<PAGE>
As filed with the Securities and Exchange Commission on June 15, 1999
Registration No. 333-79189
Registration No. 333-79189-01
Registration No. 333-79189-02
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 1
TO
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
<TABLE>
<S> <C> <C> <C>
AirGate PCS, Inc. Delaware 4182 58-2409617
AirGate Wireless, INC. Delaware 4182 58-2422929
AGW Leasing Company, Inc. Delaware 4182 58-2441171
(Exact name of registrants as (State or other jurisdiction (Primary Standard Industry (I.R.S. Employer
specified in their charters) of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>
----------------
Thomas M. Dougherty
Suite 1700 AirGate PCS, Inc.
230 Peachtree Street, N.W. Suite 1700
Atlanta, Georgia 30303 230 Peachtree Street, N.W.
(404) 522-8004 Atlanta, Georgia 30303
(Address, including zip code, and (404) 522-8004
telephone number, including area (Name, address, incuding zip code,
code, of registrants' principal and telelphone number, including
executive offices) area code, of agent for service)
----------------
Copies to:
Mary M. Sjoquist, Esq. Gary P. Cullen, Esq.
Joseph G. Passaic, Jr., Esq. Skadden, Arps, Slate, Meagher & Flom
Patton Boggs LLP (Illinois)
2550 M Street, NW 333 West Wacker Drive
Washington, DC 20037 Chicago, Illinois 60606
(202) 457-6000 (312) 407-0700
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please 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, please 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(c)
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 the 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. [_]
---------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
Part II
Information Not Required in the Prospectus
Item 13. Other Expenses of Issuance and Distribution
AirGate PCS, Inc. (the "Registrant") estimates that expenses (other than
underwriting discounts and commissions) in connection with the offering
described in this Registration Statement will be as set forth in the following
table. All amounts shown are estimates except for the Securities and Exchange
Commission registration fee, the NASD filing fee and the Nasdaq National Market
listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................... $69,500
National Association of Securities Dealers, Inc. filing fee........... 25,500
Nasdaq National Market listing fees................................... *
Printing and engraving expenses....................................... *
Accountants' fees and expenses........................................ *
Legal fees and expenses............................................... *
Fees and expenses for qualifications under state securities laws
(including legal fees)............................................... *
Transfer agent fees................................................... *
Miscellaneous......................................................... *
-------
Total............................................................... $ *
=======
</TABLE>
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* To be supplied by amendment.
Item 14. Indemnification of Directors and Officers
In accordance with General Corporation Law of the State of Delaware (being
Chapter 1 of Title 8 of the Delaware Code), the Registrant's Certificate of
Incorporation provides as follows:
The Registrant's Certificate of Incorporation provides that the Registrant
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Registrant to procure a judgment in its favor by reason of the fact that
such person acted in any of the capacities set forth above, against expenses
(including attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if such person
acted under similar standards, provided that the Registrant receive a written
undertaking by or on behalf of the director or officer to repay such amount if
it is ultimately determined that that such person is not entitled to be
indemnified by the Registrant.
The Registrant's Certificate of Incorporation further provides that to the
extent that a director or officer of the Registrant has been successful in the
defense of any action, suit or proceeding referred to above or in the defense
of any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorney's fees) actually and reasonably incurred by him or
her in connection therewith, that indemnification provided for by the
Certificate of Incorporation shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; and that the Registrant is
empowered to purchase and maintain insurance on behalf of a director or officer
of the Registrant against any liability asserted against him or here in any
such capacity, or arising out of such person's status as such, whether or not
the Registrant would have the power to indemnify him against such liabilities
under the Certificate of Incorporation.
II-1
<PAGE>
In addition to indemnification provided to our officers and directors in the
Certificate of Incorporation and under the laws of Delaware, we have entered
into indemnification agreements with certain officers and directors to provide
further assurances and protection from liability that they may incur in their
respective positions and duties in connection with the public offering or as a
fiduciary of AirGate and its shareholders. We have agreed to indemnify and hold
harmless, to the extent permitted under Delaware law, each person and
affiliated person (generally, any director, officer, employee, controlling
person, agent, or fiduciary of the indemnified person), provided that the
indemnified person was acting or serving at our request in his capacity as
either an officer, director, employee, controlling person, fiduciary or other
agent or affiliate of AirGate. Under the indemnification agreements, each
person is indemnified against any and all losses, claims, damages, expenses and
liabilities, joint or several, (including attorney's fees, expenses and amount
in settlement) that occur in connection with any threatened, pending or
completed action, suit, proceeding, alternative dispute resolution mechanism or
hearing, inquiry or investigation that such indemnified person believes in good
faith may lead to the institution of such action, under the Securities Act of
1933, Securities Exchange Act of 1934 or other federal or state statutory law
or regulation, at common law or otherwise, which relate directly or indirectly
to the registration, purchase, sale or ownership of any securities of AirGate
or to any fiduciary obligation owed with respect to AirGate and its
stockholders. As a condition to receiving indemnification, indemnified persons
are required to give us notice in writing of any claim for which
indemnification may be sought under this agreement.
The agreement provides that an indemnified person may receive indemnification
against (1) expenses (including attorney's fees and other costs, expenses and
obligations incurred), judgments, fines and penalties; (2) amounts paid in
settlement (approved by AirGate); (3) federal, state, local taxes imposed as a
result of receipt of any payments under the indemnification agreement; and (4)
all interest, assessments and other charges paid or payable in connection with
any expenses, costs of settlement or taxes. An indemnified person will be
indemnified against expenses to the extent that he is successful on the merits
or otherwise, including dismissal of an action without prejudice, in defense of
any action, suit, proceeding, inquiry or investigation. Expenses that the
indemnified person have or will incur in connection with a suit or other
proceeding may be received in advance within 10 days of written demand to
AirGate.
Prior to receiving indemnification or being advanced expenses, a committee,
consisting of either members of the board of directors or any person appointed
by the board of directors, must make a determination of whether the indemnified
person is entitled to indemnification under Delaware law. If there is a change
in control (as defined in the indemnification agreement) that occurs without
majority approval of the board of directors, then the committee will consist of
independent legal counsel selected by the indemnified person and approved by
AirGate to render a written opinion as to whether and the extent of
indemnification that the indemnified person is entitled, which will be binding
on AirGate. Under the indemnification agreement, an indemnified person may
appeal a determination by the committee's determination not to grant
indemnification or advance expenses by commencing a legal proceeding. Failure
of the committee to make a indemnification determination or the termination of
any claim by judgment, order, settlement, plea of nolo contendere, or
conviction does not create a presumption that either (1) the indemnified person
did not meet a particular standard of conduct or belief or (2) that the court
has determined that indemnification is not available.
Under the indemnification agreement, an indemnified person is entitled to
contribution from us for losses, claims, damages, expenses or liabilities as
well as other equitable considerations upon the
II-2
<PAGE>
determination of a court of competent jurisdiction that indemnification is not
available. The amount contributed by AirGate will be in proportion, as
appropriate, to reflect the relative benefits received by us and the
indemnified person or, if such contribution is not permitted under Delaware
law, then the relative benefit will be considered with the relative fault of
both parties. In connection with the registration of AirGate's securities, the
relative benefits received by AirGate and indemnified person will be deemed to
be in the same respective proportions of the net proceeds from the offering
(less expenses) received by AirGate and the indemnified person. The relative
fault of AirGate and the indemnified person is determined by reference to the
whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
AirGate or the indemnified person and their relative intent, knowledge, access
to information and opportunity to correct such statement or omission.
Contribution paid takes into account the equitable considerations, if any,
instead of a pro rata or per capital allocation. In connection with the
offering of AirGate securities, an indemnified person will not be required to
contribute any amount in excess of the lessor of (1) the proportion of the
total of such losses, claims, damages, or liabilities indemnified against equal
to the proportion of the total securities sold under the registration statement
sold by the indemnified person or (2) the proceeds received by the indemnified
person from the sale of securities under the registration statement.
Contribution will not be available if such person is found guilty of fraudulent
misrepresentation, as defined in the agreement.
In the event that AirGate is also obligated under a claim and upon written
notice to the indemnified person, we are entitled to assume defense of the
claim and select counsel which is approved by the indemnified person. Upon
receipt of the indemnified person's approval, AirGate will directly incur the
legal expenses and as a result will have the right to conduct the defense as it
sees fit in its sole discretion, including the right to settle any claim
against any indemnified party, without consent of the indemnified person.
The underwriting agreements to be filed as Exhibits 1.1 and 1.2 to the
Registration Statement provides for indemnification by the underwriters of
AirGate and its directors and certain officers, and by AirGate of the
underwriters, for certain liabilities arising under the Securities Act or
otherwise.
Item 15. Recent Sales of Unregistered Securities
In accordance with Item 701 of Regulation S-K, the following information is
presented with respect to securities sold by the Registrant within the past
three years which were not registered under the Securities Act.
(i) September 1996 Note
(a) On September 27, 1996, AirGate, L.L.C. (the "LLC") sold a $180,000 8%
note, due and payable or convertible on August 8, 1998. This note was rolled
into the 1998 Financing outlined below.
(b) The note was sold to a related party who qualified as an accredited
investor under Regulation D promulgated under the Securities Act.
(c) The note was sold for $180,000.
(d) The notes were offered and sold in reliance upon an exemption from
registration under Section 4(2) of the Securities Act.
II-3
<PAGE>
(e) Not applicable
(f) Not applicable
(ii) The 1998 Financing
(a) Between August and September 1998, the Registrant sold $4,815,000 of 8%
Convertible Promissory Notes. $3 million of the notes are due on September 18,
1999, while $1.815 million are due on August 20, 1999, unless converted. The
notes are convertible into Series A preferred stock or common stock upon the
satisfaction of certain conditions. The Registrant also issued warrants to
purchase the preferred stock to the purchasers of the notes, which warrants
were to be exercised on the earlier of five years from the date of issuance or
an initial public offering. These notes were rolled into the May 1999
Refinancing.
(b) The notes and warrants were sold to two related party venture funds and
their affiliates who qualified as accredited investors within the meaning of
Regulation D under the Securities Act.
(c) The notes and the warrants were sold for a total aggregate consideration
of $4,815,000.
(d) The notes were offered and sold in reliance upon an exemption from
registration under Section 4(2) of the Securities Act.
(e) Not applicable
(f) Not applicable
(iii) The 1999 Financings
(a) In March, April and May 1999 the Registrant sold an aggregate of $2.5
million of 8% subordinated notes.
(b) The notes and warrants were sold to two related party venture funds,
Weiss, Peck and Greer Venture Partners affiliated funds and JAFCO America
Ventures, Inc. affiliated funds, who qualified as accredited investors within
the meaning of Regulation D under the Securities Act.
(c) The notes were sold for a total aggregate consideration of $2.5 million.
(d) The notes were offered and sold in reliance upon an exemption from
registration under Section 4(2) of the Securities Act.
(e) Not applicable
(f) Not applicable
(iv) The May 1999 Refinancing
(a) In May 1999, the Registrant consolidated the promissory notes issued to
the two related party venture funds in the 1998 financing and the March, April
and May 1999 financings totaling $7.325 million into promissory notes that will
be converted into shares of the Registrant's common stock concurrently with the
completion of the offering contemplated hereby at a price 48% less than the
price of a share of common stock sold in the offering. The warrants held by
these funds were
II-4
<PAGE>
terminated. In addition, the Registrant issued warrants to Weiss, Peck and
Greer Venture Partners affiliated funds to purchase shares of common stock for
an aggregate price of up to $2.75 million at a price 25% less than the price of
a share of common stock sold in this offering.
(b) The promissory notes and the warrants were issued to two related party
venture funds, Weiss, Peck and Greer Venture Partners affiliated funds and
JAFCO America Ventures, Inc. affiliated funds, who qualified as accredited
investors within the meaning of Regulation D under the Securities Act.
(c) The aggregate consideration received in exchange for the promissory notes
and the warrant was the refinancing of $7.325 million of promissory notes and
the cancellation of warrants held by each venture fund.
(d) The notes and the warrant were offered and sold in reliance upon an
exemption from registration under Section 4(2) of the Securities Act.
(e) Not applicable
(f) Not applicable
Item 16. Exhibits
The exhibits and financial statement schedules filed as a part of the
Registration Statement are as follows:
(a) List of Exhibits
<TABLE>
<S> <C>
1.1** Form of Equity Underwriting Agreement
1.2** Form of Debt Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of AirGate PCS, Inc.
3.2 Amended and Restated Bylaws of AirGate PCS, Inc.
4.1 Specimen of Common Stock Certificate of AirGate PCS, Inc.
4.2** Form of warrants
4.3** Form of Indenture for Senior Discount Notes
5.1 Opinion of Patton Boggs LLP regarding legality of the common stock
being offered
5.2 Opinion of Patton Boggs LLP regarding legality of the Senior Discount
Notes being offered
10.1+ Sprint PCS Management Agreement between SprintCom, Inc. and AirGate
Wireless, L.L.C.
10.2 Sprint PCS Services Agreement between Sprint Spectrum L.P. and AirGate
Wireless, L.L.C.
10.3 Sprint Spectrum Trademark and Service Mark License Agreement
10.4 Sprint Trademark and Service Mark License Agreement
10.5+ Master Site Agreement dated August 6, 1998 between AirGate and
BellSouth Carolinas PCS, L.P., BellSouth Personal Communications, Inc.
and BellSouth Mobility PCS.
10.6+ Compass Telecom, L.L.C. Construction Management Agreement
10.7** Commercial Real Estate Lease dated August 7, 1998 between AirGate and
Perry Company of Columbia, Inc. to lease a warehouse facility.
10.8 Form of Indemnification Agreement
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C>
10.9 Employment Agreement dated April 9, 1999 between AirGate and Mr.
Thomas M. Dougherty
10.10** Form of Executive Employment Agreement
10.11** Form of 1999 Stock Option Plan
10.12** Form of Consent and Agreement with Sprint PCS
21.1 Subsidiaries of AirGate PCS, Inc.
23.1* Consent of KPMG LLP
23.2 Consent of Patton Boggs LLP (included in Exhibits 5.1 and 5.2)
24.1* Powers of Attorney
25.1** Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of Trustee, on Form T-1, in connection with the Senior
Discount Notes offering
27.1* Financial Data Schedule
</TABLE>
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* Previously filed
**To be filed by amendment
+Confidential treatment requested
(b) Financial Statement Schedule
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 17. Undertakings
The Registrant hereby undertakes:
(1) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has 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 Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant 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 issue.
(2) To provide to the underwriter at the closing specified in the
underwriting agreements certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to
each purchaser.
(3) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(4) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
II-6
<PAGE>
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of Fulton,
State of Georgia, on June 15, 1999.
AIRGATE PCS, INC.
/s/ Thomas M. Dougherty
By: _________________________________
Name: Thomas M. Dougherty
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Thomas M. Dougherty Chief Executive Officer June 15 1999
______________________________________ and Director (Principal
Thomas M. Dougherty Executive Officer)
/s/ Alan B. Catherall* Chief Financial Officer June 15, 1999
______________________________________ (Principal Financial and
Alan B. Catherall Accounting Officer)
/s/ W. Chris Blane* Vice President and June 15, 1999
______________________________________ Director
W. Chris Blane
/s/ Thomas D. Body, III* Vice President and June 15, 1999
______________________________________ Director
Thomas D. Body, III
/s/ Barry Schiffman* Director June 15, 1999
______________________________________
Barry Schiffman
/s/ Gill Cogan* Director June 15, 1999
______________________________________
Gill Cogan
/s/ Thomas M. Dougherty June 15, 1999
*By: _________________________________
Thomas M. Dougherty
Attorney-in-Fact
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of Fulton,
State of Georgia, on June 15, 1999.
AIRGATE WIRELESS, INC.
/s/ Thomas M. Dougherty
By: _________________________________
Name: Thomas M. Dougherty
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Thomas M. Dougherty Chief Executive Officer June 15, 1999
______________________________________ and Director (Principal
Thomas M. Dougherty Executive Officer)
/s/ Alan B. Catherall* Chief Financial Officer June 15, 1999
______________________________________ (Principal Financial and
Alan B. Catherall Accounting Officer)
/s/ W. Chris Blane* Vice President and June 15, 1999
______________________________________ Director
W. Chris Blane
/s/ Thomas D. Body, III* Vice President and June 15, 1999
______________________________________ Director
Thomas D. Body, III
/s/ Barry Schiffman* Director June 15, 1999
______________________________________
Barry Schiffman
/s/ Gill Cogan* Director June 15, 1999
______________________________________
Gill Cogan
/s/ Thomas M. Dougherty June 15, 1999
*By: _________________________________
Thomas M. Dougherty
Attorney-in-Fact
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of Fulton,
State of Georgia, on June 15, 1999.
AGW LEASING COMPANY, INC.
/s/ Thomas M. Dougherty
By: _________________________________
Name: Thomas M. Dougherty
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Thomas M. Dougherty Chief Executive Officer June 15, 1999
______________________________________ and Director (Principal
Thomas M. Dougherty Executive Officer)
/s/ Alan B. Catherall* Chief Financial Officer June 15, 1999
______________________________________ (Principal Financial and
Alan B. Catherall Accounting Officer)
/s/ W. Chris Blane* Vice President and June 15, 1999
______________________________________ Director
W. Chris Blane
/s/ Thomas D. Body, III* Vice President and June 15, 1999
______________________________________ Director
Thomas D. Body, III
/s/ Barry Schiffman* Director June 15, 1999
______________________________________
Barry Schiffman
/s/ Gill Cogan* Director June 15, 1999
______________________________________
Gill Cogan
/s/ Thomas M. Dougherty June 15, 1999
*By: _________________________________
Thomas M. Dougherty
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AIRGATE HOLDING COMPANY, INC.
(Originally incorporated August 4, 1998 under the name
AirGate Holding Company, Inc.)
FIRST: The name of the Corporation is AirGate PCS, Inc. (hereinafter
sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOURTH:
A. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is twenty five million
(25,000,000) of stock consisting of:
1. Twenty million (20,000,000) shares of Common Stock, par value one
cent ($.01) per share.
2. Five million (5,000,000) shares of Preferred Stock, par value one
cent ($.01) per share.
B. The Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of the shares of Preferred
Stock in series, and by filing a certificate pursuant to the applicable law
of the State of Delaware (such certificate being hereinafter referred to as
a "Preferred Stock Designation"), to establish from time to time the number
of shares to be included in each such series, and to fix the designation
powers, preferences, and rights of the shares of each such series and any
qualifications, limitations or restrictions thereof. The number of
authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority of the Common Stock, without a vote of
the holders of the Preferred Stock, or of any series thereof, unless a vote
of any such holders is required pursuant to the terms of any Preferred
Stock Designation.
<PAGE>
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Directors and stockholders:
A. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. In addition to the powers
and authority expressly conferred upon them by statute or by this Amended
and Restated Certificate of Incorporation or the Bylaws of the Corporation,
the Directors are hereby empowered to exercise all such powers and do all
such acts and things as may be exercised or done by the Corporation.
B. The Directors of the Corporation need not be elected by written
ballot unless the Bylaws so provide.
C. So long as there is more than one shareholder of the Corporation,
no action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
D. Special meetings of stockholders of the Corporation may be called
only by the Board of Directors pursuant to a resolution adopted by a
majority of the Whole Board or as otherwise provided in the Bylaws. The
term "Whole Board" shall mean the total number of authorized directorships
(whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board for
adoption).
E. The holders of the Common Stock shall have no preemptive rights to
subscribe for any shares of any class of stock of the Corporation whether
now or hereafter authorized.
SIXTH:
A. The number of Directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the Whole Board. The Directors shall be divided into three
classes, as nearly equal in numbers as the then total number of directors
constituting the entire Board permits with the term of office of one class
expiring each year. At the annual meeting of stockholders in 1999
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second
class shall be elected to hold office for a term expiring at the second
succeeding annual meeting, and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding annual
meeting. Notwithstanding the foregoing, and except as otherwise required
by law, whenever the holders of any one or more series of Preferred Stock
shall have the right, voting separately as a class, to elect one or more
directors of the
2
<PAGE>
Corporation, the terms of the director or directors elected by such holders
shall expire at the next succeeding annual meeting of stockholders. At each
annual meeting of stockholders following such initial classification and
election, Directors elected to succeed those Directors whose terms expire
shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election with each Director to
hold office until his or her successor shall have been duly elected and
qualified.
B. Subject to the rights of holders of any series of Preferred Stock
outstanding, the newly created directorships resulting from any increase in
the authorized number of Directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of
the Directors then in office, though less than a quorum, and Directors so
chosen shall hold office for a term expiring at the annual meeting of
stockholders at which the term of office of the class to which they have
been chosen expires. No decrease in the number of Directors constituting
the Board of Directors shall shorten the term of any incumbent Director.
C. Advance notice of stockholder nominations for the election of
Directors and of business to be brought by stockholders before any meeting
of the stockholders of the Corporation shall be given in the manner
provided in the Bylaws of the Corporation.
D. Notwithstanding any other provisions of this Amended and Restated
Certificate of Incorporation or the Bylaws of the Corporation, any
Director, or the entire Board of Directors, may be removed from office at
any time, but only for cause and only by the affirmative vote of the
holders of at least 80 percent of the voting power of all of the then-
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors, voting together as a single class.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall
have the right, voting separately as a class, to elect one or more
directors of the Corporation, the provisions of section D of this Article
shall not apply with respect to the Director or Directors elected by such
holders of Preferred Stock.
SEVENTH: The Board of Directors is expressly empowered to adopt,
amend or repeal Bylaws of the Corporation. Any adoption, amendment or repeal of
the Bylaws of the Corporation by the Board of Directors shall require the
approval of a majority of the Whole Board. The term "Whole Board" shall mean
the total number of authorized directorships (whether or not there exist any
vacancies in previously authorized directorships at the time such resolution is
presented to the Board of Directors for adoption). The stockholders shall also
have power to adopt, amend or repeal the Bylaws of the Corporation provided,
however, that, in addition to any vote of the holders of any class or series of
stock of this Corporation required by law or by this Certificate of
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Incorporation, the affirmative vote of the holders of at least 80 percent of the
voting power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of Directors, voting
together as a single class, shall be required to adopt, amend or repeal any
provisions of the Bylaws of the Corporation.
EIGHTH:
A. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly provided in
this Article EIGHTH:
1. any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with: (i) any
Interested Stockholder (as hereinafter defined); or (ii) any
other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an
Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder, or any
Affiliate of any Interested Stockholder, of any assets of
the Corporation or any Subsidiary having an aggregate Fair
Market Value (as hereinafter defined) equaling or exceeding
25% or more of the combined assets of the Corporation and
its Subsidiaries; or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions)
of any securities of the Corporation or any Subsidiary to
any Interested Stockholder or any Affiliate of any
Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an
aggregate Fair Market Value (as hereinafter defined)
equaling or exceeding 25% of the combined Fair Market Value
of the outstanding common stock of the Corporation and its
Subsidiaries, except for any issuance or transfer pursuant
to an employee benefit plan of the Corporation or any
Subsidiary thereof; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of
an Interested Stockholder or any Affiliate of any Interested
Stockholder; or
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5. any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with
or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any
class of equity or convertible securities of the Corporation
or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate of any
Interested Stockholder;
shall require the affirmative vote of the holders of at least 80% of the
voting power of the then-outstanding shares of stock of the Corporation
entitled to vote in the election of Directors (the "Voting Stock") (after
giving effect to the provisions of Article FOURTH), voting together as a
single class. Such affirmative vote shall be required notwithstanding the
fact that no vote may be required, or that a lesser percentage may be
specified, by law or by any other provisions of this Certificate of
Incorporation or any Preferred Stock Designation or in any agreement with
any national securities exchange or otherwise.
The term "Business Combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of paragraphs
1 through 5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only the affirmative vote of the majority of the
outstanding shares of capital stock entitled to vote after giving effect to
the provisions of Article FOURTH, or such vote (if any), as is required by
law or by this Certificate of Incorporation, if, in the case of any
Business Combination that does not involve any cash or other consideration
being received by the stockholders of the Corporation solely in their
capacity as stockholders of the Corporation, the condition specified in the
following paragraph 1 is met or, in the case of any other Business
Combination, all of the conditions specified in either of the following
paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by a majority
of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
a. The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by the holders of Common Stock in such
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Business Combination shall at least be equal to the higher
of the following:
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting dealers'
fees, paid by the Interested Stockholder or any of its
Affiliates for any shares of Common Stock acquired by
it: (i) within the two-year period immediately prior
to the first public announcement of the proposal of the
Business Combination (the "Announcement Date"); or (ii)
in the transaction in which it became an Interested
Stockholder, whichever is higher; or
(2) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the
Interested Stockholder became an Interested Stockholder
(such latter date is referred to in this Article EIGHTH
as the "Determination Date"), whichever is higher.
b. The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by holders of shares of any class of outstanding
Voting Stock other than Common Stock shall be at least equal
to the highest of the following (it being intended that the
requirements of this subparagraph (b) shall be required to
be met with respect to every such class of outstanding
Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of a particular class of
Voting Stock):
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting dealers'
fees, paid by the Interested Stockholder for any shares
of such class of Voting Stock acquired by it: (i)
within the two-year period immediately prior to the
Announcement Date; or (ii) in the transaction in which
it became an Interested Stockholder, whichever is
higher; or
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(2) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of
Voting Stock are entitled in the event of any voluntary
or involuntary liquidation, dissolution or winding up
of the Corporation; or
(3) the Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination
Date, whichever is higher.
c. The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of
Voting Stock. If the Interested Stockholder has paid for
shares of any class of Voting Stock with varying forms of
consideration, the form of consideration to be received per
share by holders of shares of such class of Voting Stock
shall be either cash or the form used to acquire the largest
number of shares of such class of Voting Stock previously
acquired by the Interested Stockholder. The price
determined in accordance with subparagraph B.2 of this
Article EIGHTH shall be subject to appropriate adjustment in
the event of any stock dividend, stock split, combination of
shares or similar event.
d. After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination: (1) except as approved by a majority of the
Disinterested Directors (as hereinafter defined), there
shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding stock having preference over
the Common Stock as to dividends or liquidation; (2) there
shall have been: (i) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to
reflect any subdivision of the Common Stock), except as
approved by a majority of the Disinterested Directors; and
(ii) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or
any similar transaction which has the effect of reducing the
number of outstanding shares of the Common Stock, unless the
failure to so increase such annual rate is approved by a
majority of the Disinterested Directors, and (3) neither
such Interested Stockholder or
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any of its Affiliates shall have become the beneficial owner
of any additional shares of Voting Stock except as part of
the transaction which results in such Interested Stockholder
becoming an Interested Stockholder.
e. After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided, directly or
indirectly, by the Corporation, whether in anticipation of
or in connection with such Business Combination or
otherwise.
f. A proxy or information statement describing the proposed
Business Combination and complying with the requirements of
the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (or any subsequent
provisions replacing such Act, and the rules or regulations
thereunder) shall be mailed to stockholders of the
Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to
such Act or subsequent provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, a firm, a group
acting in concert, a corporation, a partnership, an
association, a joint venture, a pool, a joint stock company,
a trust, an unincorporated organization or similar company,
a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities or any other
entity.
2. "Interested Stockholder" shall mean any person (other than
the Corporation or any Holding Company or Subsidiary
thereof) who or which:
a. is the beneficial owner, directly or indirectly, of
more than 10% of the voting power of the outstanding
Voting Stock; or
b. is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the
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date in question was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the
then outstanding Voting Stock; or
c. is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within
the two-year period immediately prior to the date in
question beneficially owned by any Interested
Stockholder, if such assignment or succession shall
have occurred in the course of a transaction or series
of transactions not involving a public offering within
the meaning of the Securities Act of 1933, as amended.
3. For purposes of this Article EIGHTH, "beneficial ownership"
shall be determined in the manner provided in Section C of
Article FOURTH hereof.
4. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as in effect on the date of filing of this Certificate
of Incorporation.
5. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for
the purposes of the definition of Interested Stockholder set
forth in Paragraph 2 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly
or indirectly, by the Corporation.
6. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested
Stockholder and was a member of the Board of Directors prior
to the time that the Interested Stockholder became an
Interested Stockholder, and any Director who is thereafter
chosen to fill any vacancy of the Board of Directors or who
is elected and who, in either event, is unaffiliated with
the Interested Stockholder and in connection with his or her
initial assumption of office is recommended for appointment
or election by a majority of Disinterested Directors then on
the Board of Directors.
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7. "Fair Market Value" means:
a. in the case of stock, the highest closing sales price
of the stock during the 30-day period immediately
preceding the date in question of a share of such stock
on the National Association of Securities Dealers
Automated Quotation System or any system then in use,
or, if such stock is admitted to trading on a principal
United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, Fair
Market Value shall be the highest sale price reported
during the 30-day period preceding the date in
question, or, if no such quotations are available, the
Fair Market Value on the date in question of a share of
such stock as determined by the Board of Directors in
good faith, in each case with respect to any class of
stock, appropriately adjusted for any dividend or
distribution in shares of such stock or any stock split
or reclassification of outstanding shares of such stock
into a greater number of shares of such stock or any
combination or reclassification of outstanding shares
of such stock into a smaller number of shares of such
stock; and
b. in the case of property other than cash or stock, the
Fair Market Value of such property on the date in
question as determined by the Board of Directors in
good faith.
8. Reference to "Highest Per Share Price" shall in each case
with respect to any class of stock reflect an appropriate
adjustment for any dividend or distribution in shares of
such stock or any stock split or reclassification of
outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification
of outstanding shares of such stock into a smaller number of
shares of such stock.
9. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than
cash to be received" as used in Subparagraphs (a) and (b) of
Paragraph 2 of Section B of this Article EIGHTH shall
include the shares of Common Stock and/or the shares of
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any other class of outstanding Voting Stock retained by the
holders of such shares.
D. A majority of the Disinterested Directors of the Corporation
shall have the power and duty to determine for the purposes of this Article
EIGHTH, on the basis of information known to them after reasonable inquiry:
(a) whether a person is an Interested Stockholder; (b) the number of shares
of Voting Stock beneficially owned by any person; (c) whether a person is
an Affiliate or Associate of another; and (d) whether the assets which are
the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or
any Subsidiary in any Business Combination has an aggregate Fair Market
Value equaling or exceeding 25% of the combined Fair Market Value of the
Common Stock of the Corporation and its Subsidiaries. A majority of the
Disinterested Directors shall have the further power to interpret all of
the terms and provisions of this Article EIGHTH.
E. Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by
law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any affirmative vote of the holders of
any particular class or series of the Voting Stock required by law, this
Certificate of Incorporation or any Preferred Stock Designation, the
affirmative vote of the holders of at least 80 percent of the voting power
of all of the then-outstanding shares of the Voting Stock (after giving
effect to the provisions of Article FOURTH), voting together as a single
class, shall be required to alter, amend or repeal this Article EIGHTH.
NINTH: The Board of Directors of the Corporation, when evaluating any
offer of another person to (A) make a tender or exchange offer for any equity
security of the Corporation, (B) merge or consolidate the Corporation with
another corporation or entity or (C) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, may, in
connection with the exercise of its judgment in determining what is in the best
interest of the Corporation and its stockholders, give due consideration to all
relevant factors, including, without limitation, those factors that Directors of
any subsidiary of the Corporation may consider in evaluating any action that may
result in a change or potential change in the control of the subsidiary, and the
social and economic effect of acceptance of such offer on the Corporation's
present and future customers and employees and on the communities in which the
Corporation operates or is located and the ability of the Corporation to fulfill
its corporate objective under applicable laws and regulations.
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TENTH:
A. Each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a Director or
an Officer of the Corporation or is or was serving at the request of the
Corporation as a Director, Officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a Director, Officer, employee or agent or in any other
capacity while serving as a Director, Officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered
by such indemnitee in connection therewith; provided, however, that, except
as provided in Section C hereof with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this
Article TENTH shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however,
that, if the Delaware General Corporation Law requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
Officer (and not in any other capacity in which service was or is rendered
by such indemnitee, including, without limitation, services to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right
to appeal (hereinafter a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Section or
otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article TENTH shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a Director, Officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
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C. If a claim under Section A or B of this Article TENTH is not paid
in full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be
twenty days, the indemnitee may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the indemnitee shall be entitled to be paid also the
expenses of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking the Corporation shall be entitled to recover such expenses
upon a final adjudication that, the indemnitee has not met any applicable
standard for indemnification set forth in the Delaware General Corporation
Law. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification
of the indemnitee is proper in the circumstances because the indemnitee has
met the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders)
that the indemnitee has not met such applicable standard of conduct, shall
create a presumption that the indemnitee has not met the applicable
standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving
that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article TENTH or otherwise shall be on
the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article TENTH shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
Corporation's Certificate of Incorporation, Bylaws, agreement, vote of
stockholders or Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any Director, Officer, employee or agent of the Corporation or
subsidiary or Affiliate or another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss, whether
or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General
Corporation Law.
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F. The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article TENTH with respect to the
indemnification and advancement of expenses of Directors and Officers of
the Corporation.
ELEVENTH: A Director of this Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the Director derived an improper
personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of Directors, then the liability of a Director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
Director of the Corporation existing at the time of such repeal or modification.
TWELFTH: The provisions set forth in this Article and in Articles 5(C),
5(D), 5(E), 6, 7, 8, 10 and 11 herein may not be repealed or amended in any
respect, and no article imposing cumulative voting in the election of directors
may be added, unless such action is approved by the affirmative vote of the
holders of not less than eighty percent (80%) of the outstanding shares of
Common Stock of this Corporation, subject to the provisions of any series of
Preferred Stock which may at the time be outstanding; provided, however, that if
there is a related person (as defined in Article 8) such amendment shall also
require the affirmative vote of at least 50% of the outstanding shares of Common
Stock held by stockholders other than the related person.
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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation,
which restates and integrates and does further amend the provisions of the
Corporation's Certificate of Incorporation, having been duly proposed by the
Board of Directors of the Corporation and approved by the stockholders of the
Corporation in accordance with the provisions of Sections 242 and 245 of the
General Corporation Laws of the State of Delaware, has been executed this 21st
day of May, 1999 by Shelley Spencer, its authorized officer.
AirGate Holding Company, Inc.
By: /s Shelley Spencer
------------------
Shelley Spencer
Secretary
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EXHIBIT 3.2
AIRGATE PCS, INC.
AMENDED AND RESTATED BYLAWS
ARTICLE I - STOCKHOLDERS
------------------------
Section 1. Annual Meeting.
--------- --------------
An annual meeting of the stockholders, for the election of Directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as may be designated by resolution of the Board of
Directors.
Section 2. Special Meetings.
--------- ----------------
Special meetings of stockholders of the Corporation may be called only by
the Board of Directors pursuant to a resolution adopted by a majority of the
total number of Directors which the Corporation would have if there were no
vacancies on the Board of Directors (hereinafter the "Whole Board").
Section 3. Notice of Meetings.
--------- ------------------
Written notice of the place, date, and time of all meetings of the
stockholders, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be given, not less than ten (10) nor more
than sixty (60) days before the date on which the meeting is to be held, to each
stockholder entitled to vote at such meeting, except as otherwise provided
herein or required by law (meaning, here and hereinafter, as required from time
to time by the Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
--------- ------
At any meeting of the stockholders, the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy shall constitute a quorum for all purposes, unless or except to the extent
that the presence of a larger number may be required by law or the Corporation's
Certificate of Incorporation.
<PAGE>
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date,
or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present in person or by proxy constituting a quorum, then except as otherwise
required by law, those present in person or by proxy at such adjourned meeting
shall constitute a quorum, and all matters shall be determined by a majority of
the votes cast at such meeting.
Section 5. Organization.
--------- ------------
Such person as the Board of Directors may have designated or, in the
absence of such a person, the Chairman of the Board of the Corporation or, in
his or her absence, such person as may be chosen by the holders of a majority of
the shares entitled to vote who are present, in person or by proxy, shall call
to order any meeting of the stockholders and act as chairman of the meeting. In
the absence of the Secretary of the Corporation, the secretary of the meeting
shall be such person as the chairman appoints.
Section 6. Conduct of Business.
--------- -------------------
(a) The chairman of any meeting of stockholders shall determine the
order of business and the procedures at the meeting, including such regulation
of the manner of voting and the conduct of discussion as seem to him or her in
order. The date and time of the opening and closing of the polls for each matter
upon which the stockholders will vote at the meeting shall be announced at the
meeting by the chairman.
(b) At any annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (i) by or at
the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the business must
relate to a proper subject matter for stockholder action and the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered or mailed to
and received at the principal executive offices of the Corporation not less than
ninety (90) days prior to the date of the annual meeting; provided, however,
that in the event that less than one hundred (100) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter such
stockholder proposes to bring before the annual meeting: (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the Corporation's books, of the stockholder proposing such
business, (iii) the class and
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number of shares of the Corporation's capital stock that are beneficially owned
by such stockholder and, (iv) any material interest of such stockholder in such
business. Notwithstanding anything in these Bylaws to the contrary, no business
shall be brought before or conducted at an annual meeting except in accordance
with the provisions of this Section 6(b). The Officer of the Corporation or
other person presiding over the annual meeting shall, if the facts so warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 6(b) and,
if he should so determine, he shall so declare to the meeting and any such
business so determined to be not properly brought before the meeting shall not
be transacted.
At any special meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting by or at the direction
of the Board of Directors.
(c) Only persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of stockholders at which directors are to
be elected only: (i) by or at the direction of the Board of Directors or, (ii)
by any stockholder of the Corporation entitled to vote for the election of
Directors at the meeting who complies with the notice procedures set forth in
this Section 6(c). Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made by timely notice in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice shall
be delivered or mailed to and received at the principal executive offices of the
Corporation not less than ninety (90) days prior to the date of the meeting;
provided, however, that in the event that less than one hundred (100) days'
notice or prior disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
Such stockholder's notice shall set forth: (i) as to each person whom such
stockholder proposes to nominate for election or re-election as a Director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (ii) as to
the stockholder giving the notice (x) the name and address, as they appear on
the Corporation's books, of such stockholder and (y) the class and number of
shares of the Corporation's capital stock that are beneficially owned by such
stockholder. At the request of the Board of Directors any person nominated by
the Board of Directors for election as a Director shall furnish to the Secretary
of the Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a Director of the Corporation unless nominated in accordance
with the provisions of this Section 6(c). The Officer of the Corporation or
other person presiding at the meeting shall, if the facts so warrant, determine
that a nomination was not made in accordance with such provisions and, if he
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or she shall so determine, he or she shall so declare to the meeting and the
defective nomination shall be disregarded.
Section 7. Proxies and Voting.
--------- ------------------
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing filed in
accordance with the procedure established for the meeting. Any facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this paragraph may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
All voting, including on the election of Directors but excepting where
otherwise required by law or by the governing documents of the Corporation, may
be made by a voice vote; provided, however, that upon demand therefor by a
stockholder entitled to vote or his or her proxy, a stock vote shall be taken.
Every stock vote shall be taken by ballot, each of which shall state the name of
the stockholder or proxy voting and such other information as may be required
under the procedures established for the meeting. The Corporation shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act at
the meeting and make a written report thereof. The Corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of his
ability.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or the Certificate of Incorporation, all
other matters shall be determined by a majority of the shares present in person
or represented by proxy at the meeting and entitled to vote on the subject
matter.
Section 8. Stock List.
--------- ----------
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held.
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<PAGE>
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
Section 9. Consent of Stockholders in Lieu of Meeting.
--------- ------------------------------------------
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of stockholders of
the Corporation and may not be effected by any consent in writing by such
stockholders unless there shall be only one stockholder of the Corporation.
ARTICLE II - BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
--------- -----------------------------------------
The business and affairs of the Corporation shall be under the direction of
its Board of Directors. The number of Directors who shall constitute the Whole
Board shall be seven. The Board of Directors shall annually elect a Chairman of
the Board from among its members who shall, when present, preside at its
meetings.
The Directors, other than those who may be elected by the holders of any
class or series of Preferred Stock, shall be divided, with respect to the time
for which they severally hold office, into three classes. At the annual meeting
of stockholders in 1999 Directors of the first class shall be elected to hold
office for a term expiring at the next succeeding annual meeting, Directors of
the second class shall be elected to hold office for a term expiring at the
second succeeding annual meeting, and Directors of the third class shall be
elected to hold office for a term expiring at the third succeeding annual
meeting. Each Director shall hold office until his or her successor shall have
been duly elected and qualified. At each annual meeting of stockholders,
Directors elected to succeed those Directors whose terms then expire shall be
elected for a term of office to expire at the third succeeding annual meeting of
stockholders after their election, with each Director to hold office until his
or her successor shall have been duly elected and qualified.
Section 2. Vacancies and Newly Created Directorships.
--------- -----------------------------------------
Unless the Board of Directors otherwise determines, newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
only by a majority vote of the Directors then in office, though less than a
quorum, and Directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to which
they have been elected expires and until such Director's successor shall have
been duly elected and qualified. No decrease in the number of authorized
directors constituting the Board shall shorten the term of any incumbent
Director.
-5-
<PAGE>
Section 3. Regular Meetings.
--------- ----------------
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all Directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
--------- ----------------
Special meetings of the Board of Directors may be called by one-third (1/3)
of the Directors then in office (rounded up to the nearest whole number), by the
Chairman of the Board or the President and shall be held at such place, on such
date, and at such time as they, or he or she, shall fix. Notice of the place,
date, and time of each such special meeting shall be given each Director by whom
it is not waived not less than twenty-four (24) hours before the meeting.
Unless otherwise indicated in the notice thereof, any and all business may be
transacted at a special meeting.
Section 5. Quorum.
--------- ------
At any meeting of the Board of Directors, a majority of the Whole Board
shall constitute a quorum for all purposes. If a quorum shall fail to attend
any meeting, a majority of those present may adjourn the meeting to another
place, date, or time, without further notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
--------- -------------------------------------------------
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
--------- -------------------
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the Directors present,
except as otherwise provided herein, in the Certificate of Incorporation or
required by law. Action may be taken by the Board of Directors without a
meeting if all members thereof consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors.
-6-
<PAGE>
Section 8. Powers.
--------- ------
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or non-
negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(4) To remove any Officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any Officer upon
any other person for the time being;
(5) To confer upon any Officer of the Corporation the power to
appoint, remove and suspend subordinate Officers, employees and agents;
(6) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for Directors, Officers, employees and
agents of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for Directors, Officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent with
these Bylaws, for the management of the Corporation's business and affairs.
-7-
<PAGE>
Section 9. Compensation of Directors.
- --------- -------------------------
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as Directors,
including, without limitation, their services as members of committees of the
Board of Directors.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors.
--------- ------------------------------------
The Board of Directors, by a vote of a majority of the Board of Directors,
may from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for these committees and any others provided for herein,
elect a Director or Directors to serve as the member or members, designating, if
it desires, other Directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so
designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation Law if the resolution which designates the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.
Section 2. Conduct of Business.
--------- -------------------
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of such committee.
Section 3. Nominating Committee.
--------- --------------------
The Board of Directors shall appoint a Nominating Committee of the Board.
The Nominating Committee shall have authority: (a) to review any nominations
for election to the Board of Directors made by a stockholder of the Corporation
pursuant to Section 6(c)(ii) of Article I of these Bylaws in order to determine
compliance with such Bylaw, and (b) to recommend to the Whole Board nominees for
election to the Board of
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<PAGE>
Directors to replace those Directors whose terms expire at the annual meeting of
stockholders next ensuing.
ARTICLE IV - OFFICERS
Section 1. Generally.
--------- ---------
(a) The Board of Directors as soon as may be practicable after the
annual meeting of stockholders shall choose a Chairman of the Board, Chief
Executive Officer, a President, one or more Vice Presidents, a Secretary, one or
more Assistant Secretaries and a Chief Financial Officer and/or Treasurer and
one or more Assistant Treasurers, and from time to time may choose such other
officers as it may deem proper. The Chairman of the Board shall be chosen from
among the Directors. Any number of offices may be held by the same person.
(b) The term of office of all Officers shall be until the next
annual election of Officers and until their respective successors are chosen but
any Officer may be removed from office at any time by the affirmative vote of a
majority of the authorized number of Directors then constituting the Board of
Directors. Any vacancy occurring in any office of the Corporation by death,
resignation, removal or otherwise may be filled for the unexpired portion of the
term by the Board of Directors at any regular of special meeting.
(c) All Officers chosen by the Board of Directors shall have such
powers and duties as generally pertain to their respective Offices, subject to
the specific provisions of this ARTICLE IV. Such officers shall also have such
powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof.
Section 2. Chairman of the Board of Directors.
--------- ----------------------------------
The Chairman of the Board shall, subject to the provisions of these Bylaws
and to the direction of the Board of Directors, unless the Board has designated
another person, when present, preside at all meetings of the stockholders of the
Corporation. The Chairman of the Board shall perform all duties and have all
powers which are commonly incident to the office of Chairman of the Board or
which are delegated to him or her by the Board of Directors. He or she shall
have power to sign all stock certificates, contracts and other instruments of
the Corporation which are authorized.
Section 3. President and Chief Executive Officer.
--------- --------------------------------------
The President and Chief Executive Officer (the "President") shall have
general responsibility for the management and control of the business and
affairs of the Corporation and shall perform all duties and have all powers
which are commonly incident to the offices of President and Chief Executive
Officer or which are delegated to him or her by the Board of Directors. Subject
to the direction of the Board of Directors,
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<PAGE>
the President and Chief Executive Officer shall have power to sign all stock
certificates, contracts and other instruments of the Corporation which are
authorized and shall have general supervision of all of the other Officers
(other than the Chairman of the Board), employees and agents of the Corporation.
Section 4. Vice President.
--------- --------------
The Vice President or Vice Presidents shall perform the duties of the
President in his or her absence or during his or her inability to act. In
addition, the Vice Presidents shall perform the duties and exercise the powers
usually incident to their respective offices and/or such other duties and powers
as may be properly assigned to them by the Board of Directors, the Chairman of
the Board or the President. A Vice President or Vice Presidents may be
designated as Executive Vice President or Senior Vice President.
Section 5. Secretary.
--------- ---------
The Secretary or Assistant Secretary shall issue notices of meetings, shall
keep their minutes, shall have charge of the seal and the corporate books, shall
perform such other duties and exercise such other powers as are usually incident
to such office and/or such other duties and powers as are properly assigned
thereto by the Board of Directors, the Chairman of the Board or the President.
Subject to the direction of the Board of Directors, the Secretary shall have the
power to sign all stock certificates.
Section 6. Chief Financial Officer/Treasurer.
--------- ---------------------------------
The Chief Financial Officer/Treasurer shall be the Comptroller of the
Corporation and shall have the responsibility for maintaining the financial
records of the Corporation. He or she shall make such disbursements of the
funds of the Corporation as are authorized and shall render from time to time an
account of all such transactions and of the financial condition of the
Corporation. The Chief Financial Officer/Treasurer shall also perform such
other duties as the Board of Directors may from time to time prescribe. Subject
to the direction of the Board of Directors, the Chief Financial
Officer/Treasurer shall have the power to sign all stock certificates.
Section 7. Assistant Secretaries and Other Officers.
--------- ----------------------------------------
The Board of Directors may appoint one or more Assistant Secretaries and
such other Officers who shall have such powers and shall perform such duties as
are provided in these Bylaws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the President.
Section 8. Action with Respect to Securities of Other Corporations.
--------- -------------------------------------------------------
Unless otherwise directed by the Board of Directors, the Chief Executive
Officer or any Officer of the Corporation authorized by the Chief Executive
Officer shall have power to vote and otherwise act on behalf of the Corporation,
in person or by proxy, at
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<PAGE>
any meeting of stockholders of or with respect to any action of stockholders of
any other corporation in which this Corporation may hold securities and
otherwise to exercise any and all rights and powers which this Corporation may
possess by reason of its ownership of securities in such other corporation.
ARTICLE V - STOCK
Section 1. Certificates of Stock.
--------- ---------------------
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the Chairman of the Board or the Chief Executive
Officer, and by the Secretary, or an Assistant Secretary, or any Treasurer or
Assistant Treasurer, certifying the number of shares owned by him or her. Any
or all of the signatures on the certificate may be by facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he or she were such officer,
transfer agent or registrar at the date of issue.
Section 2. Transfers of Stock.
--------- ------------------
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these Bylaws,
an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
--------- -----------
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the next day preceding the day
on which the meeting is held, and, for determining stockholders entitled to
receive payment of any dividend or other distribution or allotment or rights or
to exercise any rights of change, conversion or exchange of stock or for any
other purpose, the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.
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A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates.
--------- --------------------------------------
In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
--------- -----------
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI - NOTICES
Section 1. Notices.
--------- -------
Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, Director, Officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram or mailgram or other
courier. Any such notice shall be addressed to such stockholder, Director,
Officer, employee or agent at his or her last known address as the same appears
on the books of the Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails or by telegram or
mailgram or other courier, shall be the time of the giving of the notice.
Section 2. Waivers.
--------- -------
A written waiver of any notice, signed by a stockholder, Director, Officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, Director, Officer, employee or agent. Attendance of
a person at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business nor the
purpose of any meeting need be specified in such a waiver.
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ARTICLE VII - MISCELLANEOUS
Section 1. Facsimile Signatures.
--------- --------------------
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these Bylaws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
--------- --------------
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Secretary.
Section 3. Reliance Upon Books, Reports and Records.
--------- ----------------------------------------
Each Director, each member of any committee designated by the Board of
Directors, and each Officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its Officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such Director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
--------- -----------
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
Section 5. Time Periods.
--------- ------------
In applying any provision of these Bylaws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
ARTICLE VIII - AMENDMENTS
The Board of Directors may amend, alter or repeal these Bylaws at any
meeting of the Board, provided notice of the proposed change was given not less
than two days prior to the meeting. The stockholders shall also have power to
amend, alter or repeal these Bylaws at any meeting of stockholders provided
notice of the proposed change was given in the notice of the meeting provided,
however, that, notwithstanding any other
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<PAGE>
provisions of the Bylaws or any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of the voting stock required by law, the
Certificate of Incorporation, any Preferred Stock Designation or these Bylaws,
the affirmative vote of the holders of at least 80% of the voting power of all
the then-outstanding shares of the Voting Stock, voting together as a single
class, shall be required to alter, amend or repeal any provisions of these
Bylaws.
The above Amended and Restated Bylaws are effective as of May 14, 1999, the
date of adoption by the Board of Directors of AirGate PCS, Inc.
-14-
<PAGE>
EXHIBIT 4.1
NUMBER COMMON STOCK
COMMON STOCK SEE REVERSE FOR CERTAIN DEFINITIONS
PAR VALUE $.01 CUSIP 009367-10 3
AIRGATE PCS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT
S P E C I M E N
is the owner of:
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK $.01 PAR VALUE PER SHARE OF
AIRGATE PCS, INC.
The shares represented by this certificate are transferable only on the stock
transfer books of the Corporation by the holder of record thereof, or by his
duly authorized attorney or legal representative, upon the surrender of this
certificate properly endorsed. This certificate and the shares represented
hereby are issued and shall be held subject to all the provisions of the
Certificate of Incorporation of the Corporation and any amendments thereto
(copies of which are on file with the Transfer Agent), to all of which
provisions the holder by acceptance hereof, assents.
This certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.
IN WITNESS THEREOF, AIRGATE PCS, INC. has caused this certificate to
be executed by the facsimile signatures of its duly authorized officers and has
caused a facsimile of its corporate seal to be hereunto affixed.
Dated: [SEAL]
President Secretary
COUNTERSIGNED AND REGISTERED:
By ___________________________________
AUTHORIZED SIGNATURE
<PAGE>
AIRGATE PCS, INC.
The Board of Directors of the Corporation is authorized by resolution(s),
from time to time adopted, to provide for the issuance of serial preferred stock
in series and to fix and state the voting powers, designations, preferences and
relative, participating, optional, or other special rights of the shares of each
such series and the qualifications, limitations and restrictions thereof. The
Corporation will furnish to any shareholder upon request and without charge a
full description of each class of stock and any series thereof.
The shares represented by this certificate may not be cumulatively voted on
any matter. The affirmative vote of the holders of at least 80% of the voting
stock of the Corporation, voting together as a single class, shall be required
to approve certain business combinations and other transactions, pursuant to the
Certificate of Incorporation or to amend certain provisions of the Certificate
of Incorporation or Bylaws.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFTS MIN ACT - __________ custodian ___________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act
________________________
(State)
</TABLE>
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
For value received, __________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFICATION NUMBER OF TRANSFEREE
________________________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
_______________________________________________ shares of the common stock
represented by the within Certificate, and do hereby irrevocably constitute and
appoint _________________________________________________________ Attorney to
transfer the said stock on the books of the within-named Corporation with full
power of substitution in the premises.
DATED ________________________ ____________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED:_________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15
<PAGE>
June 15, 1999
AirGate PCS, Inc.
230 Peachtree Street, N.W.
Suite 1700
Atlanta, Georgia 30303
Re: AirGate PCS, Inc.
Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as special counsel to AirGate PCS, Inc., a Delaware
corporation (the "Company") in connection with a Registration Statement on Form
S-1 (the "Registration Statement") pertaining to the registration of $100
million of the Company's common stock, par value $0.01 per share (the "Common
Stock"), and $150 million of the Company's Senior Discount Notes (the "Notes")
due 2009 being offered by the Company or such additional amounts of Common Stock
and Notes as may be registered in connection with this offering and pursuant to
an abbreviated registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933 (the "Securities Act").
We have examined such documents and records as we deemed appropriate,
including the following:
(i) The Company's Amended and Restated Certificate of Incorporation.
(ii) The Company's Amended and Restated Bylaws.
(iii) Resolutions duly adopted by the Board of Directors of the Company
authorizing the filing of the Registration Statement.
In the course of our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity, binding effect and enforceability
thereof on such parties.
<PAGE>
AirGate PCS, Inc.
June 15, 1999
Page 2
Based upon the foregoing, we are of the opinion that:
The shares of Common Stock have been duly authorized, and when issued
subject to effectiveness of the Registration Statement and compliance with
applicable state securities laws, will be validly issued by the Company, fully
paid and nonassessable.
We express no opinion as to the laws of any jurisdiction other than the
State of Delaware and the federal laws of the United States of America. We
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement, to the incorporation by reference of this opinion in any abbreviated
registration statement, in connection with the offering covered by the
Registration Statement, filed pursuant to Rule 462(b) under the Securities Act
and to the reference to our firm under the caption "Legal Matters" contained in
the Prospectus included therein.
Very truly yours,
PATTON BOGGS LLP
By: /s/ Mary M. Sjoquist
-------------------------------------
Mary M. Sjoquist
<PAGE>
June 15, 1999
AirGate PCS, Inc.
230 Peachtree Street, N.W.
Suite 1700
Atlanta, Georgia 30303
Re: AirGate PCS, Inc.
Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as special counsel to AirGate PCS, Inc., a Delaware
corporation (the "Company") in connection with a Registration Statement on Form
S-1 (the "Registration Statement") pertaining to the registration of $100
million of the Company's common stock, par value $0.01 per share (the "Common
Stock"), and $150 million of the Company's Senior Discount Notes (the "Notes")
due 2009, being offered by the Company or such additional amounts of Common
Stock and Notes as may be registered in connection with this offering and
pursuant to an abbreviated registration statement filed pursuant to Rule 462(b)
under the Securities Act of 1933 (the "Securities Act").
We have examined such documents and records as we deemed appropriate,
including the following:
(i) The Company's Amended and Restated Certificate of Incorporation.
(ii) The Company's Amended and Restated Bylaws.
(iii) Resolutions duly adopted by the Board of Directors of the Company
authorizing the filing of the Registration Statement.
In the course of our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity, binding effect and enforceability
thereof on such parties.
<PAGE>
AirGate PCS, Inc.
June 15, 1999
Page 2
Based upon the foregoing, we are of the opinion that:
The Notes have been duly authorized, and when issued subject to
effectiveness of the Registration Statement and compliance with applicable state
securities laws, will be binding obligations of the Company.
We express no opinion as to the laws of any jurisdiction other than the
State of Delaware and the federal laws of the United States of America. We
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement, to the incorporation by reference of this opinion in any abbreviated
registration statement, in connection with the offering covered by the
Registration Statement, filed pursuant to Rule 462(b) under the Securities Act
and to the reference to our firm under the caption "Legal Matters" contained in
the Prospectus included therein.
Very truly yours,
PATTON BOGGS LLP
By: /s/ Mary M. Sjoquist
-----------------------------------
Mary M. Sjoquist
<PAGE>
EXHIBIT 10.1
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made July 22, 1998, between
SprintCom, Inc., a Kansas corporation, and AirGate Wireless, L.L.C., a Delaware
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, 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
. Adherence to Program Requirements relating to the marketing, promotion
and distribution of Sprint PCS Products and Services.
<PAGE>
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.
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
2
<PAGE>
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.
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
3
<PAGE>
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.
-----------
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:
4
<PAGE>
(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.
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
5
<PAGE>
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, 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 pop. 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
6
<PAGE>
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.
-----------
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.
7
<PAGE>
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.
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.
8
<PAGE>
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.
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.
9
<PAGE>
The Sprint PCS National or Regional Distribution Program Requirements in effect
as of the date of this agreement are attached as Exhibit 4.1.
-----------
4.1.1 Territorial Limitations of 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.
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.
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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:
(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
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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, 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.
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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 (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
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(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.
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
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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, 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
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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).
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.
9.2 Amendments to Program Requirements. Sprint PCS may amend any of the
Sprint PCS Program Requirements, subject to the following conditions:
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(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.
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.
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9.3 Manager's Right to Request Review of Change. 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.
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;
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(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 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
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(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 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;
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(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;
(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.
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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, 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 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
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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
terminated, 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.
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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.
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:
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(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.
11.2.2.3 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 Event 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:
(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
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(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 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.
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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;
(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;
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(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.
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
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(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:
(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.
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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.
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.
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(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
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:
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(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.
(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
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
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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 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
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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;
(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:
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(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.
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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 amount is
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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 Arbitra-tion
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 determina-tion 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
determi-nation 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 en-forced 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
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(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
(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.
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(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.
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,
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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.
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.
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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.
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.
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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 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.
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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.
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
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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.
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
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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.
(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
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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, environ-mental 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 Procedings. 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.
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.
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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.
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
47
<PAGE>
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.
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.
48
<PAGE>
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.
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:
49
<PAGE>
(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;
(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:
50
<PAGE>
(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
(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
51
<PAGE>
(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.
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, 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 Provisions 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
52
<PAGE>
"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.
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.
53
<PAGE>
(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 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.
54
<PAGE>
Sprint PCS
Management Agreement
BETWEEN
SprintCom, Inc.
AND
AirGate Wireless, L.L.C.
July 22, 1998
<PAGE>
ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Airgate Wireless, L.L.C.
Service Area: Anderson, SC BTA
Asheville-Hendersonville, NC BTA
Augusta, GA BTA
Charleston, SC BTA
Columbia, SC BTA
Florence, SC BTA
Goldsboro-Kinston, NC BTA
Greenville-Washington, NC BTA
Greenville-Spartanburg, SC BTA
Greenwood, SC BTA
Hickory-Lenoir-Morganton, NC BTA
Jacksonville, NC BTA
Myrtle Beach, SC BTA
New Bern, NC
Orangeburg, SC BTA
Roanoke Rapids, NC BTA
Rocky Mount-Wilson, NC BTA
Savannah, GA BTA
Sumler, SC BTA
Wilmington, NC BTA
Camden County, NC
Currituck County, NC
Dare County, NC
Pasquotank County, NC
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.
<PAGE>
The Management Agreement is modified as follows:
1. Microwave Relocation. Sprint PCS will bear all costs associated
with clearing spectrum under Section 2.7. The last sentence of Section 2.7 is
deleted.
2. Manager's Right to Request Review of Changes. The last sentence of
Section 9.3 is deleted. The following is added at the end of Section 9.3: "If
Sprint PCS still requires Manager to implement the change to the Program
Requirement, then Manager may either submit the matter for resolution under the
procedure set forth in Section 14 or implement the change to the Program
Requirement. If Manager does not submit the matter to resolution under Section
14 within 10 days after the Chief Officer's determination is communicated to
Manager and fails to implement the change, then Sprint PCS will have the rights
under Section 11."
3. Reimbursement. The following sentences replace the sentence in
Section 10.1.6: "If Sprint PCS pays an amount to Manager under this Section 10,
which amount is for the payment of a third party (e.g., a telecommunications
carrier), and Manager fails to make payment of such amount to said third party,
then Manager will pay to or reimburse Sprint PCS for any amounts that Sprint PCS
is subsequently required to pay to said third party, to the extent of such
previous payment made to Manager. If Manager pays an amount to Sprint PCS under
this Section 10, which amount is for the payment of a third party (e.g., a
telecommunications carrier), and Sprint PCS fails to make payment of such amount
to said third party, then Sprint PCS will pay to or reimburse Manager for any
amounts that Manager is subsequently required to pay to said third party, to the
extent such previous payment was previously made to Sprint PCS."
4. Taxes. The following sentence is added at the end of Section 10.3:
"Sprint PCS will remit to the governmental authority the amount that Sprint PCS
receives from Manager for such taxes or fees pursuant to this Section 10.3."
5. Sprint's Subsequent Acquisition of Additional Spectrum. If Sprint
PCS acquires additional spectrum in the Service Area, Sprint PCS may amend the
Service Area Exhibit to the Management Agreement in its sole discretion to add
- --------------------
such newly acquired spectrum to said Exhibit. Such additional spectrum will,
-------
upon inclusion in the Services Area Exhibit, become part of the License, as such
---------------------
term is defined in the Schedule of Definitions. If additional spectrum is
included in the Service Area Exhibit and the License is then for 20 MHz or more
--------------------
of PCS spectrum in the Service Area, then the word "executed" is replaced by the
word "terminated" in Sections 11.2.1.2 and 11.5.2. Further, Sprint PCS and
Manager may exercise any and all rights under the Management Agreement, and in
particular Sections 11.2.2.2 and 11.6.2 thereof, that are available to the
parties when a Disaggregated License is sold to Manager. If the stipulations of
this paragraph are met then the reference in Section 11.5.1 to 80% will remain
80% (i.e., the change from 80% to pursuant to * paragraph 8 of this Addendum is
amended).
6. Manager's Action for Damages or Other Relief. The sentence in
Section 11.5.3 is replaced with the following: "Manager, in accordance with the
dispute resolution process in Section 14, may seek damages or other appropriate
relief."
_______________________
* Confidential portions omitted and filed separately with the Commission.
<PAGE>
7. Sprint PCS' Action for Damages or Other Relief. The sentence in
Section 11.6.4 is replaced with the following: "Sprint PCS, in accordance with
the dispute resolution process in Section 14, may seek damages or other
appropriate relief."
8. Manager's Put Right. The reference in Section 11.5.1 to 80% is
changed to *, except as provided in paragraphs 5 and 10(b)(iii) of this
Addendum.
9. Limitation of Liability. The following is added to the end of
Section 17.14: "Notwithstanding the preceding sentence, a party may make a claim
for loss of profits in the limited case where a breach is directly attributable
to a revenue generating product or price and where the loss of profits is
directly attributable to such breach. Such a claim for loss of profits may
include only those potential profits that would have been generated during the
180-day period that begins no earlier than 90 days immediately preceding the
earlier of:
(a) the date on which suit for recovery of such lost profits is
filed, or
(b) if applicable, the date on which a dispute resolution
proceeding, pursuant to Section 14 of this agreement originates."
10. Manager's Spectrum. Manager represents that it owns the licenses
described on the attached Schedule 10.
-----------
(a) Utilization of Manager's Spectrum. Manager may not during the
Term of the Management Agreement utilize the spectrum described on Schedule
--------
10 or any other spectrum that Manager acquires or obtains the right to use
--
(collectively "Manager's Spectrum"), except as expressly permitted under
the Management Agreement.
(b) Manager's Right to and Ownership of Spectrum. The following
provisions apply if, upon termination of the Management Agreement, Manager
owns any Manager's Spectrum:
(i) Customers. If Sprint PCS does not purchase the Operating
Assets, (A) Section 11.4(d) will apply the same as if the Management
Agreement terminated because of Manager's purchase of a Disaggregated
License, and (B) subscribers of Sprint PCS may roam on Manager's
network at MFN prices and Sprint PCS may resell Manager's Products and
Services at MFN prices.
(ii) Termination Rights. Notwithstanding any provision to the
contrary, Sprint PCS may exercise any and all rights under the
Management Agreement that are available to Sprint PCS when it sells a
Disaggregated License to Manager.
________________________
* Confidential portions omitted and filed separately with the Commission.
<PAGE>
(iii) Purchase Price of Manager's Put Right. The reference in
Section 11.5.1 to 80% will remain at 80% (i.e., the change from 80% to
pursuant to * paragraph 8 of this Addendum is amended).
11. Survival Upon Termination. The provisions of Sections 10, 11.4,
11.5, 11.6, 12.2, 13, 14, 16 and 17 of the Management Agreement and paragraphs
3, 4, 5, 6, 7, 8, 9, 10 and 11 of this Addendum will survive any termination of
the Management Agreement.
12. Local Telephone Exchange Build-out. Manager and Sprint PCS
acknowledge that Manager's Build-out Plan as detailed on Exhibit 2.1 to the
-----------
Management Agreement includes full (i.e., 100%) coverage of that portion of the
following local telephone exchanges located within the Service Area:
<TABLE>
<CAPTION>
Exchange: Current NPA/NXX(s):
-------- ------------------
<S> <C>
1) Catawba 704 or 828/241
2) Elm City 919/236
3) Farmville 919/753
4) Fountaine 919/749
5) Greenville 919/355, 551, 557
6) Holly Ridge 919/329
7) Jacksonville 919/340, 346
8) Litteton 919/586
9) Pinetops 919/827
10) Richlands 919/324
11) Rocky Mt. 919/442, 443, 446
12) Sherrills Ford 704 or 828/478
13) Sneads Ferry 919/327
14) Spring Hope 919/478
15) Swansboro 919/326, 354, 339
16) Tarboro 919/641, 823
17) Wilson 919/237, 243, 291, 293
</TABLE>
Sprint PCS agrees to consider any proposals submitted by Manager to reduce the
coverage within the above listed exchange boundaries if Manager reasonably
demonstrates that such coverage is impractical or unfeasible due to extreme
conditions (i.e., impenetrable zoning restrictions, significantly low population
or traffic density, or uneconomic terrain). Sprint PCS agrees to not
unreasonably withhold consent to such proposals.
13. Ownership Retention.
(a) Manager represents and warrants that the attached Schedule 13
-----------
describes the existing ownership and voting rights of AirGate, L.L.C. and
the proforma organizational and ownership structure of Manager and the
entities labeled "Holding Company" and "Intermediate Wholly-Owned
Subsidiary" when the latter two entities are formed.
_________________________
* Confidential portions omitted and filed separately with the Commission.
<PAGE>
(b) The following events will be an Event of Termination under
Section 11.3.3 of the Management Agreement:
(i) The sale, transfer, assignment, gift or pledge (each
being a "Transfer") by W. Chris Blane, Thomas D. Body, III, David C.
Roberts, Shelley L. Spencer or the Robert E. Gourlay and Associates,
L.P. (each being a "Principal," including Robert E. Gourlay
individually, and collectively being the "Principals"), of such
Principal's equity or voting interest in any of the entities described
on Schedule 13 for five years after the date of the Management
-----------
Agreement, except that the following Transfers are permitted so long
as and to the extent they are permitted under the Management
Agreement: (A) a Transfer of a direct or indirect ownership interest
in AirGate, L.L.C. to such Principal's spouse, child, adopted child,
stepchild, grandchild, parent or sibling, or to a trust established
for the benefit of any of the foregoing, provided that the Principal
retains control of the voting rights associated with the ownership
interest and remains bound by the terms of this paragraph 13 of this
Addendum; (B) a Transfer upon the death of a Principal, provided that
such Transfer is to another Principal or to a person whose interest is
subject to paragraph 13 of this Addendum; and (C) a Transfer of up to
30% of such Principal's equity interest in each such entity after the
third anniversary of the Management Agreement, so long as after any
such Transfer, the Principals control, directly or indirectly, the
right to elect or designate more than 50% of the managers of AirGate,
L.L.C.
(ii) For five years after the date of the Management
Agreement or until an initial public offering of equity in any of the
entities described in Schedule 13, whichever occurs first, the failure
-----------
of the Principals to elect or designate or to cause to be elected or
designated Principals or other individuals acceptable to Sprint PCS,
which acceptance will not be unreasonably withheld, to hold more than
50% of the manager positions of AirGate, L.L.C. and more than 50% of
the manager positions of Manager.
(iii) The failure of AirGate, L.L.C. during the five-year
period beginning on the date of the Management Agreement to meet the
FCC's minimum voting requirements to qualify as the control group for
C or F block PCS licenses as such voting requirements exist on the
date of the Management Agreement.
(c) Upon the occurrence of an Event of Termination under
paragraph 13(b) or a breach of a representation, warranty or obligation
under paragraphs 13(a) or 14(c):
(i) Manager will be deemed to be the breaching party;
(ii) Neither Manager nor any Principal or person will have
a right to cure the breach;
<PAGE>
(iii) Sprint PCS will have the right to elect a remedy
under Sections 11.6.1 or 11.6.2, notwithstanding any of the
limitations set forth in Section 11.6 (e.g., Sprint PCS can exercise
its purchase right under Section 11.6.1 during the first two years of
the Initial Term); and
(iv) If Sprint PCS elects to purchase the Operating Assets
under Section 11.6.1, the purchase price will be the lesser of (A) an
amount equal to 72% (80% minus a 10% penalty) of the Entire Business
Value, and (B) the net invested capital directly expended on the
Service Area Network (i.e., the cash directly expended minus the cash
received in connection with the Service Area Network), adjusted to
reflect a 16% annual rate of return on the equity component thereof.
(d) The term "manager" as used in paragraphs 13(b)(i)(C) and
13(b)(ii) means a manager of Airgate Wireless, L.L.C. or of Manager, as the
case may be, elected, designated, or appointed under the terms of such
limited liability company's limited liability company agreement to manage
such limited liability company's business.
14. Noncompetition; Primary Business.
(a) Each Principal agrees that such Principal will not, for five
years after the date of the Management Agreement, directly or indirectly:
(i) engage in the wireless telecommunications
business within the Service Area, except that AirGate Wireless L.L.C.
may dispose of the four PCS licenses described on Schedule 10 in a
-----------
transaction in which the Principals receive a direct or indirect
minority interest in the acquiring company so long as no Principal is
directly or indirectly active in the management of such acquiring
company; or
(ii) engage in any other business activity that
causes such Principal's primary business activity to be other than
such Principal's involvement with Manager.
Manager will cause each Principal to enter into an agreement with
Manager that gives Manager the right to enforce the obligations of such
Principal as set forth in this paragraph 14(a).
(b) Manager will cause each person who becomes employed by
Manager at a level of senior vice president or higher, including the chief
executive officer, chief operating officer, chief financial officer, chief
marketing officer, chief network officer, chief business development
officer and chief legal officer (which refers to the top-ranking officer in
each of such areas of responsibility), or who owns directly or indirectly
at least one percent of the outstanding equity interest of AirGate, L.L.C.
or Manager, to execute an agreement with Manager that prohibits such person
from directly or indirectly engaging in the wireless telecommunications
business in the Service Area during the term of such person's employment by
Manager and for 18 months after such employee's termination or resignation.
<PAGE>
(c) Upon a breach by a Principal or a person of his or her
obligations under paragraphs 14(a) or 14(b), Manager agrees to take
immediate legal action to enforce such Principal's or person's obligations
under such paragraph and the agreement that evidences such obligation to
Manager. If Manager fails to take such immediate legal action and to
diligently pursue its rights under such agreement, then Sprint PCS may
notify Manager that an Event of Termination under Section 11.3.3 of the
Management Agreement has occurred, and the rights set forth in paragraph
13(c) will apply.
15. Expiration Upon Change of Control. The restrictions set forth in
paragraphs 13(b) and 14(a)(ii) will expire upon a Change of Control of Sprint or
Sprint PCS, other than the Change of Control contemplated as described in
Section 17.23 of the Management Agreement, if within one year of such Change in
Control at least one-third of the corporate officers of Sprint or Sprint PCS, as
the case may be, leave such company.
16. Blue Penciling. If and only if a provision of the type contained
in this sentence is enforceable in the jurisdiction in question, if any
provision contained in paragraphs 13 and 14 of this Addendum is for any reason
held to be excessively broad as to duration, geographic scope, activity or
subject in its application to any person or circumstance, such provision will,
with respect to such person or circumstance, be construed by limiting or
reducing it so as to be enforceable in such jurisdiction. If a court exercises
its rights under the preceding sentence, paragraphs 13 and 14 of this Addendum
will not be affected with respect to their application to other persons or
circumstances, unless and except to the extent a court otherwise determines. If
a court does not exercise its rights under the first sentence in this paragraph
16, unless and except to the extent the court otherwise determines, its finding
that a provision contained in paragraphs 13 or 14 of this Addendum or the
application of a provision in such paragraphs to any person or circumstance is
invalid or unenforceable, will not affect the application of the remaining
provisions in such paragraphs with respect to such person or circumstances or
the application of such provision as is held invalid or unenforceable with
respect to its application to other persons or circumstances.
17. Change in Program Requirements. In Section 7.2, the second
parenthetical is changed to reference Section 9.1 instead of Section 7.3.
[The remainder of this page is intentionally left blank.]
<PAGE>
ADDENDUM II
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: AIRGATE WIRELESS, INC.
Service Area: Anderson, SC BTA
Asheville-Henderson, NC BTA
Augusta, GA BTA
Charleston, SC BTA
Columbia, SC BTA
Florence, SC BTA
Goldsboro-Kinston, NC BTA
Greenville-Washington, NC BTA
Greenville-Spartanburg, SC BTA
Greenwood, SC BTA
Hickory-Lenoir-Morgantown, NC BTA
Jacksonville, NC BTA
Myrtle Beach, SC BTA
New Bern, NC
Orangeburg, SC BTA
Roanoke Rapids, NC BTA
Rocky Mount-Wilson, NC BTA
Savannah, GA BTA
Sumter, SC BTA
Wilmington, NC BTA
Camden County, NC
Currituck County, NC
Dare County, NC
Pasquotank County, NC
This Addendum II (this "Addendum"), dated as of May 24, 1999, contains
certain additional and supplemental terms and provisions to that certain Sprint
PCS Management Agreement entered into as of July 22, 1998, by the same parties
as this Addendum, which Management Agreement was further amended by that certain
Addendum I entered into as of July 22, 1998 (the Management 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 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 of, and Exhibits to, the Management Agreement unless
otherwise noted.
<PAGE>
The Management Agreement is modified as follows:
1. Term. In the event AirGate PCS, Inc. completes an initial public
offering of stock during the Initial Term, the Management Agreement will
automatically renew for one 10 year renewal period (the "First Renewal Term")
unless an event occurs during the Initial Term that if not cured in the time
permitted under the Management Agreement, if any, or waived by Sprint PCS, will
become an Event of Termination. If the Initial Term would expire before the
applicable cure period has expired, the Initial Term will be extended for the
duration of the cure period. If Manager cures within the applicable cure
period, or the breach is waived by Sprint PCS, regardless of whether the Initial
Term has been extended, the Management Agreement will renew, and the First
Renewal Term is deemed to have commenced on July 22, 2018. If Manager does not
cure within the applicable cure period, Sprint PCS may terminate the Management
Agreement in accordance with its terms.
2. Revised Financing Plan. Exhibit 1.7 attached to this Addendum
supersedes and replaces in its entirety Exhibit 1.7 attached to the Management
Agreement.
3. 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.
4. Amendments to Section 13 of Addendum I to Management Agreement. (i)
Manager represents and warrants that it will enter into agreements with each of
the Principals (as defined below), pursuant to which each Principal is bound to
comply with the restrictions set forth in Sections 13 and 14 of Addendum I, as
modified by this Addendum; such agreements with the Principals will contain
penalty provisions acceptable to Sprint PCS.
(ii) If AirGate PCS, Inc. does not complete an initial public offering of
stock by December 31, 1999, the following amendments to Section 13 of Addendum I
will be of no force and effect. Unless AirGate PCS, Inc. does not complete an
initial public offering of stock by December 31, 1999, Section 13 of Addendum I
to the Management Agreement will be amended to read as follows:
"(a) Manager represents and warrants that the attached Schedule 13
describes the existing ownership rights of AirGate PCS, Inc. and the
organizational and ownership structure of Manager and entities labeled
"AirGate PCS, Inc.", "AirGate Wireless, Inc." and "AGW Leasing
Company, Inc.".
(b) The following events will be deemed a material breach of a
material term of the Management Agreement under Section 11.3.3 of the
Management Agreement when a party gives written notice to the other
party of the occurrence of such event:
The sale, transfer, assignment, gift or pledge (each being a
"Transfer") by W. Chris Blane, Thomas D. Body, III, David C. Roberts,
Shelley L. Spencer or Robert E. Gourlay and Associates, L.P. (each
being a "Principal," including Robert E. Gourlay individually, and
collectively being the "Principals"), of such Principal's equity or
voting interest in any of the entities described in Schedule 13
-----------
2
<PAGE>
for five years after the date of the Management Agreement, except that
the following Transfers are permitted so long as and to the extent
they are permitted under the Management Agreement: (A) a Transfer of a
direct or indirect ownership in AirGate PCS, Inc. to such Principal's
spouse, child, adopted child, stepchild, grandchild, parent or
sibling, or to a trust established for the benefit of any of the
foregoing, provided that the Principal retains control of the voting
rights associated with the ownership interest and remains bound by the
terms of this paragraph 13 of the Addendum; (B) a Transfer upon the
death of a Principal, provided that such Transfer is to another
Principal or to a person whose interest is subject to paragraph 13 of
this Addendum; and (C) a Transfer of up to 30% of the such Principal's
equity interest in AirGate PCS, Inc. after the third anniversary of
the Management Agreement."
Sections (b)(ii) and (b)(iii) of Addendum I to the Sprint PCS
Management Agreement will be deleted in their entirety.
(c) Upon the occurrence of an Event of Termination under paragraph
13(b) or a breach of a representation, warranty or obligation under
paragraphs 13(a) or 14(c):
(i) Management will have an opportunity to cure pursuant to
Section 11.3.3 by taking immediate legal action to enforce such
Principal's or person's obligations under such paragraph and the
agreement that evidences such obligation to Manager. If Manager takes
such action immediately and pursues its rights diligently, Sprint PCS
will not terminate the Management Agreement. If Manager fails to take
such immediate legal action and to diligently pursue its rights under
such agreement, then Manager will be deemed to be the breaching party
and Sprint PCS may terminate the Management Agreement upon 30 days'
notice to Manager.
(ii) Sprint PCS will have the right to elect a remedy under
Sections 11.6.1 or 11.6.2, notwithstanding any of the limitations set
forth in Section 11.6 (e.g., Sprint PCS can exercise its purchase
right under Section 11.6.1 during the first two years of the Initial
Term).
(iii) If Sprint PCS elects to purchase the Operating Assets
under Section 11.6.1, the purchase price will be an amount equal to
72% (80% minus a 10% penalty) of the Entire Business Value.
5. Services Agreement. Section 2.1.3 of the Services Agreement is amended
to add the following paragraph:
"In the event AirGate PCS, Inc. completes an initial public offering of
stock prior to December 31, 1999, Sprint Spectrum will not provide Manager
with notice of the discontinuance of an Available Service until at least
March 31, 2001, with such discontinuance to be effective as of December 31,
2001.
3
<PAGE>
IN WITNESS WHEREOF, the parties have cause this Addendum to be executed as
of this 24th day of May, 1999.
AIRGATE WIRELESS, INC.
BY: /s/ Shelley Spencer
-------------------
Name: Shelley Spencer
---------------
Title: Corporate Secretary
-------------------
SPRINTCOM, INC.
BY: /s/ Bernie Bianchino
--------------------
Name: Bernie Bianchino
----------------
Title: Chief Business Development Officer
----------------------------------
4
<PAGE>
Exhibit 10.2
Sprint PCS
Services Agreement
BETWEEN
Sprint Spectrum L.P.
AND
AirGate wireless, L.L.C.
(JULY 22, 1998)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. ENGAGEMENT OF SPRINT SPECTRUM....................................... 1
1.1 Engagement of Sprint Spectrum................................ 1
1.2 Reliance on Manager.......................................... 1
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................................... 2
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
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............................................... 5
5.1.3 Contesting an Audit................................. 6
5.2 Confidential Information..................................... 6
6. INDEMNIFICATION..................................................... 8
6.1 Indemnification by Sprint Spectrum........................... 8
6.2 Indemnification by Manager................................... 8
6.3 Procedure.................................................... 9
6.3.1 Notice.............................................. 9
6.3.2 Defense by Indemnitor............................... 9
6.3.3 Defense by Indemnitee............................... 9
6.3.4 Costs............................................... 10
7. DISPUTE RESOLUTION.................................................. 10
7.1 Negotiation.................................................. 10
7.2 Unable to Resolve............................................ 10
7.3 Attorneys and Intent......................................... 11
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
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...................................... 11
8.4 Litigation................................................... 11
9. GENERAL PROVISIONS ................................................. 12
9.1 Notices...................................................... 11
9.2 Construction................................................. 12
9.3 Headings..................................................... 12
9.4 Further Action............................................... 12
9.5 Specific Performance......................................... 12
9.6 Entire Agreement; Amendments................................. 12
9.7 Limitation on Rights of Others............................... 13
9.8 Waivers; Remedies............................................ 12
9.9 Waiver of Jury Trial......................................... 13
9.10 Binding Effect............................................... 13
9.11 Governing Law................................................ 14
9.12 Severability................................................. 14
9.13 Limitation of Liability...................................... 14
9.14 No Assignment; Exceptions.................................... 14
9.15 Disclaimer of Agency......................................... 14
9.16 Independent Contractors...................................... 14
9.17 Expense...................................................... 15
9.18 General Terms................................................ 15
9.19 Conflicts with Management Agreement.......................... 15
9.20 Master Signature Page........................................ 15
</TABLE>
ii
<PAGE>
SPRINT PCS SERVICES AGREEMENT
This SERVICES AGREEMENT is made July 22, 1998, by and between Sprint Spectrum
L.P., a Delaware limited partnership ("Sprint Spectrum"), and AirGate Wireless,
L.L.C., a Delaware limited liability company (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.
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
<PAGE>
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.
- ----- -------------
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
2
<PAGE>
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
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.
3
<PAGE>
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.
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
<PAGE>
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:
(1) Any rights arising out of a breach of any terms of this agreement
will survive any termination of this agreement;
(2) The provisions of this Section 4.2 and Sections 5.2, 6, 7, and 9
will survive any termination of this agreement; and
(3) 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.
5.1.2 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
5
<PAGE>
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.
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
6
<PAGE>
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
(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.
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(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, 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
8
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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.
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
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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 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
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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, 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.
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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.
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
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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 the
occurrence of the event 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;
(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
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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 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
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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
(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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EXHIBIT 10.3
SPRINT SPECTRUM TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
------------------------------
THIS AGREEMENT is made as of the 22nd day of July, 1998, by and between
Sprint Spectrum L.P., a Delaware limited partnership, as licensor ("Licensor"),
and AirGate Wireless, L.L.C., a Delaware 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.
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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 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) failing 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
4
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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,
5
<PAGE>
"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.
6
<PAGE>
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
7
<PAGE>
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.
8
<PAGE>
(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
9
<PAGE>
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
10
<PAGE>
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.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
11
<PAGE>
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 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
12
<PAGE>
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.
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.
13
<PAGE>
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.
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.
14
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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.
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.
15
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PAGE>
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.
[The remainder of this page is intentionally left blank.]
16
<PAGE>
17
<PAGE>
Sprint Spectrum
Trademark and Service Mark
License Agreement
between
Sprint Spectrum L.P.
and
____________________
(date)
18
<PAGE>
EXHIBIT 10.4
SPRINT TRADEMARK AND
SERVICE MARK LICENSE AGREEMENT
------------------------------
THIS AGREEMENT is made as of the 22nd day of July, 1998, by and between
Sprint Communications Company, L.P., a Delaware limited partnership, as licensor
("Licensor"), and AirGate Wireless, L.L.C., a Delaware 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.
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(a) Grant of License. Subject to the terms and conditions hereof,
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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,
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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
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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 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:
"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
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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
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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
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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
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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
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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
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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
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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
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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
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and warrants to the other party as follows:
(a) Due Incorporation or Formation; Authorization of Agreement. Such
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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,
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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
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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
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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
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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
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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
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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
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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.
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Section 10.2 Adherence to Trademark and Service Mark Usage Guidelines.
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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
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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
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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
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
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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 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
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(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 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
13
<PAGE>
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 to
injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
14
<PAGE>
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
15
<PAGE>
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.]
16
<PAGE>
17
<PAGE>
Sprint
Trademark and Service Mark
License Agreement
between
Sprint Communications Company, L.P.
and
____________________
(date)
18
<PAGE>
EXHIBIT 10.5
MASTER SITE AGREEMENT
---------------------
THIS MASTER SITE AGREEMENT (hereinafter referred to as this "MSA"), is made
as of the 6th day of August, 1998 (the "MSA Commencement Date"), by and between
BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership, BELLSOUTH
PERSONAL COMMUNICATIONS, INC., a Delaware corporation, each doing business as
BELLSOUTH MOBILITY DCS, and their respective BellSouth Affiliates, successors
and assigns (hereinafter collectively referred to as "BellSouth") and AIRGATE
WIRELESS, L.L.C., a Delaware limited liability company, and its successors and
permitted assigns (hereinafter referred to as the "User").
WHEREAS, BellSouth is the owner of communications towers located on
property either owned, leased or licensed by BellSouth (individually, a "Tower",
collectively, "Towers");
WHEREAS, User is a provider of certain wireless digital communications
services in the United States as such services are more particularly defined in
Section 3 hereinbelow ("User's Wireless Business");
WHEREAS, BellSouth and User desire to enter into this MSA which will
establish the general terms and conditions whereby User will lease, sublease,
license or sublicense, as applicable, from BellSouth space on one or more of
BellSouth's Towers and ground space on BellSouth's land (real property owned,
leased or licensed by BellSouth with respect to each Site (as defined below)
hereinafter the "Property") for the construction of an equipment shelter or
cabinet(s) for the placement of User's communications equipment for operation of
User's Wireless Business;
WHEREAS, BellSouth and User will enter into a Site Agreement in form and
substance substantially similar to Schedule "I" attached hereto and by reference
------------
made a part hereof (individually, a "Site Agreement"; collectively, "Site
Agreements") which will establish the terms for use of a specific Site.
NOW, THEREFORE, for valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree as follows:
1. MSA. This MSA sets forth the general terms and conditions upon which
---
all Sites, as defined below, shall be leased,, subleased, licensed or
sublicensed to User. From time to time during the term hereof, User and
BellSouth may, execute Site Agreements in the form attached hereto as Schedule
--------
"I" and by reference made a part hereof. Each Site Agreement shall identify a
- ---
particular Site made subject to this MSA and more fully set forth specific terms
particular to that Site. In the event of a conflict or inconsistency between the
terms of this MSA and a Site Agreement, the terms of the Site Agreement shall
govern and control for that Site.
2. Demise.
-------
(a) Leasing Program. Subject to the following terms and conditions,
---------------
BellSouth hereby agrees to lease, sublease, license or sublicense, as
applicable, to User certain space on one or more of BellSouth's Towers together
with sufficient space on the Property with easements for access and utilities.
User's use of the Tower and Property shall be limited to the Tower and Property,
together with easements for access and utilities described and depicted in
Exhibit "A" to
- -----------
<PAGE>
each Site Agreement (the Property, the space upon BellSouth's Tower utilized by
User and any easements providing access and utilities to the Property are
sometimes referred to herein individually as a "Site" or collectively as
"Sites"). With respect to any Sites which User may desire to lease, sublease,
license or sublicense, as applicable, User shall give written notice to
BellSouth at the address provided in Section 27 hereof of such desire. After
receipt of written notice from User of such desire to add a Site to this MSA,
BellSouth shall provide User with a Site Application to be completed by User.
Upon receipt by BellSouth of the completed Site Application, together with any
application fee required by BellSouth, BellSouth shall evaluate the feasibility
of utilization of each Site requested by User to be added to this MSA. Except in
extraordinary circumstances, as determined by BellSouth in its discretion, the
application fee generally will not exceed $ * per Site. The Site Application
fee, once received by BellSouth shall in all instances under this MSA be applied
toward the first base rent payments due under the applicable Site Agreement.
BellSouth will use reasonable best efforts to respond promptly to initial
requests for a Site Application and to Site Applications submitted by User.
BellSouth may decline additional Sites for any reason whatsoever. If BellSouth
desires to lease or to license any Site to User, BellSouth shall deliver to User
three (3) completed, unexecuted counterparts of a Site Agreement pertaining to
such Site. User shall have a period of fifteen (15) business days from User's
receipt of such Site Agreement to execute and return same to BellSouth. If User
fails to return all counterparts of the Site Agreement, properly executed and
unmodified by User, together with the Site Cost Reimbursement Amount (as defined
herein) set forth in the Site Agreement, within such fifteen (15) day period
such Site Agreement shall immediately be deemed null and void. Upon receipt of
the properly executed, unmodified counterparts of the Site Agreement, BellSouth
will execute same and return a fully executed original of the Site Agreement to
User, whereupon the Site Agreement shall be deemed to be added to this MSA.
(b) Right of Refusal Sites. *
----------------------
(c) Expense Amount. *
--------------
(d) Submission of Site Application in Grows of Forty. User shall make
------------------------------------------------
all reasonable efforts to submit Site Applications for Sites (other than First
Right Sites submitted following notification of a potential third-party user as
described in Section 2(b) above) in groups of approximately * Site
Applications at a time, in order to make the processing of Site Agreements as
easy and efficient as possible.
(e) Minimum Site Application Requirement. User agrees that it shall
------------------------------------
submit not less than * Site Applications, together with the Site Application
fee, not later than ninety (90) days from the date of this MSA. In the event
that User fails to submit at least * Site Applications, together with related
fees, not later than ninety (90) days from the date of this MSA, BellSouth may,
at its option, terminate this MSA and retain any unspent amount of the Expense
Amount.
3. Permitted Use. Subject to the terms of this MSA and the Site
-------------
Agreement for each respective Site, User shall be permitted the non-exclusive
right to install, maintain, operate, service, and subject to BellSouth's prior
written approval, which approval shall not be unreasonably
___________________________
* Confidential portions omitted and filed separately with the Commission.
2
<PAGE>
withheld, conditioned or delayed, modify and replace its communication equipment
as more particularly described on the User's Co-Location Application attached as
Exhibit "C" to each Site Agreement (the "Facilities") at such Site, including
- -----------
without limitation, BellSouth's Tower, which Facilities shall be utilized for
the transmission and reception of wireless voice and data communications using
digital communications services technology. These shall be the only permissible
uses under this MSA and each Site Agreement, and User specifically acknowledges
that microwave facilities are not permitted uses.
4. Master Lease/License. A Site Agreement shall be subject and
--------------------
subordinate to all of the terms and conditions of the agreement pursuant to
which BellSouth has rights in and to the Property (the "Master Lease/License"),
which are incorporated in the Site Agreement by reference and a copy of which
has been or will be delivered to User and attached to the Site Agreement as
Exhibit "A-I" subject to redaction of the financial terms set forth therein or
- -------------
as otherwise required by confidentiality and non-disclosure provisions contained
therein. If applicable, BellSouth agrees to provide User with copies of all
amendments to, extensions of and renewal notices given pursuant to the Master
Lease/License, subject to redaction of the financial terms set forth therein or
as otherwise required by confidentiality and non-disclosure provisions contained
therein. BellSouth represents to User that as of the Execution Date of a Site
Agreement neither BellSouth nor BellSouth's Landlord ("Master Landlord") is in
default under the Master Lease/License.
5. Conditions Precedent.
--------------------
(a) Conditions Precedent Based On Consent of Master Landlord. If
--------------------------------------------------------
BellSouth is party to a Master Lease/License for a Site, the Site Agreement for
such Site shall be contingent upon BellSouth and/or User, as applicable, being
able to satisfy one (1) of the following conditions precedent within thirty (30)
days of the Execution Date of the Site Agreement, if required by the Master
Lease/License, in BellSouth's sole reasonable opinion.
(i) Notice to Master Landlord of [Sublease/License]. If notice
-----------------------------------------------
to the Master Landlord of the sublease, license or sublicense, is required by
the Master Lease/License, in BellSouth's sole reasonable opinion, BellSouth
shall so notify the Master Landlord and shall deliver, upon User's request,
evidence of such notification; or
(ii) Consent of Master Landlord to [Sublease/License] of Tower
---------------------------------------------------------
and Ground Space. BellSouth or User, at BellSouth's option, will obtain the
- ----------------
written consent of Master Landlord to BellSouth's [sublease, license,
sublicense] to User of Tower Space and Ground Space (as such terms are defined
in the Site Agreement), if required by the Master Lease/License, in BellSouth's
sole reasonable opinion;
(iii) Consent of Master Landlord to [Sublease/License] of Tower
---------------------------------------------------------
and Master Landlord Leasing Ground Space to User. BellSouth or User, at
- ------------------------------------------------
BellSouth's option, will obtain (aa) the written consent of Master Landlord to
BellSouth's [sublease, license, sublicense) to User of Tower Space, if required
by the Master Lease/License, in BellSouth's sole reasonable opinion, and (bb) a
written ground lease from the Master Landlord providing for the [lease/license)
of ground space from the Master Landlord to User for User's Ground Facilities
(as defined in the Site Agreement), upon terms and conditions acceptable to User
in User's sole and absolute discretion.
3
<PAGE>
BellSouth and User shall cooperate with one another in efforts to obtain the
consent of the Master Landlord pursuant to Sections 5(a)(ii) and 5(a)(iii)
hereof.
If BellSouth or User is able to obtain the written consent of the Master
Landlord to BellSouth's sublease, license or sublicense to User of Tower Space
and Ground Space pursuant to Section 5(a)(ii), (aa) BellSouth or User shall
deliver to the other a copy of such written consent, (bb) the condition
precedent to BellSouth leasing Tower Space and Ground Space to User shall be
deemed satisfied, and (cc) the term "Leased Space" as used in the Site Agreement
shall mean Tower Space and Ground Space and the term "Facilities" as used in the
Site Agreement shall mean the Tower Facilities and Ground Facilities.
If BellSouth or User is able to obtain the written consent of Master Landlord to
BellSouth's lease to User of Tower Space (but not to BellSouth's sublease,
license or sublicense to User of the Ground Space) and BellSouth or User is able
to obtain a ground lease from the Master Landlord pursuant to Section 5(a)(iii)
hereof, (aa) BellSouth or User shall deliver to the other a copy of such written
consent, (bb) User shall deliver to BellSouth a copy of the certification as to
the ground lease or license from the Master Landlord to User in substantially
the form of Exhibit D attached to the Site Agreement, (cc) the condition
---------
precedent set forth in Section 5(a)(ii) hereof shall not have been satisfied but
the condition precedent set forth in Section 5(a)(iii) hereof shall be deemed
satisfied, and (dd) the term "Leased Space" as used in the Site Agreement shall
mean Tower Space only and the term "Facilities" as used in the Site Agreement
shall mean Tower Facilities only. If BellSouth elects to obtain the ground lease
described in Section 5(a)(iii), then such ground lease shall be subject to
User's prior approval and User shall be responsible for the payment of
BellSouth's reasonable, documented costs in obtaining the ground lease and of
all rents and other sums due under the ground lease, as and when such sums are
due and payable.
If BellSouth or User is unable to satisfy the condition set forth in Section
5(a)(ii) or BellSouth or User is unable to satisfy the conditions set forth in
Section 5(a)(iii) within thirty (30) days of the Execution Date of the Site
Agreement, the Site Agreement shall automatically terminate and become null and
void, unless extended in writing by mutual consent of BellSouth and User. Upon
such termination, neither BellSouth nor User shall have any obligations to the
other except for any indemnity obligations, including without limitation,
environmental indemnity and tax obligations, arising prior to the date of
termination.
(b) Conditions Precedent to Site Commencement Date. Each Site
----------------------------------------------
Agreement is further contingent upon User being able to satisfy the following
conditions prior to the Site Commencement Date, as defined in the Site
Agreement:
(i) Approvals. User obtaining, after the Execution Date of the
---------
Site Agreement, all certificates, permits, licenses and other approvals that may
be required by any federal, state or local authorities (the "Approvals") to
permit User's intended use of the Leased Space. BellSouth shall cooperate, at
User's cost, with User in its effort to obtain such Approvals. In the event that
User notifies BellSouth that (aa) any application for an Approval is rejected,
(bb) an Approval is canceled, expires, lapses, or is otherwise withdrawn or
terminated for any reason whatsoever prior to installation of the Facilities by
User, or (cc) any application for Approval is not
4
<PAGE>
likely to be obtained or approved, as determined in User's sole discretion, the
Approvals shall be deemed to not have been obtained by User.
(ii) Radio Frequency Propagation Test. User determining, in
--------------------------------
Users's sole discretion, that the results of any radio frequency propagation
tests are satisfactory, such that User is able to use the Leased Space for
User's intended use.
(iii) Utilities and Access. User determining, in User's sole,
--------------------
reasonable discretion, that (aa) telephone and electric utilities are available
at the Leased Space or Tower of sufficient capacity to accommodate User's
Facilities and (bb) ingress and egress is available to and from the Leased Space
and to and from a publicly dedicated road.
(iv) Tower Capacity. User determining in User's sole,
--------------
reasonable discretion based on a Tower analysis satisfying the requirements of
Section 10 (ii) hereof that the Tower is of sufficient capacity to accommodate
the load requirements of User's Facilities.
(v) Title. User determining in User's sole discretion that the
-----
status of title as to the Leased Space and easements granted herein are
acceptable to User.
(vi) Hazardous Substances. User determining in User's sole
--------------------
discretion that the Leased Space and Property are free of all Hazardous
Substances, as defined in Section 15 (b) hereof.
If any one (1) of the conditions set forth above will not be satisfied as
of the Site Commencement Date of the Site Agreement, User shall have the right
to terminate the Site Agreement by giving BellSouth written notice thereof. If
User elects to terminate the Site Agreement, the Site Agreement shall terminate
as of the date BellSouth receives such notice from User and neither BellSouth
nor User shall have any further obligation under this Site Agreement except for
any indemnity obligations and User's obligation to remove its Facilities from
the Property.
(c) Site Cost Reimbursement Amount.*
------------------------------
6. Term.
----
(a) MSA Term. The MSA term shall begin on the MSA Commencement Date
--------
and shall continue until midnight of the tenth (10th) anniversary of the MSA
Commencement Date, unless terminated earlier in accordance with the terms hereof
(the "Term").
(b) Site Agreement Term and Renewal. The initial term of each Site
-------------------------------
Agreement and any renewal terms are provided in each Site Agreement.
Notwithstanding the expiration of this MSA, the terms and conditions of this MSA
shall continue to apply to each Site Agreement until the Site Agreement Term,
including any renewal terms expires or terminates. User shall have the right to
terminate a Site Agreement for a First Right Site if the conditions precedent in
Section 5 are not
___________________________
* Confidential portions omitted and filed separately with the Commission.
5
<PAGE>
satisfied through no fault of User.
7. Rent.
----
(a) Base Rent. During the Initial Term of any Site Agreement, User
---------
shall pay annual rent in equal annual installments in the amount set forth in
each Site Agreement, (a) in advance on or before the Site Commencement Date and
then on each anniversary date of the Site Commencement Date for Sites other than
First Right Sites and (b) in advance on or before the delivery of the fully
executed Site Agreement and then on each anniversary date of the Site
Commencement Date for First Right Sites. If the Site Agreement for a First
Right Site is terminated pursuant to Section 6(B), the annual rent that User had
paid shall be credited towards annual rent for a separate Tower Site leased by
User hereunder. Rent shall be payable by check, and checks shall be made
payable to the order of the BellSouth entity specified in the applicable Site
Agreement and shall be mailed to the address designated in the applicable Site
Agreement. In the event that the initial base rent is paid by User but the Site
Agreement does not commence because of a failure of a condition precedent
described in Section 5 or such other reason as described herein, through no
fault of User, BellSouth shall refund the initial annual payment of base rent.
(b) Taxes.
-----
(i) Property Taxes. User shall be responsible for the reporting
--------------
and payment when due of any tax directly related to User's ownership or
operation of the Facilities and such reporting and payment shall be made
directly to the appropriate tax authorities.
(ii) Sales Taxes. BellSouth shall be responsible for billing,
-----------
collecting, reporting, and remitting sales taxes directly related to rent
payments received pursuant to this MSA and any Site Agreement, if any. User
shall be responsible for reimbursing BellSouth for all sales taxes billed
related to rent payments received pursuant to this MSA and any Site Agreement,
such reimbursement to be due and payable within thirty (30) days of BellSouth's
delivery to User of a written invoice and copies of paid tax receipts specifying
the payments made by BellSouth.
(c) Site Agreement Renewal Terms. If and when one or more of the Site
----------------------------
Agreement Renewal Terms (as defined in the applicable Site Agreement) are
exercised by the User, upon the commencement of each Renewal Term, the annual
rent for each Renewal Term shall increase by the percent set forth in such Site
Agreement over the annual rent for the immediately preceding term.
(d) Additional Facilities. If, after the installation of the
---------------------
Facilities, User, with the, prior written approval of BellSouth as required by
Section 10 hereof, modifies the Facilities by adding additional equipment to the
Tower which materially increases the size or structural or windload on the Tower
or is in a different location on the Tower than the Facilities such that
additional rent is payable pursuant to Section 10 (vi) hereof, BellSouth and
User acknowledge that the rent for the Site shall be increased by an amount set
forth in the Site Agreement for each piece of additional equipment. If the Site
Agreement is silent on rent for additional equipment, BellSouth and User
acknowledge that the rent for the Site shall be increased by a mutually agreed
upon amount. In the event BellSouth and User cannot agree upon the increased
rent, the increase in rent shall be the fair market rental value for the
additional equipment placed on the Tower, which shall
6
<PAGE>
be determined by BellSouth and User each designating, within five (5) days of
the dispute, an independent MAI appraiser with demonstrated experience
appraising similar property and telecommunication uses and shall be the average
of the two appraisals prepared by the appraisers. Each party shall pay the fees
of its appraiser.
8. BellSouth to Locate on User's Towers. As additional consideration for
------------------------------------
BellSouth's agreement to lease, sublease, license or sublicense, as applicable,
the Site to User, User hereby agrees to lease, sublease, license or sublicense,
as applicable, to BellSouth space on User's tower and ground space adjacent to
such tower for the construction and placement of an equipment shelter or cabinet
(such tower and ground space collectively referred to as a "Reciprocal Site")
and shall be evidenced by a site agreement and master site agreement, in
substantially the same form as the Site Agreement for BellSouth's Tower and
Property and this MSA. In the event User refuses to lease, sublease, license or
sublicense, as applicable, a Reciprocal Site to BellSouth, for reasons unrelated
to User's capacity, zoning, permits, licenses and other required approvals, or
environmental issues with respect to such Reciprocal Site, BellSouth may elect
to terminate any existing Site Agreement with respect to a Site in the same
geographic market as the proposed Reciprocal Site refused by User in accordance
with the provisions set forth in Section 20(b) hereof.
9. Relocation of Facilities.
------------------------
(a) With respect to any Site, BellSouth reserves the right to change
the location of User's Facilities upon sixty (60) days written notice to User to
accommodate the communications equipment (including a change in frequency) of
BellSouth. User shall relocate or remove the Facilities, at BellSouth's
expense, within sixty (60) days of receipt of any such notice by User; provided,
however, if the relocated space is unacceptable to User, in User's reasonable
discretion, User shall have the right to terminate the Site Agreement upon
written notice to BellSouth, which termination shall be effective the earlier of
(i) the date set forth in User's termination notice, or (ii) two hundred forty
(240) days from User's receipt of BellSouth's relocation notice. Upon such
termination, the parties to the Site Agreement shall be released from all
duties, obligations, liabilities and responsibilities under the Site Agreement
except for any indemnity obligations, including without limitation,
environmental indemnity and tax obligations, and User's obligation to remove the
Facilities from the Property. In the event BellSouth needs additional capacity
at a Site for its equipment and there is no space on the Tower in which to
relocate User's Facilities, upon two hundred and forty (240) days notice,
BellSouth may terminate a Site Agreement, and thereafter the Site Agreement
shall be of no further force and effect, and except for any indemnity
obligations, including without limitation, environmental indemnity and tax
obligations, and User's obligation to remove the Facilities from the Property,
and BellSouth's obligation to reimburse User for the book value (to be
determined. at the date of termination of the Site Agreement) of any structural
enhancements made by User to such Site, the parties hereto shall be released
from all duties, obligations, liabilities and responsibilities under the Site
Agreement.
(b) In the event of a termination under this Section 9 within the
Initial Term of the terminated Site Agreement, BellSouth shall also reimburse
User a prorata portion of the Site Cost Reimbursement Amount applicable to such
Site Agreement based on a five-year proration of the full Site Cost
Reimbursement Amount. The amount reimbursed by BellSouth shall be equal to the
prorata portion of the Site Cost Reimbursement Amount from the date of
termination to the
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expiration of the Initial Term. BellSouth shall deliver such reimbursement to
User within thirty (30) days of the termination date of the Site Agreement.
10. Installation, Modification and Relocation.
-----------------------------------------
During the term of the Site Agreement, including any renewal terms, User
shall have the right, at User's expense, to install, and with BellSouth's prior
written approval, which approval shall not be unreasonably withheld, delayed or
denied, relocate and modify the Facilities on the Site. User's installation,
maintenance, relocation, modification, and removal shall be in compliance with
the following requirements:
(i) Facilities. With regard to a modification or relocation of the
----------
Facilities, User shall provide BellSouth with an updated Exhibit "C" listing all
-----------
communications equipment to be located on the Site.
(ii) Tower Analysis. User shall submit to BellSouth a completed Tower
--------------
analysis, prepared by licensed structural engineer approved by BellSouth (a)
describing any and all installations, modifications, or relocations, as the case
may be, of the Facilities on the Tower, (b) including information demonstrating
continued compliance with the Tower manufacturer's warranty requirements, if
delivered to User, current EIA/TIA standards, other legal requirements for the
Tower, and any other information reasonably requested by BellSouth and (c)
demonstrating that the installation, modification, or relocation, as the case
may be, does not exceed the load capacity of the Tower. The Tower analysis
shall be based on all Facilities listed on Exhibit "C" regardless of whether
-----------
User does not intend to initially install all Tower Facilities. If the Tower is
a monopole, User, at User's cost, shall be responsible for the installation of
any platforms and cutting of portals required to install User's Tower
Facilities; provided, however, User shall not cut any portal in the Tower if the
cutting of such portal would adversely affect the manufacturer's warranty on the
Tower, if any, or the integrity of the Tower. If the Tower is structurally
inadequate to accommodate User's proposed installation, modification or
relocation, User, subject to BellSouth's consent, which consent shall not be
unreasonably withheld or delayed, shall have the right to structurally enhance
the Tower to accommodate User's proposed installation, modification or
relocation of User's Tower Facilities, provided User complies with the,
following additional requirements:
(1) Plans and Specifications for Structural Enhancement. User
---------------------------------------------------
shall submit to BellSouth all plans and specifications for structurally
enhancing the Tower, the proposed architect, engineer and/or contractor involved
in the structural enhancement, and a structural analysis demonstrating that the
Tower, as structurally enhanced, will accommodate all equipment located on the
Tower at the time of the structural enhancement and the proposed installation,
modification, or relocation of User's Tower Facilities, as the case may be, all
of which shall be approved by BellSouth, which approval shall not be
unreasonably withheld, conditioned or delayed.
(2) Payment of Costs. User shall pay all costs incurred in
----------------
structurally enhancing the Tower including, without limitation, all material
costs, all architectural, engineering and contracting fees, all certificate,
permit, license and approval fees, and all actual, reasonable costs incurred by
BellSouth to review the plans and specifications and structural analysis.
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(3) Ownership of Structural Enhancements. Upon completion of
------------------------------------
and payment by User for the structural enhancements, such structural
enhancements shall become the property of BellSouth, and upon request, User
shall promptly provide to BellSouth any bills of sale or documentation
evidencing BellSouth's ownership of said enhancements.
(iii) Insurance. User shall provide BellSouth with insurance
---------
certificates for each Site evidencing that the insurance required by Section 17
of this MSA is in full force and effect including, without limitation, worker's
compensation insurance and the insurance required of User's contractors and
subcontractors.
(iv) Compliance with Laws. User's installation, modification or
--------------------
replacement of the Facilities on the Site and structural enhancement of the
Tower, if any, shall be in compliance with all applicable laws, regulations and
requirements of any federal, state or local authority, including without
limitation, OSHA work practice standards for performing said work. BellSouth,
at no cost to BellSouth, agrees to cooperate with User to obtain such
compliance.
(v) Availability of Space. With regard to the relocation of the
---------------------
Facilities, space on the Tower must be available at the levels, and/or space on
the ground must be available at the locations, to which User desires to relocate
and, if consent of the Master Landlord is required to relocate the Ground
Facilities, then such consent must be obtained prior to relocation.
(vi) Additional Rent. User shall pay BellSouth additional rent, in
---------------
an amount determined in accordance with the provisions of Section 7(d) hereof.
(vii) Plans and Specifications; Contractor. User shall submit to
------------------------------------
BellSouth (i) the plans and specifications, a detailed site plan and any other
construction documents setting forth the proposed construction, installation and
other work to be performed on the Site and Tower and (ii) the names of the
proposed contractors and subcontractors performing any such construction,
installation or other work, all of which shall be approved by BellSouth, such
approval not to be unreasonably withheld, conditioned or delayed. Following the
completion of any installation, modification or relocation, User shall provide
to BellSouth, at User's expense, updated, as-built drawings, initialed by User,
documenting all installed Facilities on the Site and conforming to the plans and
specifications, site plan, and any other construction documents approved by
BellSouth. The as-built drawings shall include an as-built survey locating the
Site to a monument or the Tower (the "As-Built Survey"). Upon receipt and
provided the As-Built Survey conforms to the plans and specifications, site plan
and any other construction documents approved by BellSouth, BellSouth shall
initial the As-Built Survey.
(viii) Liens. User shall keep the Site, Tower, Property and Facilities
-----
free from any liens arising from any work performed, materials furnished or
obligations incurred by or at the request of User in accordance with the
provisions of Section 16 (c) hereof, with the sole exception of any liens with
respect to equipment financing obtained by User for such Facilities provided
that such equipment financing liens do not encumber, attach to or affect, in any
manner, BellSouth's or the Master Landlord's right, title or interest in and to
all or any part of the Towers or the Property.
(ix) Pre-construction Meeting; Other Construction Meetings. Prior to
-----------------------------------------------------
commencing any installation and/or construction, a duly authorized
representative of User shall
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<PAGE>
meet with a duly authorized representative of BellSouth at the Tower site to
mutually approve the construction methods and procedures, such approval not to
be unreasonably withheld, conditioned or delayed by either party. BellSouth and
User agree to cooperate with one another in scheduling such pre-construction
meeting. In addition, BellSouth and User will meet during and upon substantial
completion of construction to mutually approve grounding and punch-list items,
respectively, and BellSouth and User agree to cooperate with one another in
scheduling such meetings.
11. Ingress and Egress.
------------------
(a) Upon the Execution Date of a Site Agreement, BellSouth hereby
grants to User, as well as User's contractors, subcontractors, agents,
affiliates, or employees, subject to the limitations set forth herein or in the
applicable Site Agreement, (i) the non-exclusive right to use the Tower, at
locations mutually agreed upon by User and BellSouth, for the term hereof for
ingress, egress, and access to the Tower Space adequate to service the Tower
Facilities and (ii) if the term "Leased Space" as used in the Site Agreement
includes Ground Space, a non-exclusive easement for the term hereof, for
ingress, egress, and access to the Leased Space, on a twenty-four (24) hours per
day, seven (7) days per week basis, across (aa) the Property in locations
mutually agreed upon by BellSouth and User and (bb) if the Property is leased or
licensed by BellSouth, across the property of the Master Landlord to the extent
and in the locations of the Master Landlord-granted ingress, egress and access
easements to BellSouth in the Master Lease/License. User or User's qualified,
insured contractors under User's direct supervision, as well as SprintCom, Inc.,
a Kansas corporation ("SprintCom") shall have access to the Tower upon twenty-
four (24) hours notice to BellSouth, which access shall be subject to the
accompaniment, at BellSouth's option, of BellSouth's field personnel to provide
an escort and/or supervision, and User shall reimburse BellSouth for BellSouth's
actual, reasonable costs related thereto within thirty (30) days of BellSouth's
delivery to User of a written invoice for such costs. The foregoing
notwithstanding, User and SprintCom shall have access to the Leased Space and
User's Facilities immediately and without notice in the event of an emergency,
and User shall notify BellSouth as soon as practicable of User's access
(SprintCom's) during such emergency. Other security measures required for a
particular Site may be set forth in the Site Agreement. User shall be
responsible to ensure that User's contractors, subcontractors, agents,
affiliates, employees, as well as SprintCom, are adequately insured prior to
gaining access to any Site. Without in any way limiting the scope of Section
18, User shall indemnify, protect and hold harmless BellSouth for any loss,
claim, or damages resulting from access to any Site permitted in this paragraph.
(b) Prior to the Execution Date of a Site Agreement, User may have
access to a Property and the Tower situated thereon only upon the execution and
delivery by BellSouth and User of an entry and testing agreement in form and
substance substantially similar to Schedule "II" attached hereto and by
-------------
reference made a part hereof (an "Entry and Testing Agreement") which will
establish the terms under which User may access the Property and Tower for the
"Permitted Activities," as defined in the applicable Entry and Testing
Agreement.
12. Utilities, Cable Runs. Upon execution of a Site Agreement, BellSouth
---------------------
hereby grants to User the non-exclusive right to use the Tower for the term
hereof to place any cable runs on the Tower, at locations mutually agreed upon
in writing by BellSouth and User, in order to service or operate the Facilities,
subject to BellSouth's prior written approval of the design and installation
10
<PAGE>
method and procedures, such approval not to be unreasonably withheld,
conditioned or delayed. If the term "Leased Space" as used in the Site Agreement
includes the Ground Space, upon execution of the Site Agreement, BellSouth
hereby grants to User a non-exclusive easement for the term hereof to place any
utilities or cable runs on or bring utilities across the Property and if the
Property is leased or licensed by BellSouth, the property of the Master Landlord
to the extent and in the locations the Master Landlord granted utility and cable
run easements. User shall pay the cost of all utility service necessary to
install, maintain and operate the Facilities. Where practicable, User shall
install a separate meter for User's use. If installation of a meter is not
practicable, the parties shall prorate such charges based on approximate actual
use within thirty (30) days of receipt by BellSouth of any invoice from an
applicable utility company. User shall obtain and pay the cost of telephone
connections. Installation of telephone service shall be in compliance with the
procedures for installation and maintenance of Facilities set forth herein.
13. User's Covenants. User covenants that from the Execution Date of a
----------------
Site Agreement, that the Facilities, and all installation, operation,
modification, relocation and maintenance associated therewith, will:
(a) In no way damage BellSouth's Tower, Property, any other structure
or accessories thereto, any Prior User's, as defined below, equipment or
facilities or any Subsequent User's, as defined below, equipment or facilities,
normal wear and tear excepted. If damage, other than normal wear and tear,
occurs and such damage is caused by User, or User's employees, agents,
contractors, or subcontractors, then User shall be liable for repair or
reimbursement of repair for said damages;
(b) Not interfere with BellSouth's operation on the Tower or the
operations of any Prior User (as defined herein). For purposes hereof, a "Prior
User" shall mean any other user of the Tower that has submitted to BellSouth a
site application in good faith prior to the submission of User's Site
Application for such Tower, which site application serves as the basis for a
written agreement for the use of the Tower by such user. In the event BellSouth
determines, in its sole discretion based on standard and accepted engineering
practices, that User's Facilities are interfering with the operation of
BellSouth's or a Prior User's equipment, authorized frequency spectrum or signal
strength, User shall, within forty-eight (48) hours of notification, take all
steps necessary to eliminate the interference, with the exception of ceasing
User's operations. If User cannot eliminate or resolve such interference within
the forty-eight (48) hour period, BellSouth shall have the right to require that
User turn off its Facilities and only turn on its Facilities during off-peak
hours specified by BellSouth in order to test whether such interference
continues or it has been satisfactorily eliminated. In the event that User is
unable to resolve or eliminate, to the satisfaction of BellSouth, such
interference within thirty (30) days from the initial notification of such
interference, User will immediately remove or cease operations of the
objectionable Facilities and BellSouth shall have the right to terminate the
applicable Site Agreement. User shall not on any Site interfere with
BellSouth's use of the Site, the provision of services to BellSouth's customers,
or the use of the Site by other Prior Users. Such interference shall be deemed
a material breach of the Site Agreement.
(c) Not interfere with the maintenance of BellSouth's Tower and the
Tower lighting system;
(d) Keep the Facilities in a state of repair acceptable to BellSouth
in BellSouth's
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<PAGE>
reasonable discretion;
(e) Identify the Facilities with metal tags fastened securely to its
bracket on the Tower and to each transmission line;
(f) Comply with all applicable rules and regulations of the Federal
Communications Commission ("FCC") and all federal, state and local laws
governing use of the Facilities on the Site;
(g) Comply with all applicable laws and ordinances and promptly
discharge or bond off any lien for labor or material within thirty (30) days of
filing same;
(h) Within thirty (30) days after the expiration or termination of a
Site Agreement, remove all Facilities from the Property and restore the Tower
and the Site to its original condition, normal wear and tear excepted. In the
event User has not removed the Facilities at the time of expiration or
termination of the Site Agreement, User shall pay rent at the then existing
monthly rate or on the existing monthly pro-rata basis if based upon a longer
payment term until such time as the removal of the Facilities is completed. In
the event User does not remove its Facilities within thirty (30) days after the
expiration or termination of the Site Agreement, BellSouth shall have the right
to remove and store the Facilities, at User's sole expense, and User shall
reimburse BellSouth for such expenses upon demand. If BellSouth removes the
Facilities, BellSouth shall not be responsible for any damage to the Facilities
during the removal and storage thereof unless caused by the gross negligence of
BellSouth. Notwithstanding the foregoing, except as may be required under any
lease or license agreement pursuant to which BellSouth has rights in and to the
Property, User shall not be required to remove any concrete pads upon which
User's equipment shelters or cabinets may have been located upon the expiration
or termination of a Site Agreement;
(i) Upon the completion of the initial installation of the Facilities
on the Site, within thirty (30) days of the completion of the relocation of the
Facilities or installation of additional Facilities on the Site and, for any
year in which User has performed a site audit on the Site or the Facilities or
User's operations at the Site have changed or been modified, by December 1 of
each year throughout the term of the Site Agreement, User shall provide
BellSouth with the number of batteries, battery model numbers, battery
manufacturers, the number of cells in each battery and the amount of sulfuric
acid in User's batteries on the Site in order for BellSouth or if, the property
is leased or licensed by BellSouth, the Master Landlord, to file such
information with the Environmental Protection Agency ("EPA") and any state and
local authorities as required by applicable law. Further, within thirty (30)
days of User's receipt of a written request from BellSouth, User will provide
BellSouth with any other information and copies of documents relating to the
Facilities located on the Site which BellSouth or Master Landlord may be
required to file with the FCC, EPA or any other governmental agencies. User
agrees to indemnify and hold BellSouth harmless from any liabilities resulting
from any inaccuracies in such information or documentation delivered by User to
BellSouth or User's failure to provide BellSouth with such information or
documentation in accordance with the provisions of this Section 13(i);
(j) Be coordinated through BellSouth and User shall cooperate with
BellSouth.
12
<PAGE>
(k) It is recognized that certain construction, such as the erection
of an antenna support structure, can have an effect on a given AM Signal Array
within certain parameters. This issue is addressed in Part 22 of the FCC Rules
and Regulations. A statement of this policy regarding structures erected or
modified by Commission Licensees in the vicinity of broadcast AM Stations is
found in the FCC Report No. CL-90-40, "Re-Publication of Standard Broadcast Re-
Radiation and Tower Construction Authorized Under Part 22 of the Rules." This
policy states that "Licensees and Permitees planning to construct or modify a
tower within 2 miles of a directional AM array or within .5 miles of a non-
directional AM tower should take certain precautions..." to protect the array of
said AM Station(s).
BellSouth has constructed its Towers in compliance with the rules and
regulations of the FCC. By User's collocation on any BellSouth Tower, User
accepts full responsibility (including financial responsibility) to take any and
all measures to comply with the FCC mandate as it pertains to modifications of
existing towers. After this mandate has been satisfied, all documentation to
substantiate compliance will be forwarded to BellSouth for records maintenance.
In the event that the applicable Tower at any Site was fitted with a
detuning apparatus to protect the array of a given AM Station, User will be
responsible for following the procedure set forth below to ensure that the Tower
remains in compliance:
Prior to actual collocation on the existing BellSouth Tower, a certified
letter will be sent from User to the AM station(s) in question advising
said station(s) of the intent to collocate on the BellSouth existing Tower.
This document will reference that BellSouth has detuned the structure with
the installation of a detuning apparatus; furthermore, the Tower will not
be increasing in electrical height and therefore this collocation will
cause no further perturbation to the AM Signal. A copy of this letter will
be furnished to BellSouth for record purposes. After the collocation has
been completed, User will ensure the proper working condition of the
detuning apparatus by retaining the appropriate BellSouth detuning
consultant to take proximity measurements of the Tower to adjust said
apparatus to include the new antenna. This course of action is necessary
because the detuning apparatus will need to be rendered inert during the
actual installation of any additional antennas to the structure. Any costs
involved in following this procedure will be the responsibility of User.
If, due to User's collocation, it becomes necessary to modify the actual
height of the Tower, it will be the responsibility of User to retain a detuning
consultant and perform a partial proof of performance report and/or
install/modify detuning apparatus to ensure the integrity of a given AM Signal.
14. BellSouth's Covenants. BellSouth covenants that during the term of a
---------------------
Site Agreement it shall:
(a) Maintain the Tower and surrounding area in a safe condition;
(b) Except as otherwise set forth in this MSA, take no action which
would adversely affect the User's proposed use of the Site;
13
<PAGE>
(c) Upon User's payment of rent and performance of its covenants, but
subject to the terms of any Master Lease/License pursuant to which BellSouth has
rights in and to the Property, and subject to any prior lien or encumbrance on
the Property, ensure User's quiet use and enjoyment of the Site;
(d) Comply with all applicable rules and regulations of the FCC, the
FAA, and all federal, state and local laws governing the Tower and Property;
(e) Not permit any Subsequent User (as defined herein) to interfere
with the operation of User's equipment, authorized frequency spectrum, signal
strength or Facilities. For purposes hereof, a "Subsequent User" shall mean any
other user of the Tower that submits to BellSouth a site application for the use
of such Tower after the submission of User's Site Application for such Tower.
In the event BellSouth determines, in its sole discretion based on standard and
accepted engineering practices, that the Subsequent User is interfering with the
operation of User's equipment, authorized frequency spectrum, signal strength or
Facilities, BellSouth shall, within forty-eight (48) hours of notification, take
all steps reasonably necessary to eliminate the interference, with the exception
of ceasing the Subsequent User's operations. If the Subsequent User cannot
eliminate or resolve such interference within the forty-eight (48) hour period,
BellSouth shall take all steps reasonably necessary to require that the
Subsequent User turn off its facilities and only turn on its facilities during
off-peak hours specified by BellSouth in order to test whether such interference
continues or it has been satisfactorily eliminated. In the event that the
Subsequent User is unable to resolve or eliminate, to the satisfaction of
BellSouth, such interference within thirty (30) days from the initial
notification of such interference, the Subsequent User will immediately remove
or cease operations of the objectionable facilities. Notwithstanding the
foregoing, if the Subsequent User is a governmental entity, BellSouth shall have
the right to give the governmental entity five (5) business days notice prior to
BellSouth being required to take any actions required by this Section 14(e) to
cure such interference. BellSouth shall give such governmental entity written
notice of the interference within two (2) business days of BellSouth's
determination that such action is reasonably necessary. BellSouth's notice to
the governmental entity shall be deemed given on the day it is delivered by hand
or on the day it is deposited with an overnight courier or the United States
mail;
(f) Not permit any Prior User or Subsequent User to damage User's
Facilities or the Site, normal wear and tear excepted. If damage by BellSouth,
a Prior User, or Subsequent User, other than normal wear and tear, occurs to
User's Facilities or the Site, then BellSouth, such Prior User, or Subsequent
User, shall be liable for repair or reimbursement of repair for such damages
caused by such party;
(g) Use reasonable efforts not to violate or breach any term of the
Master Lease/License giving the Master Landlord the right, with the passage of
time and/or giving of notice, to terminate the Master Lease/License; deliver to
User copies of every notice of default, non-renewal or non-conformance received
from Master Landlord immediately upon receipt thereof by BellSouth, and User
shall have the right, but not the obligation, to cure any such defaults of
BellSouth within the periods afforded BellSouth under the Master Lease;
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<PAGE>
(h) Provide the Master Landlord with the information necessary to
enable the Master Landlord to comply with the reporting requirements of the EPA
or any other governmental agency; provided, however, BellSouth shall have no
obligation to provide the Master Landlord with information regarding the User's
Facilities if User has not provided BellSouth with such information in
accordance with the provisions of Section 13(i) hereof.
15. Compliance with Laws.
--------------------
(a) FCC and FAA Compliance. BellSouth acknowledges that it is aware
----------------------
of its obligations under Section 303 of the Communications Act of 1934 (47
U.S.C. 303), as amended, to maintain the painting and illumination of Towers as
prescribed by the FCC. BellSouth further acknowledges that it is aware that it
is subject to forfeitures assessed by the FCC for violations of such rules and
requirements. BellSouth further acknowledges that it, and not User, shall be
responsible for compliance with all Tower or building marking and lighting
requirements which may be required by the Federal Aviation Administration
("FAA") or the FCC. BellSouth shall indemnify and hold harmless User from any
fines or other liabilities caused by BellSouth's failure to comply with such
requirements. Further, should User be cited by either the FCC or FAA because a
Tower is not in compliance within the time frame allowed by the citing agency,
User may terminate the Site Agreement for such Tower immediately upon notice to
BellSouth, or, at User's option, cause the Tower to comply with FAA or FCC
requirements and BellSouth shall be responsible for reimbursing User for its
actual, reasonable costs incurred to bring the Tower into compliance with FAA or
FCC requirements. Notwithstanding the foregoing, if FAA or FCC compliance
requires the removal and/or relocation of the Tower, User's sole remedy shall be
to terminate the Site Agreement for such Tower. Upon such termination, the
parties to the Site Agreement shall be released from all duties, obligations,
liabilities and responsibilities under the Site Agreement except for any
indemnity obligations, including without limitation, environmental indemnity and
tax obligations, and User's obligation to remove the Facilities from the
Property.
(b) Hazardous Substances. BellSouth and User agree that they will not
--------------------
use, store, dispose, or release any Hazardous Substances on the Property in
violation of any applicable federal, state or local law, regulation, or order.
"Hazardous Substances" means any hazardous material or substance which is or
becomes defined as a hazardous substance, pollutant or contaminant subject to
reporting, investigation or remediation pursuant to any federal, state or local
law, regulation or order; and any substance which is or becomes regulated by any
federal, state or local governmental authority; and any oil, petroleum products
and their by-products. BellSouth and User acknowledge that User, BellSouth,
Prior Users and Subsequent Users may each use diesel fuel and batteries in
appropriate small quantities from time to time to operate emergency back-up
generators provided that the transportation, delivery, storage, use and disposal
by User, BellSouth, a Prior User, or a Subsequent User, as the case may be, is
in compliance with all federal, state and local laws, regulations and orders.
BellSouth agrees to indemnify and save harmless the User against any and all
claims, liabilities, demands, causes of action, losses, damages, orders,
judgments, penalties, clean-up costs, costs and expenses including, without
limitation, attorneys fees and costs, arising from BellSouth's
misrepresentation, breach of warranty or breach of agreement contained in this
Section 15(b). User agrees to indemnify and save harmless BellSouth against any
and all claims, liabilities, demands, causes of action, losses, damages, orders,
judgments, penalties, clean-up costs, costs and expenses including, without
limitation, attorneys fees and costs arising from User's misrepresentation,
breach of warranty or breach of agreement, contained in this Section 15(b). The
15
<PAGE>
obligations of BellSouth and User to indemnify the other pursuant to this
Section 15(b) shall survive the termination or expiration of this MSA and each
Site Agreement.
(c) Phase I - Environmental Site Assessment. After the execution and
---------------------------------------
delivery by BellSouth and User of an Entry and Testing Agreement for a Site User
may perform a Phase I -environmental site assessment on the Property pertaining
to such Site provided such Phase I -environmental site assessment does not
involve any subsurface soils testing and further provided that User provides
BellSouth with a complete written copy of the Phase I - environmental site
assessment within ten (10) days of completion at no expense to BellSouth. Only
with BellSouth's prior written consent and subject to BellSouth's supervision
may User perform a Phase II - environmental site assessment on the Property.
(d) National Environmental Policy Act Compliance. Upon execution of a
--------------------------------------------
Site Agreement, and except as provided in a Site Agreement, BellSouth represents
that the Tower and Property comply with the applicable provisions of the
National Environmental Policy Act, 47 C.F.R. Section 1.1301 et seq. (`NEPA').
BellSouth acknowledges that it, and not the User, shall be responsible for
compliance with all applicable provisions of NEPA. BellSouth shall indemnify
and hold harmless User from any fines or other liabilities caused by BellSouth's
failure to comply with NEPA. In no event shall BellSouth be responsible to User
for lost profits, market share or consequential damages. Further, should
BellSouth be cited for noncompliance with NEPA and fail to bring the Tower
and/or Property into compliance, User, in addition to any and all other remedies
available to User at law or in equity, may terminate this Site Agreement
immediately upon written notice to BellSouth, or, at User's option, cause the
Tower to comply with NEPA and BellSouth shall be responsible for reimbursing
User for its actual, reasonable costs incurred to bring the Tower into
compliance with NEPA requirements. Notwithstanding the foregoing, if NEPA
compliance requires the removal and/or relocation of the Tower, User's sole
remedy shall be to terminate the Site Agreement for such Tower. Upon such
termination, the parties hereto shall be released from all duties, obligations,
liabilities and responsibilities under this Site Agreement except for any
indemnity obligations, including without limitation, environmental indemnity and
tax obligations, and User's obligation to remove the Facilities from the
Property.
(e) User acknowledges and understands that BellSouth has installed or
will install certain signage and/or physical barriers pertaining to radio
frequency exposure from BellSouth's transmitter and other equipment. User shall
instruct all of its personnel and its contractors performing work at the site to
read carefully all such signage, to follow the instructions provided in such
signage, and to honor all physical barriers. In no event shall User's personnel
or contractors tamper with any such signage or barriers. User shall be
responsible for placement of signage or physical barriers at or near its
facilities at the Site in order to comply with applicable FCC radio frequency
exposure guidelines. BellSouth agrees that it shall cooperate with User in
these efforts and that BellSouth shall instruct its personnel and contractors
performing work at the Site to read carefully all such signage, to follow the
instructions provided in such signage, and to honor all physical barriers. In
no event shall BellSouth's personnel or contractors tamper with any such signage
or barriers. BellSouth and User shall cooperate in good faith to minimize any
confusion or unnecessary duplication that could result from similar signage
being posted respecting other carriers' transmission equipment (if any) at or
near the Site.
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16. Assignment or Subletting; No Liens.
----------------------------------
(a) Assignment by User. User shall not assign, convey, or transfer
------------------
its interest in this MSA or any Site Agreement without first obtaining
BellSouth's written approval, which approval may not be unreasonably withheld,
conditioned, or delayed. User is not permitted to sublease or to license its
interest in this MSA or any Site Agreement. Notwithstanding the foregoing, User
has the right, without the necessity of obtaining BellSouth's consent, to assign
this MSA or any Site Agreement to a User Affiliate (as defined herein), provided
that User notifies BellSouth in writing of such assignment. For purposes
hereof, "User Affiliate" shall mean any entity which controls, is controlled by,
or is under common control with User or to any entity resulting from the merger
or consolidation of User, or to any person or entity which acquires
substantially all of the assets of User, provided that such assignee assumes in
full all of the obligations of User under this MSA and the Site Agreements that
may be assigned. Notwithstanding the above, in the event of a termination of
User's management relationship with SprintCom, User shall be permitted to assign
its rights under any Site Agreements to SprintCom, upon written notice to
BellSouth.
(b) Assignment by BellSouth. BellSouth shall have the right to assign
-----------------------
this MSA or any Site Agreement to a BellSouth Affiliate (as defined herein) or
an assignee who purchases an MSA, RSA, BTA or MTA, as defined by the FCC,
without User's prior approval, and shall notify User within a reasonable time of
any such assignment. For purposes of this MSA and the Site Agreements,
"BellSouth Affiliate" shall mean any entity which controls, is controlled by, or
is under common control with BellSouth Carolinas PCS, L.P. ("BSCP") or BellSouth
Personal Communications, Inc. ("BPCI"), to any entity resulting from the merger
or consolidation of BSCP or BPCI, or to any person or entity which acquires
substantially all of the assets of BSCP or BPCI, provided that such assignee
assumes in full all of the obligations of BellSouth, under this MSA and the Site
Agreements that may be assigned.
(c) Liens. Except as provided in Section 10 (viii) hereof, User shall
-----
keep the Property, the Tower, the Site and the Facilities free from any liens
arising from any work performed, materials furnished or obligations incurred by
or at the request of User. All persons either contracting with User or
furnishing or rendering labor and materials to User shall be notified in writing
by User that they must look only to User for payment for any labor or materials.
If any lien is filed against the Property, the Tower, the Site or the Facilities
as a result of the acts or omissions of User, its employees, agents or
contractors or subcontractors, User shall discharge it or bond it off within
thirty (30) days after User learns that the lien has been filed.
17. Insurance, Risk of Loss.
-----------------------
(a) User's Insurance. Prior to installation of the Facilities and to
----------------
having access to a Site and at all times during the term of a Site Agreement,
User shall provide proof of insurance for each individual Site, as outlined
below, satisfactory to BellSouth, and maintain the coverages specified below
during the term of a Site Agreement and until all Facilities are removed from
the Site following termination of a Site Agreement:
(i) Commercial General Liability Insurance with limits of not
less than $2,000,000 per occurrence and in the aggregate.
17
<PAGE>
(ii) Workers' Compensation coverage in the statutory amount.
(iii) Employers Liability coverage with limits of not less than
$500,000 each accident, $500,000 each employee by disease and $500,000 policy
limit by disease.
(iv) Automobile Liability for Owned and Non-Owned Autos,
Combined Single Limit of $1,000,000.
(v) All Risk Insurance with Replacement Value coverage of
User's Facilities and personal property located on the Property.
(b) BellSouth's Insurance. At all times during the term of a Site
---------------------
Agreement, BellSouth shall maintain insurance for such Site as outlined below:
(i) Commercial General Liability Insurance with limits of not
less than $2,000,000 per occurrence and in the aggregate.
(ii) Workers' Compensation coverage in the statutory amount.
(iii) Employers Liability coverage with limits of not less than
$500,000 each accident, $500,000 each employee by disease and $500,000 policy
limit by disease.
(iv) Automobile Liability for Owned and Non-Owned Autos,
Combined Single Limit of $1,000,000.
(v) All Risk Insurance with Replacement Value coverage of the
Tower and BellSouth's personal property located on the Property.
(c) Additional Insured. BellSouth shall be named as additional
------------------
insured on the policy listed in Section 17(a)(i) above. User shall be named as
additional insured on the policy listed in Section 17(b)(i) above.
Additionally, each party shall obtain a waiver of subrogation from its insurer
on the policies listed in Section 17(a)(i) and Section (b)(i) above. BellSouth
and User may satisfy this requirement by obtaining appropriate endorsements to
any master or blanket policy of liability insurance User or BellSouth, as
applicable, may maintain. No policy may be cancelable or subject to reduction
of coverage except after thirty (30) days prior written notice to BellSouth or
User.
(d) Third Parties. User and BellSouth shall require their respective
-------------
contractors and subcontractors to `carry workers' compensation insurance and
adequate liability insurance in conformity with the minimum requirements listed
above.
(e) Risk of Loss; Limitation of Liability. Notwithstanding anything
-------------------------------------
herein to the contrary, each party shall bear the risk of loss of or damage to
the respective personal property during the term of each Site Agreement except
to the extent caused by the negligence or willful misconduct of the other party.
Neither party shall be liable for any damage to the other party's personal
property except to the extent caused by a party's negligence or willful
misconduct. Notwithstanding anything herein to the contrary, the parties shall
not be liable for any consequential
18
<PAGE>
or incidental damages incurred by the other party due to any malfunction,
vandalism, acts of God (including, without limitation, lightning, wind, rain,
hail, fire or storms) or any other damage resulting from any reason. In the
event the Tower or other portions of the Site are destroyed or so damaged as to
be unusable, BellSouth or User shall be entitled to elect to cancel and
terminate the Site Agreement, or in the alternative may elect to restore the
Site, in which case User and BellSouth shall remain bound hereby but shall be
entitled to an abatement of rent during the loss of use, if the User or
BellSouth has not elected to cancel the Site Agreement. In no event shall the
leasehold or other interest created by the Site Agreement be specifically
enforceable and in no event shall either BellSouth or User be responsible to any
party for consequential damages, lost business opportunities, profits or market
share.
(f) Removal of Facilities. User's obligation to provide the insurance
---------------------
coverages set forth in this Section 17 shall survive the expiration or
termination of the Site Agreement until the User's Facilities are removed from
the Property.
18. Indemnification. User does hereby agree to indemnify and save
---------------
BellSouth harmless from any and all claims, liabilities, demands, causes of
action, losses, damages, orders, judgments, penalties, costs and expenses,
including without limitation, reasonable attorneys fees and costs (i) for
property damage or personal injuries or death caused by the negligence or
willful misconduct of User, User's agents, employees, and contractors arising
out of User's occupancy of the Site or the installation, maintenance, operation
and removal of the Facilities, or (ii) resulting from the User's breach of any
term or condition of this MSA or a Site Agreement. BellSouth does hereby agree
to indemnify and save User harmless from any and all claims, liabilities,
demands, causes of action, losses, damages, orders, judgments, penalties, costs
and expenses, including without limitation, reasonable attorneys fees and costs
(i) for property damage or personal injuries or death caused by the negligence
or willful misconduct of BellSouth, BellSouth's agents, employees, and
contractors arising out of BellSouth's occupancy of the Site or the
installation, maintenance and operation of the Facilities, or (ii) resulting
from BellSouth's breach of any term or condition of this MSA or a Site
Agreement. The obligations to indemnify and hold harmless set forth in this
Section shall survive the expiration or termination of this MSA and each
respective Site Agreement.
19. Default.
-------
(a) User's Default. Each of the following shall be considered a
--------------
default of a Site Agreement by the User:
(i) The failure to pay any rent or other charges required
pursuant to this MSA and the Site Agreement within thirty (30) days after
receipt of BellSouth's written notice of such failure;
(ii) The failure to cure, within (30) days after receipt of
BellSouth's written notice thereof, any breach of any other term of this MSA or
the Site Agreement, provided, however, that if such breach is not capable of
being cured within such period but User has undertaken efforts to cure such
breach, and such breach is capable of being cured, such thirty (30) day period
shall be extended for so long as User is diligently attempting in good faith, to
cure such breach, not to exceed an additional thirty (30) calendar days (except
for promises relating to interference as set forth in Section 13 (b) hereof);
19
<PAGE>
(iii) Abandonment of the Site ("Abandonment" being defined as
user not using the Site for sixty (60) consecutive days);
(iv) The failure of User to eliminate interference problems as
set forth in Section 13(b); or
(v) If (a) User gives notice to any governmental body of its
insolvency or pending insolvency or makes an assignment for the benefit of
creditors or takes any other similar action for the protection or benefit of its
creditors, or files an answer admitting the material allegations of, or
consenting to, or defaults in answering any pleading filed with respect to the
commencement of any case or proceeding respecting User under any bankruptcy or
insolvency law, or (b) any order for relief is entered against User in any case
in bankruptcy, any order, judgment or decree is entered against User by a court
of competent jurisdiction appointing a receiver, trustee, custodian or
liquidator of User or of all or a substantial part of its assets, and such
order, judgment, or decree continues unstayed and in effect for a period of
ninety (90) consecutive days, or any proceeding for the reorganization of a
party under, or for an arrangement under, any bankruptcy or insolvency law
applicable to User is commenced whether by or against User and not dismissed
within ninety (90) days from commencement thereof.
Upon default of a Site Agreement by User, in addition to all other remedies
provided at law or in equity, BellSouth may, at its option:
(aa) elect to remove all of the Facilities by legal process,
thereby terminating the Site Agreement, and store the Facilities at User's
expense, payable upon demand by BellSouth.
(bb) elect to treat the Site Agreement in full force and effect
and shall be entitled to collect the rent provided for hereunder.
Upon the termination of a Site Agreement pursuant to Section (aa) above, the
parties hereto shall be released from all duties, obligations, liabilities and
responsibilities under the Site Agreement except for indemnity obligations,
including without limitation, environmental indemnity and tax obligations, any
obligations arising prior to the date of termination, and User's obligation to
remove its Facilities from the Property.
(b) BellSouth's Default. Each of the following shall be considered a
-------------------
default of a Site Agreement by BellSouth:
(i) The failure to cure, within (30) days after receipt of
User's written notice thereof, any breach of any other term of this MSA or the
Site Agreement, provided, however, that if such breach is not capable of being
cured within such period but BellSouth has undertaken efforts to cure such
breach, and such breach is capable of being cured, such thirty (30) day period
shall be extended for so long as BellSouth is diligently attempting in good
faith, to cure such breach, not to exceed an additional thirty (30) calendar
days (except for promises relating to interference by a Subsequent User as set
forth in Section 14 (e) which must be cured within the time frame set forth
20
<PAGE>
in Section 14 (e) and except for any breach of the Master Lease/License which
must be cured within the time frames set forth in the Master Lease/License); or
(ii) The failure of BellSouth to eliminate interference
problems as set forth in Section 14 (e).
Upon default of a Site Agreement by BellSouth, in addition to all other remedies
provided at law or in equity, User may, at its option:
(aa) elect to cure BellSouth's default, in which event User
shall have the right to offset any and all reasonable costs incurred in curing
BellSouth's default against any rent or other amounts due BellSouth; or
(bb) elect to terminate the Site Agreement as of the date of
the default and to recover from BellSouth all damages (except those for which
BellSouth is not liable under the terms of this MSA) incurred by User as a
result of such default. Upon such termination, the parties hereto shall be
released from all duties, obligations, liabilities and responsibilities under
the Site Agreement except for any indemnity obligations, including without
limitation, environmental indemnity and tax obligations, obligation to pay
damages, and User's obligation to remove the Facilities from the Property.
20. Termination.
-----------
(a) Termination of Site Agreement.
-----------------------------
(i) Termination by User. Notwithstanding anything to the
-------------------
contrary contained in this MSA, User shall be entitled to terminate a Site
Agreement after the Commencement Date, with written notice to BellSouth in the
event:
(a) any Approval is canceled, expires, lapses, or is otherwise
withdrawn or terminated through no fault of the User; or
(b) any notice by BellSouth of relocation of User's Facilities
pursuant to Section 9 hereof is unacceptable to User.
Any such termination by User shall be effective thirty (30) days after receipt
of written notice by BellSouth. Upon such termination, the Site Agreement shall
terminate and be of no further force and effect, and except for any indemnity
obligations, including without limitation, environmental indemnity and tax
obligations, and User's obligations to remove the Facilities from the Property,
the parties hereto shall be released from all duties, obligations, liabilities
and responsibilities under the Site Agreement.
(ii) Termination by BellSouth.
------------------------
(a) In the event BellSouth's right to occupy the Property is
terminated at any time following execution of a Site Agreement as a result of
the termination or expiration of the Master Lease/License, the Site Agreement
shall automatically terminate upon the effective
21
<PAGE>
termination date of the Master Lease/License and be of no further force and
effect, and except for any indemnity obligations and User's obligation to remove
the Facilities from the Property, the parties hereto shall be released from all
duties, obligations, liabilities and responsibilities under the Site Agreement.
It is specifically understood that BellSouth is under no obligation to extend
the term of the Master Lease/License, irrespective of the term stated in the
Site Agreement. The applicable Site Agreement shall expire upon the expiration
or termination of the applicable Master Lease/License
(b) In the event BellSouth needs additional capacity at a Site for its
equipment, BellSouth may terminate a Site Agreement as provided in Section 9
hereof. In the event User refuses to lease, sublease, license or sublicense, as
applicable, a Reciprocal Site to BellSouth, for reasons unrelated to User's
capacity, zoning, permits, licenses and other required approvals, or
environmental issues with respect to such Reciprocal Site, BellSouth may elect
to terminate any existing Site Agreement in the same geographic market as the
proposed Reciprocal Site refused by User, effective thirty (30) days after
receipt by User of written notice. Upon termination of any Site Agreement, such
terminated Site Agreement shall be of no further force and effect and the
parties hereto shall be released from all duties, obligations, liabilities, and
responsibilities under the terminated Site Agreement, except for indemnity
obligations, User's obligation to remove the Facilities from the terminated
Site, and User's obligations set forth in Section 13 (h) hereof. In the event
User does not remove its Facilities from the terminated Site as provided in
Section 9 or Section 13 (h) hereof, as applicable, BellSouth shall have the
right to remove and store User's Facilities, at User's expense.
21. Condemnation. If the whole of the Property or Site which are subject
------------
of any Site Agreement or so much thereof as to interfere with the use thereof
shall be taken or condemned by any competent authority for any public or quasi-
public use or purpose, such Site Agreement shall terminate as of the date when
possession is taken. In such event, BellSouth shall be under no liability to
User resulting from such condemnation and User shall be entitled to no part of
any condemnation award except so much thereof as the condemning authority
expressly allocates to that portion of the proceeds directly attributable to the
value of User's Facilities on the Tower, its leasehold interest in the Site, and
moving or relocation expenses incurred by User. BellSouth shall provide User
with notice in writing of any actual or threatened condemnation proceedings
promptly after receiving notice thereof. Upon such termination, the parties to
the Site Agreement shall be released from all duties, obligations, liabilities
and responsibilities under the Site Agreement except for any indemnity
obligations, including without limitation, environmental indemnity and tax
obligations, and User's obligation to remove the Facilities from the Property.
22. Mortgage by BellSouth. This MSA and each Site Agreement is and shall
---------------------
be subject to a security interest or mortgage which might now or hereafter
constitute a lien upon the Site. This MSA and each Site Agreement is and shall
be subject and subordinate in all respects to any and all such mortgages on the
Site and to all renewals, modifications, consolidations, replacements and
extensions thereof. In the event any proceedings are brought for foreclosure or
in the event of the exercise of the power of sale under any mortgage covering
any Site, the User shall attorn to the purchaser upon any such foreclosure or
sale and recognize such purchaser as the lessor/licensor, as applicable, under
this MSA and the applicable Site Agreement(s); provided that so long as the User
is not in default hereunder, this MSA and the applicable Site Agreement(s) shall
remain in full force
22
<PAGE>
and effect, and User's use and occupancy pursuant to this MSA and applicable
Site Agreements shall not be disturbed.
23. Entirety. This MSA and Site Agreement, including all Schedules and
--------
Exhibits hereto and thereto, constitute the entire agreement between BellSouth
and User and any modification to the MSA or Site Agreement, any Schedule or
Exhibits hereto or thereto, must, in order to be effective, be in writing,
signed by authorized representatives of each party.
24. Waiver. Failure or delay on the part of either party to exercise any
------
right, power, privilege or remedy hereunder shall not operate as a waiver
thereof; nor shall any single or partial exercise of any right under this MSA of
under a Site Agreement preclude any other or further exercise thereof or the
exercise of any other right.
25. Binding Effect. This MSA and the Site Agreements shall extend to and
--------------
bind the heirs, personal representatives, successors, permitted assigns, or its
successors in interest of the parties hereto.
26. Governing Law. This MSA and each Site Agreement and performance
-------------
hereunder and thereunder shall be governed, interpreted, construed and regulated
by the laws of the state where the Property and Site are located.
27. Notice. All notices hereunder shall be deemed validly given if sent
------
by certified mail, return receipt requested, or with a nationally recognized
courier which provides notice of receipt, postage fully prepaid, addressed as
follows, or to such other addresses as may be given from either party in writing
to the other:
BellSouth: BellSouth Personal Communications, Inc.
3353 Peachtree Road,
N.E., Suite 300
Atlanta, GA 30326
Attn: Real Estate Manager
with a copy to:
BellSouth Personal Communications, Inc.
3353 Peachtree Road,
N.E., Suite 400
Atlanta, GA 30326
Attn: Legal Department
User: AirGate Wireless, LLC
4201 Congress Street, Suite 400
Charlotte, NC 28209
Attn: Chief Operating Officer
with a copy to:
AirGate Wireless, LLC
230 Peachtree Street, Suite 1700
23
<PAGE>
Atlanta, GA 30303
Attn: Legal Department
28. Headings. Section headings in this MSA and in each Site Agreement are
--------
included for the convenience of reference only and shall not constitute a part
of this MSA or the Site Agreement for any other purpose.
29. Brokerage. User warrants and represents to BellSouth that it has not
---------
dealt with a real estate agent or broker with respect to this MSA or any Site
Agreement, and shall hold BellSouth harmless against all claims by any real
estate agent or broker claiming a commission hereunder or thereunder on behalf
of User. BellSouth warrants and represents to User that except for GlobalComm,
Inc., it has not dealt with a real estate agent or broker with respect to this
MSA or any Site Agreement, and shall hold User harmless against all claims by
any real estate agent or broker claiming a commission hereunder or thereunder on
behalf of BellSouth.
30. Memorandum of Lease. At the request of User, BellSouth hereby agrees
-------------------
to execute a memorandum or short form of lease (a "Memorandum of Lease"), in
form satisfactory for recording, and such Memorandum of Lease may be filed of
record by the User, at User's sole cost, including taxes or assessments incurred
in connection therewith. The parties understand and agree that this MSA and the
Site Agreements shall not be recorded of record. User agrees to prepare,
execute and record, at its expense, a release, within thirty (30) days of
expiration or termination of a Site Agreement. In the event User fails to do
so, BellSouth has a contractual right as User's agent for this limited purpose
to prepare, execute and record such release and User shall reimburse BellSouth,
upon demand, for all expenses, including attorney fees and filing fees, incurred
in connection therewith.
31. Counterparts. This MSA and each Site Agreement may be executed in any
------------
number of counterparts, each. of which shall be an original, but all of which
together shall constitute but one instrument.
32. Authority. Each party hereby represents and warrants to the other
---------
that all necessary corporate authorizations required for execution and
performance of this MSA and each Site Agreement have been given and that the
undersigned officer is duty authorized to execute this MSA and each Site
Agreement and bind the party for which it signs.
33. Severability. If any term, covenant, condition or provision of this
------------
MSA or the Site Agreement or any application hereof or thereof shall, to any
extent, be invalid or unenforceable, the remainder of this MSA and each Site
Agreement shall not be affected thereby, and shall be valid and enforceable to
the fullest extent permitted by law.
[Remainder of page intentionally left blank.)
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year first above written.
BELLSOUTH:
----------
BELLSOUTH CAROLINAS PCS, L.P.,
a Delaware limited partnership (SEAL)
By: BellSouth Personal Communications, Inc.,
a Delaware corporation, its general partner
By: /s/ Bill C. Mayberry
-----------------------------------
Name: Bill C. Mayberry
---------------------------------
Title: Asst. Vice President-Real Estate
--------------------------------
Attest: /s/ Mark Van Dyke
-------------------------------
Name: Mark Van Dyke
---------------------------------
Title: Asst. Secretary
--------------------------------
[AFFIX CORPORATE SEAL]
BELLSOUTH PERSONAL COMMUNICATIONS, INC.,
a Delaware corporation
By: [sig]
-----------------------------------------
Name: Bill C. Mayberry
---------------------------------------
Title: Asst. Vice President-Real Estate
--------------------------------------
Attest: [sig]
-------------------------------------
Name: Mark Van Dyke
---------------------------------------
Title: Asst. Secretary
--------------------------------------
[AFFIX CORPORATE SEAL]
25
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year first above written.
USER:
-----
AIRGATE WIRELESS, L.L.C.
a Delaware limited liability company (SEAL)
By: [sig]
---------------------------
Name: W. Chris Blane
-------------------------
Title: Manager
------------------------
Witness: [sig]
----------------------
Name: Elizabeth A. Prothero
-------------------------
Title:_________________________
<PAGE>
STATE OF GEORGIA )
)
FULTON COUNTY )
I, a Notary Public for said County and State, do hereby certify that Mark
----------
Van Dyke personally appeared before me this day and acknowledged that
- -------------
he/she is Asst. Secretary of BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware
corporation, individually and as general partner of BELLSOUTH CAROLINAS PCS,
L.P., a Delaware limited partnership, and that by authority and as the act of
the corporation, individually and on behalf of the partnership, the foregoing
instrument was signed in its name by its Asst. Vice President, sealed with its
corporate seal, and attested by him/her as its Asst. Secretary.
[sig]
------------------------------------
Notary Public, State of Georgia
My Commission Expires: 4/1/02
[NOTARIAL SEAL]
STATE OF GEORGIA )
)
FULTON COUNTY )
I, a Notary Public for said County and State, do hereby certify that H.
--------
Chris Blane , a manager of AIRGATE WIRELESS, L.L.C., a Delaware limited
- --------------
liability company personally appeared before me this day and acknowledged the
due execution of the foregoing instrument on behalf of said limited liability
company.
[sig]
------------------------------------
Notary Public, State of Georgia
My Commission Expires: FEB. 12, 2001
[NOTARIAL SEAL]
<PAGE>
FIRST AMENDMENT TO MASTER SITE AGREEMENT
----------------------------------------
THIS FIRST AMENDMENT TO MASTER SITE AGREEMENT ("Amendment") is made as of
the 26 , day of March , 1999 by and between BELLSOUTH CAROLINAS PCS,
L.P., a Delaware limited partnership, BELLSOUTH PERSONAL COMMUNICATIONS, INC., a
Delaware corporation, each doing business as BELLSOUTH MOBILITY DCS, and their
respective BellSouth Affiliates, successors and assigns (hereinafter
collectively referred to as "BellSouth") and AIRGATE WIRELESS, L.L.C., a
Delaware limited liability company ("LLC"), AIRGATE WIRELESS, INC., a Delaware
corporation ("AirGate"), AGW LEASING COMPANY, INC., a Delaware corporation
("AGW"), and their respective successors and permitted assigns (AirGate and AGW
sometimes hereinafter collectively referred to as the "User"). This Amendment
is further executed by SPRINTCOM, INC., a Kansas corporation ("SprintCom"), to
evidence their consent and agreement hereto, in accordance with certain
provisions hereof.
WITNESSETH:
THAT WHEREAS, BellSouth and LLC are parties to a Master Site Agreement
dated the 6th day of August, 1998 (the "MSA"); and
WHEREAS, BellSouth and User wish to amend certain terms and provisions of
the MSA.
NOW THEREFORE, for the mutual promises herein contained and other valuable
consideration, the receipt and sufficiency of which is hereby mutually
acknowledged, BellSouth and User agree as follows:
1. Capitalized Terms. Capitalized terms contained herein and not
-----------------
otherwise defined in this Amendment shall have the remaining set forth in the
MSA.
2. Assignment and Assumption. LLC hereby assigns all of its right, title
-------------------------
and interest as "User" in and to the MSA and any Site Agreements executed as of
this date to AirGate and AGW. AirGate and AGW hereby jointly and severally
assume all of LLC's right, title and interest in and to the MSA and any Site
Agreements executed as of this date. AirGate and AGW are each parties to the
MSA as if they had been original signatories thereto. LLC is hereby released of
all obligations and liabilities under the MSA and existing Site Agreements and
AirGate and AGW expressly and jointly and severally assumes all such obligations
and liabilities.
3. Elimination of First Right Site Concept. Section 2(b) of the MSA is
---------------------------------------
deleted in its entirety. Reference in the MSA to First Right Sites shall no
longer be applicable to the MSA, except as to Sites which are First Rights Sites
for which Site Agreements have already been executed or first rights have been
previously exercised. A list of such sites is attached as Exhibit A attached
hereto and incorporated herein.
<PAGE>
4. Execution of Certain Site Agreements; Commencement Date for Initial
-------------------------------------------------------------------
Sites.
- -----
(a) User has submitted approximately * Site Applications to
BellSouth, for Sites which are referenced in Exhibit B attached hereto and
incorporated herein by reference (the "Initial Sites"). User agrees, following
the date hereof and in accordance with the terms of this Amendment, to proceed
to promptly execute Site Agreements on each of the Initial Sites.
(b) User agrees to execute and return Site Agreements on *
of the Initial Sites on or before * .
(c) User agrees to execute and return Site Agreements on *
more of the Initial Sites on or before * .
(d) User agrees to execute and return Site Agreements on the remaining
* Initial Sites on or before * .
(e) The Site Commencement Date for each Initial Site shall be the
earlier to occur of the following for the applicable Initial Site:
(i) The date when User commences the installation of its
Facilities on the Tower for that particular Initial Site; or
(ii) Forty-five (45) days from the date of full execution of the
Site Agreement for that particular Initial Site.
(f) Although the Site Commencement Date for the Initial Sites shall be
the dates stated above, the first * Dollars ($ * ) installment
of base annual rent for the Initial Sites shall not be due until the earlier to
occur of the following:
(i) the date when User commences the installation of its Facilities on
the Tower for that particular Initial Site (it being understood, however, that
User shall make such payment prior to actually beginning work at the Tower); or
(ii) * ; or
(iii) *
(g) It is contemplated that some of the Site Agreements may be
executed prior to the completion and approval by User and BellSouth of all
structural analysis, site plan/sketch, and tower elevation sketch work. Such
work shall be done in a prompt and diligent manner. In the event that the
results of any such work demonstrates that the particular Site is not suitable
and not functional for its intended purpose, then any party may terminate that
Site Agreement prior to the Site Commencement Date and that particular Site
Agreement shall terminate and be of no further force or effect. All such work
shall be completed prior to the Site Commencement Date, however, if all such
work cannot be completed by the Site Commencement Date due to circumstances
beyond
- -----------------------
*Confidential portions omitted and filed separately with the Commission.
2
<PAGE>
User's reasonable control, the parties will extend the date by which such
work shall be completed for a reasonable period of time. BellSouth shall notify
User of any such unsatisfactory results promptly upon learning of the results
and any Site Cost Reimbursement Amount paid for such Site by User shall be
credited toward its replacement as described in Section 4(h) below. User agrees
to immediately authorize the commencement of all such work.
(h) User acknowledges that it is contractually obligated to enter into
all * Site Agreements referenced above within the time frames
referenced above and to make the payment of the Site Cost Reimbursement Amount
as described below, subject to the possible termination of Site Agreements under
Section 4(g) of this Amendment. If any Site Agreements for Initial Sites are
terminated pursuant to Section 4(g) of this Amendment, User shall submit or
designate applications for additional Sites (which Sites shall be subject to the
reasonable approval of SprintCom, which approval or disapproval shall be granted
by SprintCom within five (5) business days of SprintCom's receipt of a request)
that shall become Initial Sites under this Amendment up to an aggregate number
of Initial Sites not to exceed * . In such event, any Site Cost
Reimbursement Amount or other charges previously paid shall be credited toward
the replacement Site. Without limiting BellSouth's remedies in the event of a
failure of User to execute such Site Agreements, BellSouth shall be entitled to
retain the Site Cost Reimbursement Amount.
(i) User acknowledges and agrees that all Initial Sites not terminated
under Section 4(g) of this Amendment shall become fully operational by User as
telecommunication facilities for the transmission and receipt of wireless
communications not later than * . The failure of User to meet the
foregoing date shall constitute an event of default for the applicable Site
Agreement.
5. Modification to Site Cost Reimbursement Amount Process. Section 5(c)
------------------------------------------------------
of the MSA is deleted in its entirety and replaced with the following:
(c) Site Cost Reimbursement Amount.
------------------------------
(i) User shall pay a one-time site cost reimbursement amount ("Site
Cost Reimbursement Amount") to BellSouth, paid by User to BellSouth not later
than the execution and delivery of the Site Agreement (expect as provided in
Section 5(c)(ii) below). Except in certain circumstances, as set out herein,
the Site Cost Reimbursement Amount will not exceed * Dollars ($ *
) per Site except for unusual Sites which, as a result of peculiar
characteristics required a greater capital expenditure by BellSouth (and except
as provided in Section 5(c)(ii) below). BellSouth and User acknowledge and
agree that the Site Cost Reimbursement Amount reflects an equitable sharing of
the capital costs incurred by BellSouth with respect to the construction of the
Tower and the ability of User to locate its Facilities thereon. Consequently,
the Site Cost Reimbursement Amount is independent of and in addition to, and not
in substitution or reduction of, all or any part of the Base Rent specified in
such Site Agreement, or the fair market value of the rent applicable to such
Site. In the event that User finds it necessary to structurally enhance or
otherwise to upgrade the Tower prior to locating on the Tower, any such
enhancement or upgrades shall be subject to BellSouth's prior written approval
and the costs which User incurs in performing
- -----------------------
*Confidential portions omitted and filed separately with the Commission.
3
<PAGE>
said upgrade shall be applied and credited to the Site Cost Reimbursement
Amount for that particular Site.
(ii) *
Confidential portions omitted and filed separately with the Commission.
6. Modification of Expense Amount. *
------------------------------
7. Assignment and Assumption Involving SprintCom. *
---------------------------------------------
8. Assignment. Section 16(a) of the MSA is amended to provide that User
----------
shall have the right to assign its rights in the MSA and the Site Agreements, in
whole or in part, to SprintCom without the further consent of BellSouth.
Section 16(b) of the MSA is amended to provide that BellSouth shall have the
right to assign its rights in the MSA and the Site Agreements, in whole or in
part, to any party agreeing in writing to be bound to the terms thereof without
the further consent of User or SprintCom. In the event of any such assignment,
notice shall be given to the other party.
9. Tower Enhancement. In the event that User and BellSouth find it
-----------------
necessary to structurally enhance or otherwise to upgrade the Tower prior to
User's locating on the Tower, any such proposed enhancement shall be subject to
BellSouth's prior approval in BellSouth's sole discretion. In the event that
BellSouth consents to the upgrade, the cost for such upgrade shall be shared as
between BellSouth and User as follows: (i) the first * Dollars ($
* ) shall be paid by User; (ii) for all amounts in excess of *
Dollars ($ * ), such amounts shall be shared equally between User and
BellSouth. The manner and style or upgrade, including the parties performing
the upgrade, shall be subject to BellSouth's approval, which approval shall not
be unreasonably withheld. User shall receive a credit of up to *
Dollars ($ * ) toward the first annual installment of base rent for
User's costs associated with such tower enhancement.
10. AGW as Subtenants. It is understood that AGW is a wholly owned
-----------------
subsidiary of AirGate and that AGW may be the subtenant of the various Site
Agreements. The obligations of User under the MSA and this Amendment are joint
and several obligations of AirGate and AGW. AGW has had the opportunity to
review the MSA (as amended herein) and agrees to be bound by, and agrees that it
is bound by, the terms thereof. AGW covenants that is a corporation in good
standing and is fully authorized to enter this Amendment.
11. Modification of Conditions Precedent. As it relates to the Initial
------------------------------------
Sites only, Section 5(b) of the MSA is deleted in its entirety and replaced with
the following (as it relates to all Sites other than Initial Sites, Section 5(b)
remains unchanged) (section references are to the MSA):
(b) Conditions Precedent to Site Commencement Date. Each Site Agreement is
----------------------------------------------
further contingent upon User being able to satisfy the following conditions
prior to the Site Commencement Date, as defined in the Site Agreement:
(i) Approvals. User obtaining, after the Execution Date of the Site
---------
Agreement, all certificates, permits, licenses and other approvals that may be
require by any federal, state or local authorities (the "Approvals") to permit
User's intended use of the Leased Space.
- -----------------------
*Confidential portions omitted and filed separately with the Commission.
4
<PAGE>
BellSouth shall cooperate, at User's cost, with User in its effort to obtain
such Approvals. In the event that User notifies BellSouth that (aa) any
application for an Approval is rejected following due and diligent efforts by
User to obtain the same, or (bb) any application for Approval is not likely to
be obtained or approved, as determined in User's reasonable discretion after due
and diligent efforts by User to obtain the same, the Approvals shall be deemed
to not have been obtained by User. In the event no such notification is received
by BellSouth prior to the Commencement Date, this condition shall be deemed
satisfied.
(ii) Radio Frequency Propagation Test. User determining, in User's
--------------------------------
reasonable discretion, that the results of any radio frequency propagation tests
are satisfactory, such that User is able to use the Leased Space for User's
intended use.
(iii) Utilities and Access. User determining, in User's reasonable
--------------------
discretion, that (aa) telephone and electric utilities are available at the
Leased Space or Tower of sufficient capacity to accommodate User's Facilities
and (bb) ingress and egress is available to and from the Leased Space and to and
from a publicly dedicated road.
(iv) Tower Capacity. User determining in User's reasonable discretion, on
--------------
a Tower analysis satisfying the requirements of Section 10 (ii) hereof that the
Tower is of sufficient capacity to accommodate the load requirements of User's
Facilities.
(v) Title. User determining in User's reasonable discretion that the
-----
status of title as to the Leased Space and easements granted herein are
acceptable to User.
(vi) Hazardous Substances. User determining in User's reasonable
--------------------
discretion that the Leased Space and Property are free of all Hazardous
Substances, as defined in Section 15(b) hereof.
If any one (1) of the conditions set forth above will not be satisfied,
User shall provide BellSouth with evidence satisfactory to BellSouth as to the
nature of the failure. In the event that such evidence is reasonably approved
by BellSouth, User shall have the right to terminate the Site Agreement by
giving BellSouth written notice thereof, which notice must be received on or
before the Site Commencement Date. If User elects to terminate the Site
Agreement, the Site Agreement shall terminate as of the date BellSouth receives
such notice from User and neither BellSouth nor User shall have any further
obligation under this Site Agreement except for any indemnity obligations and
User's obligation to remove its Facilities from the Property.
12. Full Force and Effect. Except as modified herein, the MSA remains
---------------------
unchanged and in full force and effect and applies to the Initial Sites subject
to this Amendment.
13. Authority. Each party hereby represents, covenants, and warrants to
---------
the other that all necessary authorizations required for the execution and
performance of this Amendment, the MSA as amended, and the Site Agreements have
been given and that the undersigned officer is duly authorized to execute this
Amendment and each Site Agreement and bind the party for which it signs.
14. Binding Effect. This Amendment shall be binding on the parties
--------------
hereto, as well as their permitted successors and assigns.
5
<PAGE>
15. Additional Provisions. This Amendment and the MSA cannot be modified
---------------------
except by a written agreement executed by BellSouth, User and SprintCom. The
headings and captions contained in this Amendment are for convenience purposes
only and shall not be considered in construing or interpreting the provisions of
this Amendment. This Amendment contains all agreements, promises, and
understandings of the parties as to the subject matter herein contained, and no
verbal agreements, promises or statements by either party shall be binding upon
the parties as to the subject matter herein. This Amendment may be executed in
several counterparts, each of which shall be treated as an original. This
Amendment has been negotiated by BellSouth and User, each had a hand in the
drafting of this Amendment, and there shall be no presumption in favor of either
party based upon the party drafting this Amendment.
16. AGW and AirGate Authority. INTENTIONALLY OMITTED.
-------------------------
6
<PAGE>
17. BellSouth Notice. Section 27 of the MSA is amended to provide that
----------------
BellSouth's notice address shall be as follows:
BellSouth Personal Communications, Inc.
1100 Peachtree Street, N.E., 8th Floor
Atlanta, Georgia 30309
Attn: Real Estate Manager
with a copy to:
BellSouth Personal Communications, Inc.
1100 Peachtree Street, N.E., Suite 910
Atlanta, Georgia 30309
Attn: Legal Department
18. Sealed Instrument. This Amendment is executed under seal. The
-----------------
parties agree, however, that at the request of either party, the Site Agreements
need not be executed under seal.
19. SprintCom Notice. For the purposes of this Amendment, SprintCom's
----------------
notice address shall be as follows:
SprintCom, Inc.
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
Attn: Corporate Secretary
with a copy to:
SprintCom, Inc.,
8140 Ward Parkway
Kansas City, Missouri 64114
Attn: Vice President Law,
General Business and Technology
Remainder of This Page Intentionally Left Blank
Signature Page Attached Hereto and Incorporated Herein by Reference
7
<PAGE>
Counterpart Signature Page to First Amendment to Master Site Agreement
----------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal
the day and year first above written.
BELLSOUTH:
BELLSOUTH CAROLINAS PCS, L.P.,
a Delaware limited partnership (SEAL)
By: BellSouth Personal Communications, Inc.,
a Delaware corporation
By:
---------------------------------
Its:
---------------------------------
Date:
---------------------------------
Attest:
----------------------------
Assistant Secretary
[CORPORATE SEAL]
Witness:
- ----------------------------
- ----------------------------
BELLSOUTH PERSONAL COMMUNICATIONS, INC.,
a Delaware corporation
By:
---------------------------
Its:
---------------------------
Date:
---------------------------
Attest:
-----------------------
Assistant Secretary
[CORPORATE SEAL]
Witness:
- -------------------------
- -------------------------
8
<PAGE>
Counterpart Signature Page to First Amendment to Master Site Agreement
----------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal
the day and year first above written.
LLC:
AIRGATE WIRELESS, L.L.C..,
a Delaware limited liability company (SEAL)
By: (SEAL)
---------------------------------
Its:
---------------------------------
Date:
---------------------------------
Witness:
- ---------------------------
- ---------------------------
9
<PAGE>
Counterpart Signature Page to First Amendment to Master Site Agreement
----------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal
the day and year first above written.
USER:
AGW LEASING COMPANY, INC.,
a Delaware corporation
By:
---------------------------------
Its:
---------------------------------
Date:
---------------------------------
Attest:
--------------------------
[_____] Secretary
[CORPORATE SEAL]
Witness:
- --------------------------
- --------------------------
AIRGATE WIRELESS, INC.,
a Delaware corporation
By:
---------------------------------
Its:
---------------------------------
Date:
---------------------------------
Attest:
--------------------------
[_____] Secretary
[CORPORATE SEAL]
Witness:
- --------------------------
- --------------------------
10
<PAGE>
Counterpart Signature Page to First Amendment to Master Site Agreement
----------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal
the day and year first above written.
SPRINTCOM:
SPRINTCOM, INC.,
a Kansas corporation
By:
---------------------------------
Its:
---------------------------------
Date:
---------------------------------
Attest:
------------------------
Assistant Secretary
[CORPORATE SEAL]
Witness:
- --------------------------
- --------------------------
11
<PAGE>
EXHIBIT 10.6
SERVICES AGREEMENT
This Agreement is entered into on this 1st day of August, 1998 by and
between AirGate Wireless, LLC ("AirGate" or "Company"), a Delaware limited
liability company, with a location at 4201 Congress Street, Suite 440,
Charlotte, NC 28209 and COMPASS Telecom Services, LLC ("COMPASS" or "Service
Provider"), a Georgia limited liability company with a location at 1230 Johnson
Ferry Road, Suite F-10, Marietta, Georgia 30068.
WHEREAS, AirGate has entered into a Sprint PCS Management Agreement with
SprintCom, Inc. to construct and operate a CDMA PCS network (the "PCS Network")
in a Service Area that consists of 20 Basic Trading Areas in North Carolina,
South Carolina and Georgia;
WHEREAS, the Sprint Agreement imposes specific technical and operational
standards for the PCS network;
WHEREAS, the Sprint Agreement includes a Build Out Plan that requires
AirGate to launch its PCS network to meet agreed to deadlines set forth in the
Build Out Plan;
WHEREAS, AirGate has selected Compass to serve as its construction and
project manager in design and construction of the PCS network; and
WHEREAS, COMPASS has provided certain Services to the Company prior to the
execution of this Agreement and has received payment therefor towards the
Contract Price.
NOW, THERFORE, in consideration of the mutual promises, covenants, and
conditions herein contained, the Company and Service Provider agree as follows:
1. DEFINITIONS.
-----------
The following terms shall have the meanings set forth below for purposes of
this Agreement:
"Additional Services" means those services not included on Exhibit A to
this Agreement that are governed by a Supplemental Statement of Services agreed
to in writing by the Company and Service Provider.
"Build Out Plan" means the Build Out Plan attached as Exhibit 2.1 to the
Sprint Agreement.
"Contract Price" means the fixed price for Services provided under this
Agreement set forth in Section 3.1.
<PAGE>
"Documentation" means all or any portion of the following: database
summaries, flow charts, program listings, and other supporting or programming
materials generated as part of this Agreement.
"PCS Network" means the CDMA PCS network to be constructed by the Company
pursuant to the Sprint Agreement.
"Services" means the tasks, performances, reports, services, Documentation,
and other items which are to be furnished by the Service Provider to the
Company pursuant to this Agreement, including all writings, inventions,
improvements or discoveries, whether or not copyrightable or patentable, which
are written, conceived, made or discovered by Service Provider and are in any
way related to the performance of this Agreement.
"Sprint Agreement" means the Sprint PCS Management Agreement between
SprintCom, Inc. and AirGate Wireless, L.L.C. dated July 22, 1998.
"Sprint Standards" means the standards and program requirements set forth
in the Sprint Agreement.
2. Services
--------
2.1 Services to be Provided. Service Provider will provide Company with
------------------------
the Services set forth in the Statement of Services attached to this Agreement
as Exhibit A (Program Management, Construction Management, Material Management &
Fixed Network). All Services will be provided on a full-time basis in a
professional manner and will be of high grade, nature and quality.
2.2 Additional Services. Services not included in an exhibit hereto shall
--------------------
be considered Additional Services governed by a supplemental statement of
services document (as provided for in Exhibit A) agreed to in writing by both
parties before the performance of any Additional Services.
3. Payment
-------
3.1 Contract Price. Company shall pay Service Provider for the Services a
---------------
fixed price of * . All of the Service prices set forth in Exhibit A,
including the prices for Additional Services, shall be fixed for the term of the
Agreement.
3.2 Included Expenses. All travel, transportation, and per diem expenses
------------------
are included within the Contract Price. Other expenses such as, but not limited
to, outside printing, overnight
_______________
* Confidential portions omitted and filed separately with the Commission.
<PAGE>
delivery and office connectivity are also included within the Contract Price,
but are subject to review and modification during the term of this Agreement.
Any modifications that result in fees to the Company in excess of the Contract
Price must be approved in advance and in writing by the Company.
3.3 Additional Expenses. Billing for any additional expense reimbursements
--------------------
must be approved by the Company and included along with normal monthly billings
for Services. Payment for expenses will be handled in the same manner as
described in Paragraph 3.1.
3.4 Credit Towards Contract Price. The Company has made payments to the
------------------------------
Service Provider for Services provided on an interim basis prior to the
execution of this Agreement as set forth on Exhibit B. These payments will be
credited towards payment of the Contract Price.
3.5 Payment Terms. Service Provider will submit invoices on a monthly
--------------
basis for payment of the portion of the Contract Price directly related to the
Services provided during the prior month. The charges will be documented and
include a detailed listing of Service Provider's time and/or expenses. The
Company will pay invoices within thirty (30) days from the date or receipt by
the Company. Service Provider shall accept no income, payment or compensation of
any kind from any third party in connection with, or related in any way to the
provision by such third party of goods or services of any kind to the Company.
3.6 Billing Address. Service Provider will submit invoices to Company at
----------------
the following address:
AirGate Wireless, LLC
230 Peachtree Street
Suite 1700
Atlanta, GA 30303
Attn: Ed Horner, President & COO
3.7 Payment Address. Payments willl be made to Service Provider at the
----------------
following address, unless otherwise requested by Service Provider:
COMPASS Telecom Services, LLC
1230 Johnson Ferry Road, Suite F-10
Marietta, GA 30068
Attn: Matt Prather or JC Massey, Vice President(s)
4. Term
----
4.1 Term. The term of this Agreement shall be for the period
----
beginning on May 1, 1998 and ending on the earlier of: (1) December 31, 2000; or
(2) completion of the Services.
<PAGE>
4.2 Renewal. This Agreement may be renewed or extended upon the written
--------
agreement of both parties.
4.3 Return of Property and Documentation upon Termination. Upon
------------------------------------------------------
termination of this Agreement, Service Provider will return to the Company all
physical property and Documentation in the possession of Service Provider
including, but not limited to, all equipment leased or purchased for Service
Provider's use during the term of this Agreement. Notwithstanding anything
herein to the contrary, any outstanding obligations for Services performed or to
be performed hereunder which extends beyond the expiration or termination of the
Agreement shall be concluded pursuant to the terms and conditions of this
Agreement.
5. Service Provider's Representations and Warranties
-------------------------------------------------
The Service Provider makes the following representations and warranties to
the Company:
5.1 Due Incorporation and Formation. Service Provider is a limited
--------------------------------
liability company duly organized, validly existing and in good standing under
the laws of (Georgia). Service Provider is qualified to do business and in good
standing in every jurisdiction in which the Services are to be performed.
Service Provider has the full power and authority to execute and deliver this
agreement and to perform its obligations under this Agreement.
5.2 Authorization of Agreements. The execution, delivery and performance
---------------------------
by the Service Provider of this Agreement are within the power of the Service
Provider and have been duly authorized by all necessary actions on the part of
the Service Provider. This Agreement constitutes the valid and binding
obligation of the Service Provider, enforceable in accordance with its terms.
5.3 Valid and Binding Obligation. Service Provider's execution of this
----------------------------
Agreement and Service Provider's performance of its obligations hereunder do not
now and will not in the future violate any agreement between Service Provider
and any third party, or any obligation of the Service Provider to any third
party, including without limitation any non-compete agreement or obligation.
5.4 Litigation. No action, suit, proceeding or investigation is pending
----------
or, to the knowledge of the Service Provider, threatened against or affecting
the Service Provider or any of its 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 Service Provider's ability to
perform its obligations under this Agreement.
5.5 Compliance with Registration and Licensing Requirements. Service
--------------------------------------------------------
Provider warrants that Service Provider has complied with all applicable
registration and licensing requirements to enable Service Provider to act as an
independent contractor under the terms of
<PAGE>
this Agreement.
5.6 Necessary Skills. Service Provider has the skill necessary to perform
----------------
the Services required pursuant to this Agreement, and all Services provided by
Service Provider shall be performed in a professional manner and shall be of a
high grade, nature and quality.
5.7 Compliance with Sprint Standards. Service Provider acknowledges that
--------------------------------
the Sprint Agreement contains Sprint Standards that the Company must meet in
constructing the PCS Network and that failure to meet the Sprint Standards could
result in a breach of the Sprint Agreement. Service Provider has reviewed the
Sprint Standards and represents that the Services will comply with the Sprint
Standards.
5.8 Compliance with Build Out Plan; Time Is of the Essence. Service
------------------------------------------------------
Provider acknowledges that the Sprint Agreement includes the Build Out Plan that
obligates the Company to complete construction of the PCS Network, and portions
thereof, in specific time frames. Service Provider has reviewed the Build Out
Plan and acknowledges that time is of the essence in performance of the Services
under this Agreement.
5.9 Subcontractors. Notwithstanding the foregoing, Company acknowledges
--------------
that Service Provider will engage certain licensed professionals to perform or
assist Service Provider in performing certain services hereunder.
6. Conflict of Interest
--------------------
During the term of this Agreement and for a period of twelve (12) months
following the expiration or termination of this Agreement, Service Provider
shall not disclose to others nor use on its own behalf or on the behalf of any
other entity for purposes of competing with Company any ideas, concepts, know-
how and techniques developed by Service Provider under this Agreement. Nothing
set forth in the preceding sentence is intended to alter or limit any other
obligations imposed by the Non-Disclosure Agreement referenced in Section 12.11
7. Indemnification
---------------
Each party hereto hereby agrees to indemnify, defend and hold harmless the
other party and its officers, directors, employees and agents from and against
all claims, damages, losses, liabilities, fines, penalties, costs and expenses
(including out-of-pocket expenses and reasonable attorneys fees) arising out of
or resulting from any claim, action or other proceeding based upon, relating to
or arising from (a) any breach of this Agreement or (b) the negligent acts or
omissions or willful misconduct of such party or its employees. Notwithstanding
the foregoing, to the extent any agreement entered into between Service Provider
and any subcontractor rendering professional services contains a provision
entitling the Company to third-party beneficiary status thereunder, Company
agrees to satisfy any claims relating to services performed by such persons
directly from such person.
<PAGE>
8. Termination
-----------
8.1 Breach. Either party may terminate this Agreement immediately upon
------
written notice if the other party is in breach of a material provision or
representation and warranty of this Agreement and the breach has not been cured
within sixty (60) days after written notice thereof.
8.2 Termination of Sprint Agreement. The Company may terminate this
-------------------------------
Agreement on thirty (30) days notice, if the Sprint Agreement is terminated.
8.3 Documentation. In the event of termination of this Agreement for any
-------------
reason whatsoever, including the conclusion of Scope of Services identified in
Exhibit A, Service Provider shall immediately, at Company's option and request,
document in detail the status of the Services that have been terminated and
either deliver to Company or dispose of, in accordance with the Company's
instructions, any materials relating to the Services, Software, Documentation in
progress or within its or any third party's possession.
8.4 Effect of Termination In the event of termination of this Agreement,
---------------------
all rights and obligations of the Company for payment for any Services not
provided as of the date of termination shall cease.
9. Regulations and Applicable Laws
-------------------------------
9.1 Compliance with Immigration Laws. Service Provider warrants and
--------------------------------
represents that it will not allow any unauthorized aliens under the Immigration
Reform and Control Act of 1986 or its implementing regulations to perform the
Services to be rendered hereunder. Service Provider shall indemnify and hold
harmless Company from and against any and all liabilities, damages, losses,
claims or expenses (including attorneys' fees) arising out of any breach by
Service Provider of this section.
9.2 Compliance with Laws. Service Provider shall, while on Company
--------------------
property or performing Services hereunder, comply with all applicable local,
state and federal laws and regulations, including, without limitation, laws and
regulations under the Occupational Safety and Health Act ("OSHA").
10. Assignment
----------
10.1 Assignment by the Company. Company may assign any or all rights and/or
-------------------------
obligations arising under this Agreement to any of its parent, subsidiaries or
affiliates and to SprintCom, Inc., its successors, affiliates and related
parties upon notice to Service Provider. Company may assign any or all rights
and/or obligations arising under this agreement to any other party upon the
consent of the Service Provider, which consent shall not be unreasonably
withheld, conditioned or delayed. Upon such assignment, the Company will be
released
<PAGE>
from any and all obligations under this Agreement.
10.2 Assignment by the Service Provider. Service Provider may of its
----------------------------------
parent, subsidiaries or affiliates upon prior consent of the Company, which
consent shall not be unreasonably withheld or delayed.
11. Insurance
---------
11.1 Minimum Levels. Service Provider, at Service Provider's expense,
--------------
shall maintain during the term of this Agreement, all insurance and/or bonds
required by law or the Agreement, including but not limited to (i) statutory
workers' compensation as required by the law of the state in which the work is
to be performed and of no less than $500,000 per accident or disease; (ii)
employer's liability with limits of at least $500,000 per person, $500,000 per
accident/injury and (iii) commercial general liability insurance with limits of
at least $1,000,000 per occurrence; (iv) business automobile insurance covering
the ownership, maintenance or use of any owned, non-owned or hired automobile
with coverage of not less than $1,000,000 combined single limit per accident for
bodily injury and property damage liability; (v) umbrella excess liability
insurance with a limit of not less than $5,000,000 combined single limit.
Service Provider agrees to name the Company as an additional insured under the
above coverage.
11.2 Proof of Insurance. Service Provider shall, at Company's request,
------------------
provide to Company certificates of insurance showing adequate proof of the
insurance required hereunder.
11.3 Subcontractor Insurance. Service Provider shall also require its
-----------------------
agents or subcontractors, if any, who may enter upon Company's premises to
maintain the insurance coverage required herein, and at Company's request,
furnish to Company adequate proof of such insurance.
11.4 Additional Insured. AirGate agrees to name COMPASS as an additional
------------------
insured on its commercial liability, builder's risk and property liability
insurance for the duration of the project. In addition, COMPASS will be named
as an additional insured by AirGate's agents, contractors, or subcontractors.
12. MISCELLANEOUS
-------------
12.1 No 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.
12.2 Independent Contractors. The parties do not intend to create any
-----------------------
partnership, joint venture or other profit-sharing arrangement, employer-
employee relationship, or any other relationship other than that expressly
provided in this Agreement.
<PAGE>
12.3 Responsibility for Taxes. Service Provider shall be solely
------------------------
responsible and the Company shall have no liability for the payment of all
taxes, including social security taxes, and any other sums due any government
entity as a result of payments made to Service Provider by Company or for which
Service Provider may otherwise be liable, and for any health, liability or life
insurance Service Provider may hold or acquire.
12.4 Limitation on Damages. Notwithstanding any provisions herein to the
---------------------
contrary, neither party shall, under any circumstances be liable for any
special, incidental or consequential damages.
12.5 Entire Agreement. This Agreement and the exhibits hereto reflect the
----------------
entire agreement of the parties and supersede all other agreements (excluding
the existing Non Disclosure Agreement) or understandings whether written or oral
in connection with the subject matter of the Agreement.
12.6 Governing Law. This Agreement shall be construed both as to validity
-------------
and performance and enforced in accordance with the laws of the State of Georgia
without giving reference to its principles of conflicts of law.
12.7 Attorneys' Fees. In the event of any action at law or equity between
---------------
the parties arising out of this Agreement, the prevailing party shall be
entitled to recover from the other party all reasonable costs and expenses
thereof, including reasonable attorneys' fees and other related costs.
12.8 No Waiver. The failure of either party to insist upon the strict
---------
performance of any terms, covenants or conditions of this Agreement at any time,
or in any one or more instances, or its failure to take advantage of any of its
rights hereunder, or any course of conduct or dealing shall not be construed as
a waiver or relinquishment of any such rights or conditions at any future time
and shall in no way effect the continuance in full force and effect of all the
provisions of this Agreement.
12.9 Specific Performance. The parties agree that damages may be
--------------------
inadequate to compensate for the unique losses to be suffered in the event of a
breach hereof, and that the damaged party will be entitled, in addition to any
other remedy it may have under this Agreement or at law, to seek and obtain
injunctive relief and other equitable relief, including specific performance of
the terms of this Agreement.
12.10 Marketing. Service Provider shall not advertise, market or otherwise
---------
disclose to others any information relating to this Agreement, nor commercially
use the Company's trade name or trademarks or those of any of its affiliated
companies without Company's prior written consent.
<PAGE>
12.11 Confidentiality. This Agreement shall be governed by the terms and
---------------
conditions of the Non-Disclosure Agreement executed by the parties and dated
February 19, 1998.
12.12 Arbitration. In the event of any dispute between the Service
-----------
Provider and the Company as to any matter referred to herein or as to the
interpretation of any part of this Agreement, or entitlements arising from or
related to this Agreement or as to the calculation of any amounts payable under
this Agreement, the parties agree that such dispute will not be referred to any
court but will be referred to binding arbitration. At any time a party may
submit to the other a written notice to the effect that there exists a matter
that requires resolution as between the parties and requiring that such matter
be resolved by arbitration (the "Arbitration Notice"). In the period of twenty-
one days following the receipt of the Arbitration Notice, the parties will
attempt to resolve the dispute. If the dispute is not resolved within that
period, each party to the dispute will within the next twenty-one-day period
name one arbitrator and those two arbitrators within the next ten days will name
a third who will act as chair of the arbitration panel. Once a panel of three
arbitrators is appointed, each of the parties will have fifteen days to provide
to the arbitrators and to the other party a written statement setting forth its
position, with respect to the matter in the Arbitration Notice. The arbitration
shall be held in Atlanta, Georgia and governed by the rules of the American
Arbitration Association. The arbitrators shall resolve all disputed matters
within one-hundred twenty days following their appointment and their decision
with respect to all disputed matters shall be final and binding and without
appeal and shall be enforceable pursuant to the terms thereof. The costs of any
arbitration, including the reasonable fee for the arbitrators, shall be borne by
such party or parties, and in such proportions, as shall be determined by the
arbitrators.
12.13 Material Change to Business Plan If during the term of this
--------------------------------
Agreement, there is a material change to the Company's business plan which
requires a reduction in the Services to be provided by the Service Provider, the
parties agree to negotiate in good faith to amend this Agreement on terms that
reasonably reflect the changes to the business plan.
12.14 Additional Authorizations. 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 purpose of this
Agreement.
12.15 Counterparts. 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.
<PAGE>
12.16 Separability. In case any provision of this Agreement shall be held
------------
invalid, illegal or unenforceable by a court of competent jurisdiction, the
remaining provisions hereof shall not in any way be affected or impaired
thereby, but shall, subject to the discretion of such court, remain in full
force and effect, and any invalid, illegal or unenforceable provision shall be
deemed, without further action on the part of the parties hereto, amended and
limited to the extent necessary to render the same valid, legal and enforceable.
IN WITNESS WHEREOF the parties execute this Agreement and bind themselves to its
terms as of the date of execution of this Agreement.
AirGate Wireless, LLC
/s/ Ed Horner
- ------------------------------
Ed Horner (Date)
President & COO
COMPASS Telecom Services, LLC COMPASS Telecom Services, LLC
/s/ Matt Prather /s/ Jc Massey
- ------------------------------ ------------------------------
Matt Prather (Date) JC Massey (Date)
Vice President Vice President
<PAGE>
EXHIBIT 10.8
AIRGATE PCS, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is entered into as of the 14
day of May, 1999 by and between AirGate PCS, Inc., a Delaware corporation (the
"Company") and the Indemnitees identified on the signature pages hereto
(collectively with their respective Affiliated Persons, as defined below, the
"Indemnitees").
RECITALS
The Company and Indemnitees recognize the continued difficulty in obtaining
liability insurance for its directors, officers, employees, controlling persons,
fiduciaries and other agents and affiliates, the significant increases in the
cost of such insurance and the general reductions in the coverage of such
insurance.
The Company and Indemnitees further recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees,
controlling persons, fiduciaries and other agents and affiliates to expensive
litigation risks at the same time as the availability and coverage of liability
insurance has been severely limited.
The current protection available to directors, officers, employees,
controlling persons, fiduciaries and other agents and affiliates of the Company
may not be adequate under the present circumstances, and directors, officers,
employees, controlling persons, fiduciaries and other agents and affiliates of
the Company (or persons who may be alleged or deemed to be the same), including
the Indemnitees, may not be willing to continue to serve or be associated with
the Company in such capacities without additional protection.
The Company (i) desires to attract and retain the involvement of highly
qualified persons, such as Indemnitees, to serve and be associated with the
Company, and (ii) accordingly, wishes to provide for the indemnification and
advancement of expenses to each Indemnitee to the maximum extent permitted by
law.
NOW, THEREFORE, the Company and each Indemnitee hereby agree as follows:
Section 1. Indemnification.
a. Indemnification of Expenses. The Company shall indemnify and
hold harmless each Indemnitee (including all of its respective Affiliated
Persons (as defined below)) to the fullest extent permitted by law if such
Indemnitee was or is or becomes a party to or witness or other participant in,
any threatened, pending or completed action, suit, proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or investigation that such
Indemnitee in good faith believes might lead to the institution of any such
action, suit, proceeding or alternative dispute resolution mechanism, whether
civil, criminal, administrative, investigative or other (hereinafter a "Claim")
by reason of (or arising in part out of) any event or occurrence related to the
fact that Indemnitee is or was (or is alleged to be or to have been) a director,
officer, employee, controlling person, fiduciary or other agent or affiliate of
the Company, or any subsidiary of the Company, or is or was (or is alleged to be
or to have been)
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serving at the request of the Company as a director, officer, employee,
controlling person, fiduciary or other agent or affiliate of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action or inaction on the part of such Indemnitee while serving (or
allegedly serving) in such capacity including, without limitation any and all
losses, claims, damages, expenses and liabilities, joint or several (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit proceeding or any claim asserted)
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, which relate directly or
indirectly to the registration, purchase, sale or ownership of any securities of
the Company or to any fiduciary obligation owed with respect to the Company and
its stockholders (hereinafter an "Indemnification Event"), against any and all
expenses (including attorneys' fees and all other costs, expenses and
obligations incurred in connection with investigating, defending a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate, in, any such action, suit proceeding, alternative dispute
resolution mechanism, hearing, inquiry or investigation), judgments, fines,
penalties and amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt of any payments under this Agreement
(collectively, hereinafter "Expenses"), including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses.
Such payment of Expenses shall be made by the Company as soon as practicable but
in any event no later than ten (10) days after written demand by the Indemnitee
therefor is presented to the Company.
b. Reviewing Party. Notwithstanding the foregoing, (i) the obligations of
the Company under Section 1(a) shall be subject to the condition that the
Reviewing Party (as defined in Section 10(f) hereof) shall not have determined
(in a written opinion, in any case in which the Independent Legal Counsel
referred to in Section 10(e) hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an advance payment of Expenses to Indemnitee pursuant to Section
2(a) (an "Expense Advance") shall be subject to the condition that, if, when and
to the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitees' obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(d) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 10(e) hereof. If there has
been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee
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substantively would not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation seeking
an initial determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
c. Contribution. If the indemnification provided for in Section 1(a)
above for any reason is held by a court of competent jurisdiction to be
unavailable to an Indemnitee in respect of any losses, claims, damages, expenses
or liabilities referred to therein, then the Company, in lieu of indemnifying
such Indemnitee thereunder, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, expenses or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Indemnitees, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Indemnitee in connection with the action or inaction which resulted in such
losses, claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. In connection with the registration of the Company's
securities, the relative benefits received by the Company and any Indemnitee
shall be deemed to be in the same respective proportions that the net proceeds
from the offering (before deducting expenses) received by the Company and the
Indemnitee, in each case as set forth in the table on the cover page of the
applicable prospectus, bear to the aggregate public offering price of the
securities so offered. The relative fault of the Company and any Indemnitee
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Indemnitee and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and each Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 1(c) were determined by pro
rata or per capita allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. In connection with the registration of the Company's
securities, in no event shall an Indemnitee be required to contribute any amount
under this Section 1(c) in excess of the lesser of (i) that proportion of the
total of such losses, claims, damages or liabilities indemnified against equal
to the proportion of the total securities sold under such registration statement
which is being sold by such Indemnitee or (ii) the proceeds received by such
Indemnitee from its sale of securities under such registration statement. No
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not found guilty of such fraudulent misrepresentation.
d. Survival Regardless of Investigation. The indemnification and
contribution provided for in this Section 1 will remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnitees or any
officer, director, employee, agent or controlling person of the Indemnitees.
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e. Change in Control. The Company agrees that if there is a Change in
Control (as defined below) of the Company (other than a Change in Control which
has been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control) then, with respect to all
matters thereafter arising concerning the rights of any Indemnitee to payments
of Expenses under this Agreement or any other agreement or under the Company's
Certificate of Incorporation or Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in Section 10(e) hereof) shall be selected
by the Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitees as to whether and to what extent
Indemnitees would be permitted to be indemnified under applicable law. The
Company agrees to abide by such opinion and to pay the reasonable fees of the
Independent Legal Counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
f. Mandatory Payment of Expenses. Notwithstanding any other provision of
this Agreement other than Section 8 hereof, to the extent that an Indemnitee has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in the defense of any action, suit,
proceeding, inquiry or investigation referred to in Section (1) (a) hereof or in
the defense of any claim, issue or matter therein, such Indemnitee shall be
indemnified against all Expenses incurred by such Indemnitee in connection
therewith.
Section 2. Expenses; Indemnification Procedure.
a. Advancement of Expenses. The Company shall advance all Expenses
incurred by any Indemnitee. The advances to be made hereunder shall be paid by
the Company to the Indemnitee as soon as practicable but in any event no later
than ten (10) days after written demand by such Indemnitee therefor to the
Company.
b. Notice/Cooperation by Indemnitees. Each Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitees). In addition, each Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee's power.
c. No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that any
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of the Reviewing
Party to have made a determination as to whether an Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that the Indemnitee has not met such
standard of conduct or did not have such belief, prior to the commencement of
legal proceedings
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by Indemnitee to secure a judicial determination that the Indemnitee should be
indemnified under applicable law, shall be a defense to the Indemnitee's claim
or create a presumption that the Indemnitee has not met any particular standard
of conduct or did not have any particular belief. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnitee is not so entitled.
d. Notice to Insurers. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of each Indemnitee, all amounts payable as a result of such action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies.
e. Selection of Counsel. In the event the Company shall be
obligated hereunder to pay the expenses of any Claim, the Company shall be
entitled to assume the defense of such Claim, with counsel approved by the
applicable Indemnitee, which approval shall not be unreasonably withheld, upon
the delivery to such Indemnitee of written notice of its election to do so.
After delivery of such notice, approval of such counsel by the Indemnitee and
the retention of such counsel by the Company, the Company will not be liable to
such Indemnitee under this Agreement for any fees of counsel subsequently
incurred by such Indemnitee with respect to the same Claim; provided that (i)
the Indemnitee shall have the right to employ such Indemnitee's counsel in any
such Claim at the Indemnitee's expense and (ii) if (A) the employment of counsel
by the Indemnitee has been previously authorized by the Company, (B) such
Indemnitee shall have reasonably concluded that there is a conflict of interest
between the Company and such Indemnitee in the conduct of any such defense, or
(C) the Company shall not continue to retain such counsel to defend such Claim,
then the fees and expenses of the Indemnitee's counsel shall be at the expense
of the Company. The Company shall have the right to conduct such defense as it
sees fit in its sole discretion, including the right to settle any claim against
any Indemnitee without the consent of such Indemnitee.
Section 3. Additional Indemnification Rights; Nonexclusivity.
a. Scope. The Company hereby agrees to indemnify each Indemnitee
to the fullest extent permitted by law, notwithstanding that such
indemnification may not be specifically authorized by the other provisions of
this Agreement, the Company's Certificate of Incorporation, the Company's Bylaws
or by statute. In the event of any change after the date of this Agreement, in
any applicable law, statute or rule which expands the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
employee, controlling person, agent or fiduciary, it is the intent of the
parties hereto that each Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its Board of Directors or an officer, employee, agent or
fiduciary, such change, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder except as set forth
in Section 8(a) hereof.
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b. Nonexclusivity. The indemnification provided by this Agreement
shall be in addition to any rights to which any Indemnitee may be entitled under
the Company's Certificate of Incorporation, its Bylaws, any agreement, any vote
of stockholders or disinterested directors, the General Corporation Law of the
State of Delaware, or otherwise. The indemnification provided under this
Agreement shall continue as to each Indemnitee for any action such Indemnitee
took or did not take while serving in an indemnified capacity even though the
Indemnitee may have ceased to serve in such capacity.
Section 4. No Duplication of Payments.
The Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against any Indemnitee to the extent such
Indemnitee has otherwise actually received payment (under any insurance policy,
Certificate of Incorporation, Bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder.
Section 5. Partial Indemnification.
If any Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for any portion of Expenses incurred in
connection with any Claim, but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such Expenses to which such Indemnitee is entitled.
Section 6. Mutual Acknowledgment.
The Company and each Indemnitee acknowledge that in certain instances,
Federal law or applicable public policy may prohibit the Company from
indemnifying its directors, officers, employees, controlling persons,
fiduciaries or other agents or affiliates under this Agreement or otherwise.
Each Indemnitee understands and acknowledges that the Company has undertaken or
may be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's rights under public policy to
indemnify the Indemnitees.
Section 7. Liability Insurance.
To the extent the Company maintains liability insurance applicable to
directors, officers, employees, control persons, fiduciaries or other agents and
affiliates, each Indemnitee shall be covered by such policies in such a manner
as to provide to the Indemnitee the same rights and benefits as are accorded to
the most favorably insured of the Company's directors, if such Indemnitee is a
director; or of the Company's officer's, if such Indemnitee is not a director of
the Company but is an officer; or of the Company's key employees, controlling
persons, fiduciaries or other agents or affiliates, if such Indemnitee is not an
officer or director but is a key employee, control person, fiduciary, agent or
affiliate.
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Section 8. Exceptions.
Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:
a. Excluded Action or Omissions. To indemnify any Indemnitee for
such Indemnitee's acts, omissions or transactions from which the Indemnitee may
not be relieved of liability under applicable law;
b. Claims Initiated by Indemnitee. To indemnify or advance
expenses to any Indemnitee with respect to Claims initiated or brought
voluntarily by such Indemnitee and not by way of defense, except (i) with
respect to actions or proceedings to establish or enforce a right to indemnify
under this Agreement or any other agreement or insurance policy or under the
Company's Certificate of Incorporation or Bylaws now or hereafter in effect
relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board
of Directors has approved the initiation or bringing of such Claim, or (iii) as
otherwise required under Section 145 of the Delaware General Corporation Law,
regardless of whether such Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the case
may be:
c. Lack of Good Faith. To indemnify an Indemnitee for any expenses
incurred by such Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
d. Claims Under Section 16(b). To indemnify any Indemnitee for
expenses and the payment of profits arising from the purchase and sale by such
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended or any similar successor statute.
Section 9. Period of Limitations.
No legal action shall be brought and no cause of action shall be asserted
by or in the right of the Company against any Indemnitee, such Indemnitee's
estate, spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and
any claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two-
year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall
govern.
Section 10. Construction of Certain Phrases.
a. For the purposes of this Agreement, an "Affiliated Person" of
an Indemnitee shall include any director, officer, employee, controlling person
(within the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended), agent or
fiduciary of the Indemnitee, any stockholder of the Company for whom Indemnitee
serves as a director, officer, employee, controlling person, agent
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or fiduciary, and any partnership, corporation, limited liability company,
association, joint stock company, trust or joint venture controlling, controlled
by or under common control with such a stockholder. For these purposes,
"control" means the possession, directly or indirectly, of the power to direct
management and policies of a person or entity, whether through the ownership of
voting securities, contract or otherwise.
b. For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents, fiduciaries and other Affiliated Persons, so that if Indemnitee is or
was a director, officer, employee, agent, control person, fiduciary or an
Affiliated Person of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee,
control person, agent or fiduciary or another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, such Indemnitee shall
stand in the same position under the provisions of this Agreement with respect
to the resulting or surviving corporation as such Indemnitee would have with
respect to such constituent corporation if its separate existence had continued.
c. For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on any Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent, fiduciary or other Affiliated Person with respect to
an employee benefit plan, its participants or its beneficiaries: and if any
Indemnitee acted in good faith and in a manner such Indemnitee reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, such Indemnitee shall be deemed to have acted in a manner
"not opposed to the best interests of the Company" as referred to in this
Agreement.
d. For purposes of this Agreement a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, (A) who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company's then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person, or (B) becomes the "beneficial owner" (as
defined in rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing more than 20% of the total voting power represented by
the Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
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constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
transactions) all or substantially all of the Company's assets.
e. For purposes of this Agreement, "Independent Legal Counsel"
shall mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 1(e) hereof, who shall not have otherwise performed
services for the Company or any Indemnitee within the last thee years (other
than with respect to matters concerning the right of any Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
f. For purposes of this Agreement, a "Reviewing Party" shall mean
any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which an Indemnitee
is seeking indemnification, or Independent Legal Counsel.
g. For purposes of this Agreement, "Voting Securities" shall mean
any securities of the Company that vote generally in the election of directors.
Section 11. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall constitute an original.
Section 12. Binding Effect; Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, and personal and legal representatives. The Company
shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all, or a substantial
part, of the business and/or assets of the Company, by written agreement in form
and substance satisfactory to each Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
This Agreement shall continue in effect with respect to Claims relating to
Indemnifiable Events regardless of whether any Indemnitee continues to serve as
a director, officer, employee, agent, controlling person, or fiduciary of the
Company or of any other enterprise at the Company's request.
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Section 13. Attorneys' Fees.
In the event that any action is instituted by an Indemnitee under this
Agreement or under any liability insurance policies maintained by the Company to
enforce or interpret any of the terms hereof or thereof, any Indemnitee shall be
entitled to be paid all Expenses incurred by such Indemnitee with respect to
such action, regardless of whether such Indemnitee is ultimately successful in
such action, and shall be entitled to the advancement of Expenses with respect
to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that each of the material assertions
made be such Indemnitee as a basis for such action was not made in good faith or
was frivolous. In the event of an action instituted by or in the name of the
Company under this Agreement to enforce or interpret any of the terms of this
Agreement, the Indemnitee shall be entitled to be paid all Expenses incurred by
such Indemnitee in defense of such action (including costs and expenses incurred
with respect to Indemnitee counterclaims and cross-claims made in such action),
and shall be entitled to the advancement of Expenses with respect to such
action, unless, as a part of such action, a court having jurisdiction over such
action determines that each of such Indemnitee's material defenses to such
action was made in bad faith or was frivolous.
Section 14. Notice.
All notices and other communications required or permitted hereunder shall
be in writing, shall be effective when given, and shall in any event be deemed
to be given (a) five (5) days after deposit with the U.S. Postal Service or
other applicable postal service, if delivered by first class mail, postage
prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the
business day of deposited with Federal Express or similar overnight courier,
freight prepaid, or (d) one day after the business day of delivery by facsimile
transmission, if deliverable by facsimile transmission, with copy by first class
mail, postage prepaid, and shall be addressed if to and Indemnitee, at the
Indemnitee's address as set forth beneath the Indemnitte's signature to this
Agreement, and if to the Company at the address of its principal corporate
offices (attention: Secretary) or at such other address as such party may
designate by ten days' advance written notice to the other party hereto.
Section 15. Consent to Jurisdiction.
The Company and each Indemnitee each hereby irrevocably consent other
jurisdiction of the courts of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or relates to this
Agreement and agree that any action instituted under this Agreement shall be
commenced, prosecuted and continued only in the Court of Chancery of the State
of Delaware in and for New Castle County, which shall be the exclusive and only
proper forum for adjudicating such a claim.
Section 16. Severability.
The provisions of this Agreement shall be severable in the event that any
of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law.
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Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
Section 17. Choice of Law.
This Agreement shall be governed by and its provisions construed and
enforced in accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents, entered into and to be performed entirely
within the State of Delaware, without regard to the conflict of laws principles
thereof.
Section 18. Subrogation.
In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
each Indemnitee, who shall execute all documents required and shall do all acts
that may be necessary to secure such rights and to enable the Company
effectively to bring suite to enforce such rights.
Section 19. Amendment and Termination.
No amendment, modification, termination or cancellation of this Agreement
shall be effective unless it is in writing signed by all parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
Section 20. Integration and Entire Agreement.
This Agreement sets forth the entire understanding between the parties
hereto and supersedes and merges all previous written and oral negotiations,
commitments, understandings and agreements relating to the subject matter hereof
between the parties hereto.
Section 21. No Construction as Employment Agreement.
Nothing contained in this Agreement shall be construed as giving any
Indemnitee any right to be retained in the employ of the Company or any of its
subsidiaries.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
AIRGATE PCS, INC.
a Delaware corporation
By:
Title:
Address:
11
<PAGE>
INDEMNITEES
By:
Title:
By:
Title:
By:
Title:
12
<PAGE>
EXHIBIT 10.9
AIRGATE WIRELESS, INC.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into on April 9,
1999 by and between AirGate Wireless, Inc., a Delaware corporation (the
"Company"), and Thomas M. Dougherty ("Executive" or "Employee"), effective April
15, 1999 for a period of five years through April 15, 2004.
1. Duties and Scope of Employment.
------------------------------
(a) Position; Duties. The Company shall employ the Executive as the
----------------
Chief Executive Officer of the Company reporting to the Board of Directors of
the Company. The Executive shall render such business and professional services
in the performance of his duties, consistent with Executive's position within
the Company, and shall serve as a member of the Board of Directors of the
Company.
(b) Obligations. Excepting his current employment and consulting
-----------
obligations with SprintCom (which continue through August 20, 1999), (the
"SprintCom Duties"), (i) Executive shall devote his full business efforts and
time to the Company, and (ii) Executive agrees not to actively engage in any
other employment, occupation or consulting activity without the prior approval
of the Board of Directors of the Company. Executive represents and warrants to
the best of his knowledge that the performance of his duties under this
Agreement will not conflict or create a breach of the SprintCom Duties or any
other agreements or duties by which Executive is obligated or bound.
2. Employee Benefits. Executive shall be eligible for (i) all employee
-----------------
benefit plans and policies currently and hereafter maintained by the Company for
its employees of comparable positions, subject to the terms and conditions of
such plans and policies, and (ii) such other employee benefits as are set forth
in this Agreement. It is anticipated that the basic benefit plans and policies
shall be in place by May 1, 1999.
3. At-Will Employment. Executive and the Company understand and
------------------
acknowledge that Executive's employment with the Company constitutes "at-will"
employment. Executive and the Company acknowledge that this employment
relationship may be terminated at any time, upon four (4) weeks written notice
to the other party, with or without cause or for any or no cause, at the option
either of the Company or Executive, subject to the termination provisions set
forth in Paragraphs 4(e) and 4(f) below.
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4. Compensation.
------------
(a) Base Salary. While employed by the Company pursuant to this
-----------
Agreement, the Company shall pay the Executive as compensation for his services
a base salary at the annualized rate of $180,000 (the "Base Salary). In
addition, on a one-time basis, Employer shall receive a bonus of Fifteen
Thousand Dollars ($15,000) on May 1, 1999. The Base Salary shall be increased
by not less than Twenty Thousand Dollars ($20,000) each year for each of the
next four years on the anniversary date of the effective date hereof (April 15,
2000, and on April 15th, of each year thereafter through April 15, 2003). Such
salary shall be paid periodically in accordance with normal Company payroll
practices and subject to the usual, required withholding. Executive understands
and agrees that neither his job performance nor promotions, commendations,
bonuses or the like from the Company give rise to or in any way serve as the
basis for modification, amendment, or extension, by implication or otherwise, of
this Agreement.
(b) Bonuses. In addition to Executive's Base Salary, Executive shall
-------
be eligible to receive an annual bonus (the "Bonus"), equal to a maximum of
fifty percent (50%) of Executive's Base Salary then in effect, as determined by
the Board. The Bonus shall be payable in accordance with the Company's normal
practices and policies. The Executive and the Board each year shall establish
specific criteria for the annual cash bonus.
(c) Stock Option. The Company hereby agrees to award or cause to be
------------
awarded to Executive by no later than May 31, 1999 (the "Effective Date") a
stock option (the "Stock Option") to purchase a total number of shares equal to
2.0% of the fully diluted common shares of the Company's ultimate parent
company, AirGate Holding Company, Inc. (the "Parent") as of the Effective Date.
The exercise price shall equal the fair market value on the date of grant (the
"Effective Date Price"). The Stock Option shall vest twenty-five percent of the
shares subject to the Stock Option on April 15, 1999. Beginning one year after
April 15, 1999, the remaining shares, subject to the Stock Option, shall vest in
equal installments at the end of each full quarter thereafter for which
Executive continued in active full-time employment so that, assuming continued
employment, 100% of the shares subject to the Stock Option shall be fully vested
and exercisable five years after the Effective Date. Notwithstanding the
foregoing, Executive shall not be vested in any shares if he voluntarily
terminates his employment with the Company prior to April 15, 2000. In
addition, the Stock Option shall not be exercisable as to any vested shares
prior to April 15, 2000 unless Executive is terminated involuntarily by the
Company in which event exercise must occur within the permissible exercise
period for incentive stock options set fourth in IRC Section 422. The Stock
Option shall be otherwise subject to the terms and conditions of the stock
option plan and form of stock option agreement to be adopted by the Company for
its employees. If after the initial grant of the Stock Option to Executive, the
Company increases the number of shares of the Company's common stock authorized
for issuance to employees pursuant to employee stock options to more than ten
percent (10%) of the fully diluted shares of the Company, then the Board shall
consider (but shall not be obligated to grant) an additional award of stock
options to Executive. Furthermore, if Parent successfully completes an initial
public offering or private placement offering in which at least $50,000,000.00
in new equity funds is raised before April 15, 2000, Company agrees to award or
cause it to be awarded an additional option to Executive for Parent common stock
so that Executive
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continues, after such initial public offering to hold Stock Options equal to 2%
of the number of shares outstanding. Any option granted shall have substantially
the same terms and conditions as the previously granted Stock Option, except, at
Executive's election, such option shall either be (i) an incentive stock option
with an exercise price equal to fair market value at date of grant, or (ii) a
nonstatutory stock option with an exercise price equal to the Effective Date
Price. The parties agree to negotiate reasonably and in good faith to modify
this subsection (c) to preserve the intent hereof to the extent the existing
Parent/Company group or the proposed offering are restructured.
(d) Annual Benefit Program. The Company shall, by May 31, 1999,
----------------------
establish an executive benefit/perquisite program, under which Employee shall
receive $15,000 annually to purchase the benefits/perquisites of his choice
(which include car allowance, private school or higher education expense
reimbursement, supplemental insurance, club memberships and such other benefits
as the program shall include.) In addition, Employee will be provided health,
dental and disability insurance for him and his family under Company policies.
(e) Termination of Employment. Unless the termination of employment
--------------------------
by Employee is voluntary by Employee or "for cause", as the term is defined
hereinafter, upon such termination Employee shall receive six months Base Salary
(at the rate in effect on the date of termination) plus one month's Base Salary
for each year (or part thereof) Employee is employed by the Company. In
addition, Employee shall immediately receive all Stock Options vested as of the
date of termination and Employee shall receive health and dental benefits which
he is receiving when terminated for an additional six (6) months after
termination.
(f) Discharge for Cause. The Company may discharge the Employee for
-------------------
cause ("Cause") at any time, and upon the occurrence of such discharge for
Cause, this Agreement shall terminate except that the restrictions and
provisions imposed on the Employee under Section Paragraph 8 below. For purpose
of this Agreement, the term "Cause" shall mean (i) conduct by the Employee that
amounts to fraud, gross dishonesty, gross negligence or willful misconduct in
the performance of his duties hereunder; or (ii) continuous and material failure
by the Employee after written notice to perform his duties hereunder in the
manner and to the extent required under this Agreement or breach by the Employee
of the obligation to refrain from engaging in the activities prohibited by the
Covenant Not to Compete; or (iii) final conviction of a felonious crime, or (iv)
repeated instances of drug or alcohol abuse or unauthorized absences during
scheduled work hours.
(g) Except as specified in Paragraph 4(e) or as required under the
terms of the Stock Option and any other applicable benefit program, Executive
shall be entitled to no additional compensation or benefits following
termination of his employment. As an absolute condition to any payments pursuant
to Paragraph 4(e), Employee shall execute and deliver a binding written release
from Employee, in form satisfactory to the Company, releasing any and all claims
of any kind or nature relating to the employment relationship (including claims
for wrongful termination or discrimination of any kind) that Employee may have
against the Company and/or its officers, agents, employees, directors and
shareholders.
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5. Expenses. The Company will pay or reimburse Executive for reasonable
--------
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder in
accordance with the Company's established policies.
6. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death or incapacity and (b) any successor or assign of the Company.
Any such successor of the Company shall be deemed substituted for the Company
under the terms of this Agreement for all purposes. As used herein, "successor"
shall include any person, firm, corporation or other business entity which at
any time, whether by purchase, merger or otherwise, directly or indirectly
acquires all or substantially all of the assets or business of the Company.
None of the rights of Executive to receive any form of compensation payable
pursuant to this Agreement shall be assignable or transferable except through a
testamentary disposition or by the laws of descent and distribution upon the
death of Executive. Any attempted assignment, transfer, conveyance or other
disposition (other than as aforesaid) of any interest in the rights of Executive
to receive any form of compensation hereunder shall be null and void.
7. Notices. All notices, requests, demands and other communications
-------
called for hereunder shall be in writing and shall be deemed given if delivered
personally or three (3) days after being mailed by registered or certified mail,
return receipt requested, prepaid and addressed to the parties or their
successors in interest at the following addresses, or at such other addresses as
the parties may designate by written notice in the manner aforesaid:
If to the Company: AirGate Wireless, Inc.
230 Peachtree Street, N.W., Suite 1700
Atlanta, Georgia 30303
Attention: Board of Directors
If to Executive: Thomas M. Dougherty
2412 Bohler Road, N.W.
Atlanta, Georgia 30305
or at the last residential address known by the
Company.
8. Restrictions on Employment.
--------------------------
(a) Covenant Not to Compete (the "Covenant Not to Compete"). During
-------------------------------------------------------
Executive's employment with the company and for a period of eighteen (18) months
after Executive's employment has terminated, Executive shall not, directly or
indirectly, for himself or on behalf of or in conjunction with any other person,
firm or entity, engage in the Restricted Business in the same or
4
<PAGE>
similar capacity as Executive has been employed by the Company, anywhere within
the Restricted Territory.
(b) Restricted Business. "Restricted Business" means the business of
-------------------
wireless telecommunications services.
(c) Restricted Territory. "Restricted Territory" means the Service
--------------------
Area as defined in the Sprint PCS Management Agreement between SprintCom, Inc,
and the Company, a copy of which is attached hereto and made a part hereof (the
"Management Agreement"). If the Service Area in the Management Agreement is
amended during Executive's employment with the Company, then the Company and
Executive agree to execute an amendment to this Agreement to reflect and
incorporate herein, such amendment to the Service Area.
(d) During Executive's employment with the Company and for a period of
eighteen (18) months thereafter, Executive shall, not directly or indirectly,
for himself or on behalf of or in conjunction with any other person, firm or
entity, initiate any action to solicit in competition with the wireless
telecommunications services business ("Capital Business") of the Company or to
divert or attempt to divert from the Company the Business of any Customer,
person, firm or entity for which the Company provided services in connection
with the Business at any time during the period of twenty-four (24) months
immediately preceding the time of such solicitation, diversion or attempt to
divert and with whom Executive had material contact in the course of Executive's
employment with the Company; or
(e) During Executive's employment with the Company and for a period of
eighteen (18) months thereafter, Executive shall not, directly or indirectly,
for himself or behalf of or in conjunction with any other person, firm or
entity, initiate any action to hire for any other employer, any employee of the
Company or directly or indirectly cause any employee of the Company to leave
employment in order to work for another.
(f) Employee acknowledges that the Company has conducted and expects
to conduct its business throughout the Restricted Territory and that the Company
expects that during the aforesaid period, the Company will continue to expand
its business throughout the Restricted Territory and that this expectation is
realistic; that Employee shall be engaged in and responsible for the Company's
business in his executive capacity with respect to the Company's activities
throughout the Restricted Territory; and that because of Employee's association
with the Company, the Company's business would be seriously and irreparably
harmed if Employee were to compete with the Company in the manner prohibited
above.
(g) Severability. The covenants and restrictions set forth in this
------------
Section 8 are intended to conform to applicable law. If, however, a court
determines that any aspect of any covenant or restriction exceeds what is
permitted or enforceable by law, then such covenant or restriction shall be
limited or otherwise reformed as necessary to comply with and be enforceable
5
<PAGE>
under applicable law. If a court determines that any provision of this Section
8 is unenforceable and cannot be reformed, then such provision shall be deemed
eliminated from this Section to the minimum extent necessary to permit the
remaining provisions of this Section to be enforced.
9. Confidential Information. During the period of two (2) years after
-------------------------
Employee's employment has terminated for any reason whatsoever (or, in the case
of trade secrets, for so long as the information in question remains a trade
secret) and during any period Employee is employed by Employer, Employee shall
not, without the prior written consent of the Company, directly or indirectly,
divulge, disclose or publish to any person or entity, or reproduce or use in any
way, except only as required for the benefit of the Company, any Confidential
Information (as defined herein). Upon the Company's request and, in any event,
upon the termination of Employee's employment with the Company for any reason
whatsoever, Employee shall immediately return any reproductions of Confidential
Information to the Company. For purposes of this Agreement, "Confidential
Information" means any trade secrets and any information relating to the
Company's business that is competitively sensitive and not generally known by
the public, including processes, policies, procedures, techniques, designs,
drawings, know-how, show-how, technical information, technology, specifications,
products, computer programs (including computer programs developed, improved or
modified by Employee for or on behalf of the Company for use in the Company's
business), algorithms, systems, methods of operation, order entry forms, price
lists, customer lists, customer information, solicitation leads, marketing
research data, marketing and advertising materials and methods and manuals and
forms, all of which pertain to the Company's business . Confidential
Information does not include any information which (i) is available in published
print or otherwise known to the public, unless published or made known as a
result of acts or omissions of Employee, or (ii) is lawfully obtained by
Employee in writing from a third party who did not acquire such confidential
information or trade secret, directly or indirectly, from Employee or the
Company.
10. Entire Agreement. This Agreement represents the entire agreement and
----------------
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersedes and replaces any and
all prior agreements and understandings concerning Executive's employment
relationship with the Company.
11. Arbitration and Equitable Relief.
--------------------------------
(a) To the extent permitted by applicable law, Executive agrees that
any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof shall be settled by arbitration to be held in
Fulton County, Georgia, in accordance with the National Rules for the Resolution
of Employment Disputes then in effect of the American Arbitration Association
(the "Rules"). The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction.
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(b) The arbitrator[s] shall apply Georgia law to the merits of any
dispute or claim, without reference to rules of conflict of law. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. Executive hereby expressly
consents to the personal jurisdiction of the state and federal courts located in
Georgia for any action or proceeding arising from or relating to this Agreement
and/or relating to any arbitration in which the parties are participants.
(c) Executive understands that nothing in Section 10 modifies
Executive's at-will status. Either the Company or Executive can terminate the
employment relationship on four (4) weeks written notice, with or without cause,
subject to the termination provision in Paragraph 4(e) hereinabove.
(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 11
, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING
THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE
'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING
TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED
TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD
FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, AND THE FAIR LABOR
STANDARDS ACT;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
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(e) Notwithstanding any provision herein to the contrary, this
Paragraph 11 shall not apply to any dispute or controversy arising under
Paragraph 8 or the interpretation, validity, construction, performance, breach
or termination thereof.
12. Severability. In the event that any provision hereof becomes or is
------------
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
13. No Oral Modification, Cancellation or Discharge. This Agreement may
-----------------------------------------------
only be amended, canceled or discharged in writing signed by Executive and the
Company.
14. Withholding. The Company shall be entitled to withhold, or cause to
-----------
be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.
15. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Georgia.
16. Acknowledgment. Executive acknowledges that he has had the
--------------
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
* * * *
8
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below.
AIRGATE WIRELESS, INC.
By: [Sig]
-----------------------
Title:
--------------------
Date:
---------------------
Thomas M. Dougherty
[Sig]
--------------------------
Thomas M. Dougherty
Date:
---------------------
-9-
<PAGE>
Exhibit 21.1 Subsidiaries of AirGate PCS, Inc.
Name of Subsidiary State of Incorporation
------------------ ----------------------
AirGate Wireless, Inc. Delaware
AGW Leasing Company, Inc./1/ Delaware
- ------------------------
/1/ AGW Leasing Company, Inc. is a wholly-owned subsidiary of AirGate Wireless,
Inc.
