<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Number: 0-23102
INTERCEL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 58-1944750
(State of Incorporation) (I.R.S. employer
identification no.)
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (706) 645-2000
Indicate by a check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at March 31, 1997
Common Stock at $.01 par value 26,864,511
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERCEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
-------- -----------
ASSETS (DOLLARS IN THOUSANDS)
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $207,511 $185,525
Short term Investments - 75,659
Accounts Receivable - Net of Allowance for Doubtful Accounts 13,131 8,228
Inventories 19,372 7,805
Prepaid Expenses and Other 2,271 12,642
-------- --------
242,285 289,859
-------- --------
PROPERTY AND EQUIPMENT, AT COST: 303,035 261,251
Less: Accumulated Depreciation (18,322) (9,982)
-------- --------
284,713 251,269
-------- --------
OTHER ASSETS:
Licenses, net 406,567 365,964
Goodwill, net 22,518 22,670
Deferred Offering Costs, net 13,377 13,687
Deferred Income Taxes 2,776 2,190
Deferred Charges and Other, net 858 1,478
-------- --------
446,096 405,989
-------- --------
Total Assets $973,094 $947,117
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable - Trade $ 28,158 $ 7,723
Advance Billings and Customer Deposits 2,008 1,352
Accrued Construction Costs 2,211 15,214
Accrued Taxes Other than Income 4,443 3,609
Accrued Other 4,707 5,494
Current Portion of Long Term Obligations 112 118
-------- --------
41,639 33,510
-------- --------
LONG TERM OBLIGATIONS:
12% Senior Discount Notes due February 2006 223,080 216,465
12% Senior Discount Notes due May 2006 223,738 217,345
Vendor Financing Agreement 103,833 69,514
Other 715 741
-------- --------
551,366 504,065
-------- --------
COMMITMENTS AND CONTINGENCIES: - -
MINORITY INTEREST IN SUBSIDIARY: 2,602 2,535
STOCKHOLDERS' EQUITY:
Series A Convertible Preferred Stock 1 1
Series B Convertible Preferred Stock 1 1
Common Stock 269 269
Paid-in Capital 430,058 430,053
Accumulated Deficit (52,332) (22,766)
Deferred Compensation (165) (206)
Treasury Stock (345) (345)
-------- --------
377,487 407,007
-------- --------
Total Liabilities and Stockholders' Equity $973,094 $947,117
======== ========
</TABLE>
The accompanying condensed notes to financial statements
are an integral part of these statements.
2
<PAGE> 3
INTERCEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1996
-------- -------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
REVENUES AND SALES:
Monthly Access Revenue $ 8,540 $ 3,428
Airtime Revenue 1,827 1,317
Roaming Revenue 1,242 1,503
Toll Revenue 1,290 578
Installation and Connection Revenue 667 81
Other Revenue 518 89
-------- -------
Total Service Revenues 14,084 6,996
Equipment Sales 5,025 854
-------- -------
Total Revenues and Sales 19,109 7,850
-------- -------
OPERATING EXPENSES:
Cost of Services 5,428 684
Cost of Equipment Sold 11,987 694
Operations 3,809 1,204
Selling and Marketing 5,237 1,274
General and Administrative 7,680 1,810
Depreciation 8,340 731
Amortization 1,178 881
-------- -------
Total Operating Expenses 43,659 7,278
-------- -------
OPERATING (LOSS) INCOME: (24,550) 572
-------- -------
OTHER EXPENSE (INCOME):
Net Interest Expense (Income) 4,543 (739)
Miscellaneous Expense 473 303
-------- -------
Total Other Expense (Income) 5,016 (436)
-------- -------
(LOSS) INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (29,566) 1,008
Income Tax (Provision) Benefit - (472)
-------- -------
(LOSS) INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE (29,566) 536
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 0 (2,583)
-------- -------
NET LOSS $(29,566) $(2,047)
======== =======
PER SHARE DATA:
(LOSS) INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE $ (1.10) $ 0.03
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 0.00 (0.13)
-------- -------
NET LOSS PER COMMON SHARE $ (1.10) $ (0.10)
======== =======
AVERAGE COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING 26,812 19,899
======== =======
</TABLE>
The accompanying condensed notes to financial statements
are an integral part of these statements.
3
<PAGE> 4
INTERCEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1996
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash Flows (Used In) Provided From Operating Activities:
Net Loss $(29,566) $ (2,047)
Adjustments to Reconcile Net Loss to Net Cash
(Used In) Provided From Operating Activities -
Minority Interest in Loss of Subsidiary (113) (79)
Cumulative Effect of Change in Accounting Principle - 2,583
Loss on Equity Investment - 34
Depreciation and Amortization 9,518 1,612
Bond Accretion 6,320 1,328
Amortization of Deferred Offering Costs 375 -
Deferred Compensation - Restricted Stock 41 41
Deferred Taxes, Net - 20
Changes in Assets and Liabilities:
Increase in Accounts Receivable (4,903) (174)
(Increase) Decrease in Inventories (11,567) 81
Decrease in Prepaid Expenses and Other 10,371 125
Increase in Deferred Charges and Other (31) (697)
Increase in Accounts Payable 20,435 1,058
Decrease in Accrued Expenses (50,207) (796)
Increase in Advance Billings and Customer Deposits 656 38
-------- --------
Net Cash (Used In) Provided From Operating Activities (48,671) 3,127
-------- --------
Cash Flows Provided From (Used In) Investing Activities:
Capital Expenditures (36,209) (10,874)
Cash Acquired in Powertel Business Combination - 15,379
Short-Term Investments 75,659 (29,388)
Microwave Relocation Cost (3,265) -
-------- --------
Net Cash Provided From (Used In) Investing Activities 36,185 (24,883)
-------- --------
Cash Flows From Financing Activities:
Proceeds from Sale of Stock, Net 5 111,446
Proceeds from Issuance of Senior Notes, Net - 192,998
Borrowings Under Vendor Financing Agreement 34,319 -
Repayments of Long-term Obligations (6) (28,102)
Other 154 224
-------- --------
Net Cash Provided From Financing Activities 34,472 276,566
-------- --------
Net Increase in Cash 21,986 254,810
Cash and Cash Equivalents at Beginning of Period 185,525 630
-------- --------
Cash and Cash Equivalents at End of Period $207,511 $255,440
======== ========
</TABLE>
The accompanying condensed notes to financial statements
are an integral part of these statements.
4
<PAGE> 5
INTERCEL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
Article 10 of Regulation S-X. The accompanying unaudited condensed
consolidated financial statements reflect, in the opinion of
management, all adjustments necessary to achieve a fair statement of
financial position and results for the interim periods presented. All
such adjustments are of a normal recurring nature. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
2. Certain prior year amounts have been reclassified to conform with the
current period presentation.
3. On May 1, 1997 (the "Closing Date"), pursuant to an Asset
Purchase Agreement dated as of December 23, 1996, Unity Cellular
Systems, Inc. ("Unicel") and Intercel Licenses, Inc. (the "Licensee"),
each a wholly owned subsidiary of the Company, sold and assigned (the
"Maine Disposition") to MRCC, Inc., a wholly owned subsidiary of Rural
Cellular Corporation ("Rural Cellular"): (i) substantially all of the
assets and rights of Unicel, including Unicel's 51% general
partnership interest in the Northern Maine Cellular Partnership; and
(ii) the FCC licenses held by Licensee to provide cellular and
microwave service in the Bangor, Maine RSA and Maine RSA3 and to
provide microwave service in Maine RSA2. On the Closing Date, MRCC,
Inc. paid the Seller $71,799 in cash and paid $5,405 into escrow.
The following unaudited pro forma condensed consolidated statements of
operations assume the sale occurred at the beginning of each period
presented. In the opinion of management, all adjustments necessary to
present fairly such unaudited pro forma condensed statements of
operations have been made.
<TABLE>
<CAPTION> Three Months Ended March 31,
(unaudited)
----------------------------------------------
Pro Forma Pro Forma
1997 1996
--------------- -----------------
(Dollars in thousands, except per share data)
<S> <C> <C>
Total Revenues and Sales . . . . . . . . . $ 15,614 $ 4,399
Net Loss . . . . . . . . . . . . . . . . . (29,961) (2,028)
Net Loss Per Common Share . . . . . . . . . $ (1.12) $ (0.10)
</TABLE>
5
<PAGE> 6
4. On May 5, 1997, the FCC officially granted the Company PCS
licenses for which the Company was the winning bidder in the D/E/F
block auctions for 13 Basic Trading Areas covering approximately 6.8
million persons (according to industry publications) located in
Kentucky, Tennessee, Illinois and Indiana for a purchase price of
$31.2 million, of which $6.2 million had previously been paid by the
Company. On May 12, 1997, the Company paid the remaining $25 million
and took possession of these licenses.
5. During first quarter 1996, the Company changed its method of
accounting for costs incurred in connection with certain promotional
programs under which the Company's cellular customers received
discounted cellular equipment or airtime usage credits. Under its
previous accounting method, all such costs were deferred and amortized
over the life of the related non-cancelable cellular telephone service
agreements. Under the new accounting method, the costs are expensed as
incurred. This change in accounting principle resulted in a total
nonrecurring charge for the cumulative effect of this accounting
change, net of taxes, of approximately $2.6 million. Additionally,
such costs are not deferred in conjunction with the acquisition of PCS
customers.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
InterCel, Inc. ("InterCel" or the "Company") provides personal
communications services ("PCS") in the southeastern United States under the
name "Powertel" and cellular telephone service in contiguous portions of
western Georgia and eastern Alabama under the name "InterCel." On May 1, 1997,
the Company sold substantially all the assets related to its cellular telephone
operations in the State of Maine for approximately $77.2 million.
InterCel's PCS licenses encompass a territory of approximately 246,000
contiguous square miles with a population of approximately 24.3 million people
in the Major Trading Areas ("MTAs") of Atlanta, Georgia; Jacksonville, Florida;
Memphis, Tennessee/Jackson, Mississippi; and Birmingham, Alabama (all MTAs
collectively, the "Current PCS Markets"); and in 13 Basic Trading Areas
("BTAs") in Kentucky and Tennessee. InterCel first introduced its PCS services
in October 1996 in Jacksonville, Florida and Montgomery, Alabama and, to date,
has launched its PCS services in an additional 14 markets in Alabama, Florida,
Georgia, Mississippi and Tennessee. In all of these markets, the Company was
the first to offer PCS services commercially. InterCel intends to continue to
rapidly build out its PCS network and to launch its PCS services.
In the Federal Communication Commission's D/E/F Auctions, the Company
acquired both the 10 MHz "D" block and the 10 MHz "E" block licenses in each of
the BTAs of Evansville, Indiana; Lexington, Louisville, Bowling Green-Glasgow,
Corbin, Madisonville, Owensboro, Paducah-Murray-Mayfield and Somerset,
Kentucky; Nashville and Cookeville, Tennessee; and Hopkinsville,
Kentucky-Clarksville, Tennessee; and the 10 MHz "E" block license in the
Knoxville, Tennessee BTA (collectively, the "Kentucky/Tennessee BTAs" and
together with the Current PCS Markets, the "PCS Markets"). These licenses
encompass an area of approximately 66,000 square miles with a population of
approximately 6.8 million people. With the addition of the Kentucky/Tennessee
BTAs, InterCel has one of the largest contiguous PCS footprints in the
southeastern United States. On May 5, 1997, the FCC officially granted the
Company these PCS licenses for a purchase price of $31.2 million, of which $6.2
million had previously been paid. On May 12, 1997, the Company paid the
remaining $25 million and took possession of these licenses.
Average revenues per subscriber in the wireless industry have declined
during recent years and are expected to continue to decline in the future. The
Company believes that this downward trend is the result of the addition of
lower usage customers who utilize cellular service for security, personal
convenience or as backup for their traditional landline telephones. In
addition, the Company expects that revenue per minute will continue to decline
as competition within the wireless telecommunications industry intensifies. The
Company believes the effect of this trend on the Company's earnings will be
mitigated by corresponding increases in the number of subscribers and the
number of minutes of usage per subscriber.
7
<PAGE> 8
The Company's overall historical financial performance has been
impacted positively by its efforts to attract and retain subscribers and
encourage more use of its services. Unlike many other companies in the
cellular industry that continue to experience operating losses due to the
substantial capital costs associated with constructing a system and acquiring
licenses, the Company has been successful in achieving positive operating
income from its cellular operations.
As a result of: (i) the significant costs required to build out and
maintain the PCS system, hire and manage the required personnel to operate the
PCS business and market its services; (ii) the significant subsidization of PCS
handsets to customers; and (iii) the depreciation of PCS equipment and
amortization of the PCS licenses, the Company incurred an operating loss of
$24.6 million for the quarter ended March 31, 1997. The Company expects to
continue subsidizing the cost of PCS handsets to customers for the foreseeable
future and expects that negative PCS equipment margins will continue to
contribute significantly to future operating results. The Company expects to
continue incurring significant operating losses during the remainder of 1997
and thereafter as it continues to build out its PCS system and build its PCS
customer base.
Minimizing customer attrition, or "churn," becomes a greater challenge
as the subscriber base grows and the marketplace becomes more competitive. The
Company achieved an average monthly churn rate of 1.5% and 2.3%, respectively,
for its cellular and PCS lines of business for the quarter ended March 31,
1997. The Company believes that it may experience an increase in its PCS churn
rate during the current year related to the disconnection of non-paying
customers. However, the Company expects to minimize the impact of such increase
by focusing efforts on collections and consistently high levels of customer
satisfaction coupled with a proactive customer retention program.
The Company offers its PCS customers a choice of multiple pricing
plans, with varying amounts of unbilled or "free" minutes included in the
monthly access charge. From November 29, 1996 to January 18, 1997, the Company
offered its customers a special, limited-time promotional pricing plan (the
"Prestige Partners Promotion") in all of its operational markets. This special
limited-time promotional pricing plan offered unlimited local airtime through
December 31, 1997 (with the exception of certain subscribers in the Memphis
area who were unable to obtain the PCS handset model of their choice due to a
shortage in that market and for whom the promotional pricing extends through
April 30, 1998) for a $50 per month access charge (excluding toll and roaming
charges, taxes and other optional fees). As of March 31, 1997, a substantial
majority of the Company's PCS subscribers were participants in this promotion.
The majority of the interest costs incurred during 1996 were
capitalized as a cost of construction of the Company's PCS system. As the
Company has now begun providing PCS services in several markets, the interest
costs related to the construction of the PCS systems in such markets will be
amortized over the life of the related assets from the time such systems were
placed in service. Additionally, the Company's depreciation and amortization
8
<PAGE> 9
expenses have significantly increased as a result of the fixed assets and PCS
licenses related to PCS systems placed in service during fourth quarter 1996
and first quarter 1997 and will continue to increase as a result of systems to
be placed in service during the remainder of 1997 and thereafter.
Unless otherwise indicated, all population data set forth herein is
based on the 1996 Paul Kagan Associates, Inc. Cellular/PCS Pop Book.
RESULTS OF OPERATIONS
The following table reflects the composition of the Company's
cellular and PCS service revenue and equipment sales, and related gross
margins, as well as overall operating and other costs and margins, as a
percentage of total revenue. The Company's historical results of operations,
particularly in view of the Maine Disposition and the start-up costs associated
with the Company's PCS business, will not be comparable with future periods.
<TABLE>
<CAPTION>
QUARTERS ENDED MARCH 31,
----------------------------- -------------------------------
1997 1996
----------------------------- -------------------------------
COMBINED COMBINED
PCS PCS
AND AND
CELLULAR PCS (A) CELLULAR CELLULAR PCS (A) CELLULAR
-------- ------- -------- -------- ------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
SERVICE REVENUE & COST ANALYSIS:
Service Revenue
Local Customers--
Access Revenue $4,000 $ 4,540 $ 8,540 $ 3,428 $ - $ 3,428
Airtime Revenue 1,545 282 1,827 1,317 - 1,317
Toll Revenue 218 673 891 166 - 166
------ -------- -------- ------- ------- -------
5,763 5,495 11,258 4,911 - 4,911
------ -------- -------- ------- ------- -------
Roamers--
Access & Airtime Revenue 1,242 - 1,242 1,503 - 1,503
Toll Revenue 399 - 399 413 - 413
------ -------- -------- ------- ------- -------
1,641 - 1,641 1,916 - 1,916
------ -------- -------- ------- ------- -------
Other Service Revenue 334 851 1,185 170 170
------ -------- -------- ------- ------- -------
Total Service Revenue 7,738 6,346 14,084 6,997 - 6,997
Cost of Services 1,069 4,359 5,428 684 - 684
------ -------- -------- ------- ------- -------
Gross Margin $6,669 $ 1,987 $ 8,656 $ 6,313 $ - $6,313
====== ======== ======== ======= ======= =======
EQUIPMENT SALES & COST ANALYSIS:
Equipment Sales $240 $ 4,785 $ 5,025 $853 $ - $853
Cost of equipment Sales 840 11,147 11,987 694 - 694
------ -------- -------- ------- ------- -------
Gross Margin $ (600) $ (6,362) $ (6,962) $159 $ - $159
====== ======== ======== ======= ======= =======
OPERATING MARGIN ANALYSIS:
Total Revenues $7,978 $ 11,131 $ 19,109 $ 7,850 $ - $ 7,850
------ -------- -------- ------- ------- -------
Operating Expense--
Cost of Services and Equipment Sales 1,909 15,506 17,415 1,378 - 1,378
Operations 1,010 2,799 3,809 1,070 134 1,204
Selling and Marketing 1,239 3,998 5,237 1,096 178 1,274
General and Administrative 913 6,767 7,680 793 1,017 1,810
Depreciation 951 7,389 8,340 709 22 731
Amortization 178 1,000 1,178 881 - 881
------ -------- -------- ------- ------- -------
Total Operating Expenses 6,200 37,459 43,659 5,927 1,351 7,278
------ -------- -------- ------- ------- -------
Operating Income (Loss) 1,778 (26,328) (24,550) 1,923 (1,351) 572
Interest Expense (Income), net 134 4,409 4,543 305 (1,044) (739)
Miscellaneous (Income) Expense (93) 566 473 (81) 384 303
------ -------- -------- ------- ------- -------
(Loss) Income before Income Taxes 1,737 (31,303) (29,566) 1,699 (691) 1,008
Income Tax (Provision) Benefit - - - (763) 291 (472)
------ -------- -------- ------- ------- -------
(Loss) Income before Cumulative Effect 1,737 (31,303) (29,566) 936 (400) 536
Cumulative Effect of Change in -
Accounting Principle - - - (2,583) - (2,583)
------ -------- -------- ------- ------- -------
Net Income (Loss) $1,737 $(31,303) $(29,566) $(1,647) $ (400) $(2,047)
====== ======== ======== ======= ======= =======
</TABLE>
(a) The Company did not commence PCS operations until the fourth quarter of
1996.
9
<PAGE> 10
Quarter Ended March 31, 1997 Compared to Quarter Ended March 31, 1996
The following discussion reflects the Company's results of operations
for its PCS and cellular lines of business. All general corporate costs have
been allocated to those lines of business based on management's estimates of
actual expenses incurred related to such lines of business.
Service revenue from local customers increased $6.3 million or 129.3%
for the quarter ended March 31, 1997, as compared to the same period of
1996. Cellular service revenue from local customers increased $.9 million or
17.4%, primarily as a result of a 23.1% increase in the number of customers (to
49,731 at March 31, 1997, from 40,403 at March 31, 1996). This increase in
cellular subscribers is attributable to the success of the Company's marketing
efforts as well as the overall increase in nationwide cellular penetration
rates. PCS service revenue from local customers, which was $5.5 million for the
quarter ended March 31, 1997, was the result of the first quarter 1997
addition of 19,994 subscribers (to 34,886 at March 31, 1997). The increase in
new PCS customers was due primarily to the recent service launch in 16 PCS
markets coupled with the success of the Prestige Partners Promotion, which was
offered in all operational markets through January 18, 1997.
The average monthly service revenue per local cellular subscriber
(excluding roaming revenue and equipment sales) decreased to $39.40 for the
quarter ended March 31, 1997, from $41.42 for the same period of the prior
year. This decrease was due primarily to the addition of customers who tend to
use cellular service less frequently and a decrease in cellular pricing. The
average monthly service revenue per local PCS subscriber was $63.52, which is
substantially higher than cellular due mainly to the $50 monthly access fee
associated with the Prestige Partners Promotion.
Roamer revenue (including roamer long distance), which was generated
solely from the Company's cellular business, decreased $.3 million or 14.4% for
the quarter ended March 31, 1997, as compared to the same period of the prior
year. This decrease is attributable primarily to the amended agreement with
BellSouth Cellular Corp., operating as BellSouth Mobility, Inc. ("BellSouth
Mobility"), effective January 16, 1997, under which the parties agreed to
per-minute reductions to the rates charged to BellSouth Mobility customers
roaming in InterCel's service territory.
10
<PAGE> 11
Cost of services includes the cost of: (i) interconnection with Local
Exchange Carriers ("LECs") facilities; (ii) direct cell site costs (e.g.
property taxes, site lease costs and electric utilities); (iii) cellular
roaming validation (provided by a third-party clearinghouse); (iv) long
distance toll services; (v) cellular cloning and fraud; and (vi) supplementary
services (such as voice mail). For the quarter ended March 31, 1997, cost of
services increased $4.7 million or 693.6%, as compared to the same period of
1996 and was 38.5% of total service revenue, compared to 9.8% for the same
period in 1996. This increase is primarily attributable to costs associated
with operating and maintaining the expanding PCS network, including costs of
interconnection and transport and cell site leases, taxes and utilities.
Additionally, the Company, like other participants in the cellular industry,
has recently experienced a dramatic increase in costs associated with both
cloning and subscription fraud.
To date, wireless telecommunications operators have been required to
pay fees to the LECs for interconnection to their networks. However, pursuant
to the 1996 Telecommunications Act, such interconnection arrangements must now
be reciprocal and cost-based, with each party compensating the other at the
same rate for the right to interconnect with each other's network. The Company
has recently concluded negotiations for interconnection with BellSouth
Telecommunications Corporation, the local exchange subsidiary of BellSouth
Corporaton ("BellSouth"), the LEC with which the Company primarily
interconnects in its service territory, on behalf of its cellular and PCS
operations and has executed interconnection agreements with respect to the
same. Under the new arrangements, the mutual and reciprocal interconnection
rates for those states in which the Company interconnects with BellSouth range
from $.005644 per minute to $.01586. These rates represent a significant
decrease from the previous rates paid by the Company to BellSouth of
approximately $.022 per minute.
The Company generated a negative cellular equipment margin of 250% on
$.2 million of sales for the quarter ended March 31, 1997, as compared to a
positive margin of 18.6% on $.9 million of sales for the same period of 1996.
This decrease is due to the Company's change in its method of accounting for
certain promotional costs (primarily equipment credits) in 1996. Under the new
method of accounting, all cellular equipment subsidies are expensed as
incurred. Such subsidies were deferred and amortized over the life of the
related cellular contract in prior periods. For its PCS operations, the
Company generated a negative equipment margin of 133% on $4.8 million of sales
for the quarter ended March 31, 1997, as the result of the Company's decision
to subsidize the cost of PCS handsets. The Company expects to continue
subsidizing the cost of PCS handsets to consumers for the foreseeable future.
Operations costs, which include the costs of maintaining the cellular
and PCS systems, customer service, inventory management, and in-house cellular
installations, totaled $3.8 million for the quarter ended March 31, 1997, which
represented an increase of $2.6 million, or 216.4%, from the same period of
1996. Cellular operations costs totaled $1.0 million for the quarter ended
March 31, 1997, which represented a 5.6% decrease from the same period of 1996.
Cellular operations costs as a percentage of total revenue improved to 12.7%
for the quarter ended March 31, 1997 as compared to 13.6% for the same period
of
11
<PAGE> 12
1996. PCS operations costs totaled $2.8 million for the quarter ended March 31,
1997 and were comprised primarily of salaries and benefits, bad debt provisions
and credit and collection costs.
Selling and marketing costs were $5.2 million for the quarter ended
March 31, 1997, an increase of $3.9 million, or 300.0%, as compared to the same
period of the prior year. Substantially all of this increase is attributable to
the extensive PCS advertising campaign associated with the Prestige Partners
Promotion, as well as the costs of all direct and indirect sales channels,
including commissions incurred as the result of the increase in PCS subscribers.
General and administrative costs ("G&A") were $7.7 million for the
quarter ended March 31, 1997, an increase of $5.9 million or 324.3% from the
same period of 1996. PCS G&A costs totaled $6.8 million for the quarter ended
March 31, 1997 and were comprised primarily of costs (excluding depreciation)
associated with the corporate and regional facilities.
Depreciation and amortization for the quarter ended March 31, 1997,
totaled $9.5 million, as compared to $1.6 million for the same period of 1996,
and consists principally of the depreciation of the cellular and PCS network
and the amortization of PCS licenses. Substantally all of the increase of $7.9
million in depreciation and amortization for the quarter ended March 31, 1997
is due to the PCS system and PCS licenses, portions of which were placed in
service in late fourth quarter 1996. The Company anticipates these costs will
continue to increase in future periods as additional portions of the PCS system
are completed and placed in service.
Net consolidated interest expense totaled $4.5 million for the quarter
ended March 31, 1997 as compared to net interest income of $.7 million for the
same period of 1996. Interest income earned during such periods was $3.2
million and $2.3 million, respectively. Additionally, approximately $6.7
million and $2.7 million of interest expense was capitalized during the
quarters ended March 31, 1997 and 1996, respectively, as the Company continued
to construct its PCS system.
The effective income tax rates for the quarters ended March 31, 1997
and 1996 were 0% and 46.8%, respectively. The decrease between periods is
primarily attributable to the deferred tax asset valuation allowance required
as of March 31, 1997 ($23.0 million). The Company generated a $29.6 million
loss from continuing operations during first quarter 1997 and expects to
continue to incur significant operating losses throughout the remainder of 1997
12
<PAGE> 13
and beyond. The tax benefit of these operating losses will not be recognized
until it is more likely than not that such benefit is realizable.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires significant amounts of capital for funding the
operations and expansion of its PCS business. The Company may also require
additional financing in the event it decides to make additional acquisitions.
Total capital expenditures, including capital expenditures for
information technology and the support of the PCS business, are estimated to be
approximately $280.0 million for 1997. Costs associated with the PCS System
buildout include the cost of tower sites, leasehold improvements, base station
and switch equipment, microwave relocation and labor expenses related to
construction of sites. The Company currently estimates that capital
expenditures will total approximately $200.0 million in 1997 to complete the
initial buildout of the PCS system in the Current PCS Markets (excluding
Albany, Georgia and Chattanooga, Tennessee) and the digital upgrade of the
Company's cellular system, and $150.0 million ($30.0 million in 1997 and $120.0
million in 1998) relating to the initial buildout of the PCS system in the
Kentucky/Tennessee BTAs. Upon completion of the initial buildouts, the Company
expects to be able to offer PCS services in markets containing approximately
55% of the population within the PCS Markets. The initial coverage is expected
to extend across most metropolitan areas, certain secondary cities and major
connecting highway corridors within the PCS Markets. Thereafter, based on
customer demand and competitive factors, the Company intends to continue to
build out its PCS system to enhance and expand its coverage.
In December 1996, the Company entered into an agreement with Rural
Cellular to sell substantially all of the assets of Unicel for an aggregate
purchase price of $77.2 million. The Company closed the Maine Disposition in
May 1997.
During the first quarter, the Company decided not to proceed with a
contemplated private offering of $300 million of Senior Notes due 2007 (the
"Proposed Debt Offering") due to adverse market conditions. Pursuant to stock
purchase agreements dated March 14, 1997 between the Company and The Huff
Alternative Income Fund, L.P. ("Huff") and SCANA Communications, Inc.
("SCANA"), respectively, Huff and SCANA each agreed to purchase 50,000 shares
of nonvoting convertible Preferred Stock from the Company in a private
placement for an aggregate purchase price of $45 million (the "Preferred Stock
Transactions"). The proceeds from the Preferred Stock Transactions were closed
into escrow on March 14, 1997. However, because the Company did not receive at
least $100 million of gross proceeds by April 30, 1997 from the Proposed Debt
Offering, the escrowed amounts related to the Preferred Stock Transactions were
returned to Huff and SCANA in accordance with the stock purchase agreements.
The Company currently estimates that approximately $325 million of net
proceeds from additional financings will be required in order to finance the
development, construction and operating costs associated with the initial
buildout of the PCS Markets and the
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completion of the digital upgrade of the Company's cellular system. The Company
intends to raise this capital during 1997 through public or private offerings
of debt and/or equity securities, additional financing available under terms
similar to the terms of the existing $165.0 million credit agreement (the
"Vendor Financing Agreement") with Ericsson Inc. for PCS equipment purchases
related to the initial buildout of the Kentucky/Tennessee BTAs, and/or
additional dispositions of assets. The Company intends to obtain financing for
its equipment purchases for the Kentucky/Tennessee BTAs concurrent with signing
an equipment purchase agreement for the Kentucky/Tennessee BTAs. There can be
no assurance that the Company will be able to raise any additional capital
during 1997 or, if available, that additional capital can be obtained on terms
acceptable to the Company and within the limitations contained in the
indentures (the "Indentures") relating to the Company's 12% Senior Discount
Notes due February 2006 and 12% Senior Discount Notes due May 2006
(collectively, the "Senior Notes") or the Vendor Financing Agreement.
Although the Company is currently unable to predict with certainty the
amount of expenditures that may be made subsequent to the initial buildout of
the PCS system, the Company expects that it may require additional capital.
Sources of additional capital may include vendor financing, cash flow from
operations, public and private equity and debt financing and asset dispositions
by the Company. The Company may also require additional financing in the event
it decides to make additional acquisitions. The extent of additional financing
required will partially depend on the success of the Company's businesses. The
Company currently has no other sources of income or cash flows other than its
cellular and newly launched PCS operations and the interest income earned from
investing its cash and the proceeds of the public and private debt and equity
offerings which were completed during 1996. There can be no assurance that
additional financing will be available to the Company, or if available, that it
can be obtained on terms acceptable to the Company and within the limitations
contained in the Indentures, the Vendor Financing Agreement or in any future
financing arrangements. The restrictions on additional indebtedness under the
Indentures require the Company to satisfy specified leverage ratios in order to
incur indebtedness; however, they permit the Company and its subsidiaries to
incur an unlimited amount of additional indebtedness to finance the acquisition
of inventory or equipment.
The Company expects to incur significant operating losses and to
generate significant negative cash flow from operating activities during the
next several years, while it develops and constructs its PCS system and builds
a PCS customer base. Cash interest will not be payable on the Senior Notes
prior to 2001. Management believes that cash flow from operations may be
insufficient to repay the Senior Notes or any additional financing that the
Company may obtain in full at maturity and that they may need to be refinanced.
There can be no assurance that any such refinancing could be effected
successfully or on terms acceptable to the Company.
During the quarter ended March 31, 1997, the Company used net cash of
$48,671 from operating activities, which was a decrease of $51,798 from the
same period of 1996. Included in net cash used in operating activities for the
quarter ended March 31, 1997 was
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<PAGE> 15
$29,566 of net loss, $6,320 of bond accretion on the Senior Notes, $9,518 of
depreciation and amortization and $35,246 related to changes in assets and
liabilities.
Cash provided from investing activities was $36,185 for the quarter
ended March 31, 1997, as compared to cash used of $24,883 for the same period
of 1996. For investing activities for the quarter ended March 31, 1997, the
Company incurred capital expenditures totaling $36,209 (primarily related to
the buildout of the PCS system and support systems) and other license costs
(primarily microwave relocation expenditures) of $3,265. These uses of capital
were more than offset by the liquidation of short term investments totaling
$75,659.
Cash provided from financing activities, which consisted primarily of
additional borrowings of $34,319 under the Vendor Financing Agreement, amounted
to $34,472 for the quarter ended March 31, 1997 compared to $276,566 for the
same period of 1996, during which the Company completed debt and equity
offerings which provided $304 million in gross proceeds.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 128 ("FAS 128"),
"Earnings Per Share" and Statement of Financial Accounting Standards No. 129
("FAS 129"), "Disclosure of Information About Capital Structure," both of which
become effective for fiscal years beginning after December 15, 1997. FAS 128
changes certain reporting and disclosure requirements for earnings per share.
FAS 129 continues the exisiting requirements to disclose the pertinent rights
and privileges of all securities other than ordinary common stock but expands
the number of companies subject to portions of its requirements. The Company
plans to adopt these statements for the 1998 fiscal year.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements appear in a number of places in
this Report and include all statements which are not historical facts and
which relate to the intent, belief or current expectations of the Company, its
directors or its officers with respect to, among other things: (i) the
Company's financing plans, including the Company's ability to obtain financing
in the future; (ii) trends affecting the Company's financial condition or
results of operations; (iii) the Company's growth strategy (including the
Company's anticipated network buildout) and operating strategy; (iv) the
Company's anticipated capital needs and anticipated capital expenditures; and
(v) projected outcomes and effects on the Company of litigation and
investigations concerning the Company. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of: (i) factors
affecting the availability, terms and cost of capital, risks associated with
the selection of the Company's PCS digital protocol and PCS system
implementation, competitive factors and pricing pressures, general economic
conditions, the failure of the market demand for the Company's products and
services to be commensurate with management's expectations or past experience,
the impact of present or future laws and regulations on the Company's business,
changes in operating expenses or the failure of operating and buildout expenses
to be consistent with management's expectations and the difficulty of
accurately predicting the outcome and effect of certain matters, such as
matters involving litigation and investigations; (ii) various factors discussed
herein; and (iii) those factors discussed in detail in the Company's filings
with the Securities and Exchange Commission, including the "Risk Factors"
section of the Company's Registration Statement on Form S-1 (Registration
Number 333-2748), as declared effective by the Securities and Exchange
Commission on April 16, 1996.
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ITEM 3. QUANITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
Not applicable.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company, through its subsidiary Powertel/Birmingham, Inc.
("Powertel/Birmingham"), has been served with a complaint filed by American
Page One, Inc. d/b/a American Mobile Wireless Communications ("Plaintiff") in
Circuit Court of Macon County, Alabama on April 4, 1997. The complaint alleges
several causes of action based on negligence, misrepresentation, fraudulent
concealment and breach of contract. All counts involve the same set of facts
arising out of Powertel/Birmingham's agency agreement with Plaintiff and relate
to allegations regarding Powertel/Birmingham's billing and service procedures.
Plaintiff claims that Powertel/Birmingham has breached its agency contract and
has committed other torts with respect to Plaintiff by failing to accurately
track Plaintiff's account with respect to inventory invoicing and commissions,
failing to pay timely commissions, failing to provide services to Plaintiff's
customers in a competent and accurate manner, billing Plaintiff's customers
inaccurately and in excessive amounts, and making false representations with
regard to its customer service and operational capabilities. Plaintiff is
seeking unspecified damages. While the Company believes that the claims are
without merit and intends to vigorously defend itself, there can be no
assurance that these claims will not have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company recently received a Civil Investigative Demand (the
"Demand") from the U.S. Department of Justice Antitrust Division (the
"Antitrust Division") requiring the Company to produce certain documents and
answer certain interrogatories in connection with the Antitrust Division's
investigation of possible bid rigging and market allocation for licenses
auctioned by the FCC for broadband PCS frequency blocks. The Demand requires
the Company to produce all of its documents relating to auction strategies and
requires the Company to identify executives or managers with responsibility for
making bids. The Company's response is due on May 19, 1997. The Company
intends to cooperate fully and in a timely manner with all such requests from
the Antitrust Division.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS.
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Exhibit Number Exhibit Description
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<S> <C>
* 2(a) Business Combination Agreement dated as of August 23, 1995 by and among InterCel, Inc., Powertel
PCS Partners, L.P., the partners of Powertel PCS Partners, L.P. and the stockholders of certain of
the partners of Powertel PCS Partners, L.P. (Filed as Exhibit 2(a) to Registration Statement on
Form
</TABLE>
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<PAGE> 18
<TABLE>
<S> <C>
S-1, File No. 33-96218 (the "February 1996 Form S-1"), and incorporated herein by reference.)
* 2(b) Amended and Restated Business Combination Agreement dated as of August 12, 1993 among Unity
Telephone Company, InterCel, Inc. and certain stockholders of Unity Telephone Company, with
Exhibits. (Filed as Exhibit 2 to Registration Statement on Form S-1, File No. 33-72734 (the "1993
Form S-1"), and incorporated herein by reference.)
* 2(c) Letter Agreement dated January 31, 1994 among Bert G. Clifford, Coral B. Clifford and InterCel,
Inc. (Filed as Exhibit 2(a) to 1993 Form S-1 and incorporated herein by reference.)
* 2(d) Amendment No. 1 to Business Combination Agreement dated as of October 17, 1995 between InterCel,
Inc. and InterCel PCS Services, Inc. (Filed as Exhibit 2(d) to February 1996 Form S-1 and
incorporated herein by reference.)
* 3(a) Restated Certificate of Incorporation dated June 3, 1992 of InterCel, Inc. (Filed as Exhibit 3(a)
to 1993 Form S-1 and incorporated herein by reference.)
* 3(b) Second Restated Certificate of Incorporation of InterCel, Inc. (Filed as Exhibit 3(b) to February
1996 Form S-1 and incorporated herein by reference.)
* 3(c) Third Restated Certificate of Incorporation of InterCel, Inc. (Filed as Exhibit 10(yy) to the
Form 10-Q for the quarter ended September 30, 1996 (the "1996 Third Quarter 10-Q") and
incorporated herein by reference.)
* 3(d) Restated By-laws of InterCel, Inc. (Filed as Exhibit 3(b) to 1993 Form S-1 and incorporated herein
by reference.)
* 4(a) Indenture dated as of February 7, 1996 between InterCel, Inc. and Bankers Trust Company, as
Trustee, relating to the 12% Senior Discount Notes Due 2006 of InterCel, Inc. (Filed as Exhibit
4(a) to February 1996 Form S-1 and incorporated herein by reference.)
* 4(b) Warrant Agreement dated as of February 7, 1996 between InterCel, Inc. and Bankers Trust Company,
as Warrant Agent. (Filed as Exhibit 4(b) to February 1996 Form S-1 and incorporated herein by
reference.)
* 4(c) Form of Indenture (including form of Note) between InterCel, Inc. and Bankers Trust Company, as
Trustee, relating to the 12% Senior Discount Notes Due 2006 of InterCel, Inc. (Filed as Exhibit
4(c) to Registration Statement on Form S-1, File No. 333-2748 (the "April 1996 Form S-1"), and
incorporated herein by reference.)
* 4(d) Certificate of Designations, Powers, Preferences and Relative, Participating or Other Rights, and
the Qualifications, Limitations or Restrictions Thereof, of Series A Convertible Preferred Stock
of InterCel, Inc. (Filed as Exhibit 10(tt) to 1996 Third Quarter 10-Q and incorporated herein by
reference.)
* 4(e) Certificate of Designations, Powers, Preferences and Relative, Participating or Other Rights, and
the Qualifications, Limitations or Restrictions Thereof,
</TABLE>
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<TABLE>
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of Series B Convertible Preferred Stock of InterCel, Inc. (Filed as Exhibit 10(uu) to 1996 Third
Quarter 10-Q and incorporated herein by reference.)
* 4(f) Certificate of Designations, Powers, Preferences and Relative, Participating or Other Rights, and
the Qualifications, Limitations or Restrictions Thereof, of Series C Convertible Preferred Stock
of InterCel, Inc. (Filed as Exhibit 4(f) to the Annual Report on Form 10-K for the year ended
December 31, 1996 (the "1996 Form 10-K") and incorporated herein by reference.)
* 4(g) Certificate of Designations, Powers, Preferences and Relative, Participating or Other Rights, and
the Qualifications, Limitations or Restrictions Thereof, of Series D Convertible Preferred Stock
of InterCel, Inc. (Filed as Exhibit 4(g) to 1996 Form 10-K and incorporated herein by reference.)
* 10(a) Building Lease dated November 1, 1991 between InterCel, Inc. and Riverside Corporation. (Filed as
Exhibit 10(q) to Annual Report on Form 10-K for the year ended December 31, 1991, File No. 33-
41230 and incorporated herein by reference.)
* 10(b) InterCel, Inc. 1995 Employee Restricted Stock Plan (as amended on November 17, 1995). (Filed as
Exhibit 10(e) to February 1996 Form S-1 and incorporated herein by reference.)
* 10(c) InterCel, Inc. 1991 Stock Option Plan (as amended on November 17, 1995). (Filed as Exhibit 10(f)
to February 1996 Form S-1 and incorporated herein by reference.)
* 10(d) InterCel, Inc. Amended Nonemployee Stock Option Plan. (Filed as Exhibit 10(q) to Annual Report on
Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K") and incorporated herein by
reference.)
* 10(e) Amended and Restated Option Agreement dated as of October 29, 1993 among InterCel, Inc., Bert G.
Clifford and Coral B. Clifford. (Filed as Exhibit 10(gg) to 1993 Form S-1 and incorporated herein
by reference.)
* 10(f) Directed Employee Benefit Trust Agreement between The Charles Schwab Trust Company and InterCel,
Inc. (Filed as Exhibit 10(jjj) to 1994 Form 10-K and incorporated herein by reference.)
* 10(g) InterCel, Inc. 401(k) Profit Sharing Plan. (Filed as Exhibit 10(j) to February 1996 Form S-1 and
incorporated herein by reference.)
* 10(h) Defined Benefit Pension Plan and Trust Adoption Agreement (Unity Telephone Company) dated as of
January 15, 1984. (Filed as Exhibit 10(ss) to 1993 Form S-1 and incorporated herein by
reference.)
* 10(i) Defined Benefit Pension Plan (Unity Telephone Company). (Filed as Exhibit 10(tt) to 1993 Form S-1
and incorporated herein by reference.)
* 10(j) Amendment to Unity Telephone Company Pension Plan dated June 29, 1992. (Filed as Exhibit 10(uu)
to 1993 Form S-1 and incorporated herein by reference.)
* 10(k) Software License Agreement between InterCel, Inc. and Systematics Telecommunications Services,
Inc. dated July 24, 1992. (Filed as Exhibit 10(aa) to the Annual Report on Form 10-KSB for the
year ended December 31, 1992 (the "1992 Form 10-KSB") and incorporated herein by reference.)
</TABLE>
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* 10(l) Lease Agreement dated August 17, 1992 between InterCel, Inc. and Eastern Telecom. (Filed as
Exhibit 10(cc) to 1992 Form 10-KSB and incorporated herein by reference.)
* 10(m) Customer Acceptance Agreement dated December 21, 1992 between InterCel, Inc. and Interstate/Valley
Telephone Company. (Filed as Exhibit 10(gg) to 1992 Form 10-KSB and incorporated herein by
reference.)
* 10(n) Directors and Officers Insurance and Company Reimbursement Policy. (Filed as Exhibit 10(ii) to
1993 Form S-1 and incorporated herein by reference.)
* 10(o) Form of Indemnity Agreement. (Filed as Exhibit 10(jj) to 1993 Form S-1 and incorporated herein by
reference.)
* 10(p) Agreement dated July 28, 1995 between InterCel, Inc. and GGT U.S.A./South, Inc. d/b/a Bright
House. (Filed as Exhibit 10(oo) to February 1996 Form S-1 and incorporated herein by reference.)
* 10(q) DMS-MTX Cellular Supply Agreement dated March 29, 1995 between InterCel, Inc. and Northern Telecom
Inc. (Filed as Exhibit 10(pp) to February 1996 Form S-1 and incorporated herein by reference.)
* 10(r) Amendment No. 1 to DMS-MTX Cellular Supply Agreement between InterCel, Inc. and Northern Telecom
Inc. dated August 9, 1995. (Filed as Exhibit 10(qq) to February 1996 Form S-1 and incorporated
herein by reference.)
* 10(s) Information and Network Products and Services Agreement dated June 16, 1994 between InterCel, Inc.
and GTE Telecommunications Service Incorporated. (Filed as Exhibit 10(uu) to February 1996 Form
S-1 and incorporated herein by reference.)
* 10(t) Site Acquisition Services Agreement entered into as of September 18, 1995, by and between Telesite
Services, L.L.C. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(vv) to February 1996 Form
S-1 and incorporated herein by reference.)
* 10(u) Site Acquisition Services Agreement entered into as of September 15, 1995, by and between
Silvergate, L.L.C. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(ww) to February 1996 Form
S-1 and incorporated herein by reference.)
* 10(v) Site Acquisition Services Agreement entered into as of September 20, 1995, by and between
Teletronics, Inc. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(xx) to February 1996 Form
S-1 and incorporated herein by reference.)
* 10(w) Amendment No. 1 to Site Acquisition Services Agreement entered into as of December 4, 1995 by and
between Silvergate, L.L.C. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(yy) to February
1996 Form S-1 and incorporated herein by reference.)
* 10(x) ITC Holding Company, Inc. Employees Pension Plan and Trust (as amended on December 15, 1994).
(Filed as Exhibit 10(zz) to February 1996 Form S-1 and incorporated herein by reference.)
</TABLE>
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<TABLE>
<S> <C>
* 10(y) Memorandum of Understanding dated January 19, 1996 between InterCel, Inc. and Ericsson, Inc.
(Filed as Exhibit 10(aaa) to February 1996 Form S-1 and incorporated herein by reference.)
* 10(z) Credit Agreement dated as of March 4, 1996 among InterCel PCS Services, Inc., as Borrower, and
Ericsson Inc., as Initial Lender, and Ericsson Inc. as Agent. (Filed as Exhibit 10(nn) to April
1996 Form S-1 and incorporated herein by reference.)
* 10(aa) Stock Purchase Agreement dated as of March 4, 1996 between InterCel, Inc. and MPX Systems, Inc.
(Filed as Exhibit 10(oo) to April 1996 Form S-1 and incorporated herein by reference.)
* 10(bb) Stock Purchase Agreement dated as of March 4, 1996 between InterCel, Inc. and Ericsson Inc.
(Filed as Exhibit 10(pp) to April 1996 Form S-1 and incorporated herein by reference.)
* 10(cc) Asset Purchase Agreement dated as of March 5, 1996 by and between GTE Mobilnet Incorporated,
InterCel Atlanta Licenses, Inc. and InterCel, Inc. (Filed as Exhibit 10(qq) to April 1996 Form S-1
and incorporated herein by reference.)
* 10(dd) Acquisition Agreement dated as of March 4, 1996 between InterCel PCS Services, Inc. and Ericsson,
Inc. (Filed as Exhibit 10(rr) to April 1996 Form S-1 and incorporated herein by reference.)
* 10(ee) Second Amendment to InterCel, Inc. Pension Plan dated as of August 21, 1996. (Filed as Exhibit
10(ss) to 1996 Third Quarter 10-Q and incorporated herein by reference).
* 10(ff) License Agreement between LHS Communications, Inc. and Powertel, Inc. dated August 2, 1996.
(Filed as Exhibit 10(vv) to 1996 Third Quarter 10-Q and incorporated herein by reference.)
* 10(gg) Amendment No. 1 to the Credit Agreement by and among Powertel, Inc. as Borrower, Ericsson, Inc.,
as Initial Lender, and Ericsson, Inc., as Agent, dated as of October 31, 1996. (Filed as Exhibit
10(ww) to 1996 Third Quarter 10-Q and incorporated herein by reference.)
* 10(hh) Asset Purchase Agreement dated December 23, 1996 by and among Rural Cellular Corporation, Unity
Cellular Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as Exhibit 99.1 to the
Form 8-K dated January 8, 1997 and incorporated herein by reference.)
* 10(ii) Stock Purchase Agreement dated as of March 14, 1997 between InterCel, Inc. and SCANA
Communications, Inc. (Filed as Exhibit 10(pp) to 1996 Form 10-K and incorporated herein by
reference.)
* 10(jj) Escrow Agreement dated as of March 14, 1997 by and among InterCel, Inc., SCANA Communications,
Inc. and Bankers Trust Company, as Escrow Agent. (Filed as Exhibit 10(qq) to 1996 Form 10-K and
incorporated herein by reference.)
* 10(kk) Stock Purchase Agreement dated as of March 14, 1997 between InterCel, Inc. and The Huff
Alternative Income Fund, L.P. (Filed as Exhibit 10(rr) to 1996 Form 10-K and incorporated herein
by reference.)
</TABLE>
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<TABLE>
<S> <C>
* 10(ll) Escrow Agreement dated as of March 14, 1997 by and among InterCel, Inc., The Huff Alternative
Income Fund, L.P. and Bankers Trust Company, as Escrow Agent. (Filed as Exhibit 10(ss) to 1996
Form 10-K and incorporated herein by reference.)
* 10(mm) Closing Memorandum dated May 1, 1997 by and between Rural Cellular Corporation, MRCC, Inc., Unity
Cellular Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as Exhibit 2.2 to the
Form 8-K dated May 12, 1997 and incorporated herein by reference.)**
10(nn) Termination of Stock Purchase Agreement dated as of April 30, 1997 by and between The Huff
Alternative Income Fund, L.P. and InterCel, Inc.
10(oo) Termination of Stock Purchase Agreement dated as of April 30, 1997 by and between SCANA
Communications, Inc. and InterCel, Inc.
10(pp) Agreement effective as of April 1, 1997 by and between BellSouth Telecommunications, Inc. and
Intercel, Inc.**
10(qq) Agreement effective as of April 1, 1997 by and between BellSouth Telecommunications, Inc. and
Powertel, Inc.**
11 Statement regarding Computation of Per Share Earnings.
27 Financial Data Schedule
* 99 Press release dated March 17, 1997 regarding offerings of Senior Notes and Preferred Stock.
(Filed as Exhibit 99 to 1996 Form 10-K and incorporated herein by reference.)
--------------------------------
</TABLE>
* Previously filed.
** The Registrant agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the Securities and Exchange Commission upon
request, as provided in Item 601(b)(2) of Regulation S-K.
(B) REPORTS ON FORM 8-K.
On January 8, 1997, the Company filed a Current Report on Form 8-K
dated December 23, 1996. Such Form 8-K was filed in connection with the
execution of an Asset Purchase Agreement with respect to the Maine Disposition
and reported information under Item 5 (Other Events).
22
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
<TABLE>
<S> <C>
INTERCEL, INC.
(Registrant)
May 14, 1997 /s/ Allen E. Smith
- ----------------- ---------------------------------------------------
Date Allen E. Smith
President and Chief Executive Officer
May 14, 1997 /s/ Fred G. Astor, Jr.
- ----------------- ---------------------------------------------------
Date Fred G. Astor, Jr.
Executive Vice President and Chief Financial Officer (Chief
Accounting Officer)
</TABLE>
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Page
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<S> <C> <C>
*2(a) Business Combination Agreement dated as of August 23, 1995 by and among InterCel, Inc.,
Powertel PCS Partners, L.P., the partners of Powertel PCS Partners, L.P. and the
stockholders of certain of the partners of Powertel PCS Partners, L.P. (Filed as Exhibit
2(a) to Registration Statement on Form S-1, File No. 33-96218 (the "February 1996 Form S-
1"), and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . .
*2(b) Amended and Restated Business Combination Agreement dated as of August 12, 1993 among Unity
Telephone Company, InterCel, Inc. and certain stockholders of Unity Telephone Company, with
Exhibits. (Filed as Exhibit 2 to Registration Statement on Form S-1, File No. 33-72734 (the
"1993 Form S-1"), and incorporated herein by reference.) . . . . . . . . . . . . . . . . . .
*2(c) Letter Agreement dated January 31, 1994 among Bert G. Clifford, Coral B. Clifford and
InterCel, Inc. (Filed as Exhibit 2(a) to 1993 Form S-1 and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*2(d) Amendment No. 1 to Business Combination Agreement dated as of October 17, 1995 between
InterCel, Inc. and InterCel PCS Services, Inc. (Filed as Exhibit 2(d) to February 1996 Form
S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . .
*3(a) Restated Certificate of Incorporation dated June 3, 1992 of InterCel, Inc. (Filed as Exhibit
3(a) to 1993 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . .
*3(b) Second Restated Certificate of Incorporation of InterCel, Inc. (Filed as Exhibit 3(b) to
February 1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . .
*3(c) Third Restated Certificate of Incorporation of InterCel, Inc. (Filed as Exhibit 10(yy) to
the Form 10-Q for the quarter ended September 30, 1996 (the "1996 Third Quarter 10-Q") and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*3(d) Restated By-laws of InterCel, Inc. (Filed as Exhibit 3(b) to 1993 Form S-1 and incorporated
herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*4(a) Indenture dated as of February 7, 1996 between InterCel, Inc. and Bankers Trust Company, as
Trustee, relating to the 12% Senior Discount Notes Due 2006 of InterCel, Inc. (Filed as
Exhibit 4(a) to February 1996 Form S-1 and incorporated herein by reference.) . . . . . . . .
*4(b) Warrant Agreement dated as of February 7, 1996 between InterCel, Inc. and Bankers Trust
Company, as Warrant Agent. (Filed as Exhibit 4(b) to February 1996 Form S-1 and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*4(c) Form of Indenture (including form of Note) between InterCel, Inc. and Bankers Trust Company,
as Trustee, relating to the 12% Senior Discount Notes Due 2006 of InterCel, Inc. (Filed as
Exhibit 4(c) to Registration Statement on Form S-1, File No. 333-2748 (the "April 1996 Form
S-1"), and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit
No. Description Page
--- ----------- ----
<S> <C> <C>
*4(d) Certificate of Designations, Powers, Preferences and Relative, Participating or Other
Rights, and the Qualifications, Limitations or Restrictions Thereof, of Series A Convertible
Preferred Stock of InterCel, Inc. (Filed as Exhibit 10(tt) to 1996 Third Quarter 10-Q and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*4(e) Certificate of Designations, Powers, Preferences and Relative, Participating or Other
Rights, and the Qualifications, Limitations or Restrictions Thereof, of Series B Convertible
Preferred Stock of InterCel, Inc. (Filed as Exhibit 10(uu) to 1996 Third Quarter 10-Q and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*4(f) Certificate of Designations, Powers, Preferences and Relative, Participating or Other
Rights, and the Qualifications, Limitations or Restrictions Thereof, of Series C Convertible
Preferred Stock of InterCel, Inc. (Filed as Exhibit 4(f) to the Annual Report on Form 10-K
for the year ended December 31, 1996 (the "1996 Form 10-K") and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*4(g) Certificate of Designations, Powers, Preferences and Relative, Participating or Other
Rights, and the Qualifications, Limitations or Restrictions Thereof, of Series D Convertible
Preferred Stock of InterCel, Inc. (Filed as Exhibit 4(g) to 1996 Form 10-K and incorporated
herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(a) Building Lease dated November 1, 1991 between InterCel, Inc. and Riverside Corporation.
(Filed as Exhibit 10(q) to Annual Report on Form 10-K for the year ended December 31, 1991,
File No. 33-41230 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . .
*10(b) InterCel, Inc. 1995 Employee Restricted Stock Plan (as amended on November 17, 1995).
(Filed as Exhibit 10(e) to February 1996 Form S-1 and incorporated herein by reference.) . .
*10(c) InterCel, Inc. 1991 Stock Option Plan (as amended on November 17, 1995). (Filed as Exhibit
10(f) to February 1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . .
*10(d) InterCel, Inc. Amended Nonemployee Stock Option Plan. (Filed as Exhibit 10(q) to Annual
Report on Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K") and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(e) Amended and Restated Option Agreement dated as of October 29, 1993 among InterCel, Inc.,
Bert G. Clifford and Coral B. Clifford. (Filed as Exhibit 10(gg) to 1993 Form S-1 and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(f) Directed Employee Benefit Trust Agreement between The Charles Schwab Trust Company and
InterCel, Inc. (Filed as Exhibit 10(jjj) to 1994 Form 10-K and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(g) InterCel, Inc. 401(k) Profit Sharing Plan. (Filed as Exhibit 10(j) to February 1996 Form S-1
and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(h) Defined Benefit Pension Plan and Trust Adoption Agreement (Unity Telephone Company) dated as
of January 15, 1984. (Filed as Exhibit 10(ss) to 1993 Form S-1 and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
Exhibit
No. Description Page
--- ----------- ----
<S> <C> <C>
*10(i) Defined Benefit Pension Plan (Unity Telephone Company). (Filed as Exhibit 10(tt) to 1993
Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . .
*10(j) Amendment to Unity Telephone Company Pension Plan dated June 29, 1992. (Filed as Exhibit
10(uu) to 1993 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . .
*10(k) Software License Agreement between InterCel, Inc. and Systematics Telecommunications
Services, Inc. dated July 24, 1992. (Filed as Exhibit 10(aa) to the Annual Report on Form
10-KSB for the year ended December 31, 1992 (the "1992 Form 10-KSB") and incorporated herein
by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(l) Lease Agreement dated August 17, 1992 between InterCel, Inc. and Eastern Telecom. (Filed as
Exhibit 10(cc) to 1992 Form 10-KSB and incorporated herein by reference.) . . . . . . . . . .
*10(m) Customer Acceptance Agreement dated December 21, 1992 between InterCel, Inc. and
Interstate/Valley Telephone Company. (Filed as Exhibit 10(gg) to 1992 Form 10-KSB and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(n) Directors and Officers Insurance and Company Reimbursement Policy. (Filed as Exhibit 10(ii)
to 1993 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . .
*10(o) Form of Indemnity Agreement. (Filed as Exhibit 10(jj) to 1993 Form S-1 and incorporated
herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(p) Agreement dated July 28, 1995 between InterCel, Inc. and GGT U.S.A./South, Inc. d/b/a Bright
House. (Filed as Exhibit 10(oo) to February 1996 Form S-1 and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(q) DMS-MTX Cellular Supply Agreement dated March 29, 1995 between InterCel, Inc. and Northern
Telecom Inc. (Filed as Exhibit 10(pp) to February 1996 Form S-1 and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(r) Amendment No. 1 to DMS-MTX Cellular Supply Agreement between InterCel, Inc. and Northern
Telecom Inc. dated August 9, 1995. (Filed as Exhibit 10(qq) to February 1996 Form S-1 and
incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(s) Information and Network Products and Services Agreement dated June 16, 1994 between
InterCel, Inc. and GTE Telecommunications Service Incorporated. (Filed as Exhibit 10(uu) to
February 1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . .
*10(t) Site Acquisition Services Agreement entered into as of September 18, 1995, by and between
Telesite Services, L.L.C. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(vv) to
February 1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . .
*10(u) Site Acquisition Services Agreement entered into as of September 15, 1995, by and between
Silvergate, L.L.C. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(ww) to February
1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
Exhibit
No. Description Page
--- ----------- ----
<S> <C> <C>
*10(v) Site Acquisition Services Agreement entered into as of September 20, 1995, by and between
Teletronics, Inc. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(xx) to February 1996
Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . .
*10(w) Amendment No. 1 to Site Acquisition Services Agreement entered into as of December 4, 1995
by and between Silvergate, L.L.C. and Powertel PCS Partners, L.P. (Filed as Exhibit 10(yy)
to February 1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . .
*10(x) ITC Holding Company, Inc. Employees Pension Plan and Trust (as amended on December 15,
1994). (Filed as Exhibit 10(zz) to February 1996 Form S-1 and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(y) Memorandum of Understanding dated January 19, 1996 between InterCel, Inc. and Ericsson, Inc.
(Filed as Exhibit 10(aaa) to February 1996 Form S-1 and incorporated herein by reference.) .
*10(z) Credit Agreement dated as of March 4, 1996 among InterCel PCS Services, Inc., as Borrower,
and Ericsson Inc., as Initial Lender, and Ericsson Inc. as Agent. (Filed as Exhibit 10(nn)
to April 1996 Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . .
*10(aa) Stock Purchase Agreement dated as of March 4, 1996 between InterCel, Inc. and MPX Systems,
Inc. (Filed as Exhibit 10(oo) to April 1996 Form S-1 and incorporated herein by reference.)
*10(bb) Stock Purchase Agreement dated as of March 4, 1996 between InterCel, Inc. and Ericsson Inc.
(Filed as Exhibit 10(pp) to April 1996 Form S-1 and incorporated herein by reference.) . . .
*10(cc) Asset Purchase Agreement dated as of March 5, 1996 by and between GTE Mobilnet Incorporated,
InterCel Atlanta Licenses, Inc. and InterCel, Inc. (Filed as Exhibit 10(qq) to April 1996
Form S-1 and incorporated herein by reference.) . . . . . . . . . . . . . . . . . . . . . . .
*10(dd) Acquisition Agreement dated as of March 4, 1996 between InterCel PCS Services, Inc. and
Ericsson, Inc. (Filed as Exhibit 10(rr) to April 1996 Form S-1 and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(ee) Second Amendment to InterCel, Inc. Pension Plan dated as of August 21, 1996. (Filed as
Exhibit 10(ss) to 1996 Third Quarter 10-Q and incorporated herein by reference). . . . . . .
*10(ff) License Agreement between LHS Communications, Inc. and Powertel, Inc. dated August 2, 1996.
(Filed as Exhibit 10(vv) to 1996 Third Quarter 10-Q and incorporated herein by reference.) .
*10(gg) Amendment No. 1 to the Credit Agreement by and among Powertel, Inc. as Borrower, Ericsson,
Inc., as Initial Lender, and Ericsson, Inc., as Agent, dated as of October 31, 1996. (Filed
as Exhibit 10(ww) to 1996 Third Quarter 10-Q and incorporated herein by reference.) . . . . .
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
Exhibit
No. Description Page
--- ----------- ----
<S> <C> <C>
*10(hh) Asset Purchase Agreement dated December 23, 1996 by and among Rural Cellular Corporation,
Unity Cellular Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as Exhibit
99.1 to the Form 8-K dated January 8, 1997 and incorporated herein by reference.) . . . . . .
*10(ii) Stock Purchase Agreement dated as of March 14, 1997 between InterCel, Inc. and SCANA
Communications, Inc. (Filed as Exhibit 10(pp) to 1996 Form 10-K and incorporated herein by
reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(jj) Escrow Agreement dated as of March 14, 1997 by and among InterCel, Inc., SCANA
Communications, Inc. and Bankers Trust Company, as Escrow Agent. (Filed as Exhibit 10(qq)
to 1996 Form 10-K and incorporated herein by reference.) . . . . . . . . . . . . . . . . . .
*10(kk) Stock Purchase Agreement dated as of March 14, 1997 between InterCel, Inc. and The Huff
Alternative Income Fund, L.P. (Filed as Exhibit 10(rr) to 1996 Form 10-K and incorporated
herein by reference.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*10(ll) Escrow Agreement dated as of March 14, 1997 by and among InterCel, Inc., The Huff
Alternative Income Fund, L.P. and Bankers Trust Company, as Escrow Agent. (Filed as Exhibit
10(ss) to 1996 Form 10-K and incorporated herein by reference.) . . . . . . . . . . . . . . .
*10(mm) Closing Memorandum dated May 1, 1997 by and between Rural Cellular Corporation, MRCC, Inc.,
Unity Cellular Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as Exhibit
2.2 to the Form 8-K dated May 12, 1997 and incorporated herein by reference.)** . . . . . . .
10(nn) Termination of Stock Purchase Agreement dated as of April 30, 1997 by and between The Huff
Alternative Income Fund, L.P. and InterCel, Inc. . . . . . . . . . . . . . . . . . . . . . .
10(oo) Termination of Stock Purchase Agreement dated as of April 30, 1997 by and between SCANA
Communications, Inc. and InterCel, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
10(pp) Agreement effective as of April 1, 1997 by and between BellSouth Telecommunications, Inc.
and Intercel, Inc.** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10(qq) Agreement effective as of April 1, 1997 by and between BellSouth Telecommunications, Inc.
and Powertel, Inc.** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 Statement regarding Computation of Earnings Per Share . . . . . . . . . . . . . . . . . . . .
27 Financial Data Schedule (for SEC use only) . . . . . . . . . . . . . . . . . . . . . . . . .
*99 Press release dated March 17, 1997 regarding offerings of Senior Notes and Preferred Stock.
(Filed as Exhibit 99 to 1996 Form 10-K and incorporated herein by reference.) . . . . . . . .
--------------------------------
</TABLE>
* Previously filed.
** The Registrant agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the Securities and Exchange Commission upon
request, as provided in Item 601(b)(2) of Regulation S-K.
<PAGE> 1
EXHIBIT(nn)
TERMINATION OF STOCK PURCHASE AGREEMENT
THIS TERMINATION OF STOCK PURCHASE AGREEMENT (this "Termination") is
made and entered into as of the 30th day of April, 1997, by and between THE HUFF
ALTERNATIVE INCOME FUND, L.P., a Delaware limited partnership (the "Purchaser"),
and INTERCEL, INC., a Delaware corporation (the "Seller").
RECITALS
WHEREAS, Purchaser and Seller executed that certain Stock Purchase
Agreement dated as of March 14, 1997 (the "Purchase Agreement"); and
WHEREAS, Section 8.1(e) of the Purchase Agreement allows for
termination of the Purchase Agreement with the mutual written consent of the
parties, and the parties mutually desire to terminate the Purchase Agreement so
that it shall no longer be in force.
NOW, THEREFORE, for and in consideration of the premises, mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, each intending to be legally bound, do hereby agree as follows:
1. TERMINATION OF PURCHASE AGREEMENT. Pursuant to Section 8.1(e) and
Section 8.2(a) of the Purchase Agreement, Purchaser and Seller hereby terminate
the Purchase Agreement as of this date and agree that the Purchase Agreement is
void and (subject to the next sentence) there shall be no liability on the part
of either party hereto as a result of the Purchase Agreement (except that
nothing herein or in the Purchase Agreement shall relieve either party from
liability for any breach of the Purchase Agreement occurring prior to this
Termination). Seller and Purchaser acknowledge and agree that the provisions of
Section 9.1 of the Purchase Agreement shall survive this Termination.
2. ESCROW AGREEMENT DELIVERIES. Pursuant to Section 3(d) of the Escrow
Agreement dated as of March 14, 1997 (the "Escrow Agreement") by and among
Purchaser, Seller and Bankers Trust Company, as escrow agent (the "Escrow
Agent"), Purchaser and Seller shall promptly execute and deliver to the Escrow
Agent a termination notice substantially in the form attached hereto as Exhibit
A. Purchaser and Seller agree to execute and deliver any other documents,
certificates or notices reasonably required by the Escrow Agent to give effect
to this Termination.
3. MISCELLANEOUS.
(a) BINDING AGREEMENT. The terms, conditions, provisions and agreements
herein contained shall be binding upon and inure to the benefit of the parties
hereto and their respective representatives, successors and permitted assigns.
(b) AUTHORIZATION OF TERMINATION. Purchaser and Seller represent and
warrant, each to the other with respect to itself, that the execution and
delivery of this Termination has been duly authorized by all necessary corporate
action.
(c) GOVERNING LAW. The terms and provisions of this Termination and the
rights and obligations of the parties hereto shall be governed by, and construed
and enforced in
1
<PAGE> 2
accordance with, the laws of the State of New York (without regard to choice of
laws principles).
(d) CAPTIONS AND HEADINGS. The captions and headings throughout this
Termination are for convenience and reference only and do not constitute a part
hereof.
(e) COUNTERPARTS. This Termination may be signed in any number of
counterparts all of which shall constitute one and the same document, and may be
executed and delivered via facsimile.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Termination through their duly authorized representatives, as of the day and
year first above written.
PURCHASER:
THE HUFF ALTERNATIVE
INCOME FUND, L.P.
a Delaware limited partnership
BY: WRH Partners, L.L.C., General
Partner
By: /s/ Joseph R. Thornton
- ------------------------------ -----------------------
Its: Its: Attorney in Fact
-------------------------- -----------------------
[CORPORATE SEAL]
SELLER:
INTERCEL, INC.,
a Delaware corporation
/s/ Jill F. Dorsey By: /s/ Allen E. Smith
- ----------------------------------- -----------------------------
Its: Vice President/General Counsel Its: President
------------------------------- -----------------------------
[CORPORATE SEAL]
2
<PAGE> 3
EXHIBIT A
TERMINATION NOTICE
Via Facsimile
Bankers Trust Company, as Escrow Agent
under the Escrow Agreement referred to below
4 Albany Street
New York, NY 10006
Ladies and Gentlemen:
Pursuant to the terms of the Escrow Agreement dated as of March 14,
1997 (the "Escrow Agreement") by and among InterCel, Inc., The Huff Alternative
Income Fund, L.P. and Bankers Trust Company, as Escrow Agent thereunder, you are
notified that the undersigned have terminated the Purchase Agreement referenced
therein. All capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Escrow Agreement.
You are hereby directed to promptly (i) liquidate all investments in
the Escrow Fund and pay in full to the Purchaser in immediately available funds
all such amounts as shall be received upon the liquidation of such investments
(and any and all other amounts then on deposit in the Escrow Fund); and (ii)
return the Certificate to the Seller, all in accordance with Section 3(d) of the
Escrow Agreement. The monies received upon liquidation of the Escrow Fund shall
be delivered to the Purchaser by wire transfer to: _________. The Certificate
shall be delivered via overnight delivery service to InterCel, Inc., 1239 O.G.
Skinner Drive, West Point, Georgia 31833, (706) 645-2000, Attn: Jill F. Dorsey,
Esq. Please notify the parties hereto via facsimile (in accordance with Section
9 of the Escrow Agreement) when you have completed the liquidation of the
Escrow Fund and delivery of the Certificate pursuant to these instructions.
INTERCEL, INC.
By
--------------------------------------
Its:
THE HUFF ALTERNATIVE INCOME FUND, L.P.
BY: WRH Partners, L.L.C., General Partner
By
--------------------------------------
Its:
Accepted and agreed to
this __ day of ______, 1997
BANKERS TRUST COMPANY,
as Escrow Agent
By:
---------------------------
Its:
A-1
<PAGE> 1
EXHIBIT(oo)
TERMINATION OF STOCK PURCHASE AGREEMENT
THIS TERMINATION OF STOCK PURCHASE AGREEMENT (this "Termination") is
made and entered into as of the 30th day of April, 1997, by and between SCANA
COMMUNICATIONS, INC., a South Carolina corporation (the "Purchaser"), and
INTERCEL, INC., a Delaware corporation (the "Seller").
RECITALS
WHEREAS, Purchaser and Seller executed that certain Stock Purchase
Agreement dated as of March 14, 1997 (the "Purchase Agreement"); and
WHEREAS, Section 8.1(e) of the Purchase Agreement allows for
termination of the Purchase Agreement with the mutual written consent of the
parties, and the parties mutually desire to terminate the Purchase Agreement so
that it shall no longer be in force.
NOW, THEREFORE, for and in consideration of the premises, mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, each intending to be legally bound, do hereby agree as follows:
1. TERMINATION OF PURCHASE AGREEMENT. Pursuant to Section 8.1(e) of the
Purchase Agreement, Purchaser and Seller hereby agree that the Purchase
Agreement is terminated, void and is of no further force or effect as of the
date of this Termination. There shall be no liability on the part of either
party hereto as a result of the Purchase Agreement and this Termination (except
that nothing herein shall relieve either party from liability for any breach of
any other agreement between the parties occurring prior to or after this
Termination).
2. ESCROW AGREEMENT DELIVERIES. Pursuant to Section 3(d) of the Escrow
Agreement dated as of March 14, 1997 (the "Escrow Agreement") by and among
Purchaser, Seller and Bankers Trust Company, as escrow agent (the "Escrow
Agent"), Purchaser and Seller shall promptly execute and deliver to the Escrow
Agent a termination notice substantially in the form attached hereto as Exhibit
A. Purchaser and Seller agree to execute and deliver any other documents,
certificates or notices reasonably required by the Escrow Agent to give effect
to this Termination.
3. MISCELLANEOUS.
(a) BINDING AGREEMENT. The terms, conditions, provisions and agreements
herein contained shall be binding upon and inure to the benefit of the parties
hereto and their respective representatives, successors and permitted assigns.
(b) AUTHORIZATION OF TERMINATION. Purchaser and Seller represent and
warrant, each to the other with respect to itself, that the execution and
delivery of this Termination has been duly authorized by all necessary corporate
action.
(c) GOVERNING LAW. The terms and provisions of this Termination and the
rights and obligations of the parties hereto shall be governed by, and construed
and enforced in
<PAGE> 2
accordance with, the laws of the State of Georgia (without regard to choice of
laws principles).
(d) CAPTIONS AND HEADINGS. The captions and headings throughout this
Termination are for convenience and reference only and do not constitute a part
hereof.
(e) COUNTERPARTS. This Termination may be signed in any number of
counterparts all of which shall constitute one and the same document, and may be
executed and delivered via facsimile.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Termination through their duly authorized representatives, as of the day and
year first above written.
PURCHASER:
SCANA COMMUNICATIONS, INC.,
a South Carolina corporation
/s/ Lynn M. Williams By: /s/ H. Thomas Arthur
- ------------------------------- -------------------------------
Its: Corporate Secretary Its: V.P. and General Counsel
--------------------------- -------------------------------
[CORPORATE SEAL]
SELLER:
INTERCEL, INC.,
a Delaware corporation
/s/ Lorena G. Turner By: /s/ Fred G. Astor
- ------------------------------- -------------------------------
Its: Assistant Secretary Its: Executive Vice President and
--------------------------- ------------------------------
Chief Financial Officer
[CORPORATE SEAL]
2
<PAGE> 3
EXHIBIT A
TERMINATION NOTICE
Via Federal Express
Bankers Trust Company, as Escrow Agent
under the Escrow Agreement referred to below
4 Albany Street
New York, NY 10006
Ladies and Gentlemen:
Pursuant to the terms of the Escrow Agreement dated as of March 14,
1997 (the "Escrow Agreement") by and among InterCel, Inc., SCANA Communications,
Inc. and Bankers Trust Company, as Escrow Agent thereunder, you are notified
that the undersigned have terminated the Purchase Agreement referenced therein.
All capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Escrow Agreement.
You are hereby directed to promptly (i) liquidate all investments in
the Escrow Fund and pay in full to the Purchaser in immediately available funds
all such amounts as shall be received upon the liquidation of such investments
(and any and all other amounts then on deposit in the Escrow Fund); and (ii)
return the Certificate to the Seller, all in accordance with Section 3(d) of the
Escrow Agreement. The monies received upon liquidation of the Escrow Fund shall
be delivered to the Purchaser by wire transfer to: ____________________________.
The Certificate shall be delivered via overnight delivery service to InterCel,
Inc., 1239 O.G. Skinner Drive, West Point, Georgia 31833, (706) 645-2000, Attn:
Jill F. Dorsey, Esq. Please notify the parties hereto via facsimile (in
accordance with Section 9 of the Escrow Agreement) when you have completed the
liquidation of the Escrow Fund and delivery of the Certificate pursuant to these
instructions.
INTERCEL, INC.
By
-----------------------------
Its:
SCANA COMMUNICATIONS, INC.
By
-----------------------------
Its:
Accepted and agreed to
this __ day of ______, 1997
BANKERS TRUST COMPANY,
as Escrow Agent
By:
-----------------------------
Its:
A-1
<PAGE> 1
EXHIBIT(pp)
AGREEMENT
THIS AGREEMENT is made by and between BellSouth Telecommunications,
Inc. ("BellSouth"), a Georgia corporation, and InterCel, Inc. ("InterCel" or
"Carrier"), a Delaware corporation, and shall be deemed effective as of April
1, 1997 (the "Effective Date"). This Agreement constitutes an agreement
between BellSouth, on the one hand and Carrier, on the other hand. BellSouth
and Carrier are each referred to herein as a "party" and collectively as
"parties."
WITNESSETH
WHEREAS, The Telecommunications Act of 1996, Public Law 104-104 (the
"Act"), was signed into law on February 8, 1996;
WHEREAS, the Act, among other things, places certain duties and
obligations upon, and grants certain rights to, telecommunications carriers;
WHEREAS, BellSouth is a Telecommunications Carrier, and an Incumbent
Local Exchange Carrier ("ILEC"), authorized to provide telecommunications
services in the states of Alabama, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina, and Tennessee;
WHEREAS, Carrier is a Commercial Mobile Radio Service ("CMRS")
provider licensed by the Federal Communications Commission ("FCC") to provide
commercial mobile radio services in the states of Alabama and Georgia;
WHEREAS, Carrier is licensed to do business in such states and
operates a CMRS network that is interconnected, or will be interconnected with,
the BellSouth network;
WHEREAS, under the FCC Order dated August 8, 1996 and published in the
Federal Register on August 29, 1996 pertaining to interconnection, unbundling,
and resale (the "Order"), the FCC ordered that ILECs negotiate with CMRS
providers for such services pursuant to Sections 251 and 252 of the Act;
however, certain of the FCC rules, appended to, and made part of, the Order
have been stayed by the United States Court of Appeals for the Eighth Circuit
pending further judicial review;
WHEREAS, BellSouth is entering into this Agreement in order, among
other things, to fulfill its obligation to establish mutual compensation
arrangements for the transport and termination of telecommunications;
NOW THEREFORE, in consideration of the mutual agreements contained
herein, the parties agree as follows:
<PAGE> 2
I. DEFINITIONS. For purposes of this Agreement, the following capitalized
terms shall have the indicated meanings unless the provision in which any such
term appears states otherwise. Terms that appear herein (whether or not
capitalized) that are not defined herein shall have the meaning set forth in
the Act, or in the Order, or shall have the meanings ascribed to them in their
customary usage in the telecommunications industry as of the Effective Date.
A. "COMMISSION" means the appropriate regulatory agency in each of the
states in which Carrier is licensed to do business in BellSouth's region.
B. "INTERMEDIARY FUNCTION" means the delivery, pursuant to an
appropriate agreement or Commission directive, of telecommunications traffic to
or from a Local Exchange Carrier ("LEC") other than BellSouth, an ALEC, or
another telecommunications carrier, such as a CMRS provider other than Carrier,
through the network of BellSouth or Carrier from or to an end user of BellSouth
or Carrier.
C. "LOCAL TRAFFIC" means for purposes of reciprocal compensation and
the obligation of the parties to provide Local Interconnection (1) any
telephone call that originates on the network of Carrier within a Major Trading
Area ("MTA") and terminates on the network of BellSouth in the same MTA and
within the Local Access and Transport Area ("LATA") in which the call is handed
off from Carrier to BellSouth and (2) any telephone call that originates on the
network of BellSouth that is handed off to Carrier in the same LATA in which
the call originates and terminates on the network of Carrier in the MTA in
which the call is handed off from BellSouth to the Carrier. The exchange of
traffic on BellSouth's interLATA EAS routes shall be treated as Local Traffic.
EAS routes are those exchanges within an exchange's Basic Local Calling Area,
as defined in Section A3 of BellSouth's General Subscriber Services Tariff.
D. "LOCAL INTERCONNECTION" means the delivery of Local Traffic to be
terminated on each party's local network so that end users of a party have the
ability to reach end users of another party without the use of any access code
or substantial delay in the processing of the call .
E. "PERCENT OF INTERSTATE USAGE" OR"PIU" means a factor to be
applied to terminating access services minutes of use (for termination of Toll
Traffic) to obtain those minutes that should be rated as interstate access
services minutes of use. The numerator includes all interstate"nonintermediary"
minutes of use, less any interstate minutes of use for Terminating Party Pays
services, such as 800 Services. The denominator includes all"nonintermediary"
access minutes of use of Toll Traffic less all minutes attributable to
terminating party pays services.
F. "PERCENT LOCAL USAGE" OR"PLU" means a factor to be applied to
terminating minutes of use. The numerator shall include all Local Traffic
minutes of use. The denominator is the total minutes of use including Local
Traffic and Toll Traffic.
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G. "TOLL TRAFFIC" means all traffic that is not Local Traffic or
access services, as described in Section VI.F of this Agreement.
H. "MOBILE SWITCHING CENTER" OR"MSC" means a mobile switching center
of Carrier.
II. PURPOSE; FURTHER NEGOTIATIONS; APPLICATION OF TARIFFS
A. The parties enter this Agreement to memorialize their
agreement with respect to certain matters concerning Local Interconnection as a
result of their negotiations pursuant to Sections 251 and 252 of the Act. With
respect to any facility, feature, function, service, or other arrangement
concerning Local Interconnection or any other matter subject to negotiation
pursuant to Sections 251 and 252 of the Act between the parties that has not
been agreed upon by the parties and memorialized herein, (a) the parties shall
conduct further negotiations pursuant to Sections 251 and 252 of the Act upon a
written request therefor by Carrier, and (b) Carrier reserves any rights it
might have under Section 332 of the Communications Act of 1934, 47
U.S.C. Section 332, as amended.
B. Any facility, feature, function, or service in use or
available for use between BellSouth and any party as of the Effective Date that
is not expressly governed by this Agreement shall continue to be governed by
such applicable tariff, agreement, or other arrangement, if any, in effect as
of the Effective Date, as may be modified from time to time pursuant to
applicable rules of the Commission. In the event of a conflict between any
provision of this Agreement and any provision of an applicable tariff, the
Agreement shall always control.
C. It is the parties' intent that this Agreement be consistent
with all applicable federal, state, and local statutes, rules, and regulations
in effect as of the Effective Date, including, but not limited to, the Act and
the Order.
III. TERM OF THE AGREEMENT
A. This Agreement shall be in full force and effect for a period
of two years from the Effective Date. The Agreement shall be automatically
renewed for an additional term of six months following such initial two-year
term and for successive six-month terms thereafter following each preceding
six-month renewal term unless a party provides to the other a written notice
of termination at least sixty days prior to the last day of the initial
two-year term or any subsequent six-month renewal term, as the case may be.
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B. In the event BellSouth or Carrier receives from the other a
notice of termination pursuant to paragraph A of this Section, InterCel may
within 30 days thereof send to BellSouth a written request to renegotiate this
Agreement pursuant to Sections 251 and 252 of the Act, in which case this
Agreement shall not be terminated, but shall continue in full force and effect,
unless and until a substitute agreement between the parties with respect to the
matters governed herein takes effect.
C. Notwithstanding the foregoing, the parties may terminate this
Agreement at any time upon their written mutual consent.
IV. LOCAL INTERCONNECTION
The delivery of Local Traffic between the parties shall be reciprocal
and compensation will be mutual. Each party will pay the other for transporting
and terminating its respective Local Traffic on the other's network at the
Local Interconnection rates set forth in Attachment B-1, by this reference
incorporated herein. The amount that each party shall pay to the other for the
delivery of Local Traffic shall be calculated by multiplying the applicable
rate in Attachment B-1 for each type of call by the total minutes of use each
month for each such type of call. The minutes of use or portion thereof for
each call, as the case may be, will be accumulated for the monthly billing
period and the total of such minutes of use for the entire month rounded to the
nearest minute. The usage charges will be billed based on the rounded total
monthly minutes. The charges for Local Interconnection shall be billed monthly
and payable monthly. For undisputed bill amounts, late payment fees, not to
exceed 1% per month after the due date, may be assessed if interconnection
charges are not paid within 30 days of the due date of the monthly bill.
V. MODIFICATION OF RATES
A. (1) The"Interim LATA-wide Additive" reflected in Attachment
B-1 shall be adjusted, retroactively to the Effective Date, based on the Final
LATA-wide Additive either determined by (a) further agreement as described in
subsection (B) hereof or (b) a final order (including the exhaustion of all
appeals, if any) of the Commission or the FCC, as the case may be, provided
that such a final order meets the criteria contained in subsection (C) hereof.
The "LATA-wide Additive" is intended to compensate BellSouth for any additional
transport and other costs associated with transporting and terminating Local
Traffic throughout a LATA instead of only within local calling areas, including
EAS routes, as defined by the Commission as of the Effective Date. As of the
Effective Date, the parties disagree as to the proper amount for the LATA-Wide
Additive. The Interim LATA-wide Additive of $.0025 per minute that is included
in the Type 1, 2A, and 2A-CCS7 rates set forth in Attachment B-1 was arrived at
through negotiation and compromise and is without prejudice to either party's
position as to what additional or lesser charges, if any, should apply. As
such, the fact that the
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parties have agreed to this amount as the Interim LATA-wide Additive shall have
no probative value in any Commission or FCC proceedings, as the case may be, to
determine the Final LATA-wide Additive described in this section.
(2) This adjustment, or "true-up," will consist of:
i. Calculating the difference between the Final
LATA-wide Additive and the Interim LATA-wide Additive, as reflected in
Attachment B-1 of this Agreement. The difference is referred to as
the"LATA-wide Additive Adjustment";
ii. Multiplying the "LATA-wide Additive Adjustment" by all
minutes of use for which the Interim LATA-wide was applied and billed by the
parties since the Effective Date, the product of which shall be the"True-up
Adjustment";
iii. The parties will reciprocally compensate each other
in an amount equal to the "True-up Adjustment".
B. The parties may continue to negotiate after the Effective Date
in an effort to obtain a Final LATA-wide Additive. InterCel may send BellSouth
a written request for negotiation of a Final LATA-wide Additive pursuant to
Sections 251 and 252 of the Act, no sooner than seventy-five (75) days after
the Effective Date. Following such request, the parties shall negotiate, and if
necessary arbitrate, the Final LATA-wide Additive pursuant to, and in
accordance with, the Act.
C. Any final order that forms the basis of a "true-up" under this
Agreement shall meet the following criteria:
1. It shall be a proceeding to which BellSouth and
Carrier are entitled to be full parties and have had an opportunity to
participate in;
2. It shall apply the provisions of the Act, including
but not limited to Section 252(d) and all effective implementing rules and
regulations, provided that the Act and such regulations are in effect at the
time of the final order; and
3. It shall include as an issue any additional transport
and other costs associated with transporting and terminating Local Traffic
throughout a LATA instead of only within local calling areas, including EAS
routes, as defined by the Commission as of the Effective Date.
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VI. METHODS OF INTERCONNECTION
A. (1) The parties agree that there are three appropriate
methods of interconnecting facilities: (a) virtual collocation where physical
collocation is not practical for technical reasons or because of space
limitations; (b) physical collocation; and (c) interconnection at any
technically feasible point via purchase of facilities from either party by the
other party. The rates and charges for collocation shall be as set forth in
Attachment C-13, incorporated herein by this reference, or as otherwise agreed
upon by the parties. Facilities for interconnection that are not purchased
pursuant to an agreement between the parties may be purchased by Carrier at the
rates, terms and conditions set forth in BellSouth's intrastate Switched Access
(Section E6) or Special Access (Section E7) services tariff. The
interconnection of facilities shall be pursuant to the forms of interconnection
(for example, Type 1, Type 2A and Type 2B) described in BellSouth's General
Subscriber Services Tariff, Section A35; provided, however, that such
interconnection arrangements shall be provided at the rates, terms and
conditions set forth in this Agreement.
(2) Local Interconnection shall be provided at a level of
quality at least equal to that which each party provides to itself, an
Affiliate, or any other telecommunications carrier, except that, upon request,
a different level of quality may be provided to the extent technically feasible
and subject to the negotiation of acceptable provisions and compensation
arrangements. All interconnection facilities shall meet the applicable
telecommunications industry standards of engineering, design, and operation, as
the case may be, for LEC-CMRS interconnection in effect from time to time.
B. The parties agree to accept and provide any of the preceding
methods of interconnection. Reciprocal connectivity shall be established to at
least one BellSouth access tandem within every LATA that Carrier desires to
serve, or Carrier may elect to interconnect directly at the end office for
delivery of traffic to end users served by that end office. Such
interconnecting facilities shall conform, at a minimum, to the
telecommunications industry standard of DS-1 pursuant to Bellcore Standard No.
TR-NWT-00499. Signal transfer point, Signaling System 7 ("SS7") connectivity is
required at each interconnection point after Carrier implements SS7 capability
within its own network. BellSouth will provide out-of-band signaling using
Common Channel Signaling Access Capability where technically and economically
feasible, in accordance with the technical specifications set forth in the
BellSouth Guidelines to Technical Publication, TR-TSV-000905. The parties'
facilities shall (i) provide the necessary on-hook, off-hook answer and
disconnect supervision, (ii) hand off calling party number ID when technically
feasible, and (iii) honor privacy codes when sent and permitted line blocking
requests.
C. Nothing herein shall prevent Carrier from utilizing
collocation facilities, purchased from the appropriate tariffs, for Local
Interconnection.
D. The parties agree to establish trunk groups from the
interconnecting facilities of subsection (") of this section such that each
party provides a reciprocal of
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each trunk group established by the other party. Notwithstanding the foregoing,
each party may construct its network, including the interconnecting facilities,
to achieve optimum cost effectiveness and network efficiency. Unless otherwise
agreed, BellSouth will provide or bear the cost of all trunk groups for the
delivery of traffic from BellSouth to Carrier's MSCs within BellSouth's service
territory, and Carrier will provide or bear the cost of all trunk groups for
the delivery of traffic from Carrier to each BellSouth access tandem and end
office at which the parties interconnect. In the event one party interconnects
to the other via the purchase of facilities from the other party, the parties
shall negotiate a rate for such interconnection facilities if an intrastate
tariff, as amended from time to time, does not otherwise apply. In the event
the parties agree to use any two-way interconnection facilities in lieu of
separate one- way facilities, the appropriate charges for such facilities shall
be divided on a pro rata basis reflecting the percentage of traffic that
terminates on the network of each party.
E. The parties agree to use an auditable PLU factor as a method
for determining the amount of traffic that is Local Traffic.
F. When the parties provide an access service connection between
an interexchange carrier ("IXC") and each other, each party will provide its
own access services to the IXC. Each party will bill its own access services
rates to the IXC.
G. INTENTIONALLY DELETED
H. The ordering and provision of all facilities or services
purchased from BellSouth by Carrier shall be as set forth in the BellSouth
Telecommunications Wireless Customer Guide, as amended from time to time. The
ordering and provisioning of facilities or services by a party, including, but
not limited to, installation, testing, maintenance, repair, and disaster
recovery, shall be provided at a level of quality and care at least equal to
that which it provides to itself, an affiliate, or any other telecommunications
carrier unless Carrier and BellSouth specifically negotiate a different level
of quality or care.
I. BellSouth shall endeavor to provide by December 31, 1997 to
Carrier an Electronic Interface (EI) for transferring and receiving orders,
confirmations, completion notices, and other provisioning data, materials and
documents. This EI shall be administered through a gateway that will serve as a
single point of contact for the transmission of such data from Carrier to
BellSouth, and from BellSouth to Carrier. The requirements and implementation
of such a data transfer system are subject to future agreement by Carrier and
BellSouth.
J. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that InterCel may not make more than one such
request for negotiations with respect to the services described in this section
in any calendar year during which the Agreement is in effect.
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<PAGE> 8
K. The parties acknowledge that the issues of performance
criteria and remedies for noncompliance related to Local Interconnection remain
unresolved as of the Effective Date. Upon Carrier's written request, the
parties will continue to negotiate these issues in good faith after the
Effective Date, taking into account any relevant Commission decisions,
arbitrations, and other determinations. In the event the parties are unable to
reach agreement on these unresolved issues by the seventy-fifth (75) day
following the Effective Date, then, in addition to all other available
remedies, either party may seek arbitration or other resolution thereof from
the Commission to the extent permitted under sections 251 and 252 of the Act.
VII. INTRALATA AND INTERLATA TOLL TRAFFIC INTERCONNECTION
A. For originating and terminating intrastate or interstate Toll
Traffic, each party shall pay the other at BellSouth's intrastate or
interstate, as appropriate, switched network access service rate elements on a
per minute of use basis. Said rate elements shall be as set out in BellSouth's
Intrastate Access Services Tariff or BellSouth's Interstate Access Services
Tariff as those Tariffs may be amended from time to time during the term of
this Agreement. The appropriate charges will be determined by the routing of
the call. The terminating switched access rates may change during the term of
this Agreement and the appropriate rate shall be the rate in effect when the
Toll Traffic is terminated.
B. INTENTIONALLY DELETED
C. Each party shall compensate the other, pursuant to the
appropriate originating switched access charges, including the database query
charge, for the origination of 800 traffic terminated to the other party.
D. INTENTIONALLY DELETED
E. INTENTIONALLY DELETED
F. INTENTIONALLY DELETED
G. This Agreement is intended to govern the interconnection of
traffic to and from the parties' networks only. Toll Traffic originated by a
party to this Agreement and delivered to the other party for termination to the
network of a nonparty telecommunications carrier ("Nonparty Carrier") may be
delivered only with the consent of such Nonparty Carrier or pursuant to
Commission directive. If a Nonparty Carrier objects to the delivery of such
Toll Traffic, then either party to this Agreement may request direction from
the Commission. If a Nonparty Carrier consents, then the party performing the
intermediary function will bill the other party and the other party shall pay a
$.002 per minute intermediary charge in addition to any charges that the party
performing the intermediary function may be obligated to pay to the Nonparty
Carrier (collectively called "Toll Intermediary Charges"). The parties agree
that the charges that the party performing the intermediary function may be
obligated to pay to the
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Nonparty Carrier may change during the term of this Agreement and that the
appropriate rate shall be the rate in effect when the traffic is terminated.
VIII. PROVISION OF UNBUNDLED ELEMENTS
At any time after the Effective Date, pursuant to Sections 251 and 252
of the Act, upon request by Carrier, the parties shall negotiate for
BellSouth's provision of unbundled network elements, as provided in Section II
of this Agreement.
IX. ACCESS TO POLES, DUCTS, CONDUITS, AND RIGHTS OF WAY
At any time after the Effective Date, pursuant to Sections 251 and 252
of the Act, upon request by Carrier, the parties shall negotiate for
BellSouth's provision of access to poles, ducts, conduits, and rights of way,
as provided in Section II of this Agreement.
X. ACCESS TO 911/E911 EMERGENCY NETWORK
A. BellSouth and Carrier recognize that 911 and E911 services were
designed and implemented primarily as methods of providing emergency services
to fixed location subscribers. While BellSouth and Carrier recognize the need
to provide "911-like" service to mobile subscribers, both parties recognize
that current technological restrictions prevent an exact duplication of the
services provided to fixed location customers. BellSouth agrees to
route"911-like" calls received from Carrier to the emergency agency designated
by Carrier for such calls. Carrier agrees that it shall bear the cost of
facilities it uses to deliver such"911-like" calls to BellSouth's network and
to provide to BellSouth the information required by applicable statutes or
regulations governing routing of 911 calls from CMRS subscribers so that each
call may be properly routed.
B. BellSouth and Carrier recognize that the technology and regulatory
requirements for the provision of"911- like" service by CMRS carriers are
evolving and agree to modify or supplement the foregoing in order to
incorporate technically feasible improvements that Carrier desires to implement
or to permit Carrier to comply with applicable regulatory requirements,
provided that Carrier shall reimburse BellSouth for the incremental costs of
any such technological modification or supplement beyond the cost of an
equivalent, or the most similar, technology at the time accepted in the
telecommunications industry.
C. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that InterCel may not make more than one such
request for negotiations with respect to the services described in this section
in any calendar year during which the Agreement is in effect.
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XI. INTENTIONALLY DELETED
XII. INTENTIONALLY DELETED
XIII. ACCESS TO TELEPHONE NUMBERS
A. BellSouth, during any period in which it serves as a North
American Numbering Plan administrator for its territory, shall ensure that
Carrier has nondiscriminatory access to telephone numbers for assignment to its
telephone exchange service customers. BellSouth shall provide numbering
resources pursuant to the Bellcore Guidelines Regarding Number Assignment and
shall provide such resources on terms no less favorable than those which
BellSouth provides to itself, its subsidiaries or Affiliates, or any other
telecommunication carriers. Carrier agrees that it will complete the NXX code
application in accordance with Industry Carriers Compatibility Forum, Central
Office Code Assignment Guidelines, ICCF 93-0729-010. Except for Type 1 DID
numbers, this service will be at no charge.
B. If during the term of this Agreement BellSouth ceases to be
the North American Numbering Plan administrator, the parties agree to comply
with the guidelines, plan, or rules adopted pursuant to 47 U.S.C. Section
251(e).
XIV. ACCESS TO SIGNALING AND SIGNALING DATABASES
A. BellSouth will offer to Carrier use of its signaling network
and signaling databases on an unbundled basis at BellSouth's published tariffed
rates or at unbundled rates that may be available through non-tariffed
arrangements except as provided in subsection C below. Signaling functionality
will be available with both A-link and B- link connectivity.
B. BellSouth agrees to input the NXXs assigned to Carrier into
the Local Exchange Routing Guide ("LERG").
C. Where interconnection is via B-link connections, charges for
the SS7 interconnection elements are as follows: 1) Port Charge - BellSouth
shall not bill an STP port charge nor shall BellSouth pay a port charge; 2) SS7
Network Usage - BellSouth shall bill its tariffed surrogate usage charge and
shall pay usage billed by the Carrier at rates not to exceed those charged by
BellSouth; 3) SS7 Link - BellSouth will bill its tariffed charges for only two
links of each quad ordered. Application of these charges in this manner is
designed to reflect the reciprocal use of the parties' signaling networks.
Where interconnection is via A-link connections, charges for the SS7
interconnection elements are as follows: 1) Port Charge - BellSouth shall bill
its tariffed STP port charge but shall not pay a termination charge at the
Carrier's end office; 2) SS7 Network Usage - BellSouth shall bill its tariffed
surrogate usage charge but shall not pay for any usage; 3) SS7 Link - BellSouth
shall bill its tariffed charges for each link in the A- link pair but shall not
pay the Carrier for any portion of those links.
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D. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section, and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that InterCel may not make more than one such
request for negotiations with respect to the services described in this section
in any calendar year during which the Agreement is in effect.
XV. NETWORK DESIGN AND MANAGEMENT
A. The parties agree to work cooperatively to install and
maintain reliable interconnected telecommunications networks, including but not
limited to, maintenance contact numbers and escalation procedures. BellSouth
agrees to provide reasonable public notice of changes in the information
necessary for the transmission and routing of services using its local exchange
facilities or networks, as well as of any other changes that would affect the
interoperability of those facilities and networks.
B. The interconnection of all networks will be based upon
accepted industry/national guidelines for transmission standards and traffic
blocking criteria, as defined in this Agreement.
C. The parties will work cooperatively to apply sound network
management principles by invoking appropriate network management controls, if
technically feasible, e.g.. call gapping, to alleviate or prevent network
congestion.
D. Neither party will charge rearrangement, reconfiguration,
disconnection, termination or other such non- recurring fees that may be
associated with the initial reconfiguration of either party's existing network
interconnection arrangements. Notwithstanding the foregoing, the parties may
charge non-recurring fees for any additions to, or added capacity to, any
existing facility or trunk.
E. The parties agree to provide Common Channel Signaling (CCS)
information to one another, where available, in conjunction with all traffic in
order to enable full interoperability of CLASS features and functions except
for features or functions that have not been deployed in the parties'
respective networks, where available. All CCS signaling parameters will be
provided, including automatic number identification ("NI"), originating line
information (OLI), calling party category, charge number, etc. All privacy
indicators will be honored, and the parties agree to cooperate on the exchange
of Transactional Capabilities Application Part (TCAP) messages to facilitate
full interoperability of CCS-based features between the respective networks.
F. For network expansion, the parties agree to review engineering
requirements on a quarterly basis and establish forecasts for trunk utilization
as required by Section VI of this Agreement. New trunk groups will be
implemented as stated by engineering requirements for both parties.
G. The parties agree to provide each other with the proper call
information,
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i.e. originated call party number and destination call party number, CIC, and
OZZ, including all proper translations for routing between networks and any
information necessary for billing where either party provides recording
capabilities. The exchange of information is required to enable each party to
bill properly.
H. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section, and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that InterCel may not make more than one such
request for negotiations with respect to the services described in this section
in any calendar year during which the Agreement is in effect.
XVI. IMPLEMENTATION OF AGREEMENT
The parties agree to provide the appropriate staff support to ensure
effective implementation, administration of this Agreement and conversion of
pricing for existing services to the appropriate rates contained in this
Agreement.
XVII. AUDITING PROCEDURES
A. Within thirty (30) days of a party's receipt of a written
request to audit, such party must provide a mutually acceptable independent
auditor (the"Auditor") with access to such party's books and records so that
the Auditor can perform an audit of the billing of traffic between the parties.
The parties agree to retain records of call detail for a minimum of nine months
from which the PLU can be ascertained. The audit shall be performed by the
Auditor during normal business hours at an office designated by the party being
audited. Audit requests shall not be submitted more frequently than once per
calendar year. The PLU shall be adjusted based upon the audit results and shall
apply to the usage for the quarter the audit was completed, the usage for the
quarter prior to the completion of the audit, and to the usage following the
completion of the audit until again revised pursuant to a subsequent audit. The
party requesting the audit shall pay the cost of the audit, including the
Auditor's fees, except that if, as a result of the audit, the party being
audited is found to have overstated the PLU by twenty percentage points or
more, that party shall reimburse the party requesting the audit for the cost of
the audit, including the Auditor's fees.
B. For combined interstate and intrastate Carrier Toll Traffic
terminated by BellSouth over the same facilities, Carrier shall provide a PIU
factor to BellSouth. Carrier does not intend to provide interexchange carrier
services to BellSouth end-users. Nevertheless, should Carrier in the future
provide toll services through the use of network switched access services, then
all jurisdictional report requirements, rules and regulations specified in
E2.3.14 of BellSouth's Intrastate Access Services Tariff will apply to
Carrier's services and operations to the same degree and in the same manner as
such requirements, rules, and regulations apply to BellSouth. After the Local
Traffic percentage has been determined by use of the PLU factor for application
and billing of local interconnection, the PIU factor will be used for
application and billing of interstate
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and intrastate access charges, as appropriate.
XVIII. LIABILITY AND INDEMNIFICATION
A. Liability Cap.
(1) With respect to any claim or suit, whether based in contract, tort
or any other theory of legal liability, by Carrier, any Carrier customer or by
any other person or entity, for damages associated with any of the services
provided by BellSouth pursuant to or in connection with this Agreement,
including but not limited the installation, provision, preemption, termination,
maintenance, repair or restoration of service, and subject to the provisions of
the remainder of this Article XVIII, BellSouth's liability shall be limited to
an amount equal to the proportionate charge for the service provided pursuant
to this Agreement, for the period during which the service was affected.
Notwithstanding the foregoing, claims for damages by Carrier, and Carrier
customer or any other person or entity resulting from the gross negligence or
willful misconduct of BellSouth and claims for damages by Carrier resulting
from the failure of BellSouth to honor in one or more material respects any one
or more of the material provisions of this Agreement shall not be subject to
such limitation of liability.
(2) With respect to any claim or suit, whether based in contract, tort
or any other theory of legal liability, by BellSouth, any BellSouth customer or
by any other person or entity, for damages associated with any of the services
provided by Carrier pursuant to or in connection with this Agreement, including
but not limited to the installation, provision, preemption, termination,
maintenance, repair or restoration of service, and subject to the provisions of
the remainder of this Article XVIII, Carrier's liability shall be limited to an
amount equal to the proportionate charge for the service provided pursuant to
this Agreement for the period during which the service was affected.
Notwithstanding the foregoing, claims for damages by BellSouth, any BellSouth
customer or any other person or entity resulting from the gross negligence or
willful misconduct of Carrier and claims for damages by BellSouth resulting
from the failure of Carrier to honor in one or more material respects any one
or more of the material provisions of this Agreement shall not be subject to
such limitation of liability.
B. Neither party shall be liable for any act or omission of any
other telecommunications company to the extent such other telecommunications
company provides a portion of a service.
C. Neither party shall be liable for damages to the other party's
terminal location, point of interconnection, or the other party's customers'
premises resulting from the furnishing of a service, including but not limited
to the installation and removal of equipment and associated wiring, except to
the extent the damage is caused by such Party's gross negligence or willful
misconduct.
D. Each party shall, to the greatest extent permitted by the law
governing this
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Agreement ("Applicable Law"), include in its tariff (if it files one) or, where
it does not file a tariff, in an appropriate contract with its customers that
relates to the subject matter of this Agreement, a limitation of liability (i)
that covers the other party to the same extent the first party covers itself
and (ii) that limits the amount of damages a customer may recover to the amount
charged the applicable customer for the service that gave rise to such loss.
E. No Consequential Damages - EXCEPT AS OTHERWISE PROVIDED IN
THIS SECTION XVIII, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE, OR SPECIAL DAMAGES SUFFERED BY
SUCH OTHER PARTY (INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO BUSINESS,
LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED BY SUCH OTHER PARTY),
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY, STRICT
LIABILITY, OR TORT, INCLUDING WITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER
ACTIVE OR PASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THE
POSSIBILITY THAT SUCH DAMAGES COULD RESULT. EACH PARTY HEREBY AGREES TO HOLD
HARMLESS THE OTHER PARTY AND SUCH OTHER PARTY'S AFFILIATES, AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ALL SUCH DAMAGES.
PROVIDED, HOWEVER, NOTHING CONTAINED IN THIS SECTION XVIII SHALL LIMIT A
PARTY'S LIABILITY TO THE OTHER FOR (I) WILLFUL OR INTENTIONAL MISCONDUCT, GROSS
NEGLIGENCE, OR FAILURE TO HONOR ONE OR MORE OF THE MATERIAL PROVISIONS OF THIS
AGREEMENT IN ONE OR MORE MATERIAL RESPECTS; (II) BODILY INJURY, DEATH OR DAMAGE
TO TANGIBLE REAL OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY A PARTY'S
NEGLIGENT ACT OR OMISSION OR THAT OF ITS AGENTS, SUBCONTRACTORS OR EMPLOYEES,
NOR SHALL ANYTHING CONTAINED IN THIS SECTION XVIII LIMIT THE PARTIES'
INDEMNIFICATION OBLIGATIONS AS SPECIFIED HEREIN.
F. Obligation to Indemnify - Each party shall, and hereby agrees
to, defend at the other party's request, indemnify and hold harmless the other
party and each of its officers, directors, employees and agents (each, an
"Indemnitee") against and in respect of any loss, debt, liability, damage,
obligation, claim, demand, judgment or settlement of any nature or kind, known
or unknown, liquidated or unliquidated, including without limitation all
reasonable costs and expenses incurred (legal, accounting or otherwise)
(collectively, "Damages") arising out of, resulting from or based upon any
pending or threatened claim, action, proceeding or suit by any third party (a
"Claim") (i) arising from any breach of any representation, warranty or
covenant made by such indemnifying party (the "Indemnifying Party") in this
Agreement, (ii) based upon injuries or damage to any person or property or the
environment arising out of or in connection with this Agreement that are the
result of the Indemnifying Party's actions, breach of Applicable Law, or status
of its employees, agents and subcontractors, or (iii) for actual or alleged
infringement of any patent, copyright, trademark, service mark, trade name,
trade dress, trade secret or any other intellectual
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<PAGE> 15
property right, now known or later developed (referred to as "Intellectual
Property Rights") to the extent that such Claim for infringement arises from
lndemnitee's use of the services provided to it under this Agreement.
G. Each party's failure to perform under this Agreement shall be
excused by labor strikes, civil commotion, criminal actions taken against them,
acts of God, and other circumstances beyond their reasonable control.
H. The obligations of the parties contained within this section
shall survive/e the expiration of this Agreement.
XIX. MORE FAVORABLE PROVISIONS
A. The parties agree that if ---
1. the FCC or the Commission finds that the terms of this Agreement are
inconsistent in one or more material respects with any of its or their
respective decisions, rules, or regulations, or
2. the FCC or the Commission preempts the effect of this Agreement, then,
in either case,
upon such occurrence becoming final and no longer subject to administrative or
judicial review, the parties shall immediately commence good faith negotiations
to conform this Agreement to the requirements of any such decision, rule,
regulation, or preemption. The revised agreement shall have the same effective
date as the initial FCC or Commission action giving rise to such negotiations.
The rates, terms, and conditions of any new agreement shall not be applied
retroactively to any period prior to such effective date except to the extent
that such retroactive effect is expressly required by such FCC or Commission
decision, rule, regulation, or preemption.
B. In the event that BellSouth, either before or after the
Effective Date, enters into an agreement with any other telecommunications
carrier (an "Other Interconnection Agreement") which provides for the provision
within a state of any of the arrangements covered by this Agreement upon rates,
terms or conditions that differ from the rates, terms and conditions for such
arrangements set forth in this Agreement ("Other Terms"), then BellSouth shall
be deemed thereby to have offered such arrangements to Carrier upon such Other
Terms in that state only, which Carrier may accept as provided in Part E of
this Section. In the event that Carrier accepts such offer within sixty (60)
days after the Commission, or the FCC, as the case may be, approves such Other
Interconnection Agreement pursuant to Section 252 of the Act, or within thirty
(30) days after Carrier acquires actual knowledge of an Other Interconnection
Agreement not requiring the approval of the Commission pursuant to Section 252
of the Act, as the case may be, such Other Terms shall be effective between
BellSouth and Carrier as of the effective date of such Other Interconnection
Agreement or the
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<PAGE> 16
Effective Date of this Agreement, whichever is later. In the event that Carrier
accepts such offer more than sixty (60) days after the Commission, or the FCC,
as the case may be, approves such Other Interconnection Agreement pursuant to
Section 252 of the Act, or more than thirty (30) days after acquiring actual
knowledge of an Other Interconnection Agreement not requiring the approval of
the Commission pursuant to Section 252 of the Act, as the case may be, such
Other Terms shall be effective between BellSouth and Carrier as of the date on
which Carrier accepts such offer.
C. In the event that after the Effective Date the FCC or the
Commission having jurisdiction enters an order (an"Interconnection Order")
requiring BellSouth to provide within a particular state any of the
arrangements covered by this Agreement upon Other Terms, then upon such
Interconnection Order becoming final and not subject to further administrative
or judicial review, BellSouth shall be deemed to have offered such arrangements
to Carrier upon such Other Terms, which Carrier may accept as provided in Part
E of this Section. In the event that Carrier accepts such offer within sixty
(60) days after the date on which such Interconnection Order becomes final and
not subject to further administrative or judicial review, such Other Terms
shall be effective between BellSouth and Carrier as of the effective date of
such Interconnection Order or the Effective Date of this Agreement, whichever
is later. In the event that Carrier accepts such offer more than sixty (60)
days after the date on which such Interconnection Order becomes final and not
subject to further administrative or judicial review, such Other Terms shall be
effective between BellSouth and Carrier as of the date on which Carrier accepts
such offer.
D. In the event that after the Effective Date BellSouth files and
subsequently receives approval for one or more intrastate or interstate tariffs
(each, an "Interconnection Tariff") offering to provide within a particular
state any of the arrangements covered by this Agreement upon Other Terms, then
upon such Interconnection Tariff becoming effective, BellSouth shall be deemed
thereby to have offered such arrangements to Carrier upon such Other Terms in
that state only, which Carrier may accept as provided in Part E of this
Section. In the event that Carrier accepts such offer within sixty (60) days
after the date on which such Interconnection Tariff becomes effective, such
Other Terms shall be effective between BellSouth and Carrier as of the
effective date of such Interconnection Tariff or the Effective Date of this
Agreement, whichever is later. In the event that Carrier accepts such offer
more than sixty (60) days after the date on which such Interconnection Tariff
becomes effective, such Other Terms shall be effective between BellSouth and
Carrier as of the date on which Carrier accepts such offer.
E. In the event that BellSouth is deemed to have offered Carrier
the arrangements covered by this Agreement upon Other Terms, Carrier in its
sole discretion may accept such offer either --
1. by accepting such Other Terms in their entirety; or
2. by accepting the Other Terms that directly relate to any one
or more of the following arrangements as described by lettered category:
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a. local interconnection (including transport and termination),
b. interLATA and IntraLATA toll traffic interconnection,
c. unbundled access to network elements, which include: local loops,
network interface devices, switching capability, interoffice
transmission facilities, signaling networks and call-related
databases, operations support systems functions, operator services and
directory assistance, and any elements that result from subsequent
bona fide requests,
d. access to poles, ducts, conduits and rights-of-way,
e. access to 911/E911 emergency network,
f. collocation, or
g. access to telephone numbers.
The terms of this Agreement, other than those affected by the Other Terms
accepted by Carrier, shall remain in full force and effect.
F. Corrective Payment. In the event that --
1. BellSouth and Carrier revise this Agreement pursuant to Part
A of this Section, or
2. Carrier accepts a deemed offer of Other Terms pursuant to Part
E of this Section, then BellSouth or Carrier, as applicable, shall make a
corrective payment to the other party to correct for the difference between (a)
the rates set forth herein and (b) the rates in such revised agreement or Other
Terms for the period from (x) the effective date of such revised agreement or
Other Terms until (y) the later of the date that the parties execute such
revised agreement or the parties implement such Other Terms, plus simple
interest at a rate equal to the thirty (30) day commercial paper rate in effect
from time to time for high-grade, unsecured notes sold through dealers by major
corporations in multiples of $1,000.00 as regularly published in The Wall
Street Journal.
XX. TAXES
A. For the purposes of this section, the terms "taxes" and "fees"
shall include but not be limited to federal, state or local sales, use, excise,
gross receipts or other taxes or tax-like fees of whatever nature and however
designated (including tariff surcharges and any fees, charges or other
payments, contractual or otherwise, for the use of public streets or rights of
way, whether designated as franchise fees or otherwise) imposed, or sought to
be imposed, on or with respect to the services furnished hereunder or measured
by the charges or payments therefor, excluding any taxes levied on income.
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B. Taxes and fees imposed on the providing party, which are
neither permitted nor required to be passed on by the providing party to its
customer, shall be borne and paid by the providing party. Taxes and fees
imposed on the purchasing party, which are not required to be collected and/or
remitted by the providing party, shall be borne and paid by the purchasing
party.
C. Taxes and fees imposed on the purchasing party shall be borne
by the purchasing party, even if the obligation to collect and/or remit such
taxes or fees is placed on the providing party. To the extent permitted by
applicable law, any such taxes and/or fees shall be shown as separate items on
applicable billing documents between the parties. Notwithstanding the
foregoing, the purchasing party shall remain liable for any such taxes and fees
regardless of whether they are actually billed by the providing party at the
time that the respective service is billed.
D. If the purchasing party determines that in its opinion any
such taxes or fees are not lawfully due, the providing party shall not bill
such taxes or fees to the purchasing party if the purchasing party provides
written certification, reasonably satisfactory to the providing party, stating
that it is exempt or otherwise not subject to the tax or fee, setting forth the
basis therefor, and satisfying any other requirements under applicable law. If
any authority seeks to collect any such tax or fee that the purchasing party
has determined and certified not to be lawfully due, or any such tax or fee
that was not billed by the providing party, the purchasing party may contest
the same in good faith, at its own expense. In the event that such contest
must be pursued in the name of the providing party, the providing party shall
permit the purchasing party to pursue the contest in the name of providing
party and providing party shall have the opportunity to participate fully in
the preparation of such contest. In any such contest, each party shall
promptly furnish the others with copies of all filings in any proceeding,
protest, or legal challenge, all rulings issued in connection therewith, and
all correspondence between the purchasing party and the taxing authority.
E. If it is ultimately determined that any additional amount of
such a tax or fee is due to the imposing authority, the purchasing party shall
pay such additional amount, including any interest and penalties thereon.
Notwithstanding any provision to the contrary, the purchasing party shall
protect, indemnify and hold harmless (and defend at the purchasing party's
expense) the providing party from and against any such tax or fee, interest or
penalties thereon, or other charges or payable expenses (including reasonable
attorney fees) with respect thereto, which are reasonably and necessarily
incurred by the providing party in connection with any claim for or contest of
any such tax or fee. Each party shall notify the other party in writing of any
assessment, proposed assessment or other claim for any additional amount of
such a tax or fee by a taxing authority; such notice to be provided, if
possible, at least ten (10) days prior to the date by which a response, protest
or other appeal must be filed, but in no event later than thirty (30) days
after receipt of such assessment, proposed assessment or claim.
F. Taxes and fees imposed on the providing party, which are
permitted or required to be passed on by the providing party to its customer,
shall be borne by the
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purchasing party. To the extent permitted by applicable law, any such taxes
and/or fees shall be shown as separate items on applicable billing documents
between the parties. Notwithstanding the foregoing, the purchasing party shall
remain liable for any such taxes and fees regardless of whether they are
actually billed by the providing party at the time that the respective service
is billed.
G. If the purchasing party disagrees with the providing party's
determination as to the application or basis for any such tax or fee, the
parties shall consult with respect to the imposition and billing of such tax or
fee and with respect to whether to contest the imposition of such tax or fee.
Notwithstanding the foregoing, the providing party shall retain responsibility
for determining whether and to what extent any such taxes or fees are
applicable. The providing party shall further retain responsibility for
determining whether and how to contest the imposition of such taxes or fees,
provided, however, the parties agree to consult in good faith as to such
contest and that any such contest undertaken at the request of the purchasing
party shall be at the purchasing party's expense. In the event that such
contest must be pursued in the name of the providing party, the providing party
shall permit the purchasing party to pursue the contest in the name of the
providing party and the providing party shall have the opportunity to
participate fully in the preparation of such contest.
H. If after consultation in accordance with the preceding
Section, the purchasing party does not agree with the providing party's final
determination as to the application or basis of a particular tax or fee, and if
the providing party, after receipt of a written request by the purchasing party
to contest the imposition of such tax or fee with the imposing authority, fails
or refuses to pursue such contest or to allow such contest by the purchasing
party, the purchasing party may utilize the dispute resolution process outlined
in Section XXII of this Agreement. Utilization of the dispute resolution
process shall not relieve the purchasing party from liability for any tax or
fee billed by the providing party pursuant to this subsection during the
pendency of such dispute resolution proceeding. In the event that the
purchasing party prevails in such dispute resolution proceeding, it shall be
entitled to a refund in accordance with the final decision therein.
Notwithstanding the foregoing, if at any time prior to a final decision in such
dispute resolution proceeding the providing party initiates a contest with the
imposing authority with respect to any of the issues involved in such dispute
resolution proceeding, the dispute resolution proceeding shall be dismissed as
to such common issues and the final decision rendered in the contest with the
imposing authority shall control as to such issues.
I. In the event that all or any portion of an amount sought to be
collected must be paid in order to contest the imposition of any such tax or
fee, or to avoid the existence of a lien on the assets of the providing party
during the pendency of such contest, the purchasing party shall be responsible
for such payment and shall be entitled to the benefit of any refund or
recovery. If it is ultimately determined that any additional amount of such a
tax or fee is due to the imposing authority, the purchasing party shall pay
such additional amount, including any interest and penalties thereon.
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J. Notwithstanding any provision to the contrary, the purchasing
party shall protect, indemnify and hold harmless (and defend at the purchasing
party's expense) the providing party from and against any such tax or fee,
interest or penalties thereon, or other reasonable charges or payable expenses
(including reasonable attorney fees) with respect thereto, which are incurred
by the providing party in connection with any claim for or contest of any such
tax or fee. Each party shall notify the other party in writing of any
assessment, proposed assessment or other claim for any additional amount of
such a tax or fee by a taxing authority; such notice to be provided, if
possible, at least ten (10) days prior to the date by which a response, protest
or other appeal must be filed, but in no event later than thirty (30) days
after receipt of such assessment, proposed assessment or claim.
K. In any contest of a tax or fee by one party, the other party
shall cooperate fully by providing records, testimony and such additional
information or assistance as may reasonably be necessary to pursue the contest.
Further, the other party shall be reimbursed for any reasonable and necessary
out-of-pocket copying and travel expenses incurred in assisting in such
contest. Notwithstanding any other provision in this Agreement, each party
agrees to indemnify and hold harmless the other party from and against any
losses, damages, claims, demands, suits, liabilities, and expenses including
reasonable attorney's fees, that arise out of its failure to perform its
obligations under this Section.
XXI. TREATMENT OF PROPRIETARY AND CONFIDENTIAL INFORMATION
A. The parties agree that it may be necessary to provide each
other with certain confidential information, including trade secret
information, including but not limited to, technical and business plans,
technical information, proposals, specifications, drawings, procedures,
customer account data, call detail records and like information (hereinafter
collectively referred to as "Information"). The parties agree that if
Information is provided in written, graphic or other usable form and clearly
marked with a confidential, private or proprietary legend, then that
Information will be returned to the owner within a reasonable time. Both
parties agree that such marked Information shall not be copied or reproduced in
any form except to the extent required to perform this Agreement. The parties
shall protect any Information received from distribution, disclosure or
dissemination to anyone except employees of the parties with an identifiable
need to know such Information who agree in writing to be bound by the terms of
this Section; however, in no event shall any of Carrier's Information be
disclosed to any person employed by an affiliate of BellSouth engaged in the
provision of CMRS. In the event any person having had access to Carrier's
Information is subsequently employed by an affiliate of BellSouth engaged in
the provision of CMRS, such person shall be required to agree in writing not to
reveal or use such Information. The parties will use the same standard of care
to protect Information received as they would use to protect their own
confidential and proprietary Information.
B. Notwithstanding the foregoing, all Information in any party's
possession that would constitute Customer Proprietary Network Information of
the party or the
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parties' customers pursuant to any federal or state law or the rules and
regulations of the FCC or any state commission, and any Information developed
or received by a party regarding the other party's facilities, services,
volumes, or usage shall automatically be deemed confidential Information for
all purposes, even if not marked as such, and shall be held confidential as is
required for Information.
C. Notwithstanding the foregoing, there will be no obligation to
protect any portion of any Information that is either: 1) made publicly
available by the owner of the Information or lawfully disclosed by a nonparty
to this Agreement; 2) lawfully obtained from any source other than the owner of
the Information; 3) independently developed by personnel of the receiving party
to whom Information had not been previously disclosed and not based on or
derived from such Information; or 4) previously known to the receiving party
without an obligation to keep it confidential. A party may also disclose all
Information it is required or ordered to disclose by law, a court, or
governmental agency, as long as the party that owns such Information has been
notified of the required disclosure promptly after the disclosing party becomes
aware of its requirement to disclose. The party required to disclose the
Information shall take all lawful measures to avoid disclosing the Information
called for until the party that owns the Information has had a reasonable time
to seek and comply with a protective order issued by a court or governmental
agency of competent jurisdiction that with respect to the Information otherwise
required to be disclosed.
D. The party's obligations to safeguard information shall
survive the expiration or termination of this Agreement.
XXII. RESOLUTION OF DISPUTES
Except as otherwise stated in this Agreement, if any dispute arises as
to the interpretation of any provision of this Agreement or as to the proper
implementation of this Agreement, the parties shall initially refer the
disputed issue to individuals designated by the parties. If the issue is not
resolved within 30 days, either party may petition the Commission for a
resolution of the dispute, and/or pursue any other remedy available to it at
law or in equity.
XXIII. LIMITATION OF USE
The parties agree that this Agreement shall not be proffered by either
party in any jurisdiction as evidence of any concession or as a waiver of any
position taken by the other party in that or any other jurisdiction or for any
other purpose.
XXIV. WAIVERS
This Agreement may not be amended in any way except upon the written
consent of the parties. No party shall be deemed to have waived any rights it
has under the Agreement based on its prior decision not to enforce, or its
failure to strictly enforce, any such rights. No amendment or waiver of any
provision of this Agreement, and no consent to any default under this Agreement
shall be effective unless the same
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is in writing and signed by an officer of the party against whom such
amendment, waiver or consent is claimed.
XXV. MISCELLANEOUS TERMS
A. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Georgia, without regard
to Georgia's conflict of law principles, and, where applicable, federal law,
including the Communications Act of 1934, as amended by the Act.
B. In the event any provision of this Agreement shall be held to
be invalid, illegal or unenforceable, it shall be severed from the Agreement
and the remainder of this Agreement shall remain valid and enforceable and
shall continue in full force and effect; provided, however, that if any severed
provisions of this Agreement are essential to any party's ability to continue
to perform its material obligations hereunder to the reasonable satisfaction of
the party to which the obligations are owed, the parties shall immediately
begin negotiations of new provisions to replace the severed provisions.
C. INTENTIONALLY DELETED
D. INTENTIONALLY DELETED
E. The parties are independent contractors and nothing herein
shall be construed to imply that they are partners, joint venturers or agents
of one another.
F. Except as otherwise expressly provided in this Agreement, each
of the remedies provided under this Agreement is cumulative and is in addition
to any remedies that may be available at law or in equity.
G. Except as may be specifically set forth in this Agreement,
this Agreement does not provide and shall not be construed to provide any
person not a party or proper assignee or successor hereunder with any remedy,
claim, liability, reimbursement, cause of action, or other privilege arising
under or relating to this Agreement.
H. Neither party shall publish or use any advertising, sales
promotions or other publicity materials that use the other party's logo,
trademarks or service marks without the prior written approval of the other
party.
I. No party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the other
party, which will not be unreasonably withheld; provided, that (i) the parties
will permit the addition of wholly-owned Affiliates as parties hereto and (ii)
a party may assign its rights or delegate its obligations hereunder without the
consent of the other party to a wholly-owned Affiliate if such Affiliate is, in
the case of BellSouth, an authorized local exchange telephone carrier, or in
the case of Carrier, a licensed provider of radio telecommunications services,
and provided further that (a) the performance of any assignee shall be
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guaranteed by any such assignor and (b) a Carrier may also assign its rights or
obligations to a controlling parent corporation without the consent of
BellSouth
J. Any liabilities or obligations of a party for acts or
omissions prior to the cancellation or termination of this Agreement, any
obligation of a party under the provisions regarding indemnification,
Confidential Information, limitations on liability, and any other provisions of
this Agreement which, by their terms, are contemplated to survive (or to be
performed after) termination of this Agreement, shall survive cancellation or
termination thereof.
K. Whenever any provision of this Agreement refers to a technical
reference, technical publication, any publication of telecommunications
industry administrative or technical standards, or any other document
specifically incorporated into this Agreement, it will be deemed to be a
reference to the most recent version or edition (including any amendments,
supplements, addenda, or successors) or such documents that is in effect, and
will include the most recent version or edition (including any amendments,
supplements, addenda, or successors) or each document incorporated by reference
in such a technical reference, technical publication, or publication of
industry standards. Should there be an inconsistency between or among
publications or standards, the parties shall mutually agree upon which
requirement shall apply.
L. The drafting of this Agreement was a collaborative effort
between the parties. Accordingly, in connection with the interpretation for
any reason of any provision of this Agreement, there shall be no inference
drawn against the party that drafted such provision.
XXVI. EXECUTION
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and which together shall constitute a single
agreement. A facsimile copy of a party's execution of this Agreement shall be
valid and binding upon the party and must be followed as soon as practicable
thereafter by the original version of such execution.
XXVII. NOTICES
A. Every notice, consent, approval, or other communications
required or contemplated by this Agreement shall be in writing and shall be
either delivered in person or by overnight express service addressed to:
BellSouth Telecommunications, Inc. CARRIER
675 W. Peachtree St. N.E. InterCel, Inc.
Suite 4300 1233 O.G. Skinner Drive
Atlanta, Georgia 30375 West Point, Georgia 31833
Attn: Legal Dept. "Wireless" Attorney Attn: Vice President & General
Counsel
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B. A party may change the designated representative and/or
address for the receipt of notices by giving seven (7) days prior written
notice to the other party. Any notice or other communication is deemed given
when received.
XXVIII. ENTIRE AGREEMENT
This Agreement (including all attachments incorporated herein)
constitutes the entire agreement of the parties with respect to the matters
expressly set forth herein and supersedes any prior agreements, understanding,
undertakings, or communications, oral or written, of the parties with respect
to such matters.
BELLSOUTH TELECOMMUNICATIONS, INC. INTERCEL, INC.
By: /s/ Jerry D. Hendrix By: /s/ Edward C. Horner
------------------------------ -------------------------------
Its: Its: Chief Operating Officer
Jerry D. Hendrix Edward C. Horner
- ---------------------------------- -----------------------------------
Name Name
Date: 3/26/97 Date: April 1, 1997
--------------------------- ----------------------------
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ATTACHMENT B-1
A. Except as for those services for which no usage charges are
applicable in BellSouth's tariffs, the rate that each party shall pay to the
other for the transport and termination of Local Traffic shall be as follows,
subject to the adjustment identified in paragraph C below:
(1) For Types 1, 2A, and 2A-CCS7
Interconnection: Alabama $.00671
Georgia $.00648
(2) For Types 2B and 2B-CCS7
Interconnection: Alabama $.0017
Georgia $.0016
B. With respect to amounts to be charged to BellSouth, the Type
2B and Type 2B-CCS7 rate above shall only apply to Local Traffic that BellSouth
delivers to any Carrier's MSC via a direct trunk from a BellSouth end office
(a) to which Carrier has a Type 2B interconnection facility and (b) that serves
the same BellSouth subscribers to which Carrier may terminate Local Traffic
over such Type 2B interconnection facility; other Local Traffic subject to
usage charges shall be billed to BellSouth at the Type 2A rate set forth above.
C. The Type 1, Type 2A, and Type 2A-CCS7 rate set forth above
includes $.0025 as an Interim LATA-wide Additive. This Interim LATA-wide
Additive of $.0025 is subject to the adjustment described in Section V of the
Agreement. When this adjustment is completed, the rates above for Type 1, Type
2A, and Type 2A-CCS7 interconnection shall be adjusted upward or downward to
reflect the Final LATA-wide Additive determined pursuant to Section V.
<PAGE> 1
EXHIBIT(qq)
AGREEMENT
THIS AGREEMENT is made by and between BellSouth Telecommunications,
Inc. ("BellSouth"), a Georgia corporation, and Powertel, Inc. ("Powertel"), a
Delaware corporation, together with and on behalf of certain of its direct and
indirect, wholly owned and partially owned wireless operating subsidiaries
(Powertel and each such subsidiary a "Carrier" hereunder) and shall be deemed
effective as of April 1, 1997 (the "Effective Date"). Powertel hereby
represents that it has the authority to bind each Carrier. This Agreement
constitutes an agreement between (i) BellSouth, on the one hand and (ii) each
Carrier, on the other hand. BellSouth and each Carrier are referred to herein
as a "party" and collectively as "parties."
WITNESSETH
WHEREAS, The Telecommunications Act of 1996, Public Law 104-104 (the
"Act"), was signed into law on February 8, 1996;
WHEREAS, the Act, among other things, places certain duties and
obligations upon, and grants certain rights to, telecommunications carriers;
WHEREAS, BellSouth is a Telecommunications Carrier, and an Incumbent
Local Exchange Carrier ("ILEC"), authorized to provide telecommunications
services in the states of Alabama, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina, and Tennessee;
WHEREAS, Carrier is a Commercial Mobile Radio Service ("CMRS")
provider licensed by the Federal Communications Commission ("FCC") to provide
commercial mobile radio services in the states of Alabama, Florida, Georgia,
Kentucky, Louisiana, Mississippi, South Carolina and Tennessee;
WHEREAS, Carrier is licensed to do business in such states and
operates a CMRS network that is interconnected, or will be interconnected with,
the BellSouth network ;
WHEREAS, under the FCC Order dated August 8, 1996 and published in the
Federal Register on August 29, 1996 pertaining to interconnection, unbundling,
and resale (the "Order"), the FCC ordered that ILECs negotiate with CMRS
providers for such services pursuant to Sections 251 and 252 of the Act;
however, certain of the FCC rules, appended to, and made part of, the Order
have been stayed by the United States Court of Appeals for the Eighth Circuit
pending further judicial review;
<PAGE> 2
WHEREAS, BellSouth is entering into this Agreement in order, among
other things, to fulfill its obligation to establish mutual compensation
arrangements for the transport and termination of telecommunications;
NOW THEREFORE, in consideration of the mutual agreements contained
herein, the parties agree as follows:
I. DEFINITIONS. For purposes of this Agreement, the following capitalized
terms shall have the indicated meanings unless the provision in which any such
term appears states otherwise. Terms that appear herein (whether or not
capitalized) that are not defined herein shall have the meaning set forth in
the Act, or in the Order, or shall have the meanings ascribed to them in their
customary usage in the telecommunications industry as of the Effective Date.
A. "COMMISSION" means the appropriate regulatory agency in each of
the states in which Carrier is licensed to do business in BellSouth's region.
B. "INTERMEDIARY FUNCTION" means the delivery, pursuant to an
appropriate agreement or Commission directive, of telecommunications traffic to
or from a Local Exchange Carrier ("LEC") other than BellSouth, an ALEC, or
another telecommunications carrier, such as a CMRS provider other than Carrier,
through the network of BellSouth or Carrier from or to an end user of BellSouth
or Carrier.
C. "LOCAL TRAFFIC" means for purposes of reciprocal compensation and
the obligation of the parties to provide Local Interconnection (1) any
telephone call that originates on the network of Carrier within a Major Trading
Area ("MTA") and terminates on the network of BellSouth in the same MTA and
within the Local Access and Transport Area ("LATA") in which the call is handed
off from Carrier to BellSouth and (2) any telephone call that originates on the
network of BellSouth that is handed off to Carrier in the same LATA in which
the call originates and terminates on the network of Carrier in the MTA in
which the call is handed off from BellSouth to the Carrier. The exchange of
traffic on BellSouth's interLATA EAS routes shall be treated as Local Traffic.
EAS routes are those exchanges within an exchange's Basic Local Calling Area,
as defined in Section A3 of BellSouth's General Subscriber Services Tariff.
D. "LOCAL INTERCONNECTION" means the delivery of Local Traffic to be
terminated on each party's local network so that end users of a party have the
ability to reach end users of another party without the use of any access code
or substantial delay in the processing of the call.
E. "PERCENT OF INTERSTATE USAGE" OR "PIU" means a factor to be
applied to terminating access services minutes of use (for termination of Toll
Traffic) to obtain those minutes that should be rated as interstate access
services minutes of use. The numerator includes all interstate
"nonintermediary" minutes of use, less any interstate minutes of use for
Terminating Party Pays services, such as 800 Services. The
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denominator includes all "nonintermediary" access minutes of use of Toll
Traffic less all minutes attributable to terminating party pays services.
F. "PERCENT LOCAL USAGE" OR "PLU" means a factor to be applied to
terminating minutes of use. The numerator shall include all Local Traffic
minutes of use. The denominator is the total minutes of use including Local
Traffic and Toll Traffic.
G. "TOLL TRAFFIC" means all traffic that is not Local Traffic or
access services, as described in Section VI.F of this Agreement.
H. "MOBILE SWITCHING CENTER" OR "MSC" means a mobile switching center
of Carrier.
II. PURPOSE; FURTHER NEGOTIATIONS; APPLICATION OF TARIFFS
A. The parties enter this Agreement to memorialize their
agreement with respect to certain matters concerning Local Interconnection as a
result of their negotiations pursuant to Sections 251 and 252 of the Act. With
respect to any facility, feature, function, service, or other arrangement
concerning Local Interconnection or any other matter subject to negotiation
pursuant to Sections 251 and 252 of the Act between the parties that has not
been agreed upon by the parties and memorialized herein, (a) the parties shall
conduct further negotiations pursuant to Sections 251 and 252 of the Act upon a
written request therefor by Carrier, and (b) Carrier reserves any rights it
might have under Section 332 of the Communications Act of 1934, 47 U.S.C.
Section 332, as amended.
B. Any facility, feature, function, or service in use or
available for use between BellSouth and any party as of the Effective Date that
is not expressly governed by this Agreement shall continue to be governed by
such applicable tariff, agreement, or other arrangement, if any, in effect as
of the Effective Date, as may be modified from time to time pursuant to
applicable rules of the Commission. In the event of a conflict between any
provision of this Agreement and any provision of an applicable tariff, the
Agreement shall always control.
C. It is the parties' intent that this Agreement be consistent
with all applicable federal, state, and local statutes, rules, and regulations
in effect as of the Effective Date, including, but not limited to, the Act and
the Order.
III. TERM OF THE AGREEMENT
A. This Agreement shall be in full force and effect for a period
of two years from the Effective Date. The Agreement shall be automatically
renewed for an additional term of six months following such initial two-year
term and for successive six-month terms thereafter following each preceding
six-month renewal term unless a party
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provides to the other a written notice of termination at least sixty days prior
to the last day of the initial two-year term or any subsequent six-month
renewal term, as the case may be.
B. In the event BellSouth or Carrier receives from the other a
notice of termination pursuant to paragraph A of this Section, Powertel may
within 30 days thereof send to BellSouth a written request to renegotiate this
Agreement pursuant to Sections 251 and 252 of the Act, in which case this
Agreement shall not be terminated, but shall continue in full force and effect,
unless and until a substitute agreement between the parties with respect to the
matters governed herein takes effect.
C. Notwithstanding the foregoing, the parties may terminate this
Agreement at any time upon their written mutual consent.
IV. LOCAL INTERCONNECTION
The delivery of Local Traffic between the parties shall be reciprocal
and compensation will be mutual. Each party will pay the other for
transporting and terminating its respective Local Traffic on the other's
network at the Local Interconnection rates set forth in Attachment B-1, by this
reference incorporated herein. The amount that each party shall pay to the
other for the delivery of Local Traffic shall be calculated by multiplying the
applicable rate in Attachment B-1 for each type of call by the total minutes of
use each month for each such type of call. The minutes of use or portion
thereof for each call, as the case may be, will be accumulated for the monthly
billing period and the total of such minutes of use for the entire month
rounded to the nearest minute. The usage charges will be billed based on the
rounded total monthly minutes. The charges for Local Interconnection shall be
billed monthly and payable monthly. For undisputed bill amounts, late payment
fees, not to exceed 1% per month after the due date, may be assessed if
interconnection charges are not paid within 30 days of the due date of the
monthly bill.
V. MODIFICATION OF RATES
A. (1) The "Interim LATA-wide Additive" reflected in Attachment
B-1 shall be adjusted, retroactively to the Effective Date, based on the Final
LATA-wide Additive either determined by (a) further agreement as described in
subsection (B) hereof or (b) a final order (including the exhaustion of all
appeals, if any) of the Commission or the FCC, as the case may be, provided
that such a final order meets the criteria contained in subsection (C) hereof.
The "LATA-wide Additive" is intended to compensate BellSouth for any additional
transport and other costs associated with transporting and terminating Local
Traffic throughout a LATA instead of only within local calling areas, including
EAS routes, as defined by the Commission as of the Effective Date. As of the
Effective Date, the parties disagree as to the proper amount for the LATA-Wide
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Additive. The Interim LATA-wide Additive of $.0025 per minute that is included
in the Type 1, 2A, and 2A-CCS7 rates set forth in Attachment B-1 was arrived at
through negotiation and compromise and is without prejudice to either party's
position as to what additional or lesser charges, if any, should apply. As
such, the fact that the parties have agreed to this amount as the Interim
LATA-wide Additive shall have no probative value in any Commission or FCC
proceedings, as the case may be, to determine the Final LATA-wide Additive
described in this section.
(2) This adjustment, or "true-up," will consist of:
i. Calculating the difference between the Final
LATA-wide Additive and the Interim LATA-wide Additive, as reflected in
Attachment B-1 of this Agreement. The difference is referred to as the
"LATA-wide Additive Adjustment";
ii. Multiplying the "LATA-wide Additive Adjustment" by
all minutes of use for which the Interim LATA-wide was applied and billed by
the parties since the Effective Date, the product of which shall be the
"True-up Adjustment";
iii. The parties will reciprocally compensate each other
in an amount equal to the "True-up Adjustment".
B. The parties may continue to negotiate after the Effective Date
in an effort to obtain a Final LATA-wide Additive. Powertel may send BellSouth
a written request for negotiation of a Final LATA-wide Additive pursuant to
Sections 251 and 252 of the Act, no sooner than seventy-five (75) days after
the Effective Date. Following such request, the parties shall negotiate, and
if necessary arbitrate, the Final LATA-wide Additive pursuant to, and in
accordance with, the Act.
C. Any final order that forms the basis of a "true-up" under this
Agreement shall meet the following criteria:
1. It shall be a proceeding to which BellSouth and
Carrier are entitled to be full parties and have had an opportunity to
participate in;
2. It shall apply the provisions of the Act, including
but not limited to Section 252(d) and all effective implementing rules and
regulations, provided that the Act and such regulations are in effect at the
time of the final order; and
3. It shall include as an issue any additional transport
and other costs associated with transporting and terminating Local Traffic
throughout a LATA instead of only within local calling areas, including EAS
routes, as defined by the Commission as of the Effective Date.
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VI. METHODS OF INTERCONNECTION
A. (1) The parties agree that there are three appropriate
methods of interconnecting facilities: (a) virtual collocation where physical
collocation is not practical for technical reasons or because of space
limitations; (b) physical collocation; and (c) interconnection at any
technically feasible point via purchase of facilities from either party by the
other party. The rates and charges for collocation shall be as set forth in
Attachment C-13, incorporated herein by this reference, or as otherwise agreed
upon by the parties. Facilities for interconnection that are not purchased
pursuant to an agreement between the parties may be purchased by Carrier at the
rates, terms and conditions set forth in BellSouth's intrastate Switched Access
(Section E6) or Special Access (Section E7) services tariff. The
interconnection of facilities shall be pursuant to the forms of interconnection
(for example, Type 1, Type 2A and Type 2B) described in BellSouth's General
Subscriber Services Tariff, Section A35; provided, however, that such
interconnection arrangements shall be provided at the rates, terms and
conditions set forth in this Agreement.
(2) Local Interconnection shall be provided at a level of
quality at least equal to that which each party provides to itself, an
Affiliate, or any other telecommunications carrier, except that, upon request,
a different level of quality may be provided to the extent technically feasible
and subject to the negotiation of acceptable provisions and compensation
arrangements. All interconnection facilities shall meet the applicable
telecommunications industry standards of engineering, design, and operation, as
the case may be, for LEC-CMRS interconnection in effect from time to time.
B. The parties agree to accept and provide any of the preceding
methods of interconnection. Reciprocal connectivity shall be established to at
least one BellSouth access tandem within every LATA that Carrier desires to
serve, or Carrier may elect to interconnect directly at the end office for
delivery of traffic to end users served by that end office. Such
interconnecting facilities shall conform, at a minimum, to the
telecommunications industry standard of DS-1 pursuant to Bellcore Standard No.
TR-NWT-00499. Signal transfer point, Signaling System 7 ("SS7") connectivity
is required at each interconnection point after Carrier implements SS7
capability within its own network. BellSouth will provide out-of-band
signaling using Common Channel Signaling Access Capability where technically
and economically feasible, in accordance with the technical specifications set
forth in the BellSouth Guidelines to Technical Publication, TR-TSV-000905. The
parties' facilities shall (i) provide the necessary on-hook, off-hook answer
and disconnect supervision, (ii) hand off calling party number ID when
technically feasible, and (iii) honor privacy codes when sent and permitted
line blocking requests.
C. Nothing herein shall prevent Carrier from utilizing
collocation facilities, purchased from the appropriate tariffs, for Local
Interconnection.
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D. The parties agree to establish trunk groups from the
interconnecting facilities of subsection (A) of this section such that each
party provides a reciprocal of each trunk group established by the other party.
Notwithstanding the foregoing, each party may construct its network, including
the interconnecting facilities, to achieve optimum cost effectiveness and
network efficiency. Unless otherwise agreed, BellSouth will provide or bear
the cost of all trunk groups for the delivery of traffic from BellSouth to
Carrier's MSCs within BellSouth's service territory, and Carrier will provide
or bear the cost of all trunk groups for the delivery of traffic from Carrier
to each BellSouth access tandem and end office at which the parties
interconnect. In the event one party interconnects to the other via the
purchase of facilities from the other party, the parties shall negotiate a rate
for such interconnection facilities if an intrastate tariff, as amended from
time to time, does not otherwise apply. In the event the parties agree to use
any two-way interconnection facilities in lieu of separate one-way facilities,
the appropriate charges for such facilities shall be divided on a pro rata
basis reflecting the percentage of traffic that terminates on the network of
each party.
E. The parties agree to use an auditable PLU factor as a method
for determining the amount of traffic that is Local Traffic.
F. When the parties provide an access service connection between
an interexchange carrier ("IXC") and each other, each party will provide its
own access services to the IXC. Each party will bill its own access services
rates to the IXC.
G. INTENTIONALLY DELETED
H. The ordering and provision of all facilities or services
purchased from BellSouth by Carrier shall be as set forth in the BellSouth
Telecommunications Wireless Customer Guide, as amended from time to time. The
ordering and provisioning of facilities or services by a party, including, but
not limited to, installation, testing, maintenance, repair, and disaster
recovery, shall be provided at a level of quality and care at least equal to
that which it provides to itself, an affiliate, or any other telecommunications
carrier unless Carrier and BellSouth specifically negotiate a different level
of quality or care.
I. BellSouth shall endeavor to provide by December 31, 1997 to
Carrier an Electronic Interface (EI) for transferring and receiving orders,
confirmations, completion notices, and other provisioning data, materials and
documents. This EI shall be administered through a gateway that will serve as
a single point of contact for the transmission of such data from Carrier to
BellSouth, and from BellSouth to Carrier. The requirements and implementation
of such a data transfer system are subject to future agreement by Carrier and
BellSouth.
J. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that
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neither Powertel nor Carrier collectively may make more than one such request
for negotiations with respect to the services described in this section in any
calendar year during which the Agreement is in effect.
K. The parties acknowledge that the issues of performance
criteria and remedies for noncompliance related to Local Interconnection remain
unresolved as of the Effective Date. Upon Carrier's written request, the
parties will continue to negotiate these issues in good faith after the
Effective Date, taking into account any relevant Commission decisions,
arbitrations, and other determinations. In the event the parties are unable to
reach agreement on these unresolved issues by the seventy-fifth (75) day
following the Effective Date, then, in addition to all other available
remedies, either party may seek arbitration or other resolution thereof from
the Commission to the extent permitted under sections 251 and 252 of the Act.
VII. INTRALATA AND INTERLATA TOLL TRAFFIC INTERCONNECTION
A. For originating and terminating intrastate or interstate Toll
Traffic, each party shall pay the other at BellSouth's intrastate or
interstate, as appropriate, switched network access service rate elements on a
per minute of use basis. Said rate elements shall be as set out in BellSouth's
Intrastate Access Services Tariff or BellSouth's Interstate Access Services
Tariff as those Tariffs may be amended from time to time during the term of
this Agreement. The appropriate charges will be determined by the routing of
the call. The terminating switched access rates may change during the term of
this Agreement and the appropriate rate shall be the rate in effect when the
Toll Traffic is terminated.
B. INTENTIONALLY DELETED
C. Each party shall compensate the other, pursuant to the
appropriate originating switched access charges, including the database query
charge, for the origination of 800 traffic terminated to the other party.
D. INTENTIONALLY DELETED
E. INTENTIONALLY DELETED
F. INTENTIONALLY DELETED
G This Agreement is intended to govern the interconnection of
traffic to and from the parties' networks only. Toll Traffic originated by a
party to this Agreement and delivered to the other party for termination to the
network of a nonparty telecommunications carrier ("Nonparty Carrier") may be
delivered only with the consent of such Nonparty Carrier or pursuant to
Commission directive. If a Nonparty Carrier objects to the delivery of such
Toll Traffic, then either party to this Agreement may request direction from
the Commission. If a Nonparty Carrier consents, then the party
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performing the intermediary function will bill the other party and the other
party shall pay a $.002 per minute intermediary charge in addition to any
charges that the party performing the intermediary function may be obligated to
pay to the Nonparty Carrier (collectively called "Toll Intermediary Charges").
The parties agree that the charges that the party performing the intermediary
function may be obligated to pay to the Nonparty Carrier may change during the
term of this Agreement and that the appropriate rate shall be the rate in
effect when the traffic is terminated.
VIII. PROVISION OF UNBUNDLED ELEMENTS
At any time after the Effective Date, pursuant to Sections 251 and 252
of the Act, upon request by Carrier, the parties shall negotiate for
BellSouth's provision of unbundled network elements, as provided in Section II
of this Agreement.
IX. ACCESS TO POLES, DUCTS, CONDUITS, AND RIGHTS OF WAY
At any time after the Effective Date, pursuant to Sections 251 and 252
of the Act, upon request by Carrier, the parties shall negotiate for
BellSouth's provision of access to poles, ducts, conduits, and rights of way,
as provided in Section II of this Agreement.
X. ACCESS TO 911/E911 EMERGENCY NETWORK
A. BellSouth and Carrier recognize that 911 and E911 services were
designed and implemented primarily as methods of providing emergency services
to fixed location subscribers. While BellSouth and Carrier recognize the need
to provide "911-like" service to mobile subscribers, both parties recognize
that current technological restrictions prevent an exact duplication of the
services provided to fixed location customers. BellSouth agrees to route
"911-like" calls received from Carrier to the emergency agency designated by
Carrier for such calls. Carrier agrees that it shall bear the cost of
facilities it uses to deliver such "911-like" calls to BellSouth's network and
to provide to BellSouth the information required by applicable statutes or
regulations governing routing of 911 calls from CMRS subscribers so that each
call may be properly routed.
B. BellSouth and Carrier recognize that the technology and regulatory
requirements for the provision of "911-like" service by CMRS carriers are
evolving and agree to modify or supplement the foregoing in order to
incorporate technically feasible improvements that Carrier desires to implement
or to permit Carrier to comply with applicable regulatory requirements,
provided that Carrier shall reimburse BellSouth for the incremental costs of
any such technological modification or supplement beyond the cost of an
equivalent, or the most similar, technology at the time accepted in the
telecommunications industry.
C. Upon request, the parties shall conduct further negotiations
pursuant to
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Sections 251 and 252 of the Act regarding the provision of services described
in this Section and nothing in this Agreement shall prohibit, or shall be
construed to prohibit, such negotiations or any arbitration arising therefrom,
if necessary, provided that neither Powertel nor Carrier collectively may make
more than one such request for negotiations with respect to the services
described in this section in any calendar year during which the Agreement is in
effect.
XI. INTENTIONALLY DELETED
XII. INTENTIONALLY DELETED
XIII. ACCESS TO TELEPHONE NUMBERS
A. BellSouth, during any period in which it serves as a North
American Numbering Plan administrator for its territory, shall ensure that
Carrier has nondiscriminatory access to telephone numbers for assignment to its
telephone exchange service customers. BellSouth shall provide numbering
resources pursuant to the Bellcore Guidelines Regarding Number Assignment and
shall provide such resources on terms no less favorable than those which
BellSouth provides to itself, its subsidiaries or Affiliates, or any other
telecommunication carriers. Carrier agrees that it will complete the NXX code
application in accordance with Industry Carriers Compatibility Forum, Central
Office Code Assignment Guidelines, ICCF 93-0729-010. Except for Type 1 DID
numbers, this service will be at no charge.
B. If during the term of this Agreement BellSouth ceases to be
the North American Numbering Plan administrator, the parties agree to comply
with the guidelines, plan, or rules adopted pursuant to 47 U.S.C. Section
251(e).
XIV. ACCESS TO SIGNALING AND SIGNALING DATABASES
A. BellSouth will offer to Carrier use of its signaling network
and signaling databases on an unbundled basis at BellSouth's published tariffed
rates or at unbundled rates that may be available through non-tariffed
arrangements except as provided in subsection C below. Signaling functionality
will be available with both A-link and B-link connectivity.
B. BellSouth agrees to input the NXXs assigned to Carrier into
the Local Exchange Routing Guide ("LERG").
C. Where interconnection is via B-link connections, charges for
the SS7 interconnection elements are as follows: 1) Port Charge - BellSouth
shall not bill an STP port charge nor shall BellSouth pay a port charge; 2) SS7
Network Usage - BellSouth shall bill its tariffed surrogate usage charge and
shall pay usage billed by the Carrier at rates not to exceed those charged by
BellSouth; 3) SS7 Link - BellSouth will bill its tariffed charges for only two
links of each quad ordered. Application of these
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charges in this manner is designed to reflect the reciprocal use of the
parties' signaling networks. Where interconnection is via A-link connections,
charges for the SS7 interconnection elements are as follows: 1) Port Charge -
BellSouth shall bill its tariffed STP port charge but shall not pay a
termination charge at the Carrier's end office; 2) SS7 Network Usage -
BellSouth shall bill its tariffed surrogate usage charge but shall not pay for
any usage; 3) SS7 Link - BellSouth shall bill its tariffed charges for each
link in the A-link pair but shall not pay the Carrier for any portion of those
links.
D. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section, and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that neither Powertel nor Carrier
collectively may make more than one such request for negotiations with respect
to the services described in this section in any calendar year during which the
Agreement is in effect.
XV. NETWORK DESIGN AND MANAGEMENT
A. The parties agree to work cooperatively to install and
maintain reliable interconnected telecommunications networks, including but not
limited to, maintenance contact numbers and escalation procedures. BellSouth
agrees to provide reasonable public notice of changes in the information
necessary for the transmission and routing of services using its local exchange
facilities or networks, as well as of any other changes that would affect the
interoperability of those facilities and networks.
B. The interconnection of all networks will be based upon
accepted industry/national guidelines for transmission standards and traffic
blocking criteria, as defined in this Agreement.
C. The parties will work cooperatively to apply sound network
management principles by invoking appropriate network management controls, if
technically feasible, e.g.. call gapping, to alleviate or prevent network
congestion.
D. Neither party will charge rearrangement, reconfiguration,
disconnection, termination or other such non-recurring fees that may be
associated with the initial reconfiguration of either party's existing network
interconnection arrangements. Notwithstanding the foregoing, the parties may
charge non-recurring fees for any additions to, or added capacity to, any
existing facility or trunk.
E. The parties agree to provide Common Channel Signaling (CCS)
information to one another, where available, in conjunction with all traffic in
order to enable full interoperability of CLASS features and functions except
for features or functions that have not been deployed in the parties'
respective networks, where available. All CCS signaling parameters will be
provided, including automatic number identification (ANI), originating line
information (OLI), calling party category, charge
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number, etc. All privacy indicators will be honored, and the parties agree to
cooperate on the exchange of Transactional Capabilities Application Part (TCAP)
messages to facilitate full interoperability of CCS-based features between the
respective networks.
F. For network expansion, the parties agree to review engineering
requirements on a quarterly basis and establish forecasts for trunk utilization
as required by Section VI of this Agreement. New trunk groups will be
implemented as stated by engineering requirements for both parties.
G. The parties agree to provide each other with the proper call
information, i.e. originated call party number and destination call party
number, CIC, and OZZ, including all proper translations for routing between
networks and any information necessary for billing where either party provides
recording capabilities. The exchange of information is required to enable each
party to bill properly.
H. Upon request, the parties shall conduct further negotiations
pursuant to Sections 251 and 252 of the Act regarding the provision of services
described in this Section, and nothing in this Agreement shall prohibit, or
shall be construed to prohibit, such negotiations or any arbitration arising
therefrom, if necessary, provided that neither Powertel nor Carrier
collectively may make more than one such request for negotiations with respect
to the services described in this section in any calendar year during which the
Agreement is in effect.
XVI. IMPLEMENTATION OF AGREEMENT
The parties agree to provide the appropriate staff support to ensure
effective implementation, administration of this Agreement and conversion of
pricing for existing services to the appropriate rates contained in this
Agreement.
XVII. AUDITING PROCEDURES
A. Within thirty (30) days of a party's receipt of a written
request to audit, such party must provide a mutually acceptable independent
auditor (the "Auditor") with access to such party's books and records so that
the Auditor can perform an audit of the billing of traffic between the parties.
The parties agree to retain records of call detail for a minimum of nine months
from which the PLU can be ascertained. The audit shall be performed by the
Auditor during normal business hours at an office designated by the party being
audited. Audit requests shall not be submitted more frequently than once per
calendar year. The PLU shall be adjusted based upon the audit results and shall
apply to the usage for the quarter the audit was completed, the usage for the
quarter prior to the completion of the audit, and to the usage following the
completion of the audit until again revised pursuant to a subsequent audit. The
party requesting the audit shall pay the cost of the audit, including the
Auditor's fees, except that if, as a result of the audit, the party being
audited is found to have overstated the PLU by twenty percentage points or
more, that party shall reimburse the party requesting the audit for the cost of
the audit, including the Auditor's fees.
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B. For combined interstate and intrastate Carrier Toll Traffic
terminated by BellSouth over the same facilities, Carrier shall provide a PIU
factor to BellSouth. Carrier does not intend to provide interexchange carrier
services to BellSouth end-users. Nevertheless, should Carrier in the future
provide toll services through the use of network switched access services, then
all jurisdictional report requirements, rules and regulations specified in
E2.3.14 of BellSouth's Intrastate Access Services Tariff will apply to
Carrier's services and operations to the same degree and in the same manner as
such requirements, rules, and regulations apply to BellSouth. After the Local
Traffic percentage has been determined by use of the PLU factor for application
and billing of local interconnection, the PIU factor will be used for
application and billing of interstate and intrastate access charges, as
appropriate.
XVIII. LIABILITY AND INDEMNIFICATION
A. Liability Cap.
(1) With respect to any claim or suit, whether based in contract, tort
or any other theory of legal liability, by Carrier, any Carrier customer or by
any other person or entity, for damages associated with any of the services
provided by BellSouth pursuant to or in connection with this Agreement,
including but not limited the installation, provision, preemption, termination,
maintenance, repair or restoration of service, and subject to the provisions of
the remainder of this Article XVIII, BellSouth's liability shall be limited to
an amount equal to the proportionate charge for the service provided pursuant
to this Agreement, for the period during which the service was affected.
Notwithstanding the foregoing, claims for damages by Carrier, and Carrier
customer or any other person or entity resulting from the gross negligence or
willful misconduct of BellSouth and claims for damages by Carrier resulting
from the failure of BellSouth to honor in one or more material respects any one
or more of the material provisions of this Agreement shall not be subject to
such limitation of liability.
(2) With respect to any claim or suit, whether based in contract, tort
or any other theory of legal liability, by BellSouth, any BellSouth customer or
by any other person or entity, for damages associated with any of the services
provided by Carrier pursuant to or in connection with this Agreement, including
but not limited to the installation, provision, preemption, termination,
maintenance, repair or restoration of service, and subject to the provisions of
the remainder of this Article XVIII, Carrier's liability shall be limited to an
amount equal to the proportionate charge for the service provided pursuant to
this Agreement for the period during which the service was affected.
Notwithstanding the foregoing, claims for damages by BellSouth, any BellSouth
customer or any other person or entity resulting from the gross negligence or
willful misconduct of Carrier and claims for damages by BellSouth resulting
from the failure of Carrier to honor in one or more material respects any one
or more of the material provisions of this Agreement shall not be subject to
such limitation of liability.
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<PAGE> 14
B. Neither party shall be liable for any act or omission of any
other telecommunications company to the extent such other telecommunications
company provides a portion of a service.
C. Neither party shall be liable for damages to the other party's
terminal location, point of interconnection, or the other party's customers'
premises resulting from the furnishing of a service, including but not limited
to the installation and removal of equipment and associated wiring, except to
the extent the damage is caused by such Party's gross negligence or willful
misconduct.
D. Each party shall, to the greatest extent permitted by the law
governing this Agreement ("Applicable Law"), include in its tariff (if it files
one) or, where it does not file a tariff, in an appropriate contract with its
customers that relates to the subject matter of this Agreement, a limitation of
liability (i) that covers the other party to the same extent the first party
covers itself and (ii) that limits the amount of damages a customer may recover
to the amount charged the applicable customer for the service that gave rise to
such loss.
E. No Consequential Damages - EXCEPT AS OTHERWISE PROVIDED IN
THIS SECTION XVIII, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE, OR SPECIAL DAMAGES SUFFERED BY
SUCH OTHER PARTY (INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO BUSINESS,
LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED BY SUCH OTHER PARTY),
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY, STRICT
LIABILITY, OR TORT, INCLUDING WITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER
ACTIVE OR PASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THE
POSSIBILITY THAT SUCH DAMAGES COULD RESULT. EACH PARTY HEREBY AGREES TO HOLD
HARMLESS THE OTHER PARTY AND SUCH OTHER PARTY'S AFFILIATES, AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ALL SUCH DAMAGES.
PROVIDED, HOWEVER, NOTHING CONTAINED IN THIS SECTION XVIII SHALL LIMIT A
PARTY'S LIABILITY TO THE OTHER FOR (I) WILLFUL OR INTENTIONAL MISCONDUCT, GROSS
NEGLIGENCE, OR FAILURE TO HONOR ONE OR MORE OF THE MATERIAL PROVISIONS OF THIS
AGREEMENT IN ONE OR MORE MATERIAL RESPECTS; (II) BODILY INJURY, DEATH OR DAMAGE
TO TANGIBLE REAL OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY A PARTY'S
NEGLIGENT ACT OR OMISSION OR THAT OF ITS AGENTS, SUBCONTRACTORS OR EMPLOYEES,
NOR SHALL ANYTHING CONTAINED IN THIS SECTION XVIII LIMIT THE PARTIES'
INDEMNIFICATION OBLIGATIONS AS SPECIFIED HEREIN.
F. Obligation to Indemnify - Each party shall, and hereby agrees
to, defend at the other party's request, indemnify and hold harmless the other
party and each of its officers, directors, employees and agents (each, an
"Indemnitee") against and in respect
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<PAGE> 15
of any loss, debt, liability, damage, obligation, claim, demand, judgment or
settlement of any nature or kind, known or unknown, liquidated or unliquidated,
including without limitation all reasonable costs and expenses incurred (legal,
accounting or otherwise) (collectively, "Damages") arising out of, resulting
from or based upon any pending or threatened claim, action, proceeding or suit
by any third party (a "Claim") (i) arising from any breach of any
representation, warranty or covenant made by such indemnifying party (the
"Indemnifying Party") in this Agreement, (ii) based upon injuries or damage to
any person or property or the environment arising out of or in connection with
this Agreement that are the result of the Indemnifying Party's actions, breach
of Applicable Law, or status of its employees, agents and subcontractors, or
(iii) for actual or alleged infringement of any patent, copyright, trademark,
service mark, trade name, trade dress, trade secret or any other intellectual
property right, now known or later developed (referred to as "Intellectual
Property Rights") to the extent that such Claim for infringement arises from
lndemnitee's use of the services provided to it under this Agreement.
G. Each party's failure to perform under this Agreement shall be
excused by labor strikes, civil commotion, criminal actions taken against them,
acts of God, and other circumstances beyond their reasonable control.
H. The obligations of the parties contained within this section
shall survive/e the expiration of this Agreement..
XIX. MORE FAVORABLE PROVISIONS
A. The parties agree that if ---
1. the FCC or the Commission finds that the terms of
this Agreement are inconsistent in one or more material respects with any of
its or their respective decisions, rules, or regulations, or
2. the FCC or the Commission preempts the effect of this
Agreement, then, in either case, upon such occurrence becoming final and no
longer subject to administrative or judicial review, the parties shall
immediately commence good faith negotiations to conform this Agreement to the
requirements of any such decision, rule, regulation, or preemption. The
revised agreement shall have the same effective date as the initial FCC or
Commission action giving rise to such negotiations. The rates, terms, and
conditions of any new agreement shall not be applied retroactively to any
period prior to such effective date except to the extent that such retroactive
effect is expressly required by such FCC or Commission decision, rule,
regulation, or preemption.
B. In the event that BellSouth, either before or after the
Effective Date, enters into an agreement with any other telecommunications
carrier (an "Other
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<PAGE> 16
Interconnection Agreement") which provides for the provision within a state of
any of the arrangements covered by this Agreement upon rates, terms or
conditions that differ from the rates, terms and conditions for such
arrangements set forth in this Agreement ("Other Terms"), then BellSouth shall
be deemed thereby to have offered such arrangements to Carrier upon such Other
Terms in that state only, which Carrier may accept as provided in Part E of
this Section. In the event that Carrier accepts such offer within sixty (60)
days after the Commission, or the FCC, as the case may be, approves such Other
Interconnection Agreement pursuant to Section 252 of the Act, or within thirty
(30) days after Carrier acquires actual knowledge of an Other Interconnection
Agreement not requiring the approval of the Commission pursuant to Section 252
of the Act, as the case may be, such Other Terms shall be effective between
BellSouth and Carrier as of the effective date of such Other Interconnection
Agreement or the Effective Date of this Agreement, whichever is later. In the
event that Carrier accepts such offer more than sixty (60) days after the
Commission, or the FCC, as the case may be, approves such Other
Interconnection Agreement pursuant to Section 252 of the Act, or more than
thirty (30) days after acquiring actual knowledge of an Other Interconnection
Agreement not requiring the approval of the Commission pursuant to Section 252
of the Act, as the case may be, such Other Terms shall be effective between
BellSouth and Carrier as of the date on which Carrier accepts such offer.
C. In the event that after the Effective Date the FCC or the
Commission having jurisdiction enters an order (an "Interconnection Order")
requiring BellSouth to provide within a particular state any of the
arrangements covered by this Agreement upon Other Terms, then upon such
Interconnection Order becoming final and not subject to further administrative
or judicial review, BellSouth shall be deemed to have offered such arrangements
to Carrier upon such Other Terms, which Carrier may accept as provided in Part
E of this Section. In the event that Carrier accepts such offer within sixty
(60) days after the date on which such Interconnection Order becomes final and
not subject to further administrative or judicial review, such Other Terms
shall be effective between BellSouth and Carrier as of the effective date of
such Interconnection Order or the Effective Date of this Agreement, whichever
is later. In the event that Carrier accepts such offer more than sixty (60)
days after the date on which such Interconnection Order becomes final and not
subject to further administrative or judicial review, such Other Terms shall be
effective between BellSouth and Carrier as of the date on which Carrier accepts
such offer.
D. In the event that after the Effective Date BellSouth files and
subsequently receives approval for one or more intrastate or interstate tariffs
(each, an "Interconnection Tariff") offering to provide within a particular
state any of the arrangements covered by this Agreement upon Other Terms, then
upon such Interconnection Tariff becoming effective, BellSouth shall be deemed
thereby to have offered such arrangements to Carrier upon such Other Terms in
that state only, which Carrier may accept as provided in Part E of this
Section. In the event that Carrier accepts such offer within sixty (60) days
after the date on which such Interconnection Tariff becomes effective, such
Other Terms shall be effective between BellSouth and
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<PAGE> 17
Carrier as of the effective date of such Interconnection Tariff or the
Effective Date of this Agreement, whichever is later. In the event that
Carrier accepts such offer more than sixty (60) days after the date on which
such Interconnection Tariff becomes effective, such Other Terms shall be
effective between BellSouth and Carrier as of the date on which Carrier accepts
such offer.
E. In the event that BellSouth is deemed to have offered Carrier
the arrangements covered by this Agreement upon Other Terms, Carrier in its
sole discretion may accept such offer either --
1. by accepting such Other Terms in their entirety; or
2. by accepting the Other Terms that directly relate to
any one or more of the following arrangements as described by lettered
category:
a. local interconnection (including transport and
termination),
b. interLATA and IntraLATA toll traffic
interconnection,
c. unbundled access to network elements, which
include: local loops, network interface devices, switching capability,
interoffice transmission facilities, signaling networks and call-related
databases, operations support systems functions, operator services and
directory assistance, and any elements that result from subsequent bona fide
requests,
d. access to poles, ducts, conduits and
rights-of-way,
e. access to 911/E911 emergency network,
f. collocation, or
g. access to telephone numbers.
The terms of this Agreement, other than those affected by the Other Terms
accepted by Carrier, shall remain in full force and effect.
F. Corrective Payment. In the event that --
1. BellSouth and Carrier revise this Agreement pursuant
to Part A of this Section, or
2. Carrier accepts a deemed offer of Other Terms
pursuant to Part E of this Section,
then BellSouth or Carrier, as applicable, shall make a corrective payment to
the other party to correct for the difference between (a) the rates set forth
herein and (b) the rates in such revised agreement or Other Terms for the
period from (x) the effective date of
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<PAGE> 18
such revised agreement or Other Terms until (y) the later of the date that the
parties execute such revised agreement or the parties implement such Other
Terms, plus simple interest at a rate equal to the thirty (30) day commercial
paper rate in effect from time to time for high-grade, unsecured notes sold
through dealers by major corporations in multiples of $1,000.00 as regularly
published in The Wall Street Journal.
XX. TAXES
A. For the purposes of this section, the terms "taxes" and "fees"
shall include but not be limited to federal, state or local sales, use, excise,
gross receipts or other taxes or tax-like fees of whatever nature and however
designated (including tariff surcharges and any fees, charges or other
payments, contractual or otherwise, for the use of public streets or rights of
way, whether designated as franchise fees or otherwise) imposed, or sought to
be imposed, on or with respect to the services furnished hereunder or measured
by the charges or payments therefor, excluding any taxes levied on income.
B. Taxes and fees imposed on the providing party, which are
neither permitted nor required to be passed on by the providing party to its
customer, shall be borne and paid by the providing party. Taxes and fees
imposed on the purchasing party, which are not required to be collected and/or
remitted by the providing party, shall be borne and paid by the purchasing
party.
C. Taxes and fees imposed on the purchasing party shall be borne
by the purchasing party, even if the obligation to collect and/or remit such
taxes or fees is placed on the providing party. To the extent permitted by
applicable law, any such taxes and/or fees shall be shown as separate items on
applicable billing documents between the parties. Notwithstanding the
foregoing, the purchasing party shall remain liable for any such taxes and fees
regardless of whether they are actually billed by the providing party at the
time that the respective service is billed.
D. If the purchasing party determines that in its opinion any
such taxes or fees are not lawfully due, the providing party shall not bill
such taxes or fees to the purchasing party if the purchasing party provides
written certification, reasonably satisfactory to the providing party, stating
that it is exempt or otherwise not subject to the tax or fee, setting forth the
basis therefor, and satisfying any other requirements under applicable law. If
any authority seeks to collect any such tax or fee that the purchasing party
has determined and certified not to be lawfully due, or any such tax or fee
that was not billed by the providing party, the purchasing party may contest
the same in good faith, at its own expense. In the event that such contest
must be pursued in the name of the providing party, the providing party shall
permit the purchasing party to pursue the contest in the name of providing
party and providing party shall have the opportunity to participate fully in
the preparation of such contest. In any such contest, each party shall
promptly furnish the others with copies of all filings in any proceeding,
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<PAGE> 19
protest, or legal challenge, all rulings issued in connection therewith, and
all correspondence between the purchasing party and the taxing authority.
E. If it is ultimately determined that any additional amount of
such a tax or fee is due to the imposing authority, the purchasing party shall
pay such additional amount, including any interest and penalties thereon.
Notwithstanding any provision to the contrary, the purchasing party shall
protect, indemnify and hold harmless (and defend at the purchasing party's
expense) the providing party from and against any such tax or fee, interest or
penalties thereon, or other charges or payable expenses (including reasonable
attorney fees) with respect thereto, which are reasonably and necessarily
incurred by the providing party in connection with any claim for or contest of
any such tax or fee. Each party shall notify the other party in writing of any
assessment, proposed assessment or other claim for any additional amount of
such a tax or fee by a taxing authority; such notice to be provided, if
possible, at least ten (10) days prior to the date by which a response, protest
or other appeal must be filed, but in no event later than thirty (30) days
after receipt of such assessment, proposed assessment or claim.
F. Taxes and fees imposed on the providing party, which are
permitted or required to be passed on by the providing party to its customer,
shall be borne by the purchasing party. To the extent permitted by applicable
law, any such taxes and/or fees shall be shown as separate items on applicable
billing documents between the parties. Notwithstanding the foregoing, the
purchasing party shall remain liable for any such taxes and fees regardless of
whether they are actually billed by the providing party at the time that the
respective service is billed.
G. If the purchasing party disagrees with the providing party's
determination as to the application or basis for any such tax or fee, the
parties shall consult with respect to the imposition and billing of such tax or
fee and with respect to whether to contest the imposition of such tax or fee.
Notwithstanding the foregoing, the providing party shall retain responsibility
for determining whether and to what extent any such taxes or fees are
applicable. The providing party shall further retain responsibility for
determining whether and how to contest the imposition of such taxes or fees,
provided, however, the parties agree to consult in good faith as to such
contest and that any such contest undertaken at the request of the purchasing
party shall be at the purchasing party's expense. In the event that such
contest must be pursued in the name of the providing party, the providing party
shall permit the purchasing party to pursue the contest in the name of the
providing party and the providing party shall have the opportunity to
participate fully in the preparation of such contest.
H. If after consultation in accordance with the preceding
Section, the purchasing party does not agree with the providing party's final
determination as to the application or basis of a particular tax or fee, and if
the providing party, after receipt of a written request by the purchasing party
to contest the imposition of such tax or fee with the imposing authority, fails
or refuses to pursue such contest or to allow such contest
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<PAGE> 20
by the purchasing party, the purchasing party may utilize the dispute
resolution process outlined in Section XXII of this Agreement. Utilization of
the dispute resolution process shall not relieve the purchasing party from
liability for any tax or fee billed by the providing party pursuant to this
subsection during the pendency of such dispute resolution proceeding. In the
event that the purchasing party prevails in such dispute resolution proceeding,
it shall be entitled to a refund in accordance with the final decision therein.
Notwithstanding the foregoing, if at any time prior to a final decision in such
dispute resolution proceeding the providing party initiates a contest with the
imposing authority with respect to any of the issues involved in such dispute
resolution proceeding, the dispute resolution proceeding shall be dismissed as
to such common issues and the final decision rendered in the contest with the
imposing authority shall control as to such issues.
I. In the event that all or any portion of an amount sought to be
collected must be paid in order to contest the imposition of any such tax or
fee, or to avoid the existence of a lien on the assets of the providing party
during the pendency of such contest, the purchasing party shall be responsible
for such payment and shall be entitled to the benefit of any refund or
recovery. If it is ultimately determined that any additional amount of such a
tax or fee is due to the imposing authority, the purchasing party shall pay
such additional amount, including any interest and penalties thereon.
J. Notwithstanding any provision to the contrary, the purchasing
party shall protect, indemnify and hold harmless (and defend at the purchasing
party's expense) the providing party from and against any such tax or fee,
interest or penalties thereon, or other reasonable charges or payable expenses
(including reasonable attorney fees) with respect thereto, which are incurred
by the providing party in connection with any claim for or contest of any such
tax or fee. Each party shall notify the other party in writing of any
assessment, proposed assessment or other claim for any additional amount of
such a tax or fee by a taxing authority; such notice to be provided, if
possible, at least ten (10) days prior to the date by which a response, protest
or other appeal must be filed, but in no event later than thirty (30) days
after receipt of such assessment, proposed assessment or claim.
K. In any contest of a tax or fee by one party, the other party
shall cooperate fully by providing records, testimony and such additional
information or assistance as may reasonably be necessary to pursue the contest.
Further, the other party shall be reimbursed for any reasonable and necessary
out-of-pocket copying and travel expenses incurred in assisting in such
contest. Notwithstanding any other provision in this Agreement, each party
agrees to indemnify and hold harmless the other party from and against any
losses, damages, claims, demands, suits, liabilities, and expenses including
reasonable attorney's fees, that arise out of its failure to perform its
obligations under this Section.
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XXI. TREATMENT OF PROPRIETARY AND CONFIDENTIAL INFORMATION
A. The parties agree that it may be necessary to provide each
other with certain confidential information, including trade secret
information, including but not limited to, technical and business plans,
technical information, proposals, specifications, drawings, procedures,
customer account data, call detail records and like information (hereinafter
collectively referred to as "Information"). The parties agree that if
Information is provided in written, graphic or other usable form and clearly
marked with a confidential, private or proprietary legend, then that
Information will be returned to the owner within a reasonable time. Both
parties agree that such marked Information shall not be copied or reproduced in
any form except to the extent required to perform this Agreement. The parties
shall protect any Information received from distribution, disclosure or
dissemination to anyone except employees of the parties with an identifiable
need to know such Information who agree in writing to be bound by the terms of
this Section; however, in no event shall any of Carrier's Information be
disclosed to any person employed by an affiliate of BellSouth engaged in the
provision of CMRS. In the event any person having had access to Carrier's
Information is subsequently employed by an affiliate of BellSouth engaged in
the provision of CMRS, such person shall be required to agree in writing not to
reveal or use such Information. The parties will use the same standard of care
to protect Information received as they would use to protect their own
confidential and proprietary Information.
B. Notwithstanding the foregoing, all Information in any party's
possession that would constitute Customer Proprietary Network Information of
the party or the parties' customers pursuant to any federal or state law or the
rules and regulations of the FCC or any state commission, and any Information
developed or received by a party regarding the other party's facilities,
services, volumes, or usage shall automatically be deemed confidential
Information for all purposes, even if not marked as such, and shall be held
confidential as is required for Information.
C. Notwithstanding the foregoing, there will be no obligation to
protect any portion of any Information that is either: 1) made publicly
available by the owner of the Information or lawfully disclosed by a nonparty
to this Agreement; 2) lawfully obtained from any source other than the owner of
the Information; 3) independently developed by personnel of the receiving party
to whom Information had not been previously disclosed and not based on or
derived from such Information; or 4) previously known to the receiving party
without an obligation to keep it confidential. A party may also disclose all
Information it is required or ordered to disclose by law, a court, or
governmental agency, as long as the party that owns such Information has been
notified of the required disclosure promptly after the disclosing party becomes
aware of its requirement to disclose. The party required to disclose the
Information shall take all lawful measures to avoid disclosing the Information
called for until the party that owns the Information has had a reasonable time
to seek and comply with a protective order issued by a court or governmental
agency of competent jurisdiction that with respect to the Information otherwise
required to be disclosed.
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<PAGE> 22
D. The party's obligations to safeguard information shall
survive the expiration or termination of this Agreement.
XXII. RESOLUTION OF DISPUTES
Except as otherwise stated in this Agreement, if any dispute arises as
to the interpretation of any provision of this Agreement or as to the proper
implementation of this Agreement, the parties shall initially refer the
disputed issue to individuals designated by the parties. If the issue is not
resolved within 30 days, either party may petition the Commission for a
resolution of the dispute, and/or pursue any other remedy available to it at
law or in equity.
XXIII. LIMITATION OF USE
The parties agree that this Agreement shall not be proffered by either
party in any jurisdiction as evidence of any concession or as a waiver of any
position taken by the other party in that or any other jurisdiction or for any
other purpose.
XXIV. WAIVERS
This Agreement may not be amended in any way except upon the written
consent of the parties. No party shall be deemed to have waived any rights it
has under the Agreement based on its prior decision not to enforce, or its
failure to strictly enforce, any such rights. No amendment or waiver of any
provision of this Agreement, and no consent to any default under this Agreement
shall be effective unless the same is in writing and signed by an officer of
the party against whom such amendment, waiver or consent is claimed.
XXV. MISCELLANEOUS TERMS
A. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Georgia, without regard
to Georgia's conflict of law principles, and, where applicable, federal law,
including the Communications Act of 1934, as amended by the Act.
B. In the event any provision of this Agreement shall be held to
be invalid, illegal or unenforceable, it shall be severed from the Agreement
and the remainder of this Agreement shall remain valid and enforceable and
shall continue in full force and effect; provided, however, that if any severed
provisions of this Agreement are essential to any party's ability to continue
to perform its material obligations hereunder to the reasonable satisfaction of
the party to which the obligations are owed, the parties shall immediately
begin negotiations of new provisions to replace the severed provisions.
C. INTENTIONALLY DELETED
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D. INTENTIONALLY DELETED
E. The parties are independent contractors and nothing herein
shall be construed to imply that they are partners, joint venturers or agents
of one another.
F. Except as otherwise expressly provided in this Agreement, each
of the remedies provided under this Agreement is cumulative and is in addition
to any remedies that may be available at law or in equity.
G. Except as may be specifically set forth in this Agreement,
this Agreement does not provide and shall not be construed to provide any
person not a party or proper assignee or successor hereunder with any remedy,
claim, liability, reimbursement, cause of action, or other privilege arising
under or relating to this Agreement.
H. Neither party shall publish or use any advertising, sales
promotions or other publicity materials that use the other party's logo,
trademarks or service marks without the prior written approval of the other
party.
I. No party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the other
party, which will not be unreasonably withheld; provided, that (i) the parties
will permit the addition of wholly-owned Affiliates as parties hereto, and (ii)
a party may assign its rights or delegate its obligations hereunder without the
consent of the other party to a wholly-owned Affiliate if such Affiliate is, in
the case of BellSouth, an authorized local exchange telephone carrier , or in
the case of Carrier, a licensed provider of radio telecommunications services,
and provided further that (a) the performance of any assignee shall be
guaranteed by any such assignor and (b) a Carrier may also assign its rights or
obligations to a controlling parent corporation without the consent of
BellSouth
J. Any liabilities or obligations of a party for acts or
omissions prior to the cancellation or termination of this Agreement, any
obligation of a party under the provisions regarding indemnification,
Confidential Information, limitations on liability, and any other provisions of
this Agreement which, by their terms, are contemplated to survive (or to be
performed after) termination of this Agreement, shall survive cancellation or
termination thereof.
K. Whenever any provision of this Agreement refers to a technical
reference, technical publication, any publication of telecommunications
industry administrative or technical standards, or any other document
specifically incorporated into this Agreement, it will be deemed to be a
reference to the most recent version or edition (including any amendments,
supplements, addenda, or successors) or such documents that is in effect, and
will include the most recent version or edition (including any amendments,
supplements, addenda, or successors) or each document incorporated by reference
in such a technical reference, technical publication, or publication of
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<PAGE> 24
industry standards. Should there be an inconsistency between or among
publications or standards, the parties shall mutually agree upon which
requirement shall apply.
L. The drafting of this Agreement was a collaborative effort
between the parties. Accordingly, in connection with the interpretation for
any reason of any provision of this Agreement, there shall be no inference
drawn against the party that drafted such provision.
XXVI. EXECUTION
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and which together shall constitute a single
agreement. A facsimile copy of a party's execution of this Agreement shall be
valid and binding upon the party and must be followed as soon as practicable
thereafter by the original version of such execution.
XXVII. NOTICES
A. Every notice, consent, approval, or other communications
required or contemplated by this Agreement shall be in writing and shall be
either delivered in person or by overnight express service addressed to:
BELLSOUTH TELECOMMUNICATIONS, INC. CARRIER
675 W. Peachtree St. N.E. Powertel, Inc.
Suite 4300 1233 O.G. Skinner Drive
Atlanta, Georgia 30375 West Point, Georgia 31833
Attn: Legal Dept. "Wireless" Attorney Attn: Vice President &
General Counsel
B. A party may change the designated representative and/or
address for the receipt of notices by giving seven (7) days prior written
notice to the other party. Any notice or other communication is deemed given
when received.
XXVIII. ENTIRE AGREEMENT
This Agreement (including all attachments incorporated herein)
constitutes the entire agreement of the parties with respect to the matters
expressly set forth herein and supersedes any prior agreements, understanding,
undertakings, or communications, oral or written, of the parties with respect
to such matters.
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BELLSOUTH TELECOMMUNICATIONS, INC. POWERTEL, INC. ON BEHALF OF
ITSELF AND THE FOLLOWING
SUBSIDIARIES:
POWERTEL/BIRMINGHAM, INC.
A MISSOURI CORPORATION;
POWERTEL/JACKSONVILLE, INC.
A DELAWARE CORPORATION;
POWERTEL/MEMPHIS, INC.
A DELAWARE CORPORATION; AND
POWERTEL/ATLANTA, INC.
A DELAWARE CORPORATION.
By: /s/ Jerry D. Hendrix By: /s/ Edward C. Horner
-------------------------- ------------------------------
Its: Its: Chief Operating Officer
Jerry D. Hendrix Edward C. Horner
- ------------------------------ ----------------------------------
Name Name
Date: 3/26/97 Date: April 1, 1997
------------------------- -----------------------------
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ATTACHMENT B-1
A. Except as for those services for which no usage charges are
applicable in BellSouth's tariffs, the rate that each party shall pay to the
other for the transport and termination of Local Traffic shall be as follows,
subject to the adjustment identified in paragraph C below:
<TABLE>
<S> <C> <C> <C> <C>
(1) For Types 1, 2A, and 2A-CCS7
Interconnection: Alabama $.00671
Florida $.00576
Georgia $.00648
Kentucky $.00713
Louisiana $.005664
Mississippi $.01228
South Carolina $.01586
Tennessee $.00577
(2) For Types 2B and 2B-CCS7
Interconnection: Alabama $.0017
Florida $.002
Georgia $.0016
Kentucky $.002562
Louisiana $.001599
Mississippi $.00991
South Carolina $.01323
Tennessee $.0019
</TABLE>
B. With respect to amounts to be charged to BellSouth, the Type
2B and Type 2B-CCS7 rate above shall only apply to Local Traffic that BellSouth
delivers to any Carrier's MSC via a direct trunk from a BellSouth end office
(a) to which Carrier has a Type 2B interconnection facility and (b) that serves
the same BellSouth subscribers to which Carrier may terminate Local Traffic
over such Type 2B interconnection facility; other Local Traffic subject to
usage charges shall be billed to BellSouth at the Type 2A rate set forth above.
C. The Type 1, Type 2A, and Type 2A-CCS7 rate set forth above
includes $.0025 as an Interim LATA-wide Additive. This Interim LATA-wide
Additive of $.0025 is subject to the adjustment described in Section V of the
Agreement. When this adjustment is completed, the rates above for Type 1, Type
2A, and Type 2A-CCS7 interconnection shall be adjusted upward or downward to
reflect the Final LATA-wide Additive determined pursuant to Section V.
26
<PAGE> 1
Exhibit 11
INTERCEL, INC.
EARNINGS PER SHARE CALCULATION
PRIMARY & FULLY DILUTED EARNINGS PER SHARE:
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1997 MARCH 31, 1996
--------------------------------------
(In thousands, except per share data)
<S> <C> <C>
Net (Loss) Income Before Cumulative Effect of Change
in Accounting Principle $ (29,566) $ 536
Cumulative Effect of Change in Accounting Principle -- (2,583)
------------ ----------
Net Loss $ (29,566) $ (2,047)
============ ==========
Weighted average shares outstanding 26,812 19,899
Common stock equivalents outstanding (a) -- --
============ ----------
26,812 19,899
============ ==========
PER SHARE DATA:
Net (Loss) Income Before Cumulative Effect of Change
in Accounting Principle $ (1.10) $ 0.03
Cumulative Effective of Change in Accounting Principle $ -- (0.13)
------------ ----------
Net Loss $ (1.10) $ (0.10)
============ ==========
</TABLE>
(a) Excludes 277 and 1,160 common stock equivalents (as calculated under
the treasury stock method) for the three months ended March 31, 1997
and 1996, respectively, as inclusion of such equivalents would have
an antidilutive effect on earnings per share for those periods.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 207,511
<SECURITIES> 0
<RECEIVABLES> 13,131
<ALLOWANCES> 901
<INVENTORY> 19,372
<CURRENT-ASSETS> 242,285
<PP&E> 303,035
<DEPRECIATION> (18,322)
<TOTAL-ASSETS> 973,094
<CURRENT-LIABILITIES> 41,639
<BONDS> 446,818
0
2
<COMMON> 269
<OTHER-SE> 377,216
<TOTAL-LIABILITY-AND-EQUITY> 973,094
<SALES> 5,025
<TOTAL-REVENUES> 19,109
<CGS> 11,987
<TOTAL-COSTS> 43,659
<OTHER-EXPENSES> 473
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,543
<INCOME-PRETAX> (29,566)
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,566)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,566)
<EPS-PRIMARY> (1.10)
<EPS-DILUTED> 0
</TABLE>
