goodwill of the business symbolized thereby;
and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE MARK RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor,
for the term of this agreement, a non-transferable, royalty-free license
to use the Licensed Marks solely for and in connection with the
marketing, promotion, advertisement, distribution, lease or sale of
Sprint PCS Products and Services and Premium and Promotional Items in
the Service Area.
(a) Related Equipment. The rights granted hereunder to Licensee shall not
include the right to manufacture equipment under the Licensed Marks.
However, subject to the terms and conditions hereof, Licensor hereby
grants to Licensee, and Licensee hereby accepts from Licensor, for the
term of this agreement, a non-transferable, royalty-free license to
market, promote, advertise, distribute and resell and lease Related
Equipment in connection with the marketing, promotion, advertisement,
distribution, lease or sale by Licensee of Sprint PCS Products and
Services, and to furnish services relating to such Related Equipment
(including installation, repair and maintenance of Related Equipment),
under the Licensed Marks.
<PAGE>
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Ouality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law.
Such Quality Standards are designed to ensure that the quality of the
Sprint PCS Products and Services and Premium and Promotional Items
marketed, promoted, advertised, distributed, leased and sold under the
Licensed Marks are consistent with the high reputation of the Licensed
Marks and are in conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Ouality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Affiliation Agreement
as Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall
(i) be consistent with the reputation for quality associated with the
Licensed Marks and (ii) be commensurate with a high level of quality
(taking into account Licensee's fundamental underlying technology and
standards), consistent with the level of quality being offered in the
market for products and services of the same kind as the Sprint PCS
Products and Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to
change the Quality Standards, it will notify Licensee in writing of
such proposed amendments, and will afford Licensee a reasonable time
period in which to adopt such changes as may be required in order for
Licensee to conform to the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking; Compliance with Trademark Laws. Licensee shall cause
the appropriate designation "T" or "SM" or the registration symbol "(R)" to be
placed adjacent to the Licensed Marks in connection with the use thereof and to
indicate such additional information as
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Licensor shall reasonably specify from time to time concerning the license
rights under which Licensee uses the Licensed Marks. Licensee shall place the
following notice on all printed or electronic materials on which the Licensed
Marks appear: "SPRINT", the "DIAMOND" logo and "Sprint PCS", "Sprint Personal
Communications Services" are trademarks and/or service marks of Sprint
Communications Company, L.P., "used under license" or such other notice as
Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the
Licensed Marks in any manner that would reflect adversely on the image of
quality symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and Licensee
and their respective Controlled Related Parties (each a "Restricted Party")
shall cause their respective officers and directors (in their capacity as such)
to, and shall take all reasonable measures to cause their respective employees,
attorneys, accountants, consultants and other agents and advisors (collectively,
and together with their respective officers and directors, "Agents") to, keep
secret and maintain in confidence the terms of this agreement and all
confidential and proprietary information and data of the other party or its
Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently
comes into the public domain, through no fault of the receiving party;
(ii) prior to receipt hereunder was property within the legitimate
possession of the Receiving Party or, subsequent to receipt hereunder
is lawfully received from a third party having rights therein without
restriction of the third party's right to disseminate
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the Confidential Information and without notice of any restriction
against its further disclosure.
(iii) is independently developed by the Receiving Party through Persons who
have not had, either directly or indirectly, access to or knowledge of
such Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such Confidential
Information shall cease to be confidential and proprietary information
covered by this agreement only to the extent of the disclosure so
consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by a
protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for purpose
of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of its
Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing part), may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of a
protective
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order or other appropriate remedy or receipt of a waiver hereunder, the
Receiving Party shall furnish only that portion of the Confidential Information
which it is advised by opinion of its counsel is legally required to be
furnished and shall exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment shall be accorded such
Confidential Information, it being understood that such reasonable efforts shall
be at the cost and expense of the disclosing party whose Confidential
Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall survive,
as to any party, until two (2) years following the date of termination of this
agreement, and, as to any Controlled Related Party of a party, until two (2)
years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the
Licensed Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i) Licensee
will not at any time challenge Licensor's rights, title or interest in the
Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and
warrants that:
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(a) Licensor has good title to the Licensed Marks and has the right to
grant the licenses provided for hereunder in accordance with the terms
and conditions hereof, free of any liabilities, charges, liens,
pledges, mortgages, restrictions, adverse claims, security interests,
rights of others, and encumbrances of any kind (collectively,
"Encumbrances"), other than Encumbrances which will not restrict or
interfere in any material respect with the exercise by Licensee of the
rights granted to Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending or,
to the knowledge of Licensor, threatened with respect to Licensor's
ownership of the Licensed Marks or which, if adversely determined,
would restrict or otherwise interfere in any material respect with the
exercise by Licensee of the rights purported to be granted to Licensee
hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation: Authorization of Agreement. Such party
is a corporation duly organized, a limited liability company duly
organized or a partnership duly formed, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate, company or
partnership power and authority to oven its property and carry on its
business as owned and carried on at the date hereof and as contemplated
hereby. Such party is duly licensed or qualified to do business and, if
applicable, is in good standing in each of the jurisdictions in which
the failure to be so licensed or qualified
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would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder. Such party has the
corporate, company or partnership power and authority to execute and
deliver this agreement and to perform its obligations hereunder and the
execution, delivery and performance of this agreement have been duly
authorized by all necessary corporate, company or partnership action.
Assuming the due execution and delivery by the other party hereto, this
agreement constitutes the legal, valid and binding obligation of such
party enforceable against such party in accordance with its terms,
subject as to enforceability to limits imposed, by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
the availability of equitable remedies.
(b) No Conflict with Restrictions: No Default. Neither the execution,
delivery and performance of this agreement nor the consummation by such
party of the transactions contemplated hereby (i) will conflict with,
violate or result in a breach of any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree,
determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any
arbitrator, applicable to such party or any of its Controlled Related
Parties, (ii) will conflict with, violate, result in a breach of or
constitute a default under any of the terms, conditions or provisions
of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited
liability company agreement, or partnership agreement of such party or
any of its Controlled Related Parties or of any material agreement or
instrument to which such party or any of its Controlled Related Parties
is a party or by which such party or any of its Controlled Related
Parties is or may be bound or to which any of its material properties
or assets is subject (other than any such conflict, violation, breach
or default that has been validly and unconditionally waived), (iii)
will conflict with, violate, result in a breach of, constitute a
default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required by,
give to others any material interests or rights or require any consent,
authorization or approval under any indenture, mortgage, lease
agreement or instrument to which such party or any of its Controlled
Related Parties is a party or by which such party or any of its
Controlled Related Parties is or may be bound, or (iv) will result in
the creation or imposition of any lien upon any of the material
properties or assets of such party or any of its Controlled Related
Parties, which in any such case could reasonably be expected to
materially impair such party's ability to perform its obligations under
this agreement or to have a material adverse effect on the consolidated
financial condition of each party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing
with, or consent, approval, license, permit or other authorization or
order by, any governmental or regulatory authority, domestic or
foreign, that is required to be obtained by such party in connection
with the valid execution, delivery, acceptance and performance by such
party under this agreement or the consummation by such
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party of any transaction contemplated hereby has been completed, made
or obtained, as the case may be.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or
affecting such party or any of its Controlled Related Parties or any of
their properties, assets or businesses in any court or before or by any
governmental department, board, agency or instrumentality, domestic or
foreign, or any arbitrator which could, if adversely determined (or, in
the case of an investigation could lead to any action, suit or
proceeding, which if adversely determined could), reasonably be
expected to materially impair such party's ability to perform its
obligations under this agreement or to have a material adverse effect
on the consolidated financial condition of such party or its parent;
and such party or any of its Controlled Related Parties has not
received any currently effective notice of any default, and such party
or any of its Controlled Related Parties is not in default, under any
applicable order, writ, injunction, decree, permit, determination or
award of any court, any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator, which default
could reasonably be expected to materially impair such party's ability
to perform its obligations under this agreement or to have a material
adverse effect on the consolidated financial condition of such party or
its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify the
other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
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(i) the material breach of any representation or warranty made by such
party in this agreement; and
(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
(b) In addition to the indemnification provided for in Section 8.1(a),
Licensee agrees to indemnify Licensor against and hold it harmless from
any Loss suffered or incurred by Licensor or its Controlled Related
Parties by reason of a third party claim arising out of or relating to
(i) the use of the Licensed Marks by Licensee; or (ii) the marketing,
promotion, advertisement, distribution, lease or sale by Licensee (or
any permitted sublicensee) or by any additional Licensee (or any
permitted sublicensee) of any Sprint PCS Products and Services, Related
Equipment or Premium and Promotional Items under the Licensed Marks
pursuant to this agreement, including unfair or fraudulent advertising
claims, warranty claims and product defect or liability claims,
pertaining to the Sprint PCS Products and Services, Related Equipment
or Premium and Promotional Items. Notwithstanding the foregoing,
Licensee will not be required under this paragraph (b) to indemnify any
Loss arising solely out of Licensee's use of the Licensed Marks in
compliance with the terms of the Trademark and Service Mark Usage
Guidelines; provided that Licensor shall have no obligation to
indemnify for third-party claims alleged to arise from the specifics of
uses of third-party trademarks or service marks, or the specifics of
claims made, in marketing materials prepared by or for Licensee, which
marketing materials have not been approved by Licensor prior to the
publication out of which such claims are alleged to have arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as set
forth in this agreement shall be unconditional and irrevocable, and shall not be
subject to any, defense or be released, discharged or otherwise affected by any
matter, including impossibility, illegality, impracticality, frustration of
purpose, force majeure, act of government, the bankruptcy or insolvency of any
party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make any
use of the Licensed Marks in connection with products or services other than the
Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related
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Equipment and Premium and Promotional Items, nor to make any use of the Licensed
Marks directed outside of the Service Area.
Section 10.2. Adherence to Trademark and Service Mark Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Mark Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed Marks
on any type of marketing, advertising or promotional materials, Licensee agrees
to submit samples of such materials to Licensor for approval. Licensor shall
have fourteen (14) days from the date Licensor receives such materials to
approve or object to any such materials submitted to Licensor for review. In the
event Licensor does not object to such materials within such fourteen (14) day
period, such materials shall be deemed approved by Licensor. Thereafter,
Licensee shall not be obligated to submit to Licensor materials prepared in
accordance with the samples previously approved by Licensor and the Trademark
and Service Mark Usage Guidelines; provided, however, Licensee shall, at the
reasonable request of Licensor, continue to furnish samples of such marketing,
advertising and promotional materials to Licensor from time to time during the
term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee agrees
not to use (a) any trademark or service mark which is confusingly similar to, or
a colorable imitation of, the Licensed Marks or any part thereof, or (b) any
work, symbol. character, or set of words, symbols, or characters, which in any
language would be identified as the equivalent of the Licensed Marks or that are
otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1. Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee shall
use the Licensed Marks in a manner that is consistent with the brand image and
principles established by Licensor, and mechanics to ensure consistency will be
included in the Marketing Communications Guidelines.
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Section 11.3. Management of Brand Image. Licensor shall be responsible for
the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing Communications
Guidelines shall establish reasonable principles to be followed in the
development of advertising, marketing and promotional campaigns in order to
ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns conducted by Licensee shall be conducted in a manner
consistent with the Marketing Communications Guidelines.
Section 11.4. Advertising Agencies: Promotions. Licensee may select its own
advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall conduct
ongoing reviews of upcoming advertising, marketing and promotional campaigns of
each party and shall use good faith efforts to coordinate their respective
campaigns in a manner that will maximize the advertising, marketing and
promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition. Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5. Ownership of Advertising Materials. All agreements entered
into by Licensee with advertising agencies shall provide that Licensor shall own
all advertising materials (including concepts, themes, characters and the like)
created or developed thereunder. Subject to the terms and conditions set forth
herein, Licensee shall receive a perpetual, non-exclusive, royalty-free license
to use such materials in connection with advertising and promotional materials
developed by Licensee; provided, however, that the rights granted under such
perpetual license shall be limited solely to the use of such materials and shall
not extend the term of the license with respect to the Licensed Marks provided
for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of the
parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
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provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee agrees,
and shall require its permitted sublicensees to agree, not to incur or contract
any debt or obligation on behalf of Licensor, or commit any act, make any
representation, or advertise in any manner that may adversely affect any right
of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution and
continues until the Affiliation Agreement terminates, unless earlier terminated
in accordance with the terms set forth in this Article 13. This agreement
automatically terminates upon termination of the Affiliation Agreement.
Section 13.2. Events of Termination. If any of the following events shall
occur with respect to Licensee, each such occurrence shall be deemed an "Event
of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with any
of the material terms and conditions contained herein in any material
respect.
(c) Material Misrepresentation. Licensee breaches any material
representation or warranty of Licensee made in Section 4.2 or Article 6
in any material respect.
(d) Termination of Affiliation Agreement. The termination of the
Affiliation Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee: or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4. Licensee's Right to Terminate. Licensee may, at its option,
without prejudice to any other remedies it may have, terminate this agreement by
giving written notice of
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such termination to Licensor as follows: (a) immediately, in the event that
Licensor abandons the Licensed Marks or otherwise ceases to support the Licensed
Marks in Licensor's business; or (b) immediately in the event of the occurrence
of a Bankruptcy with respect to Licensor; or (c) immediately in the event of an
occurrence of termination pursuant to Section 13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within thirty (30) days following the date on which
this agreement terminates (except in the case of a termination resulting from an
Event of Termination described in Section 13.2(b), (c) or (d), in which case
such rights to use the Licensed Marks will terminate immediately upon the date
of termination); provided, however, that Licensee may thereafter sell, transfer
or otherwise dispose of any Related Equipment and Premium and Promotional Items
that are then in Licensee's inventory (or which Licensee has purchased or is
then legally obligated to purchase) for an additional reasonable period not to
exceed three (3) months. Licensee's right of disposal under this Section 13.5
shall not prohibit Licensor from granting to third parties during the disposal
period licenses and other rights with respect to the Licensed Marks. The
provisions of Articles 3, 4, 5, 6 and 8 will survive any termination of this
agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior written
consent of Licensor (in its sole discretion), shall have no right to assign any
of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing herein
shall be construed to limit the right of the Licensor to transfer or assign its
interests in the Licensed Marks, subject to the agreement of the assignee to be
bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees: Sublicenses: Licenses to
Additional Licensees. Licensee shall not sublicense (or attempt to sublicense)
any of its rights hereunder without the prior written consent of Licensor, in
the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section l5.1. Notices. Any notice, payment, demand; or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written
notice to the other party. All notices and other communications given to a party
in accordance with the provisions of this
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agreement shall be deemed to have been given and received (i) four (4) Business
Days after the same are sent by certified or registered mail, postage prepaid,
return receipt requested, (ii) when delivered by hand or transmitted by
facsimile (with acknowledgment received and, in the case of a facsimile only, a
copy of such notice is sent no later than the next Business Day by a reliable
overnight courier service, with acknowledgment of receipt) or (iii) one (1)
Business Day after the same are sent by a reliable overnight courier service,
with acknowledgment of receipt.
Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this agreement.
Section 15.5. Table of Contents: Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is intended
to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this agreement. If necessary to effect the intent
of the parties, the parties will negotiate in good faith to amend this agreement
to replace the unenforceable language with enforceable language which as closely
as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request of
the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of Missouri
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other party
that the other party would be irreparably damaged if any of the provisions of
this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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<PAGE>
to injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.10. Entire Agreement. The provisions of this agreement set forth
the entire agreement and understanding between the parties as to the subject
matter hereof and supersede all prior agreements, oral or written, and other
communications between the parties relating to the subject matter hereof.
Section 15.11. Limitation on Rights of Others. Nothing in this agreement,
whether express or implied, shall be construed to give any party other than the
parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
Section 15.12. Waivers: Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction: Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any Missouri
State court sitting in the County of Jackson or any Federal court of
the United States of America sitting in the Western District of
Missouri, and any appellate court from any such court, in any suit
action or proceeding arising out of or relating to this agreement, or
for recognition or enforcement of any judgment, and each party hereby
irrevocably and unconditionally agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in such
Missouri State Court or, to the extent permitted by law, in such
Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement in Missouri State court
sitting in the County of Jackson or any Federal court sitting in the
Western District of Missouri. Each party hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such suit, action or proceeding in any such
court and further waives the right to object, with respect to such
suit, action or proceeding, that such court does not have jurisdiction
over such party.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
15
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(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement, provided
that such service shall be deemed to have been given only when actually
received by such party. Nothing in this agreement shall affect the
right of a party to serve process in another manner permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
agreement.
Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Section 15.16. Master Signature Page. Each party agrees that it will
execute the Master Signature Page that evidences such party's agreement to
execute, become a party to and be bound by this agreement, which document is
incorporated herein by this reference.
[The remainder of this page is intentionally left blank.]
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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#: 29449v.2
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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IDENTITY STANDARDS
The Sprint Brand Identity Program has been designed to make all Sprint
marketing communications materials consistent in overall style. This program
will achieve a more distinctive Sprint look, reinforcing the image of Sprint as
a company that can provide seamless communications solutions under a single
brand.
Sprint Brand Investment Group phone (800) 627-2635 fax (800) 769-9534
. The Sprint visual identifier (logo) should always be reproduced from master
reproduction art. The logo should always be used in the horizontal position.
Stacking of the diamond and logotype is not allowed. The diamond symbol
should never be separated from the logotype or used as a design element.
. To create Sprint Red in four-color process printing, use 100% magenta and a
90% screen of yellow. When printing with a 133-line screen or better, Sprint
Gray may be created using an 80% screen of black.
. Presentation of the Sprint visual identifier is shown to the right.
. Trademark notation (R) must be used on all promotional material (The ONLY
exception to this rule is business cards, stationery and signage.)
. A minimum unobstructed area is required equal to 1/2 the height of the Sprint
diamond symbol surrounding the logo.
Sprint
vertical axis
. The vertical alignment of a strong graphic element and typeface with the
Sprint visual identifier creates a uniform look for Sprint communications. The
alignment follows a vertical axis (above), flush-left with the Sprint
logotype.
. Sprint Red should be used as a background or prominent color whenever
possible.
. The Sprint logo should appear in either the bottom or top 20% position.
<TABLE>
<CAPTION>
TYPEFACES
<S> <C> <C>
Garamond Light Garamond Book Garamond Bold
Garamond Condensed Light Garamond Condensed Book Garamond Condensed Bold
Univers Light Univers Light Italic Univers Regular
Univers Regular Italic Univers Bold Univers Bold Italic
Univers Condensed Light Univers Condensed Light Italic Univers Condensed Regular
Univers Condensed Regular Italic Universe Condensed Bold Univers Condensed Bold Italic
Stone Sans Regular Stone Sans Regular Italic Stone Sans Semibold
Stone Sans Semibold Italic Stone Sans Bold Stone Sans Bold Italic
</TABLE>
COATED COLOR MATCH
SPOT COLORS
Sprint Red (diamond)
Pantone 485
Sprint Gray (logotype)
Pantone 425
PROCESS COLORS
Sprint Red (diamond)
100% MAGENTA
90% Yellow
Sprint Gray (logotype)
80% black
SPRINT(R)
Preferred two-color
Sprint Red (diamond) & Sprint Gray (type)*
SPRINT (R)
Preferred one-color
Sprint Gray
SPRINT(R)
Preferred one-color option
All black*
SPRINT(R)
Two-color reverse
Sprint Red and white on Sprint Gray
SPRINT(R)
Two-color reverse option
Sprint Red and white on black
SPRINT(R)
One-color reverse
White on Sprint Red
*Sprint Red diamond and
black logotype is not permitted.
<PAGE>
Logo Orientation
. Size - The Sprint PCS logo should always be 80% the size of the diamond Sprint
logo. (Size the "S" in Sprint PCS to 80% of the capital height of the "S" in
Sprint.)
. Clear Space - a minimum unobstructed area equal to half the height of the
Sprint diamond symbol (1/2x) must surround the outermost points of the Sprint
visual identifier and Sprint PCS logo on all four sides.
. Horizontal Alignment - The preferred usage of the Sprint visual identifier and
the Sprint PCS logo is to horizontally align the baselines of the Sprint and
Sprint PCS logotypes. The Sprint visual identifier should always appear to the
left of the Sprint PCS logo. A minimum distance equal to two times the height
of the Sprint diamond (2x) must separate the two logos. A greater separation
is preferred, and should be used whenever possible.
. Vertical Alignment - When available space for logo insertion is less than 2"
by 2" square, a vertical alignment may be used. In the preferred vertical
format, the Sprint PCS logo is centered underneath the left edge of the Sprint
diamond and the right edge of the (R) following Sprint. A minimum distance
equal to the height of the Sprint diamond (x) must separate the bottom of the
Sprint logotype and the top of the Sprint PCS logotype. The econdary vertical
format aligns Sprint PCS flush left with the "S" in Sprint. Original master
reproduction art must be used for all alignments.
. Alignment Axis - To aid in creating a family look for all Sprint
communications and to draw attention to the Sprint visual identifier, a strong
graphic or copy element should align with the vertical alignment axis of the
Sprint identifier. The alignment axis is flush left with the Sprint logotype.
. Position - The logos should be positioned in either the bottom or top 20% of
the printed material.
Logo Use
. The Sprint visual identifier (logo) should always be reproduced from master
reproduction art. The logo should always be used in the horizontal position.
Stacking of the diamond and logotype is not allowed. The diamond symbol should
never be separated from the logotype or used as a design element.
. All communications must use both the diamond Sprint visual identifier and
Sprint PCS logo.
. "Sprint PCS" should never be incorporated into the diamond Sprint logo. The
diamond Sprint visual identifier ad the Sprint PCS logo must always appear
separately.
. Sprint PCS should always appear on one line. Sprint PCS should never be
abbreviated as "SPCS."
. No patterns or graphics are permitted behind the visual identifiers.
LOGO STAGING (HORIZONTAL & VERTICAL)
Minimum spacing requirements
Preferred Format: Horizontal
SPRINT(R) SPRINT PCS(R)
Preferred Format: Vertical Alternate Format: Vertical
SPRINT PCS(R) SPRINT PCS(R)
LOGO DON'TS
The following examples violate branding standards.
Incorrect Sprint logotype stacked
with the diamond symbol.
Incorrect Sprint visual identifier
printed on a patterned background.
Incorrect: Typeset letterforms used to
approximate the Sprint PCS visual identifier
Incorrect: Sprint visual identifier
combined with incomplete
Sprint PCS logo.
Incorrect: Typeset letterforms used to
approximate the Sprint visual indentifier.
Incorrect: Sprint visual identifier
printed entirely in Sprint Red.
Incorrect: Incorrect horizontal alignment and
insufficient staging area between Sprint visual
identifier and Sprint PCS logo.
Incorrect: Sprint PCS logotype stacked.
COATED COLOR MATCH
SPOT COLOR
Sprint Red
(diamond)
Pantone 485
Sprint Gray
(logotype)
Pantone 425
PROCESS COLORS
Sprint Red
(diamond)
100% Magenta
90% Yellow
Sprint Gray
(logotype)
80% Black
<PAGE>
SPRINT PCS
SERVICES AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
TEXAS UNWIRED
JANUARY 7, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
1. ENGAGEMENT OF SPRINT SPECTRUM..................................... 1
1.1 Engagement of Sprint Spectrum............................. 1
1.2 Reliance on Manager....................................... 2
1.3 Non-exclusive Service..................................... 2
1.4 Manager's Use of Services................................. 2
2. SERVICES.......................................................... 2
2.1 Available Services; Selected Services..................... 2
2.1.1 Available Services.................................. 2
2.1.2 Selected Services................................... 3
2.1.3 Changes to Selected Services........................ 3
2.1.4 Performance of Selected Services.................... 3
2.2 Third Party Vendors....................................... 3
2.3 Contracts................................................. 4
3. FEES FOR SELECTED SERVICES........................................ 4
3.1 Payment of Fees........................................... 4
3.2 Adjustment of Fees........................................ 4
3.3 Late Payments............................................. 4
3.4 Taxes..................................................... 5
4. TERM; TERMINATION; EFFECT OF TERMINATION.......................... 5
4.1 Term...................................................... 5
4.2 Effect of Termination..................................... 5
5: BOOKS AND RECORDS; CONFIDENTIAL INFORMATION....................... 5
5.1 Books and Records......................................... 5
5.1.1 General............................................. 5
5.1.2 Audit............................................... 6
5.1.3 Contesting an Audit................................. 6
5.2 Confidential Information.................................. 7
6. INDEMNIFICATION .................................................. 8
6.1 Indemnification by Sprint Spectrum........................ 8
6.2 Indemnification by Manager................................ 9
6.3 Procedure................................................. 9
6.3.1 Notice.............................................. 9
6.3.2 Defense by Indemnitor............................... 10
6.3.3 Defense by Indemnitee............................... 10
6.3.4 Costs............................................... 10
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7. DISPUTE RESOLUTION.................................................. 10
7.1 Negotiation ................................................ 10
7.2 Unable to Resolve........................................... 11
7.3 Attorneys and Intent........................................ 11
8. REPRESENTATIONS AND WARRANTIES...................................... 11
8.1 Due Incorporation or Formation; Authorization of Agreements. 11
8.2 Valid and Binding Obligation................................ 11
8.3 No Conflict; No Default..................................... 12
8.4 Litigation.................................................. 12
9. GENERAL PROVISIONS.................................................. 12
9.1 Notices .................................................... 12
9.2 Construction ............................................... 12
9.3 Headings.................................................... 12
9.4 Further Action.............................................. 13
9.5 Specific Performance........................................ 13
9.6 Entire Agreement; Amendments................................ 13
9.7 Limitation on Rights of Others.............................. 13
9.8 Waivers; Remedies........................................... 13
9.9 Waiver of Jury Trial........................................ 14
9.10 Binding Effect.............................................. 14
9.11 Governing Law............................................... 14
9.12 Severability................................................ 14
9.13 Limitation of Liability..................................... 14
9.14 No Assignment; Exceptions................................... 15
9.15 Disclaimer of Agency........................................ 15
9.16 Independent Contractors..................................... 15
9.17 Expense..................................................... 15
9.18 General Terms............................................... 15
9.19 Conflicts with Management Agreement......................... 16
9.20 Master Signature Page....................................... 16
ii
<PAGE>
SPRINT PCS SERVICES AGREEMENT
This SERVICES AGREEMENT is made January 7, 2000, by and between Sprint
Spectrum L.P., a Delaware limited partnership ("Sprint Spectrum"), and Texas
Unwired, a Louisiana general partnership (but not any Related Party)
("Manager"). The definitions for this agreement are set forth on the "Schedule
of Definitions."
RECITALS
A. Manager and the holder of the License ("Sprint PCS") are entering into
a Management Agreement contemporaneously with the execution of this agreement,
under which Manager will design, construct, operate, manage and maintain a
wireless services network in the Service Area in accordance with Sprint PCS
standards and will offer and promote Sprint PCS Products and Services that
operate on the Sprint PCS Network.
B. Manager desires to enter into this agreement with Sprint Spectrum,
under which Sprint Spectrum may furnish certain services to Manager to assist
Manager to build out, operate, manage and maintain the Service Area Network
under the License.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. ENGAGEMENT OF SPRINT SPECTRUM
1.1 Engagement of Sprint Spectrum. Manager engages Sprint Spectrum to
assist Manager with certain specified services in connection with the operations
of Manager and in building out, operating, managing and maintaining the Service
Area Network, subject to the terms and conditions of this agreement. Sprint
Spectrum accepts the engagement and will use the same effort and demonstrate the
same care in performing its obligations under this agreement as it uses in
conducting its own business. Manager will use the efforts and demonstrate the
care necessary for Sprint Spectrum to meet its obligations under this agreement.
When providing the Selected Services, Sprint Spectrum will provide those
services to Manager in the same manner it provides those services to its own
business, including the use of third party vendors to provide certain Selected
Services.
<PAGE>
1.2 Reliance on Manager. Manager understands that Sprint Spectrum's
ability to provide the Selected Services will depend largely on Manager's
compliance with the Sprint PCS Program Requirements under the Management
Agreement and cooperation with Sprint Spectrum. Manager agrees to comply with
such requirements and to cooperate with Sprint Spectrum to enable Sprint
Spectrum to perform its obligations under this agreement.
1.3 Non-exclusive Service. Nothing contained in this agreement confers
upon Manager an exclusive right to any of the Available Services. Sprint
Spectrum may contract with others to provide expertise and services identical or
similar to those to be made available or provided to Manager under this
agreement.
1.4 Manager's Use of Services. Manager agrees it will only use the
Selected Services in connection with its Service Area Network. Manager will not
use the Selected Services outside the Service Area or in connection with any
other business.
2. SERVICES
2.1 Available Services; Selected Services.
2.1.1 Available Services. Subject to the terms of this agreement,
Manager may obtain any of the Available Services from Sprint Spectrum in
accordance with the provisions of this Section 2.1. The Available Services
offered from time to time and the fees charged for such Available Services will
be set forth on the then current Exhibit 2.1.1 (the "Available Services and Fees
Schedule"). If Sprint Spectrum offers any new Available Service, it will deliver
a new Exhibit 2.1.1 indicating the new service and the fee for the new service.
Manager may select one or more of the categories of Available
Services. If Manager selects a particular category of services it must take and
pay for all of the services under the category selected; Manager may not select
only particular services within that category.
If Sprint Spectrum determines to no longer offer an Available Service
and the service is not a Selected Service, then Sprint Spectrum may give Manager
written notice at any time during the term of this agreement that Sprint
Spectrum no longer offers the Available Service.
Sprint Spectrum may modify Exhibit 2.1.1 from time to time. Exhibit
2.1.1 will be deemed amended upon delivery of the new Exhibit 2.1.1 to Manager.
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<PAGE>
2.1.2 Selected Services. During the term of this agreement, and
subject to the terms of this agreement, Manager has selected, and Sprint
Spectrum has agreed to furnish or cause to be furnished to Manager, the
Available Services listed on Exhibit 2.1.2 (which listed services will be the
Selected Services). Sprint Spectrum may require from time to time that certain
Available Services be Selected Services where necessary to comply with legal or
regulatory requirements (e.g., mandatory provision of emergency 911 service) or
applicable operating constraints (e.g., delivery of merchandise to the regional
distribution centers of national retail distributors).
2.1.3 Changes to Selected Services. If Manager determines it no longer
requires a Selected Service, then Manager must give Sprint Spectrum written
notice at least 3 months prior to the date on which Manager wishes to
discontinue its use of such Selected Service.
If Sprint Spectrum determines to no longer offer an Available Service
and such service is one of Manager's Selected Services, then Sprint Spectrum
must give Manager written notice at least 9 months prior to its discontinuance
of such Available Service that Sprint Spectrum will no longer offer such
Available Service. If the Available Service to be discontinued is required by
Sprint Spectrum to be a Selected Service, then Sprint Spectrum will use
commercially reasonable efforts to (a) help Manager provide the service itself
or find another vendor to provide the service, and (b) facilitate Manager's
transition to the new service provider.
2.1.4 Performance of Selected Services. Sprint Spectrum may select the
method, location and means of providing the Selected Services. If Sprint
Spectrum wishes to use Manager's facilities to provide the Selected Services,
Sprint Spectrum must obtain Manager's prior written consent.
2.2 Third Party Vendors. Some of the Available Services might be provided.
by third party vendors under arrangements between Sprint Spectrum and the third
party vendors. In some instances, Manager may receive Available Services from a
third party vendor under the same terms and conditions that Sprint Spectrum
receives such services. In other instances, Manager may receive Available
Services under the terms and conditions set forth in an agreement between
Manager and the third party vendor. If Manager wishes to engage a third party
vendor to provide Available Services, Selected Services, or Available Services
that Sprint Spectrum will no longer offer, Manager must first obtain Sprint
Spectrum's prior written consent, which consent will not be unreasonably
withheld. Before Manager may obtain from the third party vendor any Available
Services, Selected Services, or Available Services that Sprint Spectrum will no
longer offer, such vendor must execute an agreement prepared by Sprint Spectrum
that obligates the vendor to maintain the confidentiality of any proprietary
information and that prohibits the vendor from using any proprietary technology,
information or methods for its benefit or the benefit of any other person or
3
<PAGE>
entity. Manager's use of a third party vendor that is not providing Available
Services to Manager on behalf of Sprint PCS under the Management Agreement will
not qualify for assumed compliance with the Program Requirements under Sections
7.1(a)(ii) or 8.1(b) of the Management Agreement.
2.3 Contracts. Manager will notify Sprint Spectrum of any contract or
other arrangement Manager has with any other party that will affect how Sprint
Spectrum is to provide the Selected Services.
3. FEES FOR SELECTED SERVICES
3.1 Payment of Fees. Sprint Spectrum and Manager agree that the fees for
the Available Services will initially be those set forth on Exhibit 2.1.1, which
fees represent an adjustment to any fees paid by Sprint PCS to Manager under
Section 10 of the Management Agreement. The monthly charge for any fees based on
the number of subscribers of the Service Area Network will be determined based
on the number of subscribers as of the 15th day of the month for which the
charge is being calculated. Manager agrees to pay the fees to Sprint Spectrum
within 20 days after the date of the invoice. If Manager enters into an
agreement with a third patty vendor under Section 2.2, Manager agrees to pay the
fees for the services rendered by the third party vendor in accordance with the
terms and conditions of such agreement.
3.2 Adjustment of Fees. Sprint Spectrum may change the fee for any
service it provides once during any 12-month period by delivering a new Exhibit
2.1.1 to Manager. Exhibit 2.1.1 will be deemed amended on the effective date
noted on the new Exhibit 2.1.1, which will be at least 30 days after delivering
the new Exhibit 2.1.1. Manager must notify Sprint Spectrum in writing before the
effective date of the new Exhibit 2.1.1 if Manager wishes to discontinue a
Selected Service for which the price is being increased (a "Cancelled Service").
If Manager discontinues a Selected Service under this Section 3.2, Sprint
Spectrum will, at Manager's option, continue to provide the Cancelled Service
and to charge Manager the current fee (i.e., the fee under the Exhibit 2.1.1 in
effect on the date Manager gives its cancellation notice to Sprint Spectrum) for
the Cancelled Service for up to 9 months from the date Sprint Spectrum gives
Manager notice of the price change or until Manager no longer needs the
Cancelled Service, whichever occurs first. If Sprint Spectrum continues to
provide the Cancelled Service after the 9-month period, Sprint Spectrum will
apply the new fee, under the new Exhibit 2.1.1, and such fee will be applied
retroactively as of the effective date of the new schedule. Manager agrees to
pay such retroactive charge within 10 days after the date of the invoice for
such charge.
3.3 Late Payments. Any payment due under this Section 3 that is not paid
by Manager to Sprint Spectrum in accordance with the terms of this agreement
will
4
<PAGE>
bear interest at the Default Rate beginning (and including) the 6th day after
the due date until (and including) the date on which such payment is made.
3.4 Taxes. Manager will pay or reimburse Sprint Spectrum for any sales,
use, gross receipts or similar tax, administrative fee, telecommunications fee
or surcharge for taxes or fees levied by a governmental authority on the fees
and charges payable to Sprint Spectrum by Manager.
4. TERM; TERMINATION; EFFECT OF TERMINATION
4.1 Term. This agreement commences on the date of execution and continues
until the Management Agreement terminates. This agreement automatically
terminates upon termination of the Management Agreement. Neither party may
terminate this agreement for any reason other than the termination of the
Management Agreement.
4.2 Effect of Termination. Upon the termination of this agreement, all
rights and obligations of each party under this agreement will immediately
cease, except that:
(a) Any rights arising out of a breach of any terms of this agreement
will survive any termination of this agreement;
(b) The provisions of this Section 4.2 and Sections 5.2, 6, 7, and 9
will survive any termination of this agreement; and
(c) The payment obligations under Section 3 will survive any
termination of this agreement if, and to the extent, any fees have accrued or
are otherwise due and owing from Manager to Sprint Spectrum or any Sprint
Spectrum Related Party as of the date of termination of this agreement.
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION
5.1 Books and Records.
5.1.1 General. Each party must keep and maintain books and records to
support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
5
<PAGE>
5.1.2 Audit. On reasonable advance written notice by the Manager, but
no more frequently than annually, Sprint PCS will provide a report issued in
conformity with Statement of Auditing Standard No. 70 "Reports on the Processing
of Transactions by Service Organizations" ("Type II Report" or "Manager
Management Report"). Such report will be prepared by independent auditors and
will provide an opinion on the controls placed in operation and tests of
operating effectiveness of those controls in effect at Sprint PCS over the
Manager Management Processes. "Manager Management Processes" include those
services generally provided within the Management Agreement, primarily billing
and collection of Collected Revenues. The Manager is responsible for costs
incurred attributable to such requested procedures with respect to the services
provided under this agreement, including without limitation discussion of the
billing and collection of Collected Revenues. This report will be made available
to the other party upon such other party's request.
5.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications Industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction. The
patties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the-completion of and to cause the Arbiter to
expedite its assignment.
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If the amount owed by a contesting party is reduced by more than 10% or
the amount owed to a contesting party is increased by more than 10% then the
non-contesting party will pay the costs and expenses of the Arbiter, otherwise
the contesting party will pay the costs and expenses of the Arbiter.
5.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the term of this agreement and 3 years after the date of
termination of this agreement, keep confidential, not disclose to others and use
only for the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this agreement,
except that the foregoing obligation will not apply to the extent that any
Confidential Information:
(i) is or becomes, after disclosure to a party, publicly known by
any means other than through unauthorized acts or omissions of the party or
its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third patty consistent with the terms of
the written approval of the party originally disclosing the information;
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(v) is required by the receiving party to be produced under order
of a court of competent jurisdiction or other similar requirements of a
governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 5.
(c) The party making a disclosure under Sections 5.2(b)(v), 5.2(b)(vi)
or 5.2(b)(vii) must inform the non-disclosing party as promptly as is reasonably
necessary to enable the non-disclosing party to take action to, and use the
disclosing party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(d) Manager will not, except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different licensed area, Manager may not use
any of the Confidential Information received under or in connection with this
agreement in operating its other wireless business.
6. INDEMNIFICATION
6.1 Indemnification by Sprint Spectrum. Sprint Spectrum agrees to
indemnify, defend and hold harmless Manager, its directors, managers, officers
and employees from and against any and all claims, demands, causes of action,
losses, actions, damages, liability and expense, including costs and reasonable
attorneys' fees, against Manager, its directors, managers, officers and
employees arising from or relating to the violation by Sprint Spectrum, its
directors, officers, employees, contractors, subcontractors, agents or
representatives of any law, regulation or ordinance applicable to Sprint
Spectrum in its performance of the Selected Services, or by Sprint Spectrum's,
or its directors', officers', employees', contractors', subcontractors', agents'
or representatives' breach of any representation, warranty or
8
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covenant contained in this agreement, except where and to the extent the claim,
demand, cause of action, loss, action, damage, liability and expense results
from the negligence or willful misconduct of Manager, its directors, managers,
officers, employees, agents or representatives. Sprint Spectrum's
indemnification obligations under this Section 6.1 do not apply to any third
party vendors that provide services (including Selected Services) directly to
Manager or Manager's Related Parties under a separate agreement.
6.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint Spectrum, its directors, officers and employees from and
against any and all claims, demands, causes of action, losses, actions, damages,
liability and expense, including costs and reasonable attorneys' fees, against
Sprint Spectrum, its directors, officers and employees arising from or relating
to Manager's, or its directors', managers', officers', employees', contractors',
subcontractors', agents' or representatives' violation of any law, regulation or
ordinance applicable to Manager, or by Manager's, or its directors', managers',
officers', employees', contractors', subcontractors', agents' or
representatives' breach of any representation, warranty or covenant contained in
this agreement, Manager's ownership of the Operating Assets or the operation of
the Service Area Network, except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and expense results from the
negligence or willful misconduct of Sprint Spectrum, its directors, officers,
employees, contractors, subcontractors, agents or representatives.
6.3 Procedure.
6.3.1 Notice. Any party being Indemnified ("Indemnitee") will give the
party making the Indemnification ("Indemnitor") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(1) any claim or demand is made or liability is asserted against
Indemnitee; or
(2) any suit, action, or administrative or legal proceeding is
instituted or commenced in which Indemnitee is involved or is named as a
defendant either individually or with others.
Failure to give notice as described in this Section 6.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitor is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
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6.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
6.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section 6.
Indemnitee is not permitted to settle the dispute or claim without the prior
written approval of Indemnitor, which approval will not be unreasonably
withheld.
6.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
7. DISPUTE RESOLUTION
7.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as
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they deem reasonably necessary, to exchange relevant information and to attempt
to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 5.1.2 and 5.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 7.1.
7.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, the parties will continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement, except neither party may bring a suit
for damages based on an event that occurs during the first two years of this
agreement.
7.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under this Section 7 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
8. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
8.1 Due Incorporation or Formation; Authorization of Agreements. The party
is either a corporation, limited liability company, or limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
8.2 Valid and Binding Obligation. This agreement constitutes the valid and
binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization,
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moratorium or other similar laws affecting the enforcement of creditors' rights
generally.
8.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, or (b) any term, condition or provision of the
articles of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
8.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
9. GENERAL PROVISIONS
9.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
All notices and other communications given to a patty in accordance with
the provisions of this agreement will be deemed to have been given when
received.
9.2 Construction. This agreement will be construed simply according to
its fair meaning and not strictly for or against either party.
9.3 Headings. The table of contents, section and other headings contained
in this agreement are for reference purposes only and are not intended to
describe, interpret, define, limit or expand the scope, extent or intent of this
agreement.
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9.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
9.5 Specific Performance. Each party agrees with the other party that the
party would be irreparably damaged if any of the provisions of this agreement
were not performed in accordance with their specific terms and that monetary
damages alone would not provide an adequate remedy. Accordingly, in addition to
any other remedy to which the non-breaching party may be entitled, at law or in
equity, the non-breaching party will be entitled to injunctive relief to prevent
breaches of this agreement and specifically to enforce the terms and provisions
of this agreement.
9.6 Entire Agreement; Amendments. The provisions of this agreement and the
Management Agreement (if Sprint Spectrum is a party to that agreement)
(including the exhibits to those agreements) set forth the entire agreement and
understanding between the parties as to the subject matter of this agreement and
supersede all prior agreements, oral or written, and other communications
between the parties relating to the subject matter of this agreement. Except for
Sprint Spectrum's right to amend the Available Services and the fees charged
for such services as shown on Exhibit 2.1.1, and Manager's right to amend the
Selected Services listed on Exhibit 2.1.2, this agreement may be modified or
amended only by a written amendment signed by persons or entities authorized to
bind each party.
9.7 Limitation on Rights of Others. Nothing in this agreement, whether
express or implied, will be construed to give any person or entity other than
the parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
9.8 Waivers; Remedies. The observance of any term of this agreement may be
waived (whether generally or in a particular instance and either retroactively
or prospectively) by the party entitled to enforce the term, but any waiver is
effective only if in a writing signed by the party against which the waiver is
to be asserted. Except as otherwise provided in this agreement, no failure or
delay of either party in exercising any power or right under this agreement will
operate as a waiver of the power or right, nor will any single or partial
exercise of any right or power preclude any other or further exercise of the
right or power or the exercise of any other right or power.
Sprint Spectrum is not in breach of any covenant in this agreement, if
failure of such party to comply with such covenant or Sprint Spectrum's non-
compliance with the covenant results primarily from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the ability to comply with the covenant;
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(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part of any
governmental authority in granting any consent, approval, waiver or
authorization;
(iii) the failure of any vendor to deliver in a timely manner any
equipment or service; or
(iv) any act of God, act of war or insurrection, riot, fire,
accident, explosion, labor unrest, strike, civil unrest, work stoppage,
condemnation or any similar cause or event not reasonably within the
control of Sprint Spectrum.
9.9 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
9.10 Binding Effect. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Management Agreement. The
parties intend that this agreement bind only the party signing this agreement
and that the agreement is not binding on the Related Parties of a party unless
the agreement provides that Related Parties are bound.
9.11 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
9.12 Severability. The parties intend every provision of this agreement to
be severable. If any provision of this agreement is held to be illegal, invalid,
or unenforceable for any reason, the parties intend that a court enforce the
provision to the maximum extent permissible so as to effect the intent of the
parties (including the enforcement of the remaining provisions). If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable provision with an enforceable
provision that reflects the original intent of the parties.
9.13 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING
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FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT OF BUSINESS UNDER, OR BREACH
OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR LOSS OF PROFITS ARE CLAIMED BY
OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION AGAINST WHICH A PARTY TO THIS
AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY ANOTHER PARTY TO THIS
AGREEMENT.
9.14 No Assignment; Exceptions. This agreement may only be assigned in
conjunction with and to the same party or parties to whom the Management
Agreement has been validly assigned under the Management Agreement's terms and
conditions.
9.15 Disclaimer of Agency. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
9.16 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither party
to this agreement has any fiduciary duty to the other party.
9.17 Expense. Each party bears the expense of complying with this agreement
except as otherwise expressly provided in this agreement.
9.18 General Terms.
(a) This agreement, including the attached Schedule of Definitions, is
to be interpreted in accordance with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires;
(ii) The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation";
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless
otherwise specified; and
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(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to
time (and, in the case of a statute or regulation, to any corresponding
provisions of successor statutes or regulations), unless the context
otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
9.19 Conflicts with Management Agreement. The provisions of the Management
Agreement govern over those of this Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Management
Agreement.
9.20 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
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SPRINT PROPRIETARY INFORMATION - RESTRICTED
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SPRINT SPECTRUM
TRADEMARK AND SERVICE MARK LICENSE
AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
TEXAS UNWIRED
JANUARY 7, 2000
<PAGE>
SPRINT SPECTRUM TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
------------------------------
THIS AGREEMENT is made as of the 7th day of January, 2000, by and between
Sprint Spectrum L.P., a limited partnership organized under the laws of the
State of Delaware, as licensor ("Licensor"), and Texas Unwired, a general
partnership organized under the laws of the State of Louisiana, as licensee
("Licensee"). THE DEFINITIONS FOR THIS AGREEMENT ARE SET FORTH ON THE "SCHEDULE
OF DEFINITIONS".
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"THE CLEAR ALTERNATIVE TO CELLULAR" and "EXPERIENCE THE CLEAR ALTERNATIVE TO
CELLULAR TODAY" and such other marks as may be adopted and established from time
to time and the goodwill of the business symbolized thereby; and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE MARK RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof,
Licensor hereby grants to Licensee, and Licensee hereby accepts
from Licensor, for the term of this agreement, a non-transferable,
royalty-free license to use the Licensed Marks solely for and in
connection with the marketing, promotion, advertisement,
distribution, lease or sale of Sprint PCS Products and Services
and Premium and Promotional Items in the Service Area.
Related Equipment. The rights granted hereunder to Licensee shall not include
the right to manufacture equipment under the Licensed Marks. However, subject to
the terms and conditions hereof, Licensor hereby grants to Licensee, and
Licensee hereby accepts from Licensor, for the term of this agreement, a non-
transferable, royalty-free license to market, promote, advertise, distribute and
resell and lease Related Equipment in connection with the marketing, promotion,
advertisement, distribution, lease or sale by Licensee of Sprint PCS Products
and Services, and to furnish services relating to such Related Equipment
(including installation, repair and maintenance of Related Equipment), under the
Licensed Marks.
<PAGE>
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law.
Such Quality Standards are designed to ensure that the quality of the
Sprint PCS Products and Services and Premium and Promotional Items
marketed, promoted, advertised, distributed, leased and sold under the
Licensed Marks are consistent with the high reputation of the Licensed
Marks and are in conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Management Agreement
as Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall
(i) be consistent with the reputation for quality associated with the
Licensed Marks and (ii) be commensurate with a high level of quality
(taking into account Licensee's fundamental underlying technology and
standards), consistent with the level of quality being offered in the
market for products and services of the same kind as the Sprint PCS
Products and Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to
change the Quality Standards, it will notify Licensee in writing of
such proposed amendments, and will afford Licensee a reasonable time
period in which to adopt such changes as may be required in order for
Licensee to conform to the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee. all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking: Compliance with Trademark Laws. Licensee shall cause
the appropriate designation "Tm" or "SM" or the registration symbol "(R)" to be
placed adjacent to the Licensed Marks in connection with the use thereof and to
indicate such additional information as Licensor shall reasonably specify from
time to time concerning the license rights under which
SPRINT SPECTRUM PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
Licensee uses the Licensed Marks. Licensee shall place the following notice on
all printed or electronic materials on which the Licensed Marks appear: "THE
CLEAR ALTERNATIVE TO CELLULAR", "EXPERIENCE THE CLEAR ALTERNATIVE TO CELLULAR
TODAY", and such other marks as may be adopted and established from time to
time, are trademarks and/or service marks of Sprint Spectrum L.P., "used under
license" or such other notice as Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the
Licensed Marks in any manner that would reflect adversely on the image of
quality symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and Licensee
and their respective Controlled Related Parties (each a "Restricted Party")
shall cause their respective officers and directors (in their capacity as such)
to, and shall take all reasonable measures to cause their respective employees,
attorneys, accountants, consultants and other agents and advisors (collectively,
and together with their respective officers and directors, "Agents") to keep
secret and maintain in confidence the terms of this agreement and all
confidential and proprietary information and data of the other party or its
Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently
comes into the public domain, through no fault of the receiving party;
(ii) prior to receipt hereunder was property within the legitimate
possession of the Receiving Party or, subsequent to receipt hereunder
is lawfully received from a third party having rights therein without
restriction of the third party's right to disseminate
SPRINT SPECTRUM PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
the Confidential Information and without notice of any restriction
against its further disclosure.
(iii) is independently developed by the Receiving Party through Persons who
have not had, either directly or indirectly, access to or knowledge of
such Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such Confidential
Information shall cease to be confidential and proprietary information
covered by this agreement only to the extent of the disclosure so
consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by a
protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for purpose
of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of
its Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of a
protective order or other appropriate remedy or receipt of a waiver hereunder,
the Receiving Party shall
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<PAGE>
furnish only that portion of the Confidential Information which it is advised by
opinion of its counsel is legally required to be furnished and shall exercise
all commercially reasonable efforts to obtain reliable assurance that
confidential treatment shall be accorded such Confidential Information, it being
understood that such reasonable efforts shall be at the cost and expense of the
disclosing party whose Confidential Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall survive,
as to any party, until two (2) years following the date of termination of this
agreement, and, as to any Controlled Related Party of a party, until two (2)
years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i) Licensee
will not at any time challenge Licensor's rights, title or interest in the
Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and
warrants that:
(a) Licensor has good title to the Licensed Marks and has the right to
grant the licenses provided for hereunder in accordance with the terms
and conditions hereof, free of any liabilities, charges, liens,
pledges, mortgages, restrictions, adverse claims,
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security interests, rights of others, and encumbrances of any kind
(collectively, "Encumbrances"), other than Encumbrances which will not
restrict or interfere in any material respect with the exercise by
Licensee of the rights granted to Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending or,
to the knowledge of Licensor, threatened with respect to Licensor's
ownership of the Licensed Marks or which, if adversely determined, would
restrict or otherwise interfere in any material respect with the
exercise by Licensee of the rights purported to be granted to Licensee
hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party am licenses or rights with respect to the Licensed Marks. Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation; Authorization of Agreement. Such party
is a corporation duly organized, a limited liability company duly
organized or a partnership duly formed, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate, company or partnership
power and authority to own its property and carry on its business as
owned and carried on at the date hereof and as contemplated hereby. Such
party is duly licensed or qualified to do business and, if applicable,
is in good standing in each of the jurisdictions in which the failure to
be so licensed or qualified would have a material adverse effect on its
financial condition or its ability to perform its obligations hereunder.
Such party has the corporate, company or partnership power and authority
to execute and deliver this agreement and to perform its obligations
hereunder and the execution, delivery and performance of this agreement
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have been duly authorized by all necessary corporate, company or partnership
action. Assuming the due execution and delivery by the other party hereto,
this agreement constitutes the legal, valid and binding obligation of such
party enforceable against such party in accordance with its terms, subject
as to enforceability to limits imposed by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and the availability of equitable
remedies.
(b) No Conflict with Restrictions; No Default. Neither the execution, delivery
and performance of this agreement nor the consummation by such party of the
transactions contemplated hereby (i) will conflict with, violate or result
in a breach of any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator, applicable to such party or any of
its Controlled Related Parties, (ii) will conflict with, violate, result in
a breach of or constitute a default under any of the terms, conditions or
provisions of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited liability
company agreement, or partnership agreement of such party or any of its
Controlled Related Parties or of any material agreement or instrument to
which such party or any of its Controlled Related Parties is a party or by
which such party or any of its Controlled Related Parties is or may be bound
or to which any of its Material properties or assets is subject (other than
any such conflict, violation, breach or default that has been validly and
unconditionally waived), (iii) will conflict with, violate, result in a
breach of, constitute a default under (whether with notice or lapse of time
or both), accelerate or permit the acceleration of the performance required
by, give to others any material interests or rights or require any consent,
authorization or approval under any indenture, mortgage, lease agreement or
instrument to which such party or any of its Controlled Related Parties is a
party or by which such party or any of its Controlled Related Parties is or
may be bound, or (iv) will result in the creation or imposition of any lien
upon any of the material properties or assets of such party or any of its
Controlled Related Parties, which in any such case could reasonably be
expected to materially impair such party's ability to perform its
obligations under this agreement or to have a material adverse effect on the
consolidated financial condition of each party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing with,
or consent, approval, license, permit or other authorization or order by,
any governmental or regulatory authority, domestic or foreign, that is
required to be obtained by such party in connection with the valid
execution, delivery, acceptance and performance by such party under this
agreement or the consummation by such party of any transaction contemplated
hereby has been completed, made or obtained, as the case may be.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or affecting
such party or any of its
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Controlled Related Parties or any of their properties, assets or
businesses in any court or before or by any governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator
which could, if adversely determined (or, in the case of an
investigation could lead to any action, suit or proceeding, which if
adversely determined could), reasonably be expected to materially impair
such party's ability to perform its obligations under this agreement or
to have a material adverse effect on the consolidated financial
condition of such party or its parent; and such party or any of its
Controlled Related Parties has not received any currently effective
notice of any default, and such party or any of its Controlled Related
Parties is not in default, under any applicable order, writ, injunction,
decree, permit, determination or award of any court, any governmental
department, board, agency or instrumentality, domestic or foreign, or
any arbitrator, which default could reasonably be expected to materially
impair such party's ability to perform its obligations under this
agreement or to have a material adverse effect on the consolidated
financial condition of such party or its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify the
other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
(i) the material breach of any representation or warranty made by such
party in this agreement; and
(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
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(b) In addition to the indemnification provided for in Section 8.1(a),
Licensee agrees to indemnify Licensor against and hold it harmless from
any Loss suffered or incurred by Licensor or its Controlled Related
Parties by reason of a third party claim arising out of or relating to
(i) the use of the Licensed Marks by Licensee; or (ii) the marketing,
promotion, advertisement, distribution, lease or sale by Licensee (or
any permitted sublicensee) or by any additional Licensee (or any
permitted sublicensee) of any Sprint PCS Products and Services, Related
Equipment or Premium and Promotional Items under the Licensed Marks
pursuant to this agreement, including unfair or fraudulent advertising
claims, warranty claims and product defect or liability claims,
pertaining to the Sprint PCS Products and Services, Related Equipment or
Premium and Promotional Items. Notwithstanding the foregoing, Licensee
will not be required under this paragraph (b) to indemnify any Loss
arising solely out of Licensee's use of the Licensed Marks in compliance
with the terms of the Trademark and Service Mark Usage Guidelines;
provided that Licensor shall have no obligation to indemnify for third-
party claims alleged to arise from the specifics of uses of third party
trademarks or service marks, or the specifics of claims made, in
marketing materials prepared by or for Licensee, which marketing
materials have not been approved by Licensor prior to the publication
out of which such claims are alleged to have arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as set
forth in this agreement shall be unconditional and irrevocable, and shall not be
subject to any defense or be released, discharged or otherwise affected by any
matter, including impossibility, illegality, impracticality, frustration of
purpose, force majeure, act of government, the bankruptcy or insolvency of any
party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make any
use of the Licensed Marks in connection with products or services other than the
Sprint PCS Products and Services, and as specifically authorized in Sections 1.1
(b) above with respect to Related Equipment and Premium and Promotional Items,
nor to make any use of the Licensed Marks directed outside of the Service Area.
Section 10.2. Adherence to Trademark and Service Mark Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Mark Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed Marks
on any type of marketing, advertising or promotional materials, Licensee agrees
to submit samples of such materials to Licensor for
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approval. Licensor shall have fourteen (14) days from the date Licensor receives
such materials to approve or object to any such materials submitted to Licensor
for review. In the event Licensor does not object to such materials within such
fourteen (14) day period, such materials shall be deemed approved by Licensor.
Thereafter, Licensee shall not be obligated to submit to Licensor materials
prepared in accordance with the samples previously approved by Licensor and the
Trademark and Service Mark Usage Guidelines; provided, however, Licensee shall,
at the reasonable request of Licensor, continue to furnish samples of such
marketing, advertising and promotional materials to Licensor from time to time
during the term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee agrees
not to use (a) any trademark or service mark which is confusingly similar to, or
a colorable imitation of, the Licensed Marks or any part thereof, or (b) any
work, symbol, character, or set of words, symbols, or characters, which in any
language would be identified as the equivalent of the Licensed Marks or that are
otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensors prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1. Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee shall
use the Licensed Marks in a manner that is consistent with the brand image and
principles established by Licensor, and mechanics to ensure consistency will be
included in the Marketing Communications Guidelines.
Section 11.3. Management of Brand Image. Licensor shall be responsible for
the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing Communications
Guidelines shall establish reasonable principles to be followed in the
development of advertising, marketing and promotional campaigns in order to
ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns
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conducted by Licensee shall be conducted in a manner consistent with the
Marketing Communications Guidelines.
Section 11.4. Advertising Agencies; Promotions. Licensee may select its own
advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall conduct
ongoing reviews of upcoming advertising, marketing and promotional campaigns of
each party and shall use good faith efforts to coordinate their respective
campaigns in a manner that will maximize the advertising, marketing and
promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition, Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5. Ownership of Advertising Materials. All agreements entered
into by Licensee with advertising agencies shall provide that Licensor shall own
all advertising materials (including concepts, themes, characters and the like)
created or developed thereunder. Subject to the terms and conditions set forth
herein, Licensee shall receive a perpetual, non-exclusive, royalty-free license
to use such materials in connection with advertising and promotional materials
developed by Licensee; provided, however, that the rights granted under such
perpetual license shall be limited solely to the use of such materials and shall
not extend the term of the license with respect to the Licensed Marks provided
for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of the
parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee agrees,
and shall require its permitted sublicensees to agree, not to incur or contract
any debt or obligation on behalf of Licensor, or commit any act, make any
representation, or advertise in any manner that may adversely affect any right
of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
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ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution and
continues until the Management Agreement terminates, unless earlier terminated
in accordance with the terms set forth in this Article 13. This agreement
automatically terminates upon termination of the Management Agreement.
Section 13.2. Events of Termination. If any of the following events shall
occur with respect to Licensee, each such occurrence shall be deemed an "Event
of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with any
of the material terms and conditions contained herein in any material
respect.
(c) Material Misrepresentation. Licensee breaches any material
representation or warranty of Licensee made in Section 4.2 or Article 6
in any material respect.
(d) Termination of Management Agreement. The termination of the Management
Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may at its option, without prejudice to any other remedies it may have,
terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4. Licensee's Right to Terminate. Licensee may, at its option,
without prejudice to any other remedies it may have, terminate this agreement by
giving written notice of such termination to Licensor as follows: (a)
immediately, in the event that Licensor abandons the Licensed Marks or otherwise
ceases to support the Licensed Marks in Licensor's business; or (b) immediately
in the event of the occurrence of a Bankruptcy with respect to Licensor; or (c)
immediately in the event of an occurrence of termination pursuant to Section
13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within
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thirty (30) days following the date on which this agreement terminates (except
in the case of a termination resulting from an Event of Termination described in
Section 13.2(b), (c) or (d), in which case such rights to use the Licensed Marks
will terminate immediately upon the date of termination); provided, however,
that Licensee may thereafter sell, transfer or otherwise dispose of any Related
Equipment and Premium and Promotional Items that are then in Licensee's
inventory (or which Licensee has purchased or is then legally obligated to
purchase) for an additional reasonable period not to exceed three (3) months.
Licensee's right of disposal under this Section 13.5 shall not prohibit Licensor
from granting to third parties during the disposal period licenses and other
rights with respect to the Licensed Marks. The provisions of Articles 3, 4, 5, 6
and 8 will survive any termination of this agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior written
consent of Licensor (in its sole discretion), shall have no right to assign any
of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing herein
shall be construed to limit the right of the Licensor to transfer or assign its
interests in the Licensed Marks, subject to the agreement of the assignee to be
bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees; Sublicenses; Licenses to
Additional Licensees. Licensee shall not sublicense (or attempt to sublicense)
any of its rights hereunder without the prior written consent of Licensor, in
the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written notice
to the other party in accordance with the provisions of this Section 15.1. All
notices and other communications given to a party in accordance with the
provisions of this agreement shall be deemed to have been given and received (i)
four (4) Business Days after the same are sent by certified or registered mail,
postage prepaid, return receipt requested, (ii) when delivered by hand or
transmitted by facsimile (with acknowledgment received and, in the case of a
facsimile only, a copy of such notice is sent no later than the next Business
Day by a reliable overnight courier service, with acknowledgment of receipt) or
(iii) one (1) Business Day after the same are sent by a reliable overnight
courier service, with acknowledgment of receipt.
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Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 153. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this agreement.
Section 15.5. Table of Contents; Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is intended
to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this agreement. If necessary to effect the intent
of the parties, the parties will negotiate in good faith to amend this agreement
to replace the unenforceable language with enforceable language which as closely
as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request of
the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of Missouri
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other party
that the other party would be irreparably damaged if any of the provisions of
this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled to
injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.10. Entire Agreement. The provisions of this agreement set forth
the entire agreement and understanding between the parties as to the subject
matter hereof and supersede all prior agreements, oral or written, and other
communications between the parties relating to the subject matter hereof.
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Section 15.11. Limitation on Rights of Others. Nothing in this agreement,
whether express or implied, shall be construed to give any party other than the
parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
Section 15.12. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction; Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any Missouri State
court sitting in the County of Jackson or any Federal court of the
United States of America sitting in the Western District of Missouri,
and any appellate court from any such court, in any suit action or
proceeding arising out of or relating to this agreement, or for
recognition or enforcement of any judgment, and each party hereby
irrevocably and unconditionally agrees that all claims in respect of
any, such suit, action or proceeding may be heard and determined in such
Missouri State Court or, to the extent permitted by law, in such Federal
court.
(b) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement in Missouri State court
sitting in the County of Jackson or any Federal court sitting in the
Western District of Missouri. Each party hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such suit, action or proceeding in any such
court and further waives the right to object, with respect to such suit,
action or proceeding, that such court does not have jurisdiction over
such party.
(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement, provided
that such service shall be deemed to have been given only when actually
received by such party. Nothing in this agreement shall affect the right
of a party to serve process in another manner permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
agreement.
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Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Section 15.16. Master Signature Page. Each party agrees that it will
execute the Master Signature Page that evidences such party's agreement to
execute, become a party to and be bound by this agreement, which document in
incorporated herein by this reference.
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Sprint PCS/Texas Unwired
Master Signature Page
This Master Signature Page is dated and effective as of January 7, 2000
(the "Effective Date"). This document provides that means by which each of the
undersigned entities executes and becomes a party to and bound by, to the extent
set forth above such party's signature, the Management Agreement, Services
Agreement, Sprint Trademark and Service Mark License Agreement, Sprint Spectrum
Trademark and Service Mark License Agreement, and Addendum I to such
agreements. This document may be executed in one or more counterparts.
THE MANAGEMENT AGREEMENT AND THE SERVICES AGREEMENT
CONTAIN BINDING ARBITRATION PROVISIONS THAT MAY BE
ENFORCED BY THE PARTIES TO THOSE AGREEMENTS
Sprint Spectrum L.P.
For and in consideration of the covenants contained in the Management
Agreement, Services Agreement, Sprint Spectrum Trademark and Service Mark
License Agreement, and Addendum I to such agreements (collectively, the
"Executed Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sprint Spectrum L.P. executes,
becomes a party to, and agrees to be bound by and to perform its obligations
under each of the Executed Agreements as of the Effective Date. The execution by
Sprint Spectrum L.P. of this Master Signature Page has the same force and effect
as if Sprint Spectrum L.P. executed individually each of the Executed
Agreements.
Sprint Spectrum L.P.
By: /s/ Bernard A. Bianchino,
------------------------------------
Bernard A. Bianchino,
Senior Vice President and Chief Business
Development Officer
<PAGE>
SprintCom, Inc.
For and in consideration of the convenants contained in the Management
Agreement, and Addendum I to such agreement (collectively, the "Executed
Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SprintCom, Inc. executes, becomes
a party to, and agrees to be bound by and to perform its obligations under each
of the Executed Agreements as of the Effective Date. The execution by SprintCom,
Inc. of this Master Signature Page has the same force and effect as if
SprintCom, Inc. executed individually each of the Executed Agreements.
SprintCom, Inc.
By: /s/ Bernard A. Bianchino,
-----------------------------------
Bernard A. Bianchino,
Senior Vice President and Chief Business
Development Officer
Sprint Communications Company, L.P.
For and in consideration of the covenants contained in the Management
Agreement, Sprint Spectrum Trademark and Service Mark License Agreement, and
Addendum I to such agreements (collectively, the "Executed Agreements"), and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sprint Communications Company, L.P. executes, becomes a party to,
and agrees to be bound by and to perform its obligations under each of the
Executed Agreements as of the Effective Date; provided, that Sprint
Communications Company, L.P. only agrees to be bound by and perform its
obligations under, and will enjoy the benefits given to it under the Management
Agreement, with respect to only those provisions that expressly apply to Sprint
Communications Company, L.P., including its obligations and benefits under
Section 2, 3 and 10. The execution by Sprint Communications Company, L.P. of
this Master Signature Page has the same force and effect as if Sprint
Communications Company, L.P. executed individually each of the Executed
Agreements.
Sprint Communications Company, L.P.
By: /s/ Don A. Jensen
---------------------------------
Don A. Jensen
Vice President - Law
2
<PAGE>
Texas Unwired
For and in consideration of the covenants contained in the Management
Agreement, Services Agreement, Sprint Trademark and Service Mark License
Agreement, Sprint Spectrum Trademark and Service Mark License Agreement, and
Addendum I to such agreements (collectively, the "Executed Agreements"), and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Texas Unwired executes, becomes a party to, and agrees to be bound
by and to perform its obligations under each of the Executed Agreements as of
the Effective Date. The execution by Texas Unwired of this Master Signature Page
has the same force and effect as if Texas Unwired executed individually each of
the Executed Agreements.
Texas Unwired
By: /s/ [Signature appears here]
--------------------------------
Name: [Name appears here]
---------------------------
Title: Assistant Manager
--------------------------
Louisiana Unwired LLC
Managing Partner
<PAGE>
NOTICE ADDRESS SCHEDULE
The addresses to which notice is to be sent pursuant to Section 17.1 of
the Management Agreement, Section 9.1 of the Services Agreement, Section 15.1 of
the Sprint Trademark and Service Mark License Agreement, or Section 15.1 of the
Sprint Spectrum Trademark and Service Mark License Agreement are as follows:
SPRINT SPECTRUM L.P.
4900 Main, 12th Floor with a copy to: 4900 Main, 12th Floor
Kansas City, Missouri 64112 Kansas City, Missouri 64112
Telephone: (816)559-1000 Telephone: (816)559-1000
Telecopier: (816)559-1290 Telecopier: (816)559-2591
Attention: Chief Executive Officer Attention: General Counsel
SPRINTCOM.INC. AND
SPRINT COMMUNICATIONS COMPANY, L.P. (and notices regarding the Sprint Brands)
c/o Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
Telephone: (913)624-3326
Telecopier: (913)624-8233
Attention: Corporate Secretary
Mail Stop: KSWESA0110
TEXAS UNWIRED
One Lakeshore Drive
Hibernia Tower, Suite 1900
Lake Charles, Louisiana 70629
Telephone: (318)436-9000
Telecopier: (318)497-3479
Attention: Thomas G. Henning
4
<PAGE>
EXHIBIT 10.21
CONSENT AND AGREEMENT
This Consent and Agreement (this "Consent and Agreement") is entered into
---------------------
as of June 23, 1999, between SPRINT SPECTRUM L.P., a Delaware limited
partnership ("Sprint Spectrum"), SPRINTCOM, INC., a Kansas corporation
---------------
("SprintCom"), SPRINT COMMUNICATIONS COMPANY, L.P., a Delaware limited
- -----------
partnership ("Sprint Communications"), WIRELESSCO, L.P., a Delaware limited
---------------------
partnership ("WirelessCo" and together with Sprint Spectrum, SprintCom and
----------
Sprint Communications, the "Sprint Parties"), and COBANK, ACB, as administrative
--------------
agent (together with any successors thereof in accordance with the Credit
Agreement hereinafter described, the "Administrative Agent") for the lenders
--------------------
under that certain Credit Agreement among LOUISIANA UNWIRED, L.L.C. (the
"Affiliate"), the Administrative Agent and the lenders from time to time party
- ----------
thereto (the "Lenders").
-------
Affiliate has entered into two Sprint PCS Management Agreements, one
Agreement dated and effective as of June 8, 1998, and one dated and effective as
of February 8, 1999 (such agreements, as they have been and may be amended,
modified, or supplemented from time to time, individually or together, the
"Management Agreement") with Sprint Spectrum and SprintCom providing for the
- ---------------------
design, construction and management of the Service Area Network (as therein
defined). Affiliate has also entered into the Sprint PCS Services Agreement (as
it may be amended, modified, or supplemented from time to time, the "Services
--------
Agreement") and the Sprint Trademark and Service Mark License Agreement and the
- ---------
Sprint Spectrum Trademark and Service Mark License Agreement (together, as they
may be amended, modified, or supplemented from time to time, the "License
-------
Agreements") (the Management Agreement, the Services Agreement and the License
- ----------
Agreements and all other agreements between Affiliate or its subsidiaries, on
the one hand and the Sprint Parties or any subsidiary of Sprint Corporation on
the other hand (whether entered into prior to, on, or after the date hereof)
that relate to the Service Area Network as they may be amended, modified, or
supplemented from time to time, collectively, the "Sprint Agreements").
-----------------
Affiliate has entered into or concurrently herewith is entering into that
certain Credit Agreement dated as of June 23, 1999 with the Administrative Agent
and the Lenders (such Credit Agreement, as it may be amended, supplemented,
restated, replaced or otherwise modified from time to time, the "Credit
------
Agreement"), to provide financing for a portion of the costs of the design and
- ---------
construction of the Service Area Network and for certain other purposes. The
Credit Agreement and each note, security agreement, pledge agreement, guaranty
and any and all other agreements, documents or instruments entered into in
connection with any of the foregoing, as the same may from time to time be
amended, supplemented, restated, replaced or otherwise modified from time to
time, shall collectively be referred to as the "Loan Documents."
--------------
As a condition to the availability of credit to Affiliate under the Credit
Agreement, the Administrative Agent and the Lenders have required the execution
and delivery of this Consent and Agreement by the Sprint Parties and have
required that Affiliate acknowledge, consent and
1
<PAGE>
agree to all terms and provisions of this Consent and Agreement.
Sprint Spectrum and SprintCom hold, directly or indirectly, certain of the
licenses for the service areas managed by Affiliate as contemplated in the
Management Agreement. As used in this Consent and Agreement, the term "Sprint
-------
PCS" shall refer in each particular instance or application to Sprint Spectrum
- ---
and/or SprintCom, based on which of the two entities owns the License in that
portion of the Service Area to which the subject of the instance or application
applies.
All capitalized terms in this Consent and Agreement shall have the same
meanings ascribed to them in the Management Agreement unless otherwise provided
in this Consent and Agreement; provided, that the terms "Default", "Event of
---------
Default" and "Obligations" shall have the meanings ascribed to them in the
Credit Agreement.
Accordingly, each Sprint Party and the Administrative Agent, on behalf of
itself and for the Lenders, hereby agrees as follows:
Section 1. Consent to Security Interest. In connection with the
----------------------------
transactions contemplated by the Credit Agreement and the other Loan Documents,
Affiliate has granted or will grant to the Administrative Agent, for the benefit
of the Lenders, a first priority security interest in and lien upon
substantially all of its assets and property, tangible and intangible, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof and accessions thereto, including without limitation the rights of
Affiliate in, to and under the Sprint Agreements, and the members of Affiliate
have granted or will grant to the Administrative Agents, for the benefit of the
Lenders, a first priority security interest in and pledge of all membership
interests or other equity interests in Affiliate (the "Pledged Equity"). The
foregoing security interests, liens and pledges are referred to collectively as
the "Security Interests" and the foregoing assets and property in which the
------------------
Administrative Agent, for the benefit of the Lenders, has been or will be
granted a first priority security interest in and lien are referred to
collectively as the "Collateral". Each Sprint Party (i) acknowledges notice of
----------
the Credit Agreement, (ii) consents to the granting of the Security Interests in
the Collateral to the Administrative Agent, for the benefit of the Lenders, and
(iii) agrees that (a) neither it nor any subsidiary of Sprint Corporation will
challenge or contest that the Security Interests are valid, enforceable and duly
perfected first priority security interests and liens in and to the Collateral
and (b) neither it nor any subsidiary of Sprint Corporation will argue that any
such Security Interest is subject to avoidance, limitation or subordination
under any legal or equitable theory or cause of action.
Each Sprint Party acknowledges and agrees that (i) Sections 17.15.1 and
----------------
17.15.2 of the Management Agreement do not apply to the assignment of
- -------
Affiliate's rights under the Sprint Agreements to the Administrative Agent or
the Lenders under the Loan Documents or in connection with a transaction
permitted pursuant to this Consent and Agreement to any other Person pursuant to
the Loan Documents or to any other assignment in connection with any
2
<PAGE>
transaction permitted pursuant to this Consent and Agreement and (ii) Section
-------
17.15.3 of the Management Agreement shall not apply to any Change of Control of
- -------
Affiliate in connection with the exercise by the Administrative Agent of any of
its rights or remedies under the Loan Documents, including without limitation in
connection with the sale of the membership interests of Affiliate to any Person
or to any other Change of Control of Affiliate; provided, however, Section
----------------- -------
17.15.3 of the Management Agreement shall apply to any such transaction if such
- -------
transaction is not with the Administrative Agent or the Lenders or is not a
transaction permitted pursuant to this Consent and Agreement. It is understood
that any assignment described in this Section 1 to the Administrative Agent or
---------
the Lenders is hereby consented to by the Sprint Parties; provided, that any
--------
subsequent assignment by the Administrative Agent or the Lenders shall be in
accordance with the terms of this Consent and Agreement.
Section 2. Payments. Upon receipt of the Administrative Agent's
--------
written instructions, each Sprint Party agrees to make all payments (if any) to
be made by it under the Sprint Agreements, subject to its rights of setoff or
recoupment with respect to such payments as permitted under Section 10.6 of the
------------
Management Agreement, to Affiliate directly to the Administrative Agent, or
otherwise as the Administrative Agent shall direct; provided, that during the
--------
period that Sprint PCS is making such payments directly to the Administrative
Agent or its designee pursuant to this Section 2, Sprint PCS' setoff and
---------
recoupment rights under such Section 10.6 shall not be limited to undisputed
------------
amounts. Any payments made by any Sprint Party directly to, or at the
direction of, the Administrative Agent shall fully satisfy any obligation of
such Sprint Party to make payments to Affiliate under the Sprint Agreements to
the extent of such payments.
Section 3. Notice and Effect of Event of Default, Management Agreement
-----------------------------------------------------------
Breach and Event of Termination. The Administrative Agent agrees to provide to
- -------------------------------
Sprint PCS a copy of any written notice that Administrative Agent sends to
Affiliate, promptly after sending such notice, that a Default or an Event of
Default has occurred and is continuing, and Sprint PCS agrees to provide to the
Administrative Agent a copy of any written notice that Sprint PCS sends to
Affiliate, promptly after sending such notice, that an Event of Termination or
an event that if not cured, or if notice is provided, will constitute an Event
of Termination (each of an Event of Termination and an event that if not cured
would constitute an Event of Termination, a "Management Agreement Breach") has
----------------------------
occurred. Sprint Spectrum and SprintCom acknowledge that the Administrative
Agent has informed them that an Event of Termination constitutes an Event of
Default under the Loan Documents, and Sprint Spectrum and SprintCom further
acknowledge that the Management Agreement does not prohibit Affiliate from
curing such an Event of Default.
Section 4. Event of Default without a Management Agreement Breach.
------------------------------------------------------
(a) Affiliate Remains as Manager or Interim Manager Appointed.
---------------------------------------------------------
Upon and during the continuation of an Event of Default when no Management
Agreement Breach as to which Sprint PCS has given the Administrative Agent
notice exists on the original
3
<PAGE>
date of occurrence of such Event of Default, the Administrative Agent may,
by prior written notice to Sprint PCS, (i) allow Affiliate to continue to
act as the Manager under the Sprint Agreements, (ii) appoint Sprint
Spectrum to act as "Interim Manager" under the Sprint Agreements, or (iii)
---------------
appoint a Person other than Sprint Spectrum to act as Interim Manager under
the Sprint Agreements. If the Administrative Agent initially allows
Affiliate to continue to act as the Manager under the Sprint Agreements,
the Administrative Agent may later, during a continuation of an Event of
Default; remove Affiliate as Manager and take the action described above in
clauses (ii) and (iii). The date on which a Person begins serving as
Interim Manager shall be the "Commencement Date."
-----------------
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
--------------------------------------------------------------
If the Administrative Agent appoints Sprint Spectrum as Interim Manager,
within 14 days after its appointment Sprint Spectrum shall accept the
position or designate another Person (a "Sprint Spectrum Designee") to act
------------------------
as Interim Manager under the Sprint Agreements. The Administrative Agent
shall accept Sprint Spectrum and any Sprint Spectrum Designee that is then
acting as an Other Manager (other than Affiliate) to act as Interim Manager
under the Sprint Agreements. Any Sprint Spectrum Designee that is not an
Other Manager must be acceptable to the Administrative Agent, which
acceptance will not be unreasonably withheld. If, within 30 days after the
Administrative Agent gives Sprint Spectrum notice of its appointment as
Interim Manager, Sprint Spectrum or a Sprint Spectrum Designee does not
agree to act as Interim Manager, then the Administrative Agent shall have
the right to appoint an Administrative Agent Designee as Interim Manager in
accordance with Section 4(c). At the discretion of the Administrative Agent
------------
Sprint Spectrum or the Sprint Spectrum Designee shall serve as Interim
Manager for up to six months from the Commencement Date.
Upon the expiration of its initial six-month period as Interim Manager
under the Sprint Agreements, Sprint Spectrum or the Sprint Spectrum
Designee will agree, at the written request of the Administrative Agent, to
serve as Interim Manager for up to six months from such expiration date
until the Administrative Agent gives Sprint Spectrum or the Sprint Spectrum
Designee at least 30 days' written notice of its desire to terminate the
relationship; provided, that the extended period will be for 12 months
--------
rather than six months (for a complete term of 18 months) in the event, as
of the date of the initial appointment, the aggregate number of pops that
Affiliate and all Other Managers have the right to serve under their
respective management agreements with the Sprint Parties is less than 40
million (such six or 12 month period, being the "Extension Period"). If
----------------
Sprint Spectrum's or the Sprint Spectrum Designee's term as Interim Manager
is extended, then the Administrative Agent agrees that Sprint Spectrum or
the Sprint Spectrum Designee's right to be reimbursed by Affiliate promptly
for all amounts previously expended by Sprint Spectrum or the Sprint
Spectrum Designee under Section 11.6.3 of the Management Agreement (which
--------------
expenditures were incurred in accordance with Section 9 of this Consent and
---------
Agreement) shall no longer be subordinated to the
4
<PAGE>
Obligations as provided in Section 9 in this Consent and Agreement, and
---------
Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
Affiliate for any expenses it incurs pursuant to its rights under Section
-------
11.6.3 of the Management Agreement as provided in the Management Agreement
------
(which expenditures were incurred in accordance with Section 9 of this
---------
Consent and Agreement) shall not be subject to the subordination to the
Obligations as provided in Section 9 of this Consent and Agreement;
---------
provided, that Sprint Spectrum or the Sprint Spectrum Designee's right to
be reimbursed for amounts expended under Section 11.6.3 of the Management
--------------
Agreement in an aggregate amount that exceed 5% of Affiliate's
shareholder's or member's equity or capital account plus Affiliate's
long-term debt (i.e., notes that on their face are scheduled to mature more
than one year from the date issued), as reflected on Affiliate's books (the
"Reimbursement Limit") shall remain subordinated to the Obligations as
-------------------
provided in Section 9 of this Consent and Agreement. Notwithstanding any
---------
other provision in this Section 4(b) to the contrary, Sprint Spectrum or
------------
the Sprint Spectrum Designee shall not be required to continue to serve as
Interim Manager during the Extension Period at any time after 30 days
following delivery by it to the Administrative Agent of written notice that
it needs to expend amounts under Section 11.6.3 of the Agreement that
--------------
Sprint Spectrum or the Sprint Spectrum Designee reasonably believes will
not be reimbursed based on the projected Collected Revenues for the
remainder of the Extension Period. If it becomes necessary for Sprint
Spectrum or the Sprint Spectrum Designee to expend any amount that it
believes will not be reimbursed or that exceeds the Reimbursement Limit,
Sprint Spectrum or the Sprint Spectrum Designee is not required to incur
such expense.
Within 20 days after the end of each calendar month that Sprint
Spectrum or the Sprint Spectrum Designee serves as Interim Manager,
commencing with the fourth such month and continuing through the
termination of the Extension Period (whether by expiration, resignation or
otherwise), Sprint Spectrum or the Sprint Spectrum Designee, as applicable,
shall provide the Administrative Agent with a written report setting forth
(i) all capital expenditures and other expenses Sprint Spectrum or the
Sprint Spectrum Designee has incurred or that it believes needs to be
incurred under Section 11.6.3 of the Management Agreement, (ii) a summary
--------------
of the costs and anticipated benefits of each such material capital
expenditure or material expense, and (iii) a statement of projected
Collected Revenues through the end of the Extension Period. Sprint Spectrum
or the Sprint Spectrum Designee, as applicable, shall indicate when any
amounts contained in a monthly report are estimated (not actual) amounts.
Upon the termination or expiration of the term of Sprint Spectrum or
the Sprint Spectrum Designee as Interim Manager, the Administrative Agent
shall have the right to appoint a successor Interim Manager in accordance
with Section 4(c).
------------
(c) Administrative Agent Designee as Interim Manager. If the
------------------------------------------------
Administrative Agent elects to appoint a Person other than Sprint Spectrum
to act as Interim Manager
5
<PAGE>
under the Sprint Agreements (an "Administrative Agent Designee") as
-----------------------------
permitted under Sections 4(a)(iii) and 4(b), such Administrative Agent
----------------- ---
Designee must (i) agree to serve as Interim Manager for six months unless
terminated earlier by Sprint PCS because of a material breach by the
Administrative Agent Designee of the terms of the Sprint Agreements or by
the Administrative Agent in its discretion, (ii) meet the applicable
"Successor Manager Requirements" set forth below in Section 13, and (iii)
------------------------------ ----------
agree to comply with the terms of the Sprint Agreements but will not be
required to assume the existing liabilities of Affiliate. In the case of a
proposed Administrative Agent Designee, Sprint PCS shall provide to the
Administrative Agent, within 10 Business Days after the request therefor, a
detailed description of all information reasonably requested by Sprint PCS
to enable Sprint PCS to determine if a proposed Administrative Agent
Designee satisfies the Successor Manager Requirements. Sprint PCS agrees to
inform Administrative Agent within 20 days after it receives such
information respecting such proposed Administrative Agent Designee from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. A Person that satisfies the
Successor Manager Requirements (or is deemed to satisfy such requirements)
qualifies under the Management Agreement to become a Successor Manager,
unless the Administrative Agent Designee materially breaches the terms of a
Sprint Agreement while acting as Interim Manager or no longer meets the
Successor Manager Requirements. The Administrative Agent Designee may
continue to serve as Interim Manager after the initial six-month period at
the Administrative Agent's discretion, so long as the Administrative Agent
Designee continues to satisfy the Successor Manager Requirements and it
does not materially breach the terms of the Sprint Agreements. If the
Administrative Agent Designee materially breaches any Sprint Agreement
while acting as Interim Manager, then Sprint PCS and the Administrative
Agent have the rights set forth in Section 5; provided, that Sprint PCS may
--------- --------
not allow Affiliate to act as the Manager of the Sprint Agreements without
the Administrative Agent's consent.
Section 5. Event of Default Created by a Management Agreement Breach.
---------------------------------------------------------
(a) Affiliate Remains as Manager or Interim Manager Appointed.
---------------------------------------------------------
Upon an Event of Default created by a Management Agreement Breach (so long
as at such time an Event of Default not created by a Management Agreement
Breach as to which Administrative Agent has given Sprint PCS notice is not
in existence), Sprint PCS may by prior written notice to Administrative
Agent (i) allow Affiliate to continue to act as the Manager under the
Sprint Agreements if approved by the Administrative Agent, (ii) act as
Interim Manager under the Sprint Agreements (in the case of Sprint
Spectrum) or appoint Sprint Spectrum as Interim Manager (in the case of
SprintCom), or (iii) appoint a Sprint Spectrum Designee to act as Interim
Manager under the Sprint Agreements as provided in paragraph (b) below. If
Sprint PCS initially allows Affiliate to continue to
6
<PAGE>
act as the Manager under the Sprint Agreements, Sprint PCS may later remove
Affiliate as Manager and take the action described above in clauses (ii)
and (iii). The Administrative Agent shall have no right to appoint an
Interim Manager when an Event of Default is caused by a Management
Agreement Breach (unless an Event of Default not created by a Management
Agreement Breach is in existence), unless Sprint PCS elects not to act as
Interim Manager or to appoint a Sprint Spectrum Designee.
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
--------------------------------------------------------------
If Sprint Spectrum acts as Interim Manager or designates a Sprint Spectrum
Designee to act as Interim Manager under the Sprint Agreements, the Interim
Manager shall serve as Interim Manager for up to six months from the
Commencement Date, at the discretion of Sprint Spectrum. The Administrative
Agent shall accept Sprint Spectrum and any Sprint Spectrum Designee that is
then acting as an Other Manager (other than Affiliate) to act as Interim
Manager under the Sprint Agreements. Any Sprint Spectrum Designee that is
not then acting as an Other Manager must be acceptable to the
Administrative Agent, which acceptance will not be unreasonably withheld.
Upon the expiration of its initial six-month period as Interim Manager
under the Sprint Agreements, Sprint Spectrum or the Sprint Spectrum
Designee will agree to serve as Interim Manager for the Extension Period
until the Administrative Agent gives Sprint Spectrum or the Sprint Spectrum
Designee at least 30 days' written notice of its desire to terminate the
relationship. If Sprint Spectrum's or the Sprint Spectrum Designee's term
as Interim Manager is extended, then the Administrative Agent agrees that
Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
Affiliate promptly for all amounts previously expended by Sprint Spectrum
or the Sprint Spectrum Designee under Section 11.6.3 of the Management
--------------
Agreement (which expenditures were incurred in accordance with Section 9 of
---------
this Consent and Agreement) shall no longer be subordinated to the
Obligations as provided in Section 9 of this Consent and Agreement, and
---------
Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
Affiliate for any expenses it incurs pursuant to its rights under Section
-------
11.6.3 of the Management Agreement as provided in the Management Agreement
------
(which expenditures were incurred in accordance with Section 9 of this
---------
Consent and Agreement) shall not be subject to subordination to the
Obligations as provided in Section 9 of this Consent and Agreement;
---------
provided, that Sprint Spectrum or the Sprint Spectrum Designee's right to
be reimbursed for amounts expended under Section 11.6.3 of the Management
--------------
Agreement in an aggregate amount that exceed the Reimbursement Limit shall
remain subordinated to the Obligations as provided in Section 9 of this
Consent and Agreement. Notwithstanding any other provision in this Section
-------
5(b) to the contrary, Sprint Spectrum or the Sprint Spectrum Designee shall
----
not be required to continue to serve as Interim Manager during the
Extension Period at any time after 30 days following delivery by it to the
Administrative Agent of written notice that it needs to expend amounts
under Section 11.6.3 of the Management Agreement that Sprint Spectrum or
--------------
the Sprint Spectrum Designee reasonably believes will not be reimbursed
based on the projected Collected
7
<PAGE>
Revenues for the remainder of the Extension Period. If it becomes necessary
for Sprint Spectrum or the Sprint Spectrum Designee to expend an amount
that it believes will not be reimbursed or that exceeds the Reimbursement
Limit, Sprint Spectrum or the Sprint Spectrum Designee is not required to
incur such expense.
Within 20 days after the end of each calendar month that Sprint
Spectrum or the Sprint Spectrum Designee serves as Interim Manager,
commencing with the fourth such month and continuing through the
termination of the Extension Period (whether by expiration, resignation or
otherwise), Sprint Spectrum or the Sprint Spectrum Designee, as applicable,
shall provide the Administrative Agent with a written report setting forth
(i) all capital expenditures and other expenses Sprint Spectrum or the
Sprint Spectrum Designee has incurred or that it believes needs to be
incurred under Section 11.6.3 of the Management Agreement, (ii) a summary
--------------
the costs and anticipated benefits of each such material capital
expenditure or material expense, and (iii) a statement of projected
Collected Revenues through the end of the Extension Period. Sprint Spectrum
or the Sprint Spectrum Designee, as applicable, shall indicate when any
amounts contained in a monthly report are estimated (not actual) amounts.
Upon the termination or expiration of the term of Sprint Spectrum or
the Sprint Spectrum Designee as Interim Manager and with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed), Sprint Spectrum shall have the right to appoint a successor
Interim Manager in accordance with Section 5(a).
------------
(c) Administrative Agent Designee as Interim Manager. Notwithstanding
------------------------------------------------
anything in paragraph (a) above to the contrary, if, after Acceleration (as
defined in Section 6(a) of this Consent and Agreement) and within 30 days
after Sprint PCS gives the Administrative Agent notice of a Management
Agreement Breach, Sprint Spectrum does not agree to act as Interim Manager
or does not obtain the consent of a Sprint Spectrum Designee to act as
Interim Manager under the Sprint Agreements, or if Sprint Spectrum or the
Sprint Spectrum Designee gives the Administrative Agent notice of its
resignation as Interim Manager and Sprint Spectrum fails to appoint a
successor in accordance with Section 5(b) within 30 days after such
------------
resignation, the Administrative Agent may appoint an Administrative Agent
Designee to act as Interim Manager. Such Administrative Agent Designee must
(i) agree to serve as Interim Manager for six months unless terminated
earlier by Sprint PCS because of a material breach by the Administrative
Agent of the terms of the Sprint Agreements or by the Administrative Agent
in its discretion, (ii) meet the applicable Successor Manager Requirements,
and (iii) agree to comply with the terms of the Sprint Agreements. In the
case of a proposed Administrative Agent Designee, Sprint PCS shall provide
to the Administrative Agent, within 10 Business Days after the request
therefor, a detailed description of all information reasonably requested by
Sprint PCS to enable Sprint PCS to determine if a proposed Administrative
Agent Designee satisfies the Successor Manager Requirements. Sprint PCS
agrees to inform Administrative Agent within 20 days after it receives such
8
<PAGE>
information respecting such proposed Administrative Agent Designee from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. A Person that satisfies the
Successor Manager Requirements qualifies under the Management Agreement to
become a Successor Manager, unless the Administrative Agent Designee
materially breaches the terms of a Sprint Agreement while acting as Interim
Manager or no longer meets the Successor Manager Requirements. The
Administrative Agent Designee may continue to serve as Interim Manager
after the initial six-month period at the Administrative Agent's
discretion, so long as the Administrative Agent Designee continues to
satisfy the Successor Manager Requirements and it does not materially
breach the terms of the Sprint Agreements. If the Administrative Agent
Designee materially breaches any Sprint Agreement while acting as Interim
Manager, then Sprint PCS and the Administrative Agent have the rights set
forth in Section 5; provided, that Sprint PCS may not allow Affiliate to
act as the Manager of the Sprint Agreements without the Administrative
Agent's consent.
Section 6. Purchase and Sale of the Operating Assets. Upon the
-----------------------------------------
occurrence and during the continuation of an Event of Default, the following
provisions shall govern the purchase and sale of the Operating Assets:
(a) Acceleration of the Obligations Under the Loan Documents. In
--------------------------------------------------------
the Lenders accelerate the maturity of the Obligations under the Loan
Documents (an "Acceleration" and, the date thereof, an "Acceleration
------------ ------------
Date"), the Administrative Agent shall give written notice thereof to
----
Sprint PCS. Upon receipt of notice of Acceleration, Sprint PCS shall have
the right, to which right Affiliate, by executing this Consent and
Agreement, expressly agrees, to purchase the Operating Assets from
Affiliate for an amount equal to the greater of (i) 72% of the Entire
Business Value (as defined in the Management Agreement) of Affiliate,
valued in accordance with the procedure set forth in Section 11.7 of the
Management Agreement (with the assumption that the deemed ownership of the
Disaggregated License under Section 11.7.3 of the Management Agreement
includes the transfer of the Sprint PCS customers as contemplated by
Section 11.4 of the Management Agreement), and (ii) the aggregate amount of
the Obligations. Sprint PCS shall, within 60 days of receipt of notice of
Acceleration, give Affiliate and the Administrative Agent notice of its
intent to exercise the purchase right. In the event Sprint PCS gives the
Administrative Agent written notice of its intent to purchase the Operating
Assets, the Administrative Agent agrees that it shall not enforce its
Security Interests in the Collateral until the earlier to occur of (i)
expiration of the period consisting of 120 days after the Acceleration Date
(or such later date that shall be provided for in the purchase agreement
and acceptable to the Administrative Agent in its discretion to close the
purchase of the Operating Assets) or (ii) receipt by Administrative Agent
and Affiliate from Sprint PCS of written notice that Sprint PCS has
determined not
9
<PAGE>
to proceed with the closing of the purchase of the Operating Assets for any
reason. If after the 120-day period after the Acceleration Date Affiliate
receives any purchase offer for the Operating Assets or the Pledged Equity
that is confirmed in writing by Affiliate to be acceptable to Affiliate,
Sprint PCS shall have the right subject to the consent of the
Administrative Agent, to purchase the Operating Assets or the Pledged
Equity of Affiliate, as the case may be, on terms and conditions at least
as favorable to Affiliate as the terms and conditions proposed in such
offer so long as within 14 Business Days after Sprint PCS's receipt of such
other offer Sprint PCS offers to purchase the Operating Assets or the
Pledged Equity and so long as the conditions of Sprint PCS's offer and the
amount of time it will take Sprint PCS to effect such purchase is
acceptable to Affiliate and Administrative Agent. Any such offer shall be
confirmed in writing by the third party offeror. In the event Sprint PCS
exercises its rights under this
Section 6(a), (i) Affiliate shall sell the Operating Assets or the Pledged
------------
Equity to Sprint PCS, (ii) the Administrative Agent and the Lenders shall
consent to such purchase and sale provided that the proceeds thereof shall
be sufficient to repay the aggregate amount of the Obligations, and (iii)
Sprint PCS shall make all payments to be made under this Section 6(a) to
Administrative Agent for its application against the Obligations. The
purchase right of the Sprint Parties under this Section 6(a) shall be in
------------
substitution of the purchase rights of the Sprint Parties under Section
-------
11.6.1 or any other provision of the Management Agreement. If Sprint PCS
------
purchases the Operating Assets or the Pledged Equity of Affiliate as
permitted under this Section 6(a), the Administrative Agent will release
------------
the Security Interests in the Collateral upon payment in full of the
aggregate amount of the Obligations and the termination of all commitments
to advance credit under the Credit Agreement.
(b) Sale of Operating Assets to Third Parties. If the Sprint Parties
-----------------------------------------
do not purchase the Operating Assets from Affiliate after an Acceleration
as described above in Section 6(a), the Collateral may be sold as follows:
-------------
(i) Sale to Successor Manager. The Collateral may be sold by the
-------------------------
Administrative Agent (in its sole discretion) in the exercise of certain of
its rights and remedies as a secured party under the Loan Documents or by
Affiliate, at the discretion of the Administrative Agent, to a person that
satisfies the Successor Manager Requirements. Sprint PCS shall provide to
the Administrative Agent, with a copy to Affiliate, within 10 Business Days
after the request therefor, a detailed description of all information
reasonably requested by Sprint PCS to enable Sprint PCS to determine if a
proposed buyer satisfies the Successor Manager Requirements. Sprint PCS
agrees to inform the Administrative Agent and Affiliate within 20 days
after it receives such information respecting such proposed buyer from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. If the proposed buyer
satisfies
10
<PAGE>
the Successor Manager Requirements (or is deemed to satisfy such
requirements) and wishes to become a "Successor Manager", the buyer must
-----------------
agree to be bound by the Sprint Agreements; provided, that buyer shall have
--------
no responsibility or liability for any liability to any Person other than a
Sprint Party and Related Party of Sprint PCS arising out of Affiliate's
operations prior to the date buyer becomes bound by the Sprint Agreements.
In such case the Sprint Agreements shall remain in full force and effect
with the buyer as Successor Manager and this Consent and Agreement shall
remain in full force and effect for the benefit of the Successor Manager
and any Person providing senior secured debt financing to such Successor
Manager if required by such Person. Sprint PCS agrees, with respect to any
past failure of Affiliate to perform any obligation under the Sprint
Agreements, that the Successor Manager shall have the same amount of time
to perform such obligation that Affiliate had under the Sprint Agreements,
with the performance period commencing on the date on which the buyer
becomes a Successor Manager. Sprint PCS shall permit the performance period
set forth in the Management Agreement to be extended for such period of
time that Sprint PCS believes is reasonable to allow Successor Manager to
perform such unperformed obligations.
(ii) Sale to Other than Successor Manager. The Collateral may be
------------------------------------
sold pursuant to the exercise by the Administrative Agent or the Lenders of
their rights and remedies under the Loan Agreements or by Affiliate, at the
discretion of the Administrative Agent (subject to requirements of
applicable law) to a person that does not satisfy the Successor Manager
Requirements or to a person that does not wish to become a Successor
Manager, but only under the following conditions:
(A) the Sprint Parties may terminate the Sprint Agreements with such
buyer following the closing of such purchase (and the Administrative Agent
and the buyer shall have no rights thereto or thereunder with respect to
events occurring after the closing of such purchase);
(B) the buyer may purchase the Disaggregated License (with the amount
of Spectrum described below in Section 6(b)(iv) and with the Disaggregated
----------------
License having the characteristics described in the definition thereof) for
a price equal to the sum of (1) the original cost of the applicable License
to Sprint PCS pro rated on a pops and spectrum basis, plus (2) the
microwave relocation costs paid by Sprint PCS attributable to clearing the
Spectrum in the Disaggregated License, plus (3) the amount of carrying
costs to Sprint PCS attributable to such original cost and microwave
relocation costs from the date of this Consent and Agreement to and
including the date on which the Disaggregated License is transferred to the
buyer, based on a rate of 12 percent per annum; and
(C) the purchase agreement with the buyer contains the requirements
set forth in Section 6(c) of this Consent and Agreement.
------------
11
<PAGE>
(iii) Confidentiality Agreement. Before any potential buyer is
-------------------------
provided Confidential Information respecting the potential purchase of any
of the Collateral (which buyer shall be entitled to receive), the potential
buyer shall execute a confidentiality agreement in the form attached as
Exhibit A with such changes thereto as may be reasonably requested by the
---------
parties to the agreement; provided, however, in the event the potential
--------
buyer does not satisfy the Successor Manager Requirements or has notified
Affiliate, Sprint PCS or the Administrative Agent that it does not intend
to be a Successor Manager, Confidential Information that constitutes or
relates to any technical, marketing, financial, strategic or other
information concerning any of the Sprint Parties and that does not pertain
to the business of Affiliate shall not be permitted to be provided to such
potential buyer.
(iv) Amount of Spectrum Sold. Sprint PCS will sell Spectrum as
-----------------------
follows when required under Section 6(b)(ii)(B):
-------------------
(A) If the buyer, an entity with respect to which such buyer
directly or indirectly through one or more persons owns the total voting
power or at least 50% of the total voting power or at least 50% of the
total equity (a) "controlled entity"), an entity that directly or
-----------------
indirectly through one or more persons has a parent entity that owns at
least 50% of the voting power or at least 50% of the total equity of both
the buyer and the common controlled entity (a "common controlled entity"),
------------------------
owns a license to provide wireless service to at least 50% of the pops in a
BTA with respect to which such buyer proposes to purchase Spectrum (each a
"Restricted Party" with respect to such BTA), the buyer may buy only 5 MHz
----------------
of Spectrum for such BTA.
(B) If the buyer is not a Restricted Party for a BTA with
respect to which such buyer proposes to purchase Spectrum, and either does
not satisfy the Successor Manager Requirements (other than those set forth
in Section 13(b) of this Consent and Agreement) or does not wish to be a
------------
Successor Manager, then the buyer may buy 5 MHz, 7.5 MHz or 10 MHz as the
buyer determines in its sole discretion.
(c) No Direct Solicitation of Customers. Upon the sale of the Collateral
-----------------------------------
or the Disaggregated License in accordance with this Consent and Agreement
pursuant to Section 6(b)(ii), then the Sprint Parties agree to transfer to the
----------------
buyer thereof the customers with a MIN assigned to the Service Area covered by
the Disaggregated License, but Sprint PCS shall retain the customers of a
national account and any resellers who are then party to a resale agreement with
Sprint PCS. Each Sprint Party agrees to take all actions reasonably requested by
the buyer of the Collateral to fully transfer to such purchaser such customers.
Each Sprint Party agrees that neither it nor any of its Related Parties will
directly or indirectly solicit, for six months after the date of transfer, the
customers with a MIN assigned to the Service Area covered by the Disaggregated
License; provided, that Sprint PCS retains the customers of a national account
--------
and any resellers that have entered into a resale agreement with Sprint PCS,
Sprint PCS may advertise nationally, regionally and locally, and engage direct
marketing firms to solicit
12
<PAGE>
customers generally. If the buyer continues to operate the purchased assets as a
wireless network in the same geographic area on a network that is
technologically compatible with Sprint PCS's network, the buyer and Sprint PCS
shall each agree to provide roaming services to the other (in the case of Sprint
PCS, the roaming services shall be provided to those customers of buyer in the
geographic area serviced by the Disaggregated License roaming nationally and, in
the case of buyer, the roaming services shall be provided to those customers of
Sprint PCS roaming in the geographic area covered by the Disaggregated License)
pursuant to a roaming agreement to be entered into between buyer and Sprint PCS
and to be mutually agreed upon so long as such agreement is based on Sprint
PCS's then standard roaming agreement used by Sprint PCS in the industry and the
price that each party shall pay the other party for roaming services provided to
the first party shall be a price equal to the lesser of: (1) MFN Pricing
provided by buyer to third parties roaming in the geographic area serviced by
the Disaggregated License; and (2) the national average paid by Sprint PCS to
third parties for Sprint PCS's customers to roam in such third parties'
geographic areas (including Other Managers). Such obligations with respect to
roaming shall continue until such roaming agreement is terminated pursuant to
its terms. The buyer shall agree in writing that if it continues to operate the
purchased assets as a wireless network in the same geographic area on a network
that is technologically compatible with Sprint PCS's network, the buyer shall,
to the extent required by law, provide resale to Sprint PCS in the geographic
area covered by the Disaggregated License at the MFN Pricing that buyer charges
third parties who purchase resale from buyer; provided, however, if buyer is not
--------
offering resale to any other customers then pricing of resale provided to Sprint
PCS shall be as mutually agreed; and provided, further, however, whether or not
-------- -------
buyer is required by law to offer such resale, buyer shall offer such resale (on
the terms described in this sentence) to national customers of Sprint PCS.
Section 7. No Limits on Remedies. Nothing contained in this Consent
---------------------
and Agreement shall limit any rights of the Administrative Agent or Lenders to
Accelerate. Except as expressly provided herein, nothing contained in this
Consent and Agreement shall limit any rights or remedies that the Administrative
Agent or the Lenders may have under the Loan Documents or applicable law. The
Administrative Agent may not sell, lease, assign, convey or otherwise dispose of
the Collateral other than as permitted under this Consent and Agreement.
Section 8. Rights and Obligations of Interim Manager. The Interim
-----------------------------------------
Manager may collect a reasonable management fee for its services; provided, that
--------
if Sprint Spectrum or a Related Party of Sprint PCS acts as Interim Manager,
such management fee shall not exceed the direct expenses relating to Sprint
Spectrum or such Related Party employees for the actual time spent by such
employees when performing the function of Interim Manager and Sprint Spectrum's
or such Related Party's out-of-pocket expenses. Such direct expenses shall
include such employees' salaries and benefits, and the out-of-pocket and accrued
expenses allocated to such employees. If Sprint Spectrum is the Interim
Manager, the management fee will be paid out of the 92% Management Fee that
Sprint PCS pays under the Management Agreement, and will be in addition to the
fees it receives under the Services Agreement. Sprint PCS shall collect such
management fee by setoff against the fees and any other amounts payable to
Affiliate under the
13
<PAGE>
Sprint Agreements. The Interim Manager will be required to operate the Service
Area Network in accordance with the terms of the Sprint Agreements and will be
subject to all of the requirements and obligations of such agreements, but will
not be required to assume the existing liabilities of Affiliate.
SECTION 9. Rights to Cure. Neither the provisions of this Consent and
--------------
Agreement nor any action of either Administrative Agent or Sprint PCS shall
require either Administrative Agent, any Lender or Sprint PCS to cure any
default of Affiliate under the Sprint Agreements or to perform under the Sprint
Agreements, but shall only give it the option to do so except to the extent
otherwise required by this Consent and Agreement. Sprint PCS may exercise its
rights under Section 11.6.3 of the Management Agreement upon an Event of
--------------
Termination, whether such situation arises while Affiliate, Sprint Spectrum, an
Administrative Agent Designee or a Sprint Spectrum Designee is acting as Interim
Manager and notwithstanding any other provision of this Consent and Agreement;
provided, that the right to reimbursement for any expenses incurred in
- --------
connection with such cure shall be unsecured and until such time as the
Obligations have been paid in full in cash and all commitments to advance credit
under the Credit Agreement have terminated or expired, the Person or Persons
entitled thereto shall not receive such reimbursement, except as specifically
provided in Section 4(b) or Section 5(b) of this Consent and Agreement. Sprint
------------- ------------
PCS shall not be permitted to deduct or setoff from its payments to Affiliate
any such amounts it is not entitled to receive under this Section and shall not
take any action of any type to attempt to collect such reimbursement and the
failure to be so reimbursed shall not constitute a Management Agreement Breach.
In the event that Sprint PCS receives any payments or distributions that it is
not entitled to receive under this Section, such payments shall be held in trust
for, and promptly turned over to, the parties entitled thereto. If Sprint PCS
has designated a third party to take action under Section 11.6.3 of the
--------------
Management Agreement, before taking any such action such third party shall enter
into an agreement with Administrative Agent providing that such third party
agrees to the provisions of this Section 9 as if it were a party hereto. Until
---------
such time as the Obligations have been paid in full in cash and all commitments
to advance credit under the Credit Agreement have terminated or expired, Sprint
PCS shall not be entitled to exercise any other remedies under the Sprint
Agreements, including, without limitation, the remedy of terminating the Sprint
Agreements (except to the extent permitted under Section 6(b)(ii)(A) of this
-------------------
Consent and Agreement) or the remedy of withholding any payment set forth in
Section 10 of the Management Agreement (subject to Sprint PCS's rights of setoff
- ----------
or recoupment with respect to such payments as permitted under Sections 2, 4(b)
----------------
and 5(b) of this Consent and Agreement). Until such time as the Obligations
- --------
have been paid in full in cash and all commitments to advance credit under the
Credit Agreement have terminated or expired, notwithstanding anything to the
contrary contained in Section 2.3 of the Management Agreement, in no event shall
-----------
any Person other than Affiliate or a Successor Manager be a manager or operator
for Sprint PCS with respect to the Service Area and neither Sprint PCS nor any
of its Related Parties shall own, operate, build or manage another wireless
mobility communications network in the Service Area, except to the extent
provided in Sections 2.3(a), (b), (c) or (d) of the Management Agreement and
--------------- --- --- ---
except to the extent that the Sprint Agreements are terminated in accordance
with Section 6(b)(ii)(A) of this Consent and
--------------------
14
<PAGE>
Agreement. The Administrative Agent acknowledges and agrees that Sprint PCS
shall also have the right to cure an Event of Default or to assist Affiliate in
curing an Event of Default but only to the extent Affiliate has the right to so
cure under the Loan Documents, as applicable (it being understood that the act
of Sprint PCS curing an Event of Default shall not constitute an independent
Event of Default unless the act itself would otherwise constitute a Default
(e.g. a sale of assets not otherwise permitted by the Loan Documents)),
including but not limited to Sprint PCS's providing Affiliate the funds
necessary to operate or meet certain financial covenants in the Loan Documents.
The Administrative Agent shall have the right to cure any Management Agreement
Breach.
SECTION 10. Sprint PCS's Right to Purchase Obligations, Operating Assets
------------------------------------------------------------
or Pledged Equity. (a) Following the Acceleration Date and until the 60-day
- -----------------
anniversary of the filing of a bankruptcy petition by or with respect to
Affiliate, Sprint PCS shall have the right to purchase the Obligations under,
and as defined in, the Credit Agreement, by repaying the Obligations in full in
cash. In the event that Sprint PCS purchases the Obligations within 60 days
immediately following the earlier of (i) the Acceleration Date and (ii) the date
of the filing of a bankruptcy petition by or with respect to Affiliate, Sprint
PCS may in lieu of purchasing the total amount of the Obligations, purchase all
Obligations other than the accrued interest with respect thereto for a purchase
price equal to the amount of the Obligations other than such accrued interest
and any fees and expenses that are unreasonable, in which case, such accrued
interest and unreasonable fees and expenses shall remain due and owing by
Affiliate to the Lenders.
(b) In the event that the Administrative Agent acquires the Operating
Assets or the Pledged Equity, Sprint PCS shall have the right to purchase the
Operating Assets or the Pledged Equity from the Administrative Agent during the
limited period of time provided in and otherwise in accordance with this Section
-------
10(b) by paying to the Administrative Agent in cash an amount equal to the sum
- -----
of the aggregate amount paid (by credit against the Obligations or otherwise) by
the Administrative Agent or the Lenders for the Operating Assets or Pledged
Equity, as the case may be, plus the aggregate amount of any remaining unpaid
Obligations. Administrative Agent shall give Sprint PCS notice of any
acquisition of the Operating Assets or the Pledged Equity by the Administrative
Agent promptly following the date of final consummation of such acquisition (the
"Acquisition Notice"). Sprint PCS shall, within 60 days of receipt of a valid
- -------------------
Acquisition Notice, give the Administrative Agent (and Affiliate, in the case of
a purchase of the Pledged Equity) notice of its intent to exercise its purchase
right under this Section 10(b). In the event Sprint PCS gives the Administrative
-------------
Agent written notice of its intent to purchase the Operating Assets or the
Pledged Equity, the Administrative Agent agrees that it shall provide Sprint PCS
the right to purchase the Operating Assets or Pledged Equity, as the case may
be, until the earlier to occur of (i) expiration of the period consisting of 120
days after Sprint PCS' receipt of a valid Acquisition Notice (or such later date
that shall be provided for in the purchase agreement and acceptable to the
Administrative Agent in its sole discretion to close the purchase of the
Operating Assets or Pledged Equity) or (ii) receipt by Administrative Agent
from Sprint PCS of written notice that Sprint PCS has determined not to proceed
with the closing of the purchase of the Operating Assets or the Pledged Equity.
If Sprint PCS at any time
15
<PAGE>
purchases the Operating Assets or the Pledged Equity as permitted under this
Section 10, the Administrative Agent will release the Security Interests in the
- ----------
Collateral upon payment in full of the aggregate amount of the Obligations.
Notwithstanding the foregoing, in the event that a bankruptcy petition is filed
by or with respect to Affiliate, Sprint PCS shall again have the right to
purchase the Operating Assets or the Pledged Equity from the Administrative
Agent by repaying the Obligations in full in cash, by giving the Administrative
Agent notice of its intent to exercise such purchase right no later than 60 days
following the date of filing of such bankruptcy petition.
(c) If at any time during the period described in Section 10(a) or
-------------
10(b) above or thereafter the Administrative Agent receives any purchase offer
- -----
for the Operating Assets, the Pledged Equity or the Obligations, as applicable,
that is acceptable to the Administrative Agent, the Administrative Agent shall
exercise reasonable efforts to obtain the consent of the offeror to deliver a
copy of such offer to Sprint PCS and Sprint PCS shall have the right to purchase
the Operating Assets, the Pledged Equity or the Obligations, as applicable, on
terms and conditions at least as favorable to the Administrative Agent as the
terms and conditions proposed in such offer so long as within 14 Business Days
after Sprint PCS's receipt of such other offer Sprint PCS offers to purchase the
Operating Assets, the Pledged Equity or the Obligations, as applicable, and so
long as the conditions of Sprint PCS's offer and the amount of time it will take
Sprint PCS to effect such purchase is acceptable to the Administrative Agent and
the Lenders.
(d) If Sprint PCS at any time purchases the entirety of the
Obligations as provided in this Section 10, the Administrative Agent shall
assign and transfer or cause the Lenders to assign and transfer to Sprint PCS
all rights and interests in, to and under all of the Loan Documents, including
but not limited to all security interests, liens, financing statements,
guaranties and other credit enhancements related to such Loan Documents, and all
rights and claims thereunder (collectively referred to as the "Loan Document
--------------
Rights"). If Sprint PCS purchases less than all the Obligations (as permitted
- ------
in the second sentence of Section 10(a) above), then the Administrative Agent
-------------
shall assign and transfer or cause the Lenders to assign and transfer to Sprint
PCS all Loan Document Rights, except that the Administrative Agent shall retain
the unsecured right to collect the amount of the Obligations not purchased by
Sprint PCS.
SECTION 11. Foreclosure. Upon the Administrative Agent or any Lender or
-----------
any other Person that meets the Successor Manager Requirements acquiring the
Operating Assets and the Sprint Agreements, then such Person shall be entitled
to exercise any and all rights of Affiliate under the Sprint Agreements in
accordance with the terms of the Sprint Agreements and each Sprint Party will
thereupon comply in all respects with such exercise by such Person and perform
its obligations under the Sprint Agreements and this Consent and Agreement for
the benefit of such Person. Each Sprint Party agrees that the Administrative
Agent or any Lender may (but shall not be obligated to), subject to and in
accordance with the terms of this Consent and Agreement, assign its rights and
interests acquired in the Operating Assets and the Sprint Agreements to any
buyer or transferee thereof and, in the event the buyer wishes to become a party
to the Sprint Agreements and such buyer satisfies the Successor Manager
Requirements,
16
<PAGE>
such buyer shall be bound by the Sprint Agreements; provided, that buyer shall
--------
have no responsibility or liability to any Person other than a Sprint Party and
a Related Party of a Sprint Party arising out of Affiliate's operations prior to
the date buyer becomes bound by the Sprint Agreements. In such case the Sprint
Agreements shall remain in full force and effect with the buyer as Successor
Manager and this Consent and Agreement shall remain in full force and effect for
the benefit of the Successor Manager and any Person providing senior secured
debt financing to such Successor Manager if required by such Person. Sprint PCS
agrees, with respect to any past failure of Affiliate to perform any obligation
under the Sprint Agreements, that the Successor Manager shall have the same
amount of time to perform such obligation that Affiliate had under the Sprint
Agreements, with the performance period commencing on the date on which the
buyer becomes a Successor Manager. Sprint PCS shall permit the performance
period set forth in the Management Agreement to be extended for such period of
time that Sprint PCS believes is reasonable to allow Successor Manager to
perform such unperformed obligations.
SECTION 12. Trademarks and Service Marks. In the event the
----------------------------
Administrative Agent forecloses on its security interest in the License
Agreements and transfers the License Agreements to a Person who does not meet
the Successor Manager Requirements, then Sprint PCS shall have the right to
terminate the License Agreements and cause the Administrative Agent to release
its security interest in the License Agreements immediately prior to such
transfer.
SECTION 13. Interim Manager and Successor Manager Requirements. To
--------------------------------------------------
qualify as an Interim Manager or a Successor Manager, the Person must satisfy
each of the following "Successor Manager Requirements," as applicable:
-------------------------------
(a) The Person must not during the three-year period immediately
preceding the date of determination have materially breached any material
agreement with Sprint Spectrum or its Related Parties that resulted in the
exercise of a termination right or in the initiation of judicial or
arbitration proceedings;
(b) The Person must not be one of the Persons identified on Schedule
--------
13 (a "Schedule 13 Person"); provided, that no Other Manager under any
-- ------------------
Sprint PCS Management Agreement may be identified on Schedule 13;
(c) In the case of a Successor Manager, the Person must meet a
reasonable Person's credit criteria (taking into consideration the
circumstances), it being understood that such criteria is satisfied if the
financial projections contained in the business plan such Person submits to
Sprint PCS shows the ability to service its indebtedness and meet the
build-out requirements contained in the Build-out Plan; and
(d) The Person must agree to be bound by the terms of the Sprint
Agreements as if an original party thereto; provided, in the case of an
--------
Interim Manager the Person
17
<PAGE>
must also execute a separate confidentiality agreement in the form attached
as Exhibit A with such changes thereto as may be reasonably requested by
---------
the parties to the agreement, but the Person is not required to assume the
existing liabilities of Affiliate.
Except as provided in Schedule 13, the Administrative Agent, each Lender
-----------
and each of their wholly-owned subsidiaries or entities who wholly-own such
entities shall be deemed to satisfy Sections 13(a), (b) and (c) of the preceding
--------------- --- ---
"Successor Management Requirements".
---------------------------------
SECTION 14. Management Agreement. Sprint PCS agrees that it will not
--------------------
exercise its right under the Management Agreement to purchase the Operating
Assets or to sell the Disaggregated License to Affiliate if before, or after
giving effect to such exercise, there would exist a Default or Event of Default
under the Credit Agreement, unless Sprint PCS pays the aggregate amount of the
Obligations as a condition of the exercise of such right and the Credit
Agreement shall have been terminated in connection with such payment. Sprint
PCS agrees that until the Obligations have been paid in full in cash and all
commitments to advance credit under the Credit Agreement have terminated or
expired, a failure to pay any amount by any Related Party of Affiliate under any
agreement with Sprint PCS or any of its Related Parties shall not constitute a
Management Agreement Breach for any purpose. Subject to regulatory approval in
connection with any such sale, Sprint PCS agrees that it shall always maintain
the ability to sell the Disaggregated License in accordance with this Consent
and Agreement. Sprint PCS shall own at least 10 MHz of Spectrum in the Service
Area until the first to occur of the following events: (i) the Obligations have
been paid in full in cash and all commitments to advance credit under the Credit
Agreement have terminated or expired, (ii) the sale by Sprint PCS of the
Spectrum pursuant to this Consent and Agreement shall be effected, and (iii) the
sale of the Operating Assets pursuant to this Consent and Agreement. Sprint PCS
acknowledges that the financing provided pursuant to the Loan Documents complies
with Section 1.7 of the Management Agreement dated as of June 8, 1998 and
------------
Section 11.3.6 of such Management Agreement shall no longer be applicable with
- --------------
respect to such financing, but such financing does not satisfy the financing
requirements under the Management Agreement dated as of February 8, 1999.
Notwithstanding anything to the contrary contained in Section 12.2 of the
------------
Management Agreement, the Administrative Agent, the Lenders, and any Successor
Manager or buyer of the Operating Assets or Disaggregated License shall be
permitted to disclose Confidential Information (as defined in the Management
Agreement) (i) to the extent required by law, rule or regulation, (ii) to any
regulator or any regulatory body regulating such entity, (iii) to any rating
agency in connection with requirements applicable to such Person and (iv) to the
lawyers and accountants for any such Persons.
SECTION 15. Administrative Agent and Eligible Assignees.
-------------------------------------------
(a) The Administrative Agent and each Lender must be an Eligible
Assignee. "Eligible Assignee" shall mean and include a commercial bank,
-----------------
financial institution, other "accredited investor" (as defined in
Regulation D of the Securities Act) other than individuals, or a "qualified
---------
institutional buyer" as defined in rule 144A of the Securities
-------------------
18
<PAGE>
Act; provided, that prior to the 61st day after the filing of a bankruptcy
--------
petition by or with respect to Affiliate in no event may any Person that is
engaged in or that controls, is controlled by or is under common control
with any Person engaged in, the telecommunications service business in the
United States (other than Sprint Corporation and its subsidiaries), be an
Eligible Assignee, it being understood that no small business investment
corporation that is ultimately owned by an Eligible Assignee that is
subject to Regulation Y shall be deemed to be controlled by or under common
control with such Eligible Assignee; and provided further, that after the
----------------
filing of such bankruptcy petition in no event may a Schedule 13 Person be
an Eligible Assignee.
(b) If (i) the Administrative Agent or any Lender becomes a Schedule
13 Person and (ii) a new Administrative Agent or Lender (as applicable)
commits to purchase all interests of such Administrative Agent or Lender in
the Obligations and the Loan Documents and assume all commitments and
obligations of such Administrative Agent or Lender under the Loan
Documents, in each case within such three months as described in clause (A)
below, for the aggregate amount of the unpaid Obligations of such
Administrative Agent or Lender, then such Administrative Agent or Lender
shall (A) assuming such purchaser does not breach its commitment to so
purchase, divest itself of all interests in the Obligations and the Loan
Documents within three (3) months after such Administrative Agent or Lender
becomes a Schedule 13 Person by selling such interests in consideration of
the payment of such aggregate amount and the assumption of such commitments
and obligations, and (B) promptly upon the consummation of such sale, no
longer be given or be entitled to receive any Confidential Information. In
no event shall the Administrative Agent or any Lender be obligated or
responsible to find or obtain a purchaser to purchase any Obligations or
Loan Documents or to assume any commitments or obligations.
SECTION 16. Sprint Party Representations. Each Sprint Party represents
----------------------------
and warrants to the Administrative Agent, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate and partnership action, and does not and
will not require any further consents or approvals that have not been obtained,
or violate any provision of any law, regulation, order, judgment, injunction or
similar matters or materially breach any agreement presently in effect with
respect to or binding on it; provided, that the transfer of Spectrum as
--------
contemplated under this Consent and Agreement will require regulatory approval
(which each Sprint Party agrees to use its commercially reasonable efforts to
obtain); (b) this Consent and Agreement is a legal, valid and binding obligation
of such Person enforceable against it in accordance with its terms, except that
(i) such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be limited by
equitable defenses and by the discretion of the court before which any
proceeding may be brought; (c) the Sprint Agreements are in full force and
effect and have not been amended, supplemented or modified; (d) as of the date
of execution hereof, to the knowledge of the Sprint
19
<PAGE>
Parties, no Event of Termination has occurred and is continuing (without regard
to any requirement of the delivery of written notice necessary to the occurrence
of an Event of Termination under Section 11.3 of the Management Agreement);
------------
provided, that Sprint PCS has delivered to Affiliate and the Administrative
- --------
Agent a document titled "Louisiana Unwired, L.L.C. Management Agreement Non-
Compliance Summary," which describes events that, if not cured, will become
Events of Termination; (e) on the date the Management Agreement was executed
Sprint PCS owned, and on the date hereof Sprint PCS owns, 10 MHz or more of
Spectrum in the Service Area; and (f) the only existing agreements or
arrangements between Affiliate, on the one hand, and Sprint Corporation or any
of its subsidiaries, on the other hand, are the Management Agreement, the
Services Agreement and the License Agreements.
SECTION 17. Administrative Agent Representations. The Administrative
------------------------------------
Agent represents and warrants to Sprint PCS, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate action, and does not and will not require
any further consents or approvals that have not been obtained, or violate any
provision of any law, regulation, order, judgment, injunction or similar matters
or materially breach any agreement presently in effect with respect to or
binding on it; (b) this Consent and Agreement is a legal, valid and binding
obligation of the Administrative Agent enforceable against it in accordance with
its terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be limited by equitable defenses and by the discretion of the court
before which any proceeding may be brought; (c) at the time of the execution
hereof, the only Lenders are CoBank, ACB, The Bank of New York, First Union
National Bank, PNC Bank, The CIT Group/Equipment Financing, Inc., and Coast
Business Credit, a division of Southern Pacific Bank; and (d) as of the date of
execution hereof, to the knowledge of the Administrative Agent, no Event of
Default has occurred and is continuing.
SECTION 18. Successors and Assigns. This Consent and Agreement shall be
----------------------
binding upon the successors and assigns of the parties hereto and shall inure,
together with the rights and remedies of the parties hereunder, to the benefit
of their respective successors and assigns. In the event the Sprint PCS Network
is sold in accordance with the Management Agreement, the buyer thereof will
assume the obligations of the Sprint Parties hereunder and under all the other
Sprint Agreements other than the Sprint Trademark and Service Mark License
Agreement; provided, however, the buyer of the Sprint PCS Network shall enter
--------
into an agreement with Affiliate on substantially the same terms as the Sprint
Trademark and Service Mark License Agreement with respect to such buyers'
trademarks, service marks, brands, etc. In the event a Successor Manager
becomes a party to the Sprint Agreements as provided in this Agreement, this
Consent and Agreement shall remain in full force and effect for the benefit of
the Successor Manager and any Person providing senior secured debt financing to
such Successor Manager if required by such Person.
20
<PAGE>
SECTION 19. Amendment. Neither this Consent and Agreement nor any
---------
provision herein may be waived except pursuant to an agreement or agreements in
writing entered into by Sprint PCS, the Administrative Agent and Affiliate, and
neither this Consent and Agreement nor any provision herein may be amended or
modified except pursuant to an agreement or agreements in writing entered into
by Sprint PCS, the Administrative Agent and Affiliate. The Administrative Agent
and each Lender (and its successors and assigns) shall be bound by any
modification or amendment authorized by this Section 19. No amendment or waiver
----------
or effective amendment or waiver entered into in violation of this Section 19
----------
shall be valid; provided, however, that no consent of Affiliate shall be
necessary for any amendment or modification to this Consent and Agreement made
pursuant to and in accordance with Section 24 hereof.
----------
SECTION 20. APPLICABLE LAW. THIS CONSENT AND AGREEMENT SHALL BE
--------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO.
SECTION 21. Notices. Notices and other communications provided for in
-------
this Consent and Agreement shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) if to Sprint PCS, to it at:
Sprint Spectrum L.P.
4900 Main, 12th Floor
Kansas City, Missouri, 64112
Telephone No.: (816) 559-1000
Telecopier No.: (816) 559-1290
Attention: Chief Executive Officer
with a copy to:
4900 Main, 11th Floor
Kansas City, Missouri, 64112
Telephone No.: (816) 559-1000
Telecopier No.: (816) 559-2591
Attention: General Counsel
(b) if to the Administrative Agent, to it at:
CoBank, ACB, as Administrative Agent
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Attention: Rural Utility Banking Group
21
<PAGE>
Telephone No.: (770) 618-3200
Telecopier No.: (816) 618-3202
(c) if to Affiliate, to it at:
Louisiana Unwired, L.L.C.
c/o US Unwired, L.L.C.
One Lakeshore Drive
Lake Charles, Louisiana 70602-3759
Telephone No.: (318) 436-9000
Telecopier No.: (318) 439-0769
Attention: Finance Department
with a copy to:
Telephone No.: (318) 436-9000
Telecopier No.: (318) 497-3479
Attention: Thomas G. Henning
All notices and other communications given to any party hereto in accordance
with the provisions of this Consent and Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy, or on the date five (5) business days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 21 or in
----------
accordance with the latest unrevoked direction from such party given in
accordance with this Section 21.
----------
SECTION 22. Counterparts. This Consent and Agreement may be executed in
------------
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
SECTION 23. Severability. Any provision of this Consent and Agreement
------------
that 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. The parties
shall endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provision with valid provisions the economic effect of which is as
close as possible to that of the invalid, illegal or unenforceable provision.
SECTION 24. Amendments to Form Consent and Agreement. If Sprint PCS
----------------------------------------
modifies or amends the form of Consent and Agreement it enters into with another
lender, then Sprint PCS agrees to give the Administrative Agent written notice
of such modifications and amendments and, at the request of Administrative
Agent, to amend this Consent and Agreement in the same
22
<PAGE>
manner; provided, that: (a) Sprint PCS will not modify this Consent and
--------
Agreement to incorporate changes made for the benefit of a lender because of
circumstances related to a particular Other Manager, subject to the limitations
set forth below; (b) the Administrative Agent must agree to make all (or none)
of the changes made for the other lender and the Other Manager, unless Sprint
PCS agrees to allow the Administrative Agent to make only some of the changes;
and (c) Sprint PCS is only required to make changes to this Consent and
Agreement based on changes made to the form of Consent and Agreement executed in
connection with loans to Other Managers that are syndicated or intended to be
syndicated (i.e., loans sold or participated, or intended to be sold or
participated, in whole or in part to at least three financial institutions or
investment funds) (a"Syndication Consent") until the later to occur of: (i)
-------------------
five Syndication Consents are executed, and (ii) loans to Other Managers are
syndicated where the pops in the Service Areas of such Other Managers, in the
aggregate, exceed 10 million; provided, however, that in the event any
-------- -------
Syndicated Consent executed after such later date relates to a transaction where
the pops in the Service Area of the Other Manager exceed 5 million, Sprint PCS
agrees to give the Administrative Agent the right to so amend this Consent and
Agreement, subject to the provisions of clauses (a) and (b) above.
For purposes of subsection (a) in the preceding paragraph, Sprint PCS will
not deem the following changes to be made because of circumstances related to a
particular Other Manager: (i) any form of recourse to Sprint PCS or other
similar form of credit enhancement; (ii) any change in Sprint PCS's right to
purchase Operating Assets, the Pledged Equity or Obligations; (iii) any change
in Affiliate's, Administrative Agent's or Lenders' right to sell the Collateral
or purchase the Disaggregated License (including, without limitation, any rights
of first refusal and the purchase price of the Disaggregated License); (iv) any
change in the ownership status, terms of usage or amount of Disaggregated
License utilized by Affiliate; (v) any material change in the flow of revenues
between Sprint Spectrum and Affiliate excluding changes related to the pricing
of direct or indirect fees, but including any subordination of direct or
indirect fees or other amounts or costs due under the Sprint Agreements or
hereunder to Sprint PCS; (vi) any change to obligations required to be assumed
by, or qualifications for, any Interim or Successor Manager, including changes
in the time period or terms under which Sprint PCS agrees to remain as Interim
Manager; (vii) any changes in confidentiality, non-compete or Eligible Assignee
language, including changes to Schedule 13; (viii) any clarifications of FCC
compliance issues; (ix) the issuance of legal opinions; (x) any change in the
circumstances under, or procedures by which, an Interim Manager or Successor
Manager is appointed; or (xi) any change to this Section 24.
[The remainder of this page is intentionally left blank.]
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Agreement to be executed by their respective authorized officers as of the date
and year first above written.
SPRINT SPECTRUM L.P.
By: /s/ Bernard A. Bianchino
----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINTCOM, INC.
By: /s/ Bernard A. Bianchino
------------------------------------
Bernard A. Bianchino
Vice President
WIRELESSCO, L.P.
By: /s/ Bernard A. Bianchino
-------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Thomas E. Weigman
-------------------------------------
Thomas E. Weigman, Senior Vice President,
Consumer Market Strategy and Communication
COBANK, ACB,
for itself and as Administrative Agent
By: /s/ Rick Freeman
-------------------------------------
Name: Rick Freeman
-----------------------------------
Title: Vice President
----------------------------------
24
<PAGE>
Acknowledgment, Consent and Agreement of Affiliate
--------------------------------------------------
The undersigned Affiliate (i) has reviewed this Consent and Agreement, (ii)
acknowledges, consents and agrees to the terms and provisions of this Consent
and Agreement, and (iii) agrees to be bound by the terms and provisions of this
Consent and Agreement, including, without limitation, such terms and provisions
that affect Affiliate, its assets or its rights under the Management Agreement.
Without limiting the generality of the foregoing: (i) Affiliate acknowledges
and agrees that the right to appoint an Interim Manager is intended to allow the
right and ability to preserve and/or protect the Collateral or its value and the
Service Area Network or its value and (ii) Affiliate acknowledges and agrees
that in the event of the sale of the Collateral by the Administrative Agent, the
value of the Collateral may be dependent on the right of the Person purchasing
the Collateral to assume or be a party to the Sprint Agreements and acknowledges
that any sale of the Collateral in accordance with Sections 6 and 10 hereof, the
-----------------
other provisions of this Consent and Agreement and, to the extent not
inconsistent with this Consent and Agreement, the Loan Documents is agreed to be
a commercially reasonable disposition of the Collateral by Administrative Agent.
LOUISIANA UNWIRED, L.L.P.
By: ______________________
Name: ______________________
Title: ______________________
25
<PAGE>
Exhibit 10.22
CONSENT AND AGREEMENT
(Louisiana Unwired and Texas Unwired)
This Consent and Agreement (this "Consent and Agreement") is entered into
---------------------
as of October 26, 1999, between SPRINT SPECTRUM L.P., a Delaware limited
partnership ("Sprint Spectrum"), SPRINTCOM, INC., a Kansas corporation
---------------
("SprintCom"), SPRINT COMMUNICATIONS COMPANY, L.P., a Delaware limited
---------
partnership ("Sprint Communications"), WIRELESSCO, L.P., a Delaware limited
---------------------
partnership ("WirelessCo" and together with Sprint Spectrum, SprintCom and
----------
Sprint Communications, the "Sprint Parties"), and COBANK, ACB, as administrative
--------------
agent (together with any successors thereof in accordance with the Credit
Agreement hereinafter described, the "Administrative Agent") for the lenders
--------------------
under that certain Credit Agreement among US UNWIRED, INC. (the "Parent"), the
------
Administrative Agent and the lenders from time to time party thereto (the
"Lenders"). Parent is the approximately 96% owner of Louisiana Unwired, L.L.C.
-------
("Louisiana Unwired"), which in turn is the approximately 80% owner of Texas
-----------------
Unwired, a Louisiana general partnership ("Texas Unwired", and together with
-------------
Louisiana Unwired, the "Affiliates" and, each, an "Affiliate"). This Consent
---------- ---------
and Agreement is intended to replace in its entirety that certain Consent and
Agreement dated June 23, 1999 by and between the Sprint parties and the
Administrative Agent. This Consent and Agreement shall be effective and the June
23, 1999 Consent and Agreement shall be terminated and of no further force or
effect, upon the payment in full of all amounts outstanding under the
indebtedness referenced by the June 23, 1999 Consent and Agreement.
Louisiana Unwired has entered into two Sprint PCS Management Agreements,
one Agreement dated and effective as of June 8, 1998 (the "June 8, 1998
------------
Management Agreement"), and one dated and effective as of February 8, 1999 (the
- --------------------
"February 8, 1999 Management Agreement"), and Texas Unwired expects to enter
-------------------------------------
into a Sprint PCS Management Agreement (all three such agreements, as they have
been and may be amended, modified, or supplemented from time to time,
individually or together, the "Management Agreement"), with Sprint Spectrum and
--------------------
SprintCom providing for the design, construction and management of the Service
Area Networks (as therein respectively defined). Affiliates also have entered
or will enter into a Sprint PCS Services Agreement (as they may be amended,
modified, or supplemented from time to time, the "Services Agreement") and a
------------------
Sprint Trademark and Service Mark License Agreement and a Sprint Spectrum
Trademark and Service Mark License Agreement (together, as they may be amended,
modified, or supplemented from time to time, the "License Agreements") (the
------------------
Management Agreement, the Services Agreement and the License Agreements and all
other agreements between either Affiliate or its subsidiaries, on the one hand,
and the Sprint Parties or any subsidiary of Sprint Corporation on the other hand
(whether entered into prior to, on, or after the date hereof) that relate to the
Service Area Networks as they may be amended, modified, or supplemented from
time to time, collectively, the "Sprint Agreements").
-----------------
Parent has entered into or concurrently herewith is entering into that
certain Credit Agreement dated as of October 1, 1999 with the Administrative
Agent and the Lenders (such
1
<PAGE>
Credit Agreement, as it may be amended, supplemented, restated, replaced or
otherwise modified from time to time, the "Credit Agreement"), to provide
----------------
financing for a portion of the costs of the design and construction of the
Service Area Networks and for certain other purposes. The Credit Agreement and
each note, security agreement, pledge agreement, guaranty and any and all other
agreements, documents or instruments entered into in connection with any of the
foregoing, as the same may from time to time be amended, supplemented, restated,
replaced or otherwise modified from time to time, shall collectively be referred
to as the "Loan Documents." All capitalized terms in this Consent and Agreement
--------------
shall have the same meanings ascribed to them in the Management Agreement unless
otherwise provided in this Consent and Agreement; provided, that the terms
--------
"Default", "Event of Default" and "Obligations" shall have the meanings ascribed
to them in the Credit Agreement.
The Obligations under the Loan Documents are or will be fully or partially
guaranteed, directly or indirectly, by the Affiliates and other subsidiaries of
Parent (collectively, the "Subsidiaries") and by Lucent Technologies Inc.
------------
("Lucent") pursuant to those certain Guaranties executed by the Subsidiaries in
------
favor of the Administrative Agent and the Lenders (the "Subsidiaries
------------
Guaranties") and that certain Guaranty executed by Lucent in favor of the
- ----------
Administrative Agent and the Lenders (the "Lucent Guaranty"), respectively.
---------------
Lucent and the Subsidiaries are collectively referred to as the "Guarantors."
----------
That certain Indemnity and Reimbursement Agreement (the "Lucent Reimbursement
--------------------
Agreement") between Lucent, Parent and the Subsidiaries sets forth some of
- ---------
Lucent's rights upon Lucent's payment to the Administrative Agent of amounts
pursuant to the Lucent Guaranty. The Subsidiaries Guaranties and the Lucent
Guaranty are collectively referred to as the "Guaranties" and Guaranties and the
----------
Lucent Reimbursement Agreement are collectively referred to as the "Guaranty
--------
Documents."
- ---------
As a condition to the availability of credit to Parent under the Credit
Agreement, the Administrative Agent and the Lenders have required the execution
and delivery of this Consent and Agreement by the Sprint Parties and have
required that Parent, Subsidiaries and Other Investors (as defined below)
acknowledge, consent and agree to all terms and provisions of this Consent and
Agreement. The term "Other Investors" means the members and partners of
---------------
Subsidiaries, other than Parent, including but not limited to Cameron
Communications Corporation, Louisiana Unwired, Fort Bend Communications
Corporation and XIT Leasing, Inc..
Sprint Spectrum and SprintCom hold, directly or indirectly, certain of the
licenses for the service areas managed by Affiliate as contemplated in the
Management Agreement. As used in this Consent and Agreement, the term "Sprint
------
PCS" shall refer in each particular instance or application to Sprint Spectrum
- ---
and/or SprintCom, based on which of the two entities owns the License in that
portion of the Service Area to which the subject of the instance or application
applies.
Accordingly, each Sprint Party and the Administrative Agent, on behalf of
itself and for the Lenders, hereby agrees as follows:
2
<PAGE>
SECTION 1. Consent to Security Interest. In connection with the
----------------------------
transactions contemplated by the Credit Agreement and the other Loan Documents,
each Affiliate has granted or will grant to the Administrative Agent, for the
benefit of the Lenders, a first priority security interest in and lien upon
substantially all of its assets and property, tangible and intangible, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof and accessions thereto, including without limitation the rights of such
Affiliate in, to and under the Sprint Agreements to which it is a party, and the
members or partners of such Affiliate have granted or will grant to the
Administrative Agent, for the benefit of the Lenders, a first priority security
interest in and pledge of all membership interests, partnership interests or
other equity interests in such Affiliate (the "Pledged Equity"). The foregoing
--------------
security interests, liens and pledges are referred to collectively as the
"Security Interests" and the foregoing assets and property in which the
------------------
Administrative Agent, for the benefit of the Lenders, has been or will be
granted a first priority security interest in and lien are referred to
collectively as the "Collateral". Each Sprint Party (i) acknowledges notice of
----------
the Credit Agreement, (ii) consents to the making of the Guaranties and the
granting of the Security Interests in the Collateral to the Administrative
Agent, for the benefit of the Lenders, and (iii) agrees that (a) neither it nor
any subsidiary of Sprint Corporation will challenge or contest that any of the
Guaranties are not valid and enforceable and that the Security Interests are not
valid, enforceable and duly perfected first priority security interests and
liens in and to the Collateral, (b) neither it nor any subsidiary of Sprint
Corporation will argue that any such Guaranty or Security Interest is subject to
avoidance, limitation or subordination under any legal or equitable theory or
cause of action, and (c) so long as the Management Agreement is in effect, it
will not sell, transfer or assign all or part of the Licenses that Affiliate has
the right to use under such Management Agreement; provided, however, that
-------- -------
notwithstanding the foregoing, a Sprint Party may at any time sell, transfer or
assign all or part of the Licenses that such Affiliate has the right to use in
accordance with a transaction allowed under Section 17.15.5 of such Management
---------------
Agreement, so long as the buyer, transferee or assignee, as the case may be,
agrees to be bound by the terms of this Consent and Agreement.
Each Sprint Party acknowledges and agrees that (i) Sections 17.15.1 and
----------------
17.15.2 of the Management Agreement do not apply to the assignment of either
- -------
Affiliate's rights under the Sprint Agreements to the Administrative Agent or
the Lenders under the Loan Documents or in connection with a transaction
permitted pursuant to this Consent and Agreement to any other Person pursuant to
the Loan Documents or to any other assignment in connection with any transaction
permitted pursuant to this Consent and Agreement and (ii) Section 17.15.3 of the
---------------
Management Agreement shall not apply to any Change of Control of either
Affiliate in connection with the exercise by the Administrative Agent of any of
its rights or remedies under the Loan Documents, including without limitation in
connection with the sale of the membership interests or partnership interests of
such Affiliate to any Person or to any other Change of Control of such
Affiliate; provided, however, Section 17.15.3 of the Management Agreement shall
----------------- ---------------
apply to any such transaction if such transaction is not with the Administrative
Agent or the Lenders or is not a transaction permitted pursuant to this Consent
and Agreement. It is
3
<PAGE>
understood that any assignment described in this Section 1 to the Administrative
---------
Agent or the Lenders is hereby consented to by the Sprint Parties; provided,
--------
that any subsequent assignment by the Administrative Agent or the Lenders shall
be in accordance with the terms of this Consent and Agreement.
SECTION 2. Payments. Upon receipt of the Administrative Agent's
--------
written instructions, each Sprint Party agrees to make all payments (if any) to
be made by it under the Sprint Agreements, subject to its rights of setoff or
recoupment with respect to such payments as permitted under Section 10.6 of the
------------
Management Agreement, to either Affiliate directly to the Administrative Agent,
or otherwise as the Administrative Agent shall direct; provided, that during the
--------
period that Sprint PCS is making such payments directly to the Administrative
Agent or its designee pursuant to this Section 2, Sprint PCS' setoff and
---------
recoupment rights under such Section 10.6 shall not be limited to undisputed
------------
amounts. Any payments made by any Sprint Party directly to, or at the
direction of, the Administrative Agent shall fully satisfy any obligation of
such Sprint Party to make payments to Affiliates under the Sprint Agreements to
the extent of such payments.
SECTION 3. Notice and Effect of Event of Default, Management Agreement
-----------------------------------------------------------
Breach and Event of Termination. The Administrative Agent agrees to provide to
- -------------------------------
Sprint PCS a copy of any written notice that Administrative Agent sends to
Parent, promptly after sending such notice, that a Default or an Event of
Default has occurred and is continuing, and Sprint PCS agrees to provide to the
Administrative Agent a copy of any written notice that Sprint PCS sends to
either Affiliate, promptly after sending such notice, that an Event of
Termination or an event that if not cured, or if notice is provided, will
constitute an Event of Termination (each of an Event of Termination and an event
that if not cured would constitute an Event of Termination, a "Management
-----------
Agreement Breach") has occurred. Sprint Spectrum and SprintCom acknowledge that
- ----------------
the Administrative Agent has informed them that an Event of Termination
constitutes an Event of Default under the Loan Documents, and Sprint Spectrum
and SprintCom further acknowledge that the Management Agreement does not
prohibit Parent or either Affiliate from curing such an Event of Default.
SECTION 4. Event of Default without a Management Agreement Breach.
------------------------------------------------------
(a) Affiliates Remain as Managers or Interim Managers Appointed.
-----------------------------------------------------------
Upon and during the continuation of an Event of Default when no Management
Agreement Breach as to which Sprint PCS has given the Administrative Agent
notice exists on the original date of occurrence of such Event of Default,
the Administrative Agent may, by prior written notice to Sprint PCS, (i)
allow Affiliates to continue to act as the Managers under the Sprint
Agreements, (ii) appoint Sprint Spectrum to act as "Interim Manager" under
---------------
the Sprint Agreements, or (iii) appoint a Person other than Sprint Spectrum
to act as Interim Managers under the Sprint Agreements. If the
Administrative Agent initially allows Affiliates to continue to act as the
Managers under the Sprint Agreements, the Administrative Agent may later,
during a continuation of an Event of Default, remove
4
<PAGE>
Affiliates as Managers and take the action described above in clauses (ii)
and (iii). The date on which a Person begins serving as Interim Managers
shall be the "Commencement Date."
-----------------
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Managers.
---------------------------------------------------------------
If the Administrative Agent appoints Sprint Spectrum as Interim Managers,
within 14 days after its appointment Sprint Spectrum shall accept the
position or designate another Person (a "Sprint Spectrum Designee") to act
------------------------
as Interim Managers under the Sprint Agreements. The Administrative Agent
shall accept Sprint Spectrum and any Sprint Spectrum Designee that is then
acting as an Other Manager (other than Affiliates) to act as Interim
Managers under the Sprint Agreements. Any Sprint Spectrum Designee that is
not an Other Manager must be acceptable to the Administrative Agent, which
acceptance will not be unreasonably withheld. If, within 30 days after the
Administrative Agent gives Sprint Spectrum notice of its appointment as
Interim Managers, Sprint Spectrum or a Sprint Spectrum Designee does not
agree to act as Interim Managers, then the Administrative Agent shall have
the right to appoint an Administrative Agent Designee as Interim Managers
in accordance with Section 4(c). At the discretion of the Administrative
------------
Agent, Sprint Spectrum or the Sprint Spectrum Designee shall serve as
Interim Managers for up to six months from the Commencement Date.
Upon the expiration of its initial six-month period as Interim
Managers under the Sprint Agreements, Sprint Spectrum or the Sprint
Spectrum Designee will agree, at the written request of the Administrative
Agent, to serve as Interim Managers for up to six months from such
expiration date until the Administrative Agent gives Sprint Spectrum or the
Sprint Spectrum Designee at least 30 days' written notice of its desire to
terminate the relationship; provided, that the extended period will be for
--------
12 months rather than six months (for a complete term of 18 months) in the
event, as of the date of the initial appointment, the aggregate number of
pops that Affiliates and all Other Managers have the right to serve under
their respective management agreements with the Sprint Parties is less than
40 million (such six or 12 month period, being the "Extension Period"). If
----------------
Sprint Spectrum's or the Sprint Spectrum Designee's term as Interim
Managers is extended, then the Administrative Agent agrees that Sprint
Spectrum or the Sprint Spectrum Designee's right to be reimbursed by the
applicable Affiliate promptly for all amounts previously expended by Sprint
Spectrum or the Sprint Spectrum Designee under Section 11.6.3 of the
--------------
Management Agreement (which expenditures were incurred in accordance with
Section 9 of this Consent and Agreement) shall no longer be subordinated to
---------
the Obligations as provided in Section 9 in this Consent and Agreement, and
---------
Sprint Spectrum or the Sprint Spectrum Designee's right to be reimbursed by
the applicable Affiliate for any expenses it incurs pursuant to its rights
under Section 11.6.3 of the Management Agreement as provided in the
--------------
Management Agreement (which expenditures were incurred in accordance with
Section 9 of this Consent and Agreement) shall not be subject to the
---------
subordination to the Obligations as provided in Section 9 of this Consent
---------
and Agreement; provided, that Sprint Spectrum or the Sprint Spectrum
5
<PAGE>
Designee's right to be reimbursed for amounts expended under Section 11.6.3
--------------
of the Management Agreements in an aggregate amount that exceed 5% of the
applicable Affiliate's shareholder's, partner's or member's equity or
capital account plus such Affiliate's long-term debt (i.e., notes that on
their face are scheduled to mature more than one year from the date
issued), as reflected on such Affiliate's books (the "Reimbursement Limit")
-------------------
shall remain subordinated to the Obligations as provided in Section 9 of
---------
this Consent and Agreement. Notwithstanding any other provision in this
Section 4(b) to the contrary, Sprint Spectrum or the Sprint Spectrum
-----------
Designee shall not be required to continue to serve as Interim Managers
during the Extension Period at any time after 30 days following delivery by
it to the Administrative Agent of written notice that Sprint Spectrum or
the Sprint Spectrum Designee needs to expend amounts under Section 11.6.3
--------------
of the Management Agreement that Sprint Spectrum or the Sprint Spectrum
Designee reasonably believes will not be reimbursed based on the projected
Collected Revenues for the remainder of the Extension Period or paid by the
Lenders. If it becomes necessary for Sprint Spectrum or the Sprint Spectrum
Designee to expend any amount that it believes will not be reimbursed or
that exceeds the Reimbursement Limit, Sprint Spectrum or the Sprint
Spectrum Designee is not required to incur such expense.
Within 20 days after the end of each calendar month that Sprint
Spectrum or the Sprint Spectrum Designee serves as Interim Managers,
commencing with the fourth such month and continuing through the
termination of the Extension Period (whether by expiration, resignation or
otherwise), Sprint Spectrum or the Sprint Spectrum Designee, as applicable,
shall provide the Administrative Agent with a written report setting forth
(i) all capital expenditures and other expenses Sprint Spectrum or the
Sprint Spectrum Designee has incurred or that it believes needs to be
incurred under Section 11.6.3 of the Management Agreement, (ii) a summary
--------------
of the costs and anticipated benefits of each such material capital
expenditure or material expense, and (iii) a statement of projected
Collected Revenues through the end of the Extension Period. Sprint Spectrum
or the Sprint Spectrum Designee, as applicable, shall indicate when any
amounts contained in a monthly report are estimated (not actual) amounts.
Upon the termination or expiration of the term of Sprint Spectrum or
the Sprint Spectrum Designee as Interim Managers, the Administrative Agent
shall have the right to appoint successor Interim Managers in accordance
with Section 4(c).
(c) Administrative Agent Designee as Interim Managers. If the
-------------------------------------------------
Administrative Agent elects to appoint a Person other than Sprint Spectrum
to act as Interim Managers under the Sprint Agreements (an "Administrative
--------------
Agent Designee") as permitted under Sections 4(a)(iii) and 4(b), such
-------------- ----------------- ---
Administrative Agent Designee must (i) agree to serve as Interim Managers
for six months unless terminated earlier by Sprint PCS because of a
material breach by the Administrative Agent Designee of the terms of the
Sprint Agreements that is not timely cured or by the Administrative Agent
in its discretion, (ii) meet the applicable "Successor Manager
-----------------
Requirements" set forth below in
------------
6
<PAGE>
Section 13, and (iii) agree to comply with the terms of the Sprint
----------
Agreements but will not be required to assume the existing liabilities of
Affiliates. In the case of a proposed Administrative Agent Designee, Sprint
PCS shall provide to the Administrative Agent, within 10 Business Days
after the request therefor, a detailed description of all information
reasonably requested by Sprint PCS to enable Sprint PCS to determine if a
proposed Administrative Agent Designee satisfies the Successor Manager
Requirements. Sprint PCS agrees to inform Administrative Agent within 20
days after it receives such information respecting such proposed
Administrative Agent Designee from the Administrative Agent whether such
designee satisfies the Successor Manager Requirements. If Sprint PCS does
not so inform the Administrative Agent within such 20-day period, then
Sprint PCS shall be deemed to agree, for all purposes of this Consent and
Agreement, that such proposed designee satisfies the Successor Manager
Requirements. A Person that satisfies the Successor Manager Requirements
(or is deemed to satisfy such requirements) qualifies under the Management
Agreement to become a Successor Manager, unless the Administrative Agent
Designee materially breaches the terms of a Sprint Agreement while acting
as Interim Managers or no longer meets the Successor Manager Requirements.
The Administrative Agent Designee may continue to serve as Interim Managers
after the initial six-month period at the Administrative Agent's
discretion, so long as the Administrative Agent Designee continues to
satisfy the Successor Manager Requirements and it does not materially
breach the terms of the Sprint Agreements. If the Administrative Agent
Designee materially breaches any Sprint Agreement while acting as Interim
Managers, then Sprint PCS and the Administrative Agent have the rights set
forth in Section 5; provided, that Sprint PCS may not allow Affiliates to
--------- --------
act as Manager of the Sprint Agreements without the Administrative Agent's
consent.
SECTION 5. Event of Default Created by a Management Agreement Breach.
---------------------------------------------------------
(a) Affiliates Remain as Managers or Interim Managers Appointed.
-----------------------------------------------------------
Upon an of Default created by a Management Agreement Breach (so long as at
such time an Event of Default not created by a Management Agreement Breach
as to which Administrative Agent has given Sprint PCS notice is not in
existence), Sprint PCS may by prior written notice to Administrative Agent
(i) allow the applicable Affiliate to continue to act as the Manager under
the applicable Sprint Agreements if approved by the Administrative Agent,
(ii) act as Interim Manager under the applicable Sprint Agreements (in the
case of Sprint Spectrum) or appoint Sprint Spectrum as Interim Manager (in
the case of SprintCom), or (iii) appoint a Sprint Spectrum Designee to act
as Interim Manager under the applicable Sprint Agreements as provided in
paragraph (b) below. If Sprint PCS initially allows the applicable
Affiliate to continue to act as the Manager under the applicable Sprint
Agreements, Sprint PCS may later remove such Affiliate as Manager and take
the action described above in clauses (ii) and (iii). The Administrative
Agent shall have no right to appoint an Interim Manager when an Event of
Default is caused by a Management Agreement Breach (unless an Event of
Default not
7
<PAGE>
created by a Management Agreement Breach is in existence), unless Sprint
PCS elects not to act as Interim Manager or to appoint a Sprint Spectrum
Designee.
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
--------------------------------------------------------------
If Sprint Spectrum acts as Interim Manager or designates a Sprint Spectrum
Designee to act as Interim Manager under the applicable Sprint Agreements,
the Interim Manager shall serve as Interim Manager for up to six months
from the Commencement Date, at the discretion of Sprint Spectrum. The
Administrative Agent shall accept Sprint Spectrum and any Sprint Spectrum
Designee that is then acting as an Other Manager (other than Affiliate) to
act as Interim Manager under the applicable Sprint Agreements. Any Sprint
Spectrum Designee that is not then acting as an Other Manager must be
acceptable to the Administrative Agent, which acceptance will not be
unreasonably withheld.
Upon the expiration of its initial six-month period as Interim Manager
under the applicable Sprint Agreements, Sprint Spectrum or the Sprint
Spectrum Designee will agree to serve as Interim Manager for the Extension
Period until the Administrative Agent gives Sprint Spectrum or the Sprint
Spectrum Designee at least 30 days' written notice of its desire to
terminate the relationship. If Sprint Spectrum's or the Sprint Spectrum
Designee's term as Interim Manager is extended, then the Administrative
Agent agrees that Sprint Spectrum or the Sprint Spectrum Designee's right
to be reimbursed by Affiliate promptly for all amounts previously expended
by Sprint Spectrum or the Sprint Spectrum Designee under Section 11.6.3 of
--------------
the Management Agreement (which expenditures were incurred in accordance
with Section 9 of this Consent and Agreement) shall no longer be
---------
subordinated to the Obligations as provided in Section 9 of this Consent
---------
and Agreement, and Sprint Spectrum or the Sprint Spectrum Designee's right
to be reimbursed by the applicable Affiliate for any expenses it incurs
pursuant to its rights under Section 11.6.3 of the Management Agreement as
--------------
provided in the Management Agreement (which expenditures were incurred in
accordance with Section 9 of this Consent and Agreement) shall not be
---------
subject to subordinated to the Obligations as provided in Section 9 of this
---------
Consent and Agreement; provided, that Sprint Spectrum or the Sprint
Spectrum Designee's right to be reimbursed for amounts expended under
Section 11.6.3 of the Management Agreement in an aggregate amount that
--------------
exceed the Reimbursement Limit shall remain subordinated to the Obligations
as provided in Section 9 of this Consent and Agreement. Notwithstanding any
other provision in this Section 5(b) to the contrary, Sprint Spectrum or
-----------
the Sprint Spectrum Designee shall not be required to continue to serve as
Interim Manager during the Extension Period at any time after 30 days
following delivery by it to the Administrative Agent of written notice that
it needs to expend amounts under Section 11.6.3 of the Management Agreement
--------------
that Sprint Spectrum or the Sprint Spectrum Designee reasonably believes
will not be reimbursed based on the projected Collected Revenues for the
remainder of the Extension Period or paid by the Lenders. If it becomes
necessary for Sprint Spectrum or the Sprint Spectrum Designee to expend an
amount that it believes will not be reimbursed or that exceeds the
Reimbursement Limit, Sprint Spectrum or the
8
<PAGE>
Sprint Spectrum Designee is not required to incur such expense.
Within 20 days after the end of each calendar month that Sprint
Spectrum or the Sprint Spectrum Designee serves as Interim Manager,
commencing with the fourth such month and continuing through the
termination of the Extension Period (whether by expiration, resignation or
otherwise), Sprint Spectrum or the Sprint Spectrum Designee, as applicable,
shall provide the Administrative Agent with a written report setting forth
(i) all capital expenditures and other expenses Sprint Spectrum or the
Sprint Spectrum Designee has incurred or that it believes needs to be
incurred under Section 11.6.3 of the Management Agreement, (ii) a summary
--------------
of the costs and anticipated benefits of each such material capital
expenditure or material expense, and (iii) a statement of projected
Collected Revenues through the end of the Extension Period. Sprint Spectrum
or the Sprint Spectrum Designee, as applicable, shall indicate when any
amounts contained in a monthly report are estimated (not actual) amounts.
Upon the termination or expiration of the term of Sprint Spectrum or
the Sprint Spectrum Designee as Interim Manager and with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed), Sprint Spectrum shall have the right to appoint a successor
Interim Manager in accordance with Section 5(a).
------------
(c) Administrative Agent Designee as Interim Managers.
-------------------------------------------------
Notwithstanding anything in paragraph (a) above to the contrary, if, after
Acceleration (as defined in Section 6(a) of this Consent and Agreement) and
within 30 days after Sprint PCS gives the Administrative Agent notice of a
Management Agreement Breach, Sprint Spectrum does not agree to act as
Interim Manager or does not obtain the consent of a Sprint Spectrum
Designee to act as Interim Manager under the Sprint Agreements, or if
Sprint Spectrum or the Sprint Spectrum Designee gives the Administrative
Agent notice of its resignation as Interim Manager and Sprint Spectrum
fails to appoint a successor in accordance with Section 5(b) within 30 days
------------
after such resignation, the Administrative Agent may appoint an
Administrative Agent Designee to act as Interim Managers. Such
Administrative Agent Designee must (i) agree to serve as Interim Managers
for six months unless terminated earlier by Sprint PCS because of a
material breach by the Administrative Agent of the terms of the Sprint
Agreements or by the Administrative Agent in its discretion, (ii) meet the
applicable Successor Manager Requirements, and (iii) agree to comply with
the terms of the Sprint Agreements. In the case of a proposed
Administrative Agent Designee, Sprint PCS shall provide to the
Administrative Agent, within 10 Business Days after the request therefor, a
detailed description of all information reasonably requested by Sprint PCS
to enable Sprint PCS to determine if a proposed Administrative Agent
Designee satisfies the Successor Manager Requirements. Sprint PCS agrees to
inform Administrative Agent within 20 days after it receives such
information respecting such proposed Administrative Agent Designee from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such
9
<PAGE>
20-day period, then Sprint PCS shall be deemed to agree, for all purposes
of this Consent and Agreement, that such proposed designee satisfies the
Successor Manager Requirements. A Person that satisfies the Successor
Manager Requirements qualifies under the Management Agreement to become a
Successor Manager, unless the Administrative Agent Designee materially
breaches the terms of a Sprint Agreement while acting as Interim Managers
or no longer meets the Successor Manager Requirements. The Administrative
Agent Designee may continue to serve as Interim Managers after the initial
six-month period at the Administrative Agent's discretion, so long as the
Administrative Agent Designee continues to satisfy the Successor Manager
Requirements and it does not materially breach the terms of the Sprint
Agreements. If the Administrative Agent Designee materially breaches any
Sprint Agreement while acting as Interim Managers, then Sprint PCS and the
Administrative Agent have the rights set forth in Section 5; provided, that
Sprint PCS may not allow Affiliates to act as Manager of the Sprint
Agreements without the Administrative Agent's consent.
SECTION 6. Purchase and Sale of the Operating Assets. Upon the
-----------------------------------------
occurrence and during the continuation of an Event of Default, the following
provisions shall govern the purchase and sale of the Operating Assets:
(a) Acceleration of the Obligations Under the Loan Documents. In
--------------------------------------------------------
the event the Lenders accelerate the maturity of the Obligations under the
Loan Documents (an "Acceleration" and, the date thereof, an "Acceleration
------------ ------------
Date"), the Administrative Agent shall give written notice thereof to
----
Sprint PCS. Upon receipt of notice of Acceleration, Sprint PCS shall have
the right, to which right Parent, each Affiliate and each Other Investor,
by acknowledging this Consent and Agreement, expressly agrees, to purchase
the combined Operating Assets from Affiliates for an amount equal to the
greater of (i) 72% of the Entire Business Value (as defined in the
Management Agreement) of Affiliates, valued in accordance with the
procedure set forth in Section 11.7 of the Management Agreement (with the
assumption that the deemed ownership of the Disaggregated License under
Section 11.7.3 of the Management Agreement includes the transfer of the
Sprint PCS customers as contemplated by Section 11.4 of the Management
Agreement), and (ii) the aggregate amount of the Obligations. Sprint PCS
shall, within 60 days of receipt of notice of Acceleration, give Parent,
Affiliates and the Administrative Agent notice of its intent to exercise
the purchase right. In the event Sprint PCS gives the Administrative Agent
written notice of its intent to purchase the Operating Assets, the
Administrative Agent agrees that it shall not enforce its Security
Interests in the Collateral until the earlier to occur of (i) expiration of
the period consisting of 120 days after the Acceleration Date (or such
later date that shall be provided for in the purchase agreement and
acceptable to the Administrative Agent in its discretion to close the
purchase of the Operating Assets) or (ii) receipt by Administrative Agent,
Parent and Affiliates from Sprint PCS of written notice that Sprint PCS has
determined not to proceed with the closing of the purchase of the Operating
Assets for any reason. If after the 120-day period after the Acceleration
Date, Parent or either
10
<PAGE>
Affiliate receives any purchase offer for its Operating Assets or Pledged
Equity that is confirmed in writing by Parent or such Affiliate to be
acceptable to Parent or such Affiliate, Sprint PCS shall have the right
subject to the consent of the Administrative Agent, to purchase such
Operating Assets or Pledged Equity, as the case may be, on terms and
conditions at least as favorable to Parent or such Affiliate as the terms
and conditions proposed in such offer so long as within 14 Business Days
after Sprint PCS's receipt of such other offer Sprint PCS offers to
purchase such Operating Assets or Pledged Equity and so long as the
conditions of Sprint PCS's offer and the amount of time it will take Sprint
PCS to effect such purchase is acceptable to Parent, such Affiliate and
Administrative Agent. Any such offer shall be confirmed in writing by the
third party offeror. In the event Sprint PCS exercises its rights under
this Section 6(a), (i) Parent, the Other Investors and Affiliates shall
------------
sell the Operating Assets or the Pledged Equity to Sprint PCS, (ii) the
Administrative Agent and the Lenders shall consent to such purchase and
sale, and (iii) Sprint PCS shall make all payments to be made under this
Section 6(a) to Administrative Agent for its application against the
Obligations. The purchase right of the Sprint Parties under this Section
-------
6(a) shall be in substitution of the purchase rights of the Sprint Parties
----
under Section 11.6.1 or any other provision of the Management Agreement. If
--------------
Sprint PCS purchases the Operating Assets or the Pledged Equity of
Affiliates as permitted under this Section 6(a), and the Obligations have
------------
been paid in full and the Credit Agreement is terminated or assigned to a
Sprint Party, the Administrative Agent and the Subsidiaries will release or
assign their interests in the Collateral, the Loan Documents and the
Guaranty Documents as described below in Section 6(d).
(b) Sale of Operating Assets to Third Parties. If the Sprint Parties
-----------------------------------------
do not purchase the Operating Assets from Affiliates after an Acceleration
as described above in Section 6(a), the Collateral may be sold as follows:
------------
(i) Sale to Successor Manager. The Collateral may be sold by
-------------------------
the Administrative Agent (in its sole discretion) in the exercise of
certain of its rights and remedies as a secured party under the Loan
Documents or by Parent or either Affiliate, at the discretion of the
Administrative Agent, to a person that satisfies the Successor Manager
Requirements. Sprint PCS shall provide to the Administrative Agent, with a
copy to Parent or such Affiliate, within 10 Business Days after the request
therefor, a detailed description of all information reasonably requested by
Sprint PCS to enable Sprint PCS to determine if a proposed buyer satisfies
the Successor Manager Requirements. Sprint PCS agrees to inform the
Administrative Agent and Parent or such Affiliate within 20 days after it
receives such information respecting such proposed buyer from the
Administrative Agent whether such designee satisfies the Successor Manager
Requirements. If Sprint PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager Requirements. If the proposed buyer
satisfies the Successor Manager Requirements (or is deemed to satisfy such
requirements) and wishes to become a "Successor Manager",
-----------------
11
<PAGE>
the buyer must agree to be bound by the Sprint Agreements; provided, that
--------
buyer shall have no responsibility or liability for any liability to any
Person other than a Sprint Party and Related Party of Sprint PCS arising
out of such Affiliate's operations prior to the date buyer becomes bound by
the applicable Sprint Agreements. In such case the applicable Sprint
Agreements shall remain in full force and effect with the buyer as
Successor Manager and this Consent and Agreement shall remain in full force
and effect for the benefit of the Successor Manager and any Person
providing senior secured debt financing to such Successor Manager if
required by such Person. Sprint PCS agrees, with respect to any past
failure of such Affiliate to perform any obligation under the applicable
Sprint Agreements, that the Successor Manager shall have the same amount of
time to perform such obligation that such Affiliate had under the
applicable Sprint Agreements, with the performance period commencing on the
date on which the buyer becomes a Successor Manager. Sprint PCS shall
permit the performance period set forth in the Management Agreement to be
extended for such period of time that Sprint PCS believes is reasonable to
allow Successor Manager to perform such unperformed obligations.
(ii) Sale to Other than Successor Manager. The Collateral may
------------------------------------
be sold pursuant to the exercise by the Administrative Agent or the Lenders
of their rights and remedies under the Loan Documents or by Parent or
either Affiliate, at the discretion of the Administrative Agent (subject to
requirements of applicable law) to a person that does not satisfy the
Successor Manager Requirements or to a person that does not wish to become
a Successor Manager, but only under the following conditions:
(A) the Sprint Parties may terminate the applicable
Sprint Agreements with such buyer following the closing of such purchase
(and the Administrative Agent and the buyer shall have no rights thereto or
thereunder with respect to events occurring after the closing of such
purchase);
(B) the buyer may purchase the applicable Disaggregated
License (with the amount of Spectrum described below in Section 6(b)(iv)
----------------
and with such Disaggregated License having the characteristics described in
the definition thereof) for a price equal to the sum of (1) the original
cost of the applicable License to Sprint PCS pro rated on a pops and
spectrum basis, plus (2) the microwave relocation costs paid by Sprint PCS
attributable to clearing the Spectrum in such Disaggregated License, plus
(3) the amount of carrying costs to Sprint PCS attributable to such
original cost and microwave relocation costs from the date of this Consent
and Agreement to and including the date on which such Disaggregated License
is transferred to the buyer, based on a rate of 12 percent per annum; and
(C) the purchase agreement with the buyer contains the
requirements set forth in Section 6(c) of this Consent and Agreement.
------------
(iii) Confidentiality Agreement. Before any potential buyer is
-------------------------
12
<PAGE>
provided Confidential Information respecting the potential purchase of any
of the Collateral (which buyer shall be entitled to receive), the potential
buyer shall execute a confidentiality agreement in the form attached as
Exhibit A with such changes thereto as may be reasonably requested by the
---------
parties to the agreement; provided, however, in the event the potential
--------
buyer does not satisfy the Successor Manager Requirements or has notified
Parent, the applicable Affiliate, Sprint PCS or the Administrative Agent
that it does not intend to be a Successor Manager, Confidential Information
that constitutes or relates to any technical, marketing, financial,
strategic or other information concerning any of the Sprint Parties and
that does not pertain to the business of such Affiliate shall not be
permitted to be provided to such potential buyer.
(iv) Amount of Spectrum Sold. Sprint PCS will sell Spectrum as
-----------------------
follows when required under Section 6(b)(ii)(B):
-------------------
(A) If the buyer, an entity with respect to which such
buyer directly or indirectly through one or more persons owns the total
voting power or at least 50% of the total voting power or at least 50% of
the total equity (a "controlled entity"), an entity that directly or
-----------------
indirectly through one or more persons has a parent entity that owns at
least 50% of the voting power or at least 50% of the total equity of both
the buyer and the common controlled entity (a "common controlled entity"),
------------------------
owns a license to provide wireless service to at least 50% of the pops in a
BTA with respect to which such buyer proposes to purchase Spectrum (each a
"Restricted Party" with respect to such BTA), the buyer may buy only 5 MHz
----------------
of Spectrum for such BTA.
(B) If the buyer is not a Restricted Party for a BTA
with respect to which such buyer proposes to purchase Spectrum, and either
does not satisfy the Successor Manager Requirements (other than those set
forth in Section 13(b) of this Consent and Agreement) or does not wish to
-------------
be a Successor Manager, then the buyer may buy 5 MHz, 7.5 MHz or 10 MHz as
the buyer determines in its sole discretion.
(c) No Direct Solicitation of Customers. Upon the sale of Collateral or
-----------------------------------
Disaggregated License in accordance with this Consent and Agreement pursuant to
Section 6(b)(ii), then the Sprint Parties agree to transfer to the buyer
- ----------------
thereof the customers with a MIN assigned to the Service Area covered by such
Disaggregated License, but Sprint PCS shall retain the customers of a national
account and any resellers who are then party to a resale agreement with Sprint
PCS. Each Sprint Party agrees to take all actions reasonably requested by the
buyer of such Collateral to fully transfer to such purchaser such customers.
Each Sprint Party agrees that neither it nor any of its Related Parties will
directly or indirectly solicit, for six months after the date of transfer, the
customers with a MIN assigned to the Service Area covered by such Disaggregated
License; provided, that Sprint PCS retains the customers of a national account
--------
and any resellers that have entered into a resale agreement with Sprint PCS,
Sprint PCS may advertise nationally, regionally and locally, and engage direct
marketing firms to solicit customers generally. If the buyer continues to
operate the purchased assets as a wireless network
13
<PAGE>
in the same geographic area on a network that is technologically compatible with
Sprint PCS's network, the buyer and Sprint PCS shall each agree to provide
roaming services to the other (in the case of Sprint PCS, the roaming services
shall be provided to those customers of buyer in the geographic area serviced by
such Disaggregated License roaming nationally and, in the case of buyer, the
roaming services shall be provided to those customers of Sprint PCS roaming in
the geographic area covered by such Disaggregated License) pursuant to a roaming
agreement to be entered into between buyer and Sprint PCS and to be mutually
agreed upon so long as such agreement is based on Sprint PCS's then standard
roaming agreement used by Sprint PCS in the industry and the price that each
party shall pay the other party for roaming services provided to the first party
shall be a price equal to the lesser of: (1) MFN Pricing provided by buyer to
third parties roaming in the geographic area serviced by such Disaggregated
License; and (2) the national average paid by Sprint PCS to third parties for
Sprint PCS's customers to roam in such third parties' geographic areas
(including Other Managers). Such obligations with respect to roaming shall
continue until such roaming agreement is terminated pursuant to its terms. The
buyer shall agree in writing that if it continues to operate the purchased
assets as a wireless network in the same geographic area on a network that is
technologically compatible with Sprint PCS's network, the buyer shall, to the
extent required by law, provide resale to Sprint PCS in the geographic area
covered by such Disaggregated License at the MFN Pricing that buyer charges
third parties who purchase resale from buyer; provided, however, if buyer is not
--------
offering resale to any other customers then pricing of resale provided to Sprint
PCS shall be as mutually agreed; and provided, further, however, whether or not
-------- -------
buyer is required by law to offer such resale, buyer shall offer such resale (on
the terms described in this sentence) to national customers of Sprint PCS.
(d) Release and Assignment of Rights. If Sprint PCS purchases the
--------------------------------
Operating Assets or the Pledged Equity as permitted under Section 6(a) or
------------
Section 10, and the Obligations have been paid in full and the Credit Agreement
- ----------
is terminated or assigned to a Sprint Party: (i) Parent, Subsidiaries and the
Other Investors will have no right to any amounts paid by Sprint PCS pursuant to
such purchase (except to the extent such purchase is pursuant to Section 6(a)
------------
and the amount paid by Sprint PCS exceeds the amount of the Obligations and is
not payable to other creditors of Parent or Subsidiaries); (ii) the
Administrative Agent will, at the election of Sprint PCS, either release or
assign to Sprint PCS, all Security Interests in the Collateral, and release or
assign to Sprint PCS, all rights related to the Loan Documents and the Guaranty
Documents and all payments under the Loan Documents and the Guaranty Documents;
and (iii) the Subsidiaries and the Other Investors will, at the election of
Sprint PCS, release or assign to Sprint PCS, any and all rights they have
against the Collateral or arising out of any payment to the Administrative
Agent, Lucent or any Sprint Party with respect to the Loan Documents or the
Guaranty Documents.
Notwithstanding anything contained in Sections 6(a), 6(d), 10(a),
10(b) or 10(d), or any other provision in this Consent and Agreement, any
purchase of Operating Assets, the Pledged Equity or the Obligations by Sprint
PCS and any release or assignment of Security Interests in the Collateral rights
related to the Loan Documents or the Guaranty Documents or
14
<PAGE>
payments under the Loan Documents or the Guaranty Documents, or any release or
assignment of rights arising out of any payment to the Administrative Agent,
Lucent or any Sprint Party with respect to the Loan Documents or the Guaranty
Documents will be subject to Lucent's rights under the Lucent Guaranty and the
Lucent Reimbursement Agreement, including, without limitation, Lucent's rights
of subrogation contained therein.
SECTION 7. No Limits on Remedies. Nothing contained in this Consent
---------------------
and Agreement shall limit any rights of the Administrative Agent or Lenders to
cause an Acceleration. Except as expressly provided herein, nothing contained
in this Consent and Agreement shall limit any rights or remedies that the
Administrative Agent or the Lenders may have under the Loan Documents or
applicable law. The Administrative Agent may not sell, lease, assign, convey or
otherwise dispose of the Collateral other than as permitted under this Consent
and Agreement.
SECTION 8. Rights and Obligations of Interim Manager. An Interim
-----------------------------------------
Manager may collect a reasonable management fee for its services; provided, that
--------
if Sprint Spectrum or a Related Party of Sprint PCS acts as Interim Manager,
such management fee shall not exceed the direct expenses relating to Sprint
Spectrum or such Related Party employees for the actual time spent by such
employees when performing the function of Interim Manager and Sprint Spectrum's
or such Related Party's out-of-pocket expenses. Such direct expenses shall
include such employees' salaries and benefits, and the out-of-pocket and accrued
expenses allocated to such employees. If Sprint Spectrum is the Interim Manager,
the management fee will be paid out of the 92% Management Fee that Sprint PCS
pays under the Management Agreement, and will be in addition to the fees it
receives under the Services Agreement. Sprint PCS shall collect such management
fee by setoff against the fees and any other amounts payable to the applicable
Affiliate under the Sprint Agreements. The Interim Manager will be required to
operate the applicable Service Area Network in accordance with the terms of the
applicable Sprint Agreements and will be subject to all of the requirements and
obligations of such agreements, but will not be required to assume the existing
liabilities of the applicable Affiliate.
SECTION 9. Rights to Cure. Neither the provisions of this Consent and
--------------
Agreement nor any action of either Administrative Agent or Sprint PCS shall
require either Administrative Agent, any Lender or Sprint PCS to cure any
default of either Affiliate under the Sprint Agreements or to perform under the
Sprint Agreements, but shall only give it the option to do so except to the
extent otherwise required by this Consent and Agreement. Sprint PCS may
exercise its rights under Section 11.6.3 of the Management Agreement upon an
--------------
Event of Termination, whether such situation arises while either Affiliate,
Sprint Spectrum, an Administrative Agent Designee or a Sprint Spectrum Designee
is acting as Interim Manager and notwithstanding any other provision of this
Consent and Agreement; provided, that the right to reimbursement for any
--------
expenses incurred in connection with such cure shall be unsecured and until such
time as the Obligations have been paid in full in cash and all commitments to
advance credit under the Credit Agreement have terminated or expired, the Person
or Persons entitled thereto shall not receive such reimbursement, except as
specifically provided in Section 4(b) or
------------
15
<PAGE>
Section 5(b) of this Consent and Agreement. Sprint PCS shall not be permitted to
- ------------
deduct or setoff from its payments to either Affiliate any such amounts it is
not entitled to receive under this Section and shall not take any action of any
type to attempt to collect such reimbursement and the failure to be so
reimbursed shall not constitute a Management Agreement Breach. In the event that
Sprint PCS receives any payments or distributions that it is not entitled to
receive under this Section, such payments shall be held in trust for, and
promptly turned over to, the parties entitled thereto. If Sprint PCS has
designated a third party to take action under Section 11.6.3 of the Management
--------------
Agreement, before taking any such action such third party shall enter into an
agreement with Administrative Agent providing that such third party agrees to
the provisions of this Section 9 as if it were a party hereto. Until such time
---------
as the Obligations have been paid in full in cash and all commitments to advance
credit under the Credit Agreement have terminated or expired, Sprint PCS shall
not be entitled to exercise any other remedies under the Sprint Agreements,
including, without limitation, the remedy of terminating the Sprint Agreements
(except to the extent permitted under Sections 6(b)(ii)(A) and 12 of this
---------------------------
Consent and Agreement) or the remedy of withholding any payment set forth in
Section 10 of the Management Agreement (subject to Sprint PCS's rights of setoff
- ----------
or recoupment with respect to such payments as permitted under Sections 2, 4(b)
----------------
and 5(b) of this Consent and Agreement). Until such time as the Obligations have
- --------
been paid in full in cash and all commitments to advance credit under the Credit
Agreement have terminated or expired, notwithstanding anything to the contrary
contained in Section 2.3 of the Management Agreement, in no event shall any
-----------
Person other than Affiliates or a Successor Manager be a manager or operator for
Sprint PCS with respect to the Service Areas and neither Sprint PCS nor any of
its Related Parties shall own, operate, build or manage another wireless
mobility communications network in the Service Areas, except to the extent
provided in Sections 2.3(a), (b), (c) or (d) of the Management Agreement and
--------------- --- --- ---
except to the extent that the Sprint Agreements are terminated in accordance
with Section 6(b)(ii)(A) of this Consent and Agreement. The Administrative Agent
-------------------
acknowledges and agrees that Sprint PCS shall also have the right to cure an
Event of Default or to assist Parent or Affiliates in curing an Event of Default
but only to the extent Parent or Affiliates have the right to so cure under the
Loan Documents, as applicable (it being understood that the act of Sprint PCS
curing an Event of Default shall not constitute an independent Event of Default
unless the act itself would otherwise constitute a Default (e.g. a sale of
assets not otherwise permitted by the Loan Documents)), including but not
limited to Sprint PCS's providing Parent or Affiliates the funds necessary to
operate or meet certain financial covenants in the Loan Documents. The
Administrative Agent shall have the right to cure any Management Agreement
Breach.
SECTION 10. Sprint PCS's Right to Purchase Obligations, Operating Assets
------------------------------------------------------------
or Pledged Equity. (a) Following the Acceleration Date or, if earlier, the 180-
- -----------------
day anniversary of a Management Agreement Breach that either Affiliate fails to
cure (the "180-day Anniversary"), and until the 60-day anniversary of the filing
--------------------
of a bankruptcy petition by or with respect to Parent or any Affiliate, Sprint
PCS shall have the right to purchase the Obligations under, and as defined in,
the Credit Agreement, by repaying the Obligations in full in cash. In the event
that Sprint PCS purchases the Obligations within 60 days immediately following
the earliest of (i) the
16
<PAGE>
Acceleration Date, (ii) the 180-day Anniversary, and (iii) the date of the
filing of a bankruptcy petition by or with respect to Parent or any Affiliate,
Sprint PCS may in lieu of purchasing the total amount of the Obligations,
purchase all Obligations other than the accrued interest with respect thereto
for a purchase price equal to the amount of the Obligations other than such
accrued interest and any fees and expenses that are unreasonable, in which case,
such accrued interest and unreasonable fees and expenses shall remain due and
owing by Parent or Affiliates to the Lenders.
(b) In the event that the Administrative Agent acquires the Operating
Assets or the Pledged Equity, Sprint PCS shall have the right to purchase the
Operating Assets or the Pledged Equity from the Administrative Agent during the
limited period of time provided in and otherwise in accordance with this Section
-------
10(b) by paying to the Administrative Agent in cash an amount equal to the sum
- -----
of the aggregate amount paid (by credit against the Obligations or otherwise) by
the Administrative Agent or the Lenders for the Operating Assets or Pledged
Equity, as the case may be, plus the aggregate amount of any remaining unpaid
Obligations. Administrative Agent shall give Sprint PCS notice of any
acquisition of the Operating Assets or the Pledged Equity by the Administrative
Agent promptly following the date of final consummation of such acquisition (the
"Acquisition Notice"). Sprint PCS shall, within 60 days of receipt of a valid
- -------------------
Acquisition Notice, give the Administrative Agent (and the applicable Affiliate,
in the case of a purchase of the Pledged Equity) notice of its intent to
exercise its purchase right under this Section 10(b). In the event Sprint PCS
-------------
gives the Administrative Agent written notice of its intent to purchase the
Operating Assets or the Pledged Equity, the Administrative Agent agrees that it
shall provide Sprint PCS the right to purchase the Operating Assets or Pledged
Equity, as the case may be, until the earlier to occur of (i) expiration of the
period consisting of 120 days after Sprint PCS' receipt of a valid Acquisition
Notice (or such later date that shall be provided for in the purchase agreement
and acceptable to the Administrative Agent in its sole discretion to close the
purchase of the Operating Assets or Pledged Equity) or (ii) receipt by
Administrative Agent from Sprint PCS of written notice that Sprint PCS has
determined not to proceed with the closing of the purchase of the Operating
Assets or the Pledged Equity. If Sprint PCS at any time purchases the
Operating Assets or the Pledged Equity as permitted under this Section 10, the
----------
Administrative Agent and the Subsidiaries will release or assign their interests
in the Collateral, the Loan Documents and the Guaranty Documents as described in
Section 6(d). Notwithstanding the foregoing, in the event that a bankruptcy
- ------------
petition is filed by or with respect to any Affiliate, Sprint PCS shall again
have the right to purchase the Operating Assets or the Pledged Equity from the
Administrative Agent by repaying the Obligations in full in cash, by giving the
Administrative Agent notice of its intent to exercise such purchase right no
later than 60 days following the date of filing of such bankruptcy petition.
(c) If at any time during the period described in Section 10(a) or
-------------
10(b) above or thereafter the Administrative Agent receives any purchase offer
- -----
for the Operating Assets, the Pledged Equity or the Obligations, as applicable,
that is acceptable to the Administrative Agent, the Administrative Agent shall
exercise reasonable efforts to obtain the consent of the offeror to
17
<PAGE>
deliver a copy of such offer to Sprint PCS and Sprint PCS shall have the right
to purchase the Operating Assets, the Pledged Equity or the Obligations, as
applicable, on terms and conditions at least as favorable to the Administrative
Agent as the terms and conditions proposed in such offer so long as within 14
Business Days after Sprint PCS's receipt of such other offer Sprint PCS offers
to purchase the Operating Assets, the Pledged Equity or the Obligations, as
applicable, and so long as the conditions of Sprint PCS's offer and the amount
of time it will take Sprint PCS to effect such purchase is acceptable to the
Administrative Agent and the Lenders.
(d) If Sprint PCS at any time purchases the entirety of the
Obligations as provided in this Section 10, the Administrative Agent shall
assign and transfer or cause the Lenders to assign and transfer to Sprint PCS
all rights and interests in, to and under all of the Loan Documents, including
but not limited to all security interests, liens, financing statements,
guaranties and other credit enhancements related to such Loan Documents, and all
rights and claims thereunder (collectively referred to as the "Loan Document
--------------
Rights"). If Sprint PCS purchases less than all the Obligations (as permitted
- ------
in the second sentence of Section 10(a) above), then the Administrative Agent
-------------
shall assign and transfer or cause the Lenders to assign and transfer to Sprint
PCS all Loan Document Rights, except that the Administrative Agent shall retain
the unsecured right to collect the amount of the Obligations not purchased by
Sprint PCS. If Sprint PCS at any time purchases the entirety or less than all
of the Obligations, the Subsidiaries will release any and all rights they have
against the Collateral or arising out of any payment to the Administrative
Agent, Lucent or any Sprint Party with respect to the Loan Documents or their
Guaranty Document.
SECTION 11. Foreclosure. Upon the Administrative Agent or any Lender or
-----------
any other Person that meets the Successor Manager Requirements acquiring
Operating Assets and the related Sprint Agreements, then such Person shall be
entitled to exercise any and all rights of the applicable Affiliate under the
applicable Sprint Agreements in accordance with the terms of the applicable
Sprint Agreements and each Sprint Party will thereupon comply in all respects
with such exercise by such Person and perform its obligations under the
applicable Sprint Agreements and this Consent and Agreement for the benefit of
such Person. Each Sprint Party agrees that the Administrative Agent or any
Lender may (but shall not be obligated to), subject to and in accordance with
the terms of this Consent and Agreement, assign its rights and interests
acquired in the Operating Assets and the Sprint Agreements to any buyer or
transferee thereof and, in the event the buyer wishes to become a party to the
related Sprint Agreements and such buyer satisfies the Successor Manager
Requirements, such buyer shall be bound by the applicable Sprint Agreements;
provided, that buyer shall have no responsibility or liability to any Person
- --------
other than a Sprint Party and a Related Party of a Sprint Party arising out of
the applicable Affiliate's operations prior to the date buyer becomes bound by
the applicable Sprint Agreements. In such case the applicable Sprint Agreements
shall remain in full force and effect with the buyer as Successor Manager and
this Consent and Agreement shall remain in full force and effect for the benefit
of the Successor Manager and any Person providing senior secured debt financing
to such Successor Manager if required by such Person. Sprint PCS agrees, with
respect to any past failure of the applicable Affiliate to perform any
obligation under the Sprint
18
<PAGE>
Agreements, that the Successor Manager shall have the same amount of time to
perform such obligation that the applicable Affiliate had under the Sprint
Agreements, with the performance period commencing on the date on which the
buyer becomes a Successor Manager. Sprint PCS shall permit the performance
period set forth in the Management Agreement to be extended for such period of
time that Sprint PCS believes is reasonable to allow Successor Manager to
perform such unperformed obligations.
SECTION 12. Trademarks and Service Marks. In the event the
----------------------------
Administrative Agent forecloses on its security interest in the License
Agreements and transfers the License Agreements to a Person who does not meet
the Successor Manager Requirements, then Sprint PCS shall have the right to
terminate the License Agreements and cause the Administrative Agent to release
its security interest in the License Agreements immediately prior to such
transfer.
SECTION 13. Interim Manager and Successor Manager Requirements. To
--------------------------------------------------
qualify as an Interim Manager or a Successor Manager, the Person must satisfy
each of the following "Successor Manager Requirements," as applicable:
-------------------------------
(a) The Person must not during the three-year period immediately
preceding the date of determination have materially breached any material
agreement with Sprint Spectrum or its Related Parties that resulted in the
exercise of a termination right or in the initiation of judicial or
arbitration proceedings;
(b) The Person must not be one of the Persons identified on Schedule
--------
13 (a "Schedule 13 Person"); provided, that no Other Manager under any
-- ------------------
Sprint PCS Management Agreement may be identified on Schedule 13;
(c) In the case of a Successor Manager, the Person must meet a
reasonable Person's credit criteria (taking into consideration the
circumstances), it being understood that such criteria is satisfied if the
financial projections contained in the business plan such Person submits to
Sprint PCS shows the ability to service its indebtedness and meet the
build-out requirements contained in the Build-out Plan; and
(d) The Person must agree to be bound by the terms of the applicable
Sprint Agreements as if an original party thereto; provided, in the case of
--------
an Interim Manager, the Person must also execute a separate confidentiality
agreement in the form attached as Exhibit A with such changes thereto as
---------
may be reasonably requested by the parties to the agreement, but the Person
is not required to assume the existing liabilities of the applicable
Affiliate.
Except as provided in Schedule 13, the Administrative Agent, each Lender
-----------
and each of their wholly-owned subsidiaries or entities who wholly-own such
entities shall be deemed to satisfy Sections 13(a), (b) and (c) of the preceding
--------------- --- ---
"Successor Management Requirements".
---------------------------------
19
<PAGE>
SECTION 14. Management Agreement. Sprint PCS agrees that it will not
--------------------
exercise its right under the Management Agreement to purchase the Operating
Assets or to sell the Disaggregated License to either Affiliate if before, or
after giving effect to such exercise, there would exist a Default or Event of
Default under the Credit Agreement, unless Sprint PCS pays the aggregate amount
of the Obligations as a condition of the exercise of such right and the Credit
Agreement shall have been terminated in connection with such payment. Sprint PCS
agrees that until the Obligations have been paid in full in cash and all
commitments to advance credit under the Credit Agreement have terminated or
expired, a failure to pay any amount by any Related Party of any Affiliate under
any agreement with Sprint PCS or any of its Related Parties (other than the
Management Agreements, the Services Agreements or the License Agreements) shall
not constitute a Management Agreement Breach for any purpose. Subject to
regulatory approval in connection with any such sale, Sprint PCS agrees that it
shall always maintain the ability to sell the Disaggregated License in
accordance with this Consent and Agreement. Sprint PCS shall own at least 10 MHz
of Spectrum in each Service Area until the first to occur of the following
events: (i) the Obligations have been paid in full in cash and all commitments
to advance credit under the Credit Agreement have terminated or expired, (ii)
the sale by Sprint PCS of the Spectrum for such Service Area pursuant to this
Consent and Agreement shall be effected, (iii) the sale of the Operating Assets
for such Service Area pursuant to this Consent and Agreement, and (iv) the
termination of the Management Agreement for such Service Area. Sprint PCS
acknowledges that the financing provided pursuant to the Loan Documents, the
senior subordinated discount notes to be issued under that certain Indenture
between Parent and The Depository Trust Company, as trustee thereunder, pursuant
to the terms and conditions set forth in the Offering Memorandum of Parent
delivered to potential buyers of such notes, and the private placement of
preferred stock of Parent to The 1818 Fund III, L.P. contemplated by Parent,
comply with Section 1.7 of the Management Agreements, as amended by Addendum II
-----------
to the February 8, 1999 Management Agreement and Addendum III to the June 8,
1998 Management Agreement ("Section 1.7"), and that Section 11.3.6 of such
----------- --------------
Management Agreements shall no longer be applicable with respect to such
financings, so long as the amounts and deadlines set forth in Section 1.7 are
satisfied. Notwithstanding anything to the contrary contained in Section 12.2 of
------------
the Management Agreement, the Administrative Agent, the Lenders, and any
Successor Manager or buyer of the Operating Assets or Disaggregated License
shall be permitted to disclose Confidential Information (as defined in the
Management Agreement) (i) to the extent required by law, rule or regulation,
(ii) to any regulator or any regulatory body regulating such entity, (iii) to
any rating agency in connection with requirements applicable to such Person and
(iv) to the lawyers and accountants for any such Persons.
SECTION 15. Administrative Agent and Eligible Assignees.
-------------------------------------------
(a) The Administrative Agent and each Lender must be an Eligible
Assignee. "Eligible Assignee" shall mean and include a commercial bank,
-----------------
financial institution, other "accredited investor" (as defined in Regulation D
of the Securities Act) other than individuals, or a "qualified institutional
-----------------------
buyer" as defined in rule 144A of the Securities
- -----
20
<PAGE>
Act; provided, that prior to the 61st day after the filing of a bankruptcy
--------
petition by or with respect to Affiliate in no event may any Person that is
engaged in or that controls, is controlled by or is under common control with
any Person engaged in, the telecommunications service business in the United
States (other than Sprint Corporation and its subsidiaries), be an Eligible
Assignee, it being understood that no small business investment corporation that
is ultimately owned by an Eligible Assignee that is subject to Regulation Y
shall be deemed to be controlled by or under common control with such Eligible
Assignee; and provided further, that after the filing of such bankruptcy
----------------
petition in no event may a Schedule 13 Person be an Eligible Assignee.
(b) If (i) the Administrative Agent or any Lender becomes a Schedule
13 Person and (ii) a new Administrative Agent or Lender (as applicable) commits
to purchase all interests of such Administrative Agent or Lender in the
Obligations and the Loan Documents and assume all commitments and obligations of
such Administrative Agent or Lender under the Loan Documents, in each case
within such three months as described in clause (A) below, for the aggregate
amount of the unpaid Obligations of such Administrative Agent or Lender, then
such Administrative Agent or Lender shall (A) assuming such purchaser does not
breach its commitment to so purchase, divest itself of all interests in the
Obligations and the Loan Documents within three (3) months after such
Administrative Agent or Lender becomes a Schedule 13 Person by selling such
interests in consideration of the payment of such aggregate amount and the
assumption of such commitments and obligations, and (B) promptly upon the
consummation of such sale, no longer be given or be entitled to receive any
Confidential Information. In no event shall the Administrative Agent or any
Lender be obligated or responsible to find or obtain a purchaser to purchase any
Obligations or Loan Documents or to assume any commitments or obligations.
SECTION 16. Sprint Party Representations. Each Sprint Party represents
----------------------------
and warrants to the Administrative Agent, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate and partnership action, and does not and
will not require any further consents or approvals that have not been obtained,
or violate any provision of any law, regulation, order, judgment, injunction or
similar matters or materially breach any agreement presently in effect with
respect to or binding on it; provided, that the transfer of Spectrum as
--------
contemplated under this Consent and Agreement will require regulatory approval
(which each Sprint Party agrees to use its commercially reasonable efforts to
obtain); (b) this Consent and Agreement is a legal, valid and binding obligation
of such Person enforceable against it in accordance with its terms, except that
(i) such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be limited by
equitable defenses and by the discretion of the court before which any
proceeding may be brought; (c) the Sprint Agreements are in full force and
effect and have not been amended, supplemented or modified; (d) as of the date
of execution hereof, to the knowledge of the Sprint
21
<PAGE>
Parties, no Event of Termination has occurred and is continuing (without regard
to any requirement of the delivery of written notice necessary to the occurrence
of an Event of Termination under Section 11.3 of the Management Agreement);
------------
provided, that Sprint PCS has delivered to Affiliate and the Administrative
- --------
Agent a document titled "Management Agreement Non-Compliance Summary," which
describes events that, if not cured, will become Events of Termination; (e) on
the date the Management Agreement was executed Sprint PCS owned, and on the date
hereof Sprint PCS owns, 10 MHz or more of Spectrum in the Service Areas; and (f)
the only existing agreements or arrangements between either Affiliate, on the
one hand, and Sprint Corporation or any of its subsidiaries, on the other hand,
are the Management Agreement, the Services Agreements and the License
Agreements.
SECTION 17. Administrative Agent Representations. The Administrative
------------------------------------
Agent represents and warrants to Sprint PCS, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate action, and does not and will not require
any further consents or approvals that have not been obtained, or violate any
provision of any law, regulation, order, judgment, injunction or similar matters
or materially breach any agreement presently in effect with respect to or
binding on it; (b) this Consent and Agreement is a legal, valid and binding
obligation of the Administrative Agent enforceable against it in accordance with
its terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be limited by equitable defenses and by the discretion of the court
before which any proceeding may be brought; (c) at the time of the execution
hereof, the only Lenders are CoBank, ACB, The Bank of New York, First Union
National Bank, City National Bank (LSA), PNC Bank, The CIT Group/Equipment
Financing, Inc., Coast Business Credit, a division of Southern Pacific Bank; and
(d) as of the date of execution hereof, to the knowledge of the Administrative
Agent, no Event of Default has occurred and is continuing; and (e) the
Guaranties have been received from the parties to such agreements.
SECTION 18. Successors and Assigns. This Consent and Agreement shall be
----------------------
binding upon the successors and assigns of the parties hereto and shall inure,
together with the rights and remedies of the parties hereunder, to the benefit
of their respective successors and assigns. In the event the Sprint PCS Network
is sold in accordance with the Management Agreement, the buyer thereof will
assume the obligations of the Sprint Parties hereunder and under all the other
Sprint Agreements other than the Sprint Trademark and Service Mark License
Agreements; provided, however, the buyer of the Sprint PCS Network shall enter
--------
into agreements with Affiliates on substantially the same terms as the Sprint
Trademark and Service Mark License Agreements with respect to such buyers'
trademarks, service marks, brands, etc. In the event a Successor Manager becomes
a party to the Sprint Agreements as provided in this Consent and Agreement, this
Consent and Agreement shall remain in full force and effect for the benefit of
the Successor Manager and any Person providing senior secured debt financing to
such Successor Manager if required by such Person.
22
<PAGE>
SECTION 19. Amendment. Neither this Consent and Agreement nor any
---------
provision herein may be waived except pursuant to an agreement or agreements in
writing entered into by Sprint PCS, the Administrative Agent, Parent and
Affiliates, and neither this Consent and Agreement nor any provision herein may
be amended or modified except pursuant to an agreement or agreements in writing
entered into by Sprint PCS, the Administrative Agent, Parent and Affiliates.
The Administrative Agent and each Lender (and its successors and assigns) shall
be bound by any modification or amendment authorized by this Section 19. No
----------
amendment or waiver or effective amendment or waiver entered into in violation
of this Section 19 shall be valid; provided, however, that no consent of Parent,
----------
the Other Investors or Affiliates shall be necessary for any amendment or
modification to this Consent and Agreement made pursuant to and in accordance
with Section 24 hereof.
----------
SECTION 20. APPLICABLE LAW. THIS CONSENT AND AGREEMENT SHALL BE
--------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO.
SECTION 21. Notices. Notices and other communications provided for in
-------
this Consent and Agreement shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) if to Sprint PCS, to it at:
Sprint Spectrum L.P.
4900 Main, 12th Floor
Kansas City, Missouri, 64112
Telephone No.: (816) 559-1000
Telecopier No.: (816) 559-1290
Attention: Chief Executive Officer
with a copy to:
4900 Main, 11th Floor
Kansas City, Missouri, 64112
Telephone No.: (816) 559-1000
Telecopier No.: (816) 559-2591
Attention: General Counsel
(b) if to the Administrative Agent, to it at:
CoBank, ACB, as Administrative Agent
23
<PAGE>
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Attention: Rural Utility Banking Group
Telephone No.: (770) 618-3200
Telecopier No.: (816) 618-3202
(c) if to Louisiana Unwired, to it at:
Louisiana Unwired, LLC
c/o US Unwired Inc.
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
Telephone No.: (318) 436-9000
Telecopier No.: (318) 439-7769
Attention: Finance Department
with a copy to:
Legal Department - US Unwired
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
Telephone No.: (318) 436-9000
Telecopier No.: (318) 497-3479
(d) if to Texas Unwired, to it at:
Texas Unwired
c/o US Unwired Inc.
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
Telephone No.: (318) 436-9000
Telecopier No.: (318) 439-7769
Attention: Finance Department
with a copy to:
Legal Department - US Unwired
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70629
24
<PAGE>
Telephone No.: (318) 436-9000
Telecopier No.: (318) 497-3479
All notices and other communications given to any party hereto in accordance
with the provisions of this Consent and Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy, or on the date five (5) business days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 21 or in
----------
accordance with the latest unrevoked direction from such party given in
accordance with this Section 21.
----------
SECTION 22. Counterparts. This Consent and Agreement may be executed in
------------
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
SECTION 23. Severability. Any provision of this Consent and Agreement
------------
that 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. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provision with valid provisions the economic effect of which is as
close as possible to that of the invalid, illegal or unenforceable provision.
SECTION 24. Amendments to Form Consent and Agreement. If Sprint PCS
----------------------------------------
modifies or amends the form of Consent and Agreement it enters into with another
lender, then Sprint PCS agrees to give the Administrative Agent written notice
of such modifications and amendments and, at the request of Administrative
Agent, to amend this Consent and Agreement in the same manner; provided, that:
--------
(a) Sprint PCS will not modify this Consent and Agreement to incorporate changes
made for the benefit of a lender because of circumstances related to a
particular Other Manager, subject to the limitations set forth below; (b) the
Administrative Agent must agree to make all (or none) of the changes made for
the other lender and the Other Manager, unless Sprint PCS agrees to allow the
Administrative Agent to make only some of the changes; and (c) Sprint PCS is
only required to make changes to this Consent and Agreement based on changes
made to the form of Consent and Agreement executed in connection with loans to
Other Managers that are syndicated or intended to be syndicated (i.e., loans
sold or participated, or intended to be sold or participated, in whole or in
part to at least three financial institutions or investment funds) (a
"Syndication Consent") until the later to occur of: (i) five Syndication
- --------------------
Consents are executed, and (ii) loans to Other Managers are syndicated where the
pops in the Service Areas of such Other Managers, in the aggregate, exceed 10
million; provided, however, that in the event any Syndicated Consent executed
-----------------
after such later date relates to a transaction where the pops in the Service
Area of the Other Manager exceed 5 million, Sprint PCS agrees to give the
Administrative Agent the right to so amend this Consent and Agreement,
25
<PAGE>
subject to the provisions of clauses (a) and (b) above.
For purposes of subsection (a) in the preceding paragraph, Sprint PCS will
not deem the following changes to be made because of circumstances related to a
particular Other Manager: (i) any form of recourse to Sprint PCS or other
similar form of credit enhancement; (ii) any change in Sprint PCS's right to
purchase Operating Assets, the Pledged Equity or Obligations; (iii) any change
in an affiliate's, administrative agent's or lenders' right to sell the
collateral or purchase the Disaggregated License (including, without limitation,
any rights of first refusal and the purchase price of the Disaggregated
License); (iv) any change in the ownership status, terms of usage or amount of
Disaggregated License utilized by an affiliate; (v) any material change in the
flow of revenues between Sprint Spectrum and an affiliate excluding changes
related to the pricing of direct or indirect fees, but including any
subordination of direct or indirect fees or other amounts or costs due under the
Sprint Agreements or hereunder to Sprint PCS; (vi) any change to obligations
required to be assumed by, or qualifications for, any Interim or Successor
Manager, including changes in the time period or terms under which Sprint PCS
agrees to remain as Interim Manager; (vii) any changes in confidentiality, non-
compete or Eligible Assignee language, including changes to Schedule 13; (viii)
any clarifications of FCC compliance issues; (ix) the issuance of legal
opinions; (x) any change in the circumstances under, or procedures by which, an
Interim Manager or Successor Manager is appointed; or (xi) any change to this
Section 24.
SECTION 25. Termination. Except as otherwise provided herein, this
-----------
Consent and Agreement shall terminate and be of no further force and effect upon
the first to occur of the following: (a) the Obligations are paid in full and
the Credit Agreement is terminated or assigned to a Sprint Party; and (b) the
Sprint Agreements terminate.
SECTION 26. Texas Unwired. Texas Unwired is a Texas general partnership
-------------
with three partners: Louisiana Unwired, Fort Bend Communications Corporation and
XIT Leasing, Inc. Louisiana Unwired intends to extend credit to Texas Unwired
under an inter-company loan. So long as such inter-company loan is outstanding,
Administrative Agent and the Lenders will have a security interest in the assets
of Texas Unwired, and such assets will be Collateral under the Loan Documents.
Sprint PCS's right to buy the assets of Texas Unwired under Sections 6 and 10 of
this Consent and Agreement shall continue for so long as such assets are
Collateral under the Loan Documents (even if Lucent, and not the Lenders, have
the right to enforce the Loan Documents). The partnership interest of Texas
Unwired held by Louisiana Unwired shall continue to be Pledged Equity under this
Consent and Agreement even if the assets of Texas Unwired are no longer
Collateral under the Loan Documents.
[The remainder of this page is intentionally left blank.]
26
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Agreement to be executed by their respective authorized officers as of the date
and year first above written.
SPRINT SPECTRUM L.P.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINTCOM, INC.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Vice President
WIRELESSCO, L.P.
By: /s/ Bernard A. Bianchino
-----------------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Thomas E. Weigman
--------------------------------------
Thomas E. Weigman, Senior Vice President,
Consumer Market Strategy and Communications
COBANK, ACB,
for itself and as Administrative Agent
By: /s/ Teresa L. Paurtain
-----------------------------------
Name: Teresa L. Paurtain
---------------------------------
Title: Assistant Corporate Secretary
--------------------------------
27
<PAGE>
Acknowledgment, Consent and Agreement of Affiliates
---------------------------------------------------
Each of the undersigned Affiliates (i) has reviewed this Consent and
Agreement, (ii) acknowledges, consents and agrees to the terms and provisions of
this Consent and Agreement, and (iii) agrees to be bound by the terms and
provisions of this Consent and Agreement, including, without limitation, such
terms and provisions that affect either Affiliate, and any of such Affiliate's
assets or its rights under the Management Agreement. Without limiting the
generality of the foregoing: (i) each Affiliate acknowledges and agrees that the
right to appoint an Interim Manager is intended to allow the right and ability
to preserve and/or protect the Collateral or its value and the Service Area
Network or its value and (ii) each Affiliate acknowledges and agrees that in the
event of the sale of the Collateral by the Administrative Agent, the value of
the Collateral may be dependent on the right of the Person purchasing the
Collateral to assume or be a party to the Sprint Agreements and acknowledges
that any sale of the Collateral in accordance with Sections 6 and 10 hereof, the
-----------------
other provisions of this Consent and Agreement and, to the extent not
inconsistent with this Consent and Agreement, the Loan Documents is agreed to be
a commercially reasonable disposition of the Collateral by Administrative Agent.
Each of the undersigned agrees that this Acknowledgment, Consent and
Agreement is valid and enforceable with respect to the undersigned as to Texas
Unwired's treatment as an Affiliate even though Texas Unwired has not yet
acquired the Sprint PCS-related assets from Meretel Communications, L.P. and
become a Manager with respect to a Sprint PCS network. The undersigned's
execution of this Acknowledgment, Consent and Agreement shall continue in full
force and effect as if Texas Unwired owned such assets and was a Manager at the
time of the undersigned's execution of this Acknowledgment, Consent and
Agreement. Each of the undersigned agrees to execute one or more additional
agreements that Sprint PCS or the Administrative Agent deems to be necessary or
appropriate to evidence such continuing effect and enforceability.
LOUISIANA UNWIRED, LLC
By: _________________________________
Name: _______________________________
Title: ______________________________
TEXAS UNWIRED
By:
Name:
Title:
28
<PAGE>
Acknowledgment, Consent and Agreement of Parent, Other Investors and
--------------------------------------------------------------------
Subsidiaries
------------
Each of the undersigned (i) has reviewed this Consent and Agreement, (ii)
acknowledges, consents and agrees to the terms and provisions of this Consent
and Agreement, particularly as they modify the price (as set forth in the
Management Agreements) pursuant to which Sprint PCS may purchase the Operating
Assets under Sections 6 and 10 hereof, and (iii) agrees to be bound by the terms
-----------------
and provisions of this Consent and Agreement and to take such action as is
necessary to cause each Affiliate and its Related Parties to comply with the
terms and provisions of this Consent and Agreement. Without limiting the
generality of the foregoing, each of the undersigned: (i) acknowledges and
agrees that the right to appoint an Interim Manager is intended to allow the
right and ability to preserve and/or protect the Collateral or its value and the
Service Area Network or its value and (ii) acknowledges and agrees that in the
event of the sale of the Collateral by the Administrative Agent, the value of
the Collateral may be dependent on the right of the Person purchasing the
Collateral to assume or be a party to the Sprint Agreements and acknowledges
that any sale of the Collateral in accordance with Sections 6 and 10 hereof, the
-----------------
other provisions of this Consent and Agreement and, to the extent not
inconsistent with this Consent and Agreement, the Loan Documents is agreed to be
a commercially reasonable disposition of the Collateral by Administrative Agent.
Each of the undersigned agrees that this Acknowledgment, Consent and
Agreement is valid and enforceable with respect to the undersigned as to Texas
Unwired's treatment as an Affiliate even though Texas Unwired has not yet
acquired the Sprint PCS-related assets from Meretel Communications, L.P. and
become a Manager with respect to a Sprint PCS network. The undersigned's
execution of this Acknowledgment, Consent and Agreement shall continue in full
force and effect as if Texas Unwired owned such assets and was a Manager at the
time of the undersigned's execution of this Acknowledgment, Consent and
Agreement. Each of the undersigned agrees to execute one or more additional
agreements that Sprint PCS or the Administrative Agent deems to be necessary or
appropriate to evidence such continuing effect and enforceability.
US UNWIRED, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
UNWIRED TELECOM CORP.
By: ________________________________
Name: ______________________________
Title: _____________________________
29
<PAGE>
CAMERON COMMUNICATIONS CORPORATION
By: ________________________________
Name: ______________________________
Title: _____________________________
FORT BEND COMMUNICATIONS CORPORATION
By: ________________________________
Name: ______________________________
Title: _____________________________
XIT LEASING, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
30
<PAGE>
FIRST AMENDMENT TO OMNIBUS AGREEMENT
This First Amendment dated as of February 9, 2000 (the "First Amendment")
to the Omnibus Agreement (the "Agreement") made and entered into as of September
7, 1999, each by and among Unwired Telecom Corp., formerly known as US Unwired,
Inc., a Louisiana corporation ("Unwired"), EATELCORP, Inc., a Louisiana
corporation ("EATEL"), Fort Bend Telephone Company, a Texas corporation ("Fort
Bend"), XIT Leasing, Inc., a Texas Corporation ("XIT"), Wireless Management
Corporation, a Louisiana corporation ("Wireless"), Meretel Communications
Limited Partnership, a Louisiana limited partnership in commendam ("Meretel")
and Meretel Wireless, Inc., a Louisiana corporation ("MI"). Unwired, EATEL and
Fort Bend are sometimes collectively referred to as the "Partners", the Partners
and XIT are collectively referred to as the "Meretel Partners" and the parties
hereto are collectively referred to as the "Parties".
RECITALS
--------
WHEREAS, the Parties have agreed to certain amendments to the Agreement and
desire to enter into this First Amendment to memorialize such amendments
(capitalized terms used herein to have the meanings ascribed to them in the
Agreement unless otherwise expressly defined herein), and to further agree to
expeditiously undertake their reasonable best efforts to consummate the
transactions contemplated by the Agreement as amended by this First Amendment
(the "Amended Agreement").
NOW, THEREFORE, in consideration of the benefits to be derived hereby, the
Parties do hereby agree as follows:
Section 1. Recitals. The Recitals set forth hereinabove are incorporated
herein.
Section 2. Mutual Representations and Warranties. Each Party reaffirms as
of the date hereof the representations and warranties made by it to each of the
other Parties in the Agreement.
Section 3. Amendments to Section 3 of the Agreement (Contributions,
Distributions and Other Transfers). Sections 3(a), (c), (d)(i) and (e) of the
Agreement are amended and restated in their entirety to read as follows:
"(a) (i) transfer the Biloxi/Gulfport BTA, free of any liens,
encumbrances or restrictions, from the applicable Unwired/Sprint Agreement
to the Meretel/Sprint Agreement and (ii) transfer the Beaumont and Lufkin
BTAs, free of any liens, encumbrances or restrictions (other than those
securing the Assumed Liabilities (as such term is defined in Section 4 of
the BL PCS Customer Agreement), from the Meretel/Sprint Agreement to the
applicable agreement between Newco (as defined in the next sentence) and
Sprint. "Newco" means Texas Unwired, a general partnership organized prior
to this First Amendment, managed by Unwired or its affiliate and owned 80%
by Unwired or its affiliate, 15% by Fort Bend or its affiliate and 5% by
XIT or its affiliate, pursuant to the terms of an agreement, including the
related contribution and assumption agreement (the "Newco Agreement")
substantially in the form attached as Exhibit A to the
<PAGE>
Agreement. Upon the Closing, the related contribution and assumption
agreement comprising a part of the Newco Agreement, as well as the
distribution agreement from Unwired to U.S. Unwired, Inc., and the
contribution agreement from U.S. Unwired, Inc., to Louisiana Unwired,
L.L.C. (each in the form previously provided to the Parties, the "Unwired
Affiliates Distribution and Contribution Agreements"), will be executed.
(c) Meretel and the Meretel Partners have negotiated the transfer (a
portion of which will be a capital contribution) to Meretel, as of August
1, 1998, by Unwired of its PCS customers and related assets located in the
Baton Rouge, Lafayette and Beaumont BTAs pursuant to the terms of the
agreement (the "Unwired PCS Customer Agreement") attached as Exhibit B to
the Agreement. Prior to the execution of this First Amendment, the Unwired
PCS Customer Agreement has been executed. At the Closing, Section 3 of the
Unwired PCS Customer Agreement shall be deemed to be amended as follows:
(i) The following sentence is added to the end of the first paragraph
of Section 3: "In addition, the Contributor will receive $913,373
of the Consideration to be delivered pursuant to clause "(A)" of
this Section 3 as additional paid-in capital of the Partnership
rather than cash; and interest as provided in clause (i) of this
Section 3 shall cease to accrue on December 31, 1999, on the
amount of the Consideration delivered as additional paid-in
capital of the Partnership and shall continue to accrue on the
balance of the Consideration to be paid in cash. "
(ii) Section 3(f) is amended and restated to read in its entirety as
follows:
"(f) Effective Time for Issuance of Units. The additional
Units in the Partnership to be obtained by the Contributor
pursuant to this Section 3, if any, shall be deemed to be issued
to and obtained by the Contributor effective as of January 1,
2000 (the time for the actual issuance and delivery of the Units,
if any, shall be subject to the other requirements of this
Section 3), notwithstanding that the Contributed Assets are to be
transferred to and obtained by the Partnership as of the
Effective Date. It is the intent of the parties that the issuance
of such additional Units to the Contributor shall not affect the
proportionate interests held in the Partnership by any of its
partners prior to January 1, 2000."
(d) (i) Meretel and the Meretel Partners have negotiated the
distribution by Meretel to Unwired, Fort Bend and XIT of Meretel's PCS
customers and related assets located in the Beaumont and Lufkin BTAs, and
the assumption by Unwired, Fort Bend and XIT of the Assumed Liabilities,
pursuant to the terms of the agreement (the "BL PCS Customer
2
<PAGE>
Agreement") attached as Exhibit C to this First Amendment (which replaces
Exhibit C to the Agreement), and Unwired, Fort Bend and XIT have negotiated
the contribution by Unwired, Fort Bend and XIT, directly or indirectly, of
their respective resulting interests in such assets to Newco, and the
assumption by Newco of the Assumed Liabilities, pursuant to the Newco
Agreement and the Unwired Affiliates Distribution and Contribution
Agreements. Upon the Closing, the BL PCS Customer Agreement will be
executed. The "Assumed Liabilities" shall include the portion of Meretel's
outstanding indebtedness owed to its bank lenders (of which CoBank ACB is
the agent) secured by Meretel's assets located in the Beaumont and Lufkin
BTAs having a principal balance of $13,673,483 as of January 1, 2000, plus
accrued interest thereon from January 1, 2000.
(e) Meretel and the Meretel Partners have negotiated the contribution
to Meretel by EATEL, as a capital contribution by EATEL to Meretel, of
EATEL's PCS customers and related assets located in the Baton Rouge and
Lafayette BTAs pursuant to the terms of the agreement (the "EATEL PCS
Customer Agreement") attached as Exhibit D to the Agreement, provided (i)
the Effective Date thereof shall be December 8, 1999, (ii) the reference in
Sections 2(e) and (f) to the "Closing Date" shall be changed to the
"Effective Date"; and (iii) Section 3 thereof shall be amended and restated
in its entirety to read as follows:
"Section 3. Consideration. Subject to the adjustments, if any,
provided below in Section 3(a), the Partnership shall deliver the
following amounts to the Contributor in exchange for the Contributed
Assets: (i) $7,616,000 worth of additional Units (as such term is
defined in the Articles of Partnership and determined as of the
Closing Date pursuant to the Omnibus Agreement and Section 8 of the
Articles of Partnership) and additional paid-in capital of the
Partnership, of which $3,113,389 shall be allocated to additional
paid-in capital (the "Consideration"), plus (ii) interest on
$10,729,389 at the rate of 8.03% compounded annually from and
including the Effective Date until January 1, 2000 (the "Interest").
The Interest shall be paid to the Contributor by the delivery of cash
payable by wire transfer or delivery of other immediately available
funds. The Interest shall be delivered to the Contributor within five
days of the Closing Date; provided, payment of the Interest shall not
be required until consented to by CoBank, ACB.
(a) Adjustment to Consideration. The Consideration is equal
to the sum of the following two items: (i) the product of $448.00
times the number of Customers less the sum of (w) the product of
10% times $448.00 times the number of Customers who had
outstanding invoices aged more than 30 but less than 61 days as
of the Effective Date, plus (x) the product of 30% times $448.00
times the number of Customers who had outstanding invoices aged
more than 60 but less than 91 days as of the Effective Date, plus
(y) the product of 90% times $448.00 times the number of
Customers who had outstanding invoices aged more than 90 but less
than 121 days as of the Effective Date, plus (z) the product of
100% times $448.00 times the number of Customers who had
outstanding invoices aged more than 120 days as of the Effective
Date; and (ii) the Book Value
3
<PAGE>
(as defined below) of the Inventory. The Consideration shall be
based solely on Customers and Inventory acquired by the
Contributor in the ordinary course of business prior to the
Effective Date. The Consideration shall be adjusted on the basis
of the results of an audit of the Contributed Assets and Assumed
Liabilities (as defined below) to be conducted by representatives
of Fort Bend on behalf of the Partnership to substantiate the
information provided by the Contributor to the Partnership
relating to the Contributed Assets and Assumed Liabilities (the
"Audit"). For purposes of this Agreement, "Book Value" shall mean
the book value of Contributor's assets as of the Effective Date
determined in accordance with generally accepted accounting
principles consistently applied.
(b) Audit Procedures. The Audit shall be conducted
commencing no later than 10 days following the Closing Date, and
shall be concluded no later than 40 days following the Closing
Date, or at such other date as the Contributor and Fort Bend
otherwise mutually agree. No later than 50 days following the
Closing Date, or at such other date as the Contributor and Fort
Bend otherwise mutually agree, Fort Bend shall deliver to the
Contributor a statement (the "Audit Statement") showing (i) the
amount of any changes to the Consideration arising out of the
Audit, and (ii) a narrative explanation of each of the proposed
changes. In the event that Partnership fails to deliver an Audit
Statement within such 50-day period, Partnership shall be
conclusively presumed to have accepted the Consideration as the
Final Consideration. The Contributor shall have the right to
review the Audit Statement (and supporting work papers) and
provide written notice to Fort Bend of the Contributor's
objections with respect to any error, omission, or other
discrepancy in the Audit Statement (the "Discrepancy Notice")
until 10 days following Contributor's receipt of the Audit
Statement. In the event that Contributor fails to deliver a
Discrepancy Notice within such 10-day period, Contributor shall
be conclusively presumed to have accepted the adjustments set
forth in the Audit Statement. Fort Bend and the Contributor shall
work together in good faith to resolve any dispute referenced in
a Discrepancy Notice and agree on the final amount of any
adjustment to the Consideration. However, Fort Bend's
determination of the amount of any adjustment to the
Consideration shall be binding and conclusive on the Contributor,
the Partnership and all other parties to this Agreement if the
dispute is regarding less than $250,000. Section 11 of this
Agreement shall govern all disputes regarding $250,000 or more.
Fort Bend shall make a final determination in this regard no
later than the 20th day following delivery of the Audit Statement
(the "Determination Date").
(c) Payment of Adjusted Amount. In the event that the
actions contemplated by Section 3(a) and Section 3(b) are
completed before delivery of the Consideration is made (as
contemplated under Section 3), the Partnership's delivery
obligation to the Contributor under Section 3 shall relate only
to the amount of the final Consideration, as adjusted pursuant to
Section 3(a) and Section 3(b) (the "Final Consideration"). In the
event that the actions contemplated by
4
<PAGE>
Section 3(a) and Section 3(b) are not completed until after
delivery of the Consideration has been made, Partnership and
Contributor shall comply with the following requirements, as
applicable: (i) if the Final Consideration exceeds the
Consideration, the Contributor shall receive additional paid-in
capital in the Partnership equal in value to the amount of such
excess effective as of the Effective Date; (ii) if the Final
Consideration is less than the Consideration, the Contributor
shall relinquish to the Partnership, and the Partnership shall
rescind and cancel, effective as of the Effective Date such
amount of additional paid-in capital in the Partnership equal in
value to the amount of the difference.
(d) Effective Time For Issuance of Units. The additional
Units and paid-in capital in the Partnership to be obtained by
the Contributor pursuant to this Section 3 shall be deemed to be
issued to and obtained by the Contributor effective as of January
1, 2000 (the time for the actual issuance and delivery of the
Units shall be subject to the other requirements of this Section
3), notwithstanding that the Contributed Assets are to be
transferred to and obtained by the Partnership as of the
Effective Date. It is the intent of the parties that the issuance
of such additional Units and additional paid-in capital to the
Contributor shall not affect the proportionate interests held in
the Partnership by any of its partners prior to January 1, 2000."
Upon the Closing, the EATEL PCS Customer Agreement, amended as aforesaid, will
be executed, and the resale agreement between Meretel and EATEL's affiliate will
be terminated as of December 8, 1999.
Section 4. Amendments to Section 4 of the Agreement (Changes in Meretel and
Wireless). Section 4(a) of the Agreement is amended and restated to read in its
entirety as follows:
"(a) At the Closing, Wireless, the Meretel Partners and MI shall
execute or cause to be executed, or authorize or cause to be authorized, as
the case may be, Articles of Amendment to the Articles of Incorporation of
Wireless, Amended and Restated Bylaws of Wireless and Fourth Amendment to
the Articles of Partnership of Meretel, in the forms of Exhibits E, F and G
to the Agreement, provided Exhibit G shall be amended by amending and
restating Sections 6, 7 and 8 thereof in their entirety as follows:
6. Section 6.1 of the Amended Articles is hereby amended and
restated to read in its entirety as follows:
"As of January 1, 2000, and from that date through the date
of the Fourth Amendment, each Limited Partner has contributed, or
has agreed to contribute, to the capital of the Partnership the
amount set forth opposite its name below (excluding the
additional paid-in capital specified in Section 8 of the Amended
Articles):
5
<PAGE>
Limited Partner Capital Contribution
--------------- --------------------
EATEL $18,209,506
Unwired $ 4,661,184 of which $380,605 shall be paid in cash
simultaneously with the execution of the
Fourth Amendment (by deducting such
amount from the cash portion of the
Consideration payable to Unwired
pursuant to the Unwired PCS Customer
Agreement (as defined in the Omnibus
Agreement))
Fort Bend $ 9,729,520 of which $632,544 shall be paid in cash
simultaneously with the execution of the
Fourth Amendment
XIT $ 1,797,083 of which $121,163 shall be paid in cash
simultaneously with the execution of the
----------- Fourth Amendment
Total $34,397,293
===========
7. Section 6.3 of the Amended Articles is hereby amended and
restated to read in its entirety as follows:
"On and after the date of the Fourth Amendment, no Partner
shall be obligated to make any additional Deferred Capital
Contributions other than the following Deferred Capital
Contribution in the following aggregate amount to be made no
later than the date set forth opposite such amount (or such other
date specified by the General Partner), each Partner hereby
agreeing to contribute the portion thereof equal to its
percentage ownership interest as specified in Section 8 below
(such contribution to be made in cash or by application of a
Partner's additional paid-in capital as each Partner may elect):
Aggregate Deferred Capital Contribution Date
--------------------------------------- ----
$ 6,676,703 August 1, 2000
Unwired shall not be permitted to make additional Deferred
Capital Contributions which will increase the percentage
ownership interest of it and its Affiliates in the Partnership to
more than 20% without the express prior written agreement of all
the Partners."
6
<PAGE>
8. Section 8 of the Amended Articles is hereby amended and
restated to read in its entirety as follows:
"As of January 1, 2000, and from that date through the date
of the Fourth Amendment, the Partners agree that the total number
of Units owned by each Partner, the percentage ownership interest
of each Partner in the Partnership and the amount of additional
paid-in capital contributed by each Partner is set forth opposite
its name below, subject to adjustment, retroactive to January 1,
2000, in accordance with Section 6(c) of that certain agreement
dated as of September 7, 1999, as amended, among the General
Partner and the Limited Partners (the "Omnibus Agreement"):
Amount of
Percentage Additional
Partner Units Owned Ownership Interest Paid-In Capital
------- ----------- ------------------ ---------------
General Partner 702 2.00%
EATEL 18,210 51.88% $ 3,113,389
Unwired 4,661 13.28% $ 913,373
Fort Bend 9,730 27.72%
XIT 1,797 5.12%
----------- ------------------ ---------------
Total 35,100 100.00% $ 4,026,762
=========== ================== ===============
The total number of Units outstanding on any date shall equal the
dollar amount of total capital contributions (initial and
deferred) made by the Partners on or prior to such date divided
by $1,000.00; provided, however, the amount of additional paid-in
capital contributed by a Partner, unless and until utilized as a
Deferred Capital Contribution, shall be excluded from the
determination of the total number of Units outstanding on any
date. Deferred Capital Contributions paid on or prior to such
date shall be included for purposes of computing the number of
Units; unpaid Deferred Capital Contributions shall not be
included for such purposes. The total number of Units
attributable to a Partner on any date shall equal the total
capital contributions (initial and deferred but excluding
additional paid-in capital unless and until utilized as a
Deferred Capital Contribution) made by such Partner on or prior
to such date divided by $1,000.00. A Partner shall be entitled to
withdraw its additional paid-in capital at any time after August
1, 2000, and interest shall accrue (at a rate equal to that then
paid by the Partnership to its primary lender) on any unpaid
amount thereof from the date of the withdrawal request until
paid. Upon sale or dissolution of the Partnership, additional
paid-in capital previously
7
<PAGE>
contributed by a Partner and not utilized as a Deferred Capital
Contribution or withdrawn shall be included in determining the
Partner's percentage interest in the sale proceeds or
distributions of capital to be made by the Partnership, as the
case may be."
Sections 4(c)(iii) and (v) of the Agreement are amended to change the
reference to "Exhibit I" therein to "Exhibit I to this First Amendment."
Section 5. Amendment to Section 6 of the Agreement (Adjustments in Meretel
Percentage Interests). Section 6 of the Agreement is amended and restated to
read in its entirety as follows:
"(a) At the Closing but effective as of January 1, 2000, each Meretel
Partner's percentage interest in Meretel will be adjusted to its Fixed
Percentage Interest as specified in the table below, and the Articles of
Partnership of Meretel will be amended pursuant to Exhibit G to the
Agreement, as amended pursuant to Section 4 of the First Amendment, to
reflect its Fixed Percentage Interest. To the extent that the adjustments
specified in clauses (b) and (c) below result in the percentage interest of
a Partner (the "Final Percentage Interest") exceeding or being less than
the Fixed Percentage Interest of such Partner, the dollar amount of such
excess shall be allocated to additional paid-in capital of such Partner and
the dollar amount of such deficit shall be made from such Partner's
additional paid-in capital, if any, and the balance shall be made in cash.
If a Partner fails to make the contribution with respect to such deficit,
the Fixed Percentage Interest of such Partner shall be adjusted
accordingly, but nothing shall preclude the Partnership from taking
collection action against such defaulting Partner. The percentage interest
of Wireless in Meretel will remain the same, i.e., 2%, but the ownership
interest of the affiliates of the Partners in Wireless will be adjusted at
the Closing but effective as of January 1, 2000, as provided in Section
8(e). The Fixed Percentage Interest of each Meretel Partner shall be as
follows:
Meretel Partner Fixed Percentage Interest
--------------- -------------------------
Unwired 13.28%
Fort Bend 27.72%
EATEL 51.88%
XIT 5.12%
Wireless 2.00%
(b) A Meretel Partner's Final Percentage Interest is the percentage
determined by (i)(A) subtracting from its Original Meretel Equity Value its
Newco Equity Value, (B) adding in the case of EATEL, the EATEL Contribution
Amount, and in the case of Unwired, $1,500,000 of the Unwired Price (the
"Unwired Contribution Amount") and (C) adding or subtracting, as the case
may be, its Switch Adjustment, (ii) dividing the result by the sum of
clause (i) for each Meretel Partner, and (iii) subtracting from the result
of clause (ii) 0.8% from EATEL and Fort Bend and 0.4% from Unwired.
8
<PAGE>
A Meretel Partner's Original Meretel Equity Value is a dollar amount
equal to its percentage interest in Meretel, directly and, in the case of
each of the Partners, through the stock ownership in Wireless of its
affiliate, multiplied by the Total Meretel Equity Value. For purposes of
this Agreement, each Meretel Partner's percentage interest as of the date
of the Agreement (which includes its indirect percentage interest by virtue
of its affiliate's ownership of shares of Wireless) is as follows:
Meretel Partner Percentage Interest
--------------- -------------------
Unwired 31.25%
Fort Bend 31.25%
EATEL 31.25%
XIT 6.25%
The Total Meretel Equity Value is $83,191,000 minus Closing Meretel Debt.
Closing Meretel Debt is the actual amount of Meretel's debt at January 1,
2000, minus that portion of the Final Purchase Price under the Asset Purchase
Agreement, as adjusted to reflect the exclusion by Pinnacle of any towers
therefrom (the "Tower Price") not applied to Meretel's debt by the Closing.
A Meretel Partner's Newco Equity Value is a dollar amount equal to its
percentage interest in Newco multiplied by the Total Newco Equity Value.
Unwired's percentage interest in Newco is 80%, Fort Bend's percentage interest
is 15%, XIT's percentage interest is 5% and EATEL's percentage interest is 0%.
The Total Newco Equity Value is $24,125,390 minus 29% of the Closing
Meretel Debt.
The Switch Adjustment for each Meretel Partner is:
Meretel Partner Switch Adjustment
--------------- -----------------
Fort Bend ($ 36,808)
Unwired $ 103,624
EATEL ($ 62,715)
XIT ($ 4,101)
The Unwired Price is the Consideration specified in the Unwired PCS
Customer Agreement, as amended.
The EATEL Contribution Amount is the Consideration specified in the EATEL
PCS Customer Agreement.
(c) The Parties agree that the exact Tower Price, EATEL Contribution
Amount and Closing Meretel Debt may not have been finally determined by the
Closing, in which case the
9
<PAGE>
Parties will make a good faith estimate of the applicable amounts and will
use those estimates to make the adjustments provided above. The Parties
further agree that once all final amounts are determined, they will reapply
the foregoing methodology to determine the capital required for each
Meretel Partner's Final Percentage Interest to be effective as of January
1, 2000.
(d) The guaranties of Unwired, Fort Bend, EATEL and XIT in favor of
CoBank with respect to Meretel's loan obligations to CoBank shall be
amended to reflect their respective Fixed Percentage Interests, to be
effective as of January 1, 2000."
Section 6. Amendments to Section 8 of the Agreement (Additional Covenants).
Sections 8(c) and (d) of the Agreement are amended and restated in their
entirety as follows:
"(c) At the Closing, but effective as of January 1, 2000, EATEL will
contribute the EATEL Contribution to the capital of Meretel.
(d) At the Closing, but effective as of January 1, 2000, Unwired will
contribute the Unwired Contribution."
Section 7. Amendment to Section 9 of the Agreement (Closing;
Effectiveness). Section 9 of the Agreement is amended and restated to read in
its entirety as follows:
"A Closing (the "Closing") of the transactions contemplated hereby shall be
held at 10:00 a.m., Central Standard time, on February 11, 2000, to be held at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin, 1200 Smith St.,
14th Floor, Houston, Texas, or at such later date, other time and place as the
Parties shall mutually agree. At the Closing,
(a) The transfers contemplated by Section 3 (a) shall be executed and
become effective as of January 1, 2000.
(b) The transfer or sublease contemplated by Section 3(b) shall be
executed and become effective as of January 1, 2000.
(c) The BL PCS Customer Agreement shall be executed.
(d) The EATEL PCS Customer Agreement shall be executed.
(e) The changes in Meretel and Wireless contemplated by Section 4,
other than the management transition of Wireless already undertaken as
provided herein, shall be authorized and executed and shall become
effective as of January 1, 2000.
(f) The adjustments contemplated by Section 6 shall be made and become
effective as of January 1, 2000.
(g) The mutual release contemplated by Section 7 shall be executed and
become effective.
10
<PAGE>
(h) The contributions, stock transfer and stock issuances contemplated
by Section 8 shall be made and shall be effective as of January 1, 2000.
(i) Each Party shall execute and deliver to each requesting Party such
other instruments, consistent with the terms of this Agreement, as the
requesting Party shall reasonably request in order to effect or evidence
the transactions contemplated hereby or the satisfaction of the conditions
herein to consummation of such transactions.
(j) The contribution and assumption agreement related to and
comprising a part of the Newco Agreement and the Unwired Affiliates
Distribution and Contribution Agreements shall be executed.
(k) Intentionally omitted.
(l) The opinion letter of Ernst & Young, LLP, relating to the tax
consequences of the transactions contemplated hereby, in form and substance
satisfactory to the Parties, shall be delivered to Meretel.
(m) The two management agreements between Meretel and Unwired and
Meretel and EATEL executed several years ago, as subsequently reviewed and
amended, shall be deemed canceled and terminated in their entirety.
(n) The balance sheet of Meretel immediately prior to the Closing
shall, effective as of January 1, 2000, be apportioned between Meretel and
Newco in accordance with the allocation methodology set forth on Exhibit K
attached to this First Amendment.
The Parties agree that the transfers, changes and other matters
contemplated by the Amended Agreement are interrelated and, other than the
management transition of Wireless already underway, the switch conversion
contemplated by Section 3(d)(ii) and the Unwired PCS Customer Agreement, the
effectiveness thereof should occur at the same time. Accordingly, the Parties
agree to use their reasonable best efforts so that all the remaining
transactions contemplated hereby are consummated no later than February 11,
2000, or such later date as the Parties shall mutually agree, to be effective as
provided herein, subject to the adjustments contemplated by Section 6(c).
Section 8. Counterpart Execution. The Parties agree that this First
Amendment may be executed in multiple counterparts, each of which shall be
considered a single instrument.
Section 9. Headings; Construction. The descriptive headings contained in
this First Amendment are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this First Amendment. The provisions
of this First Amendment were negotiated by the Parties hereto and this First
Amendment shall be deemed to have been drafted by all the Parties hereto.
11
<PAGE>
Section 10. Entire Agreement. The Amended Agreement constitutes the entire
agreement of the Parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
the parties with respect to the subject matter hereof.
Section 11. Approval by the Meretel Partners, Wireless and MI. By their
respective execution of this First Amendment, each of the Meretel Partners,
Wireless and MI do hereby consent to and authorize the amendments to the
Articles of Partnership of Meretel contemplated by the Amended Agreement and the
transfers, contributions, distributions and other transactions contemplated by
the Amended Agreement to which Meretel is a party, and no further action or
authorization shall be necessary or required by any of them in order to
consummate the same.
Section 12. Intended Tax Consequences. The parties intend that the
transfers, contributions, distributions and other transactions contemplated by
the Amended Agreement shall be treated as tax free transactions to the extent
permitted and available under the Internal Revenue Code.
Section 13. Continued Effectiveness. As amended hereby, the Agreement shall
continue in full force and effect between the Parties.
WHEREFORE, the Parties have executed this First Amendment as of the date
first set forth hereinabove by their respective undersigned duly authorized
officers.
UNWIRED TELECOM CORP., formerly known as
US Unwired, Inc.
By: /s/ Thomas Henning
-------------------------------------
Name: Thomas Henning
-----------------------------------
Title: Secretary
----------------------------------
FORT BEND TELEPHONE COMPANY
By: /s/ George Head
-------------------------------------
Name: George Head
-----------------------------------
Title: President & CEO
----------------------------------
EATELCORP, INC.
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: Executive President
----------------------------------
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XIT LEASING, INC.
By: /s/ Gilbert R. Rasco
-------------------------------------
Name: Gilbert R. Rasco
-----------------------------------
Title: Secretary
----------------------------------
WIRELESS MANAGEMENT CORPORATION
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: President
----------------------------------
MERETEL COMMUNICATIONS LIMITED
PARTNERSHIP
By: Wireless Management Corporation, its
General Partner
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: President
----------------------------------
MERETEL WIRELESS, INC.
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: Executive President
----------------------------------
Exhibits:
Exhibit C - BL PCS Customer Agreement
Exhibit I - Transitional Services Fees Payable to Unwired
Exhibit K - Balance Sheet Apportionment Methodology
13
<PAGE>
EXHIBIT C
---------
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") made and entered into
effective as of January 1, 2000 (the "Effective Date"), by and between UNWIRED
TELECOM CORP., f/k/a US UNWIRED, INC., a Louisiana corporation ("Unwired"), FORT
BEND TELEPHONE COMPANY, a Texas corporation ("Fort Bend"), XIT LEASING, INC., a
Texas corporation ("XIT"), and MERETEL COMMUNICATIONS LIMITED PARTNERSHIP, a
Louisiana partnership in commendam (the "Partnership"), acting through its
undersigned general partner, Wireless Management Corporation, a Louisiana
corporation (the "General Partner").
RECITALS
--------
WHEREAS, the Partnership was formed pursuant to the Articles of Partnership
in Commendam made and entered into as of July 26, 1995, as amended (the
"Articles of Partnership"), by and among the General Partner, Unwired, Fort
Bend, XIT, EATELCORP, Inc., a Louisiana corporation ("Eatel"), and Meretel
Wireless, Inc., a Louisiana corporation ("MWT");
WHEREAS, Unwired is a limited partner of the Partnership (and an affiliate
of Unwired is a shareholder of the General Partner); Fort Bend is a limited
partner of the Partnership (and an affiliate of Fort Bend is a shareholder of
the General Partner); XIT is a limited partner of the Partnership; Eatel is a
limited partner of the Partnership (and an affiliate of Eatel is a shareholder
of the General Partner); and MWI is no longer a partner in the Partnership;
WHEREAS, the Partnership entered into that certain management agreement
dated June 8, 1998 (the "Sprint PCS Management Agreement"), with Sprint
Spectrum, L.P., and SprintCom, Inc. (collectively, "Sprint") to manage and
construct a wireless personal communications service ("PCS") system in the
following five basic trading areas in which the Partnership had previously
obtained from the Federal Communications Commission (the "FCC") licenses to
construct and operate a PCS system pursuant to the FCC Block C auction (each, a
"BTA"): (1) BTA #034 Beaumont and BTA #265 Lufkin (collectively, the
"Beaumont/Lufkin BTAs"): and (2) BTA #032 Baton Rouge, BTA #236 Lafayette and
BTA #180 Hammond; and, pursuant to the Sprint PCS Management Agreement, the
Partnership took advantage of the FCC's offer for amnesty in the five BTAs by
returning the FCC licenses it previously obtained from the FCC to the FCC;
WHEREAS, prior to the Sprint PCS Management Agreement, Unwired was a
wholesaler of PCS services obtained from the Partnership and, pursuant to its
marketing and sales activities, developed and owned a base of PCS retail
customers (the "Unwired Customers"); and, pursuant to the Sprint PCS Management
Agreement and that certain Contribution Agreement dated effective as of August
1, 1998 (the "Unwired PCS Customer Agreement"), Unwired contributed the Unwired
Customers to the Partnership;
WHEREAS, the Partnership has entered into that certain Asset Purchase
Agreement dated April 7, 1999 by and between the Partnership and Pinnacle
Towers, Inc. ("Pinnacle"), as amended (the "Pinnacle APA"), that certain Master
Tower Lease dated July 8, 1999 by and between the
<PAGE>
Partnership and Pinnacle, as amended (the "Pinnacle Lease"), and certain other
agreements executed and delivered by the Partnership and certain other parties
relating thereto, pursuant to which the Partnership has agreed, upon
satisfaction of certain terms and conditions, to sell and lease back its radio
signal transmission towers, associated equipment, land, ground leases and leases
of tower space to tower tenants (collectively, the "Pinnacle Agreements").
WHEREAS, Unwired, Fort Bend, Eatel, XIT, MWI, the General Partner, and the
Partnership have entered into an agreement dated effective as of September 7,
1999, as amended by the First Amendment thereto dated as of February ___, 2000
(the "Omnibus Agreement") which provides for the consummation of certain
transactions with respect to the Partnership (the "Restructuring Transactions"),
one of the conditions to the closing of which is the execution and delivery of
this Agreement (which, in the Omnibus Agreement, is referred to as the "BL PCS
Customer Agreement");
WHEREAS, in order to carry out the foregoing, the Partnership desires to
distribute, transfer and convey to Unwired, Fort Bend, and XIT (collectively,
the "Distributees") all of its right, title and interest in and to all of the
Distributed Assets (as defined hereinbelow), and assign to them the Assumed
Liabilities (as defined hereinbelow), in accordance with the terms and
provisions of this Agreement; and
WHEREAS, the Distributees desire to obtain from the Partnership all of the
Partnership's right, title and interest in and to all of the Distributed
Assets, and assume the Assumed Liabilities, in accordance with the terms and
provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, and
benefits to be obtained hereby and other good and valuable consideration, the
receipt and sufficiency of which the Partnership and Distributees hereby
acknowledge, the Partnership and Distributees hereby agree as follows:
AGREEMENTS
----------
SECTION 1. RECITALS. The Recitals are hereby incorporated herein.
SECTION 2. DISTRIBUTION OF ASSETS. Subject to the other terms and
conditions of this Agreement, the Partnership hereby distributes, transfers and
conveys to the Distributees, and the Distributees each hereby agree to acquire
and take from the Partnership, all of the Partnership's right, title and
interest in and to the Distributed Assets as of the Effective Date. For
purposes hereof, the "Distributed Assets" shall mean all of the following assets
and properties associated with the PCS business activities that the Partnership
conducts in and with respect to the Beaumont/Lufkin BTAs as of the Effective
Date:
(a) all customers of the Partnership, including the Unwired
Customers, who have telephone numbers with the area code (NPA) "409" (the
"Customers");
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<PAGE>
(b) all contracts, oral or written, between the Partnership and the
Customers relating to the provision of PCS services by the Partnership to
the Customers (the "PCS Contracts"); provided, however, that the interests
hereby obtained in the PCS Contracts shall relate solely to the delivery of
PCS services in the Beaumont/Lufkin BTAs, and thus shall constitute an
undivided interest in any PCS Contracts that provide for the delivery of
PCS services in BTAs other than the Beaumont/Lufkin BTAs;
(c) all trade secrets, know-how, trade dress, data, proprietary
information, and other intellectual property, including the right to
recover for infringement thereon, associated with the Customers, PCS
Contracts, and delivery of PCS services to the Customers under the PCS
Contracts (the "Intellectual Property"); provided, however, that the
Intellectual Property shall not include (i) any rights or interests in or
to the Partnership's name or logo, or any intellectual property of the
Partnership associated with activities of the Partnership unrelated to the
Customers, PCS Contracts, or delivery of PCS Services to the Customers, or
(ii) any items that are non-transferable (such as third party commercial
software licenses);
(d) all payments and proceeds on or relating to accounts receivable
associated with the provision of services to Customers under the PCS
Contracts on and after the Effective Date (the "Accounts");
(e) all handsets which are the subject of the PCS Contracts and
that are owned by the Partnership on the Effective Date (the "Handsets");
(f) all radio signal transmission towers located within the
Beaumont/Lufkin BTAs which have not been acquired by Pinnacle pursuant to
the Pinnacle Agreements as of the Effective Date (the "Residual
Beaumont/Lufkin Towers"), and all other tangible personal property of the
Partnership relating to PCS activities that on the Effective Date is
located either (i) on the Residual Beaumont/Lufkin Towers, (ii) on the
radio signal transmission towers located within the Beaumont/Lufkin BTAs
which have been acquired (and thus are owned) by Pinnacle pursuant to the
Pinnacle Agreements as of the Effective Date, or (iii) at the following
addresses (the "Tangible Personal Property"):
(1) 4414 Dowlen Road
Suite 105
Beaumont, TX 77706
(2) #62 Cental Mall
3100 Highway 365
Port Arthur, TX 77642;
(g) all leases, subleases and other rights between the Partnership
and lessors and sublessors relating to (i) the two locations set forth
above in Section 2(f), (ii) the Residual Beaumont/Lufkin Towers, and (iii)
the Pinnacle Agreements, including without limitation the Pinnacle Lease,
but only to the extent attributable to the Beaumont/Lufkin BTAs
(collectively, the "Leases");
3
<PAGE>
(h) inventory relating to PCS activities located at the two
locations set forth above in Section 2(f) as of the Effective Date and as
set forth in Schedule 1 attached hereto and incorporated herein (the
"Inventory");
(i) all goodwill associated with the Customers, PCS Contracts, and
delivery of PCS services to the Customers under the PCS Contracts (the
"Goodwill");
(j) all information, data and records of the Partnership relating
to the Customers, PCS Contracts, Accounts, Handsets, Tangible Personal
Property, Leases, Inventory, Intellectual Property, and Goodwill (the
"Books and Records");
(k) all customer proprietary network information and subscriber
list information, as such terms are defined in Section 222(f) of the
Communications Act of 1934, as amended (47 USC (S) 222(f)), regarding the
Customers ("CPNI/SLI"); and
(l) all other benefits, rights and interests of the Partnership in
and to the Customers, PCS Contracts, Intellectual Property, Accounts,
Handsets, Tangible Personal Property, Leases, Inventory, Goodwill and Books
and Records; provided, however, that the interests hereby obtained shall
relate solely to the Beaumont/Lufkin BTAs, and thus shall constitute an
undivided interest in any items that relate to both the Beaumont/Lufkin
BTAs and BTAs other than the Beaumont/Lufkin BTAs, including without
limitation the Pinnacle APA, Pinnacle Lease and other Pinnacle Agreements.
SECTION 4. ASSUMED LIABILITIES. Subject to the terms and conditions of
this Agreement, the Distributees hereby severally assume, and shall discharge
and satisfy, all of the Assumed Liabilities as of the Effective Date. For
purposes of this Agreement, the term "Assumed Liabilities" shall mean all
obligations and liabilities of the Partnership accruing on and after the
Effective Date solely with respect to (i) the PCS Contracts, (ii) the Leases,
(iii) without duplication, the Pinnacle Agreements, but only to the extent
attributable to obligations and liabilities associated with radio signal
transmission towers constructed or acquired in the Beaumont/Lufkin BTAs, (iv)
the Intellectual Property, (v) a $13,673,483 portion of the total aggregate
outstanding principal amount and accrued interest thereon owed by the
Partnership as of the Effective Date to CoBank, ACB, individually and as agent
for other lenders, and The CIT Group/Equipment Financing, Inc., (vi) $1,876,423
(plus accrued interest) portion of the indebtedness owed to Unwired, and (vii)
the agreements and other items referenced on Schedule 2, attached to and made a
part of this Agreement, to the extent and in the manner indicated on Schedule 2.
SECTION 5. EXCLUDED LIABILITIES. Except for the Assumed Liabilities, the
Distributees do not hereby assume or agree to assume any other debts,
liabilities and obligations, whether accrued or fixed, absolute or contingent,
matured or unmatured or determined or determinable, of the Partnership or any of
its affiliates, including, without limitation, those arising under any law,
action, claim, suit or governmental order and those arising under any contract,
agreement, arrangement, commitment or undertaking of the Partnership or any of
its affiliates (collectively, the "Excluded Liabilities").
4
<PAGE>
SECTION 6. RELATIVE INTERESTS AND OBLIGATIONS. The Distributees shall,
pursuant to Section 2 of this Agreement, obtain the following undivided
ownership interests in the Distributed Assets: (a) 80% Unwired; (b) 15% Fort
Bend; (c) 5% XIT. The individual obligations and duties that the Distributees
each have with respect to the discharge and satisfaction of the Assumed
Liabilities shall be proportionate to, and no more than, the foregoing
proportionate interests that they each obtain in the Distributed Assets.
SECTION 7. EFFECT OF DISTRIBUTION WITH RESPECT TO PARTNERSHIP. As a
result of the distribution of the Distributed Assets to the Distributees
pursuant to this Agreement, each of their respective ownership interests in the
Partnership shall be reduced and adjusted as of the Effective Date in the manner
contemplated by the Omnibus Agreement. However, the economic burden of any
payment required to be made by the Partnership to Pinnacle after the Closing
(under this Agreement) pursuant to the indemnification or other obligations set
forth in the Pinnacle Agreements shall be allocated in an equitable manner among
and between the Distributees and the other partners of the Partnership based on
their proportionate ownership interests in the Partnership during the time
period during which the liability for the payment accrues.
SECTION 8. CLOSING AND CONVEYANCE INSTRUMENTS. The closing of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin, 1200 Smith
Street, 14/th/ Floor, Houston, Texas, or at such other place as the parties
mutually agree, simultaneously with the execution of this Agreement. All
actions taken at the Closing shall be deemed to have been taken simultaneously
at the time the last of any such actions is taken or completed. The Closing,
and each of the transactions contemplated by this Agreement, shall be effective
as of the close of business on the Effective Date. At the Closing, the
Partnership and Distributees shall deliver to each other a completed General
Conveyance, Transfer and Assignment, in the form attached hereto as Exhibit A,
covering all of the Distributed Assets. At the Closing and at all times after
the Closing, the Partnership shall execute and deliver, or cause to be executed
and delivered, all such other documents or instruments of conveyance,
assignment, or transfer, in each case dated effective as of the Effective Date,
as is necessary or appropriate in order to effectuate the distribution of the
Distributed Assets as contemplated in Section 2 and vest title in or confirm
title to the Distributed Assets to the Distributees (collectively, the
"Conveyance Instruments").
SECTION 9. CERTAIN ALTERNATIVE ARRANGEMENTS. In the event that the
Distributees and Partnership are precluded from fully consummating the
transactions contemplated by this Agreement, including without limitation with
respect to the Residual Beaumont/Lufkin Towers or Pinnacle Agreements, by any
one or more third parties, including without limitation Pinnacle or the lessors
on the ground leases associated with the Residual Beaumont/Lufkin Towers, the
Distributees and Partnership shall enter into such mutually agreeable
alternative contractual arrangements as are necessary or appropriate in order to
approximate as closely as possible the results otherwise contemplated by this
Agreement, including without limitation the execution and delivery of sublease
or comparable agreements (as contemplated by Section 3(b) of the Omnibus
Agreement with respect to the Pinnacle Agreements).
5
<PAGE>
SECTION 10. NO REPRESENTATIONS OR WARRANTIES. The Distributed Assets are
hereby transferred to and received by the Distributees without any
representations or warranties, whether express or implied, of any nature
whatsoever, on an "as is" "where is" basis, but with full subrogation to all
rights and claims of the Partnership against prior owners.
SECTION 11. GOOD FAITH EFFORTS. All parties to this Agreement shall make
good faith efforts to take and complete all steps necessary or appropriate in
order to consummate the transactions contemplated by this Agreement.
SECTION 12. NON-COMPETITION MATTERS. At and as of the Effective Date,
Section 9(a), Section 9(b), and Section 9(c) of the Unwired PCS Customer
Agreement shall not be applicable to the Distributed Assets; provided, however,
that this Section 12 of this Agreement shall not otherwise affect any of
Unwired's obligations under any of the documents or agreements governing the
organization or operation of the Partnership or entered into pursuant to the
Omnibus Agreement, including the Unwired PCS Customer Agreement.
SECTION 13. DISPUTE RESOLUTION PROCEDURES
(a) Agreement to Use Procedure. The parties have entered into
this Agreement in good faith and in the belief that it is mutually advantageous
to them. It is with that same spirit of cooperation that they pledge to attempt
to resolve any dispute amicably without the necessity of litigation.
Accordingly, if a dispute arises between them relating to this Agreement (a
"Dispute"), they will first utilize the procedures specified in this Section 13
(the "Procedure") prior to the commencement of any legal action.
(b) Initiation of Procedure. The party seeking to initiate the
Procedure (the "Initiating Party") shall give written notice to the other party
setting forth a general description of the nature of the Dispute, the Initiating
Party's claim for relief, and the identity of one or more individuals with
authority to settle the Dispute on behalf of the Initiating Party. The party
receiving such notice (the "Responding Party") shall have five business days
within which to designate by written notice to the Initiating Party one or more
individuals with authority to settle the Dispute on behalf of the Responding
Party. The individuals so designated by the Initiating Party and the Responding
Party shall be known as the "Authorized Individuals."
(c) Direct Negotiations. The Authorized Individuals shall be
entitled to make such investigation of the Dispute as they deem appropriate, but
agree to promptly, and in no event later than 30 days from the date of the
Initiating Party's written notice, meet to discuss in good faith a resolution of
the Dispute. The Authorized Individuals shall meet at such times and places and
with such frequency as they may agree. If the Dispute has not been resolved
within 30 days from the date of their initial meeting, the parties shall cease
direct negotiations and shall submit the Dispute to mediation in accordance with
the following provisions of this Section 13.
(d) Selection of Mediator. After direct negotiations have ceased,
the Authorized Individuals shall work together in good faith to select one
qualified attorney-mediator not affiliated with any of the parties. If the
Authorized Individuals are not able to agree on a mediator within five
6
<PAGE>
business days from the date they cease direct negotiations, the Initiating Party
and the Responding Party each shall select a mediator (collectively, the
"Preliminary Mediators"). The Preliminary Mediators shall in turn select another
mediator to alone preside over the mediation of the Dispute.
(e) Time and Place for Mediation. In consultation with the
mediator selected, the parties shall promptly designate a mutually convenient
time and place for the mediation, and unless circumstances require otherwise,
such time to be not later than 45 days after selection of the mediator.
(f) Exchange of Information. In the event any party to this
Agreement has substantial need for information in the possession of another
party to this Agreement in order to prepare for the mediation, all parties shall
attempt in good faith to agree on procedures for the expeditious exchange of
such information. If no agreement is reached in this regard, the mediator shall
decide on the appropriate procedures.
(g) Summary of Views. At least seven days prior to the first
scheduled session of the mediation, each party shall deliver to the mediator and
to the other party a concise written summary of the facts concerning the matter
in Dispute, and such other matters required by the mediator. The mediator may
also request, as the mediator determines is appropriate, that a confidential
issue paper be submitted by each party to the mediator.
(h) Parties to be Represented. In the mediation, each party shall
be represented by an Authorized Individual and may be represented by counsel. In
addition, each party may, with permission of the mediator, bring such addition
persons as needed to respond to questions, contribute information and
participate in the negotiations.
(i) Conduct of Mediation. The mediator shall determine the format
for the meetings, designed to assure that both the mediator and the Authorized
Individuals have an opportunity to hear an oral presentation of each party's
views on the matter in dispute, and that the authorized parties attempt to
negotiate a resolution of the matter in dispute, with or without the assistance
of counsel or others, but with the assistance of the mediator. To this end, the
mediator is authorized to conduct both joint meetings and separate private
caucuses with the parties. The mediation session shall be private, and all
information and statements shall remain confidential. The mediator will keep
confidential all information learned in private caucus with any party unless
specifically authorized by such party to make disclosure of the information to
the other party. The parties shall keep confidential, and shall not use for any
other purpose, all information and statements obtained or made in the course of
the mediation process. The parties hereby agree to sign a document agreeing that
the mediator shall be governed by the provisions of Chapter 154 of the Texas
Remedies and Practice Code and such other rules as the mediator shall prescribe.
The parties commit to participate in the proceedings in good faith with the
intention of resolving the Dispute if at all possible.
(j) Termination of Procedure. The parties agree to participate in
the mediation procedure to its conclusion. The mediation shall be terminated (i)
by the execution of a settlement agreement by the parties, (ii) by a declaration
of the mediator that the mediation is terminated, or
7
<PAGE>
(iii) by a written declaration of a party to the effect that the mediation
process is terminated at the conclusion of one full day's mediation session.
Even if the mediation is terminated without a resolution of the Dispute, the
parties agree not to terminate negotiations and not to commence any legal action
or seek other remedies prior to the expiration of five days following the
mediation. Notwithstanding the foregoing, any party may commence litigation
within such five day period if litigation could be barred by an applicable
statute of limitations or in order to request an injunction to prevent
irreparable harm.
(k) Fees of Mediator, Disqualification. The fees and expenses of
the mediator shall be shared equally by the parties. The mediator shall be
disqualified as a witness, consultant, expert or counsel for any party with
respect to the Dispute and any related matters.
(l) Confidentiality. Mediation is a compromise negotiation for
purposes of the Federal and State Rules of Evidence and constitutes privileged
communication under Texas and Louisiana law. The entire mediation process is
confidential, and no stenographic, visual or audio record shall be made. All
conduct, statements, promises, offers, views and opinions, whether oral or
written, made in the course of the mediation by any party, their agents,
employees, representatives or other invitees and by the mediator are
confidential and shall, in addition and where appropriate, be deemed to be
privileged. Such conduct, statements, promises, offers, views and opinions
shall not be discoverable or admissible for any purposes, including impeachment,
in any litigation or other proceeding involving the parties, and shall not be
disclosed to anyone not an agent, employee, expert, witness, or representative
of any of the parties; provided, however, that evidence otherwise discoverable
or admissible is not excluded from discovery or admission as a result of its use
in the mediation.
SECTION 14. MISCELLANEOUS PROVISIONS.
(a) Further Documentation. At any time, and from time to time
hereafter, upon the reasonable request of any party, and without payment of
further consideration to the other party, each party covenants to do, execute,
acknowledge and deliver, and cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances, including the execution and delivery of the
Conveyance Instruments, as may be required in order to (i) complete the
transactions contemplated by this Agreement, (ii) assign, transfer, grant,
convey, assure and confirm to Unwired, Fort Bend, and XIT, or to collect and
reduce to possession, any or all of the Distributed Assets or the Assumed
Liabilities as provided for herein, and (iii) to evidence any of the foregoing.
(b) Notices. All notices, requests, demands, claims, and other
communications pertaining to this Agreement ("Notices") must be in writing, must
be sent to the addressee at the address set forth in this Section, or at such
other address as the addressee has designated by a Notice given in the manner
set forth in this Section, and must be sent by telegram, telex, facsimile,
electronic mail, courier, or prepaid, certified U.S. mail. Notices will be
deemed given when received, if sent by telegram, telex, electronic mail or
facsimile, and if received between the hours of 8:00 a.m. and 5:00 p.m., local
time of the destination address, on a business day (with confirmation of
completed transmission sufficing as prima facie evidence of receipt of a notice
sent
8
<PAGE>
by telex, telecopy, electronic mail, or facsimile), and when delivered and
receipted for (or when attempted delivery is refused at the address where sent)
if sent by courier or by certified U.S. mail. Notices sent by telegram, telex,
electronic mail, or facsimile and received between 12:01 a.m. and 7:59 a.m.,
local time of the destination address, on a business day will be deemed given at
8:00 a.m. on that same day. Notices sent by telegram, telex, electronic mail, or
facsimile and received at a time other than between the hours of 12:01 a.m. and
5:00 p.m., local time of the destination address, on a business day will be
deemed given at 8:00 a.m. on the next following business day after the day of
receipt. The addresses for Notice are as follows:
If to the Partnership: Meretel Communications Limited Partnership
Wireless Management Corporation, General Partner
c/o EATELCORP, Inc.
913 South Burnside Ave.
Gonzales, Louisiana 70737
Telephone No.: (225) 621-4231
Facsimile No.: (225) 644-8566
Attention: John D. Scanlan
If to Unwired: Unwired Telecom Corp.
Suite 1900
One Lakeshore Drive
Lake Charles, Louisiana 70629
Telephone No.: (318) 436-9000
Facsimile No.: (318) 497-3479
Attention: Robert Piper
If to Fort Bend: Fort Bend Telephone Company
1260 Pin Oak Road
Katy, Texas 77493
Facsimile No.: (281) 396-5524
Telephone No.: (281) 396-5759
Attention: George V. Head
If to XIT: XIT Leasing, Inc.
P.O. Box 2008
314 W Texas
Brazoria, Texas 77422
Facsimile No.: (409) 798-3005
Telephone No.: (409) 798-2121
Attention: Gilbert R. Rasco
(c) Severability. Each part of this Agreement is intended to be
severable. If any term, covenant, condition or provision hereof is unlawful,
invalid, or unenforceable for any reason whatsoever, and such illegality,
invalidity, or unenforceability does not affect the remaining parts
9
<PAGE>
of this Agreement, then all such remaining parts hereof shall be valid and
enforceable and have full force and effect as if the invalid or unenforceable
part had not been included.
(d) Rights Cumulative; Waivers. The rights of each of the parties
under this Agreement are cumulative and may be exercised as often as any party
considers appropriate. The rights of each of the parties hereunder shall not be
capable of being waived or varied otherwise than by an express waiver or
variation that is in writing and signed by the parties. Any failure to exercise
or any delay in exercising any of such rights shall not operate as a waiver or
variation of that or any other such right. Any defective or partial exercise of
any of such rights shall not preclude any other or further exercise of that or
any other such right. No act or course of conduct or negotiation on the part of
any party shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.
(e) Headings. The headings of the Sections and Subsections
contained in this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provision thereof.
(f) Construction. Unless the context otherwise requires, singular
nouns and pronouns, when used herein, shall be deemed to include the plural of
such noun or pronoun and pronouns of one gender shall be deemed to include the
equivalent pronoun of the other gender.
(g) Assignment. This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights and benefits hereof,
including the Attachments hereto, shall be binding upon, and shall inure to the
benefit of, the undersigned parties and their respective successors and assigns.
No party may assign either this Agreement or any of its rights, interests, or
obligations under this Agreement without the prior written consent of the
Partnership and all of the Distributees; provided, however, that a Distributee
may assign all, but not less than all, of its rights, interests, and obligations
under this Agreement to (i) an Affiliate (as defined below) of the Distributee,
or (ii) Newco (as defined in the Omnibus Agreement); provided, further, that in
the event of an assignment permitted by the foregoing clauses, the Distributee
in question shall remain responsible for the performance of all of its
obligations under this Agreement. For purposes of this Section 14(g) of this
Agreement, the term "Affiliate" shall mean, with respect to a Distributee, any
corporation, limited liability company, partnership, trust, or other entity
controlling, controlled by, or under common control with the Distributee. For
this purpose the terms "controls," "controlled by," or "under common control
with" shall mean the ownership and possession, directly or indirectly, of at
least 80% of the beneficial interests in the entity in question and the power to
direct or cause the direction of the management and policies of the entity in
question.
(h) Prior Understandings. This Agreement supersedes any and all
prior discussions and agreements between the parties with respect to the
distribution of the Distributed Assets and other matters contained herein, and
this Agreement contains the sole and entire understanding between the parties
hereto with respect to the transactions contemplated in this Agreement, except
as otherwise provided in the Omnibus Agreement.
10
<PAGE>
(i) Integrated Agreement; Amendments. This Agreement and all
attachments hereto constitute the final complete expression of the intent and
understanding of the parties hereto. This Agreement shall not be altered or
modified except by a subsequent writing, signed by the parties hereto.
(j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing any such counterpart.
(k) Survival. Each and every covenant and agreement hereinabove
made by the parties shall survive the consummation of the distribution of the
Distributed Assets.
(l) Joinder of Other Parties. Eatel is executing this Agreement
to acknowledge its fairness, and Eatel's assent to the terms and conditions
hereof.
(m) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED, AND THE
RIGHTS AND OBLIGATIONS OF THE CONTRIBUTOR AND THE PARTNERSHIP HEREUNDER
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA WITHOUT REGARD
TO THE CONFLICTS OF LAWS AND RULES THEREOF.
[SIGNATURES ON NEXT PAGE]
11
<PAGE>
IN TESTIMONY WHEREOF, the parties hereto have executed this Agreement in
multiple originals on February __, 2000 to be effective as of the Effective
Date.
MERETEL COMMUNICATIONS LIMITED
PARTNERSHIP
By Wireless Management Corporation, its
General Partner
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
UNWIRED TELECOM CORP. f/k/a US UNWIRED, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
FORT BEND TELEPHONE COMPANY
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
XIT LEASING, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
<PAGE>
EATELCORP, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
Schedule 1 - List of Inventory
Schedule 2 - List of Other Agreements To Be Assumed
Exhibit A - Form of General Conveyance, Transfer and Assignment
13
<PAGE>
SCHEDULE 1
----------
List of Inventory
14
<PAGE>
SCHEDULE 2
----------
List of Other Agreements to Be Assumed
1. See Schedule 2-A attached hereto and incorporated herein by reference.
15
<PAGE>
EXHIBIT A
Form of General Conveyance, Transfer and Assignment
16
<PAGE>
EXHIBIT I
[Letterhead of US Unwired]
November 12, 1999
Mr. Robert Burgess
Chief Operating Officer
Meretel Communications, L.P.
406 B. Worthy
Gonzalcs, LA 70737
Dear Robert
Here is a quick summation of our discussion in Lafayette concerning
management Services.
<TABLE>
<CAPTION>
After November 1 After November 1
---------------- ----------------
<S> <C> <C>
General Fees: $100,895 S126,709
Management, Accounting,
Finance, Marketing, Sales
Technical, Information
Technology, Human Resources
and Legal
Customer Care:
*Call Center $2.15/subscriber/month $4.05/subscriber/month
Activations $13.25/activation
Loyalty Welcomes $2.25/activation
Third Party National Retailers:
Set-up Fee (one-time charge) $20,000
Monthly Fee $12,500/month
</TABLE>
*Prepay will add S1.00/subscriber to fee for use of the US Unwired platform.
The general fees are for the services that are already being provided but
have allowed for a reduction of two-thirds of the sales and marketing costs
(Meretel is performing those services itself in Lafayette: and Baton Rouge).
When the spin-off of Meretel is complete, all the sales and marketing charges
will be dropped. The new rate also allows for a small mark-up as US Unwired is
no longer committed to performing these services at cost. As has been the case.
. Existing services can be terminated only by groups;
. Information Technology, Human Resources, and Legal will remain as long as
any existing services are being provided;
. Existing "Management" service can not be terminated without simultaneously
terminating Marketing, Sales, Technical, Call Center; and
. No credit checks or collections are included in the proposed services.
<PAGE>
Customer Care services will be charged at Sprint's rates less 10 Percent.
Prepay will add $1.00 per subscriber for use of US Unwired's software platform.
Sprint charges $13.83 per subscriber for a similar service.
After reviewing the National third Party Retailer program, we have
determined we need five additional CSRs to handle Meretel's volume. The training
for this Position takes a lot of time. However, since Meretel wants to be using
these distribution points by December 1, we will move one and maybe two
experienced CSRs from our existing staff to help get the program started. The
monthly fee of $12,500 is meant to cover the, salaries of these five new staff
members.
It is my understanding Tom Henning committed to providing billing services
under the current contract through January 2000. If services are required beyond
that time, the charges will more closely resemble; Sprint's charges.
One other service Meretel may want to consider is from a department we call
Back-End Prepay. This is a group whose sale responsibility is to reduce prepay
churn and increase its ARPU. In order to perform this service. we would need to
be aware of all your sales and marketing promotions prior to their
implementation.
Call me if you have any questions
Sincerely.
/s/ Robert Piper
Robert Piper
President
RP/cn
<PAGE>
EXHIBIT K
Meretel
Balance Sheet Apportionment
<TABLE>
<CAPTION>
Allocation Method
Balance Sheet Category -----------------------------------------------------------------
<S> <C>
* Cash - Operating Valuation
* Cash - Store Depository Valuation
Cash - Petty Directly assigned
Cash & Cash Equivalents
A/R - Customer Receivables Directly Assigned
A/R - Customer Receivables - Eatel Meretel
A/R - Accrued Cust. Reveivables Directly Assigned
A/R - Roamer Net Settlement Allocated based on Clearing House reports for 15th of prior month
A/R - Allow. For Doubtful Accts. In same porportion as Cust. Rec. and Accrued Cust. Rec.
Due From ( To) Affilitates
Sale of Customer Base - USU Apportioned on customer base apportionment
Interest on customer base Apportioned on customer base apportionment
Other NBV of store fixtures - Directly Assigned
Total
Due From / (To) - LA Unwired, LLC Meretel
* Due From / (To) - LEC Unwired, LLC Valuation
* Due From / (To) - Wireless Mgmt. Valuation
* NSF Clearing Valuation
* Credit Bureau Clearing Valuation
* Refund Clearing Valuation
Employee Advances Valuation
Deposits Directly Assigned
Other Accounts Receivable Valuation
Other Receivables
Prepaid Rent Directly Assigned - Tower Leases
Prepaid Insurance Valuation
Prepaid Eng. Spares Inventory Directly Assigned
Prepaid Other Valuation
Prepaid Expenses
Inventory - PCS Directly Asssigned
Inventory - Prepaid Cards Directly Asssigned
Inventory - Accessories Directly Asssigned
Inventory
PPE - Gross Directly Assigned
Accumulated Depreciation Directly Assigned
Net PPE
Subscriber Base Directly assigned based on where original customer was from
Less Amorization Follows Subscriber Base
Net Subscriber Base
Loan Origination Fees Valuation
Acc. Amort. - Loan Orig. Fees Valuation
Investment in CoBank Valuation
Other Assets
Total Assets
* A/P - Trade Valuation
A/P - Roamers Allocated based on Clearing House reports for 15th of prior month
Payroll W/H Other Than Taxes Based on accrued payroll
* A/P - Accrued Invoices Valuation
* A/P - Accrued PO's Valuation
Accounts Payable
Property and State & Local Telcom tax Directly assigned
Federal Telcom Tax allocated based on retail subscribers
* Use Tax Valuation
* Acrued Interest Expense Valuation
Accrued Payroll Directly assigned based on employee location
Unearned Revenue Apportioned based on A/R
Deposits Payable Valuation
* Accrued Professional Services Valuation
Accrued Commissions Expense Directly assigned
Microwave Relocation Valuation
* Sprint Management Fee Valuation
* Accrued Other Valuation
Accrued Expenses
LTD - Bank Financing Valuation
Paid In Capital Valuation
Retained Earnings Balancing
Stockholder's Equity
Total Liabilities & Stockholders' Equity
</TABLE>
* Items marked will be assumed to total by "New Meretel". The 29% owed by Texas
Unwired will be paid by Texas Unwired bo Meretel.
This is for logistic reasons, a vendor will be paid by "New Meretel" and
reimbursed 29% by Texas Unwired.
<PAGE>
EXHIBIT 10.24
TELECOM DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is dated as of January 1, 2000
between Unwired Telecom Corp. ("Telecom") and US Unwired Inc. ("Unwired").
Recitals
1. Telecom is the wholly-owned subsidiary of Unwired.
2. Pursuant to a Distribution Agreement dated contemporaneously
herewith, Meretel Communications Limited Partnership ("Meretel") distributed to
certain of its limited partners, including Telecom, an undivided interest in
certain assets, and the distributees assumed an undivided interest in certain
liabilities and obligations of Meretel (collectively, the "Undivided
Interest").
3. Telecom desires to convey all of its rights, liabilities and
obligations under the Undivided Interest to Unwired as its sole shareholder, and
Unwired desires to accept such Undivided Interest and assume the Undivided
Interest.
NOW, THEREFORE, Telecom and Unwired hereby agree as follows:
Agreement
Telecom hereby distributes, transfers and conveys to Unwired all of its
rights, liabilities and obligations under the Undivided Interest, and Unwired
agrees to accept and to be bound by and assume the Undivided Interest.
Unwired Telecom Corp.
By: /s/ Thomas G. Henning
-----------------------------
Thomas G. Henning
Secretary
US Unwired Inc.
By: /s/ Robert Piper
-----------------------------
Robert Piper
<PAGE>
EXHIBIT 10.25
UNWIRED CONTRIBUTION AGREEMENT
This Contribution Agreement is dated as of January 1, 2000 between US
Unwired Inc. ("Unwired") and Louisiana Unwired, LLC ("La. Unwired").
RECITALS
1. La. Unwired is the wholly-owned subsidiary of Unwired.
2. Pursuant to a Telecom Distribution Agreement dated contemporaneously
herewith (the "Telecom Distribution Agreement"), Unwired obtained from its
subsidiary, Unwired Telecom Corp., a distribution of an undivided interest in
certain assets, liabilities and obligations (collectively, the "Undivided
Interest") distributed to Unwired Telecom Corp. pursuant to a Distribution
Agreement contemporaneously herewith ("Meretel Distribution Agreement") between
Meretel Communications Limited Partnership and certain of its limited partners,
including Unwired Telecom Corp.
3. Unwired desires to convey all of the rights, liabilities and
obligations received by it in and to the Undivided Interest pursuant to the
Telecom Distribution Agreement as a contribution to La. Unwired, and La. Unwired
desires to accept such contribution.
NOW, THEREFORE, Unwired and La. Unwired hereby agree as follows:
AGREEMENT
Unwired hereby contributes, transfers and conveys to La. Unwired all of
its rights, liabilities and obligations received and assumed by it in and to the
Undivided Interest under the Telecom Distribution Agreement, which constitutes
all of the rights, liabilities and obligations received and assumed by Unwired
Telecom Corp. under the Meretel Distribution Agreement, and La. Unwired agrees
to accept and to be bound by and assume the Undivided Interest.
US Unwired Inc.
By: /s/ Thomas G. Henning
------------------------------------
Thomas G. Henning
Louisiana Unwired, LLC
By: /s/ Robert Piper
-----------------------------------
Robert Piper
<PAGE>
EXHIBIT 10.26
===============================================================================
LOAN AGREEMENT
DATED AS OF January 1, 2000
By and Between
TEXAS UNWIRED
as Borrower,
and
LOUISIANA UNWIRED, LLC
as Lender
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
SECTION 1
AMOUNTS AND TERMS OF REVOLVING LOANS
1.1 Revolving Loans......................................................... 2
---------------
(A) Revolving Loans.................................................... 2
----------------
(B) Note............................................................... 2
----
(C) Advances........................................................... 2
--------
1.2 Interest................................................................ 2
--------
(A) Interest........................................................... 2
--------
(B) Calculation and Payment............................................ 2
-----------------------
(C) Default Rate of Interest........................................... 3
------------------------
(D) Excess Interest.................................................... 3
---------------
1.3 Notice of Borrowing of Revolving Loans.................................. 3
--------------------------------------
1.4 Fees and Expenses....................................................... 3
------------------
1.5 Payments................................................................ 3
--------
1.6 Reduction of Revolving Loan Commitment and Mandatory Repayments of
------------------------------------------------------------------
Revolving Loans......................................................... 4
---------------
(A) Scheduled Reductions of Revolving Loan Commitment.................. 4
-------------------------------------------------
(B) Reductions Resulting From Mandatory Repayments..................... 5
----------------------------------------------
(C) Voluntary Reduction of Revolving Loan Commitment................... 5
------------------------------------------------
(D) Mandatory Repayments............................................... 5
--------------------
1.7 Voluntary Prepayments and Other Mandatory Repayments.................... 5
----------------------------------------------------
(A) Voluntary Prepayment of Loans...................................... 5
-----------------------------
(B) Repayments from Excess Cash Flow................................... 6
--------------------------------
(C) Repayments from Insurance Proceeds................................. 6
----------------------------------
(D) Repayments from Equity Issuances................................... 6
--------------------------------
(E) Repayments from Debt Incurrence.................................... 6
-------------------------------
(F) Repayments from Asset Dispositions................................. 6
----------------------------------
1.8 Loan Accounts........................................................... 6
-------------
1.9 Taxes................................................................... 6
-----
1.10 Term of This Agreement.................................................. 7
----------------------
SECTION 2
AFFIRMATIVE COVENANTS
2.1 Compliance With Laws.................................................... 7
--------------------
2.2 Maintenance of Books and Records; Properties; Insurance................. 7
-------------------------------------------------------
2.3 Inspection; Lender Meeting.............................................. 8
--------------------------
2.4 Legal Existence, Etc.................................................... 8
--------------------
2.5 Use of Proceeds......................................................... 8
---------------
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
2.6 Further Assurances; Notices of Acquisition of Real Property............ 9
-----------------------------------------------------------
2.7 Collateral Assignments of Material Contracts........................... 9
--------------------------------------------
2.8 Enforcement of Sprint Agreements....................................... 9
--------------------------------
SECTION 3
NEGATIVE COVENANTS
3.1 Indebtedness........................................................... 9
------------
3.2 Liens and Related Matters.............................................. 9
-------------------------
(A) No Liens.......................................................... 9
--------
(B) No Negative Pledges............................................... 10
-------------------
3.3 Investments............................................................ 10
-----------
3.4 Contingent Obligations................................................. 10
----------------------
3.5 Restricted Junior Payments............................................. 10
--------------------------
3.6 Restriction on Fundamental Changes..................................... 10
----------------------------------
3.7 Restriction on Equity Issuance......................................... 11
------------------------------
3.8 Disposal of Assets or Subsidiary Stock................................. 11
--------------------------------------
3.9 Transactions with Affiliates........................................... 11
----------------------------
3.10 Management Fees and Compensation....................................... 11
--------------------------------
3.11 Conduct of Business.................................................... 11
-------------------
3.12 Fiscal Year............................................................ 12
-----------
3.13 Subsidiaries........................................................... 12
------------
3.14 Sprint Agreements...................................................... 12
-----------------
SECTION 4
FINANCIAL COVENANTS AND REPORTING
4.1 EBITDA................................................................. 12
------
4.2 Indebtedness to Capitalization Ratio................................... 12
------------------------------------
4.3 Financial Statements and Other Reports................................. 13
--------------------------------------
(A) Quarterly Financials.............................................. 13
--------------------
(B) Year-End Financials............................................... 13
-------------------
(C) Borrower Compliance Certificate................................... 13
-------------------------------
(D) Accountants' Reliance Letter...................................... 13
----------------------------
(E) Accountants' Reports.............................................. 13
--------------------
(F) Management Report................................................. 14
-----------------
(G) Projections....................................................... 14
-----------
(H) SEC Filings and Press Releases.................................... 14
------------------------------
(I) Events of Default, Etc............................................ 14
-----------------------
(J) Litigation........................................................ 14
----------
(K) Supplemented Schedules; Notice of Corporate Changes............... 15
---------------------------------------------------
(L) Regulatory and Other Notices...................................... 15
----------------------------
(M) Filings and Notices Relating to Sprint Agreements................. 15
-------------------------------------------------
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
(N) Other Information 15
-----------------
4.4 Accounting Terms; Utilization of GAAP for Purposes of Calculations
------------------------------------------------------------------
Under Agreement........................................................ 15
---------------
SECTION 5
REPRESENTATIONS AND WARRANTIES
5.1 Disclosure............................................................. 16
----------
5.2 No Material Adverse Effect............................................. 16
--------------------------
5.3 Organization, Powers, Authorization and Good Standing.................. 16
-----------------------------------------------------
(A) Organization and Powers........................................... 16
-----------------------
(B) Authorization; Binding Obligation................................. 17
---------------------------------
(C) Qualification..................................................... 17
-------------
5.4 Compliance of Agreement, Loan Documents and Borrowings with
-----------------------------------------------------------
Applicable Law......................................................... 17
--------------
5.5 Compliance with Law; Governmental Approvals............................ 17
-------------------------------------------
5.6 Tax Returns and Payments............................................... 17
------------------------
5.7 Environmental Matters.................................................. 17
---------------------
5.8 Financial Statements................................................... 18
--------------------
5.9 Intellectual Property.................................................. 18
---------------------
5.10 Litigation, Investigations, Audits, Etc................................ 18
---------------------------------------
5.11 Employee Labor Matters................................................. 19
----------------------
5.12 Employee Benefit Plans................................................. 19
----------------------
5.13 Communications Regulatory Matters...................................... 19
---------------------------------
5.14 Perfection and Priority................................................ 20
-----------------------
5.15 Solvency............................................................... 20
--------
5.16 Investment Company Act; Public Utility Holding Act..................... 20
--------------------------------------------------
5.17 Certain Agreements and Material Contracts.............................. 20
-----------------------------------------
5.18 Subsidiary............................................................. 20
----------
5.19 Title to Properties.................................................... 21
-------------------
SECTION 6
EVENTS OF DEFAULT AND RIGHTS AND REMEDIES
6.1 Event of Default....................................................... 21
----------------
(A) Payment........................................................... 21
-------
(B) Default in Other Agreements....................................... 21
---------------------------
(C) Breach of Certain Provisions...................................... 21
----------------------------
(D) Breach of Warranty................................................ 21
------------------
(E) Other Defaults Under Loan Documents............................... 21
-----------------------------------
(F) Default Under US Unwired Credit Agreement......................... 22
-----------------------------------------
(G) Involuntary Bankruptcy; Appointment of Receiver; Etc.............. 22
-----------------------------------------------------
(H) Voluntary Bankruptcy; Appointment of Receiver; Etc................ 22
---------------------------------------------------
</TABLE>
(iii)
<PAGE>
<TABLE>
<S> <C>
(I) Governmental Liens................................................ 22
------------------
(J) Judgment and Attachments.......................................... 22
------------------------
(K) Dissolution....................................................... 23
-----------
(L) Solvency.......................................................... 23
--------
(M) Injunction........................................................ 23
----------
(N) ERISA; Pension Plans.............................................. 23
--------------------
(O) Environmental Matters............................................. 23
---------------------
(P) Invalidity of Loan Documents...................................... 23
----------------------------
(Q) Damage; Strike; Casualty.......................................... 23
------------------------
(R) Licenses and Permits.............................................. 24
--------------------
(S) Failure of Security............................................... 24
-------------------
(T) Change in Control................................................. 24
-----------------
(U) Material Adverse Effect........................................... 24
-----------------------
(V) Sprint Agreements and Other Material Contracts.................... 24
----------------------------------------------
6.2 Suspension of Commitments.............................................. 24
-------------------------
6.3 Acceleration........................................................... 24
------------
6.4 Rights of Collection................................................... 25
--------------------
6.5 Consents............................................................... 25
--------
6.6 Performance by Lender.................................................. 25
---------------------
6.7 Set Off and Sharing of Payments........................................ 25
-------------------------------
6.8 Application of Payments................................................ 25
-----------------------
SECTION 7
CONDITIONS TO REVOLVING LOANS
7.1 Conditions to Initial Revolving Loan................................... 26
------------------------------------
(A) Executed Loan Documents........................................... 26
-----------------------
(B) Closing Certificates; Opinions.................................... 26
------------------------------
(C) Collateral........................................................ 27
----------
(D) Consents.......................................................... 27
--------
(E) Financial Matters................................................. 28
-----------------
(F) Miscellaneous..................................................... 28
-------------
7.2 Conditions to All Revolving Loans...................................... 29
---------------------------------
SECTION 8
MISCELLANEOUS
8.1 Indemnities............................................................ 30
-----------
8.2 Amendments and Waivers................................................. 30
----------------------
8.3 Notices................................................................ 30
-------
8.4 Failure or Indulgence Not Waiver; Remedies Cumulative.................. 31
-----------------------------------------------------
8.5 Marshaling; Payments Set Aside......................................... 31
------------------------------
8.6 Severability........................................................... 31
------------
</TABLE>
(iv)
<PAGE>
<TABLE>
<S> <C>
8.7 Headings............................................................... 31
--------
8.8 Applicable Law......................................................... 31
--------------
8.9 Successors and Assigns................................................. 32
----------------------
8.10 No Fiduciary Relationship.............................................. 32
-------------------------
8.11 Construction........................................................... 32
------------
8.12 Confidentiality........................................................ 32
---------------
8.13 Consent to Jurisdiction and Service of Process......................... 32
----------------------------------------------
8.14 Waiver of Jury Trial................................................... 33
--------------------
8.15 Survival of Warranties and Certain Agreements.......................... 33
---------------------------------------------
8.16 Entire Agreement....................................................... 34
----------------
8.17 Counterparts; Effectiveness............................................ 34
---------------------------
SECTION 9
DEFINITIONS
9.1 Certain Defined Terms.................................................. 34
---------------------
9.2 Other Definitional Provisions.......................................... 45
-----------------------------
</TABLE>
(v)
<PAGE>
SCHEDULES
Schedule 2.7 Material Contracts to be Assigned
Schedule 3.9 Transactions with Affiliates
Schedule 3.10 Permitted Management Fees
Schedule 5.3(A) Jurisdiction of Organization
Schedule 5.3(C) Qualification to Transact Business
Schedule 5.4 Governmental Approvals
Schedule 5.10 Litigation, Etc.
Schedule 5.11 Labor Matters
Schedule 5.13(A) License Information
Schedule 5.17 Certain Agreements and Material Contracts
Schedule 9.1 Service Areas
EXHIBITS
Exhibit 1.3 Form of Notice of Borrowing
Exhibit 4.3(C) Form of Compliance Certificate
Exhibit 9.1 Form of Revolving Loan Promissory Note
(vi)
<PAGE>
INDEX OF DEFINED TERMS
Defined Term Defined in Section
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Accounting Changes (S)4.4
Affiliate (S)9.1
Agreement (S)9.1
Applicable Law (S)9.1
Asset Disposition (S)9.1
Bankruptcy Code (S)9.1
Base Rate (S)9.1
Beaumont-Lufkin BTAs (S)9.1
Borrower Preamble
Business Day (S)9.1
Cash Equivalents (S)9.1
Closing Date (S)9.1
Collateral (S)9.1
Collateral Contract Assignments (S)9.1
Communications Act (S)9.1
Compliance Certificate (S)4.3(C)
Contingent Obligation (S)9.1
Default (S)9.1
EBITDA (S)9.1
Environmental Laws (S)9.1
Event of Default (S)6.1
Excess Cash Flow (S)9.1
Expiration Date (S)9.1
Facility (S)9.1
FCC (S)9.1
FDPA (S)2.2
Federal Funds Rate (S)9.1
Fort Bend Pledge Agreement (S)9.1
Funding Date (S)7.2
GAAP (S)9.1
Governmental Approvals (S)9.1
Governmental Authority (S)9.1
Guarantees (S)9.1
Guarantors (S)9.1
Indebtedness (S)9.1
Indebtedness to Capitalization Ratio (S)9.1
Indemnities (S)8.1
Intellectual Property Rights (S)5.9
(vii)
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Investment (S)9.1
IRC (S)9.1
Lender Preamble
Licenses (S)9.1
Lien (S)9.1
Loan Documents (S)9.1
Material Adverse Effect (S)9.1
Material Contracts (S)9.1
Meretel Recitals
Mortgage (S)9.1
Net Proceeds (S)9.1
Note (S)9.1
Notice of Borrowing (S)1.3
Obligations (S)9.1
Omnibus Agreement (S)9.1
Operating Cash Flow (S)9.1
PCS (S)9.1
PCS System (S)9.1
Permitted Encumbrances (S)9.1
Person (S)9.1
Pledge Agreements (S)9.1
Projections (S)9.1
PUC (S)9.1
Restricted Junior Payment (S)9.1
Revolving Loan(s) (S)9.1
Revolving Loan Commitment (S)9.1
SEC (S)4.3(H)
Security Agreement (S)9.1
Security Documents (S)9.1
Security Interest (S)9.1
Service Areas (S)9.1
Sprint (S)9.1
Sprint Agreements (S)9.1
Sprint Consent and Agreement (S)9.1
Statement (S)4.3(B)
Subsidiary (S)9.1
US Unwired Recitals
US Unwired Credit Agreement Recitals
US Unwired Lenders Recitals
Wireless System (S)9.1
XIT Pledge Agreement (S)9.1
(viii)
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LOAN AGREEMENT
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This LOAN AGREEMENT (this "Agreement") is entered into as of January 1,
2000, between TEXAS UNWIRED, a Louisiana general partnership ("Borrower"), and
LOUISIANA UNWIRED, LLC, a Louisiana limited liability company ("Lender").
Capitalized terms used and not otherwise defined herein shall have the meanings
given to them in Section 9.1 of this Agreement.
R E C I T A L S:
- - - - - - - -
WHEREAS, US Unwired Inc. ("US Unwired") owns an approximate 96% membership
interest in Lender, and Lender owns an 80% partnership interest in Borrower;
WHEREAS, Lender guaranteed the obligations of US Unwired under that certain
Credit Agreement, dated October 1, 1999, among US Unwired, CoBank, ACB, as
administrative agent, and certain other agents and lenders (as heretofore and
hereafter amended, the "US Unwired Credit Agreement"); and
WHEREAS, Borrower desires that Lender extend a revolving credit facility to
Borrower to refinance certain indebtedness assumed by Borrower from Meretel
Communications Limited Partnership, a Louisiana partnership in commendam
("Meretel"), to finance the construction of the Wireless System associated with
the Service Areas, to provide working capital financing for Borrower and to
provide funds for other general corporate purposes of Borrower; and
WHEREAS, Borrower intends to secure all of its Obligations under the Loan
Documents by granting to Lender, a first priority security interest in and lien
upon substantially all of its now owned or hereafter acquired personal and real
property; and
WHEREAS, pursuant to the US Unwired Credit Agreement, Lender may extend
credit to Borrower only upon the terms and conditions set forth in Section
3.1(C)(4) of the US Unwired Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
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SECTION 1
AMOUNTS AND TERMS OF REVOLVING LOANS
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1.1 Revolving Loans. Subject to the terms and conditions of this
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Agreement and in reliance upon the representations, warranties and covenants of
Borrower and Guarantors contained herein and in the other Loan Documents:
(A) Revolving Loans. Lender agrees to lend to Borrower, during the
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period commencing on the date all conditions precedent set forth in Subsections
7.1 and 7.2 are satisfied or waived as provided herein and ending on the
Business Day immediately preceding the Expiration Date, the Revolving Loans;
provided, that at any one time the aggregate principal amount of all Revolving
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Loans outstanding may not exceed the Revolving Loan Commitment. Within the
limits of the Revolving Loan Commitment and this Subsection 1.1(A), amounts
borrowed under this Subsection 1.1(A) may be prepaid and reborrowed at any time
prior to the Expiration Date.
(B) Note. Borrower shall execute and deliver to Lender a Note in the
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principal amount of the Revolving Loan Commitment.
(C) Advances. Revolving Loans will be made available by wire
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transfer of immediately available funds.
1.2 Interest.
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(A) Interest. From the date each Revolving Loan is made, each
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Revolving Loan shall accrue interest at the sum of the Base Rate plus 3.000% per
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annum. Except as otherwise set forth in Section 6.6, interest on all other
Obligations shall also accrue interest at the sum of the Base Rate plus 3.000%
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per annum.
(B) Calculation and Payment. The interest on the Revolving Loans and
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all other Obligations shall be calculated daily on the basis of a three hundred
sixty-five or -six (365-6) day year for the actual number of days elapsed. The
date of funding shall be included in the calculation of interest. The date of
payment of any Revolving Loan shall be excluded from the calculation of
interest; provided, if a Revolving Loan is repaid on the same day that it is
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made, one (1) day's interest shall be charged.
Interest accruing on the Revolving Loans is payable in arrears on each
of the following dates or events: (i) the last day of each calendar quarter,
(ii) the prepayment of such Revolving Loans (or portion thereof) and (iii) the
Expiration Date, whether by acceleration or otherwise.
(C) Default Rate of Interest. At the election of Lender, after the
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occurrence of a Default and for so long as it continues, all Revolving Loans and
other Obligations shall bear interest at the sum of the Base Rate plus 5.000%
----
per annum.
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(D) Excess Interest. Under no circumstances will the rate of interest
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chargeable be in excess of the maximum amount permitted by law. If any such
excess interest is charged and paid in error, then the excess amount will be
promptly refunded.
1.3 Notice of Borrowing of Revolving Loans. Whenever Borrower desires to
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request a Revolving Loan pursuant to Subsection 1.1, Borrower shall give
irrevocable prior written notice in the form attached hereto as Exhibit 1.3 (a
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"Notice of Borrowing"), specifying the effective date of such borrowing and the
principal amount of such Revolving Loan to be borrowed, not later than 11:00
a.m. (Lake Charles time), one (1) Business Day before the proposed borrowing is
to be effective.
1.4 Fees and Expenses. Borrower agrees to pay promptly all fees, costs
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and expenses (including those of attorneys) incurred by Lender in connection
with (i) any matters contemplated by or arising out of the Loan Documents, and
(ii) the continued administration of the Loan Documents, including any such
fees, costs and expenses incurred in perfecting, maintaining, determining the
priority of and releasing any security, any tax payable in connection with any
Loan Documents and any amendments, modifications and waivers. Borrower shall
also reimburse on demand Lender for its out-of-pocket expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
transactions contemplated herein. Borrower agrees to pay promptly all fees,
costs and expenses incurred by Lender in connection with any action to enforce
any Loan Document or to collect any payments due from Borrower. All fees, costs
and expenses for which Borrower is responsible under this Subsection 1.4 shall
be deemed part of the Obligations when incurred, payable upon demand and in
accordance with the second paragraph of Subsection 1.5 and secured by the
Collateral.
1.5 Payments. All payments by Borrower of the Obligations shall be made
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in same day funds and delivered to Lender by wire transfer to the following
account or such other place as Lender may from time to time designate:
Account Number 6020001699
Hibernia National Bank
Reference: ABA Routing #065000090
Borrower shall receive credit on the day of receipt for funds received by Lender
by 11:00 a.m. (Lake Charles time) on any Business Day. Funds received on any
Business Day after such time shall be deemed to have been paid on the next
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day that is not a Business Day, the payment shall be due on the next
succeeding Business Day and such extension of time shall be included in the
computation of the amount of interest and fees due hereunder.
Borrower hereby authorizes Lender to make (but Lender shall not be
obligated to make) a Revolving Loan for the payment of interest. Prior to an
Event of Default, other fees, costs and expenses (including those of attorneys)
reimbursable pursuant to Subsection 1.4 or elsewhere in any
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Loan Document may be debited as a Revolving Loan after fifteen (15) days notice.
After the occurrence of an Event of Default, any such other fees, costs and
expenses may be debited as a Revolving Loan without notice.
To the extent Borrower or any Guarantor makes a payment or payments to
Lender, which payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds repaid, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by Lender.
1.6 Reduction of Revolving Loan Commitment and Mandatory Repayments of
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Revolving Loans.
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(A) Scheduled Reductions of Revolving Loan Commitment. Commencing on
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March 31, 2004, the Revolving Loan Commitment shall be permanently reduced on
each date shown below in an amount set forth opposite each such date (which
reductions shall be in addition to those provided for in Subsection 1.6(B) and,
to the extent set forth therein, Subsection 1.6(C)):
Quarterly Amount of
Reduction
Dates of Commitment Reduction Revolving Loan Commitment
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March 31, 2004, June 30, 2004, September 30, $ 250,000
2004 and December 31, 2004
March 31, 2005, June 30, 2005, September 30, $ 750,000
2005, and December 31, 2005
March 31, 2006, June 30, 2006, September 30, $1,250,000
2006, and December 31, 2006
March 31, 2007, June 30, 2007, September 30, $1,250,000
2007, and December 31, 2007
March 31, 2008, June 30, 2008, September 30, $1,500,000
2008, and December 31, 2008
(B) Reductions Resulting From Mandatory Repayments. The Revolving
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Loan Commitment also shall be permanently reduced to the extent and in the
amount that Borrower is
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required to apply mandatory repayments to be made pursuant to Subsections 1.7
(B), (C), (D), (E) or (F) to the Facility (whether or not any Revolving Loans
are then outstanding and available to be repaid). All reductions provided for in
this Subsection 1.6(B) shall be in addition to (and shall not serve to reduce
the amount or date of) the scheduled reductions provided for in Subsection
1.6(A) and the voluntary reductions provided for in Subsection 1.6(C) and,
accordingly, may result in the termination of the Revolving Loan Commitment
prior to the date set forth in clause (iii) of the definition of the term
"Expiration Date."
(C) Voluntary Reduction of Revolving Loan Commitment. Borrower shall
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have the right, upon at least three Business Days' notice to Lender, to
permanently reduce the then unused portion of the Revolving Loan Commitment.
Each reduction shall be in a minimum amount of at least $250,000.
Notwithstanding the foregoing, no reduction shall be permitted if, after giving
effect thereto and to any prepayment made therewith, the aggregate principal
balance of the Revolving Loans then outstanding would exceed the Revolving Loan
Commitment as so reduced. Each reduction pursuant to this Subsection 1.6(C) may
be used as a one-time credit against the next succeeding scheduled reduction(s)
required pursuant to Subsection 1.6(A).
(D) Mandatory Repayments. On the date of each Revolving Loan
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Commitment reduction provided for in this Subsection 1.6, Borrower shall repay
Revolving Loans in an amount at least sufficient to reduce the aggregate
principal balance of Revolving Loans then outstanding to the amount of the
Revolving Loan Commitment as so reduced. If at any time the aggregate
outstanding amount of Revolving Loans exceeds the Revolving Loan Commitment,
Borrower shall repay Revolving Loans in an amount at least sufficient to reduce
the aggregate principal balance of Revolving Loans then outstanding to the
amount of the Revolving Loan Commitment, and until such repayment is made,
Lender shall not be obligated to make Revolving Loans. Any repayments pursuant
to this Subsection 1.6(D) shall be accompanied by accrued interest on the amount
repaid.
1.7 Voluntary Prepayments and Other Mandatory Repayments.
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(A) Voluntary Prepayment of Loans. At any time, with one day's
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notice, Borrower may prepay the Revolving Loans, in whole or in part, without
penalty. All prepayment notices shall be irrevocable. All prepayments shall be
accompanied by accrued interest on the amount prepaid.
(B) Repayments from Excess Cash Flow. Within one hundred twenty (120)
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days after the end of each of its fiscal years, commencing with the fiscal year
ending December 31, [2003], Borrower shall repay the Revolving Loans in an
amount equal to fifty percent (50%) of the Excess Cash Flow for such fiscal
year.
(C) Repayments from Insurance Proceeds. Borrower shall repay the
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Revolving Loans in an amount equal to all Net Proceeds received by Borrower
which are insurance proceeds from any Asset Disposition to the extent that such
proceeds are not reinvested in equipment or other
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assets that are used or useful in the business of Borrower within nine months of
receipt by Borrower.
(D) Repayments from Equity Issuances. Immediately upon receipt of
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proceeds from the issuance of any ownership interests in Borrower or any rights
to purchase any such interest, Borrower shall repay the Revolving Loans in an
amount equal to fifty percent (50%) of the amount of (i) such proceeds minus
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(ii) all fees, costs and expenses actually incurred in connection with such
equity issuance.
(E) Repayments from Debt Incurrence. Immediately upon receipt of
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proceeds from the incurrence of any additional Indebtedness, Borrower shall
repay the Revolving Loans in an amount equal to the amount of (i) such proceeds
minus (ii) all fees, costs and expenses actually incurred in connection with
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such debt incurrence.
(F) Repayments from Asset Dispositions. Immediately upon receipt by
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Borrower of Net Proceeds other than insurance proceeds from any Asset
Disposition, Borrower shall repay the Revolving Loans in an amount equal to such
Net Proceeds.
1.8 Loan Accounts. Lender will maintain loan account records for (i) all
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Revolving Loans, interest charges and payments thereof, (ii) the charging and
payment of all fees, costs and expenses and (iii) all other debits and credits
pursuant to this Agreement. The balance in the loan accounts shall be
presumptive evidence of the amounts due and owing to Lender, provided that any
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failure by Lender to maintain such records shall not limit or affect Borrower's
obligation to pay. During the continuance of an Event of Default, Borrower
irrevocably waives the right to direct the application of any and all payments
and Borrower hereby irrevocably agrees that Lender shall have the continuing
exclusive right to apply and reapply payments in any manner it deems
appropriate.
1.9 Taxes. Any and all payments or reimbursements made hereunder or under
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the Note shall be made free and clear of and without deduction for any and all
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto (all such taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto excluding such taxes
imposed on net income), excluding, however, taxes imposed on the net income of
Lender. If Borrower shall be required by law to deduct any such amounts from or
in respect of any sum payable hereunder to Lender, then the sum payable
hereunder shall be increased as may be necessary so that, after making all
required deductions, Lender receives an amount equal to the sum it would have
received had no such deductions been made.
1.10 Term of This Agreement. All of the Obligations shall become due and
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payable as otherwise set forth herein, but in any event, all of the remaining
Obligations shall become due and payable on the date set forth in clause (iii)
of the definition of the term "Expiration Date." This Agreement shall remain in
effect through and including, and shall terminate immediately after (except as
specifically otherwise provided herein), the date on which all Obligations shall
have been indefeasibly and irrevocably paid and satisfied in full.
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SECTION 2
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as this Agreement is in effect
and until payment in full of all Obligations, unless Lender shall otherwise give
its prior written consent, Borrower shall perform and comply with all covenants
in this Section 2.
2.1 Compliance With Laws. Borrower will (i) comply with the requirements
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of all Applicable Laws (including laws, rules, regulations and orders relating
to taxes, employer and employee contributions, securities, employee retirement
and welfare benefits, environmental protection matters and employee health and
safety) as now in effect and which may be imposed in the future in all
jurisdictions in which Borrower is now or hereafter doing business, other than
those laws, rules, regulations and orders the noncompliance with which could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, and (ii) obtain and maintain all rights to licenses,
qualifications and permits (including the Licenses) now held or hereafter
required to be held by Borrower or any of, the loss, suspension or revocation of
which or which the failure to obtain or renew could reasonably be expected to
have a Material Adverse Effect. This Subsection 2.1 shall not preclude Borrower
from contesting any taxes or other payments, if they are being diligently
contested in good faith and if adequate reserves therefor are maintained in
conformity with GAAP.
2.2 Maintenance of Books and Records; Properties; Insurance. Borrower
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will keep adequate records and books of account, in which complete entries will
be made in accordance with GAAP consistently applied, reflecting all financial
transactions. Borrower will maintain or cause to be maintained in good repair,
working order and condition all material properties used in the business of the
Borrower, and will make or cause to be made all appropriate repairs, renewals
and replacements thereof. Borrower will maintain or cause to be maintained,
with financially sound and reputable insurers, public liability, property loss
and damage and business interruption insurance with respect to its business and
properties and the business and properties of Borrower against loss and damage
of the kinds customarily carried or maintained by corporations of established
reputation engaged in the cellular telephone and wireless communications
industry and in amounts acceptable to Lender and will deliver evidence thereof
to Lender. If any part of the Collateral lies within a "special flood hazard
area" as defined and specified by the Federal Emergency Management Agency (or
other appropriate Governmental Authority) pursuant to the Flood Disaster
Protection Act of 1973, as amended (the "FDPA"), and Lender determines that
flood insurance coverage is required to be obtained for such Collateral in order
for Lender to comply with the FDPA, Borrower shall obtain and maintain such
flood insurance policies as Lender reasonably requests so that Lender (or any
assignee thereof) shall be deemed in compliance with the FDPA and shall deliver
evidence thereof to Lender. Such policies of flood insurance shall be in form
satisfactory to Lender and shall be in an amount of at least the lessor of the
value of such Collateral constituting buildings, structures
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or personal property located within the "special flood hazard area" or the
maximum limit of coverage available under Applicable Law. Borrower will cause
Lender, pursuant to endorsements and assignments in form and substance
reasonably satisfactory to Lender, to be named, (i) as a lender loss payee in
the case of casualty insurance, (ii) as an additional insured in the case of all
liability insurance, (iii) as assignee in the case of all business interruption
insurance and (iv) as an additional insured in the case of all flood insurance.
All insurance policies required hereunder shall (i) include effective waivers by
the insurer of subrogation, (ii) provide that all insurance proceeds shall be
adjusted with and paid to Lender and (iii) be non-cancelable as to Lender except
upon thirty (30) days prior written notice given by the insurer to Lender.
2.3 Inspection; Lender Meeting. Borrower will permit any authorized
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representatives of Lender (i) to visit and inspect any of the properties of
Borrower, including financial and accounting records, and to make copies and
take extracts therefrom, (ii) for the purpose of determining or monitoring the
value of the Collateral, to obtain environmental audits or assessments
(including soil samples) by an independent engineer of any Collateral
constituting real estate or interests in real estate, and (iii) to discuss its
and their affairs, finances and business with its and their officers, employees
and certified public accountants, at such reasonable times during normal
business hours and as often as may be reasonably requested. Without in any way
limiting the foregoing, Borrower will participate and will cause its and their
key management personnel to participate in a meeting with Lender at least once
during each year, which meeting shall be held at such time and such place as may
be reasonably requested by Lender.
2.4 Legal Existence, Etc. Except as otherwise permitted by Subsection
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3.6, Borrower will at all times preserve and keep in full force and effect its
legal existence and good standing and all rights and franchises material to its
business.
2.5 Use of Proceeds. Borrower will use the proceeds of the Revolving
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Loans solely for the purposes described in the recital paragraphs to this
Agreement. No part of any Revolving Loan will be used to purchase any margin
securities or otherwise in violation of the regulations of the Federal Reserve
System.
2.6 Further Assurances; Notices of Acquisition of Real Property. Borrower
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will, from time to time, do, execute and deliver all such additional and further
acts, documents and instruments as Lender reasonably requests to consummate the
transactions contemplated hereby and to vest completely in and assure Lender of
its rights under this Agreement and the other Loan Documents, including such
financing statements, documents, security agreements and reports to evidence,
perfect or otherwise implement the security for repayment of the Obligations
contemplated by the Loan Documents. Borrower will notify Lender in writing
prior to the acquisition (including by way of lease) by Borrower of any real
property or any interest therein (and the cost thereof or annual rentals with
respect thereto) and will, prior to any such acquisition, execute and deliver
all such additional documents and instruments as Lender may require pursuant to
this Subsection 2.6 (including mortgages, title insurance policies,
environmental audits, surveys and legal opinions).
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Loan Agreement/Texas Unwired
2.7 Collateral Assignments of Material Contracts. On the Closing Date,
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Borrower shall execute and deliver to Lender Collateral Contract Assignments
with respect to each of the Material Contracts listed on Schedule 2.7.
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Thereafter, Borrower shall promptly execute and deliver to Lender all such
Collateral Contract Assignments with respect to Material Contracts as Lender may
request from time to time.
2.8 Enforcement of Sprint Agreements. Borrower will diligently enforce
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the obligations of Sprint under the Sprint Agreements.
SECTION 3
NEGATIVE COVENANTS
Borrower covenants and agrees that so long as this Agreement is in effect
and until payment in full of all Obligations, unless Lender shall otherwise give
its prior written consent, Borrower shall perform and comply with all covenants
in this Section 3.
3.1 Indebtedness. Borrower will not, directly or indirectly, create,
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incur, assume, guaranty or otherwise become or remain liable with respect to any
Indebtedness other than:
(A) the Obligations; and
(B) Contingent Obligations permitted by Subsection 3.4.
3.2 Liens and Related Matters.
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(A) No Liens. Borrower will not, directly or indirectly, create,
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incur, assume or permit to exist any Lien on or with respect to any property or
asset (including any document or instrument with respect to goods or accounts
receivable) of Borrower, whether now owned or hereafter acquired, or any income
or profits therefrom, except Permitted Encumbrances.
(B) No Negative Pledges. Borrower will not, directly or indirectly,
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enter into or assume any agreement (other than the Loan Documents) prohibiting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired.
3.3 Investments. Borrower will not, directly or indirectly, make or own
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any Investment in any Person except:
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Loan Agreement/Texas Unwired
(A) Borrower may make and own Investments in Cash Equivalents;
provided that such Cash Equivalents (other than deposit accounts in which no
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more than $50,000 is held overnight) are not subject to set off rights;
(B) other Investments by Borrower which shall not, in the aggregate
for Borrower, exceed $250,000.
3.4 Contingent Obligations. Borrower will not, directly or indirectly,
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create or become or be liable with respect to any Contingent Obligation except
those:
(A) resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(B) arising under indemnity agreements to title insurers in
connection with mortgagee title insurance policies in favor of Lender;
(C) arising with respect to customary indemnification obligations
incurred in connection with permitted Asset Dispositions; and
(D) incurred in the ordinary course of business with respect to
surety and appeal bonds, performance and return-of-money bonds and other similar
obligations not exceeding at any time outstanding $100,000 in aggregate
liability.
3.5 Restricted Junior Payments. Borrower will not, directly or
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indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment.
3.6 Restriction on Fundamental Changes. Borrower will not, directly or
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indirectly: (i) unless and only to the extent required by law, amend, modify or
waive any term or provision of its partnership agreement; or (ii) enter into any
transaction of merger or consolidation; (iii) liquidate, wind-up or dissolve
itself (as suffer any liquidation or dissolution); or (iv) acquire by purchase
or otherwise all or any substantial part of the business or assets of any other
Person.
3.7 Restriction on Equity Issuance. Borrower will not, directly or
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indirectly, issue any capital stock or other equity interests or admit any
additional partners.
3.8 Disposal of Assets or Subsidiary Stock. Borrower will not, directly
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or indirectly, convey, sell, lease, sublease, transfer or otherwise dispose of,
or grant any Person an option to acquire, in one transaction or a series of
transactions, any of its property, business or assets, or the partnership
interests in Borrower, whether now owned or hereafter acquired, except for (i)
bona fide sales of inventory to customers for fair value in the ordinary course
of business and dispositions of obsolete equipment not used or useful in the
business; (ii) fair market value sales of Cash Equivalents; and (iii) all other
Asset Dispositions if all of the following conditions are met: (a) the
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Loan Agreement/Texas Unwired
aggregate market value of assets sold in any one transaction or series of
related transactions does not exceed $100,000; (b) the aggregate market value of
assets (including such assets but excluding any assets sold pursuant to clauses
(i) through (v) above inclusive) sold or otherwise disposed of in the
immediately preceding 12-month period does not exceed $250,000 in the aggregate
for Borrower; (c) the consideration received is at least equal to the fair
market value of such assets; (d) the sole consideration received is cash; (e)
after giving effect to the sale or other disposition of such assets, Borrower,
is in compliance on a pro forma basis with the covenants set forth in Section 4
recomputed for the most recently ended month for which information is available
and Borrower is in compliance with all other terms and conditions contained in
this Agreement; and (f) no Default or Event of Default then exists or shall
result from such sale or other disposition.
3.9 Transactions with Affiliates. Borrower will not, directly or
----------------------------
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate or with any director, officer or employee of
Borrower or any Affiliate, except (i) as set forth on Schedule 3.9; (ii)
------------
transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of Borrower and upon fair and reasonable terms
which are fully disclosed to Lender and are no less favorable to Borrower than
would be obtained in a comparable arm's length transaction with a Person that is
not an Affiliate; or (iii) payment of compensation to directors, officers and
employees in the ordinary course of business for services actually rendered in
their capacities as directors, officers and employees, provided such
compensation is reasonable and comparable with compensation paid by companies of
like nature and similarly situated. Notwithstanding the foregoing, upon the
election of Lender no payments may be made with respect to any items set forth
in clauses (i) and (ii) of the preceding sentence upon the occurrence and during
the continuation of a Default or Event of Default.
3.10 Management Fees and Compensation. Borrower will not, directly or
--------------------------------
indirectly, pay any management, consulting or other similar fees to any Person,
except as provided in Schedule 3.10.
-------------
3.11 Conduct of Business. Borrower will not, directly or indirectly,
-------------------
engage in any business other than businesses of owning, constructing, managing,
operating and investing (subject to Subsection 3.3) in Wireless Systems.
3.12 Fiscal Year. Borrower will not change its fiscal year.
-----------
3.13 Subsidiaries. Borrower will not, directly or indirectly, establish,
------------
create or acquire any Subsidiary.
3.14 Sprint Agreements. Borrower will not (i) agree or enter into any
-----------------
amendment or termination of any of the Sprint Agreements or (ii) exercise any of
its elections or rights under Section 11 of the Management Agreements that are
part of the Sprint Agreements.
12
<PAGE>
Loan Agreement/Texas Unwired
SECTION 4
FINANCIAL COVENANTS AND REPORTING
Borrower covenants and agrees that so long as this Agreement is in effect
and until payment in full of all Obligations, unless Lender shall otherwise give
its prior written consent, Borrower shall perform and comply with all covenants
in this Section 4. For the purposes of this Section 4, all covenants calculated
for Borrower shall be calculated on a consolidated basis for Borrower.
4.1 EBITDA. Commencing September 30, 2002, and at each fiscal quarter end
------
thereafter, Borrower shall achieve an EBITDA of not less than $1.
4.2 Indebtedness to Capitalization Ratio. Borrower shall maintain an
------------------------------------
Indebtedness to Capitalization Ratio of not less than the ratio set forth in the
following table for the following dates:
Minimum Indebtedness
Date to Capitalization Ratio
---- -----------------------
Closing through 0.53:1.0
December 31, 2000
March 30, 2001 through 0.59:1.0
December 31, 2001
March 30, 2002 through 0.63:1.0
December 31, 2002
4.3 Financial Statements and Other Reports. Borrower will maintain, a
--------------------------------------
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP (it being understood that quarterly financial statements are not
required to have footnote disclosures). Borrower will deliver each of the
financial statements and other reports described below to Lender.
(A) Quarterly Financials. As soon as available and in any event
--------------------
within sixty (60) days after the end of each fiscal quarter, Borrower will
deliver the consolidated and consolidating balance sheets of Borrower, as at the
end of such fiscal quarter, and the related consolidated and consolidating
statements of income, partner capital and cash flow for such fiscal quarter and
for the period from the beginning of the then current fiscal year of Borrower to
the end of such quarter.
(B) Year-End Financials. As soon as available and in any event within
-------------------
one hundred twenty (120) days after the end of each fiscal year of Borrower,
Borrower will deliver (i) the
13
<PAGE>
Loan Agreement/Texas Unwired
consolidated and consolidating balance sheets of Borrower, as at the end of such
year, and the related consolidated and consolidating statements of income,
partner capital and cash flow for such fiscal year and (ii) a report with
respect to the financial statements from a firm of certified public accountants
selected by Borrower and reasonably acceptable to Lender, which report shall be
prepared in accordance with Statement of Auditing Standards No. 58 (the
"Statement") entitled "Reports on Audited Financial Statements" and such report
shall be "Unqualified" (as such term is defined in such Statement).
(C) Borrower Compliance Certificate. Together with each delivery of
-------------------------------
consolidated and consolidating financial statements of Borrower pursuant to
Subsections 4.3(A) and 4.3(B), Borrower will deliver a fully and properly
completed compliance certificate in substantially the same form as Exhibit
4.3(C) (each, a "Compliance Certificate") signed by the chief executive officer
or chief financial officer of Borrower.
(D) Accountants' Reliance Letter. Together with each delivery of
----------------------------
consolidated and consolidating financial statements of Borrower pursuant to
Subsection 4.3(B), Borrower will deliver a copy of a letter addressed to
Borrower's certified public accountants informing such accountants that a
primary intent of Borrower for the professional services such accountants
provided to Borrower in preparing their audit report was to benefit or influence
Lender and its successors or assigns, and identifying Lender as the party that
Borrower intends to rely on such professional services provided to Borrower by
such accountants.
(E) Accountants' Reports. Promptly upon receipt thereof, Borrower
--------------------
will deliver copies of all significant reports submitted by Borrower's firm of
certified public accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or related internal
control systems of Borrower made by such accountants, including any comment
letter submitted by such accountants to management in connection with their
services.
(F) Management Report. Together with each delivery of consolidated
-----------------
and consolidating financial statements of Borrower pursuant to Subsections
4.3(A) and 4.3(B), Borrower will deliver a management report (i) outlining
principal factors affecting performance in each market and describing the
operations and financial condition of Borrower for the quarter then ended and
the portion of the current fiscal year then elapsed (or for the fiscal year then
ended in the case of year-end financials), including a report on key subscriber,
penetration, churn, additions, deactivations and operating statistics, (ii)
setting forth in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding figures
from the most recent Projections for the current fiscal year delivered pursuant
to Subsection 4.3(G) and (iii) discussing the reasons for any significant
variations. The information above shall be presented in reasonable detail and
shall be certified by the chief financial officer of Borrower to the effect that
such information fairly presents the results of operations and financial
condition of Borrower as at the dates and for the periods indicated.
14
<PAGE>
Loan Agreement/Texas Unwired
(G) Projections. As soon as available and in any event prior to the
-----------
end of each of Borrower's fiscal years, Borrower will deliver Projections of
Borrower for such fiscal year, quarter by quarter. Together with each delivery
of consolidated and consolidating financial statements of Borrower pursuant to
Subsections 4.3(A) and 4.3(B), Borrower will deliver a schedule comparing the
actual performance of Borrower for such fiscal quarter and for the portion of
the fiscal year then ended against the Projections for the then-current fiscal
year delivered pursuant to this Subsection 4.3(G). Promptly after becoming aware
thereof, Borrower will notify Lender of any material amendment to or deviation
from such Projections.
(H) SEC Filings and Press Releases. Promptly upon their becoming
------------------------------
available, Borrower will deliver copies of (i) all financial statements,
reports, notices and proxy statements sent or made available by Borrower to its
security holders, (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by Borrower with any securities
exchange or with the Securities and Exchange Commission (the "SEC") or any
governmental or private regulatory authority, and (iii) all press releases and
other statements made available by to the public concerning developments in the
business of any such Person.
(I) Events of Default, Etc. Promptly upon any officer of Borrower
-----------------------
obtaining knowledge of any of the following events or conditions, Borrower shall
deliver copies of all notices given or received by Borrower with respect to any
such event or condition and a certificate of Borrower's chief executive officer
specifying the nature and period of existence of such event or condition and
what action Borrower has taken, is taking and proposes to take with respect
Default; (ii) any notice that any Person has given to Borrower or any other
action taken with respect to a claimed default or event or condition of the type
referred to in Subsection 6.1(B); or (iii) any event or condition that could
reasonably be expected to have a Material Adverse Effect.
(J) Litigation. Promptly upon any officer of Borrower obtaining
----------
knowledge of (i) the institution of any action, suit, proceeding, governmental
investigation or arbitration against or affecting Borrower not previously
disclosed by Borrower to Lender or (ii) any material development in any action,
suit, proceeding, governmental investigation or arbitration at any time pending
against or affecting Borrower which, in each case, could reasonably be expected
to have a Material Adverse Effect, Borrower will promptly give notice thereof to
Lender and provide such other information as may be reasonably available to
Borrower to enable Lender and its counsel to evaluate such matter.
(K) Supplemented Schedules; Notice of Corporate Changes. Annually,
---------------------------------------------------
concurrently with Borrower's delivery of the Projections required by Subsection
4.3(G), Borrower shall supplement in writing and deliver revisions of the
Schedules annexed to this Agreement to the extent necessary to disclose new or
changed facts or circumstances after the Closing Date; provided that subsequent
--------
disclosures shall not constitute a cure or waiver of any Default or Event of
Default resulting from the matters disclosed.
15
<PAGE>
Loan Agreement/Texas Unwired
(L) Regulatory and Other Notices. Within fifteen (15) days after
----------------------------
filing, receipt or becoming aware thereof, copies of any filings or
communications sent to or notices and other communications received by Borrower
from any Governmental Authority, including the FCC, any applicable PUC and the
SEC, relating to any noncompliance by Borrower with any law or with respect to
any matter or proceeding the effect of which could reasonably be expected to
have a Material Adverse Effect or which could reasonably be expected to result
in a material adverse amendment, change or termination of any License.
(M) Filings and Notices Relating to Sprint Agreements. Promptly upon
-------------------------------------------------
receipt or availability, Borrower will deliver copies of (i) all FCC filings,
orders or other writings relating to (a) the "Licenses," as defined in the
Sprint Agreements, (b) any of the Sprint Agreements or (c) the transactions
contemplated thereby, and (ii) all notices delivered to or given by Borrower
relating to a breach, default or "Event of Termination," as defined in the
Sprint Agreements, including any threatened action with respect thereto, under
any of the Sprint Agreements.
(N) Other Information. With reasonable promptness, Borrower will
-----------------
deliver such other information and data with respect to Borrower and any of the
Guarantors as from time to time may be reasonably requested by Lender.
4.4 Accounting Terms; Utilization of GAAP for Purposes of Calculations
------------------------------------------------------------------
Under Agreement. For purposes of this Agreement, all accounting terms not
- ---------------
otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP. Except as otherwise expressly provided, financial
statements and other information furnished to Lender pursuant to this Agreement
shall be prepared in accordance with GAAP as in effect at the time of such
preparation. No "Accounting Changes" (as defined below) shall affect financial
covenants, standards or terms in this Agreement; provided that Borrower shall
--------
prepare footnotes to each Compliance Certificate and the financial statements
required to be delivered hereunder that show the differences between the
financial statements delivered (which reflect such Accounting Changes) and the
basis for calculating financial covenant compliance (without reflecting such
Accounting Changes). "Accounting Changes" means: (i) changes in accounting
principles required by GAAP and implemented by Borrower; (ii) changes in
accounting principles recommended by Borrower's certified public accountants and
implemented by Borrower; and (iii) changes in carrying value of Borrower's
assets, liabilities or equity accounts. All such adjustments resulting from
expenditures made subsequent to the Closing Date (including, but not limited to,
capitalization of costs and expenses or payment of pre-Closing Date liabilities)
shall be treated as expenses in the period the expenditures are made.
SECTION 5
REPRESENTATIONS AND WARRANTIES
16
<PAGE>
Loan Agreement/Texas Unwired
In order to induce Lender to enter into this Agreement and to make the
Revolving Loans, Borrower represents and warrants to Lender on the Closing Date
that the following statements are true, correct and complete:
5.1 Disclosure. No information furnished by or on behalf of Borrower or
----------
any Guarantor contained in this Agreement, the financial statements referred to
in Subsection 5.8 or any other document, certificate, opinion or written
statement furnished to Lender for use in connection with the Loan Documents
contains any untrue statement of a material fact or omitted, omits or will omit
to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which the same
were made. Borrower is not aware of any facts which it has not disclosed in
writing to the Lender having a Material Adverse Effect, or insofar as Borrower
can now foresee, that could reasonably be expected to have a Material Adverse
Effect.
5.2 No Material Adverse Effect. Since January 1, 2000 there has been no
--------------------------
event or change in facts or circumstance affecting Borrower, any of its
properties, or any of the Guarantors which individually or in the aggregate have
had or could reasonably be expected to have a Material Adverse Effect and that
have not been disclosed herein or in the attached Schedules.
5.3 Organization, Powers, Authorization and Good Standing.
-----------------------------------------------------
(A) Organization and Powers. Borrower is a partnership duly organized,
-----------------------
validly existing and in good standing under the laws of its jurisdiction of
formation (which jurisdiction is set forth on Schedule 5.3(A)). Borrower has all
---------------
requisite legal power and authority to own and operate its properties, to carry
on its business as now conducted and proposed to be conducted, to enter into
each Loan Document to which it is a party and to carry out its respective
obligations with respect thereto.
(B) Authorization; Binding Obligation. Borrower has taken all
---------------------------------
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Loan Documents to which it
is a party. This Agreement is, and the other Loan Documents when executed and
delivered will be, the legally valid and binding obligations of the applicable
parties thereto (other than Lender), each enforceable against each of such
parties, as applicable, in accordance with their respective terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debt or relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and general
principles of equity.
(C) Qualification. Borrower is duly qualified and authorized to do
-------------
business and in good standing in each jurisdiction where the nature of its
business and operations requires such qualification and authorization, except
where the failure to be so qualified, authorized and in good standing could not
reasonably be expected to have a Material Adverse Effect. All jurisdictions in
which each it is qualified and authorized to do business are set forth on
Schedule 5.3 (C).
- ----------------
17
<PAGE>
Loan Agreement/Texas Unwired
5.4 Compliance of Agreement, Loan Documents and Borrowings with
-----------------------------------------------------------
Applicable Law. The execution, delivery and performance by Borrower of the Loan
- --------------
Documents to which it is a party, the borrowings hereunder and the transactions
contemplated hereby and thereby do not and will not, by the passage of time, the
giving of notice or otherwise, (i) except as set forth on Schedule 5.4 hereto,
------------
require any Governmental Approval or violate any Applicable Law relating to
Borrower, (ii) conflict with, result in a breach of or constitute a default
under the partnership agreement or other organizational documents of Borrower or
any Material Contract to which it is a party or by which any of its properties
may be bound or any Governmental Approval relating to it or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by it.
5.5 Compliance with Law; Governmental Approvals. Borrower (i) has or
-------------------------------------------
has valid and enforceable rights to all material Governmental Approvals,
including the Licenses, required by any Applicable Law for it to conduct its
business and (ii) is in material compliance with each Governmental Approval,
including the Licenses, applicable to it and in compliance with all other
Applicable Laws relating to it or any of its respective properties the violation
of which could reasonably be expected to have a Material Adverse Effect. Each
such Governmental Approval is in full force and effect, is final and not subject
to review on appeal and is not the subject of any pending or threatened attack
by direct or collateral proceeding.
5.6 Tax Returns and Payments. Borrower has duly filed or caused to
------------------------
be filed all federal, state, local and other tax returns required by Applicable
Law to be filed, and has paid, or made adequate provision for the payment of,
all federal, state, local and other taxes, assessments and governmental charges
or levies upon it and its property, income, profits and assets which are due and
payable, except where the payment of such tax is being diligently contested in
------
good faith and adequate reserves therefor have been established in compliance
with GAAP. The charges, accruals and reserves on the books of Borrower in
respect of federal, state, local and other taxes for all fiscal years and
portions thereof are in the judgment of Borrower adequate, and Borrower does not
anticipate any additional material taxes or assessments for any of such years.
5.7 Environmental Matters. Borrower is in compliance in all material
---------------------
respects with all applicable Environmental Laws, and there is no contamination
at, under or about such properties or such operations which interfere in any
material respect with the continued operation of such properties or impair in
any material respect the fair saleable value thereof, except for any such
violations or contamination as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
5.8 Financial Statements. All financial statements concerning
--------------------
Borrower or Guarantors which have been or will hereafter be furnished to Lender,
including the January 1, 2000 financials describing the beginning balance sheet
of Borrower, pursuant to this Agreement have been or will be prepared in
accordance with GAAP consistently applied (except as disclosed therein) and do
or will present fairly the financial condition of the Persons covered thereby as
of the date thereof and
18
<PAGE>
the results of their operations for the periods covered thereby and do and will
disclose all material liabilities and Contingent Obligations of any of Borrower
as at the dates thereof. Borrower does not have outstanding, as of the Closing
Date, and after giving effect to the Revolving Loans hereunder on the Closing
Date, any Indebtedness for borrowed money or Contingent Obligations other than
(i) the Revolving Loans, (ii) the Indebtedness permitted under Subsection 3.1,
and (iii) the Contingent Obligations permitted under Subsection 3.4.
5.9 Intellectual Property. Borrower owns, or possesses through valid
---------------------
licensing arrangements, the right to use all patents, copyrights, trademarks,
trade names, service marks, technology know-how and processes used in or
necessary for the conduct of its business as currently conducted (collectively,
the "Intellectual Property Rights") without infringing upon any validly asserted
rights of others. No event has occurred which permits, or after notice or lapse
of time or both would permit, the revocation or termination of any such rights.
Borrower has not been threatened with any litigation regarding Intellectual
Property Rights that would present a material impediment to its business.
5.10 Litigation, Investigations, Audits, Etc. Except as set forth on
----------------------------------------
Schedule 5.10, there is no action, suit, proceeding or investigation pending
- -------------
against, or, to the knowledge of Borrower, threatened against or in any other
manner relating adversely to, Borrower or any of its properties, or the
Licenses, in any court or before any arbitrator of any kind or before or by any
Governmental Authority (including the FCC). None of the actions, suits,
proceedings or investigations disclosed on Schedule 5.10 (i) calls into question
-------------
the validity of this Agreement or any other Loan Document, or (ii) individually
or collectively involves the possibility of any judgment or liability not fully
covered by insurance which, if determined adversely to Borrower, could
reasonably be expected to have a Material Adverse Effect. Borrower is not the
subject of any review or audit by the Internal Revenue Service or any
investigation by any Governmental Authority concerning the violation or possible
violation of any law.
5.11 Employee Labor Matters. Except as set forth on Schedule 5.11, (i)
---------------------- -------------
none of Borrower or any of its employees is subject to any collective bargaining
agreement, (ii) no petition for certification or union election is pending with
respect to the employees of Borrower and no union or collective bargaining unit
has sought such certification or recognition with respect to the employees of
Borrower and (iii) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of Borrower after due inquiry,
threatened between Borrower and its respective employees, other than employee
grievances arising in the ordinary course of business which could not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.
5.12 Employee Benefit Plans. Borrower is in compliance in all material
----------------------
respects with the applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder, the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
19
<PAGE>
5.1 Communications Regulatory Matters.
---------------------------------
(A) Schedule 5.13(A) sets forth a true and complete list of the
----------------
following information for each License issued to or managed by Borrower: the
name of the licensee, the type of service, the expiration date and the
geographic area covered by such License.
(B) The Licenses are valid and in full force and effect without
conditions except for such conditions as are generally applicable to holders of
such Licenses. No event has occurred and is continuing which could reasonably be
expected to (i) result in the imposition of a material forfeiture or the
revocation, termination or adverse modification of any such License or (ii)
materially and adversely affect any rights of Borrower thereunder. Borrower has
no reason to believe and has no knowledge that any Licenses will not be renewed
in the ordinary course. Borrower is not a party to any investigation, notice of
violation, order or complaint issued by or before the FCC, and there are no
proceedings pending by or before the FCC which could in any manner threaten or
adversely affect the validity of any License.
(C) All of the material properties, equipment and systems owned,
leased or managed by Borrower are, and (to the best knowledge of Borrower) all
such property, equipment and systems to be acquired or added in connection with
any contemplated system expansion or construction will be, in good repair,
working order and condition (reasonable wear and tear excepted) and are and will
be in compliance with all terms and conditions of the Licenses and all standards
or rules imposed by any Governmental Authority or as imposed under any
agreements with telephone companies and customers.
(D) Borrower has paid all franchise, license or other fees and
charges which have become due pursuant to any Governmental Approval in respect
of its business and has made appropriate provision as is required by GAAP for
any such fees and charges which have accrued.
5.14 Perfection and Priority. The Security Interest is a valid and
-----------------------
perfected first priority lien, security title or security interest in the
Collateral in favor of Lender securing, in accordance with the terms of the
Security Documents, the Obligations, and the Collateral is subject to no Lien
other than permitted pursuant to Subsection 3.2. The Security Interest is
enforceable as security for the Obligations in accordance with its terms.
5.15 Solvency. Borrower: (i) owns and will own assets the present fair
--------
saleable value of which are (a) greater than the total amount of liabilities
(including contingent liabilities) of Borrower and (b) greater than the amount
that will be required to pay the probable liabilities of its then existing debts
and liabilities as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to Borrower; (ii)
has capital that is not unreasonably small in relation to its business as
presently conducted or after giving effect to any contemplated trans-action; and
(iii) does not intend to incur and does not believe that it will incur debts and
liabilities beyond its ability to pay such debts and liabilities as they become
due.
20
<PAGE>
5.16 Investment Company Act; Public Utility Holding Act. Borrower is not an
--------------------------------------------------
"investment company" as that term is defined in and is not otherwise subject to
regulation under, the Investment Company Act of 1940, as amended. Borrower is
not a "holding company" as that term is defined in, and is not otherwise subject
to regulation under, the Public Utility Holding Company Act of 1935, as amended.
5.17 Certain Agreements and Material Contracts. Schedule 5.17 sets forth a
----------------------------------------- -------------
complete and accurate list of all loan agreements, indentures, guarantees,
capital leases and other similar credit or reimbursement agreements and all
Material Contracts of Borrower. Borrower has performed all of its material
obligations under such agreements and Material Contracts and, to the best
knowledge of Borrower, each other party thereto is in compliance with each such
agreement or Material Contract. Each such agreement or Material Contract is in
full force and effect in accordance with the terms thereof. Borrower has made
available a true and complete copy of each such agreement or Material Contract
listed on Schedule 5.17 for inspection by Lender.
-------------
5.18 Subsidiary. Borrower has no Subsidiary.
----------
5.19 Title to Properties. Borrower has such title or leasehold interest in
-------------------
and to the real property owned or leased by it as is necessary or desirable to
the conduct of its business and valid and legal title or leasehold interest in
and to all of its personal property, including those reflected on the balance
sheets of Borrower delivered pursuant to Subsection 5.8, except those which have
been disposed of by Borrower subsequent to such date which dispositions have
been in the ordinary course of business or as otherwise expressly permitted
hereunder.
SECTION 6
EVENTS OF DEFAULT AND RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean the occurrence or
----------------
existence of any one or more of the following:
(A) Payment. Failure to repay any outstanding principal amount of any
-------
Revolving Loan at the time required pursuant to this Agreement, or failure to
pay, within five (5) days after the due date, any interest on any Revolving Loan
or any other amount due under this Agreement or any of the other Loan Documents;
or
(B) Default in Other Agreements. (i) Failure of Borrower to pay when
---------------------------
due or within any applicable grace period any principal or interest on
Indebtedness (other than the Revolving Loans) or any Contingent Obligation, or
(ii) any other breach or default of Borrower with respect to any Indebtedness
(other than the Revolving Loans) or any Contingent Obligation, if the effect of
such breach or default is to cause or to permit the holder or holders then to
cause such
21
<PAGE>
Indebtedness or Contingent Obligation having an aggregate principal amount for
Borrower in excess of $250,000 to become or be declared due prior to its stated
maturity; or
(C) Breach of Certain Provisions. Failure of Borrower to perform or
----------------------------
comply with any term or condition contained in that portion of Subsection 2.2
relating to Borrower's obligation to maintain insurance, Subsection 2.4,
Subsection 2.8, Section 3 or Section 4; or
(D) Breach of Warranty. Any representation, warranty, certification
------------------
or other statement made by Borrower or any Guarantor in any Loan Document or in
any statement or certificate at any time given by Borrower or any Guarantor in
writing pursuant or in connection with any Loan Document is false in any
material respect on the date made or deemed made; or
(E) Other Defaults Under Loan Documents. Borrower, any Guarantor or
-----------------------------------
any other party (other than Lender) breaches or defaults in the performance of
or compliance with any term contained in this Agreement or the other Loan
Documents and such default is not remedied or waived within fifteen (15) days
after receipt by Borrower, such Guarantor or such other party of notice from
Lender of such default (other than occurrences described in other provisions of
this Subsection 6.1 for which a different grace or cure period is specified or
which constitute immediate Events of Default); or
(F) Default Under US Unwired Credit Agreement. Any Default or Event
-----------------------------------------
of Default under, and as defined in, the US Unwired Credit Agreement, provided,
--------
however, that Lender has given Borrower at least sixty (60) days' notice; or
- -------
(G) Involuntary Bankruptcy; Appointment of Receiver; Etc. (i) A court
-----------------------------------------------------
enters a decree or order for relief with respect to Borrower or any Guarantor in
an involuntary case under the Bankruptcy Code, which decree or order is not
stayed or other similar relief is not granted under any applicable federal or
state law within forty-five (45) days; or (ii) the continuance of any of the
following events for forty-five (45) days unless dismissed, bonded or
discharged: (a) an involuntary case is commenced against Borrower or any
Guarantor under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect; or (b) a decree or order of a court for the appointment
of a receiver, liquidator, sequestrator, trustee, custodian or other officer
having similar powers over Borrower or any Guarantor, or over all or a
substantial part of its property, is entered; or (c) an interim receiver,
trustee or other custodian is appointed without the consent of Borrower or any
Guarantor, for all or a substantial part of the property of Borrower or any
Guarantor; or
(H) Voluntary Bankruptcy; Appointment of Receiver; Etc. Borrower or
---------------------------------------------------
any Guarantor (i) commences a voluntary case under the Bankruptcy Code, files a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts of
Borrower or any Guarantor, or consents to, or fails to contest in a timely and
appropriate manner, the entry of an order for relief in an involuntary case, the
conversion of an involuntary case to a voluntary case under any such law, or the
appointment of or
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taking possession by a receiver, trustee or other custodian of all or a
substantial part of the property of Borrower or any Guarantor; or (ii) makes any
assignment for the benefit of creditors; or (iii) the Board of Directors or
other governing body of Borrower or any Guarantor adopts any resolution or
otherwise authorizes action to approve any of the actions referred to in this
Subsection 6.1(H); or
(I) Governmental Liens. Any Lien, levy or assessment (other than
------------------
Permitted Encumbrances) is filed or recorded with respect to or otherwise
imposed upon all or any part of the Collateral or the other assets of Borrower
by the United States or any department or instrumentality thereof or by any
state, county, municipality or other Governmental Authority; or
(J) Judgment and Attachments. Any money judgment, writ or warrant of
------------------------
attachment or similar process (other than those described in Subsection 6.1(I))
involving an amount in any individual case or in the aggregate for Borrower at
any time in excess of $250,000 (in either case not adequately covered by
insurance as to which the insurance company has acknowledged coverage) is
entered or filed against Borrower or any of its assets and remains undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days or in any event
later than five (5) Business Days prior to the date of any proposed sale
thereunder; or
(K) Dissolution. Any order, judgment or decree is entered against
-----------
Borrower or any of Guarantor decreeing the dissolution or split up of Borrower
or any Guarantor and such order remains undischarged or unstayed for a period in
excess of fifteen (15) days; or
(L) Solvency. Borrower or any Guarantor ceases to be solvent or
--------
Borrower or any Guarantor admits in writing its present or prospective inability
to pay its debts as they become due; or
(M) Injunction. Borrower or any Guarantor is enjoined, restrained or
----------
in any way prevented by the order of any court or any Governmental Authority
from conducting all or any material part of its business and such order
continues for more than fifteen (15) days; or
(N) ERISA; Pension Plans. (i) Borrower fails to make full payment
--------------------
when due of all amounts which, under the provisions of any employee benefit
plans or any applicable provisions of the IRC, any it is required to pay as
contributions thereto and such failure results in or could reasonably be
expected to have a Material Adverse Effect; or (ii) an accumulated funding
deficiency occurs or exists, whether or not waived, with respect to any such
employee benefit plans; or (iii) any employee benefit plan of Borrower loses its
status as a qualified plan under the IRC and such loss results in or could
reasonably be expected to have a Material Adverse Effect; or
(O) Environmental Matters. Borrower fails to: (i) obtain or maintain
---------------------
any operating licenses or permits required by environmental authorities; (ii)
begin, continue or complete any remediation activities as required by any
environmental authorities; (iii) store or dispose of any hazardous materials in
accordance with applicable environmental laws and regulations; or (iv)
23
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comply with any other environmental laws, if in any such case such failure could
reasonably be expected to have a Material Adverse Effect; or
(P) Invalidity of Loan Documents. Any of the Loan Documents for any
----------------------------
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or Borrower or any Guarantor denies that it has any further liability
under any Loan Documents to which it is party, or gives notice to such effect;
or
(Q) Damage; Strike; Casualty. Any material damage to, or loss, theft
------------------------
or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of Borrower if any such event or circumstance results in or could
reasonably be expected to have a Material Adverse Effect; or
(R) Licenses and Permits. (i) The loss, suspension or revocation of,
--------------------
or failure to renew, any license or permit now held or hereafter acquired by
Borrower, if such loss, suspension, revocation or failure to renew could
reasonably be expected to have a Material Adverse Effect; or (ii) one or more
Licenses shall be terminated, revoked, substantially adversely modified or fail
to be renewed at its stated expiration; or
(S) Failure of Security. Lender does not have or ceases to have a
-------------------
valid and perfected first priority security interest (subject to Permitted
Encumbrances) in the Collateral or any substantial portion thereof, in each
case, for any reason other than the failure of Lender to take any action within
its control; or
(T) Change in Control. Lender ceases to beneficially own and control
-----------------
at least 80% of the partnership interests of Borrower, or Lender ceases to be
the Managing Partner of Borrower; or
(U) Material Adverse Effect. Any event not referred to elsewhere in
-----------------------
this Subsection 6.1 shall occur which results in a Material Adverse Effect; or
(V) Sprint Agreements and Other Material Contracts. Any breach,
----------------------------------------------
default, termination or Event of Termination shall have occurred under any of
the Sprint Agreements or other Material Contracts by any of the parties thereto,
or any of the Sprint Agreements or other Material Contracts shall have been
terminated or otherwise have ceased to be in full force and effect.
6.2 Suspension of Commitments. Upon the occurrence of any Default or
-------------------------
Event of Default, Lender, without notice or demand, may immediately cease making
additional funds available under the Revolving Loans and cause its obligation to
lend to be suspended; provided that, in the case of a Default, if the subject
--------
condition or event is waived, cured or removed by Lender
24
<PAGE>
within any applicable grace or cure period, the suspended Revolving Loan
Commitment shall be reinstated.
6.3 Acceleration. Upon the occurrence of any Event of Default described
------------
in the foregoing Subsections 6.1(G) or 6.1(H), the unpaid principal amount of
and accrued interest and fees on the Revolving Loans and all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
requirements of any kind, all of which are hereby expressly waived by Borrower,
and the obligations of Lender to make funds available under the Revolving Loans
shall thereupon terminate. Upon the occurrence and during the continuance of any
other Event of Default, Lender may by written notice to Borrower declare all or
any portion of the Revolving Loans and all or some of the other Obligations to
be, and the same shall forthwith become, immediately due and payable together
with accrued interest thereon, and upon such acceleration the obligations of
Lender to make funds available under the Revolving Loan commitment shall
thereupon terminate.
6.4 Rights of Collection. Upon the occurrence of any Event of Default and
--------------------
at any time thereafter and unless and until such Event of Default is waived by
Lender, Lender may exercise all other rights and remedies under this Agreement,
the other Loan Documents and Applicable Law, in order to satisfy all of the
Obligations.
6.5 Consents. Borrower acknowledges that certain transactions
--------
contemplated by this Agreement and the other Loan Documents and certain actions
which may be taken by Lender in the exercise of their respective rights under
this Agreement and the other Loan Documents may require the consent of a
Governmental Authority. If counsel to Lender reasonably determines that the
consent of a Governmental Authority is required in connection with the
execution, delivery and performance of any of the aforesaid Loan Documents or
any Loan Documents delivered to Lender in connection therewith or as a result of
any action which may be taken pursuant thereto, then Borrower, at Borrower's
sole cost and expense, agrees to use its reasonable efforts to secure such
consent and to cooperate with and Lenders in any action commenced by or any
Lender to secure such consent.
6.6 Performance by Lender. If Borrower shall fail to perform any
---------------------
covenant, duty or agreement contained in any of the Loan Documents, Lender may
perform or attempt to perform such covenant, duty or agreement on behalf of
Borrower after the expiration of any cure or grace periods set forth herein. In
such event, Borrower shall, at the request of Lender, promptly pay any amount
reasonably expended by Lender in such performance or attempted performance to
Lender, together with interest thereon at the highest rate of interest in effect
upon the occurrence of an Event of Default as specified in Subsection 1.2(C)
from the date of such expenditure until paid. Notwithstanding the foregoing, it
is expressly agreed that Lender shall not have any liability or responsibility
for the performance of any obligation of Borrower under this Agreement or any
other Loan Document.
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<PAGE>
6.7 Set Off and Sharing of Payments. In addition to any rights now or
-------------------------------
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, Lender is hereby
authorized by Borrower at any time or from time to time, with reasonably prompt
subsequent notice to Borrower (any prior or contemporaneous notice being hereby
expressly waived) to set off and to appropriate and to apply any and all (A)
balances held by Lender at any of its offices for the account of Borrower
(regardless of whether such balances are then due to Borrower), and (B) other
property at any time held or owing by Lender to or for the credit or for the
account of Borrower, against and on account of any of the Obligations.
6.8 Application of Payments. Subsequent to the acceleration of the
-----------------------
Revolving Loans pursuant to Subsection 6.3, all payments received by Lender on
the Obligations and on the proceeds from the enforcement of the Obligations
shall be distributed as follows: First, to all Lender's fees and expenses then
due and payable, then to all other expenses then due and payable by Borrower
hereunder, then to all indemnitee obligations then due and payable by Borrower
hereunder, then to all commitment and other fees and commissions then due and
payable by Borrower, then to accrued and unpaid interest on the Revolving Loans,
and then to the principal amount of the Revolving Loans, in that order.
SECTION 7
CONDITIONS TO REVOLVING LOANS
The obligations of Lender to make Revolving Loans are subject to
satisfaction of all of the applicable conditions set forth below.
7.1 Conditions to Initial Revolving Loan. The obligation of Lender to
------------------------------------
make the initial Revolving Loan is, in addition to the conditions precedent
specified in Subsection 7.2, subject to the satisfaction of each of the
following conditions:
(A) Executed Loan Documents. This Agreement, the Note, the Security
-----------------------
Agreement, the Mortgage, the Guaranties, the Pledge Agreements, the Collateral
Contract Assignments and all other documents and instruments contemplated by
such agreements, shall have been duly authorized and executed by Borrower,
Guarantors or Fort Bend, as applicable, in form and substance satisfactory to
Lender, and Borrower shall have delivered original counterparts thereof to
Lender;
(B) Closing Certificates; Opinions.
-------------------------------
(1) Officer's Certificate. Lender shall have received a certificate
---------------------
from the chief executive officer or chief financial officer of Borrower, in form
and substance reasonably satisfactory to Lender, to the effect that, as of such
date: all representations and warranties of Borrower contained in this Agreement
and the other Loan Documents are true, correct and complete; that
26
<PAGE>
Borrower is not in violation of any of the covenants contained in this Agreement
and the other Loan Documents; that, after giving effect to the transactions
contemplated by this Agreement, no Default or Event of Default has occurred and
is continuing; that Borrower has satisfied each of the closing conditions to be
satisfied hereby; and that Borrower has filed all required tax returns and owes
no delinquent taxes, except where the payment of such tax is being diligently
------
contested in good faith and adequate reserves therefor have been established in
compliance with GAAP.
(2) Certificate of Secretary of Borrower and Each Guarantor. Lender
-------------------------------------------------------
shall have received a certificate of the secretary or assistant secretary of
Borrower and each Guarantor certifying as of such date that attached thereto is
a true and complete copy of the articles of organization or incorporation of
Borrower and each Guarantor, as the case may be, and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of organization or incorporation; that attached thereto is a true
and complete copy of the operating agreement or bylaws, if any, of Borrower and
each Guarantor as in effect on the date of such certification; that attached
thereto is a true and complete copy of consents of members or resolutions duly
adopted by the Board of Directors or other governing body of Borrower and each
Guarantor, as the case may be, authorizing the borrowings or guaranties
contemplated hereunder, the execution, delivery and performance of this
Agreement and the other Loan Documents, and the granting of the Security
Interest; and as to the incumbency and genuineness of the signature of each
officer of Borrower and each Guarantor executing Loan Documents.
(3) Certificates of Good Standing. Lender shall have received long-
-----------------------------
form certificates as of a recent date of the good standing of Borrower and each
of the Guarantors under the laws of its jurisdiction of organization and such
other jurisdictions as are requested by Lender.
(4) Opinions of Counsel. Lender shall have received favorable
-------------------
opinions of counsel to Borrower, each Guarantor, and Fort Bend addressed to
Lender with respect to the Loan Documents, the Security Interest regulatory
matters (including, without limitation, the Licenses) and such other matters as
Lender shall request, all reasonably satisfactory in form and substance to
Lender.
(C) Collateral.
----------
(1) Filings and Recordings. All filings and recordings that are
----------------------
necessary to perfect the Security Interest in the Collateral constituting
personal property described in the Security Documents shall have been filed in
all appropriate locations and Lender shall have received evidence satisfactory
to Lender that such Security Interest constitutes a valid and perfected first
priority Lien therein.
(2) Lien Searches. Borrower shall have delivered to Lender the
-------------
results of a Lien search of all filings made against each of Borrower, Fort Bend
and XIT under the Uniform Commercial Code as in effect in any jurisdiction in
which any of its respective assets are located,
27
<PAGE>
indicating among other things that the Collateral is free and clear of any Lien,
except for Permitted Encumbrances.
(3) Insurance. Lender shall have received certificates of insurance
---------
and certified copies of insurance policies in the form required under Subsection
2.2 and the Security Documents and otherwise in form and substance reasonably
satisfactory to Lender.
(D) Consents.
--------
(1) Governmental and Third Party Approvals. Borrower, each Guarantor
--------------------------------------
and Fort Bend shall have delivered to Lender all necessary approvals,
authorizations and consents, if any, of all Persons, Governmental Authorities,
including the FCC and all applicable PUC's, and courts having jurisdiction with
respect to the execution and delivery of this Agreement and the other Loan
Documents, and the granting of the Security Interest, and all such approvals
shall be in form and substance satisfactory to Lender.
(2) Permits and Licenses. Lender shall have received copies of all
--------------------
material permits and licenses, including the Licenses, required under Applicable
Laws for the conduct of Borrower's business.
(3) No Injunction, Etc. No action, proceeding, investigation,
------------------
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, as determined by Lender in its
reasonable discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(E) Financial Matters.
-----------------
(1) Financial Statements. Lender shall have received such recent
--------------------
annual and interim financial statements and other financial information with
respect to Borrower and each Guarantor prepared in accordance with GAAP as
Lender shall request.
(2) Fees, Expenses, Taxes, Etc. There shall have been paid by
---------------------------
Borrower to Lender the fees set forth or referenced in Subsection 1.4 and any
other accrued and unpaid fees or commissions due hereunder (including legal fees
and expenses), and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes, fees
and other charges in connection with the execution, delivery, recording, filing
and registration of any of the Loan Documents.
(F) Miscellaneous.
-------------
28
<PAGE>
(1) Proceedings and Documents. All opinions, certificates and other
-------------------------
instruments and all proceedings in connection with the transactions contemplated
by this Agreement shall be reasonably satisfactory in form and substance to
Lender. Lender shall have received copies of all other instruments and other
evidence as Lender may reasonably request, in form and substance reasonably
satisfactory to Lender, with respect to the transactions contemplated by this
Agreement and the taking of all actions in connection therewith.
(2) Sprint Agreements. Borrower and Sprint shall have entered into
-----------------
agreements with respect to Borrower's operations in form and content
satisfactory to Lender.
(3) Sprint Certificate. Sprint shall have executed and delivered to
------------------
Lender a certificate as to breaches or potential Events of Termination under the
Sprint Agreements, in form and content satisfactory to Lender.
(4) Master Tower Lease. Borrower and Pinnacle Towers Inc. shall have
------------------
entered into a Master Tower Lease and related documentation satisfactory in form
and content to Lender.
(5) Transfer of Beaumont-Lufkin BTAs. Lender shall have received
--------------------------------
evidence satisfactory to it of the consummation of the transfer from Meretel to
Borrower of the PCS customers and related assets with respect to the Beaumont-
Lufkin BTAs, all on the terms and conditions set forth in the Omnibus Agreement.
7.2 Conditions to All Revolving Loans. The obligation of Lender to make
---------------------------------
available the funds for the Revolving Loans, on any date (each such date a
"Funding Date") is subject to the further conditions precedent set forth below.
(A) Lender shall have received, in accordance with the provisions of
Subsection 1.3, a notice requesting an advance of such funds.
(B) The representations and warranties contained in Section 5 of this
Agreement and elsewhere herein and in the Loan Documents shall be (and each
request by Borrower for a Revolving Loan shall constitute a representation and
warranty by Borrower that such representations and warranties are) true, correct
and complete in all material respects on and as of such Funding Date to the same
extent as though made on and as of that date, except for any representation or
warranty limited by its terms to a specific date and taking into account any
amendments to the Schedules or Exhibits as a result of any disclosures made in
writing by Borrower to Lender after the Closing Date and approved by Lender in
writing.
(C) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated that would constitute an
Event of Default or a Default.
29
<PAGE>
(D) No order, judgment or decree of any court, arbitrator or
Governmental Authority shall purport to enjoin or restrain Lender from advancing
funds under the Revolving Loan.
(E) Since the date hereof, there shall not have occurred any event or
condition that has had or could reasonably be expected to have a Material
Adverse Effect.
(F) All Loan Documents shall be in full force and effect.
(G) Borrower and Guarantors shall have delivered to Lender such other
documents, certificates and opinions as Lender reasonably requests.
SECTION 8
MISCELLANEOUS
8.1 Indemnities. Borrower agrees to indemnify, pay, and hold Lender and
-----------
its respective officers, directors, employees, agents, and attorneys (the
"Indemnities") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits and claims of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Indemnitee as a result of its being a party to this Agreement; provided, that
--------
Borrower shall have no obligation to an Indemnitee hereunder with respect to
liabilities arising from the gross negligence or willful misconduct of that
Indemnitee as determined by a court of competent jurisdiction. This Subsection
8.1 and all indemnification provisions contained within any other Loan Document
shall survive the termination of this Agreement.
8.2 Amendments and Waivers. Except as otherwise provided herein, no
----------------------
amendment, modification, termination or waiver of any provision of this
Agreement, the Note or any of the other Loan Documents, or consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower and Lender. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Lender to take
additional Collateral pursuant to any Loan Document. No notice to or demand on
Borrower in any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Subsection 8.2
shall be binding upon the holder of the Note and each future holder of the Note,
and, if signed by Borrower, on Borrower.
8.3 Notices. Any required notice or other communication shall be in
-------
writing addressed to the respective party as set forth below and may be
personally delivered, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (i) if delivered in person, when
delivered; (ii) if delivered by telecopy, on the date of transmission if
transmitted on
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a Business Day before 2:00 p.m. (Lake Charles time) and otherwise on the
Business Day next succeeding the date of transmission; (c) if delivered by
overnight courier, two (2) days after delivery to the courier properly
addressed; or (d) if delivered by U.S. mail, four (4) Business Days after
deposit with postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower: Texas Unwired
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70602-3709
Attn: ______________
Fax No.: ___________
If to a Lender: Louisiana Unwired, LLC
One Lakeshore Drive, Suite 1900
Lake Charles, Louisiana 70602-3709
Attn: Finance Department
Fax No.: 318/310-3510
cc: Thomas G. Henning
Fax No.: 318/497-3479
8.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
-----------------------------------------------------
delay on the part of Lender to exercise, nor any partial exercise of, any power,
right or privilege hereunder or under any other Loan Documents shall impair such
power, right, or privilege or be construed to be a waiver of any Default or
Event of Default. All rights and remedies existing hereunder or under any other
Loan Document are cumulative to and not exclusive of any rights or remedies
otherwise available.
8.5 Marshaling; Payments Set Aside. Lender shall not be under any
------------------------------
obligation to marshal any assets in payment of any or all of the Obligations.
To the extent that Borrower makes payment(s) or Lender enforces its Liens or
Lender exercises its right of set-off, and such payment(s) or the proceeds of
such enforcement or set-off is subsequently invalidated, declared to be
fraudulent or preferential, set aside, or required to be repaid by anyone, then
to the extent of such recovery, the Obligations or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or set-off had not occurred.
8.6 Severability. The invalidity, illegality, or unenforceability in any
------------
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.
31
<PAGE>
8.7 Headings. Section and Subsection headings are included herein for
--------
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.
8.8 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE
--------------
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
COLORADO, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
8.9 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors and
assigns except that Borrower may not assign its rights or obligations hereunder
without the written consent of Lender.
8.10 No Fiduciary Relationship. No provision in the Loan Documents and no
-------------------------
course of dealing between the parties shall be deemed to create any fiduciary
duty owing to Borrower by Lender.
8.11 Construction. Lender and Borrower acknowledge that each of them has
------------
had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review the Loan Documents with its legal counsel and that the
Loan Documents shall be constructed as if jointly drafted by Lender and
Borrower.
8.12 Confidentiality. Lender agrees to hold any confidential information
---------------
that it may receive from Borrower or any of the Guarantors pursuant to this
Agreement in confidence, except for disclosure: (i) on a confidential basis to
legal counsel, independent public accountants and other professional advisors of
Lender; (ii) to regulatory officials having jurisdiction over Lender; (iii) as
required by Applicable Law or legal process; or (iv) in connection with any
legal proceeding between Lender and Borrower (provided that, in the event Lender
is so required to disclose such confidential information pursuant to clauses
(iii) or (iv) of this Subsection 8.12, Lender shall promptly notify Borrower, so
that Borrower or any of the Guarantors may seek a protective order or other
appropriate remedy); and (v) to another Person in connection with a disposition
or proposed disposition to that Person of all or part of Lender's interests
hereunder, provided that such disclosure is made subject to an appropriate
confidentiality agreement on terms substantially similar to this Subsection
8.12. For purposes of the foregoing, "confidential information" shall mean all
information respecting Borrower or any of the Guarantors, other than (A)
information previously filed by Borrower or any of the Guarantors with any
Governmental Authority and available to the public, and (B) information
previously published in any public medium from a source other than, directly or
indirectly, Lender.
8.13 Consent to Jurisdiction and Service of Process. (A) BORROWER HEREBY
----------------------------------------------
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL COURT OR COLORADO STATE COURT IN THE STATE OF COLORADO HAVING SUBJECT
MATTER JURISDICTION OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENTS.
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<PAGE>
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, PERSONAL JURISDICTION OF ANY
SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION.
(B) BORROWER HEREBY AGREES THAT SERVICE OF THE SUMMONS AND COMPLAINT AND
ALL OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING BY REGISTERED MAIL A COPY OF SUCH PROCESS TO BORROWER AT
THE ADDRESS TO WHICH NOTICES TO BORROWER ARE THEN TO BE SENT PURSUANT TO
SUBSECTION 8.3 AND THAT PERSONAL SERVICE OF PROCESS SHALL NOT BE REQUIRED.
NOTHING HEREIN SHALL BE CONSTRUED TO PROHIBIT SERVICE OF PROCESS BY ANY OTHER
METHOD PERMITTED BY LAW.
8.14 Waiver of Jury Trial. BORROWER AND LENDER HEREBY WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND ANY
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. BORROWER AND LENDER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWER AND LENDER FURTHER WARRANT AND REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE INTERCOMPANY LOAN. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT. BORROWER AND LENDER ALSO WAIVE ANY BOND OR
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SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED
OF LENDER.
8.15 Survival of Warranties and Certain Agreements. All agreements,
---------------------------------------------
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Revolving Loans, and the execution
and delivery of the Note. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Borrower set forth in Subsections 1.4,
1.9, 8.1, 8.13 and 8.14 shall survive the payment of the Revolving Loans and the
termination of this Agreement.
8.16 Entire Agreement. This Agreement, the Note and the other Loan
----------------
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, understandings, whether oral or written, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral agreements or discussions of the
parties hereto.
8.17 Counterparts; Effectiveness. This Agreement and any amendments,
---------------------------
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
SECTION 9
DEFINITIONS
9.1 Certain Defined Terms. The terms defined below are used in this
---------------------
Agreement as so defined. Terms defined in the preamble and recitals to this
Agreement are used in this Agreement as so defined.
"Affiliate" means any Person: (i) directly or indirectly controlling,
controlled by, or under common control with, Borrower; (ii) directly or
indirectly owning or holding five percent (5%) or more of any equity interest in
Borrower; or (iii) five percent (5%) or more of whose voting stock or other
equity interest is directly or indirectly owned or held by Borrower. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") means the
possession directly or indirectly of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities or by contract or otherwise.
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"Agreement" means this Loan Agreement (including all schedules and exhibits
hereto), as amended and supplemented from time to time as permitted herein.
"Applicable Law" shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to it, including the Licenses, the Communications
Act and all Environmental Laws, and all orders, decisions, judgments and decrees
of all courts and arbitrators in proceedings or actions to which the Person in
question is a party or by which it is bound.
"Asset Disposition" means the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise, by Borrower, of
any of the following: (i) any of the capital stock or the ownership interests
of any of its Subsidiaries or (ii) any or all of its assets, other than sales of
inventory in the ordinary course of business, sales of Cash Equivalents for
fair.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as amended from time to time or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect and all rules and
regulations promulgated thereunder.
"Base Rate" means a variable rate of interest per annum equal, on any day,
to the Federal Funds Rate plus 0.50%.
----
"Beaumont-Lufkin BTAs" means the Beaumont-Port Arthur and the Lufkin-
Nacodoches, Texas business trading areas.
"Brazoria" means Brazoria Telephone Company, a Texas corporation, and its
successors and assigns.
"Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of Colorado, or is a day on which
banking institutions located in such state are closed or which the Federal
Reserve Banks are closed.
"Cash Equivalents" means: (i) marketable direct obligations issued or
unconditionally guarantied by the United States Government or issued by any
agency thereof, in each case maturing within one (1) year from the date of
acquisition thereof; (ii) commercial paper maturing no more than one (1) year
from the date issued and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Service or at least P-1 from Moody's
Investors Service, Inc.; (iii) certificates of deposit or bankers' acceptances
maturing within one (1) year from the date of issuance thereof issued by, or
overnight reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$500,000,000; and (iv) time deposits maturing no more than thirty (30) days from
the date of creation thereof with commercial banks having membership in the
Federal Deposit Insurance Corporation in amounts at any one such institution not
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<PAGE>
exceeding the lesser of $100,000 or the maximum amount of insurance applicable
to the aggregate amount of Borrower's deposits at such institution.
"Closing Date" means February 7, 2000.
"Collateral" means, collectively: (i) all "Collateral" as defined in the
Security Documents; (ii) all real property and interests in real property
mortgaged pursuant to the Security Documents; and (iii) any property or interest
provided in addition to or in substitution for any of the foregoing.
"Collateral Contract Assignments" means, collectively, all collateral
assignments of Material Contracts, in form and content approved by Lender,
executed by Borrower in favor of Lender, as required pursuant to Subsection
2.7, as amended and supplemented from time to time.
"Communications Act" shall mean the Communications Act of 1934, as amended
and any similar or successor federal statute, and the rules and regulations of
the FCC thereunder, all as the same may be in effect from time to time.
"Contingent Obligation," as applied to any Person, means any direct or
indirect liability of that Person: (i) with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; or (iii) under any foreign
exchange contract, currency swap agreement, interest rate swap agreement or
other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall also include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by it of
the obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of nonperformance by any other party or parties
to an agreement, and (c) any liability of it for the obligations of another
through any agreement to purchase, repurchase or otherwise acquire such
obligation or any property constituting security therefor, to provide funds for
the payment or discharge of such obligation or to maintain the solvency,
financial condition or any balance sheet item or level of income of another.
The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.
"Default" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default if that condition or event were not
cured or removed within any applicable grace or cure period.
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"EBITDA" means, as of any fiscal quarter-end, net income for the trailing
four-quarter period, plus interest expense paid or accrued during such period
----
plus any non-cash charges for such period and minus net interest income for such
- ---- -----
period, to the extent included in determining net income, and minus any non-cash
-----
gains for such period, but excluding depreciation and amortization expense to
the extent deducted during such period in calculating net income.
"Environmental Laws" shall mean all applicable federal, state or local
laws, statutes, rules, regulations or ordinances, codes, common law, consent
agreements, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder relating to public health, safety or the
pollution or protection of the environment, including those relating to
releases, discharges, emissions, spills, leaching, or disposals to air, water,
land or ground water, to the withdrawal or use of ground water, to the use,
handling or disposal of polychlorinated biphenyls, asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including petroleum, crude oil or any fraction thereof, or other
hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or
other controlled, prohibited, or regulated substances, including any such
provisions under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. (S) 9601 et seq.), or the Resource
-- ---
Conservation and Recovery Act of 1976, as amended (42 U.S.C. (S) 6901 et seq.).
-- ---
"Excess Cash Flow" means, for any fiscal year, (i) Operating Cash Flow for
such year minus (ii) the sum of (a) Fixed Charges plus (b) net changes in
----- ----
working capital for such year.
"Expiration Date" means the earlier of (i) the suspension (subject to
reinstatement) of the Lenders' obligations to make Loans pursuant to Subsection
6.2, (ii) the acceleration of the Obligations pursuant to Subsection 6.3 or
(iii) September 30, 2007.
"FBCC" means Fort Bend Communication Companies, Inc., a Texas corporation,
and its successors and assigns.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"Facility" means the revolving loan credit facility extended to Borrower
pursuant to Subsection 1.1(A).
"Federal Funds Rate" shall mean, for any day, the rate of interest per
annum (rounded upward, if necessary, to the nearest whole multiple of 1/100 of
1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day and (ii) if no such rate is so
published on the next succeeding Business Day, the
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Federal Funds Rate for such day shall be the average rate quoted to Lender on
such day on such transactions as determined by Lender.
"Fixed Charges" means the sum of (i) scheduled principal payments
(including any principal paid pursuant to scheduled reductions in commitments to
lend), (ii) cash interest expense, (iii) cash taxes, and (iv) capital
expenditures.
"Fort Bend" means Fort Bend Telephone Company, a Texas Corporation, and its
successors and assigns.
"Fort Bend Pledge Agreement" means the partnership interest security
agreement, dated as of even date herewith, executed by Fort Bend in favor of
Lender, in form and content approved by Lender, pursuant to which Fort Bend has
pledged, as security for the Obligations, on a first priority basis, all
partnership interests in Borrower that it now owns or may hereafter acquire, as
such agreement may be amended and supplemented from time to time.
"GAAP" means generally accepted accounting principles as set forth in
statements from Auditing Standards No. 69 entitled "The Meaning of 'Present
Fairly in Conformance with Generally Accepted Accounting Principles in the
Independent Auditors Reports'" issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants and statements and pro
nouncements of the Financial Accounting Standards Board that are applicable to
the circumstances as of the date of determination.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities, including all Licenses.
"Governmental Authority" means any nation, province, or state or any
political subdivision of any of the foregoing, and any government or any Person
exercising executive, legislative, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing, including the FCC and any PUC.
"Guaranties" means the continuing guaranties, dated as of even date
herewith, in form and content approved by Lender, executed by each Guarantor in
favor of Lender, as amended and supplemented from time to time.
"Guarantors" means, collectively, FBCC, XIT and Brazoria.
"Indebtedness," as applied to any Person, means, without duplication: (i)
all indebtedness for borrowed money; (ii) that portion of obligations with
respect to capital leases or other capitalized agreements that is properly
classified as a liability on a balance sheet in conformity with GAAP; (iii)
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notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money; (iv) any obligation owed for
all or any part of the deferred purchase price of property or services, except
trade payables arising in the ordinary course of business not more than ninety
(90) days past due; (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person, but only to the extent of the fair value of such property
or asset; (vi) fixed rate hedging obligations that are due (after giving effect
to any period of grace or notice requirement applicable thereto) and remain
unpaid; (vii) obligations with respect to principal under Contingent Obligations
for the repayment of money or the deferred purchase price of property, whether
or not then due and payable (calculated as the amount of such principal); and
(viii) obligations under partnership, organizational or other agreements to fund
capital contributions or other equity calls with respect to any Person or
investment, or to redeem, repurchase or otherwise make payments in respect to
capital stock or other securities of it.
"Indebtedness to Capitalization Ratio" means the ratio derived by dividing
(i) Indebtedness by (ii) the sum of Indebtedness and contributed equity.
"Investment" means (i) any direct or indirect purchase or other acquisition
by Borrower of any beneficial interest in, including stock, partnership interest
or other equity securities of, any other Person; and (ii) any direct or indirect
loan, advance, guarantee, assumption of liability or other obligation of
liability, or capital contribution by Borrower to any other Person, including
all indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
----
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.
"IRC" means the Internal Revenue Code of 1986, as amended from time to time
and all rules and regulations promulgated thereunder.
"Licenses" shall mean any cellular telephone, microwave, personal
communications or other telecommunications or similar license, authorization,
waiver, certificate of compliance, franchise, approval or permit, whether for
the acquisition, construction or operation of any Wireless System, granted or
issued by the FCC or any applicable PUC and held by Borrower or as to which
Borrower has management, operating or similar rights.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement and any lease in the nature
thereof), and any agreement to give any lien, mortgage, pledge, security
interest, charge or encumbrance.
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"Loan Documents" means this Agreement, the Note, the Security Documents,
the Sprint Consent and Agreement and all other instruments, documents and
agreements executed by or on behalf of Borrower and delivered concurrently
herewith or at any time hereafter to or for the benefit of Lender in connection
with the Revolving Loans and other transactions contemplated by this Agreement,
all as amended, supplemented or modified from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Borrower or any of the Guarantors or (ii) the impairment of the ability of
Borrower or any of the Guarantors to perform its obligations under any Loan
Document to which it is a party or of Lender to enforce any Loan Document or
collect any of the Obligations. In determining whether any individual event
could reasonably be expected to have a Material Adverse Effect, notwithstanding
that such event does not of itself have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of such event and all
other then existing events could reasonably be expected to have a Material
Adverse Effect.
"Material Contracts" means (a) any contract or any other agreement, written
or oral, of Borrower involving monetary liability of or to any it in an amount
in excess of $500,000 per annum and (b) any other contract or agreement, written
or oral, of Borrower the failure to comply with which could reasonably be
expected to have a Material Adverse Effect; provided, however, that any contract
or agreement which is terminable by a party other than Borrower without cause
upon notice of ninety (90) days or less shall not be considered a Material
Contract.
"Mortgage" means the Mortgage, dated as of even date herewith, in form and
content approved by Lender, executed by Borrower in favor of Lender, encumbering
all interests now owned or hereafter acquired by Borrower in real property
situated in the State of Texas, as amended and supplemented from time to time.
"Net Proceeds" means cash proceeds received by Borrower from any Asset
Disposition (including insurance proceeds, awards of condemnation, and payments
under notes or other debt securities received in connection with any Asset
Disposition), net of (i) the costs of such sale, lease, transfer or other
disposition (including taxes attributable to such sale, lease or transfer) and
(ii) amounts applied to repayment of Indebtedness (other than the Obligations)
secured by a Lien on the asset or property disposed.
"Note" means the note of Borrower substantially in the form of Exhibit 9.1
-----------
and any replacements, restatements, renewals or extensions of any such notes, in
whole or in part.
"Obligations" means all obligations, liabilities and indebtedness of every
nature of Borrower from time to time owed to Lender under the Loan Documents
including the principal amount of all debts, claims and indebtedness, accrued
and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time
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hereafter owing, due or payable whether before or after the filing of a
proceeding under the Bankruptcy Code by or against Borrower or any of the
Guarantors.
"Omnibus Agreement" means that certain Omnibus Agreement, dated as of
September 7, 1999, as amended by that certain First Amendment to Omnibus
Agreement, dated as of January 1, 2000, among Unwired Telecom Corp., formerly
known as US Unwired Inc., EATELCORP, Inc., Fort Bend, XIT, Wireless Management
Corporation, Meretel and Meretel Wireless, Inc., relating to the restructuring
of Meretel and the formation of Texas Unwired.
"Operating Cash Flow" means the sum of (i) pre-tax income or deficit, as
the case may be (excluding extraordinary gains and losses, the write up or down
of any asset and interest income), (ii) total interest expense (including non-
cash interest), (iii) depreciation and amortization expense and (iv) taxes,
federal or state, imposed upon income. For any period of calculation, Operating
Cash Flow shall be adjusted to give effect to any acquisition, sale or other
disposition of any operation or business (or any portion thereof) during the
period of calculation as if such acquisition, sale or other disposition occurred
on the first day of such period of calculation.
"PCS System" shall mean any broadband personal communications services
telecommunications system operating on radio spectrum at 1900 MHZ or a License
to operate such a system.
"PCS" means personal communications services operations on radio spectrum
at 1900 MHZ.
"Permitted Encumbrances" means the following:
(1) Liens for taxes, assessments or other governmental charges not yet
due and payable unless the same are being diligently contested in good faith and
by appropriate proceedings and then only if and to the extent that adequate
reserves therefor are maintained in accordance with GAAP;
(2) statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred in the
ordinary course of business for sums not more than sixty (60) days delinquent or
which are being contested in good faith; provided that a reserve or other
--------
appropriate provision shall have been made therefor and the aggregate amount of
liabilities secured by such Liens is less than $100,000;
(3) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974 or any rule or regulation promulgated thereunder),
or to secure the performance of tenders, statutory obligations, surety, stay,
customs and appeal bonds, bids, leases, government contracts, trade contracts,
41
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performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(4) deposits, in an aggregate amount not to exceed $100,000, made in
the ordinary course of business to secure liability to insurance carriers;
(5) any attachment or judgment Lien not constituting an Event of
Default under Subsection 6.1(K);
(6) easements, rights of way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of Borrower or any of its Subsidiaries; and
(7) Liens in favor of Lender.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, limited liability partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof and their respective permitted successors and
assigns (or in the case of a governmental person, the successor functional
equivalent of it).
"Pledge Agreements" means, collectively, the Fort Bend Pledge Agreement and
the XIT Pledge Agreement.
"Projections" means forecasted; (i) balance sheets; (ii) profit and loss
statements; and (iii) cash flow statements, all prepared on a consistent basis
with Borrower's historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions. The Projections
represent and will represent as of the date thereof the good faith estimate of
Borrower and its senior management concerning the most probable course of its
business.
"PUC" means any state, provincial or other local regulatory agency or body
that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Wireless System or long distance
telecommunications systems or over Persons who own, construct or operate a
Wireless System or long distance telecommunications systems, in each case by
reason of the nature or type of the business subject to regulation and not
pursuant to laws and regulations of general applicability to Persons conducting
business in any such jurisdiction.
"Restricted Junior Payment" means: (i) any dividend or other distribution,
direct or indirect, on account of any equity interest in Borrower, including any
membership interest and any shares of any class of stock of Borrower now or
hereafter outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class; (ii) any redemption, conversion, exchange,
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retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any equity interest in Borrower, including any
membership interest and any shares of any class of stock of Borrower now or
hereafter outstanding; (iii) any payment or prepayment of interest on, principal
of, premium, if any, redemption, conversion, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Indebtedness
subject to subordination provisions for the benefit of Lender; and (iv) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire any equity interest in Borrower, including
any membership interest and shares of any class of stock of Borrower now or
hereafter outstanding;
"Revolving Loan" or "Revolving Loans" means an advance or advances under
the Revolving Loan Commitment.
"Revolving Loan Commitment" means, initially, $20,000,000, as such amount
is reduced from time to time as provided in this Agreement.
"Security Agreement" means the Security Agreement, dated as of even date
herewith, in form and content approved by Lender, executed by Borrower in favor
of Lender, encumbering all of the personal property of Borrower, wherever
situated, as amended and supplemented from time to time.
"Security Documents" means, collectively, all instruments, documents and
agreements executed to provide collateral security with respect to the
Obligations, including, without limitation, the Mortgage, the Security
Agreement, the Guaranties, the Pledge Agreements, the Collateral Contract
Assignments and all instruments, documents and agreements executed pursuant to
the terms of the foregoing.
"Security Interest" shall mean all Liens in favor of Lender, created
hereunder or under any of the Security Documents to secure the Obligations.
"Service Areas" means the PCS business trading areas described on Schedule
--------
9.1.
- ---
"Sprint" means, collectively, Sprint Spectrum L.P., SprintCom, Inc. and
WirelessCo, L.P.
"Sprint Agreements" means, collectively, the Sprint PCS Management
Agreement, dated ___________________, between Borrower and Sprint, as heretofore
amended and supplemented, and related services, trademark, service mark, and
other agreements, as any such agreement may be amended or supplemented from time
to time, and all other agreements entered into between or among Sprint and
Borrower in connection therewith as they may be amended or supplemented from
time to time.
"Sprint Consent and Agreement" means that certain Consent and Agreement
dated as of October 26, 1999, between Sprint and the Agents and Lenders under
the US Unwired Credit
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Agreement and agreed to by US Unwired, Lender, Borrower, and the owners of
Lender and Borrower.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of stock (or equivalent
ownership or controlling interest) entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Wireless System" means a cellular mobile radio telephone system, or a PCS
System, and shall include a microwave system or a paging system operated in
connection with (and in the same general service area as) any of the foregoing
systems.
"XIT" means XIT Leasing, Inc., a Texas corporation, and its successors and
assigns.
"XIT Pledge Agreement" means the partnership interest security agreement
dated as of even date herewith, executed by XIT in favor of Lender, in form and
content approved by Lender, pursuant to which XIT has pledged, as security for
the Obligations, on a first priority basis, all partnership interests in Texas
Unwired that it now owns or may hereafter acquire, as such agreement may be
amended and supplemented from time to time.
9.2 Other Definitional Provisions. References to "Sections,"
-----------------------------
"Subsections," "Exhibits" and "Schedules" shall be to Sections, Subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Subsection 9.1 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. In this Agreement, "hereof," "herein," "hereto," "hereunder"
and the like mean and refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the respective word appears;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography and other means of reproducing words in a
tangible visible form; the words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments, and other modifications thereto, but only to
the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Loan Document; references
to Persons include their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; and all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
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[Signatures Continued from Previous Page]
LOUISIANA UNWIRED, LLC, as Lender
By: /s/ Robert Piper
-----------------------------
Robert Piper, Manager
<PAGE>
Witness the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
TEXAS UNWIRED, as Borrower
By: LOUISIANA UNWIRED, LLC
as its Managing Partner
By: /s/ Thomas Henning
----------------------------------
Thomas Henning, Assistant Manager
Attest: /s/ Robert Piper
------------------------------
Name: Robert Piper
------------------------
Title: Manager
-----------------------
[Signatures Continued on Following Page]
