<PAGE>
As filed with the Securities and Exchange Commission on August 6, 1999
Registration No. 333-79189-02
Registration No. 333-79189-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 4
TO
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C> <C>
AirGate PCS, Inc. Delaware 4812 58-2422929
AGW Leasing Company, Inc. Delaware 4812 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 organization) Classification Code Number) Identification No.)
</TABLE>
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Harris Tower Thomas M. Dougherty
Suite 1700 AirGate PCS, Inc.
233 Peachtree Street, N.E. Harris Tower
Atlanta, Georgia 30303 Suite 1700
(404) 525-7272 233 Peachtree Street, N.E.
(Address, including zip code, and Atlanta, Georgia 30303
telephone number, including area (404) 525-7272
code, of registrants' principal (Name, address, including zip code, and
executive offices) telephone number, including area code,
of agent for service)
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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. and AGW Leasing Company, Inc. (the "Registrants") estimate
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................ $ 75,801
National Association of Securities Dealers, Inc. filing fee........ 27,767
Nasdaq National Market listing fees................................ 76,625
Printing and engraving expenses.................................... 350,000
Accountants' fees and expenses..................................... 250,000
Legal fees and expenses............................................ 350,000
Fees and expenses for qualifications under state securities laws
(including legal fees)............................................ 10,000
Transfer agent fees................................................ 5,000
Miscellaneous...................................................... 854,807
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Total............................................................ $2,000,000
==========
</TABLE>
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), each Registrant's Certificate of
Incorporation provides as follows:
Each 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 receives 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.
Each 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.
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In addition to indemnification provided to our officers and directors in the
Certificate of Incorporation and under the laws of Delaware, AirGate PCS, Inc.
has 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 PCS, Inc. 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 PCS, Inc. 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 PCS, Inc. or to any fiduciary obligation
owed with respect to AirGate PCS, Inc. 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 PCS, Inc.); (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 PCS, Inc.
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 PCS, Inc. 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 PCS, Inc. 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 PCS, Inc. 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 PCS, Inc.'s
securities, the relative benefits received by AirGate PCS, Inc. 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 PCS, Inc. and
the indemnified person. The relative fault of AirGate PCS, Inc. 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 PCS, Inc. 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 PCS, Inc. 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 PCS, Inc. 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 PCS, Inc. 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 PCS, Inc. and its directors and certain officers, and by AirGate PCS,
Inc. 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 Registrants 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, AirGate PCS, Inc. sold $4,815,000 of
8% Convertible Promissory Notes. $3 million of the notes was due on September
18, 1999, while $1.815 million was 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. AirGate PCS, Inc. 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 AirGate PCS, Inc. 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, AirGate PCS, Inc. 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 AirGate PCS, Inc.'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
II-4
<PAGE>
were 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 $2.73 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 $7.561 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 Subordinated 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
Subordinated 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>
<C> <S>
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 Credit Agreement with Lucent (including the form of pledge
agreement and form of intercreditor agreement)
10.13** Form of Consent and Agreement
10.14 Assignment of Sprint PCS Management Agreement, Sprint Spectrum
Services Agreement and Trademark and Service Mark Agreements from
AirGate Wireless, L.L.C. to AirGate Wireless, Inc. date November 20,
1998.
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
Subordinated Discount Notes offering
27.1* Financial Data Schedule
</TABLE>
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* Previously filed
**To be filed by amendment
+Confidential treatment requested on portions of these documents
(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
Each of the Registrants 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 such Registrant pursuant to the foregoing
provisions, or otherwise, such 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 such Registrant of expenses incurred
or paid by a director, officer or controlling person of such 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, such 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.
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<PAGE>
(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-7
<PAGE>
Pursuant to the requirements of the Securities Act, AirGate PCS, Inc. has
duly caused this Amendment No. 4 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 August 6, 1999.
Airgate PCS, Inc.
By: _________________________________
Name: Thomas M. Dougherty
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 4 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 August 6, 1999
______________________________________ and Director (Principal
Thomas M. Dougherty Executive Officer)
/s/ Alan B. Catherall* Chief Financial Officer August 6, 1999
______________________________________ (Principal Financial and
Alan B. Catherall Accounting Officer)
/s/ W. Chris Blane* Vice President and August 6, 1999
______________________________________ Director
W. Chris Blane
/s/ Thomas D. Body III* Vice President and August 6, 1999
______________________________________ Director
Thomas D. Body III
/s/ Barry Schiffman* Director August 6, 1999
______________________________________
Barry Schiffman
/s/ Gill Cogan* Director August 6, 1999
______________________________________
Gill Cogan
/s/ Thomas M. Dougherty August 6, 1999
*By: _________________________________
Thomas M. Dougherty
Attorney-in-Fact
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act, AGW Leasing Company, Inc.
has duly caused this Amendment No. 4 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 August 6, 1999.
AGW Leasing Company, Inc.
By: _________________________________
Name: Thomas M. Dougherty
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 4 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 August 6, 1999
______________________________________ and Director (Principal
Thomas M. Dougherty Executive Officer)
/s/ Alan B. Catherall* Chief Financial Officer August 6, 1999
______________________________________ (Principal Financial and
Alan B. Catherall Accounting Officer)
/s/ W. Chris Blane* Vice President and August 6, 1999
______________________________________ Director
W. Chris Blane
/s/ Thomas D. Body III* Vice President and August 6, 1999
______________________________________ Director
Thomas D. Body III
/s/ Barry Schiffman* Director August 6, 1999
______________________________________
Barry Schiffman
/s/ Gill Cogan* Director August 6, 1999
______________________________________
Gill Cogan
/s/ Thomas M. Dougherty August 6, 1999
*By: _________________________________
Thomas M. Dougherty
Attorney-in-Fact
</TABLE>
<PAGE>
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AIRGATE PCS, INC.
(ORIGINALLY INCORPORATED OCTOBER 14, 1998 UNDER THE NAME
AIRGATE WIRELESS, 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 thirty million (30,000,000) of
stock consisting of:
1. twenty-five million (25,000,000) 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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<PAGE>
(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
8
<PAGE>
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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<PAGE>
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 and having been duly adopted 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 9th
day of July, 1999 by Shelley Spencer, its authorized officer.
AirGate PCS, Inc.
By: /s/ Shelley Spencer
---------------------------
Shelley Spencer
Title: Vice President and Secretary
15
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CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AIRGATE PCS, INC.
AirGate PCS, Inc., a corporation duly organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that:
I. The amendment to the Corporation's Amended and Restated Certificate of
Incorporation set forth below was duly adopted in accordance with the provisions
of Section 242 and has been consented to in writing by the sole stockholder in
accordance with Section 228 of the General Corporation Law of the State of
Delaware.
II. Article FIFTH of the Corporation's Amended and Restated Certificate of
Incorporation is amended by adding thereto the following paragraph:
F. The Corporation and the holders of its Common Stock shall be bound
to (i) any and all provisions of Section 11 of the Sprint PCS
Management Agreement dated July 22, 1998 (the "Agreement") between
AirGate Wireless, LLC, Sprint Spectrum L.P., Sprint Communications
Company, L.P. and SprintCom, Inc. assigned to the Corporation in
November of 1998, which provide for the sale of the operating
assets of the Corporation to SprintCom, Inc. upon non-renewal (as
defined under the Agreement) and/or an event of termination (as
set forth under Section 11 of the Agreement), said Agreement
(including Section 11) having been duly approved and ratified by
the Board of Directors of the Corporation and ratified by the sole
stockholder of the Corporation; and (ii) the sale of the Operating
Assets of the Corporation pursuant to the consent and agreement to
be entered into by Sprint Spectrum L.P., Sprint Communications
Company, L.P., SprintCom, Inc., and the Corporation's Senior
Lenders, said sale of the Operating Assets having been duly
approved and ratified by the Board of Directors of the Corporation
and ratified by the sole stockholder of the Corporation. The
purchase price for such Operating Assets will be based on a
formula set forth in Section 11 of the Agreement as modified by
the consent and agreement with the Corporation's Senior Lenders.
III. Article TWELFTH of the Corporation's Amended and Restated Certificate
of Incorporation is amended to read in its entirety as follows:
TWELFTH: The provisions set forth in this Article and in Articles
5(C), 5(D), 5(E), 5(F), 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
<PAGE>
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.
IN WITNESS WHEREOF, AirGate PCS, Inc. has caused this Certificate to be
executed by Shelley Spencer, its authorized officer, on this 2nd day of August,
1999.
/s/ Shelley Spencer
-------------------
Shelley Spencer
Secretary
2
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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
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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
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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
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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
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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:
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(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
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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
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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.
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2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one
carrier at a time. The parties will share equally all costs associated with
clearing spectrum under this Section 2.7.
2.8 Determination of 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
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<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.
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3.4 IXC Services. Manager must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale rates.
Long distance telephone calls are those calls between the local calling area for
the Service Area Network and areas outside the local calling area. The local
calling area will be defined by mutual agreement of Sprint PCS and Manager. If
the parties cannot agree on the extent of the local calling area they will
resolve the matter through the dispute resolution process in Section 14. Any
arrangement must have terms at least as favorable to Manager (in all material
respects) as those offered by Sprint to any wholesale customer of Sprint in
comparable circumstances (taking into consideration volume, traffic patterns,
etc.). If Manager is bound by an agreement for these services and the agreement
was not made in anticipation of this agreement, then the requirements of this
Section 3.4 do not apply during the term of the other agreement. If the other
agreement terminates for any reason then the requirements of this Section 3.4 do
apply.
3.5 Resale of Products and Services.
3.5.1 Mandatory Resale of Products and Services. Sprint PCS must,
under FCC rules, permit Sprint PCS' service plans to be resold by a purchaser of
the service plan. Sprint PCS will not grant the purchaser of a service plan the
right to use any of the support services offered by Sprint PCS, including
customer care, billing, collection, and advertising, nor the right to use the
Brands. The reseller only has the right to use the service purchased.
Consequently, Manager agrees not to interfere with any purchaser of the Sprint
PCS Products or Services who resells the service plans in accordance with this
agreement and applicable law. Manager will notify purchaser that the purchaser
does not have a right to use the Brands or Sprint PCS' support services. In
addition, Manager will notify Sprint PCS if it reasonably believes a reseller of
retail service plans is using the support services or Brands.
3.5.2 Voluntary Resale of Products and Services. Sprint PCS may
choose to offer a resale product under which resellers will resell Sprint PCS
Products and Services under brand names other than the Brands, except Sprint PCS
may permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The
resellers may also provide their own support services (e.g., customer care and
billing) or may purchase the support services from Sprint PCS. If Sprint PCS
chooses to offer a voluntary resale product, it will adopt a program that will
be a Program Requirement under this agreement and that addresses the manner in
which Manager and Other Managers interact with the resellers. Sprint PCS will
discuss such program with Manager during development.
Manager must not sell Sprint PCS Products and Services for resale unless
Sprint PCS consents to such sales in advance in writing, except as required
under the regulations and rules concerning mandatory resale.
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.
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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.
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The Sprint PCS National or Regional Distribution Program Requirements in effect
as of the date of this agreement are attached as Exhibit 4.1.
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4.1.1 Territorial Limitations 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
-----------
pricing plans from time to time in its sole discretion by delivering to Manager
a new Exhibit 4.4.
-----------
Additionally, with prior approval from Sprint PCS, which approval will not
be unreasonably withheld, Manager may establish price plans for Sprint PCS
Products and Services that are only offered in its local market, subject to:
(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area.
If Sprint PCS fails to respond to Manager within 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
-----------
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
-----------
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):
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(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.
------------
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
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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.
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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:
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(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."
_______________________
* Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment 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.
________________________
* Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment 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.
_________________________
* Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment 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>
ADDENDUM III
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Airgate PCS, Inc. (formerly 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 III (this "Addendum"), dated as of August 2, 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 Addendum I
entered into as of July 22, 1998, and further amended by Addendum II entered
into as of May 24, 1999 (the Management Agreement, as amended by Addenda I, II,
and III, being the "Management Agreement"). The terms and provisions of this
Addendum control, supersede and amend any conflicting terms and provisions
contained in the Management Agreement. Except for express modifications made by
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. Amendments to Section 13 of Addendum I and Addendum II to the
Management Agreement. Section 13 of Addendum I and Addendum II of the
Management Agreement are 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 structure of Manager and the entities labeled "AirGate PCS,
Inc." and "AGW leasing Company, Inc."
(b) As used in Section 13(b) the Principals' equity or ownership
interest in any of the entities described in Schedule 13 shall not include
any equity or ownership interest granted to a Principal after July 22, 1998
pursuant to an incentive stock option plan adopted by AirGate PCS, Inc. for
its employees.
2. Use of Loan Proceeds. Sprint PCS is entering into that certain Consent
and Agreement with Lucent Technologies, Inc. ("Lucent") (which Consent and
Agreement, as amended and modified from time to time, is referred to as the
"Lucent Consent and Agreement") to enable Manager to obtain loans (the "Loans")
from Lucent and its successors and assigns (collectively, the "Lenders").
Manager agrees that notwithstanding the permitted uses of the proceeds of the
Loans, it will not use the proceeds from any loan or other obligation to which
the Lucent Consent and Agreement relates or from any other loan or extension of
credit to which the Lucent Consent and Agreement relates for any purpose other
than to construct and operate the Service Area Network within the Service Area
(as may be amended form time to time) as contemplated under the Management
Agreement.
3. Consent and Agreement Not Assignable. Except as a expressly required
or permitted in the Lucent Consent and Agreement, Manager may not assign the
Lucent Consent and Agreement.
4. Notices. Manager agrees to promptly give Sprint PCS a copy of any
notice Manager receives from the Administrative Agent or any Lender (as those
terms are defined in the Lucent Consent and Agreement) and a copy of any notice
Manager gives to the Administrative Agent or any Lender. Sprint PCS agrees to
promptly give Manager a copy of any notice that Sprint PCS gives to any of such
persons.
5. Sale of Operating Assets. Manager agrees that in the event of a
purchase of its Operating Assets by Sprint PCS pursuant to the Management
Agreement, the Lucent Consent and Agreement, a foreclosure sale or a bankruptcy
proceeding, Manager will cause any Operating Assets owned by its Related Parties
to be transferred to Sprint PCS in connection with such purchase.
6. No Defaults Under Credit Documents or Sprint Agreements. Manager
warrants and represents that as of the date hereof, no Default or Event of
Default under any of the Credit Documents has occurred, and no Event of
Termination under the Management Agreement or event
<PAGE>
that if not cured, or if notice were to be provided, would constitute and Event
of Termination under the Management Agreement, has occurred.
7. Revised Financing Plan. Exhibit 1.7 to this Addendum supersedes and
replaces in its entirety Exhibit 1.7 attached to the Management Agreement and
Addendum II.
8. Counterparts. This Addendum may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties have cause this Addendum III to be executed
by the respective authorized officers as of the date and year first above
written.
SPRINT SPECTRUM L.P.
BY: /s/ Bernard A. Bianchino
----------------------------------
Bernard A. Bianchino
Chief Business Development Officer
SPRINTCOM, INC.
BY: /s/ Bernard A. Bianchino
------------------------
Bernard A. Bianchino
Vice President
SPRINT COMMUNICATIONS COMPANY, L.P.
BY: /s/ Thomas E. Weigman
----------------------------------
Thomas E. Weigman
Senior Vice President, Consumer
Market Strategy and Communications
AIRGATE PCS, INC.
BY: /s/ Shelley L. Spencer
----------------------
Shelley L. Spencer
Vice President of Law
<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. In addition to the standard leasing
----------------------
program described above, User shall have a right of first refusal on certain
BellSouth Towers as described herein (each a "First Right Site"). Certain
payment obligations and rights of User differ with respect to the First Right
Sites. Except for differences specifically noted in this MSA with respect to
the First Right Sites, the First Right Sites shall for all purposes be treated
as Sites governed by this MSA. Within [ * ] business days of the execution of
this MSA, User shall submit to BellSouth a list of approximately [ * ] of
BellSouth's Towers on which User may wish to locate. The list shall include the
applicable Site number of the BellSouth Tower, as well as User's contemplated
antenna type and mounting height for each First Right Site. Until [ * ], User
shall then have a first right of refusal to locate on the listed Towers at the
specified heights and with the specified equipment shown on User's list (subject
to existing users, including other users with applications submitted to
BellSouth). In the event that a third-party potential user submits a site
application or similar request to BellSouth for one of the [ * ] Towers,
BellSouth shall notify User in writing. The form of notice shall be
substantially as shown on Schedule III attached hereto. User shall then have
------------
[ * ] business days to return to BellSouth a countersigned copy of the notice,
an executed Site Application, together with the Site Application fee and first
annual installment of rent. The Site Application fee shall be credited toward
the rental payment, and thus reduce by [ * ] the payment of the first annual
installment of rent. The return of this material by User shall constitute User's
binding agreement to execute a Site Agreement for that particular Site. In the
event that User does not forward an executed Site Application, together with the
above referenced related fees, to
- ---------------
[ * ] Portions of the specified exhibit has been omitted pursuant to a request
for confidential treatment and filed separately with the Commission.
2
<PAGE>
BellSouth within said [ * ] business days, User shall be presumed to have
declined use of that particular Tower and BellSouth will be free to proceed with
the third -party user. In the event that SprintCom (as defined herein) has
previously delivered a Site Application for a particular Site listed on the
[ * ] Towers referenced above, and a third-party potential user submits an
application for that Tower, BellSouth shall notify User. User shall have [ * ]
business days to notify BellSouth in writing that it intends to accept such Site
(in which case the prior SprintCom Site Application shall be accepted as User's
Site Application, except that information contained in User's initial list of
[ * ] potential First Right Sites shall be deemed to amend information to the
extent inconsistent with SprintCom's Site Application) and User shall submit the
first years annual rent and the Site Application fee (if not previously paid).
(c) Expense Amount. At the time User submits the above-referenced
--------------
list of [ * ] potential Tower Sites, User shall submit to BellSouth a fee of
[ * ] Dollars [ * ] to be used in accordance with this paragraph (the "Expense
Amount"). The Expense Amount shall be used by BellSouth to reimburse BellSouth
for all fees of GlobalComm, Arcadis, or other agents or consultants of BellSouth
used in the preparation and processing of Tower Sites. BellSouth shall
reasonably document amounts of the Expense Amount used by BellSouth for such
reimbursement. In the event that the Expense Amount is depleted such that it is
less than [ * ] Dollars [ * ], the User shall replenish the Expense Amount by
not less than [ * ] Dollars [ * ]. In the event that following User's
commencement or declining of the [ * ] Towers referenced above, there are funds
remaining in the Expense Amount held by BellSouth, the excess amount shall be
applied to the next-due rents under Sites leased by User, in a manner determined
by BellSouth.
(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 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
- -------------
[ * ] Portions of the specified exhibit has been omitted pursuant to a request
for confidential treatment and filed separately with the Commission.
3
<PAGE>
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
---------------------------------------------------------
Space 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 Space 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.
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.
4
<PAGE>
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 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.
5
<PAGE>
(ii) Radio Frequency Propagation Test. User determining, in
--------------------------------
User'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. User shall pay a one-time site
------------------------------
cost reimbursement amount ("Site Cost Reimbursement Amount") to BellSouth, paid
by User to BellSouth not later than (a) the execution and delivery of the Site
Agreement with respect to such Site for all Sites other than First Right Sites,
and (b) the Site Commencement Date with respect to such Site for all First Right
Sites. Except in certain circumstances, as set out herein, the Site Cost
Reimbursement Amount generally will not exceed [ * ] Dollars [ * ] per Site.
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. The preceding notwithstanding,
in the event that User has not on or before [ * ] (a) executed and returned
[ * ] or more Site Agreements, and (b) paid (i) any applicable Site Cost
Reimbursement Amount for each of said [ * ] or more Sites (for Sites other than
First Right Sites), or (ii) the first annual installment of base rent on each of
said [ * ] or more Sites (for First Right Sites), BellSouth may look back to all
existing Sites as well as those Sites for which Site Agreements have been
executed but the Site Commencement Date has not yet occurred and charge
- ---------------
[ * ] Portions of the specified exhibit has been omitted pursuant to a request
for confidential treatment and filed separately with the Commission.
6
<PAGE>
User an additional Site Cost Reimbursement Amount of [ * ] Dollars [ * ] per
Site regardless of whether any Site Cost Reimbursement Amount had previously
been paid on that Site. The preceding notwithstanding, in the event that User
has (i) executed and returned [ * ] or more Site Agreements, and (b) paid (i)
any applicable Site Cost Reimbursement Amount for each of said [ * ] or more
Sites (for Sites other than First Right Sites), or (ii) the first annual
installment of base rent on each of said [ * ] or more Sites (for First Right
Sites), the Site Cost Reimbursement Amount to be paid to BellSouth, for every
Site in excess of [ * ] shall be [ * ] Dollars [ * ]. 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 said upgrade shall be applied and credited to the Site Cost
Reimbursement Amount for that particular Site.
Beginning January 1, 1999, the Site Cost Reimbursement Amount for each new
Site shall then be based upon the amount for the Site Cost Reimbursement Amount
referenced above on the [ * ] deadline. In the event User has submitted less
than [ * ] Site Applications, together with related fees, by [ * ], the Site
Cost Reimbursement Amount shall remain at [ * ] Dollars [ * ] per Site until
User has submitted [ * ] Site Applications, with related fees, at which point
future Site Cost Reimbursement Amounts shall be [ * ] Dollars [ * ] per Site. In
the event User has submitted between [ * ] and [ * ] Site Applications, together
with related fees, by [ * ], the Site Cost Reimbursement Amount shall remain at
[ * ] Dollars [ * ] per Site until User has submitted [ * ] Site Applications,
with related fees, at which point future Site Cost Reimbursement Amounts shall
be [ * ] Dollars [ * ] per Site. In the event User has submitted [ * ] or more
Site Applications, together with related fees, by [ * ], the Site Cost
Reimbursement Amount shall remain at [ * ] Dollars [ * ] per Site.
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 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
- ---------------
[ * ] Portions of the specified exhibit has been omitted pursuant to a request
for confidential treatment and filed separately with the Commission.
7
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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 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
8
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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 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
9
<PAGE>
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
--------------
completedTower 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.
(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
10
<PAGE>
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 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
<PAGE>
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
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
12
<PAGE>
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 reasonable discretion;
(e) Identify the Facilities with metal tags fastened securely to its
bracket on the Tower and to each transmission line;
13
<PAGE>
(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.
(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
14
<PAGE>
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;
(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;
15
<PAGE>
(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;
(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.
16
<PAGE>
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
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
17
<PAGE>
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.
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
18
<PAGE>
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.
(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.
19
<PAGE>
(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 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
20
<PAGE>
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);
(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
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(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 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:
22
<PAGE>
(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 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
23
<PAGE>
(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 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
<PAGE>
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
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.
25
<PAGE>
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.)
26
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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]
27
<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
- ---------------
*Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment 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
- ---------------
*Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment 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) *
6. Modification of Expense Amount. *
------------------------------
7. Assignment and Assumption Involving SprintCom. The terms of this
---------------------------------------------
Section shall apply for each Site Agreement entered into from and after the date
hereof as well as User's contractual obligations described herein; provided,
SprintCom shall not be liable for any obligations or liabilities arising prior
to, or based on actions prior to, the date of assignment or assumption under
this Section 7, except for the obligation of User to make all rent and Site Cost
Reimbursement Amount payments under this Amendment and to execute, commence and
maintain the Site Agreements in the manner provided in this Amendment. All Site
Agreements for all Initial Sites and the MSA (to the extent the MSA governs the
applicable Site Agreements) shall be automatically, and without the need for a
further writing, assigned by User to SprintCom and assumed by SprintCom, in the
event that:
(a) [ * ] or
(b) there is an event of termination under the terms of that certain
"Management Agreement between SprintCom, Inc. and AirGate Wireless, LLC" dated
July 22, 1998 as assigned or amended, that results in the transfer of User's
assets, including the Initial Sites, to SprintCom (it being understood that in
the event of any such default, SprintCom shall immediately provide BellSouth
with written notice and BellSouth shall be entitled for all purposed to rely
upon such written notice).
SprintCom's obligation and agreement to assume such Site Agreements of User (not
terminated under Section 4(g) of this Amendment) following the occurrence of
either of the items described in subparagraphs (a) and (b) above shall expire
upon the occurrence of each of (i) the Commencement Date for such Site Agreement
having occurred; and (ii) User having paid the first annual installment of base
rent for the applicable Site Agreement; and (iii) such applicable Site becoming
fully operational by User and a telecommunications facility for the transmission
and receipt of wireless communications. Notwithstanding the preceding sentence,
condition (iii) shall no longer apply following the occurrence of (i) no more
than [ * ] of the Initial Sites being fully operational by User as
telecommunications facilities for the transmission and receipt of wireless
communications and (ii) User having obtained necessary and sufficient financing
such that it can provide reasonable evidence to BellSouth that User has the
financial resources to make annual rental payments on the Initial Sites for not
less that [ * ] SprintCom is executing this Amendment to consent to the
provisions of this Section and to be bound hereunder. SprintCom acknowledges
that it has had the opportunity to review the MSA and agrees to the provisions
of this Amendment and this Section. Upon such assignment and assumption,
SprintCom and BellSouth each agree to execute such additional documentation as
may be reasonably requested by either party to further evidence such assignment
and assumption. In the event that such assignment and assumption occurs,
SprintCom shall have all rights, privileges and obligations under the MSA as
amended herein as the MSA relates
- ---------------
*Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment and filed separately with the commission.
4
<PAGE>
to the applicable Site Agreements. Following any such assignment and assumption,
the applicable Site Agreements shall continue to be governed by the terms of
this MSA rather than the terms of the master agreement currently in place
between BellSouth and SprintCom. It is expressly understood that SprintCom's
obligations and agreements set forth above shall continue to be binding upon
SprintCom irrespective of any insolvency proceedings by User, including (without
limitation) any rejection of any or all Site Agreements by User in any
insolvency proceedings. It is agreed that SprintCom shall assume any Site
Agreements whether accepted by User (and then subsequently assigned by virtue of
a User default described above) or rejected by User in a bankruptcy proceeding.
Notwithstanding the preceding sentence, SprintCom shall not be obligated to
assume any Site Agreements during the period of User's insolvency proceeding as
established by the bankruptcy courts in which User has the option of accepting
or rejecting the applicable Site Agreements. Nonetheless, so long as SprintCom's
rights herein continue, during the continuing period of such bankruptcy
proceeding of User, SprintCom following its assumption of the contractual
obligations of User under this Amendment agrees that it shall immediately cure
any rent payment default of User under this Amendment, the MSA, or any
applicable Site Agreements which default is continuing on or after [ * ].
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.
- --------------
[ * ] Portions of the specified exhibit has been omitted pursuant to a request
for confidential treatment and filed separately with the commission.
5
<PAGE>
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. 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.
6
<PAGE>
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.
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.
-------------------------
7
<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
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.
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:
__________________________________
__________________________________
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.
LLC:
AIRGATE WIRELESS, L.L.C..,
a Delaware limited liability company (SEAL)
By: __________________________________(SEAL)
Its: __________________________________
Date: __________________________________
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.
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:
_____________________________
_____________________________
11
<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:
_____________________________
_____________________________
12
<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
_______________
* Portions of the specified exhibit has been omitted pursuant to a request for
confidential treatment 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 10.14
November 20, 1998
SprintCom, Inc.
Sprint Communications Company, L.P.
c/o Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, KS 66205
Attention: Bill Blessing
Sprint Spectrum L.P.
4900 Main Street
3rd Floor
Kansas City, MO 64112
Attention: Tom Mateer
Re: Assignment of Sprint PCS Management Agreement, Sprint Spectrum Services
Agreement and Trademark and Service Mark Agreements from AirGate Wireless,
L.L.C. to AirGate Wireless, Inc.
Dear Messrs. Blessing and Mateer:
Pursuant to Sections 17.15.3(d)(ii) and 17.15.3(e)(i) of the Sprint PCS
Management Agreement between SprintCom, Inc. and AirGate Wireless, L.L.C. dated
July 22, 1998 (the "Management Agreement"), this letter provides notice that
AirGate Wireless, L.L.C. intends to assign the Management Agreement and all
related agreements to AirGate Wireless, Inc./1/ Specifically, AirGate Wireless,
L.L.C. is assigning all of its obligations, now existing or hereafter arising,
and all rights and benefits under the Agreements to AirGate Wireless, Inc. The
entity to which the Agreements are being assigned is a newly-formed Delaware
corporation, has the same ownership as AirGate Wireless, L.L.C., and will be the
"Manager" under the Agreements. The organizational structure set forth on
Schedule 13 to the Addendum I to the Management Agreement remains unchanged,
except that AirGate Wireless, Inc., rather than AirGate Wireless, L.L.C., will
be the Manager under the Agreements. This assignment is being made to separate
the ownership of the F-block licenses that AirGate Wireless, L.L.C. presently
owns but is in the process of selling, from the assets necessary to operate the
Sprint PCS business, and to change the form of the legal organization from a
limited liability company to a corporation without changing the ultimate
ownership of the Manager.
AirGate Wirless, L.L.C. agrees that it will transfer to AirGate Wireless,
Inc., no later than February 15, 1999, all of the employees and all of the
assets necessary to act as Manager under the
- ------------
/1/ For purposes of this letter, the Management Agreement, the Sprint Spectrum
Services Agreement and the Trademark and Service Mark Agreements entered into
between AirGate Wireless, L.L.C. and SprintCom, Inc., Sprint Spectrum L.P. and
Sprint Communications Company, L.P., respectively, and all dated as of July 22,
1998, are referred to collectively as the "Agreements".
<PAGE>
Agreements. AirGate Wireless, L.L.C. represents and warrants that it is not in
default under any of the Agreements.
Pursuant to Section 9.14 of the Sprint PCS Services Agreement between
Sprint Spectrum L.P. and AirGate Wireless, L.L.C. dated July 22, 1998 (the
"Services Agreement"), AirGate Wireless, L.L.C. intends to assign the Services
Agreement to AirGate Wireless, Inc.
Pursuant to Section 14.1 of the Sprint Trademark and Service Mark License
Agreement between Sprint Communications Company, L.P. and AirGate Wireless,
L.L.C. dated as of July 22, 1998, AirGate Wireless L.L.C. seeks consent to
assign the Sprint Trademark and Service Mark License Agreement to AirGate
Wireless, Inc.
Pursuant to Section 14.1 of the Sprint Spectrum Trademark and Service Mark
License Agreement between Sprint Spectrum L.P. and AirGate Wireless L.L.C. dated
as of July 22, 1998, AirGate Wireless L.L.C. seeks consent to assign the Sprint
Spectrum Trademark and Service Mark License Agreement to AirGate Wireless, Inc.
Please acknowledge your consent to these assignments below. Upon the
assignment, SprintCom, Inc., Sprint Spectrum L.P. and Sprint Communications
Company, L.P. release AirGate Wireless, L.L.C. from all of its obligations under
the Agreements, except any liabilities for actions or failures to act under the
Agreements between their effective dates and the effective dates of their
assignments.
Sincerely,
/s/ Shelly Spencer
Shelley Spencer
Manager
AirGate Wireless, L.L.C.
Acknowledged and Agreed to:
SprintCom, Inc. Sprint Communications Company, L.P.
By: /s/ William R. Blessing By: /s/ William R. Blessing
---------------------------- ----------------------------------------
Name: William R. Blessing Name: William R. Blessing
--------------------- ---------------------------------
Title: VP Wireless Title: VP Wireless
--------------------- ---------------------------------
Sprint Spectrum L.P.
By: /s/ Bernie Bianchino
----------------------------------------
Name: Bernie Bianchino
---------------------------------
Title: Chief Businss Development Officer
---------------------------------
<PAGE>
AirGate Wireless, Inc. agrees to be bound by the terms of the Agreements
and to assume all obligations and liabilities thereunder as if an original party
thereto. AirGate Wireless, Inc. agrees to execute a Master Signature Page that
evidences this content to be bound.
AirGate Wireless, Inc.
By: /s/ Shelley Spencer
-----------------------------------------
Shelley Spencer
Manager
<PAGE>
EXHIBIT 25.1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2)__________
--------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
</TABLE>
Bankers Trust Company
Legal Department
130 Liberty Street, 31st Floor
New York, New York 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
--------------------
<TABLE>
<S> <C> <C>
AirGate PCS, Inc. DELAWARE 58-2422929
AGW Leasing Company DELAWARE 582441171
(Exact name of Registrants as (State or other jurisdiction of (I.R.S. employer
specified in its Charter) Incorporation or organization) identification no.)
</TABLE>
233 PEACHTREE STREET, N.E.
HARRIS TOWER
Suite 1700
ATLANTA, GEORGIA 30303
(404) 525-7272
(Address, including zip code, and telephone number of Registrants principal
executive offices)
Senior Subordinated Discount Notes
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 3.-15. Not Applicable
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated June 21, 1995 - Incorporated
herein by reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171, Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated March 20, 1996, incorporate by
referenced to Exhibit 1 filed with Form T-1
Statement, Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate of
Bankers Trust Company dated June 19, 1997, copy
attached.
Exhibit 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company, as amended
on November 18, 1997. Copy attached.
-2-
<PAGE>
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference
to Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
Exhibit 7 - The latest report of condition of Bankers Trust
Company dated as of March 31, 1999. Copy attached.
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on this 3RD day
of August, 1999
BANKERS TRUST COMPANY
By: _______________________________
Marc J. Parilla
Assistant Vice President
-4-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on this 3rd day
of August, 1999.
BANKERS TRUST COMPANY
By: /s/ Marc J. Parilla
------------------------
Marc J. Parilla
Assistant Vice President
-5-
<PAGE>
State of New York,
Banking Department
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section
8005 of the Banking Law," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
Witness, my hand and official seal of the Banking Department at the City of New
York,
this 27th day of June in the Year of our Lord
--------- -----------
one thousand nine hundred and ninety-seven.
Manuel Kursky
------------------------------
Deputy Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby
amended to increase the aggregate number of shares which the corporation shall
have authority to issue and to increase the amount of its authorized capital
stock in conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Six Hundred and One Million, Six Hundred Sixty-
Six Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided
into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred
Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 1000 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE>
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
James T. Byrne, Jr.
------------------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
------------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
Lea Lahtinen
------------------------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
Sandra L. West
- -------------------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE>
BY-LAWS
JUNE 22, 1999
Bankers Trust Corporation
(Incorporated under the New York Business Corporation Law)
<PAGE>
1
BANKERS TRUST CORPORATION
----------------------------------------------------------
BY-LAWS
----------------------------------------------------------
ARTICLE I
SHAREHOLDERS
SECTION 1.01 Annual Meetings. The annual meetings of shareholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the third Tuesday in April of
each year, if not a legal holiday, and if a legal holiday then on the next
succeeding business day, at such hour as shall be designated by the Board of
Directors. If no other hour shall be so designated such meeting shall be held
at 3 P.M.
SECTION 1.02 Special Meetings. Special meetings of the shareholders, except
those regulated otherwise by statute, may be called at any time by the Board of
Directors, or by any person or committee expressly so authorized by the Board of
Directors and by no other person or persons.
SECTION 1.03 Place of Meetings. Meetings of shareholders shall be held at such
place within or without the State of New York as shall be determined from time
to time by the Board of Directors or, in the case of special meetings, by such
person or persons as may be authorized to call a meeting. The place in which
each meeting is to be held shall be specified in the notice of such meeting.
SECTION 1.04 Notice of Meetings. A copy of the written notice of the place,
date and hour of each meeting of shareholders shall be given personally or by
mail, not less than ten nor more than fifty days before the date of the meeting,
to each shareholder entitled to vote at such meeting. Notice of a special
meeting shall indicate that it is being issued by or at the direction of the
person or persons calling the meeting and shall also state the purpose or
purposes for which the meeting is called. Notice of any meeting at which is
proposed to take action which would entitle shareholders to receive payment for
their shares pursuant to statutory provisions must include a statement of that
purpose and to that effect. If mailed, such notices of the annual and each
special meeting are given when deposited in the United States mail, postage
prepaid, directed to the shareholder at his address as it appears in the record
of shareholders unless he shall have filed with the Secretary of the corporation
a written request that notices intended for him shall be mailed to some other
address, in which case it shall be directed to him at such other address.
SECTION 1.05 Record Date. For the purpose of determining the shareholders
entitled to notice of or to vote any meeting of shareholders or any adjournment
thereof, or to express consent to or dissent from any proposal without a
meeting, or for the purpose of determining shareholders entitled to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action, the Board of Directors may fix, in advance, a date as the
record date for any such
<PAGE>
determination of shareholders. Such date shall not be more than fifty nor less
than ten days before the date of such meeting, nor more than fifty days prior to
any other action.
SECTION 1.06 Quorum. The presence, in person or by proxy, of the holders of a
majority of the shares entitled to vote thereat shall constitute a quorum at a
meeting of shareholders for the transaction of business, except as otherwise
provided by statute, by the Certificate of Incorporation or by the By-Laws. The
shareholders present in person or by proxy and entitled to vote at any meeting,
despite the absence of a quorum, shall have power to adjourn the meeting from
time to time, to a designated time and place, without notice other than by
announcement at the meeting, and at any adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
However, if after the adjournment the Board of Directors fixes a new record date
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each shareholder of record on the new record date entitled to notice.
SECTION 1.07 Notice of Shareholder Business at Annual Meeting. At an annual
meeting of shareholders, only such business shall be conducted as shall have
been brought before the meeting (a) by or at the direction of the Board of
Directors or (b) by any shareholder of the corporation who complies with the
notice procedures set forth in this Section 1.07. For business to be properly
brought before an annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the corporation. To
be timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not less than thirty days nor
more than fifty days prior to the meeting; provided, however, that in the event
that less than forty days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to be timely
must be received not later than the close of business on the tenth day following
the day on which such notice of the date of the annual meeting was mailed or
such public disclosure was made. A shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (a) 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, (b) the name and address, as they appear on the corporation's books, of
the shareholder proposing such business, (c) the class and number of shares of
the corporation which are beneficially owned by the shareholder and (d) any
material interest of the shareholder in such business. Notwithstanding anything
in these By-Laws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 1.07
and Section 2.03. The Chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the provisions of this
Section 1.07 and Section 2.03, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.01 Number and Qualifications. The business of the corporation shall
be managed by its Board of Directors. The number of directors constituting the
entire Board of Directors shall be not less than seven nor more than fifteen, as
shall be fixed from time to time by vote of a majority of the entire Board of
Directors. Each director shall be at least 21 years of age. Directors need not
be shareholders. No Officer-Director who shall have attained age 65, or earlier
relinquishes his responsibilities and title, shall be eligible to serve as a
director.
<PAGE>
SECTION 2.02 Election. At each annual meeting of shareholders, directors shall
be elected by a plurality of the votes to hold office until the next annual
meeting. Subject to the provisions of the statute, of the Certificate of
Incorporation and of the By-Laws, each director shall hold office until the
expiration of the term for which elected, and until his successor has been
elected and qualified.
SECTION 2.03 Nomination and Notification of Nomination. Subject to the rights
of holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, nominations for the election of
directors may be made by the Board of Directors or to any committee appointed by
the Board of Directors or by any shareholder entitled to vote in the election of
directors generally. However, any shareholder entitled to vote in the election
of directors generally may nominate one or more persons for election as
directors at a meeting only if written notice of such shareholder's intent to
make such nomination or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the Secretary of the corporation
not later than (i) with respect to an election to be held at an annual meeting
of shareholders ninety days in advance of such meeting, and (ii) with respect to
an election to be held at a special meeting of shareholders for the election of
directors, the close of business on the seventh day following the date on which
notice of such meeting is first given to shareholders. Each such notice shall
set forth: (a) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated; (b) a representation
that the shareholder is a holder of record of stock of the corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (d) such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors;
and (e) the consent of each nominee to serve as a director of the corporation if
so elected. 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 shareholder'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 procedures set forth in the By-Laws. The Chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures prescribed by these
By-Laws, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
SECTION 2.04 Regular Meetings. Regular meetings of the Board of Directors may
be held without notice at such places and times as may be fixed from time to
time by resolution of the Board and a regular meeting for the purpose of
organization and transaction of other business shall be held each year after the
adjournment of the annual meeting of shareholders.
SECTION 2.05 Special Meetings. The Chairman of the Board, the Chief Executive
Officer, the President, the Senior Vice Chairman or any Vice Chairman may, and
at the request of three directors shall, call a special meeting of the Board of
Directors, two days' notice of which shall be given in person or by mail,
telegraph, radio, telephone or cable. Notice of a special meeting need not be
given to any director who submits a signed waiver of notice whether before or
after the meeting, or who attends the meeting without protesting, prior thereto
or at its commencement, the lack of notice to him.
<PAGE>
SECTION 2.06 Place of Meeting. The directors may hold their meetings, have one
or more offices, and keep the books of the corporation (except as may be
provided by law) at any place, either within or without the State of New York,
as they may from time to time determine.
SECTION 2.07 Quorum and Vote. At all meetings of the Board of Directors the
presence of one-third of the entire Board, but not less than two directors,
shall constitute a quorum for the transaction of business. Any one or more
members of the Board of Directors or of any committee thereof may participate in
a meeting of the Board of Directors or a committee thereof by means of a
conference telephone or similar communications equipment which allows all
persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at such a
meeting. The vote of a majority of the directors present at the time of the
vote, if a quorum is present at such time, shall be the act of the Board of
Directors, except as may be otherwise provided by statute or the By-Laws.
SECTION 2.08 Vacancies. Newly created directorships resulting from increase in
the number of directors and vacancies in the Board of Directors, whether caused
by resignation, death, removal or otherwise, may be filled by vote of a majority
of the directors then in office, although less than a quorum exists.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
SECTION 3.01 Designation and Authority. The Board of Directors, by resolution
adopted by a majority of the entire Board, may designate from among its members
an Executive Committee and other committees, each consisting of three or more
directors. Each such committee, to the extent provided in the resolution or the
By-Laws, shall have all the authority of the Board, except that no such
committee shall have authority as to:
(i) the submission to shareholders of any action as to which
shareholders' authorization is required by law.
(ii) the filling of vacancies in the Board of Directors or any committee.
(iii) the fixing of compensation of directors for serving on the Board or
on any committee.
(iv) the amendment or appeal of the By-Laws, or the adoption of new
By-Laws.
(v) the amendment or repeal of any resolution of the Board which by its
terms shall not be so amendable or repealable.
The Board may designate one or more directors as alternate members of any such
committee, who may replace any absent member or members at any meeting of such
committee. Each such committee shall serve at the pleasure of the Board of
Directors.
SECTION 3.02 Procedure. Except as may be otherwise provided by statute, by the
By-Laws or by resolution of the Board of Directors, each committee may make
rules for the call and conduct of its meetings. Each committee shall keep a
record of its acts and proceedings and shall report the same from time to time
to the Board of Directors.
<PAGE>
ARTICLE IV
OFFICERS
SECTION 4.01 Titles and General. The Board of Directors shall elect from among
their number a Chairman of the Board and a Chief Executive Officer, and may also
elect a President, a Senior Vice Chairman, one or more Vice Chairmen, one or
more Executive Vice Presidents, one or more Senior Vice Presidents, one or more
Principals, one or more Vice Presidents, a Secretary, a Controller, a Treasurer,
a General Counsel, a General Auditor, and a General Credit Auditor, who need not
be directors. The officers of the corporation may also include such other
officers or assistant officers as shall from time to time be elected or
appointed by the Board. The Chairman of the Board or the Chief Executive
Officer or, in their absence, the President, the Senior Vice Chairman or any
Vice Chairman, may from time to time appoint assistant officers. All officers
elected or appointed by the Board of Directors shall hold their respective
offices during the pleasure of the Board of Directors, and all assistant
officers shall hold office at the pleasure of the Board or the Chairman of the
Board or the Chief Executive Officer or, in their absence, the President, the
Senior Vice Chairman or any Vice Chairman. The Board of Directors may require
any and all officers and employees to give security for the faithful performance
of their duties.
SECTION 4.02 Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the shareholders and of the Board of Directors. Subject to the
Board of Directors, he shall exercise all the powers and perform all the duties
usual to such office and shall have such other powers as may be prescribed by
the Board of Directors or the Executive Committee or vested in him by the By-
Laws.
SECTION 4.03 Chief Executive Officer. The Board of Directors shall designate
the Chief Executive Officer of the corporation, which person may also hold the
additional title of Chairman of the Board, President, Senior Vice Chairman or
Vice Chairman. Subject to the Board of Directors, he shall exercise all the
powers and perform all the duties usual to such office and shall have such other
powers as may be prescribed by the Board of Directors or the Executive Committee
or vested in him by the By-Laws.
SECTION 4.04 Chairman of the Board, President, Senior Vice Chairman, Vice
Chairmen, Executive Vice Presidents, Senior Vice Presidents, Principals and Vice
Presidents. The Chairman of the Board or, in his absence or incapacity the
President or, in his absence or incapacity, the Senior Vice Chairman, the Vice
Chairmen, the Executive Vice Presidents, or in their absence, the Senior Vice
Presidents, in the order established by the Board of Directors shall, in the
absence or incapacity of the Chief Executive Officer perform the duties of the
Chief Executive Officer. The President, the Senior Vice Chairman, the Vice
Chairmen, the Executive Vice Presidents, the Senior Vice Presidents, the
Principals, and the Vice Presidents shall also perform such other duties and
have such other powers as may be prescribed or assigned to them, respectively,
from time to time by the Board of Directors, the Executive Committee, the Chief
Executive Officer, or the By-Laws.
SECTION 4.05 Controller. The Controller shall perform all the duties customary
to that office and except as may be otherwise provided by the Board of Directors
shall have the general supervision of the books of account of the corporation
and shall also perform such other duties and have such powers as may be
prescribed or assigned to him from time to time by the Board of Directors, the
Executive Committee, the Chief Executive Officer, or the By-Laws.
SECTION 4.06 Secretary. The Secretary shall keep the minutes of the meetings
of the Board of Directors and of the shareholders and shall have the custody of
the seal of the corporation. He
<PAGE>
shall perform all other duties usual to that office, and shall also perform such
other duties and have such powers as may be prescribed or assigned to him from
time to time by the Board of Directors, the Executive Committee, the Chairman of
the Board, the Chief Executive Officer, or the By-Laws.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 5.01 The corporation shall, to the fullest extent permitted by Section
721 of the New York Business Corporation Law, indemnify any person who is or was
made, or threatened to be made, a party to an action or proceeding, whether
civil or criminal, whether involving any actual or alleged breach of duty,
neglect or error, any accountability, or any actual or alleged misstatement,
misleading statement or other act or omission and whether brought or threatened
in any court or administrative or legislative body or agency, including an
action by or in the right of the corporation to procure a judgment in its favor
and an action by or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any director or officer of the corporation is
serving or served in any capacity at the request of the corporation by reason of
the fact that he, his testator or intestate, is or was a director or officer of
the corporation, or is serving or served such other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise in any capacity,
against judgments, fines, amounts paid in settlement, and costs, charges and
expenses, including attorneys' fees, or any appeal therein; provided, however,
that no indemnification shall be provided to any such person if a judgment or
other final adjudication adverse to the director or officer establishes that (i)
his acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 5.02 The corporation may indemnify any other person to whom the
corporation is permitted to provide indemnification or the advancement of
expenses by applicable law, whether pursuant to rights granted pursuant to, or
provided by, the New York Business Corporation Law or other rights created by
(i) a resolution of shareholders, (ii) a resolution of directors, or (iii) an
agreement providing for such indemnification, it being expressly intended that
these By-Laws authorize the creation of other rights in any such manner.
SECTION 5.03 The corporation shall, from time to time, reimburse or advance to
any person referred to in Section 5.01 the funds necessary for payment of
expenses, including attorneys' fees, incurred in connection with any action or
proceeding referred to in Section 5.01, upon receipt of a written undertaking by
or on behalf of such person to repay such amount(s) if a judgment or other final
adjudication adverse to the director or officer establishes that (i) his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 5.04 Any director or officer of the corporation serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the corporation, or (ii) any employee benefit plan
of the corporation or any corporation referred to in clause (i), in any capacity
shall be deemed to be doing so at the request of the corporation. In all other
cases, the provisions of this Article V will apply (i) only if the person
serving another corporation or any partnership, joint venture, trust, employee
benefit plan or other enterprise so
<PAGE>
served at the specific request of the corporation, evidenced by a written
communication signed by the Chairman of the Board, the Chief Executive Officer,
the President, the Senior Vice Chairman or any Vice Chairman, and (ii) only if
and to the extent that, after making such efforts as the Chairman of the Board,
the Chief Executive Officer, or the President shall deem adequate in the
circumstances, such person shall be unable to obtain indemnification from such
other enterprise or its insurer.
SECTION 5.05 Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of the
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 5.06 The right to be indemnified or to the reimbursement or advancement
of expenses pursuant to this Article V (i) is a contract right pursuant to which
the person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the corporation and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 5.07 If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the corporation
within thirty days after a written claim has been received by the corporation,
the claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
or reimbursement or advancement of expenses to the claimant is proper in the
circumstances, nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel, or its shareholders) that the
claimant is not entitled to indemnification or to the reimbursement or
advancement of expenses, shall be a defense to the action or create a
presumption that the claimant is not so entitled.
SECTION 5.08 A person who has been successful, on the merits or otherwise, in
the defense of a civil or criminal action or proceeding of the character
described in Section 5.01 shall be entitled to indemnification only as provided
in Sections 5.01 and 5.03, notwithstanding any provision of the New York
Business Corporation Law to the contrary.
ARTICLE VI
SEAL
SECTION 6.01 Corporate Seal. The corporate seal shall contain the name of the
corporation and the year and state of its incorporation. The seal may be
altered from time to time at the discretion of the Board of Directors.
<PAGE>
ARTICLE VII
SHARE CERTIFICATES
SECTION 7.01 Form. The certificates for shares of the corporation shall be in
such form as shall be approved by the Board of Directors and shall be signed by
the Chairman of the Board, the Chief Executive Officer, the President, the
Senior Vice Chairman or any Vice Chairman and the Secretary or an Assistant
Secretary, and shall be sealed with the seal of the corporation or a facsimile
thereof. The signatures of the officers upon the certificate may be facsimiles
if the certificate is countersigned by a transfer agent or registered by a
registrar other than the corporation itself or its employees.
ARTICLE VIII
CHECKS
SECTION 8.01 Signatures. All checks, drafts and other orders for the payment
of money shall be signed by such officer or officers or agent or agents as the
Board of Directors may designate from time to time.
ARTICLE IX
AMENDMENT
SECTION 9.01 Amendment of By-Laws. The By-Laws may be amended, repealed or
added to by vote of the holders of the shares at the time entitled to vote in
the election of any directors. The Board of Directors may also amend, repeal or
add to the By-Laws, but any By-Laws adopted by the Board of Directors may be
amended or repealed by the shareholders entitled to vote thereon as provided
herein. If any By-Law regulating an impending election of directors is adopted,
amended or repealed by the Board, there shall be set forth in the notice of the
next meeting of shareholders for the election of directors the By-Laws so
adopted, amended or repealed, together with concise statement of the changes
made.
ARTICLE X
SECTION 10.01 Construction. The masculine gender, when appearing in these By-
Laws, shall be deemed to include the feminine gender.
<PAGE>
I, Marc J. Parilla, Assistant Vice President of Bankers Trust Company, New York,
New York, hereby certify that the foregoing is a complete, true and correct copy
of the By-Laws of Bankers Trust Company, and that the same are in full force and
effect at this date.
--------------------------
Marc J. Parilla
Assistant Vice President
DATED: , 1999
----------
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 03/31/99 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
--------------------------
C400
--------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS / / / / / / / / / / / /
1. Cash and balances due from depository
institutions (from Schedule RC-A): / / / / / / / / / / / /
a. Noninterest-bearing balances and
currency and coin (1)............................ 0081 1,695,000 1.a.
b. Interest-bearing balances (2).................... 0071 1,308,000 1.b.
2. Securities: / / / / / / / / / / / /
a. Held-to-maturity securities (from
Schedule RC-B, column A)......................... 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)......................... 1773 6,150,000 2.b.
3. Federal funds sold and securities
purchased under agreements to resell................. 1350 29,512,000 3.
4. Loans and lease financing receivables: / / / / / / / / / / / /
a. Loans and leases, net of unearned
income (from Schedule RC-C)...................... RCFD 2122 18,869,000 / / / / / / / / / / / / 4.a.
b. LESS: Allowance for loan and lease losses....... RCFD 3123 571,000 / / / / / / / / / / / / 4.b.
c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 / / / / / / / / / / / / 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b
and 4.c)......................................... 2125 18,298,000 4.d.
5. Trading Assets (from schedule RC-D).................. 3545 34,815,000 5.
6. Premises and fixed assets (including
capitalized leases).................................. 2145 916,000 6.
7. Other real estate owned (from Schedule RC-M)......... 2150 88,000 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M)............ 2130 883,000 8.
9. Customers' liability to this bank on
acceptances outstanding.............................. 2155 307,000 9.
10. Intangible assets (from Schedule RC-M)............... 2143 302,000 10.
11. Other assets (from Schedule RC-F).................... 2160 4,645,000 11.
12. Total assets (sum of items 1 through 11)............. 2170 98,919,000 12.
--------------------------
</TABLE>
__________________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 03/31/99 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State ZIP: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
Schedule RC--Continued
<TABLE>
<CAPTION>
--------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES / / / / / / / / / / / /
13. Deposits: / / / / / / / / / / / /
a. In domestic offices (sum of totals of columns A
and C from Schedule RC-E, part 1)............... RCON 2200 17,829,000 13.a.
(1) Noninterest-bearing(1)..................... RCON 6631 2,939,000 / / / / / / / / / / / / 13.a.(1)
(2) Interest-bearing........................... RCON 6636 14,890,000 / / / / / / / / / / / / 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from
Schedule RC-E, part II)......................... RCON 2200 20,634,000 13.b.
(1) Noninterest-bearing........................ RCFN 6631 1,878,000 / / / / / / / / / / / / 13.b.(1)
(2) Interest-bearing........................... RCFN 6636 18,756,000 / / / / / / / / / / / / 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase............................ RCFD 2800 13,513,000 14.
15. a. Demand notes issued to the U.S. Treasury........ RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D)........ RCFD 3548 22,010,000 15.b.
16. Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases): / / / / / / / / / / / /
a. With a remaining maturity of one year or less... RCFD 2332 6,400,000 16.a.
b. With a remaining maturity of more than one year
through three years............................. A547 2,347,000 16.b.
c. With a remaining maturity of more than
three years..................................... A548 2,321,000 16.c
17. Not Applicable. / / / / / / / / / / / / 17.
18. Bank's liability on acceptances executed
and outstanding..................................... RCFD 2920 307,000 18.
19. Subordinated notes and debentures (2)............... RCFD 3200 438,000 19.
20. Other liabilities (from Schedule RC-G).............. RCFD 2930 6,129,000 20.
21. Total liabilities (sum of items 13 through 20)...... RCFD 2948 91,928,000 21.
22. Not Applicable / / / / / / / / / / / / 22.
EQUITY CAPITAL / / / / / / / / / / / /
23. Perpetual preferred stock and related surplus....... RCFD 383 1,500,000 23.
24. Common stock........................................ RCFD 3230 2,127,000 24.
25. Surplus (exclude all surplus related to
preferred stock).................................... RCFD 3839 541,000 25.
26. a. Undivided profits and capital reserves.......... RCFD 3632 3,291,000 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities................... RCFD 8434 ( 59,000) 26.b.
c. Accumulated net gains (losses) on cash flow
hedges.......................................... RCFD 4336 0 26.c.
27. Cumulative foreign currency translation adjustments. RCFD 3284 ( 409,000) 27.
28. Total equity capital (sum of items 23 through 27)... RCFD 3210 6,991,000 28.
29. Total liabilities and equity capital (sum of
items 21 and 28).................................... RCFD 3300 98,919,000 29.
--------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that best describes the most
comprehensive level of auditing work performed for Number
the bank by independent external auditors as of any --------------
date during 1998.................................... RCFD 6724 1 M.1.
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</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No extermal audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
______________________
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
