<PAGE> 1
EXHIBIT 10.7
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "AGREEMENT") is entered into as of this 31st
day of July, 2000, by and between Alamosa Operations, Inc., a Delaware
corporation ("MANAGER"), and Roberts Wireless Communications, LLC, a Missouri
limited liability company ("LICENSEE") (Manager and Licensee collectively, the
"PARTIES").
RECITALS
WHEREAS, Alamosa PCS Holdings, Inc., a Delaware corporation ("ALAMOSA")
owns and operates a wireless telecommunications network, principally in the
states of Arizona, New Mexico, Texas, and Wisconsin, pursuant to management
agreements (although more than one, the "ALAMOSA MANAGEMENT AGREEMENT") with,
among others, WirelessCo, L.P., SprintSpectrum L.P., Cox Communications PCS,
L.P., Cox PCS License, LLC, and SprintCom, Inc. (collectively, "SPRINT PCS");
WHEREAS, Licensee owns and operates a wireless telecommunications network
in the Basic Trading Areas set forth on EXHIBIT A (the "BTAs"), pursuant to a
management agreement, dated as of June 8, 1998, with Sprint PCS (the "LICENSEE
MANAGEMENT AGREEMENT");
WHEREAS, Alamosa and Licensee, among others, have simultaneously entered
into an Agreement and Plan of Reorganization (herein so called) pursuant to
which Licensee will agree to merge (the "PARENT MERGER") with and into Alamosa
Holdings, Inc., a Delaware corporation ("SUPERHOLDINGS"), simultaneously with
the merger of a wholly-owned subsidiary of Superholdings with and into Alamosa
(the "SUBSIDIARY MERGER," together with the Parent Merger, the "MERGERS"), which
Mergers are expected to be consummated on or about November 1, 2000;
WHEREAS, pending consummation of the Mergers, Licensee desires that Manager
provide, and Manager has agreed to provide, (a) all network management services
for the operation of Licensee's wireless telecommunication network within the
BTAs (the "NETWORK"), (b) management of all sales and marketing services, and
(c) through the Licensee Management Agreement, customer care, billing, and other
services, all in connection with the operation of Licensee's business, on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 - LICENSES; LICENSEE MANAGEMENT AGREEMENT
1.1 Licenses. The Parties acknowledge that Sprint PCS holds the Federal
Communications Commission ("FCC") licenses to provide broadband
personal communications services ("PCS") within the BTAs (the
"Licenses"). This Agreement will, in all respects, be subject to the
FCC's rules and regulations regarding the ownership and control of the
Licenses. To the extent that the operation of any provision herein
conflicts with or violates any of the FCC's rules and regulations
governing the Licenses, the Parties agree to amend this Agreement
accordingly, and in doing so, shall, to the greatest extent possible,
preserve and maintain the respective economic benefits arising from
this Agreement. Notwithstanding anything herein to the contrary, the
"FBlock" licenses owned by Licensee are excluded from the Services
provided under this Agreement.
<PAGE> 2
1.2 Licensee Management Agreement. The Parties acknowledge that the
Licensee Management Agreement imposes operational and performance
standards and requirements upon the operation of the Network and
imposes other standards and requirements upon the conduct of Licensee's
wireless telecommunications business (collectively, the "PROGRAM
REQUIREMENTS"). In performing its services hereunder, Manager agrees to
use the same degree of care in complying with the Program Requirements
as it uses in complying with the Program Requirements that cover
Manager's own wireless networks. Licensee has delivered a true and
correct copy of the Licensee Management Agreement to Manager, and
Manager has reviewed the Agreement in its entirety. Manager shall have
the right to notify Sprint PCS that Sprint PCS should deliver copies of
notices, demands, or other material written communications regarding
the operation of the Network to Manager. To the extent Manager receives
such notices, demands, or other material written communications from
Sprint PCS, Manager shall provide Licensee with copies of such
documents, promptly after Manager's receipt thereof. To the extent
Licensee receives such notices, demands, or other material
communications directly from Sprint PCS, Licensee shall provide Manager
with copies of such documents, promptly after Licensee's receipt
thereof. In particular, Licensee agrees to provide immediate written
notice to Manager of any amendment or proposed amendment to the Program
Requirements and any notices of default from Sprint PCS. To the extent
that an amendment or modification to the Program Requirements will
result in a significant incremental increase or decrease in the cost to
Manager to perform its services as described herein, the Parties agree
to negotiate, in good faith, for a corresponding modification in the
compensation to be paid to Manager hereunder. Licensee agrees to
consider and pursue in good faith any request by Manager for Licensee
to seek modifications, waivers, interpretations, or clarifications of
the Program Requirements or other obligations of Licensee under the
Licensee Management Agreement. If, in connection with any proposed
change to the Program Requirements, Sprint PCS seeks the consent or
advice of Licensee, Licensee agrees to consult with Manager with
respect to such consent or advice.
1.3 Trademark License Agreement. The Parties acknowledge that Licensee has
also entered into a Trademark License Agreement with Sprint PCS that
governs the use of the Sprint brand, service marks, and other
intellectual property. Manager will be responsible for Licensee's
compliance with the terms and conditions of the Trademark License
Agreement; provided, however, that (a) Manager will be relieved of such
responsibility (i) to the extent of any actions taken directly by
Licensee or its employees and (ii) to the extent that Manager takes
actions upon the direct request or instruction by Licensee and (b)
Manager shall have 30 days to exercise reasonable efforts to cure any
violations or breaches, if any, by Licensee of the Trademark License
Agreement existing as of the date of this Agreement, which violations
and breaches are set forth on SCHEDULE 1.3; provided further that
Manager shall not be liable for any damages arising from such existing
violations which Manager is unable to cure through its commercially
reasonable efforts. Manager agrees to use the same degree of care in
complying with the Trademark License Agreement as it uses in complying
with the Trademark License Agreement which covers Manager's own
wireless markets.
ARTICLE 2 - ENGAGEMENT OF MANAGER
2.1 Engagement. Upon the terms and conditions, and for the compensation,
set forth herein, Licensee hereby engages Manager, and Manager hereby
accepts such engagement, to provide the services described in this
Agreement and the Schedules (collectively, the "SERVICES").
2
<PAGE> 3
2.2 Governing Standards. Subject to the terms and conditions in this
Agreement, Manager will use commercially reasonable efforts to provide
the Services and in connection therewith will be held to that standard
of care as would be exercised under similar circumstances by other
wireless network operators in accordance with sound business principles
and practices customary to the wireless telecommunications industry
and, in addition, Manager will, in the conduct of the Services
hereunder, use substantially the same standard of care as it uses in
the operation of its own wireless network.
2.3 Compliance with Regulatory Rules. In connection with the provision of
the Services under this Agreement, Manager shall comply in all material
respects with the rules and regulations of the FCC. Each Party agrees
to immediately deliver to the other Party any material notices,
filings, orders, or other documents from the FCC which relate to the
Network, the Licenses, or the business of Licensee, promptly after
receipt thereof. The Parties also agree that, in the event that a new
law or decision by a telecommunications regulatory authority at the
federal, state, or local level necessitates modifications in this
Agreement, the Parties will negotiate in good faith to modify this
Agreement in light of such law or decision and, in doing so, shall
attempt to preserve and maintain the respective economic benefits
arising from this Agreement.
2.4 Exclusivity. During the Term of this Agreement, Manager will be the
only person or entity that is engaged by Licensee as a manager or
operator of any element of the Network or of Licensee's wireless
business in the BTAs.
ARTICLE 3 - NETWORK SERVICES
3.1 Network Facilities. The Parties acknowledge that Licensee will be
responsible for the purchase and ownership of (a) equipment shelters
and cabinets located at each Licensee cell site within the BTAs
(collectively, the "SITES"); (b) all of the base station equipment,
antennas, and ancillary site equipment located at the Sites; (c) all
non-Site infrastructure equipment necessary for the operation of the
Network, but excluding the equipment which is owned by Manager and
which is covered by SECTION 3.2; and (d) all leasehold improvements,
furniture, fixtures, and equipment located at Licensee's retail stores
(the "RETAIL STORES"). Manager shall negotiate, on Licensee's behalf,
the purchase price and terms for the purchase of all of the foregoing
assets and will engage third parties, on behalf of Licensee, to
engineer and install such assets at the Sites or otherwise and to
provide other construction services. The Services to be provided by
Manager under this SECTION 3.1 shall be deemed to be Management
Services for which Manager shall be entitled to the Management Fee as
provided in SECTION 10.1. Licensee shall be the lessee of, and shall be
responsible for all lease payments under, the real property for each
Site on which Licensee owns the tower and shall be the licensee of each
Site where Licensee will collocate an antenna and other base station
equipment on a tower and real property owned by a third party.
Notwithstanding the foregoing, the Parties acknowledge that Licensee
has entered into a transaction with Roberts Tower Company and Roberts
Communications Properties LLC whereby Licensee will transfer ownership
of all or a part of its towers, switched facility locations, retail
store sites, and certain switched equipment, and all or a part of its
rights to the underlying real estate to such purchaser, who will in
turn lease such assets to Licensee.
3.2 Interconnection Arrangements. Manager will negotiate and implement
interconnection agreements, on behalf of Licensee, with the applicable
incumbent local exchange carriers ("ILECs") in the
3
<PAGE> 4
BTAs. The Parties acknowledge that the operation of the Network will be
subject to such interconnection agreements. All payments to the ILECs
required under the interconnection agreements shall be the
responsibility of Licensee and all payments shall be made pursuant to
the provisions of SECTION 12.1. The Services to be provided by Manager
under this SECTION 3.2 shall be deemed to be Management Services, for
which Manager shall be entitled to the Management Fee, as provided in
SECTION 10.1. Manager acknowledges that Sprint PCS may arrange for
interconnection in the BTAs as provided in SECTION 1.4 of the Licensee
Management Agreement.
3.3 Miscellaneous Infrastructure Provisions. At any physical location where
Manager is required to place its own equipment within Licensee's
facilities, Licensee will grant reasonable access and collocation
rights, without charge, to Manager for the purpose of the installation,
repair, maintenance, upgrade, and maintenance of Manager's equipment,
consistent with the terms and conditions of this Agreement. Licensee
shall be required to obtain all commercially reasonable consents,
permits, or other approvals that may be required by third parties in
connection with such access and rights. Licensee shall not adjust,
move, modify, or repair Manager's equipment located at any collocation
facility or otherwise, except with the prior written consent of
Manager, in the case of an emergency, or upon termination of this
Agreement if Manager fails to remove its equipment in a reasonable
time. Manager's equipment or facility shall not be removed or relocated
by Licensee, except with the prior written consent of Manager, in the
case of an emergency, or upon termination of this Agreement if Manager
fails to remove its equipment in a reasonable time. Each Party's
facilities and equipment shall remain the sole and exclusive property
of that Party, and nothing contained herein shall give or convey to
either Party any right, title, or interest whatsoever in the other
Party's facilities or equipment.
3.4 Network Build-out. Licensee has developed a Build-out Plan (as defined
in the Licensee Management Agreement) for the BTAs; Manager has
reviewed the Build-Out Plan; Manager will use commercially reasonable
efforts to implement and complete the Build-Out Plan. Manager
acknowledges that Sprint PCS has certain rights to build portions of
the Network in the BTAs, pursuant to Section 2.5 of the Licensee
Management Agreement. The Services to be provided by Manager under this
SECTION 3.4 shall be deemed to be Management Services, for which
Manager shall be entitled to the Management Fee set forth in SECTION
10.1.
3.5 Microwave Relocation. Under the Licensee Management Agreement, Sprint
PCS will perform all microwave relocation required in connection with
the deployment of the Network. Licensee will be solely responsible for
reimbursement to Sprint PCS for Licensee's portion of microwave
relocation costs in accordance with Section 2.7 of the Licensee
Management Agreement.
3.6 Access. In connection with the performance of its Services under this
Agreement, Manager shall have full access to the Network, including
without limitation access to each Site and the equipment thereon.
3.7 Network Employees. Licensee will maintain certain Network employees
designated and approved by Manager. Manager will have full authority
over, and be primarily responsible for, building out, maintaining, and
operating the Network. The Parties agree that, from time to time, it
may be necessary and desirable to utilize Manager employees to provide
Network-related services under this Agreement. Such services may
include RF redesigns, site optimizations, and system check-off after
construction. The Parties agree that Manager's executive in charge of
network operations will have
4
<PAGE> 5
overall responsibility for the provision of the network services
described in ARTICLE 3. The Services to be provided by Manager under
this SECTION 3.7 shall be deemed to be Management Services, for which
Manager will receive the Management Fee as set forth in SECTION 10.1.
3.8 Volume Discounts. Manager will use commercially reasonable efforts to
obtain for Licensee the same volume-based pricing and discounts from
vendors that Manager receives from its vendors.
ARTICLE 4 - NETWORK OPERATIONS
4.1 Operation of the Network. Licensee shall be responsible for paying for
all items relating to the operation, performance, and maintenance of
the Network, including without limitation (a) maintenance of the Sites
and the related towers and base station equipment, utility charges for
the Sites, cell site dedicated facilities (including without limitation
T-1s, DS3s, etc.), (b) the payment of all vehicle lease payments,
expenses of operation, and repair, (c) all expenses relating to RF
Engineering, (c) all toll interconnection expenses, and (d) all roaming
expenses. All such payments shall be made pursuant to SECTION 12.1.
ARTICLE 5 - CUSTOMER ACTIVATION; CUSTOMER CARE; AND BILLING
5.1 Customer Activation; Customer Care/Retention; Billing Services. All
aspects of customer activation, customer care, and billing services for
customers of Licensee will be governed by Section 2.1 of the Licensee
Management Agreement.
5.2 Management Responsibility. The Parties agree that Manager's customer
service group will have overall responsibility for the day-to-day
provision of the customer services, including the responsibility for
interfacing with Sprint PCS with regard to Licensee's obligations under
the Licensee Management Agreement. The Services to be provided by
Manager in accordance with the preceding sentence shall be deemed to be
Management Services, for which Manager will receive the Management Fee
as set forth in SECTION 10.1.
ARTICLE 6 - SALES AND MARKETING
6.1 Sprint PCS Products and Services. Manager acknowledges that Licensee
must offer for sale, promote, and support all Sprint PCS Products and
Services (as defined in the Licensee Management Agreement), unless the
parties otherwise agree in advance in writing, subject to the
exceptions set forth in the Licensee Management Agreement. During the
Term of this Agreement, Manager acknowledges that Licensee must
participate in the Sprint PCS National or Regional Distribution
Programs, the Sprint PCS National Accounts Program and the Sprint PCS
Roaming and InterService Area Programs. In addition, the Parties
acknowledge that the pricing of the Sprint PCS Products and Services
shall be governed by the Licensee Management Agreement.
6.2 Overall Management. Manager's senior executive in charge of sales and
marketing will have overall responsibility for the sales and marketing
services described in this ARTICLE 6, including without limitation the
responsibility of interfacing with Sprint PCS in connection with the
Licensee Management Agreement. The provision of Services by such senior
executive shall be deemed to be Management Services, for which Manager
shall receive the Management Fee, as set forth in SECTION 10.1.
5
<PAGE> 6
6.3 Indirect Marketing Services. Manager's marketing group will perform, on
behalf of Licensee, market research and will develop (in conjunction
with Sprint PCS) collateral and other marketing material and will have
overall responsibility for local marketing activities in the Licensee
coverage areas within the BTA (the "COVERAGE AREA"). All third party
costs for such marketing activities will be the responsibility of
Licensee. To the extent that Manager directly pays such third party
expenses, Licensee shall reimburse Manager in accordance with the terms
and conditions of SECTION 11.1. The Services to be provided by Manager
under this SECTION 6.3 shall be deemed to be Management Services, for
which Manager shall receive the Management Fee, as provided in SECTION
10.1.
6.4 Direct Marketing Activities. Licensee shall be responsible for paying
all expenses for the development and production of marketing material
for the Licensee coverage areas, including without limitation the costs
of printing marketing material, printing marketing collateral, direct
mailings, billboards, local media, radio and television, and all other
advertising activity in the BTAs. Direct Licensee marketing expenses
also include the cost for media, direct mail, presentations,
printing/collateral, public relations, and trade shows. To the extent
that Manager directly pays for any of such expenses, Licensee shall
reimburse Manager in accordance with the terms and conditions set forth
in SECTION 11.1.
6.5 Direct Sales Representative and Sales Managers. The direct sales
representatives and sales managers for Licensee's PCS business shall be
employees of Licensee. The sales representatives and sales managers
will report to one of Manager's executives.
6.6 Retail Stores. Licensee shall be responsible for the payment, pursuant
to the provisions of SECTION 12.1, of all costs and expenses associated
with the operation of Licensee Retail Stores in the BTAs. Such costs
include, without limitation, all lease and related payments for the
retail store locations, all leasehold improvements, all furniture,
fixtures, and equipment, all utilities, all telephone systems, and all
PC equipment/software in such locations. To the extent that Manager
directly pays any of such costs and expenses, Licensee shall reimburse
Manager upon the terms and conditions set forth in SECTION 11.1. The
sales representatives and store managers in the Retail Stores will be
employees of Licensee. These employees will report to one of Manager's
executives (or an employee who reports directly to such executive).
Licensee acknowledges and agrees that Manager will have the authority
to make all decisions with respect to all aspects of owning and
operating the Retail Stores, including without limitation, opening new
Retail Stores and eliminating existing Retail Stores.
6.7 Commissions. Licensee shall be responsible for paying, pursuant to the
provisions of SECTION 12.1, for all commissions, related compensation,
and related charges on the sale of PCS service by third parties
(including without limitation agents and distributors) and SPFs to
sales representatives and commissions payable to direct sales
representatives and sales representatives in the Retail Stores. To the
extent that Manager directly pays any of such commissions or charges,
Licensee shall reimburse Manager in accordance with the terms and
conditions set forth in SECTION 11.1.
6.8 Handsets. Licensee shall be responsible for the purchase, under the
direction of Manager, of all inventories of handsets and accessories
for Licensee's operations. Manager will negotiate, on behalf of
Licensee, the purchase price and terms for such purchases. Licensee
acknowledges that it is customary in the wireless industry that the
service provider (Licensee) shall be required to sell handsets to third
party retailers (sales agents and distributors) at prices that are
below the prices
6
<PAGE> 7
charged to the service provider by the manufacturer of the handsets.
The financial impact of these subsidies shall be the sole
responsibility of Licensee.
6.9 Roaming Coordination. On behalf of Licensee, Manager will be
responsible for the coordination of roaming services and will monitor
the monthly roaming settlements on behalf of Licensee in conjunction
with Sprint PCS through the Licensee Management Agreement. The Services
set forth in the foregoing sentence shall be deemed to be Management
Services, for which Manager shall be paid the Management Fee as set
forth in SECTION 10.1.
6.10 Third Party Fulfillment. On behalf of Licensee, Manager will coordinate
the fulfillment on handsets. These services will include, without
limitation, forecasting handset needs; interaction with Sprint PCS with
respect to forecasted handsets; ordering handsets on Licensee's behalf,
through Sprint PCS or BrightPoint; receiving inventory; and tracking
inventory. The Services set forth in the foregoing sentences shall be
deemed to be Management Services, for which Manager shall be paid the
Management Fee as set forth in SECTION 10.1. Licensee shall be
responsible for all charges from third parties with respect to the
warehousing, transportation and distribution of handsets to be sold by
Licensee or by its indirect sales network. To the extent that Manager
pays any of such charges, Licensee shall reimburse Manager in
accordance with the terms and conditions set forth in SECTION 11.1.
ARTICLE 7 - GENERAL AND ADMINISTRATIVE SERVICES
7.1 Executive Services. Executive services provided by the President of
Manager shall be deemed to be Management Services, for which Manager
shall be entitled to the Management Fee as provided in SECTION 10.1.
7.2 Finance and Accounting. The Chief Financial Officer of Manager will
have overall responsibility for the financial services to be provided
by Manager under this Agreement. Manager will be responsible for the
following financial and accounting services: accounting and reporting;
financial planning and budgeting; treasury functions; settlements with
Sprint PCS; and the cash management/accounts payable services described
in ARTICLE 12. The services of the Chief Financial Officer of Manager
and other employees of Manager as outlined in this SECTION 7.2, shall
be deemed to be Management Services for which Manager shall be entitled
to the Management Fee, as set forth in SECTION 10.1.
7.3 Human Resources Services. The Human Resources department of Manager
will provide human resource services to Licensee, including staffing
functions and administration of employees. The services described in
this SECTION 7.3 shall be deemed to be Management Services, for which
Manager shall be entitled to the Management Fee, as set forth in
SECTION 10.1.
7.4 Professional Services. Manager shall have the right to engage
professionals to provide services on behalf of Licensee, provided that
Manager shall not engage legal or accounting professionals on behalf of
Licensee without the prior consent of Licensee (which consent will not
be unreasonably withheld). Manager shall advise Licensee if any of such
professionals also provide professional services to Manager. Licensee
shall be responsible for paying the fees and expenses of such
professionals. To the extent that Manager pays any of such costs and
expenses directly, Licensee shall reimburse Manager in accordance with
the terms and conditions of SECTION 11.1. Manager
7
<PAGE> 8
agrees that, prior to engaging any single professional (including any
consultant) whose fees will exceed $50,000.00, it will obtain the prior
approval of Licensee (which approval will not be unreasonably
withheld).
7.5 Forecasting. On behalf of Licensee, Manager will work cooperatively
with Sprint PCS to generate mutually acceptable forecasts of important
business metrics including traffic volumes, handset sales, subscribers,
and revenues for the Sprint PCS Products and Services. The forecasts
are for planning purposes only and do not constitute Manager's
obligation to meet the quantities forecast. The Services under this
SECTION 7.4 shall be deemed to be Management Services, for which
Manager shall be entitled to the Management Fee as provided in SECTION
10.1.
7.6 General and Administrative Services. Manager will be responsible for
supervising the general and administrative services to manage the
day-to-day operations of Licensee. Licensee shall be responsible for
all general and administrative costs and expenses directly related to
Licensee's operations.
ARTICLE 8 - TAXES
8.1 Tax Returns. Licensee shall be responsible for the filing of all
required federal, state, and local tax filings and similar tax filings
with regard to the assets, operation, and business of Licensee. Manager
shall cooperate fully with Licensee and its accountants to provide on a
prompt and timely basis information within Manager's possession, which
is necessary for the preparation of such filings. Such filings will be
provided to Manager for reasonable review and approval prior to filing.
8.2 Payment of Taxes. Licensee shall have the sole responsibility to pay
all federal, state ,and local taxes and similar fees and charges when
due, including without limitation income taxes, sales taxes, employment
taxes, and withholding payments. Manager shall have the right to pay
all such taxes, fees, and charges pursuant to the provisions of SECTION
12.1.
ARTICLE 9 - DEBT
9.1 Borrowings; Debt Service. In connection with the construction and
operation of the Network and the operation of Licensee's business, the
Parties acknowledge that Licensee will be required to borrow
substantial sums of money from third parties or from Manager or its
affiliates, including without limitation vendor financing. Licensee
shall be solely responsible for the payment of all principal, interest,
and other charges in connection with such lending transactions. Manager
shall not guarantee, pledge any of its assets, or otherwise be
obligated, primarily or secondarily, with respect to any of the
borrowings, debts, or liabilities of Licensee. No provision in this
Agreement shall be deemed to make Manager liable, directly or
indirectly, for any borrowings, debts, or liabilities of Licensee,
except to the extent specifically set forth herein. Manager will
cooperate with and assist Licensee by providing information required
for certificates and other documents required for borrowings by
Licensee, and Licensee may rely on such information provided by
Manager.
ARTICLE 10 - MANAGEMENT SERVICES; MANAGEMENT FEE
10.1 Management Services; Fees. As set forth in this Agreement, certain
Services to be provided by Manager are deemed to be Management
Services. As full compensation for all of the Management
8
<PAGE> 9
Services rendered by Manager under this Agreement, Licensee agrees to
pay to Manager a management fee (the "MANAGEMENT Fee"), equal to
$100,000 per month.
10.2 Payment of Management Fee. Licensee shall pay the Management Fee to
Manager within 15 days after the end of each full or partial month
during the Term of this Agreement.
ARTICLE 11 - REIMBURSEMENT OF EXPENSES
11.1 Reimbursable Expenses. With respect to each provision in this Agreement
which requires Licensee to reimburse Manager for certain costs and
expenses incurred or paid by Manager, Manager shall prepare, and
deliver to Licensee on or before the 15th day of each month, an
invoice, payable in thirty days, in reasonable detail, which sets forth
the reimbursable items under this Agreement for the prior month.
Manager agrees that, prior to incurring any single reimbursement
expense of greater than $50,000.00, it will obtain the prior approval
of Licensee. Manager shall not be entitled to additional reimbursement
for services performed by Manager's personnel or any of its affiliates
or for their travel expenses (all of which are included in the
Management Fee).
ARTICLE 12 - CASH MANAGEMENT
12.1 Licensee Bank Accounts. Licensee has established one or more bank
accounts (the "ACCOUNTS") as depositories for all of Licensee's funds.
Manager shall have the sole authority to make draws on the Accounts and
to draw under any of Licensee's credit facilities (including, but not
limited to, any lending arrangements with Manager or its affiliates),
and Licensee agrees to execute and deliver any documentation reasonably
required in connection therewith by the depository institutions at
which the Accounts are held or by lenders for the credit facilities.
All cash receipts of Licensee, including without limitation, debt
proceeds, vendor financing proceeds, advances from Manager, and
revenues from subscribers shall be deposited in the Accounts. As part
of the Services under SECTION 7.2, Manager employees will have sole
authority over such Accounts, and shall make payments from the
Accounts, on Licensee's behalf, to pay the obligations of Licensee,
including without limitation (a) the payment to Sprint PCS of the fees
and other payments under the Licensee Management Agreement; (b) the
payment of all debt service (including principal, interest, and other
amounts) under any debt obligations of Licensee; (c) payments for the
purchase of equipment and inventory; (d) payments to service providers,
including without limitation site acquisition, telecommunications
services (including without limitation interconnection services, long
distance services, backhaul services, and roaming services), utilities,
public relations, advertising, and professional services; (e) lease or
license payments for the Sites and for the Retail Stores; (f) the
payment of tax obligations imposed on Licensee and its assets and
operations; and (g) the payment of all fees, compensation, and
reimbursements due to Manager under this Agreement. Manager shall have
no liability for any such payment that it makes in good faith,
provided, however, that Manager shall be accountable for any payments
made to Manager or any of its affiliates.
ARTICLE 13 - TERM OF THE AGREEMENT
13.1 Term. The term (the "TERM") of this Agreement shall (a) commence on the
later of the date on which (i) all consents to the transactions
contemplated by the Agreement and Plan of Reorganization have been
obtained from the parties listed on SCHEDULE 13.1, and (ii) either (A)
the waiting period prescribed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the rules and
9
<PAGE> 10
regulations promulgated thereunder (the "HSR ACT") has expired or (B)
early termination of the waiting period under the HSR Act has been
granted, and (b) continue until the consummation of the Mergers,
subject to earlier termination as provided in ARTICLE 16.
ARTICLE 14 - FINANCIAL STATEMENTS AND OPERATIONAL REPORTS
14.1 Operational Reports. Manager shall prepare monthly operating reports in
the format of, and including the information set forth in, SCHEDULE
14.1. The monthly operations reports shall include (i) unaudited
balance sheets, income statements, and cash flow statements, (ii) other
operating data, and (iii) a reasonably detailed summary of all payments
to Manager of any nature during the prior month.
14.2 Audit. Manager must maintain books and records to support and document
any fees, costs, expenses, or other charges due in connection with this
Agreement. The records must be retained for a period of at least three
years after the fees, costs, expenses, or other charges to which such
records relate have accrued and have been paid, or such other longer
period as may be required by applicable law. On reasonable advance
notice, Manager must provide reasonable access to its appropriate
records to the independent auditors or other financial representatives
selected by Licensee for purposes of conducting an audit of the fees,
costs, expenses, or other charges payable in connection with this
Agreement. Licensee will conduct the audit no more frequently than
annually. If the audit shows that Manager was underpaid, Licensee will,
unless the amount of underpayment is contested, pay to Manager the
amount of the underpayment within ten days after Manager gives Licensee
written notice of the determination of the underpayment. If the audit
determines that Manager was overpaid, Manager will, unless the amount
is contested, pay to Licensee the amount of the overpayment within ten
days after Manager determines that Manager was overpaid. To the extent
a Party contests such overpayment/underpayment, ARTICLE 22 shall apply.
To the extent that Licensee maintains independent books and records
regarding the fees, costs, expenses, or other charges due in connection
with this Agreement, Licensee must maintain such books and records and
provide access rights to Manager, on the same terms and conditions as
set forth above.
14.3 Weekly Updates. Representatives of Manager and Licensee shall meet or
otherwise communicate weekly for a report on the status of the
Build-Out Plan and other significant matters.
ARTICLE 15 - INDEMNIFICATION
15.1 Indemnification by Licensee. Licensee shall indemnify, defend, and hold
harmless Manager and its affiliates, employees, directors, officers,
and agents from and against all claims, demands, actions, causes of
actions, damages, liabilities, losses, and expenses (including
reasonable attorney's fees) incurred as a result of:
(i) claims for damage to property and/or personal injuries
(including death) arising out of the negligence or willful act
or omission of Licensee;
(ii) Licensee's failure to perform any of its obligations hereunder;
and
(iii) Manager's performance of its duties under this Agreement, so
long as (A) Manager acted in good faith and (B) Manager's
conduct did not constitute willful misconduct or gross
10
<PAGE> 11
negligence, IT BEING EXPRESSLY AGREED THAT LICENSEE'S INDEMNITY
HEREUNDER SHALL INCLUDE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTIONS, DAMAGES, LIABILITIES, LOSSES, AND EXPENSES ARISING AS
A RESULT OF THE NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE) OF
MANAGER.
15.2 Indemnification by Manager. Manager shall indemnify, defend, and hold
harmless Licensee and its affiliates, employees, directors, officers,
and agents from and against all claims, demands, actions, causes of
actions, damages, liabilities, losses, and expenses (including
reasonable attorney's fees) incurred as a result of claims for damages
to property and/or personal injuries (including death) to the extent
arising out of the willful misconduct or gross negligence of Manager.
Licensee agrees and acknowledges that if this Agreement is terminated
before the consummation of the Mergers and responsibility for the
management and operations of Licensee's business reverts to Licensee,
absent a showing of willful misconduct or gross negligence by Manager,
Licensee will hold Manager harmless from, and will not assert any
claims for, and Manager will not be liable for, any damages related to
business decisions made by Manager in connection with fulfilling its
duties and obligations under this Agreement.
15.3 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY FOR
SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR
LOSS OF PROFITS OR REVENUES, ARISING FROM THE RELATIONSHIP OF THE
PARTIES UNDER THIS AGREEMENT OR ANY BREACH OF OR DEFAULT UNDER THIS
AGREEMENT.
ARTICLE 16 - DEFAULT; TERMINATION
16.1 General Default. A Party shall be deemed in default of this Agreement
upon the occurrence of any one or more of the following events (a
"DEFAULT"):
(i) the filing of bankruptcy or making a general assignment for the
benefit of creditors;
(ii) a Party fails to make a payment of money when due, which
failure continues for more than 30 days after receipt of
written notice from the other Party; or
(iii) a Party fails to comply with any other covenant or agreement
set forth in this Agreement, which failure either (A) continues
for a period of more than 30 consecutive days after receipt of
written notice from the non-breaching Party specifying the
breach in reasonable detail, or (B) is of a nature which
requires more than 30 consecutive days (after receipt of
written notice from the non-breaching Party specifying the
breach in reasonable detail) to cure and continues for a period
of time greater than the shorter of (x) 60 consecutive days
after notice or (y) the period of time reasonably required to
cure; provided, that this extended cure period is only
available if the breaching Party diligently works toward a
cure.
16.2 Remedy. Upon the occurrence of a Default, the non-breaching Party may,
upon written notice to the breaching Party, terminate this Agreement
and, subject to the limitations set forth in SECTION 15.3, pursue any
other right or remedy under this Agreement, or at law or in equity.
11
<PAGE> 12
16.3 Termination of Merger. Upon the termination of the Agreement and Plan
of Reorganization, either Party may, upon thirty days written notice to
the other Party, terminate this Agreement. In such event, the Parties
agree to cooperate to ensure an orderly transition of management and
operations of Licensee's business from Manager to Licensee, and
Licensee agrees to exercise its reasonable best efforts to take all
actions required to assume such operations, including, without
limitation, hiring necessary managers and other employees, and
arranging for Licensee's financing of capital expenditures and working
capital needs.
ARTICLE 17 - CONFIDENTIAL INFORMATION; NON-SOLICITATION
17.1 Confidentiality. Each Party shall preserve the other Party's
confidential information disclosed to each Party in connection with
providing Service hereunder with the same degree of care it uses in
protecting its own confidential or proprietary information and shall
not disclose, directly or indirectly, such information to any third
party (other than Sprint PCS and the Members of Licensee), without the
prior written consent of the other Party.
17.2 Non-Solicitation of Employees. Each Party agrees that, during the Term
of this Agreement and for one year thereafter, such Party will not
solicit, entice, or encourage any individual who has been an employee
of the other Party within six months prior to any such solicitation,
enticement, or encouragement, to either terminate his or her employment
with the other Party, or to become employed by, or become an
independent contractor for, such Party.
ARTICLE 18 - INSURANCE
18.1 Manager's Insurance Requirements. Manager shall, at its own expense,
obtain and keep in full force and effect at all times for the duration
of this Agreement, with a carrier or carriers reasonably satisfactory
to Licensee, insurance policies of the kinds and in the amounts
required by the Alamosa Management Agreement. Upon the request of
Licensee, Manager shall furnish Licensee certificates of such
insurance, naming Licensee as an additional insured, and/or copies of
the applicable policies.
18.2 Licensee's Insurance Requirements. Licensee shall, at its own expense,
obtain and keep in full force and effect at all times for the duration
of this Agreement, with a carrier or carriers reasonably satisfactory
to Manager, insurance policies of the kinds and in the amounts required
by the Licensee Management Agreement. Upon the request of Manager,
Licensee shall furnish Manager certificates of such insurance, naming
Manager as an additional insured, and/or copies of the applicable
policies.
ARTICLE 19 - FORCE MAJEURE
19.1 Force Majeure. If the performance of this Agreement is interfered with
by any circumstance beyond the reasonable control of the Party
affected, including without limitation 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, manufacturer or equipment vendor delays or
deficiencies (including ability to process correctly calendar
date-related data), delays in repair or maintenance of cell sites due
to restricted access by third parties, delays or barriers to
construction or coverage resulting from local zoning restrictions or
frequency coordination issues with incumbent microwave users, acts of
God, such as fire, flood, earthquake, or other natural cause, terrorist
events, riots, insurrections, war or national emergency, or strikes,
12
<PAGE> 13
boycotts, lockouts ,or other labor difficulties, the Party affected by
the force majeure is excused on a day-by-day basis to the extent of the
interference; provided, that such Party shall use its best commercially
reasonable efforts to avoid or remove the causes of such
nonperformance.
ARTICLE 20 - ASSIGNABILITY
20.1 Assignability. Neither Party may assign this Agreement without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld; provided, however, that (a) Manager may assign
this Agreement in whole or in part or may delegate certain duties to an
affiliate of Manager without the consent of Licensee, if such affiliate
agrees in writing to be bound by this Agreement (or by the delegated
duties, as the case may be), and (b) Manager may assign all or any part
of its economic benefit under this Agreement to any of its lenders
without the consent of Licensee. For purposes of this Agreement, the
term "AFFILIATE" shall mean, with respect to a Party, any entity or
person that controls, is controlled by or is under common control with,
such Party.
ARTICLE 21 - NOTICES
21.1 Notices. Any notices or other communications required or permitted to
be given by this Agreement must be given in writing and must be
personally delivered, telecopied (with an original notice delivered by
overnight courier service), or mailed by prepaid certified or
registered mail to the Party to whom such notice or communication is
directed at the address of such Party set forth on the signature page
to this Agreement. Any such notice or other communication shall be
deemed to have been given on the day it is received as aforesaid. Any
Party may change its address for purposes of this Agreement by giving
notice of such change to all other Parties pursuant to this SECTION
21.1.
ARTICLE 22 - DISPUTES; ARBITRATION
22.1 Voluntary Dispute Resolution. If Licensee has a dispute over the amount
of any fees, compensation, charges, or reimbursements due or paid to
Manager under this Agreement, Licensee will nevertheless within the
required time for payment pay, pursuant to SECTION 12.1, all amounts
which are not in dispute and supply a written explanation of reasons
for disputing the unpaid amount. The Parties will cooperate in good
faith to resolve any such disputes within a 30 day period after the due
date of the original charges. All unresolved disputes and controversies
of every kind and nature between the Parties arising out of or in
connection with this Agreement as to the construction, validity,
interpretation, or meaning, performance, non-performance, enforcement,
operation, or breach shall be resolved according to the provisions of
SECTIONS 10.6 and 10.7 of the Agreement and Plan of Reorganization.
ARTICLE 23 - MISCELLANEOUS
23.1 No Partnership. This Agreement does not constitute either Party as the
agent or legal representative of the other Party and does not create a
partnership or joint venture between Manager and Licensee. Except as
provided herein, neither Party shall have any authority to enter into
an agreement for or bind the other Party in any manner whatsoever. This
Agreement confers no rights of any kind upon any third party.
13
<PAGE> 14
23.2 Entire Agreement. This Agreement sets forth the entire understanding of
the Parties and supersedes any and all prior agreements, arrangements,
or understandings relating to the subject matter hereof.
23.3 Severability. If any part of any provision of this Agreement or any
other agreement, document, or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, said part shall be ineffective to the extent of such
invalidity only, without in any way affecting the remaining parts of
said provision or the remaining provisions of this Agreement.
23.4 Governing Law. This Agreement is being executed and delivered, and is
intended to be performed in Lubbock County, in the State of Texas, and
the substantive laws of Texas shall govern the validity, construction,
enforcement, and interpretation of this Agreement.
23.5 Press Releases. Neither Party shall issue a news release, public
announcement, advertisement, or other form of publicity concerning the
existence of this Agreement or the supplies or services to be provided
hereunder without obtaining the prior written approval of the other
Party.
23.6 Amendments. No provision hereof shall be altered, modified, rescinded,
or limited, except by written agreement expressly referring hereto and
to the provisions so altered, modified, and limited and signed by all
Parties against whom such modification or limitation is asserted, nor
shall any such provision be modified or limited by course of conduct or
by usage of trade.
23.7 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and assigns.
23.8 Certain Representations. Licensee represents and warrants to Manager
that neither the execution and delivery of this Agreement, nor
consummation of any of the transactions herein contemplated, nor
compliance with the terms and provisions hereof, will contravene or
conflict with any provision of law, statute, or regulation to which
Licensee is subject or any judgment, license, order, or permit
applicable to Licensee, or any indenture, mortgage, deed of trust, or
other instrument to which Licensee may be subject or to which Licensee
may be a party; no consent, approval, authorization, or order of any
court, governmental authority, or third party is required in connection
with the execution and delivery by Licensee of this Agreement or to
consummate the transactions contemplated herein.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) TO FOLLOW.
14
<PAGE> 15
Signature Page to the Services Agreement dated as of the date first set
forth above, between Roberts Wireless Communications, LLC and Alamosa
Operations, Inc.
ALAMOSA OPERATIONS, INC.
By: /s/ David E. Sharbutt
_____________________________
Name: David E. Sharbutt
_____________________________
Title: President
_____________________________
Address:
4403 Brownfield Highway
Lubbock, Texas 79407
Attention: President
with copy to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
Attention: William S. Kleinman
ROBERT WIRELESS COMMUNICATIONS, LLC
/s/ Michael V. Roberts
__________________________________
Michael V. Roberts (Its Member)
/s/ Steven C. Roberts
__________________________________
Steven C. Roberts (Its Member)
Address:
1408 North Kingshighway, Suite 300
St. Louis, Missouri 63113
Attention: Michael V. Roberts
with a copy to:
Armstrong Teasdale LLP
One Metropolitan Square, Suite 2600
St. Louis, Missouri 63102-2740
Attention: Joseph S. von Kaenel
ROBERTS WIRELESS COMMUNICATIONS, LLC
SERVICES AGREEMENT
SIGNATURE PAGE
<PAGE> 16
SCHEDULES AND EXHIBITS
----------------------
Schedules
- ---------
1.3 Existing Trademark Violations
13.1 Required Consents
14.1 Monthly Operating Reports
Exhibits
A Basic Trading Areas
ROBERTS WIRELESS COMMUNICATIONS, LLC
SERVICES AGREEMENT
<PAGE> 17
SERVICES AGREEMENT
EXHIBIT A
ROBERTS WIRELESS COMMUNICATIONS, LLC
BASIC TRADING AREAS
Missouri Cape Girardeau BTA No. 66
Columbia BTA No. 90
Jefferson City BTA No. 217
Joplin BTA No. 220
Kirksville BTA No. 230
Poplar Bluff BTA No. 355
Rolla BTA No. 383
St. Joseph BTA No. 393
Sedalia BTA No. 414
Springfield BTA No. 428
West Plains BTA No. 470
Kansas Pittsburg BTA No. 349
Kansas City BTA BTA No. 226
(Atchison County, KS only)
Illinois Carbondale BTA No. 67
Quincy BTA No. 367
EXHIBIT A
