Exhibit 10.40
SPRINT PCS
MANAGEMENT AGREEMENT
BETWEEN
WIRELESSCO, L.P.
SPRINT SPECTRUM L.P.
AND
WASINGTON OREGON WIRELSS, LLC
JANUARY 25, 1999
TABLE OF CONTENTS
Page
1. MANAGER................................................................. 2
1.1 HIRING OF MANAGER ...............................................2
1.2 PROGRAM REQUIREMENTS ...........................................3
1.3 VENDOR PURCHASE AGREEMENTS ......................................3
1.4 INTERCONNECTION .................................................3
1.5 SEAMLESSNESS.................................................... 4
1.6 FORECASTING..................................................... 4
1.7 FINANCING .......................................................4
1.8 ETHICAL CONDUCT AND RELATED COVENANTS........................... 4
2. BUILD-OUT OF NETWORK.....................................................4
2.1 BUILD-OUT PLAN.................................................. 4
2.2 COMPLIANCE WITH REGULATORY RULES ...............................4
2.3 EXCLUSIVITY OF SERVICE AREA ....................................5
2.4 RESTRICTION ....................................................5
2.5 COVERAGE ENHANCEMENT............................................ 6
2.6 PURCHASE OF ASSETS BY MANAGER ..................................7
2.7 MICROWAVE RELOCATION........................................... 8
2.8 DETERMINATION OF POPS.......................................... 8
3. PRODUCTS AND SERVICES; IXC SERVICES......................................8
3.1 SPRINT PCS PRODUCTS AND SERVICES............................... 8
3.2 OTHER PRODUCTS AND SERVICES ....................................8
3.3 CROSS-SELLING WITH SPRINT ......................................9
3.4 IXC SERVICES.................................................... 9
3.5 RESALE OF PRODUCTS AND SERVICES.................................10
3.5.1 MANDATORY RESALE OF PRODUCTS AND SERVICES................10
3.5.2 VOLUNTARY RESALE OF PRODUCTS AND SERVICES................10
3.6 NON-COMPETITION.................................................10
3.7 RIGHT OF LAST OFFER.............................................11
4. MARKETING AND SALES ACTIVITIES..........................................11
4.1 SPRINT PCS NATIONAL OR REGIONAL DISTRIBUTION
PROGRAM REQUIREMENTS............................................11
4.1.1 TERRITORIAL LIMITATIONS ON MANAGER'S DISTRIBUTION
ACTIVITIES...............................................12
4.1.2 SETTLEMENT OF EQUIPMENT SALES............................12
4.1.3 USE OF THIRD-PARTY DISTRIBUTORS..........................12
4.2 SPRINT PCS NATIONAL ACCOUNTS PROGRAM REQUIREMENTS...............13
4.3 SPRINT PCS ROAMING AND INTER SERVICE AREA PROGRAM REQUIREMENTS..13
4.4 PRICING.........................................................13
4.5 HOME SERVICE AREA...............................................14
5. USE OF BRANDS...........................................................14
5.1 USE OF BRANDS...................................................14
5.2 CONFORMANCE TO MARKETING COMMUNICATIONS GUIDELINES..............15
5.3 JOINT MARKETING WITH THIRD PARTIES..............................15
5.4 PRIOR APPROVAL OF USE OF BRANDS.................................16
5.5 DURATION OF USE OF BRAND........................................16
6. ADVERTISING AND PROMOTION...............................................17
6.1 NATIONAL ADVERTISING AND PROMOTION..............................17
6.2 IN-TERRITORY ADVERTISING AND PROMOTION..........................17
6.3 REVIEW OF ADVERTISING AND PROMOTION CAMPAIGNS...................17
6.4 PUBLIC RELATIONS. .............................................18
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS...............................18
7.1 CONFORMANCE TO SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS........18
7.2 ESTABLISHMENT OF SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS......18
7.3 HANDOFF TO ADJACENT NETWORKS....................................18
8. SPRINT PCS CUSTOMER SERVICE ............................................19
8.1 COMPLIANCE WITH SPRINT PCS CUSTOMER SERVICE
PROGRAM REQUIREMENTS............................................19
9. SPRINT PCS PROGRAM REQUIREMENTS.........................................19
9.1 PROGRAM REQUIREMENTS GENERALLY..................................19
9.2 AMENDMENTS TO PROGRAM REQUIREMENTS..............................19
9.3 MANAGER'S RIGHT TO REQUEST REVIEW OF CHANGES....................21
9.4 SPRINT PCS' RIGHT TO IMPLEMENT CHANGES..........................21
9.5 RIGHTS OF INSPECTION............................................21
9.6 MANAGER'S RESPONSIBILITY TO INTERFACE WITH SPRINT PCS...........22
10. FEES...................................................................22
10.1 FEES AND PAYMENTS...............................................22
10.1.1 FEE BASED ON COLLECTED REVENUES.........................22
10.1.2 PAYMENT OF UNIVERSAL SERVICE FUNDS......................22
10.1.3 INTER SERVICE AREA FEES.................................22
10.1.4 INTERCONNECT FEES.......................................23
10.1.5 OUTBOUND ROAMING FEES...................................23
10.1.6 REIMBURSEMENTS..........................................23
10.2 MONTHLY TRUE UP. ..............................................23
10.3 TAXES...........................................................24
10.4 COLLECTED REVENUES DEFINITION...................................24
10.5 LATE PAYMENTS...................................................25
10.6 SETOFF RIGHT IF FAILURE TO PAY AMOUNTS DUE......................25
11. TERM; TERMINATION; EFFECT OF TERMINATION...............................26
11.1 INITIAL TERM....................................................26
11.2 RENEWAL TERMS...................................................26
11.2.1 NON-RENEWAL RIGHTS OF MANAGER...........................26
11.2.1.1 Manager's Put Right.............................26
11.2.1.2 Manager's Purchase Right........................27
11.2.2 NON-RENEWAL RIGHTS OF SPRINT PCS........................27
11.2.2.1 Sprint PCS' Purchase Right......................28
11.2.2.2 Sprint PCS' Put Right...........................29
11.2.3 EXTENDED TERM AWAITING FCC APPROVAL.....................29
11.3 EVENTS OF TERMINATION...........................................29
11.3.1 TERMINATION OF LICENSE.................................29
11.3.2 BREACH OF AGREEMENT: PAYMENT OF MONEY TERMS............30
11.3.3 BREACH OF AGREEMENT: OTHER TERMS.......................30
11.3.4 REGULATORY CONSIDERATIONS...............................30
11.3.5 TERMINATION OF TRADEMARK LICENSE AGREEMENTS.............30
11.3.6 FINANCING CONSIDERATIONS................................31
11.3.7 BANKRUPTCY OF A PARTY...................................31
11.4 EFFECT OF AN EVENT OF TERMINATION...............................32
11.5 MANAGER'S EVENT OF TERMINATION RIGHTS AND REMEDIES..............33
11.5.1 MANAGER'S PUT RIGHT.....................................34
11.5.2 MANAGER'S PURCHASE RIGHT................................34
11.5.3 MANAGER'S ACTION FOR DAMAGES OR OTHER RELIEF............35
11.6 SPRINT PCS' EVENT OF TERMINATION RIGHTS AND REMEDIES............35
11.6.1 SPRINT PCS' PURCHASE RIGHT..............................35
11.6.2 SPRINT PCS' PUT RIGHT...................................36
11.6.3 SPRINT PCS' RIGHT TO CAUSE A CURE.......................37
11.6.4 SPRINT PCS' ACTION FOR DAMAGES OR OTHER RELIEF..........39
11.7 DETERMINATION OF ENTIRE BUSINESS VALUE..........................39
11.7.1 APPOINTMENT OF APPRAISERS...............................39
11.7.2 MANAGER'S OPERATING ASSETS..............................39
11.7.3 ENTIRE BUSINESS VALUE...................................40
11.7.4 CALCULATION OF ENTIRE BUSINESS VALUE....................40
11.8 CLOSING TERMS AND CONDITIONS....................................41
11.9 CONTEMPORANEOUS AND IDENTICAL APPLICATION.......................41
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE.................41
12.1 BOOKS AND RECORDS...............................................41
12.1.1 GENERAL.................................................41
12.1.2 AUDIT...................................................41
12.1.3 CONTESTING AN AUDIT. ..................................42
12.2 CONFIDENTIAL INFORMATION........................................43
12.3 INSURANCE.......................................................44
12.3.1 GENERAL.................................................44
12.3.2 WAIVER OF SUBROGATION...................................44
12.3.3 CERTIFICATES OF INSURANCE...............................45
13. INDEMNIFICATION........................................................45
13.1 INDEMNIFICATION BY SPRINT PCS...................................45
13.2 INDEMNIFICATION BY MANAGER......................................45
13.3 PROCEDURE.......................................................46
13.3.1 NOTICE..................................................46
13.3.2 DEFENSE BY INDEMNITOR...................................46
13.3.3 DEFENSE BY INDEMNITEE...................................46
13.3.4 COSTS...................................................47
14. DISPUTE RESOLUTION.....................................................47
14.1 NEGOTIATION.....................................................47
14.2 UNABLE TO RESOLVE...............................................47
14.3 ATTORNEYS AND INTENT............................................48
14.4 TOLLING OF CURE PERIODS.........................................48
15. REPRESENTATIONS AND WARRANTIES.........................................49
15.1 DUE INCORPORATION OR FORMATION; AUTHORIZATION OF AGREEMENTS.....49
15.2 VALID AND BINDING OBLIGATION....................................49
15.3 NO CONFLICT; NO DEFAULT.........................................49
15.4 LITIGATION......................................................49
16. REGULATORY COMPLIANCE..................................................49
16.1 REGULATORY COMPLIANCE...........................................49
16.2 FCC COMPLIANCE..................................................50
16.3 MARKING AND LIGHTING............................................52
16.4 REGULATORY NOTICES..............................................52
16.5 REGULATORY POLICY-SETTING PROCEEDINGS...........................52
17. GENERAL PROVISIONS.....................................................53
17.1 NOTICES.........................................................53
17.2 CONSTRUCTION....................................................53
17.3 HEADINGS........................................................53
17.4 FURTHER ACTION..................................................53
17.5 COUNTERPART EXECUTION...........................................53
17.6 SPECIFIC PERFORMANCE............................................53
17.7 ENTIRE AGREEMENT; AMENDMENTS....................................53
17.8 LIMITATION ON RIGHTS OF OTHERS..................................54
17.9 WAIVERS.........................................................54
17.9.1 WAIVERS--GENERAL........................................54
17.9.2 WAIVERS--MANAGER........................................54
17.9.3 FORCE MAJEURE...........................................54
17.10 WAIVER OF JURY TRIAL............................................55
17.11 BINDING EFFECT..................................................55
17.12 GOVERNING LAW...................................................55
17.13 SEVERABILITY....................................................55
17.14 LIMITATION OF LIABILITY.........................................55
17.15 NO ASSIGNMENT; EXCEPTIONS.......................................56
17.15.1 GENERAL................................................56
17.15.2 ASSIGNMENT RIGHT OF MANAGER TO FINANCIAL LENDER........56
17.15.3 CHANGE OF CONTROL RIGHTS...............................57
17.15.4 RIGHT OF FIRST REFUSAL.................................59
17.15.5 TRANSFER OF SPRINT PCS NETWORK.........................59
17.16 PROVISION OF SERVICES BY SPRINT SPECTRUM........................59
17.17 NUMBER PORTABILITY..............................................59
17.18 DISCLAIMER OF AGENCY............................................60
17.19 INDEPENDENT CONTRACTORS.........................................60
17.20 EXPENSE.........................................................60
17.21 GENERAL TERMS...................................................60
17.22 CONFLICTS WITH OTHER AGREEMENTS.................................61
17.23 SURVIVAL UPON TERMINATION.......................................61
17.24 ANNOUNCED TRANSACTION...........................................61
17.25 ADDITIONAL TERMS AND PROVISIONS.................................61
17.26 MASTER SIGNATURE PAGE...........................................61
17.27 AGENT AUTHORIZATION.............................................61
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made January 25, 1999,
between WirelessCo, L.P., a Delaware limited partnership, Sprint Spectrum
L.P., a Delaware limited partnership, and Washington Oregon Wirelss,
L.L.C., an Oregon limited liabilty company (but not any Related Party)
("MANAGER"). THE DEFINITIONS FOR THIS AGREEMENT ARE SET FORTH ON THE
"SCHEDULE OF DEFINITIONS".
RECITALS
A. Sprint Spectrum L.P., a Delaware limited partnership, WirelessCo,
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas
corporation, American PCS Communications, LLC, a Delaware limited liability
company, APC PCS, LLC, a Delaware limited liability company, PhillieCo
Partners I, L.P., a Delaware limited partnership, PhillieCo, L.P., a
Delaware limited partnership, Xxx Communications PCS, L.P., a Delaware
limited partnership, and Cox PCS License, L.L.C., a Delaware limited
liability company, hold and exercise, directly or indirectly, control over
licenses to operate wireless services networks.
B. The entity or entities named in Recital A that execute this
agreement hold, directly or indirectly, the Licenses for the areas
identified on the Service Area Exhibit and are referred to in this
agreement as "SPRINT PCS." Because this agreement addresses the rights and
obligations of each license holder with respect to each of its Licenses,
each reference in this agreement to "Sprint PCS" refers to the entity that
owns, directly or indirectly, the License referred to in that particular
instance or application of the provision of this agreement. If Sprint
Spectrum does not own the License, it will provide on behalf of Sprint PCS
most or all of the services required under this agreement to be provided by
Sprint PCS.
C. The Sprint PCS business was established to use the Sprint PCS
Network, a nationwide wireless services network, to offer seamless,
integrated voice and data services using wireless technology. The Sprint
PCS Network offers the services to customers under the Brands.
D. This agreement, therefore, includes provisions defining Manager's
obligations with respect to:
o The design, construction and management of the Service Area
Network;
o Offering and promoting products and services designated by Sprint
PCS as the Sprint PCS Products and Services of the Sprint PCS
Network;
o Adherence to Program Requirements established by Sprint PCS to
ensure seamless interoperability throughout the Sprint PCS Network
and uniform and consistent quality of product and service
offerings;
o Adherence to Customer Service Program Requirements established by
Sprint PCS to ensure consistency in interactions with customers
(including billing, customer care, etc.); and
o Adherence to Program Requirements relating to the marketing,
promotion and distribution of Sprint PCS Products and Services.
E. The Sprint PCS Network is expanding with the assistance of
"managers" (companies such as Manager that manage Service Area Networks
that offer Sprint PCS Products and Services under a license owned by Sprint
PCS or one of the entities named in Recital A) and "affiliates" (companies
that manage Service Area Networks that offer Sprint PCS Products and
Services under a license owned by the affiliate).
F. Manager wishes to enter into this agreement to help construct,
operate, manage and maintain for Sprint PCS a portion of the Sprint PCS
Network in the Service Area. Sprint PCS has determined that permitting
Manager to manage a portion of the Sprint PCS Network in accordance with
the terms of this agreement will facilitate Sprint PCS' expansion of fully
digital, wireless coverage under the License and will enhance the wireless
service for customers of Sprint PCS.
G. All managers of a portion of the business of Sprint PCS, including
Manager, must construct facilities and operate in accordance with Program
Requirements established by Sprint PCS with respect to certain aspects of
the development and offering of wireless products and services and the
presentation of the products and services to customers, to establish and
operate the Sprint PCS Network successfully by providing seamless,
integrated voice and data services, using wireless technology.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby
acknowledged, the parties, intending to be bound, agree as follows:
1. MANAGER
1.1 HIRING OF MANAGER. Sprint PCS hires Manager:
(a) to construct and manage the Service Area Network in
compliance with the License and in accordance with the terms of this
agreement;
(b) to distribute continuously during the Term the Sprint PCS
Products and Services and to establish distribution channels in the Service
Area;
(c) to conduct continually during the Term advertising and
promotion activities in the Service Area (including mutual decisions to "go
dark", with respect to advertising and promotion activities, for reasonable
periods of time); and
(d) to manage that portion of the customer base of Sprint PCS
that has the NPA-NXXs assigned to the Service Area Network.
Sprint PCS has the right to unfettered access to the Service Area
Network to be constructed by Manager under this agreement. The fee to be
paid to Manager by Sprint PCS under Section 10 is for all obligations of
Manager under this agreement.
1.2 PROGRAM REQUIREMENTS. Manager must adhere to the Program
Requirements established by Sprint PCS and as modified from time to time,
to ensure uniform and consistent operation of all wireless systems within
the Sprint PCS Network and to present the Sprint PCS Products and Services
to customers in a uniform and consistent manner under the Brands.
1.3 VENDOR PURCHASE AGREEMENTS. Manager may participate in discounted
volume-based pricing on wireless-related products and services and in the
warranties Sprint PCS receives from its vendors, as is commercially
reasonable and to the extent permitted by applicable procurement agreements
(e.g., agreements related to network infrastructure equipment, subscriber
equipment, interconnection, and collocation). Sprint PCS will use
commercially reasonable efforts to obtain for managers the same price
Sprint PCS receives from vendors; this does not prohibit Sprint PCS from
entering into procurement agreements that do not provide managers with the
Sprint PCS prices.
Manager must purchase subscriber and infrastructure equipment from a
Sprint PCS approved list of products, which will include a selection from a
variety of manufacturers. Where required, the products must include
proprietary software developed by the manufacturers for Sprint PCS or by
Sprint PCS to allow seamless interoperability in the Sprint PCS Network.
Sprint PCS or the vendor may require Manager to execute a separate license
agreement for the software prior to Manager's use of the software.
Manager may only make purchases under this Section 1.3 for items to
be used exclusively in the Service Area (e.g., Manager may not purchase
base stations under a Sprint PCS contract for use in a system not
affiliated with Sprint PCS).
1.4 INTERCONNECTION. If Manager desires to interconnect a portion of
the Service Area Network with another carrier and Sprint PCS can
interconnect with that carrier at a lower rate, then to the extent
permitted by applicable laws, tariffs and contracts, Sprint PCS may arrange
for the interconnection under its agreements with the carrier and if it
does so, Sprint PCS will xxxx the interconnection fees to Manager.
1.5 SEAMLESSNESS. Manager will design and operate its systems,
platforms, products and services in the Service Area and the Service Area
Network so as to seamlessly interface them into the Sprint PCS Network.
1.6 FORECASTING. Manager and Sprint PCS will work cooperatively to
generate mutually acceptable forecasts of important business metrics
including traffic volumes, handset sales, subscribers and Collected
Revenues for the Sprint PCS Products and Services. The forecasts are for
planning purposes only and do not constitute Manager's obligation to meet
the quantities forecast.
1.7 FINANCING. The construction and operation of the Service Area
Network requires a substantial financial commitment by Manager. The manner
in which Manager will finance the build-out of the Service Area Network and
provide the necessary working capital to operate the business is described
in detail on Exhibit 1.7. Manager will allow Sprint PCS an opportunity to
review before filing any registration statement or prospectus or any
amendment or supplement thereto before distributing any offering memorandum
or amendment or supplement thereto, and agrees not to file or distribute
any such document if Sprint PCS reasonably objects in writing on a timely
basis to any portion of the document that refers to Sprint PCS, its Related
Parties, their respective businesses, this agreement or the Services
Agreement.
1.8 ETHICAL CONDUCT AND RELATED COVENANTS. Each party must perform
its obligations under this agreement in a diligent, legal, ethical, and
professional manner.
2. BUILD-OUT OF NETWORK
2.1 BUILD-OUT PLAN. Manager will build-out the Service Area Network
in the Service Area in accordance with a Build-out Plan. Sprint PCS and
Manager will jointly develop each Build-out Plan, except the initial
Build-out Plan and any modifications, additions or expansions of the
Build-out Plan will be subject to prior written approval by Sprint PCS.
Manager will report to Sprint PCS its performance regarding the critical
milestones included in the Build-out Plan on a periodic basis as mutually
agreed to by the parties, but no less frequently than quarterly. The
Build-out Plan and the Service Area Network as built must comply with
Sprint PCS Program Requirements and federal and local regulatory
requirements.
Sprint PCS approves the Build-out Plan in effect as of the date of
this agreement, which Build-out Plan is attached as Exhibit 2.1. Each new
or amended Build-out Plan will also become part of Exhibit 2.1.
2.2 COMPLIANCE WITH REGULATORY RULES. During the build-out of the
Service Area Network, Sprint PCS authorizes Manager to make all filings
with regulatory authorities regarding the build-out, including filings with
the Federal Aviation Administration, environmental authorities, and
historical districts. Manager may further delegate its duty under this
Section 2.2 to a qualified site acquisition company. Manager must ensure
that a copy of every filing is given to Sprint PCS. Manager must ensure
that Sprint PCS is notified in writing of any contact by a regulatory
agency including the FCC with Manager or Manager's site acquisition company
regarding any filing. Sprint PCS has the right to direct any proceeding,
inquiry, dispute, appeal or other activity with a regulatory or judicial
authority regarding any filing made on behalf of Sprint PCS. Manager will
amend, modify, withdraw, refile and otherwise change any filing as Sprint
PCS requires. Notwithstanding the preceding sentences in this Section 2.2,
and in conjunction with Section 16, Sprint PCS is solely responsible for
making any and all filings with the FCC regarding the build-out. Manager
will notify Sprint PCS of any activity, event or condition related to the
build-out that might require an FCC filing.
2.3 EXCLUSIVITY OF SERVICE AREA. Manager will be the only person or
entity that is a manager or operator for Sprint PCS with respect to the
Service Area and neither Sprint PCS nor any of its Related Parties will
own, operate, build or manage another wireless mobility communications
network in the Service Area so long as this agreement remains in full force
and effect and there is no Event of Termination that has occurred giving
Sprint PCS the right to terminate this agreement, except that:
(a) Sprint PCS may cause Sprint PCS Products and Services to be
sold in the Service Area through the Sprint PCS National Accounts Program
Requirements and Sprint PCS National or Regional Distribution Program
Requirements;
(b) A reseller of Sprint PCS Products and Services may sell its
products and services in the Service Area so long as such resale is not
contrary to the terms and conditions of this agreement; and
(c) Sprint PCS and its Related Parties may engage in the
activities described in Sections 2.4(a) and 2.4(b) with Manager in the
geographic areas within the Service Area in which Sprint PCS or any of its
Related Parties owns an incumbent local exchange carrier as of the date of
this agreement.
2.4 RESTRICTION. In geographic areas within the Service Area in which
Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier as of the date of this agreement, Manager must not offer any Sprint
PCS Products or Services specifically designed for the competitive local
exchange market ("FIXED WIRELESS LOCAL LOOP"), except that:
(a) Manager may designate the local exchange carrier that is a
Related Party of Sprint PCS to be the exclusive distributor of the fixed
wireless local loop product in the territory served by the local exchange
carrier, even if a portion of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product
under the terms and conditions specified by Sprint PCS (e.g., including
designation by Sprint PCS of an exclusive distribution agent for the
territory).
This restriction exists with respect to a particular geographic area only
so long as Sprint PCS or its Related Party owns such incumbent local
exchange carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint
PCS Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on
Exhibit 2.4.
2.5 COVERAGE ENHANCEMENT. Sprint PCS and Manager agree that
maintaining a high standard of customer satisfaction regarding network
capacity and footprint is a required element of the manager and affiliate
programs. Sprint PCS intends to expand network coverage to build all cells
that cover at least 5,000 pops and all interstate and major highways in the
areas not operated by Manager or Other Managers. Accordingly, Manager
agrees to build-out New Coverage when directed by Sprint PCS as set forth
in this Section 2.5. Sprint PCS agrees not to require any New Coverage
build-out during the first two years of this Agreement, nor any New
Coverage that exceeds the capacity and footprint parameters that Sprint PCS
has adopted for all of its comparable markets.
Sprint PCS will give to Manager a written notice of any New
Coverage within the Service Area that Sprint PCS decides should be
built-out. Such notice will include an analysis completed by Sprint PCS
demonstrating that such required build-out should be economically
advantageous to Manager. Such analysis will be generated in good faith and
will be based on then-currently available information, however Sprint PCS
makes no warranties or representations regarding the accuracy of, nor will
Sprint PCS be bound by, or guarantee the accuracy of, such analysis.
Manager must confirm to Sprint PCS within 90 days after receipt of the
notice that Manager will build-out the New Coverage and deliver to Sprint
PCS with such confirmation Manager's proposed amendment to the Build-out
Plan and a description of the manner and timing in which it will finance
such build-out.
If Manager confirms, within such 90-day period, its intention
to build-out the New Coverage, then Manager and Sprint PCS will diligently
finalize an amendment to the Build-out Plan and proceed as set forth in
Sections 2.1 and 2.2. The amended Build-out Plan will contain critical
milestones that provide Manager a commercially reasonable period in which
to construct and implement the New Coverage. In determining what
constitutes a "commercially reasonable period" as used in this paragraph,
the parties will consider several factors, including local zoning processes
and other legal requirements, weather conditions, equipment delivery
schedules, the need to arrange additional financing, and other construction
already in progress by Manager. Manager will construct and operate the New
Coverage in accordance with the terms of this Agreement, and the New
Coverage will be included in the Service Area Network for purposes of this
agreement.
If Manager fails to confirm, within such 90-day period, its
intention to build-out the New Coverage, declines to complete such
build-out, or fails to complete such build-out in accordance with the
amended Build-out Plan, then an Event of Termination will be deemed to have
occurred under Section 11.3.3, Manager will not have a right to cure such
breach, and Sprint PCS may exercise its rights and remedies under Section
11.2.2.1.
Notwithstanding the preceding paragraphs in this Section 2.5,
the capacity and footprint parameters contained in the amended Build-out
Plan will not be required to exceed the parameters adopted by Sprint PCS in
building out all of its comparable service areas, unless such build-out
relates to an obligation regarding the Service Area Network mandated by
law. When necessary for reasons related to new technical standards, new
equipment or strategic reasons, Sprint PCS can require Manager to build-out
the New Coverage concurrently with Sprint PCS' build-out, in which case
Sprint PCS will reimburse Manager for its costs and expenses if Sprint PCS
discontinues its related build-out.
If Sprint PCS requires build-out of New Coverage that will:
(a) cause the Manager to spend an additional amount greater
than 5% of Manager's shareholder's equity or capital account plus Manager's
long-term debt (i.e., notes that mature more than one year from the date
issued), as reflected on Manager's books; or
(b) cause the long-term operating expenses of Manager on a per
unit basis using a 10-year time frame to increase by more than 10% on a net
present value basis, then Manager may give Sprint PCS a written notice
requesting Sprint PCS to reconsider the required New Coverage.
The Sprint PCS Vice President or the designee of the Sprint PCS
Chief Officer in charge of the group that manages the Sprint PCS
relationship with Manager will review Manager's request and render a
decision regarding the New Coverage. If after the review and decision by
the Vice President or designee, Manager is still dissatisfied, then Manager
may ask that the Chief Officer to whom the Vice President or designee
reports review the matter. If Sprint PCS still requires Manager to complete
the New Coverage following the Chief Officer's review, then if Manager and
Sprint PCS fail to agree to an amended Build-out Plan within 15 days after
completion of the reconsideration process described above in this paragraph
or the end of the 90-day period described in the second paragraph of this
Section 2.5, whichever occurs first, then an Event of Termination will be
deemed to have occurred under Section 11.3.3, Manager will not have a right
to cure such breach, and Sprint PCS may exercise its rights and remedies
under Section 11.2.2.1.
2.6 PURCHASE OF ASSETS BY MANAGER. If Sprint PCS has assets located
in the Service Area that Manager could reasonably use in its construction
of the Service Area Network and if Sprint PCS is willing to sell such
assets, then Manager agrees to purchase from Sprint PCS and Sprint PCS
agrees to sell to Manager the assets in accordance with the terms and
conditions of the asset purchase agreement attached as Exhibit 2.6.
2.7 MICROWAVE RELOCATION. Sprint PCS will relocate interfering
microwave sources in the spectrum in the Service Area to the extent
necessary to permit the Service Area Network to carry the anticipated call
volume as set out in the Build-out Plan. If the spectrum cleared is not
sufficient to carry the actual call volume then Sprint PCS will clear
additional spectrum of its choosing to accommodate the call volume. Sprint
PCS may choose to clear spectrum one carrier at a time. The parties will
share equally all costs associated with clearing spectrum under this
Section 2.7.
2.8 DETERMINATION OF POPS. If any provision in this agreement
requires the determination of pops in a given area, then the pops will be
determined using the census block group pop forecast then used by Sprint
PCS, except that a different forecast will be used for any FCC filing and
in preparing the Build-out Plan if required by the FCC. Sprint PCS
presently uses the forecast of Equifax/NDS, but it may choose in its sole
discretion to use another service that provides comparable data.
3. PRODUCTS AND SERVICES; IXC SERVICES
3.1 SPRINT PCS PRODUCTS AND SERVICES. Manager must offer for sale,
promote and support all Sprint PCS Products and Services within the Service
Area, unless the parties otherwise agree in advance in writing. Within the
Service Area, Manager may only sell, promote and support wireless products
and services that are Sprint PCS Products and Services or are other
products and services authorized under Section 3.2. The Sprint PCS Products
and Services as of the date of this agreement are attached as Exhibit 3.1.
Sprint PCS may modify the Sprint PCS Products and Services from time to
time in its sole discretion by delivering to Manager a new Exhibit 3.1. If
Sprint PCS begins offering nationally a Sprint PCS Product or Service that
is a Manager's Product or Service, such Manager's Product or Service will
become a Sprint PCS Product or Service under this agreement.
3.2 OTHER PRODUCTS AND SERVICES. Manager may offer wireless products
and services that are not Sprint PCS Products and Services, on the terms
Manager determines, if the offer of the additional products and services:
(a) does not violate the obligations of Manager under this
agreement;
(b) does not cause distribution channel conflict with or
consumer confusion regarding Sprint PCS' regional and national offerings of
Sprint PCS Products and Services;
(c) complies with the Trademark License Agreements; and
(d) does not materially impede the development of the Sprint
PCS Network.
Manager will not offer any products or services under this Section
3.2 that are confusingly similar to Sprint PCS Products and Services.
Manager must request that Sprint PCS determine whether Sprint PCS considers
a product or service to be confusingly similar to any Sprint PCS Products
and Services by providing advance written notice to Sprint PCS that
describes those products and services that could be interpreted to be
confusingly similar to Sprint PCS Products and Services. If Sprint PCS
fails to provide a response to Manager within 30 days after receiving the
notice, then the products and services are deemed to create confusion with
the Sprint PCS Products and Services and the request therefore rejected. In
rejecting any request Sprint PCS must provide the reasons for the
rejection. If the rejection is based on Sprint PCS' failure to respond
within 30 days and Manager requests an explanation for the deemed
rejection, then Sprint PCS must provide within 30 days the reasons for the
rejection.
3.3 CROSS-SELLING WITH SPRINT. Manager and Sprint and Sprint's
Related Parties may enter into arrangements to sell Sprint's services,
including long distance service (except those long distance services
governed by Section 3.4), Internet access, customer premise equipment,
prepaid phone cards, and any other services that Sprint or its Related
Parties make available from time to time. Sprint's services may be packaged
with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet
access or competitive local telephone services including prepaid phone
cards, of third parties (other than Manager's Related Parties), Manager
will give Sprint the right of last offer to provide those services on the
same terms and conditions as the offer to which Manager is prepared to
agree, subject to the terms of any existing agreements Manager was subject
to prior to execution of this agreement.
If Sprint sells Sprint PCS Products and Services in the Service Area,
Manager will provide such Sprint PCS Products and Services to such
customers in accordance with the terms and conditions of the Sprint PCS
National or Regional Distribution Program Requirements.
3.4 IXC SERVICES. Manager must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale
rates. Long distance telephone calls are those calls between the local
calling area for the Service Area Network and areas outside the local
calling area. The local calling area will be defined by mutual agreement of
Sprint PCS and Manager. If the parties cannot agree on the extent of the
local calling area they will resolve the matter through the dispute
resolution process in Section 14. Any arrangement must have terms at least
as favorable to Manager (in all material respects) as those offered by
Sprint to any wholesale customer of Sprint in comparable circumstances
(taking into consideration volume, traffic patterns, etc.). If Manager is
bound by an agreement for these services and the agreement was not made in
anticipation of this agreement, then the requirements of this Section 3.4
do not apply during the term of the other agreement. If the other agreement
terminates for any reason then the requirements of this Section 3.4 do
apply.
3.5 RESALE OF PRODUCTS AND SERVICES
3.5.1 MANDATORY RESALE OF PRODUCTS AND SERVICES. Sprint PCS is
subject to FCC rules that require it to allow its service plans to be
resold by a purchaser of the service plan. Sprint PCS will not grant the
purchaser of a service plan the right to use any of the support services
offered by Sprint PCS, including customer care, billing, collection, and
advertising, nor the right to use the Brands. The reseller only has the
right to use the service purchased. Consequently, Manager agrees not to
interfere with any purchaser of the Sprint PCS Products or Services who
resells the service plans in accordance with this agreement and applicable
law. Manager will notify purchaser that the purchaser does not have a right
to use the Brands or Sprint PCS' support services. In addition, Manager
will notify Sprint PCS if it reasonably believes a reseller of retail
service plans is using the support services or Brands.
3.5.2 VOLUNTARY RESALE OF PRODUCTS AND SERVICES. Sprint PCS may
choose to offer a resale product under which resellers will resell Sprint
PCS Products and Services under brand names other than the Brands, except
Sprint PCS may permit the resellers to use the Brands for limited purposes
related to the resale of Sprint PCS Products and Services (e.g., to notify
people that the handsets of the resellers will operate on the Sprint PCS
Network). The resellers may also provide their own support services (e.g.,
customer care and billing) or may purchase the support services from Sprint
PCS.
If Sprint PCS chooses to offer a voluntary resale product, it will
adopt a program that will be a Program Requirement under this agreement and
that addresses the manner in which Manager and Other Managers interact with
the resellers. Manager must agree to comply with the terms of the program,
including its pricing provisions, if Manager wants handsets of subscribers
of resellers with NPA-NXXs of Manager to be activated. Usage of
telecommunications services while in the Service Area by subscribers of
resellers with NPA-NXXs from outside the Service Area will be subject to
the pricing provisions of the Sprint PCS Roaming and Inter Service Area
Program for roaming and inter service area pricing between Manager and
Sprint PCS unless Manager agrees in writing to different pricing.
Except as required under the regulations and rules concerning
mandatory resale, Manager may not sell Sprint PCS Products and Services for
resale unless Sprint PCS consents to such sales in advance in writing.
3.6 NON-COMPETITION. Neither Manager nor any of its Related Parties
may offer Sprint PCS Products and Services outside of the Service Area
without the prior written approval of Sprint PCS.
Within the Service Area, Manager and Manager's Related Parties may
offer, market or promote telecommunications products or services only under
the following brands:
(a) products or services with the Brands;
(b) other products and services approved under Section 3.2;
(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related
Parties,
except no brand of a significant competitor of Sprint PCS or its Related
Parties in the telecommunications business may be used by Manager or
Manager's Related Parties on these products and services.
If Manager or any of its Related Parties has licenses to provide
broadband personal communication services outside the Service Area, neither
Manager nor such Related Party may utilize the spectrum to offer Sprint PCS
Products and Services without prior written consent from Sprint PCS.
Additionally, when Manager's customers from inside the Service Area travel
or roam to other geographic areas, Manager will route the customers' calls,
both incoming and outgoing, according to the Sprint PCS Network Roaming and
Inter Service Area Program Requirements, without regard to any wireless
networks operated by Manager or its Related Parties. For example, Manager
will program the preferred roaming list for handsets sold in the Service
Area to match the Sprint PCS preferred roaming list.
3.7 RIGHT OF LAST OFFER. Manager will offer to Sprint the right to
make to Manager the last offer to provide backhaul and transport services
for call transport for the Service Area Network, if Manager decides to use
third parties for backhaul and transport services rather than
self-provisioning the services or purchasing the services from Related
Parties of Manager. Sprint will have a reasonable time to respond to
Manager's request for last offer to provide backhaul and transport pricing
and services, which will be no greater than 5 Business Days after receipt
of the request for the services and pricing from Manager.
If Manager has an agreement in effect as of the date of this
agreement for these services and the agreement was not made in anticipation
of this agreement, then the requirements of this Section 3.7 do not apply
during the term of the other agreement. If the other agreement terminates
for any reason then the requirements of this Section 3.7 do apply.
4. MARKETING AND SALES ACTIVITIES
4.1 SPRINT PCS NATIONAL OR REGIONAL DISTRIBUTION PROGRAM
REQUIREMENTS. During the term of this agreement, Manager must participate
in any Sprint PCS National or Regional Distribution Program (as in effect
from time to time), and will pay or receive compensation for its
participation in accordance with the terms and conditions of that program.
The Sprint PCS National or Regional Distribution Program Requirements in
effect as of the date of this agreement are attached as Exhibit 4.1.
4.1.1 TERRITORIAL LIMITATIONS ON MANAGER'S DISTRIBUTION
ACTIVITIES. Neither Manager nor any of its Related Parties will market,
sell or distribute Sprint PCS Products and Services outside of the Service
Area, except:
(a) as otherwise agreed upon by the parties in advance in
writing; or
(b) Manager may place advertising in media that has
distribution outside of the Service Area, so long as that advertising is
intended by Manager to reach primarily potential customers within the
Service Area.
4.1.2 SETTLEMENT OF EQUIPMENT SALES. Sprint PCS will establish
a settlement policy and process that will be included in the Sprint PCS
National or Regional Distribution Program Requirements to:
(a) reconcile sales of subscriber equipment made in the service
areas of Sprint PCS or Other Managers of Sprint PCS, that result in
activations in the Service Area; and
(b) reconcile sales of subscriber equipment made in the Service
Area that result in activations in service areas of Sprint PCS or Other
Managers.
In general, the policy will provide that the party in whose service
area the subscriber equipment is activated will be responsible for the
payment of any subsidy (i.e., the difference between the price paid to the
manufacturer and the suggested retail price for direct channels or the
difference between the price paid to the manufacturer and the wholesale
price for third party retailers) and for other costs associated with the
sale, including logistics, inventory carrying costs, direct channel
commissions and other retailer compensation.
4.1.3 USE OF THIRD-PARTY DISTRIBUTORS.
(a) Manager may request that Sprint PCS and a local distributor
enter into Sprint PCS' standard distribution agreement regarding the
purchase from Sprint PCS of handsets and accessories. Sprint PCS will use
commercially reasonable efforts to reach agreement with the local
distributor. Sprint PCS may refuse to enter into a distribution agreement
with a distributor for any reasonable reason, including that the
distributor fails to pass Sprint PCS' then current credit and background
checks or the distributor fails to agree to the standard terms of the
Sprint PCS distribution agreement. Any local distributor will be subject to
the terms of the Trademark License Agreements or their equivalent. Manager
will report to Sprint PCS the activities of any local distributor that
Manager believes to be in violation of the distribution agreement.
(b) Manager may establish direct local distribution programs in
accordance with the Sprint PCS National or Regional Distribution Program
Requirements, subject to the terms and conditions of the Trademark License
Agreements and the non-competition and other provisions contained in this
agreement. If Manager sells Sprint PCS handsets and accessories directly to
a local distributor:
(i) Sprint PCS has the right to approve or disapprove a
particular distributor,
(ii) Manager is responsible for such distributor's
compliance with the terms of the Trademark License Agreements and the
other provisions contained in this agreement, and
(iii) Manager must retain the right to terminate the
distribution rights of the local distributor when so instructed by
Sprint PCS (even if Sprint PCS initially approved or did not exercise
its right to review the distributor).
4.2 SPRINT PCS NATIONAL ACCOUNTS PROGRAM REQUIREMENTS. During the
term of this agreement, Manager must participate in the Sprint PCS National
Accounts Program (as in effect from time to time), and will be entitled to
compensation for its participation and will be required to pay the expenses
of the program in accordance with the terms and conditions of that program.
The Sprint PCS National Accounts Program Requirements in effect as of the
date of this agreement are attached as Exhibit 4.2.
4.3 SPRINT PCS ROAMING AND INTER SERVICE AREA PROGRAM REQUIREMENTS.
Manager will participate in the Sprint PCS Roaming and Inter Service Area
Program established and implemented by Sprint PCS, including roaming price
plans and inter-carrier settlements. The Sprint PCS Roaming and Inter
Service Area Program Requirements in effect as of the date of this
agreement are attached as Exhibit 4.3.
As part of the Sprint PCS Roaming and Inter Service Area Program
Requirements, Sprint PCS will establish a settlement policy and process to
equitably distribute between the members making up the Sprint PCS Network
(i.e., Sprint PCS, Manager and all Other Managers) the revenues received by
one member for services used by its customers when they travel into other
members' service areas.
4.4 PRICING. Manager will offer and support all Sprint PCS pricing
plans designated for regional or national offerings of Sprint PCS Products
and Services (e.g., national inter service area rates, regional home rates,
and local price points). The Sprint PCS pricing plans as of the date of
this agreement are attached as Exhibit 4.4. Sprint PCS may modify the
Sprint PCS pricing plans from time to time in its sole discretion by
delivering to Manager a new Exhibit 4.4.
Additionally, with prior approval from Sprint PCS, which approval
will not be unreasonably withheld, Manager may establish price plans for
Sprint PCS Products and Services that are only offered in its local market,
subject to:
(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint
PCS systems (if used).
Manager must provide advance written notice to Sprint PCS with
details of any pricing proposal for Sprint PCS Products or Services in the
Service Area. If Sprint PCS fails to respond to Manager within 10 Business
Days after receiving such notice, then the price proposed for those Sprint
PCS Products or Services is deemed approved.
At the time Sprint PCS approves a pricing proposal submitted by
Manager, Sprint PCS will provide Manager an estimate of the costs and
expenses and applicable time frames required for Sprint PCS to implement
the proposed pricing plan. Manager agrees to promptly reimburse Sprint PCS
for any cost or expense incurred by Sprint PCS to implement such a pricing
plan, which will not exceed the amount estimated by Sprint PCS if Manager
waited for Sprint PCS' response to Manager's proposal.
4.5 HOME SERVICE AREA. Sprint PCS and Manager will agree to the
initial home service area for each base station in the Service Area Network
prior to the date the Service Area Network goes into commercial operation.
If the parties cannot agree to the home service area for each base station
in the Service Area Network, then the parties will use the dispute
resolution process in Section 14 of this agreement to assign each base
station to a home service area.
5. USE OF BRANDS
5.1 USE OF BRANDS.
(a) Manager must enter into the Trademark License Agreements on
or before the date of this agreement.
(b) Manager must use the Brands exclusively in the marketing,
promotion, advertisement, distribution, lease or sale of any Sprint PCS
Products and Services within the Service Area, except Manager may use other
brands to the extent permitted by the Trademark License Agreements and not
inconsistent with the terms of this agreement.
(c) Neither Manager nor any of its Related Parties may market,
promote, advertise, distribute, lease or sell any of the Sprint PCS
Products and Services or Manager's Products and Services on a non-branded,
"private label" basis or under any brand, trademark, trade name or trade
dress other than the Brands, except (i) for sales to resellers required
under this agreement, or (ii) as permitted under the Trademark License
Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager
from including Sprint PCS Products and Services under the Brands within the
Service Area as part of a package with its other products and services that
bear a different brand or trademark. The provisions of this Section 5.1 do
not apply to the extent that they are inconsistent with applicable law or
in conflict with the Trademark License Agreements.
5.2 CONFORMANCE TO MARKETING COMMUNICATIONS GUIDELINES. Manager must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of
the Sprint PCS Products and Services. The Marketing Communications
Guidelines in effect as of the date of this agreement are attached as
Exhibit 5.2. Sprint and Sprint Spectrum may amend the Marketing
Communications Guidelines from time to time in accordance with the terms of
the Trademark License Agreements.
5.3 JOINT MARKETING WITH THIRD PARTIES.
(a) Manager may engage in various joint marketing activities
(e.g., promotions with sports teams and entertainment providers or
tournament sponsorships) with third parties in the Service Area from time
to time during the term of this agreement with respect to the Sprint PCS
Products and Services, except that Manager may engage in the joint
marketing activities only if the joint marketing activities:
(i) are conducted in accordance with the terms and
conditions of the Trademark License Agreements and the Marketing
Communications Guidelines;
(ii) do not violate the terms of this agreement;
(iii) are not likely (as determined by Sprint PCS, in its
sole discretion) to cause confusion between the Brands and any other
trademark or service xxxx used in connection with the activities;
(iv) are not likely (as determined by Sprint, in its sole
discretion) to cause confusion between the Sprint Brands and any
other trademark or service xxxx used in connection with the
activities; and
(v) are not likely (as determined by Sprint PCS, in its
sole discretion) to give rise to the perception that the Sprint PCS
Products and Services are being advertised, marketed or promoted
under any trademark or service xxxx other than the Brands, except as
provided in the Trademark License Agreements. Manager will not engage
in any activity that includes co-branding involving use of the Brands
(that is, the marketing, promotion, advertisement, distribution,
lease or sale of any of the Sprint PCS Products and Services under
the Brands and any other trademark or service xxxx), except as
provided in the Trademark License Agreements.
(b) Manager must provide advance written notice to Sprint PCS
describing any joint marketing activities that may:
(i) cause confusion between the Brands and any other
trademark or service xxxx used in connection with the proposed
activities; or
(ii) give rise to the perception that the Sprint PCS
Products and Services are being advertised, marketed or promoted
under any trademark or service xxxx other than the Brands, except as
provided in the Trademark License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within
20 days after receiving such notice, then the proposed activities are
deemed, as the case may be:
(i) not to create confusion between the Brands and any
other trademark or service xxxx; or
(ii) not to give rise to the perception that Manager's
products and services are being advertised, marketed or promoted
under any trademark or service xxxx other than the Brands, except as
provided in the Trademark License Agreements.
5.4 PRIOR APPROVAL OF USE OF BRANDS. Manager must obtain advance
written approval from Sprint for use of the Sprint Brands to the extent
required by the Sprint Trademark and Service Xxxx License Agreement and
from Sprint PCS for use of the Sprint PCS Brands to the extent required by
the Sprint Spectrum Trademark and Service Xxxx License Agreement. Sprint
PCS will use commercially reasonable efforts to facilitate any review of
Manager's use of the Brands, if Sprint PCS is included in the review
process.
5.5 DURATION OF USE OF BRAND. Manager is entitled to use the Brands
only during the term of the Trademark License Agreements and any transition
period during which Manager is authorized to use the Brands following the
termination of the Trademark License Agreements.
6. ADVERTISING AND PROMOTION
6.1 NATIONAL ADVERTISING AND PROMOTION. Sprint PCS is responsible for
(a) all national advertising and promotion of the Sprint PCS Products and
Services, including the costs and expenses related to national advertising
and promotions, and (b) all advertising and promotion of the Sprint PCS
Products and Services in the markets where Sprint PCS operates without the
use of an Other Manager.
6.2 IN-TERRITORY ADVERTISING AND PROMOTION. Manager must advertise
and promote the Sprint PCS Products and Services in the Service Area (and
may do so in the areas adjacent to the Service Area so long as Manager
intends that such advertising or promotion primarily reach potential
customers within the Service Area). Manager must advertise and promote the
Sprint PCS Products and Services in accordance with the terms and
conditions of this agreement, the Trademark License Agreements and the
Marketing Communication Guidelines. Manager is responsible for the costs
and expenses incurred by Manager with respect to Manager's advertising and
promotion activities in the Service Area.
Manager will be responsible for a portion of the cost of any
promotion or advertising done by third party retailers in the Service Area
(e.g., Best Buy) in accordance with any cooperative advertising
arrangements based on per unit handset sales.
Sprint PCS has the right to use in any promotion or advertising done
by Sprint PCS any promotion or advertising materials developed by Manager
from time to time with respect to the Sprint PCS Products and Services.
Sprint PCS will reimburse Manager for the reproduction costs related to
such use.
Sprint PCS will make available to Manager the promotion or
advertising materials developed by Sprint PCS from time to time with
respect to Sprint PCS Products and Services in current use by Sprint PCS
(e.g., radio ads, television ads, design of print ads, design of point of
sale materials, retail store concepts and designs, design of collateral).
Manager will bear the cost of using such materials (e.g., cost of local
radio and television ad placements, cost of printing collateral in
quantity, and building out and finishing retail stores).
6.3 REVIEW OF ADVERTISING AND PROMOTION CAMPAIGNS. Sprint PCS and
Manager will jointly review the upcoming marketing and promotion campaigns
of Manager with respect to Sprint PCS Products and Services (including
advertising and promotion expense budgets) and will use good faith efforts
to coordinate Manager's campaign with Sprint PCS' campaign to maximize the
market results of both parties. Sprint PCS and Manager may engage in
cooperative advertising or promotional activities during the term of this
agreement as the parties may agree in writing.
6.4 PUBLIC RELATIONS. If Manager conducts local public relations
efforts, then Manager must conduct the local public relations efforts
consistent with the Sprint PCS Communications Policies. The Sprint PCS
Communications Policies as of the date of this agreement are attached as
Exhibit 6.4. Sprint PCS may modify the Sprint PCS Communications Policies
from time to time by delivering to Manager a new Exhibit 6.4.
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 CONFORMANCE TO SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS.
(a) Manager must meet or exceed the Sprint PCS Technical
Program Requirements established by Sprint PCS from time to time for the
Sprint PCS Network. Manager will be deemed to meet the Sprint PCS Technical
Program Requirements if:
(i) Manager operates the Service Area Network at a level
equal to or better than the lower of the Operational Level of Sprint
PCS or the operational level contemplated by the Sprint PCS Technical
Program Requirements; or
(ii) Sprint PCS is responsible under the Services
Agreement to ensure the Service Area Network complies with the Sprint
PCS Technical Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has
complied with the Sprint PCS Technical Program Requirements prior to
connecting the Service Area Network to the rest of the Sprint PCS Network.
Once the Service Area Network is connected to the Sprint PCS Network,
Manager must continue to comply with the Sprint PCS Technical Program
Requirements. Sprint PCS agrees that the Sprint PCS Technical Program
Requirements adopted for Manager will be the same Sprint PCS Technical
Program Requirements applied by Sprint PCS to the Sprint PCS Network.
7.2 ESTABLISHMENT OF SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS.
Sprint PCS has delivered to Manager a copy of the current Sprint PCS
Technical Program Requirements, attached as Exhibit 7.2. Sprint PCS drafted
the Sprint PCS Technical Program Requirements to ensure a minimum,
base-line level of quality for the Sprint PCS Network. The Sprint PCS
Technical Program Requirements include standards relating to voice quality,
interoperability, consistency (seamlessness) of coverage, RF design
parameters, system design, capacity, and call blocking ratio. Sprint PCS
has selected code division multiple access as the initial air interface
technology for the Sprint PCS Network (subject to change in accordance with
Section 9.1).
7.3 HANDOFF TO ADJACENT NETWORKS. If technically feasible and
commercially reasonable, Manager will operate the Service Area Network in a
manner that permits a seamless handoff of a call initiated on the Service
Area Network to any adjacent PCS network that is part of the Sprint PCS
Network, as specified in the Sprint PCS Technical Program Requirements.
Sprint PCS agrees that the terms and conditions for seamless handoffs
adopted for the Service Area Network will be the same as the terms Sprint
PCS applies to the other parts of the Sprint PCS Network for similar
configurations of equipment.
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS
8.1 COMPLIANCE WITH SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS.
Manager must comply with the Sprint PCS Customer Service Program
Requirements in providing the Sprint PCS Products and Services to any
customer of Manager, Sprint PCS or any Sprint PCS Related Party. Manager
will be deemed to meet the standards if:
(a) Manager operates the Service Area Network at a level equal
to or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services
Agreement responsibility to ensure the Service Area Network complies with
the Sprint PCS Customer Service Standards.
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit 8.1.
9. SPRINT PCS PROGRAM REQUIREMENTS
9.1 PROGRAM REQUIREMENTS GENERALLY. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements.
This agreement also provides under Section 3.5.2 for the offering by Sprint
PCS of a voluntary resale product through a program, which program, if
adopted, will be a Program Requirement under this agreement. Sprint PCS may
unilaterally amend from time to time in the manner described in Section 9.2
all Program Requirements mentioned in this agreement. The most current
version of the Program Requirements mentioned in the first sentence of this
Section 9.1 have been provided to Manager. Manager has reviewed the Program
Requirements and adopts them for application in the Service Area.
9.2 AMENDMENTS TO PROGRAM REQUIREMENTS. Sprint PCS may amend any of
the Program Requirements, subject to the following conditions:
(a) The applicable Program Requirements, as amended, will apply
equally to Manager, Sprint PCS and each Other Manager, except if Manager
and Sprint PCS agree otherwise or if Sprint PCS grants a waiver to Manager.
Sprint PCS may grant waivers to Other Managers without affecting Manager's
obligation to comply with the Program Requirements;
(b) Each amendment will be reasonably required to fulfill the
purposes set forth in Section 1.2 with respect to uniform and consistent
operations of the Sprint PCS Network and the presentation of Sprint PCS
Products and Services to customers in a uniform and consistent manner;
(c) Each amendment will otherwise be on terms and conditions
that are commercially reasonable with respect to the construction,
operation and management of the Sprint PCS Network. With respect to any
amendment to the Program Requirements, Sprint PCS will provide for
reasonable transition periods and, where appropriate, may provide for
grandfathering provisions for existing activities by Manager that were
permitted under the applicable Program Requirements before the amendment;
(d) Sprint PCS must give Manager reasonable, written notice of
the amendment, but in any event the notice will be given at least 30 days
prior to the effective date of the amendment; and
(e) Manager must implement any changes in the Program
Requirements within a commercially reasonable period of time unless
otherwise consented to by Sprint PCS. Sprint PCS will determine what
constitutes a commercially reasonable period of time taking into
consideration relevant business factors, including the strategic
significance of the changes to the Sprint PCS Network, the relationship of
the changes to the yearly marketing cycle, and the financial demands on and
capacity generally of Other Managers. Notwithstanding the preceding two
sentences, Manager will not be required to implement any change in the
Service Area Network or the business of Manager required by an amendment to
a Program Requirement until Sprint PCS has implemented the required changes
in substantially all of that portion of the Sprint PCS Network that Sprint
PCS operates without the use of a manager or affiliate, unless the
amendment to the Program Requirement relates to an obligation regarding the
Service Area Network mandated by law. When necessary for reasons related to
new technical standards, new equipment or strategic reasons, Sprint PCS can
require Manager to implement the changes in the Service Area Network or
Manager's business concurrently with Sprint PCS, in which case Sprint PCS
will reimburse Manager for its costs and expenses if Sprint PCS
discontinues the Program Requirement changes prior to implementation.
Sprint PCS may grant Manager appropriate waivers and variances from
the requirements of any Program Requirements. Sprint PCS has the right to
adopt any Program Requirements that implement any obligation regarding the
Service Area Network mandated by law.
Any costs and expenses incurred by Manager in connection with
conforming to any change to the Program Requirements during the term of
this agreement are the responsibility of Manager.
9.3 MANAGER'S RIGHT TO REQUEST REVIEW OF CHANGES. If Sprint PCS
announces a change to a Program Requirement that will:
(a) cause the Manager to spend an additional amount greater
than 5% of Manager's shareholder's equity or capital account plus Manager's
long-term debt (i.e., notes that mature more than one year from the date
issued), as reflected on Manager's books; or
(b) cause the long term operating expenses of Manager on a per
unit basis using a 10-year time frame to increase by more than 10% on a net
present value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the change.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship
with Manager will review Manager's request and render a decision regarding
the change. If after the review and decision by the Vice President or
designee, Manager is still dissatisfied, then Manager may ask that the
Chief Officer to whom the Vice President or designee reports review the
matter. If Sprint PCS still requires Manager to implement the change to the
Program Requirement following the Chief Officer's review, then upon
Manager's failure to implement the change an Event of Termination will be
deemed to have occurred under Section 11.3.3, Manager will not have a right
to cure such breach, and Sprint PCS may exercise its rights and remedies
under Section 11.6.
9.4 SPRINT PCS' RIGHT TO IMPLEMENT CHANGES. If Manager requests
Sprint PCS to reconsider a change to a Program Requirement as permitted
under Section 9.3 and Sprint PCS decides it will not require Manager to
make the change, Sprint PCS may, but is not required to, implement the
change at Sprint PCS' expense, in which event Manager will be required to
operate the Service Area Network, as changed, but Sprint PCS will be
entitled to any revenue derived from the change.
9.5 RIGHTS OF INSPECTION. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility
operated by or for Manager at any time, with reasonable advance notice to
Manager if possible, to inspect, monitor and test in a reasonable manner
the Service Area Network, including the facilities, equipment, books and
records of Manager, to ensure that Manager has complied or is in compliance
with all covenants and obligations of Manager under this agreement,
including Manager's obligation to conform to the Program Requirements. The
inspection, monitoring and testing may not disrupt the operations of the
office or facility, nor impede Manager's access to the Service Area
Network.
9.6 MANAGER'S RESPONSIBILITY TO INTERFACE WITH SPRINT PCS. Manager
will use platforms fully capable of interfacing with the Sprint PCS
platforms in operating the Service Area Network and in providing Sprint PCS
Products and Services. Manager will pay the expense of making its platforms
fully capable of interfacing with Sprint PCS, including paying for the
following:
(i) connectivity;
(ii) any changes that Manager requests Sprint PCS to make
to Sprint PCS systems to interconnect with Manager's systems that
Sprint PCS, in its sole discretion, agrees to make;
(iii) equipment to run Manager's software;
(iv) license fees for Manager's software; and
(v) Manager's upgrades or changes to its platforms.
10. FEES
10.1 FEES AND PAYMENTS.
10.1.1 FEE BASED ON COLLECTED REVENUES. Sprint PCS will pay to
Manager a weekly fee equal to 92% of Collected Revenues for the week for
all obligations of Manager under this Agreement. The fee will be due on
Thursday of the week following the week for which the fee is calculated.
10.1.2 PAYMENT OF UNIVERSAL SERVICE FUNDS. Sprint PCS and
Manager will share any federal and state subsidy funds (e.g., payments by a
state of universal service fund subsidies to Sprint PCS or Manager), if
any, received by Sprint PCS or Manager for customers who reside in the
portion of the Service Area served by the Service Area Network.
Manager is entitled to 92% of any amount received by either party and
Sprint PCS is entitled to 8% of such amounts.
10.1.3 INTER SERVICE AREA FEES. Sprint PCS will pay to Manager
monthly a fee as set out in the Sprint PCS Roaming and Inter Service Area
Program, for each minute of use that a customer of Sprint PCS or one of the
Other Managers whose NPA-NXX is not assigned to the Service Area Network
uses the Service Area Network. Manager will pay to Sprint PCS a fee, as set
out in the Sprint PCS Roaming and Inter Service Area Program, for each
minute of use that a customer whose NPA-NXX is assigned to the Service Area
Network uses a portion of the Sprint PCS Network other than the Service
Area Network. Manager acknowledges that the manner in which the NPA-NXX is
utilized could change, which will require a modification in the manner in
which the inter service area fees, if any, will be calculated.
10.1.4 INTERCONNECT FEES. Manager will pay to Sprint PCS (or to
other carriers as appropriate) monthly the interconnect fees, if any, as
provided under Section 1.4.
10.1.5 OUTBOUND ROAMING FEES. If not otherwise provided under
any Program Requirement:
(a) Sprint PCS will pay to Manager monthly the amount of
Outbound Roaming fees that Sprint PCS collects for the month from end users
whose NPA-NXX is assigned to the Service Area; and
(b) Manager will pay to Sprint PCS (or to a clearinghouse or
other carrier as appropriate) the direct cost of providing the capability
for the Outbound Roaming, including any amounts payable to the carrier that
handled the roaming call and the clearinghouse operator.
10.1.6 REIMBURSEMENTS. Manager will pay to or reimburse Sprint
PCS for any amounts that Sprint PCS is required to pay to a third party
(e.g., a telecommunications carrier) to the extent Sprint PCS already paid
such amount to Manager under this Section 10.
10.2 MONTHLY TRUE UP. Manager will report to Sprint PCS monthly the
amount of Collected Revenues received directly by the Manager (e.g.,
customer mails payment to the business address of Manager rather than to
the lockbox or a customer pays a direct sales force representative in
cash). Sprint PCS will on a monthly basis true up the fees and payments due
under Section 10.1 against the actual payments made by Sprint PCS to
Manager. Sprint PCS will provide to Manager a true up report each month
showing the true up and the net amount due from one party to the other, if
any. If the weekly payments made to Manager exceed the actual fees and
payments due to Manager, then Manager will remit the amount of the
overpayment to Sprint PCS within 5 Business Days after receiving the true
up report from Sprint PCS. If the weekly payments made to Manager are less
than the actual fees and payments due to Manager, then Sprint PCS will
remit the shortfall to Manager within 5 Business Days after sending the
true up report to Manager.
If a party disputes any amount on the true up report, the disputing
party must give the other party written notice of the disputed amount and
the reason for the dispute within 90 days after it receives the true up
report. The dispute will be resolved through the dispute resolution process
in Section 14. The parties must continue to pay to the other party any
undisputed amounts owed under this agreement during the dispute resolution
process. The dispute of an item does not stay or diminish a party's other
rights and remedies under this agreement.
10.3 TAXES. Manager will pay or reimburse Sprint PCS for any sales,
use, gross receipts or similar tax, administrative fee, telecommunications
fee or surcharge for taxes or fees levied by a governmental authority on
the fees and charges payable by Sprint PCS to Manager.
Manager will report all taxable property to the appropriate taxing
authority for ad valorem tax purposes. Manager will pay as and when due all
taxes, assessments, liens, encumbrances, levies, and other charges against
the real estate and personal property owned by Manager or used by Manager
in fulfilling its obligations under this agreement.
Manager is responsible for paying all sales, use, or similar taxes on
the purchase and use of its equipment, advertising, and other goods or
services in connection with this agreement.
10.4 COLLECTED REVENUES DEFINITION. "COLLECTED REVENUES" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others, including the customers, whose NPA-NXX
is the same as that for the portion of the Service Area served by the
Service Area Network. In determining Collected Revenues the following
principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from
federal and state subsidy funds; they are handled separately as noted
in Section 10.1.2;
(ii) Collected Revenues do include any amounts received
for the payment of Inbound Roaming charges and interconnect fees when
calls are carried on the Service Area Network; and
(iii) Collected Revenues do not include any amounts
received with respect to any changes made by Sprint PCS under Section
9.4.
(b) The following items are not Collected Revenues; Sprint PCS
is obligated to remit the amounts received with respect to such items, if
any, to Manager, as follows:
(i) inter service area payments will be paid as provided
under Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as provided
under Section 10.1.5;
(iii) proceeds from the sale or lease of subscriber
equipment and accessories will be paid to Manager, subject to the
equipment settlement process in Section 4.1.2;
(iv) proceeds from sales not in the ordinary course of
business (e.g., sales of switches, cell sites, computers, vehicles or
other fixed assets);
(v) any amounts collected with respect to sales and use
taxes, gross receipts taxes, transfer taxes, and similar taxes,
administrative fees, telecommunications fees, and surcharges for
taxes and fees that are collected by a carrier for the benefit of a
governmental authority, subject to Manager's obligation under Section
10.3; and
(vi) Manager will be entitled to 100% of all revenues
received by Sprint PCS with respect to sales of Manager's Products
and Services.
(c) The following items are not Collected Revenues; neither
party is obligated to remit any amounts respecting such items:
(i) reasonable adjustments of a customer's account (e.g.,
if Sprint PCS or Manager reduces a customer's xxxx, then the amount
of the adjustment is not Collected Revenues); and
(ii) amount of bad debt and fraud associated with
customers whose NPA-NXX is assigned to the Service Area (e.g., if
Sprint PCS or Manager writes off a customer's xxxx as a bad debt,
there are no Collected Revenues on which a fee is due to Manager).
10.5 LATE PAYMENTS. Any amount due under this Section 10 that is not
paid by one party to the other party in accordance with the terms of this
agreement will bear interest at the Default Rate beginning (and including)
the 3rd day after the due date until (and including) the date paid.
10.6 SETOFF RIGHT IF FAILURE TO PAY AMOUNTS DUE. If Manager fails to
pay any undisputed amount due Sprint PCS or a Related Party of Sprint PCS
under this agreement, the Services Agreement, or any other agreement with
Sprint PCS or a Related Party of Sprint PCS, then Sprint PCS may setoff
against its payments to Manager under this Section 10, the following
amounts:
(a) any amount that Manager owes to Sprint PCS or a Related
Party of Sprint PCS, including amounts due under the Services Agreement;
and
(b) any amount that Sprint PCS reasonably estimates will be due
to Sprint PCS for the current month under the Services Agreement (e.g., if
under the Services Agreement customer care calls are billed monthly, Sprint
PCS can deduct from the weekly payment to Manager an amount Sprint PCS
reasonably estimates will be due Sprint PCS on account of such customer
care calls under the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts
deducted against the actual amounts due Sprint PCS and Sprint PCS' Related
Parties. If the estimated amounts deducted by Sprint PCS exceed the actual
amounts due to Sprint PCS and Sprint PCS' Related Parties, then Sprint PCS
will remit the excess to Manager with the next weekly payment. If the
estimated amounts deducted are less than the actual amounts due to Sprint
PCS and its Related Parties, then Sprint PCS may continue to setoff the
payments to Manager against the amounts due to Sprint PCS and Sprint PCS'
Related Parties. This right of setoff is in addition to any other right
that Sprint PCS may have under this agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
11.1 INITIAL TERM. This agreement commences on the date of execution
and, unless terminated earlier in accordance with the provisions of this
Section 11, continues for a period of 20 years (the "INITIAL TERM").
11.2 RENEWAL TERMS. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods
(for a maximum of 50 years including the Initial Term), unless at least 2
years prior to the commencement of any renewal period either party notifies
the other party in writing that it does not wish to renew this agreement.
11.2.1 NON-RENEWAL RIGHTS OF MANAGER. If this agreement will
terminate because Sprint PCS gives Manager timely written notice of
non-renewal of this agreement, then Manager may exercise its rights under
Section 11.2.1.1 or, if applicable, its rights under Section 11.2.1.2.
11.2.1.1 Manager's Put Right. Manager may within 30 days
after the date Sprint PCS gives notice of non-renewal put to Sprint
PCS all of the Operating Assets. Sprint PCS will pay to Manager for
the Operating Assets an amount equal to 80% of the Entire Business
Value. The closing of the purchase of the Operating Assets will occur
within 20 days after the later of (a) the receipt by Sprint PCS of
the written notice of determination of the Entire Business Value
provided by the appraisers under Section 11.7 or (b) the receipt of
all materials required to be delivered to Sprint PCS under Section
11.8. Upon closing the purchase of the Operating Assets this
agreement will be deemed terminated. The exercise of the put, the
determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and
the business, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11.8.
11.2.1.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS
spectrum in the Service Area under the License on the date this
agreement is executed, then Manager may within 30 days after
the date Sprint PCS gives notice of non-renewal declare its
intent to purchase the Disaggregated License. Subject to
receipt of FCC approval of the necessary disaggregation and
partition, Manager may purchase from Sprint PCS the
Disaggregated License for an amount equal to the greater of (1)
the original cost of the License to Sprint PCS (pro rated on a
pops and spectrum basis) plus the microwave relocation costs
paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the spectrum this
agreement will be deemed terminated. The closing of the
purchase of the Disaggregated License will occur within the
later of:
(1) 20 days after the receipt by Manager of
the written notice of determination of the Entire
Business Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of
the Disaggregated License by the FCC.
(c) The exercise of the purchase right, the
determination of the geographic extent of the Disaggregated
License coverage, the representations and warranties made by
Sprint PCS with respect to the Disaggregated License, and the
process for closing the purchase will be subject to the terms
and conditions set forth in Section 11.8.
(d) After the closing of the purchase Manager will
allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products
and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 NON-RENEWAL RIGHTS OF SPRINT PCS. If this agreement will
terminate because of any of the following five (5) events, then Sprint PCS
may exercise its rights under Section 11.2.2.1 or, if applicable, its
rights under Section 00.0.0.0:
(a) Manager gives Sprint PCS timely written notice
of non-renewal of this agreement;
(b) both parties give timely written notices of
non-renewal;
(c) this agreement expires with neither party
giving a written notice of non-renewal;
(d) either party elects to terminate this agreement
under Section 11.3.4(a); or
(e) Manager elects to terminate this agreement
under Section 11.3.4(b).
11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may
purchase from Manager all of the Operating Assets. Sprint PCS will
pay to Manager an amount equal to 80% of the Entire Business Value.
The closing of the purchase of the Operating Assets will occur within
20 days after the later of (a) the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value provided
by the appraisers under Section 11.7 or (b) the receipt of all
materials required to be delivered to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will
be deemed terminated. The exercise of the purchase right, the
determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and
the business, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11.8.
11.2.2.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC
approval, put to Manager the Disaggregated License for a
purchase price equal to the greater of (1) the original cost of
the License to Sprint PCS (pro rated on a pops and spectrum
basis) plus the microwave relocation costs paid by Sprint PCS
or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing
of the purchase of the Disaggregated License will occur within
the later of:
(1) 20 days after the receipt by Sprint PCS
of the written notice of determination of the Entire
Business Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of
the Disaggregated License by the FCC.
(c) The exercise of the put, the determination of
the geographic extent of the Disaggregated License coverage,
the representations and warranties made by Sprint PCS with
respect to the Disaggregated License, and the process for
closing the purchase will be subject to the terms and
conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives
notice of Sprint PCS' exercise of its put, advise Sprint PCS of
the amount of spectrum (not to exceed 10 MHz) it wishes to
purchase. After the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products
and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.3 EXTENDED TERM AWAITING FCC APPROVAL. If Manager is
buying the Disaggregated License as permitted or required under Sections
11.2.1.2 or 11.2.2.2, then the Term of this agreement will extend beyond
the original expiration date until the closing of the purchase of the
Disaggregated License. The parties agree to exercise their respective
commercially reasonable efforts to obtain FCC approval of the transfer of
the Disaggregated License.
11.3 EVENTS OF TERMINATION. An "EVENT OF TERMINATION" is deemed to
occur when a party gives written notice to the other party of the Event of
Termination as permitted below:
11.3.1 TERMINATION OF LICENSE.
(a) At the election of either party this agreement
may be terminated at the time the FCC revokes or fails to renew
the License. Unless Manager has the right to terminate this
agreement under Section 11.3.1(b), neither party has any claim
against the other party if the FCC revokes or fails to renew
the License, even if circumstances would otherwise permit one
party to terminate this agreement based on a different Event of
Termination, except that the parties will have the right to
pursue claims against each other as permitted under Section
11.4(b).
(b) If the FCC revokes or fails to renew the
License because of a breach of this agreement by Sprint PCS,
then Manager has the right to terminate this agreement under
Section 11.3.3 and not this Section 11.3.1.
11.3.2 BREACH OF AGREEMENT: PAYMENT OF MONEY TERMS. At the
election of the non-breaching party this agreement may be terminated upon
the failure by the breaching party to pay any amount due under this
agreement or any other agreement between the parties or their respective
Related Parties, if the breach is not cured within 30 days after the
breaching party's receipt of written notice of the nonpayment from the
non-breaching party.
11.3.3 BREACH OF AGREEMENT: OTHER TERMS. At the election of the
non-breaching party this agreement may be terminated upon the material
breach by the breaching party of any material term contained in this
agreement that does not regard the payment of money, if the breach is not
cured within 30 days after the breaching party's receipt of written notice
of the breach from the non-breaching party, except the cure period will
continue for a reasonable period beyond the 30-day period, but will under
no circumstances exceed 180 days after the breaching party's receipt of
written notice of the breach, if it is unreasonable to cure the breach
within the 30-day period, and the breaching party takes action prior to the
end of the 30-day period that is reasonably likely to cure the breach and
continues to diligently take action necessary to cure the breach.
11.3.4 REGULATORY CONSIDERATIONS.
(a) At the election of either party this agreement
may be terminated if this agreement violates any applicable law
in any material respect where such violation (i) is classified
as a felony or (ii) subjects either party to substantial
monetary fines or other substantial damages, except that before
causing any termination the parties must use best efforts to
modify this agreement, as necessary to cause this agreement (as
modified) to comply with applicable law and to preserve to the
extent possible the economic arrangements set forth in this
agreement.
(b) At the election of Manager this agreement may
be terminated if the regulatory action described under
11.3.4(a) is the result of a deemed change of control of the
License and the parties are unable to agree upon a satisfactory
resolution of the matter with the regulatory authority without
a complete termination of this agreement.
11.3.5 TERMINATION OF TRADEMARK LICENSE AGREEMENTS. If either
Trademark License Agreement terminates under its terms, then:
(a) Manager may terminate this agreement if the
Trademark License Agreement terminated because of a breach of
the Trademark License Agreement by Sprint PCS or Sprint; and
(b) Sprint PCS may terminate this agreement if the
Trademark License Agreement terminated because of a breach of
the Trademark License Agreement by Manager.
11.3.6 FINANCING CONSIDERATIONS. At the election of Sprint PCS
this agreement may be terminated upon the failure of Manager to obtain the
financing described in Exhibit 1.7 by the deadline(s) set forth on such
Exhibit.
11.3.7 BANKRUPTCY OF A PARTY. At the election of the
non-bankrupt party, this agreement may be terminated upon the occurrence of
a Voluntary Bankruptcy or an Involuntary Bankruptcy of the other party.
"VOLUNTARY BANKRUPTCY" means:
(a) the inability of a party generally to pay its
debts as the debts become due, or an admission in writing by a
party of its inability to pay its debts generally or a general
assignment by a party for the benefit of creditors;
(b) the filing of any petition or answer by a party
seeking to adjudicate itself a bankrupt or insolvent, or
seeking any liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition for
itself or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking,
consenting to, or acquiescing in the entry of an order for
relief or the appointment of a receiver, trustee, custodian or
other similar official for itself or for substantially all of
its property; or
(c) any action taken by a party to authorize any of
the actions set forth above.
"INVOLUNTARY BANKRUPTCY" means, without the consent or
acquiescence of a party:
(a) the entering of an order for relief or
approving a petition for relief or reorganization;
(b) any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or other similar relief under any present or future
bankruptcy, insolvency or similar statute, law or regulation;
(c) the filing of any petition against a party,
which petition is not dismissed within 90 days; or
(d) without the consent or acquiescence of a party,
the entering of an order appointing a trustee, custodian,
receiver or liquidator of party or of all or any substantial
part of the property of the party, which order is not dismissed
within 90 days.
11.4 EFFECT OF AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination, the party
with the right to terminate this agreement or to elect the remedy upon the
Event of Termination, as the case may be, may:
(i) in the case of an Event of Termination under Sections
11.3.1(a) or 11.3.7, give the other party written notice that the
agreement is terminated effective as of the date of the notice, in
which case neither party will have any other remedy or claim for
damages (except any claim the non-bankrupt party has against the
bankrupt party and any claims permitted under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than
under Section 11.3.1(a), give the other party written notice that the
party is exercising one of its rights, if any, under Section 11.5 or
Section 11.6.
(b) If the party terminates this agreement under Section
11.4(a)(i) then all rights and obligations of each party under this
agreement will immediately cease, except that:
(i) any rights arising out of a breach of any terms of
this agreement will survive any termination of this agreement;
(ii) the provisions described in Section 17.23 will
survive any termination of this agreement;
(iii) the payment obligations under Section 10 will
survive any termination of this agreement if, and to the extent, any
costs or fees have accrued or are otherwise due and owing as of the
date of termination of this agreement from Manager to Sprint PCS or
any Sprint PCS Related Party or from Sprint PCS to Manager or any
Manager Related Party;
(iv) either party may terminate this agreement in
accordance with the terms of this agreement without any liability for
any loss or damage arising out of or related to such termination,
including any loss or damage arising out of the exercise by Sprint
PCS of its rights under Section 11.6.3;
(v) Manager will use all commercially reasonable efforts
to cease immediately all of their respective efforts to market, sell,
promote or distribute the Sprint PCS Products and Services;
(vi) Sprint PCS has the option to buy from Manager any
new unsold subscriber equipment and accessories, at the prices
charged to Manager;
(vii) the parties will immediately stop making any
statements or taking any action that might cause third parties to
infer that any business relationship continues to exist between the
parties, and where necessary or advisable, the parties will inform
third parties that the parties no longer have a business
relationship; and
(viii)if subscriber equipment and accessories are in
transit when this agreement is terminated, Sprint PCS may, but does
not have the obligation to, cause the freight carrier to not deliver
the subscriber equipment and accessories to Manager but rather to
deliver the subscriber equipment and accessories to Sprint PCS.
(c) If the party exercises its rights under Section
11.4(a)(ii), this agreement will continue in full force and effect until
otherwise terminated.
(d) If this agreement terminates for any reason other than
Manager's purchase of the Disaggregated License, Manager will not, for 3
years after the date of termination compile, create, or use for the purpose
of selling merchandise or services similar to any Sprint PCS Products and
Services, or sell, transfer or otherwise convey to a third party, a list of
customers who purchased, leased or used any Sprint PCS Products and
Services. Manager may use such a list for its own internal analysis of its
business practices and operations. If this agreement terminates because of
Manager's purchase of the Disaggregated License, then Sprint PCS will
transfer to Manager the Sprint PCS customers with a MIN assigned to the
Service Area covered by the Disaggregated License, but Sprint PCS retains
the customers of a national account and any resellers who have entered into
a resale agreement with Sprint PCS. Manager agrees not to solicit, directly
or indirectly, any customers of Sprint PCS not transferred to Manager under
this Section 11.4(d) for 2 years after the termination of this agreement,
except that Manager's advertising through mass media will not be considered
a solicitation of Sprint PCS customers.
11.5 MANAGER'S EVENT OF TERMINATION RIGHTS AND REMEDIES. In addition
to any other right or remedy that Manager may have under this agreement,
the parties agree that Manager will have the rights and remedies set forth
in this Section 11.5 and that such rights and remedies will survive the
termination of this agreement. If Manager has a right to terminate this
agreement as the result of the occurrence of an Event of Termination under
Sections 11.3.2, 11.3.3, 11.3.5 or 11.3.7 (if Manager is the non-bankrupt
party), then Manager has the right to elect one of the following three (3)
remedies, except Manager cannot elect its remedies under Sections 11.5.1 or
11.5.2 during the first 2 years of the Initial Term with respect to an
Event of Termination under Section 11.3.3.
11.5.1 MANAGER'S PUT RIGHT. Manager may put to Sprint PCS
within 30 days after the Event of Termination all of the Operating Assets.
Sprint PCS will pay to Manager an amount equal to 80% of the Entire
Business Value. The closing of the purchase of the Operating Assets will
occur within 20 days after the later of:
(a) the receipt by Sprint PCS of the written notice
of determination of the Entire Business Value by the appraisers
under Section 11.7; or
(b) the receipt of all materials required to be
delivered to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will
be deemed terminated. The exercise of the put, the determination of the
Operating Assets, the representations and warranties made by the Manager
with respect to the Operating Assets and the business, and the process for
closing the purchase will be subject to the terms and conditions set forth
in Section 11.8.
11.5.2 MANAGER'S PURCHASE RIGHT.
(a) If Sprint PCS owns 20 MHz or more of PCS
spectrum in the Service Area under the License on the date this
agreement is executed, then Manager may, subject to receipt of
FCC approval, purchase from Sprint PCS the Disaggregated
License for the greater of (1) the original cost of the License
to Sprint PCS (pro rated on a pops and spectrum basis) plus the
microwave relocation costs paid by Sprint PCS or (2) 9% (10%
minus a 10% penalty) of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing
of the purchase of the Disaggregated License will occur within
the later of:
(1) 20 days after the receipt by Manager of
the written notice of determination of the Entire
Business Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of
the Disaggregated License by the FCC.
The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect
to the Disaggregated License, and the process for closing the
purchase will be subject to the terms and conditions set forth
in Section 11.8.
(c) After the closing of the purchase Manager will
allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Product
and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 MANAGER'S ACTION FOR DAMAGES OR OTHER RELIEF. Manager,
in accordance with the dispute resolution process in Section 14, may seek
damages or other appropriate relief.
11.6 SPRINT PCS' EVENT OF TERMINATION RIGHTS AND REMEDIES. In
addition to any other right or remedy that Sprint PCS may have under this
agreement, the parties agree that Sprint PCS will have the rights and
remedies set forth in this Section 11.6 and that such rights and remedies
will survive the termination of this agreement. If Sprint PCS has a right
to terminate this agreement as the result of the occurrence of an Event of
Termination under Sections 11.3.2, 11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if
Sprint PCS is the non-bankrupt party), then Sprint PCS has the right to
elect one of the following four (4) remedies, except that (i) if Sprint PCS
elects the remedies under Sections 11.6.1, 11.6.2 or 11.6.4, Sprint PCS may
pursue its rights under Section 11.6.3 concurrently with its pursuit of one
of the other three remedies, (ii) Sprint PCS cannot elect its remedies
under Sections 11.6.1 or 11.6.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11.3.3 (unless
the Event of Termination is caused by a breach related to the Build-out
Plan or the build-out of the Service Area Network), and (iii) Sprint PCS
cannot elect its remedy under Section 11.6.2 during the first 2 years of
the Initial Term with respect to an Event of Termination under Section
11.3.6.
11.6.1 SPRINT PCS' PURCHASE RIGHT. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an
amount equal to 72% (80% minus a 10% penalty) of the Entire Business Value.
The closing of the purchase of the Operating Assets will occur within 20
days after the later of:
(a) the receipt by Sprint PCS of the written notice
of determination of the Entire Business Value by the appraisers
pursuant to Section 11.7; or
(b) the receipt of all materials required to be
delivered to Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will
be deemed terminated. The exercise of the purchase right, the determination
of the Operating Assets, the representations and warranties made by Manager
with respect to the Operating Assets and the business, and the process for
closing the purchase will be subject to the terms and conditions set forth
in Section 11.8.
11.6.2 SPRINT PCS' PUT RIGHT.
(a) Sprint PCS may, subject to receipt of FCC
approval, put to Manager the Disaggregated License for a
purchase price equal to the greater of (1) the original cost of
the License to Sprint PCS (pro rated on a pops and spectrum
basis) plus the microwave relocation costs paid by Sprint PCS
or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing
of the purchase of the Disaggregated License will occur within
the later of:
(1) 20 days after the receipt by Sprint PCS
of the written notice of determination of the Entire
Business Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of
the Disaggregated License by the FCC.
(c) The exercise of the put, the determination of
the geographic extent of the Disaggregated License coverage,
the representations and warranties made by Sprint PCS with
respect to the Disaggregated License, and the process for
closing the purchase will be subject to the terms and
conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives
notice of Sprint PCS' exercise of its put, advise Sprint PCS of
the amount of spectrum (not to exceed 10 MHz) it wishes to
purchase. After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products
and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 SPRINT PCS' RIGHT TO CAUSE A CURE.
(a) Sprint PCS' Right. Sprint PCS may, but is not
obligated to, take such action as it deems necessary to cure
Manager's breach of this agreement, including assuming
operational responsibility for the Service Area Network to
complete construction, continue operation, complete any
necessary repairs, implement changes necessary to comply with
the Program Requirements and terms of this agreement, or take
such other steps as are appropriate under the circumstances, or
Sprint PCS may designate a third party or parties to do the
same, to assure uninterrupted availability and deliverability
of Sprint PCS Products and Services in the Service Area, or to
complete the build-out of the Service Area Network in
accordance with the terms of this agreement. In the event that
Sprint PCS elects to exercise its right under this Section
11.6.3, Sprint PCS will give Manager written notice of such
election. Upon giving such notice:
(1) Manager will collect and make available
at a convenient, central location at its principal place
of business, all documents, books, manuals, reports and
records related to the Build-out Plan and required to
operate and maintain the Service Area Network; and
(2) Sprint PCS, its employees, contractors
and designated third parties will have the unrestricted
right to enter the facilities and offices of Manager for
the purpose of curing the breach and, if Sprint PCS deems
necessary, operate the Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the
extent requested by Sprint PCS to enable Sprint PCS to exercise
its rights under this Section 11.6.3.
(b) Liability. Sprint PCS' exercise of its rights
under this Section 11.6.3 will not be deemed an assumption by
Sprint PCS of any liability attributable to Manager or any
other party, except that, without limiting the provisions of
Section 13, during the period that Sprint PCS is curing a
breach under this agreement or operating any portion of the
Service Area Network pursuant to this Section 11.6.3, Sprint
PCS will indemnify and defend Manager and its directors,
partners, officers, employees and agents from and against, and
reimburse and pay for, all claims, demands, damages, losses,
judgments, awards, liabilities, costs and expenses (including
reasonable attorneys' fees, court costs and other expenses of
litigation), whether or not arising out of third party claims,
in connection with any suit, claim, action or other legal
proceeding relating to the bodily injury, sickness or death of
persons or the damage to or destruction of property, real or
personal, resulting from or arising out of Sprint PCS'
negligence or willful misconduct in curing the breach or in the
operation of the Service Area Network. Sprint PCS' obligation
under this Section 11.6.3(b) will not apply to the extent of
any claims, demands, damages, losses, judgments, awards,
liabilities, costs and expenses resulting from the negligence
or willful misconduct of Manager or arising from any
contractual obligation of Manager.
(c) Costs and Payments. During the period that
Sprint PCS is curing a breach or operating the Service Area
Network under this Section 11.6.3, Sprint PCS and Manager will
continue to make any and all payments due to the other party
and to third parties under this agreement, the Services
Agreement and any other agreements to which such party is
bound, except that Sprint PCS may deduct from its payments to
Manager all reasonable costs and expenses incurred by Sprint
PCS in connection with the exercise of its right under this
Section 11.6.3. Sprint PCS' operation of the Service Area
Network pursuant to this Section 11.6.3 is not a substitution
for Manager's performance of its obligations under this
agreement and does not relieve Manager of its other obligations
under this agreement.
(d) Length of Right. Sprint PCS may continue to
operate the Service Area Network in accordance with Section
11.6.3 until (i) Sprint PCS cures all breaches by Manager under
this agreement; (ii) Manager cures all breaches and
demonstrates to Sprint PCS' satisfaction that it is financially
and operationally willing, ready and able to perform in
accordance with this agreement and resumes such performance;
(iii) Sprint PCS consummates the purchase of the Operating
Assets under Section 11.6.1 or the sale of the Disaggregated
License under Section 11.6.2; or (iv) Sprint PCS terminates
this agreement.
(e) Not Under Services Agreement. The exercise by
Sprint PCS of its right under this Section 11.6.3 does not
represent services rendered under the Services Agreement, and
therefore it does not allow Manager to be deemed in compliance
with the Program Requirements under Sections 7.1(a)(ii),
8.1(b).
11.6.4 SPRINT PCS' ACTION FOR DAMAGES OR OTHER RELIEF. Sprint
PCS, in accordance with the dispute resolution process in Section 14, may
seek damages or other appropriate relief.
11.7 DETERMINATION OF ENTIRE BUSINESS VALUE.
11.7.1 APPOINTMENT OF APPRAISERS. Sprint PCS and Manager must
each designate an independent appraiser within 30 days after giving the
Purchase Notice under Exhibit 11.8. Sprint PCS and Manager will direct the
two appraisers to jointly select a third appraiser within 15 days after the
day the last of them is appointed. Each appraiser must be an expert in the
valuation of wireless telecommunications businesses. Sprint PCS and Manager
must direct the three appraisers to each determine, within 45 days after
the appointment of the last appraiser, the Entire Business Value. Sprint
PCS and Manager will each bear the costs of the appraiser appointed by it,
and they will share equally the costs of the third appraiser.
11.7.2 MANAGER'S OPERATING ASSETS. The following assets are
included in the Operating Assets (as defined in the Schedule of
Definitions):
(a) network assets, including all personal
property, real property interests in cell sites and switch
sites, leasehold interests, collocation agreements, easements,
and rights-of-way;
(b) all of the real, personal, tangible and
intangible property and contract rights that Manager owns and
uses in conducting the business of providing the Sprint PCS
Products and Services, including the goodwill resulting from
Manager's customer base;
(c) sale and distribution assets primarily
dedicated (i.e., at least 80% of their revenue is derived from
the sale of Sprint PCS Products and Services) to the sale by
Manager of Sprint PCS Products and Services. For example, a
retail store that derives at least 80% of its revenue from the
sale of Sprint PCS Products and Services is an Operating Asset.
A store that derives 65% of its revenue from Sprint PCS
Products and Services is not an Operating Asset;
(d) customers, if any, that use both the other
products and services approved under Section 3.2 and the Sprint
PCS Products and Services;
(e) handset inventory;
(f) books and records of the wireless business,
including all engineering drawings and designs and financial
records; and
(g) all contracts used by Manager in operating the
wireless business including T1 service agreements, service
contracts, interconnection agreements, distribution agreements,
software license agreements, equipment maintenance agreements,
sales agency agreements and contracts with all equipment
suppliers.
11.7.3 ENTIRE BUSINESS VALUE. Utilizing the valuation
principles set forth below and in Section 11.7.4, "ENTIRE BUSINESS VALUE"
means the fair market value of Manager's wireless business in the Service
Area, valued on a going concern basis.
(a) The fair market value is based on the price a
willing buyer would pay a willing seller for the entire
on-going business.
(b) The appraisers will use the then-current
customary means of valuing a wireless telecommunications
business.
(c) The business is conducted under the Brands and
existing agreements between the parties and their respective
Related Parties.
(d) Manager owns the Disaggregated License (in the
case where Manager will be buying the Disaggregated License
under Sections 11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2) or Manager
owns the spectrum and the frequencies actually used by Manager
under this agreement (in the case where Sprint PCS will be
buying the Operating Assets under Sections 11.2.1.1, 11.2.2.1,
11.5.1 or 11.6.1).
(e) The valuation will not include any value for
the business represented by Manager's Products and Services or
any business not directly related to Sprint PCS Products and
Services.
11.7.4 CALCULATION OF ENTIRE BUSINESS VALUE. The Entire
Business Value to be used to determine the purchase price of the Operating
Assets or the Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by
the appraisers is within 10% of the lowest fair market value,
then the Entire Business Value used to determine the purchase
price under this agreement will be the arithmetic mean of the
three appraised fair market values.
(b) If two of the fair market values determined by
the appraisers are within 10% of one another, and the third
value is not within 10% of the other fair market values, then
the Entire Business Value used to determine the purchase price
under this agreement will be the arithmetic mean of the two
more closely aligned fair market values.
(c) If none of the fair market values is within 10%
of the other two fair market values, then the Entire Business
Value used to determine the purchase price under this agreement
will be the middle value of the three fair market values.
11.8 CLOSING TERMS AND CONDITIONS. The closing terms and conditions
for the transactions contemplated in this Section 11 are attached as
Exhibit 11.8.
11.9 CONTEMPORANEOUS AND IDENTICAL APPLICATION. The parties agree
that any action regarding renewal or non-renewal and any Event of
Termination will occur contemporaneously and identically with respect to
all Licenses. For example, if Manager exercises its purchase right under
Section 11.5.2, it must exercise such right with respect to all of the
Licenses under this agreement. The Term of this agreement will be the same
for all Licenses; Manager will not be permitted to operate a portion of the
Service Area Network with fewer than all of the Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 BOOKS AND RECORDS.
12.1.1 GENERAL. Each party must keep and maintain books and
records to support and document any fees, costs, expenses or other charges
due in connection with the provisions set forth in this agreement. The
records must be retained for a period of at least 3 years after the fees,
costs, expenses or other charges to which the records relate have accrued
and have been paid, or such other period as may be required by law.
12.1.2 AUDIT. On reasonable advance notice, each party must
provide access to appropriate records to the independent auditors selected
by the other party for purposes of auditing the amount of fees, costs,
expenses or other charges payable in connection with the Service Area with
respect to the period audited. The auditing party will conduct the audit no
more frequently than annually. If the audit shows that Sprint PCS was
underpaid then, unless the amount is contested, Manager will pay to Sprint
PCS the amount of the underpayment within 10 Business Days after Sprint PCS
gives Manager written notice of the determination of the underpayment. If
the audit determines that Sprint PCS was overpaid then, unless the amount
is contested, Sprint PCS will pay to Manager the amount of the overpayment
within 10 Business Days after Sprint PCS determines Sprint PCS was
overpaid. The auditing party will pay all costs and expenses related to the
audit unless the amount owed to the audited party is reduced by more than
10% or the amount owed by the audited party is increased by more than 10%,
in which case the costs and expenses related to the audit will be paid by
the audited party.
Notwithstanding the above provisions of this Section 12.1.2, rather
than allow Manager's independent auditors access to Sprint PCS' records,
Sprint PCS may provide a report issued in conformity with Statement of
Auditing Standard No. 70 "Reports on the Processing of Transactions by
Service Organizations" ("TYPE II REPORT" or "MANAGER MANAGEMENT REPORT").
Such report will be prepared by independent auditors and will provide an
opinion on the controls placed in operation and tests of operating
effectiveness of those controls in effect at Sprint PCS over the Manager
Management Processes. "Manager Management Processes" include those services
generally provided within the Management Agreement, primarily billing and
collection of Collected Revenues.
12.1.3 CONTESTING AN AUDIT. If the party that did not select
the independent auditor does not agree with the findings of the audit, then
such party can contest the findings by providing notice of such
disagreement to the other party (the "DISPUTE NOTICE"). The date of
delivery of such notice is the "DISPUTE NOTICE DATE." If the parties are
unable to resolve the disagreement within 10 Business Days after the
Dispute Notice Date, they will resolve the disagreement in accordance with
the following procedures.
The two parties and the auditor that conducted the audit will all
agree on an independent certified public accountant with a regional or
national accounting practice in the wireless telecommunications industry
(the "ARBITER") within 15 Business Days after the Dispute Notice Date. If,
within 15 Business Days after the Dispute Notice Date, the three parties
fail to agree on the Arbiter, then at the request of either party to this
agreement, the Arbiter will be selected pursuant to the rules then in
effect of the American Arbitration Association. Each party will submit to
the Arbiter within 5 Business Days after its selection and engagement all
information reasonably requested by the Arbiter to enable the Arbiter to
independently resolve the issue that is the subject of the Dispute Notice.
The Arbiter will make its own determination of the amount of fees, costs,
expenses or other charges payable under this agreement with respect to the
period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to
the parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter
will be final and binding and may be enforced by any court having
jurisdiction. The parties will cooperate fully in assisting the Arbiter and
will take such actions as are necessary to expedite the completion of and
to cause the Arbiter to expedite its assignment.
If the amount owed by a contesting party is reduced by more than 10%
or the amount owed to a contesting party is increased by more than 10% then
the non-contesting party will pay the costs and expenses of the Arbiter,
otherwise the contesting party will pay the costs and expenses of the
Arbiter.
12.2 CONFIDENTIAL INFORMATION.
(a) Except as specifically authorized by this agreement, each
of the parties must, for the Term and 3 years after the date of termination
of this agreement, keep confidential, not disclose to others and use only
for the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this
agreement, except that the foregoing obligation will not apply to the
extent that any Confidential Information:
(i) is or becomes, after disclosure to a party, publicly
known by any means other than through unauthorized acts or omissions
of the party or its agents; or
(ii) is disclosed in good faith to a party by a third
party entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or
that subsequently comes into the public domain, through no fault of
the receiving party;
(ii) prior to the effective date of this agreement was
properly within the legitimate possession of the receiving party, or
subsequent to the effective date of this agreement, is lawfully
received from a third party having rights to publicly disseminate the
Confidential Information without any restriction and without notice
to the recipient of any restriction against its further disclosure;
(iii) is independently developed by the receiving party
through persons or entities who have not had, either directly or
indirectly, access to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the
terms of the written approval of the party originally disclosing the
information;
(v) is required by the receiving party to be produced
under order of a court of competent jurisdiction or other similar
requirements of a governmental agency, and the Confidential
Information will otherwise continue to be Confidential Information
required to be held confidential for purposes of this agreement;
(vi) is required by the receiving party to be disclosed
by applicable law or a stock exchange or association on which the
receiving party's securities (or those of its Related Parties) are or
may become listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule
501(a) under the Securities Act of 1933) that is considering
providing financing to the receiving party and which financial
institution or accredited investor has agreed to keep the
Confidential Information confidential in accordance with an agreement
at least as restrictive as this Section 12.2.
(c) Notwithstanding the foregoing, Manager and Sprint PCS
authorize each other to disclose to the public in regulatory filings the
other's identity and the Service Area to be developed and managed by
Manager, and Manager authorizes Sprint PCS to mention Manager and the
Service Area in public relations announcements.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as
is reasonably necessary to enable the disclosing party to take action to,
and use the party's reasonable best efforts to, limit the disclosure and
maintain confidentiality to the extent practicable.
(e) Manager will not except when serving in the capacity of
Manager under this agreement, use any Confidential Information of any kind
that it receives under or in connection with this agreement. For example,
if Manager operates a wireless company in a different license area, Manager
may not use any of the Confidential Information received under or in
connection with this agreement in operating the other wireless business.
12.3 INSURANCE
12.3.1 GENERAL. During the term of this agreement, Manager must
obtain and maintain, and will cause any subcontractors to obtain and
maintain, with financially reputable insurers licensed to do business in
all jurisdictions where any work is performed under this agreement and who
are reasonably acceptable to Sprint PCS, the insurance described in the
Sprint PCS Insurance Requirements. The Sprint PCS Insurance Requirements as
of the date of this agreement are attached as Exhibit 12.3. Sprint PCS may
modify the Sprint PCS Insurance Requirements as is commercially reasonable
from time to time by delivering to Manager a new Exhibit 12.3.
12.3.2 WAIVER OF SUBROGATION. Manager must look first to any
insurance in its favor before making any claim against Sprint PCS or
Sprint, and their respective directors, officers, employees, agents or
representatives for recovery resulting from injury to any person (including
Manager's or its subcontractor's employees) or damage to any property
arising from any cause, regardless of negligence. Manager does hereby
release and waive to the fullest extent permitted by law, and will cause
its respective insurers to waive, all rights of recovery by subrogation
against Sprint PCS or Sprint, and their respective directors, officers,
employees, agents or representatives.
12.3.3 CERTIFICATES OF INSURANCE. Manager and all of its
subcontractors, if any, must, as a material condition of this agreement and
prior to the commencement of any work under and any renewal of this
agreement, deliver to Sprint PCS a certificate of insurance, satisfactory
in form and content to Sprint PCS, evidencing that the above insurance,
including waiver of subrogation, is in force and will not be canceled or
materially altered without first giving Sprint PCS at least 30 days prior
written notice and that all coverages are primary to any insurance carried
by Sprint PCS, its directors, officers, employees, agents or
representatives.
Nothing contained in this Section 12.3.3 will limit Manager's
liability to Sprint PCS, its directors, officers, employees, agents or
representatives to the limits of insurance certified or carried.
13. INDEMNIFICATION
13.1 INDEMNIFICATION BY SPRINT PCS. Sprint PCS agrees to indemnify,
defend and hold harmless Manager, its directors, managers, officers,
employees, agents and representatives from and against any and all claims,
demands, causes of action, losses, actions, damages, liability and expense,
including costs and reasonable attorneys' fees, against Manager, its
directors, managers, officers, employees, agents and representatives
arising from or relating to the violation by Sprint PCS of any law,
regulation or ordinance applicable to Sprint PCS or by Sprint PCS' breach
of any representation, warranty or covenant contained in this agreement or
any other agreement between Sprint PCS or Sprint PCS' Related Parties and
Manager or Manager's Related Parties except where and to the extent the
claim, demand, cause of action, loss, action, damage, liability and/or
expense results solely from the negligence or willful misconduct of
Manager.
13.2 INDEMNIFICATION BY MANAGER. Manager agrees to indemnify, defend
and hold harmless Sprint PCS and Sprint, and their respective directors,
managers, officers, employees, agents and representatives from and against
any and all claims, demands, causes of action, losses, actions, damages,
liability and expense, including costs and reasonable attorneys' fees,
against Sprint PCS or Sprint, and their respective directors, managers,
officers, employees, agents and representatives arising from or relating to
Manager's violation of any law, regulation or ordinance applicable to
Manager, Manager's breach of any representation, warranty or covenant
contained in this agreement or any other agreement between Manager or
Manager's Related Parties and Sprint PCS and Sprint PCS' Related Parties,
Manager's ownership of the Operating Assets or the operation of the Service
Area Network, or the actions or failure to act of any of Manager's
contractors, subcontractors, agents, directors, managers, officers,
employees and representatives of any of them in the performance of any work
under this agreement, except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and expense results solely
from the negligence or willful misconduct of Sprint PCS or Sprint, as the
case may be.
13.3 PROCEDURE.
13.3.1 NOTICE. Any party being indemnified ("INDEMNITEE") will
give the party making the indemnification ("INDEMNITOR") written notice as
soon as practicable but no later than 5 Business Days after the party
becomes aware of the facts, conditions or events that give rise to the
claim for indemnification if:
(a) any claim or demand is made or liability is
asserted against Indemnitee; or
(b) any suit, action, or administrative or legal
proceeding is instituted or commenced in which Indemnitee is
involved or is named as a defendant either individually or with
others.
Failure to give notice as described in this Section 13.3.1 does not
modify the indemnification obligations of this provision, except if
Indemnitee is harmed by failure to provide timely notice to Indemnitor,
then Indemnitor does not have to indemnify Indemnitee for the harm caused
by the failure to give the timely notice.
13.3.2 DEFENSE BY INDEMNITOR. If within 30 days after giving
notice Indemnitee receives written notice from Indemnitor stating that
Indemnitor disputes or intends to defend against the claim, demand,
liability, suit, action or proceeding, then Indemnitor will have the right
to select counsel of its choice and to dispute or defend against the claim,
demand, liability, suit, action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or
defense so long as Indemnitor is conducting the dispute or defense
diligently and in good faith. Indemnitor is not permitted to settle the
dispute or claim without the prior written approval of Indemnitee, which
approval will not be unreasonably withheld. Even though Indemnitor selects
counsel of its choice, Indemnitee has the right to retain additional
representation by counsel of its choice to participate in the defense at
Indemnitee's sole cost and expense.
13.3.3 DEFENSE BY INDEMNITEE. If no notice of intent to dispute
or defend is received by Indemnitee within the 30-day period, or if a
diligent and good faith defense is not being or ceases to be conducted,
Indemnitee has the right to dispute and defend against the claim, demand or
other liability at the sole cost and expense of Indemnitor and to settle
the claim, demand or other liability, and in either event to be indemnified
as provided in this Section 13.3.3. Indemnitee is not permitted to settle
the dispute or claim without the prior written approval of Indemnitor,
which approval will not be unreasonably withheld.
13.3.4 COSTS. Indemnitor's indemnity obligation includes
reasonable attorneys' fees, investigation costs, and all other reasonable
costs and expenses incurred by Indemnitee from the first notice that any
claim or demand has been made or may be made, and is not limited in any way
by any limitation on the amount or type of damages, compensation, or
benefits payable under applicable workers' compensation acts, disability
benefit acts, or other employee benefit acts.
14. DISPUTE RESOLUTION
14.1 NEGOTIATION. The parties will attempt in good faith to resolve
any dispute arising out of or relating to this agreement promptly by
negotiation between or among representatives who have authority to settle
the controversy. Either party may escalate any dispute not resolved in the
normal course of business to the appropriate (as determined by the party)
officers of the parties by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place,
and thereafter as often as they deem reasonably necessary, to exchange
relevant information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party,
to escalate any dispute arising out of or relating to the determination of
fees that is not resolved in the normal course of business or by the audit
process set forth in Sections 12.1.2 and 12.1.3, first to the appropriate
financial or accounting officers to be designated by each party. The
designated officers will meet in the manner described in the preceding
paragraph. If the matter has not been resolved by the designated officers
within 30 days after the notifying party's notice, either party may elect
to escalate the dispute to the appropriate (as determined by the party)
officers in accordance with the prior paragraphs of this Section 14.1.
14.2 UNABLE TO RESOLVE. If a dispute has not been resolved within 60
days after the notifying party's notice, either party may continue to
operate under this agreement and xxx the other party for damages or seek
other appropriate remedies as provided in this agreement. If, and only if,
this agreement does not provide a remedy (as in the case of Sections 3.4
and 4.5, where the parties are supposed to reach an agreement), then either
party may give the other party written notice that it wishes to resolve the
dispute or claim arising out of the parties' inability to agree under such
Sections of this agreement by using the arbitration procedure set forth in
this Section 14.2. Such arbitration will occur in Kansas City, Missouri,
unless the parties otherwise mutually agree, with the precise location
being as agreed upon by the parties or, absent such agreement, at a
location in Kansas City, Missouri selected by Sprint PCS. Such arbitration
will be conducted pursuant to the procedures prescribed by the Missouri
Uniform Arbitration Act, as amended from time to time, or, if none,
pursuant to the rules then in effect of the American Arbitration
Association (or at any other place and by any other form of arbitration
mutually acceptable to the parties). Any award rendered in such arbitration
will be confidential and will be final and conclusive upon the parties, and
a judgment on the award may be entered in any court of the forum, state or
federal, having jurisdiction. The expenses of the arbitration will be borne
equally by the parties to the arbitration, except that each party must pay
for and bear the cost of its own experts, evidence, and attorneys' fees.
The parties must each, within 30 days after either party gives notice
to the other party of the notifying party's desire to resolve a dispute or
claim under the arbitration procedure in this Section 14.2, designate an
independent arbitrator, who is knowledgeable with regard to the wireless
telecommunications industry, to participate in the arbitration hearing. The
two arbitrators thus selected will select a third independent arbitrator,
who is knowledgeable with regard to the wireless telecommunications
industry, who will act as chairperson of the board of arbitration. If,
within 15 days after the day the last of the two named arbitrators is
appointed, the two named arbitrators fail to agree upon the third, then at
the request of either party, the third arbitrator shall be selected
pursuant to the rules then in effect of the American Arbitration
Association. The three independent arbitrators will comprise the board of
arbitration, which will preside over the arbitration hearing and will
render all decisions by majority vote. If either party refuses or neglects
to appoint an independent arbitrator within such 30-day period, the
independent arbitrator who has been appointed as of the 31st day after the
notifying party's notice will be the sole independent arbitrator and will
solely preside over the arbitration hearing. The arbitration hearing will
commence no sooner than 30 days after the date the last arbitrator is
appointed and no later than 60 days after such date. The arbitration
hearing will be conducted during normal working hours on Business Days
without interruption or adjournment of more than 2 Business Days at any one
time or 6 Business Days in the aggregate.
The arbitrators will deliver their decision to the parties in writing
within 10 days after the conclusion of the arbitration hearing. The
arbitration award will be accompanied by findings of fact and a statement
of reasons for the decision. There will be no appeal from the written
decision, except as permitted by applicable law. The arbitration
proceedings, the arbitrators' decision, the arbitration award, and any
other aspect, matter, or issue of or relating to the arbitration are
confidential, and disclosure of such confidential information is an
actionable breach of this agreement.
Notwithstanding any other provision of this agreement, arbitration
will not be required of any issue for which injunctive relief is properly
sought by either party.
14.3 ATTORNEYS AND INTENT. If an officer intends to be accompanied at
a meeting by an attorney, the other party's officer will be given at least
3 Business Days prior notice of the intention and may also be accompanied
by an attorney. All negotiations under Section 14.1 are confidential and
will be treated as compromise and settlement negotiations for purposes of
the Federal Rules of Civil Procedure and state rules of evidence and civil
procedure.
14.4 TOLLING OF CURE PERIODS. Any cure period under Section 11.3 that
is less than 90 days will be tolled during the pendency of the dispute
resolution process. Any cure period under Section 11.3 that is 90 days or
longer will not be tolled during the pendency of the dispute resolution
process.
15. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and
warranties to the other party:
15.1 DUE INCORPORATION OR FORMATION; AUTHORIZATION OF AGREEMENTS. The
party is either a corporation, limited liability company, or limited
partnership duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Manager is qualified to do
business and is in good standing in every jurisdiction in which the Service
Area is located. The party has the full power and authority to execute and
deliver this agreement and to perform its obligations under this agreement.
15.2 VALID AND BINDING OBLIGATION. This agreement constitutes the
valid and binding obligation of the party, enforceable in accordance with
its terms, except as may be limited by principles of equity or by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally.
15.3 NO CONFLICT; NO DEFAULT. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction,
decree, determination or award of any governmental authority or any
arbitrator, applicable to such party, (b) any term, condition or provision
of the articles of incorporation, certificate of limited partnership,
certificate of organization, bylaws, partnership agreement or limited
liability company agreement (or other governing documents) of such party or
of any material agreement or instrument to which such party is or may be
bound or to which any of its material properties or assets is subject.
15.4 LITIGATION. No action, suit, proceeding or investigation is
pending or, to the knowledge of the party, threatened against or affecting
the party or any of its properties, assets or businesses in any court or
before or by any governmental agency that could, if adversely determined,
reasonably be expected to have a material adverse effect on the party's
ability to perform its obligations under this agreement. The party has not
received any currently effective notice of any default that could
reasonably be expected to result in a breach of the preceding sentence.
16. REGULATORY COMPLIANCE
16.1 REGULATORY COMPLIANCE. Manager will construct, operate, and
manage the Service Area Network in compliance with applicable federal,
state, and local laws and regulations, including Siting Regulations.
Nothing in this Section 16.1 will limit Manager's obligations under Section
2.2 and the remainder of this Section 16. Manager acknowledges that failure
to comply with applicable federal, state, and local laws and regulations in
its construction, operation, and management of the Service Area Network may
subject the parties and the License to legal and administrative agency
actions, including forfeiture penalties and actions that affect the
License, such as license suspension and revocation, and accordingly,
Manager agrees that it will cooperate with Sprint PCS to maintain the
License in full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those
Siting Regulations practices and procedures as may be requested by Sprint
PCS. Every six months, and at the request of Sprint PCS, Manager will
provide a written certification from one of Manager's chief officers that
Manager's Service Area Network complies with Siting Regulations. Manager's
first certification of compliance with Siting Regulations will be provided
to Sprint PCS six months after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service
Area Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will
bear the cost of Siting Regulations compliance audits and physical
inspections requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records.
Manager will make those records available upon request to Sprint PCS for
production, inspection, and copying in the manner specified by Sprint PCS.
Sprint PCS will bear the cost of production, inspection, and copying.
16.2 FCC COMPLIANCE. The parties agree to comply with all applicable
FCC rules governing the License or the Service Area Network and
specifically agree as follows:
(a) The party billing a customer will advise the customer that
service is provided over spectrum licensed to Sprint PCS. Neither Manager
nor Sprint PCS will represent itself as the legal representative of the
other before the FCC or any other third party, but will cooperate with each
other with respect to FCC matters concerning the License or the Service
Area Network.
(b) Sprint PCS will use commercially reasonable efforts to
maintain the License in accordance with the terms of the License and all
applicable laws, policies and regulations and to comply in all material
respects with all other legal requirements applicable to the operation of
the Sprint PCS Network and its business. Sprint PCS has sole
responsibility, except as specifically provided otherwise in Section 2.2,
for keeping the License in full force and effect and for preparing
submissions to the FCC or any other relevant federal, state or local
authority of all reports, applications, interconnection agreements,
renewals, or other filings or documents. Manager must cooperate and
coordinate with Sprint PCS' actions to comply with regulatory requirements,
which cooperation and coordination must include, without limitation, the
provision to Sprint PCS of all information that Sprint PCS deems necessary
to comply with the regulatory requirements. Manager must refrain from
taking any action that could impede Sprint PCS from fulfilling its
obligations under the preceding sentence, and must not take any action that
could cause Sprint PCS to forfeit or cancel the License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and
applicable FCC rules. Nothing in this agreement is intended to diminish or
restrict Sprint PCS' obligations as an FCC Licensee and both parties desire
that this agreement and each party's obligations under this agreement be in
compliance with the FCC rules.
(d) Nothing in this agreement will preclude Sprint PCS from
permitting or facilitating resale of Sprint PCS Products and Services to
the extent required or elected under applicable FCC regulations. Manager
will take the actions necessary to facilitate Sprint PCS' compliance with
FCC regulations. To the extent permitted by applicable regulations, Sprint
PCS will not authorize a reseller that desires to sell services and
products in only the Service Area to resell Sprint PCS wholesale products
and services, unless Manager agrees in advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to
obtain FCC consent for the implementation, continuation or further
effectuation of any term or provision of this agreement, Sprint PCS will
use all commercially reasonable efforts diligently to prepare, file and
prosecute before the FCC all petitions, waivers, applications, amendments,
rule-making comments and other related documents necessary to secure and/or
retain FCC approval of all aspects of this agreement. Manager will use
commercially reasonable efforts to provide to Sprint PCS any information
that Sprint PCS may request from Manager with respect to any matter
involving Sprint PCS, the FCC, the License, the Sprint PCS Products and
Services or any other products and services approved under Section 3.2.
Each party will bear its own costs of preparation of the documents and
prosecution of the actions.
(f) If the FCC determines that this agreement is inconsistent
with the terms and conditions of the License or is otherwise contrary to
FCC policies, rules and regulations, or if regulatory or legislative action
subsequent to the date of this agreement alters the permissibility of this
agreement under the FCC's rules or other applicable law, rules or
regulations, then the parties must use best efforts to modify this
agreement as necessary to cause this agreement (as modified) to comply with
the FCC policies, rules, regulations and applicable law and to preserve to
the extent possible the economic arrangements set forth in this agreement.
(g) Manager warrants and represents to Sprint PCS that Manager
is and at all times during the Term of this agreement will be in compliance
with FCC rules and regulations regarding limits on classes and amounts of
spectrum that may be owned by Manager. Manager agrees that in the event
that Manager is or at any time becomes in violation of such rules and
regulations, Manager will promptly take all action necessary and
appropriate (other than terminating this agreement) to cure such violation
and comply with such rules and regulations, including without limitation
disposing of its direct or indirect interests in cellular licenses.
16.3 MARKING AND LIGHTING. Manager will conform to applicable FAA
standards when Siting Regulations require marking and lighting of Manager's
Service Area Network cell sites. Manager will cooperate with Sprint PCS in
reporting lighting malfunctions as required by Siting Regulations.
16.4 REGULATORY NOTICES. Manager will, within 2 Business Days after
its receipt, give Sprint PCS written notice of all oral and written
communications it receives from regulatory authorities (including but not
limited to the FCC, the FAA, state public service commissions,
environmental authorities, and historic preservation authorities) and
complaints respecting Manager's construction, operation, and management of
the Service Area Network that could result in actions affecting the License
as well as written notice of the details respecting such communications and
complaints, including a copy of any written material received in connection
with such communications and complaints. Manager will cooperate with Sprint
PCS in responding to such communications and complaints received by
Manager. Sprint PCS has the right to respond to all such communications and
complaints, with counsel and consultants of its own choice. If Sprint PCS
chooses to respond to such communications and complaints, Manager will not
respond to them without the consent of Sprint PCS, and Manager will pay the
costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs,
and all other reasonable costs and expenses incurred by Sprint PCS.
16.5 REGULATORY POLICY-SETTING PROCEEDINGS. Manager will not
intervene in or otherwise participate in a rulemaking, investigation,
inquiry, contested case, or similar regulatory policy setting proceedings
before a regulatory authority concerning the License or construction,
operation, and management of the Service Area Network and the Sprint PCS
business operated using the Service Area Network.
17. GENERAL PROVISIONS
17.1 NOTICES. Any notice, payment, demand, or communication required
or permitted to be given by any provision of this agreement must be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested), sent by hand or overnight courier, or sent by facsimile
(with acknowledgment received and a copy sent by overnight courier),
charges prepaid and addressed as described on the Notice Address Schedule
attached to the Master Signature Page, or to any other address or number as
the person or entity may from time to time specify by written notice to the
other parties.
All notices and other communications given to a party in accordance
with the provisions of this agreement will be deemed to have been given
when received.
17.2 CONSTRUCTION. This agreement will be construed simply according
to its fair meaning and not strictly for or against either party.
17.3 HEADINGS. The table of contents, section and other headings
contained in this agreement are for reference purposes only and are not
intended to describe, interpret, define, limit or expand the scope, extent
or intent of this agreement.
17.4 FURTHER ACTION. Each party agrees to perform all further acts
and execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes
of this agreement.
17.5 COUNTERPART EXECUTION. This agreement will be executed by
affixing the parties' signatures to the Master Signature Page, which Master
Signature Page, and thus this agreement, may be executed in any number of
counterparts with the same effect as if both parties had signed the same
document. All counterparts will be construed together and will constitute
one agreement.
17.6 SPECIFIC PERFORMANCE. Each party agrees with the other party
that the party would be irreparably damaged if any of the provisions of
this agreement were not performed in accordance with their specific terms
and that monetary damages alone would not provide an adequate remedy.
Accordingly, in addition to any other remedy to which the non-breaching
party may be entitled, at law or in equity, the non-breaching party will be
entitled to injunctive relief to prevent breaches of this agreement and
specifically to enforce the terms and provisions of this agreement.
17.7 ENTIRE AGREEMENT; AMENDMENTS. The provisions of this agreement,
the Services Agreement and the Trademark License Agreements (including the
exhibits to those agreements) set forth the entire agreement and
understanding between the parties as to the subject matter of this
agreement and supersede all prior agreements, oral or written, and other
communications between the parties relating to the subject matter of this
agreement. Except for Sprint PCS' right to amend the Program Requirements
in accordance with Section 9.2 and its right to unilaterally modify and
amend certain other provisions as expressly provided in this agreement,
this agreement may be modified or amended only by a written amendment
signed by persons or entities authorized to bind each party and, with
respect to the sections set forth for Sprint on the Master Signature Page,
the persons or entities authorized to bind Sprint.
17.8 LIMITATION ON RIGHTS OF OTHERS. Except as set forth on the
Master Signature Page for Sprint, nothing in this agreement, whether
express or implied, will be construed to give any person or entity other
than the parties any legal or equitable right, remedy or claim under or in
respect of this agreement.
17.9 WAIVERS.
17.9.1 WAIVERS--GENERAL. The observance of any term of this
agreement may be waived (whether generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce the
term, but any waiver is effective only if in a writing signed by the party
against which the waiver is to be asserted. Except as otherwise provided in
this agreement, no failure or delay of either party in exercising any power
or right under this agreement will operate as a waiver of the power or
right, nor will any single or partial exercise of any right or power
preclude any other or further exercise of the right or power or the
exercise of any other right or power.
17.9.2 WAIVERS--MANAGER. Manager is not in breach of any
covenant in this agreement and no Event of Termination will have occurred
as a result of the occurrence of any event, if Manager had delegated to
Sprint Spectrum under the Services Agreement (or any successor to that
agreement) responsibility for taking any action necessary to ensure
compliance with the covenant or to prevent the occurrence of the event.
17.9.3 FORCE MAJEURE. Neither Manager nor Sprint PCS, as the
case may be, is in breach of any covenant in this agreement and no Event of
Termination will occur as a result of the failure of such party to comply
with such covenant, if such party's non-compliance with the covenant
results primarily from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the party's ability to comply with
the covenant;
(ii) the failure of any governmental authority to grant
any consent, approval, waiver, or authorization or any delay on the
part of any governmental authority in granting any consent, approval,
waiver or authorization;
(iii) the failure of any vendor to deliver in a timely
manner any equipment or services; or
(iv) any act of God, act of war or insurrection, riot,
fire, accident, explosion, labor unrest, strike, civil unrest, work
stoppage, condemnation or any similar cause or event not reasonably
within the control of such party.
17.10 WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
17.11 BINDING EFFECT. Except as otherwise provided in this agreement,
this agreement is binding upon and inures to the benefit of the parties and
their respective and permitted successors, transferees, and assigns,
including any permitted successor, transferee or assignee of the Service
Area Network or of the License. The parties intend that this agreement bind
only the party signing this agreement and that the agreement is not binding
on the Related Parties of a party unless the agreement expressly provides
that Related Parties are bound.
17.12 GOVERNING LAW. The internal laws of the State of Missouri
(without regard to principles of conflicts of law) govern the validity of
this agreement, the construction of its terms, and the interpretation of
the rights and duties of the parties.
17.13 SEVERABILITY. The parties intend every provision of this
agreement to be severable. If any provision of this agreement is held to be
illegal, invalid, or unenforceable for any reason, the parties intend that
a court enforce the provision to the maximum extent permissible so as to
effect the intent of the parties (including the enforcement of the
remaining provisions). If necessary to effect the intent of the parties,
the parties will negotiate in good faith to amend this agreement to replace
the unenforceable provision with an enforceable provision that reflects the
original intent of the parties.
17.14 LIMITATION OF LIABILITY. NO PARTY WILL BE LIABLE TO THE OTHER
PARTY FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR
PUNITIVE DAMAGES, OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE
PARTIES OR THE CONDUCT OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT,
EXCEPT WHERE SUCH DAMAGES OR LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A
THIRD PARTY IN A CLAIM OR ACTION AGAINST WHICH A PARTY TO THIS AGREEMENT
HAS A SPECIFIC OBLIGATION TO INDEMNIFY ANOTHER PARTY TO THIS AGREEMENT.
17.15 NO ASSIGNMENT; EXCEPTIONS.
17.15.1 GENERAL. Neither party will, directly or indirectly,
assign this agreement or any of the party's rights or obligations under
this agreement without the prior written consent of the other party, except
as otherwise specifically provided in this Section 17.15. Sprint PCS may
deny its consent to any assignment or transfer in its sole discretion
except as otherwise provided in this Section 17.15.
Any attempted assignment of this agreement in violation of this
Section 17.15 will be void and of no effect.
A party may assign this agreement to a Related Party of the party,
except that Manager cannot assign this agreement to a Related Party that is
a significant competitor of Sprint, Sprint PCS or their respective Related
Parties in the telecommunications business. Except as provided in Section
17.15.5, an assignment does not release the assignor from its obligations
under this agreement unless the other party to this agreement consents in
writing in advance to the assignment and expressly grants a release to the
assignor.
Except as provided in Section 17.15.5, Sprint PCS must not assign
this agreement to any entity that does not also own the License covering
the Service Area directly or indirectly through a Related Party. Manager
must not assign this agreement to any entity (including a Related Party),
unless such entity assumes all rights and obligations under the Services
Agreement, the Trademark License Agreements and any related agreements.
17.15.2 ASSIGNMENT RIGHT OF MANAGER TO FINANCIAL LENDER. If
Manager is no longer able to satisfy its financial obligations and other
duties, then Manager has the right to assign its obligations and rights
under this agreement to its Financial Lender, if:
(a) Manager or Financial Lender provides Sprint PCS at least 10
days advance written notice of such assignment;
(b) Financial Lender cures or commits to cure any outstanding
material breach of this agreement by Manager prior to the end of any
applicable cure period. If Financial Lender fails to make a timely cure
then Sprint PCS may exercise its rights under Section 11;
(c) Financial Lender agrees to serve as an interim trustee for
the obligations and duties of Manager under this agreement for a period not
to exceed 180 days. During this interim period, Financial Lender must
identify a proposed successor to assume the obligations and rights of
Manager under this agreement;
(d) Financial Lender assumes all of Manager's rights and
obligations under the Services Agreement, the Trademark License Agreements
and any related agreements; and
(e) Financial Lender provides to Sprint PCS advance written
notice of the proposed successor to Manager that Financial Lender has
identified ("SUCCESSOR NOTICE"). Sprint PCS may give to Financial Lender
written notice of Sprint PCS' decision whether to consent to such proposed
successor within 30 days after Sprint PCS' receipt of the Successor Notice.
Sprint PCS may not unreasonably withhold such consent, except that Sprint
PCS is not required to consent to a proposed successor that:
(i) has, in the past, materially breached prior
agreements with Sprint PCS or its Related Parties;
(ii) is a significant competitor of Sprint PCS or its
Related Parties in the telecommunications business;
(iii) does not meet Sprint PCS' reasonable credit
criteria;
(iv) fails to execute an assignment of all relevant
documents related to this agreement including the Services Agreement
and the Trademark License Agreements; or
(v) refuses to assume the obligations of Manager under
this Agreement, the Services Agreement, the Trademark License
Agreements and any related agreements.
If Sprint PCS fails to provide a response to Financial Lender within
30 days after receiving the Successor Notice, then the proposed successor
is deemed rejected. Any Financial Lender disclosed on the Build-out Plan on
Exhibit 2.1 is deemed acceptable to Sprint PCS.
17.15.3 CHANGE OF CONTROL RIGHTS. If there is a Change of
Control of Manager, then:
(a) Manager must provide to Sprint PCS advance written notice
detailing relevant and appropriate information about the new ownership
interests effecting the Change of Control of Manager.
(b) Sprint PCS must provide to Manager written notice of its
decision whether to consent to or reject the proposed Change of Control
within 30 days after its receipt of such notice. Sprint PCS may not
unreasonably withhold such consent, except that Sprint PCS is not required
to consent to a Change of Control in which:
(i) the final controlling entity or any of its Related
Parties has in the past materially breached prior agreements with
Sprint PCS or its Related Parties;
(ii) the final controlling entity or any of its Related
Parties is a significant competitor of Sprint PCS or its Related
Parties in the telecommunications business;
(iii) the final controlling entity does not meet Sprint
PCS' reasonable credit criteria;
(iv) the final controlling entity fails to execute an
assignment of all relevant documents related to this agreement
including the Services Agreement and the Trademark License
Agreements; or
(v) the final controlling entity or its Related Parties
refuse to assume the obligations of Manager under this agreement.
(c) In the event that Sprint PCS provides notice that it does
not consent to the Change of Control, Manager is entitled to either:
(i) contest such determination pursuant to the dispute
resolution procedure in Section 14; or
(ii) abandon the proposed Change of Control.
(d) Nothing in this agreement requires Sprint PCS' consent to:
(i) a public offering of Manager that does not result in
a Change of Control (i.e., a shift from one party being in control to
no party being in control is not a Change of Control); or
(ii) a recapitalization or restructuring of the ownership
interests of Manager that Manager determines is necessary to:
(A) facilitate the acquisition of commercial
financing and lending arrangements that will support Manager's
operations and efforts to fulfill its obligations under this
agreement; and
(B) that does not constitute a Change of Control.
(e) "CHANGE OF CONTROL" means a situation where in any one
transaction or series of related transactions occurring during any 365-day
period, the ultimate parent entity of the Manager changes. The ultimate
parent entity is to be determined using the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 rules. A Change of Control does not occur if:
(i) a party changes the form of its organization without
materially changing their ultimate ownership (e.g., converting from a
limited partnership to a limited liability company); or
(ii) one of the owners of the party on the date of this
agreement or on the date of the closing of Manager's initial equity
offering for purposes of financing its obligations under this
agreement ultimately gains control over the party, unless such party
is a significant competitor of Sprint PCS or Sprint PCS' Related
Parties in the telecommunications business.
17.15.4 RIGHT OF FIRST REFUSAL. Notwithstanding any other
provision in this agreement, Manager grants Sprint PCS the right of first
refusal described below. If Manager determines it wishes to sell an Offered
Interest, upon receiving any Offer to purchase an Offered Interest, Manager
agrees to promptly deliver to Sprint PCS an Offer Notice. The Offer Notice
is deemed to constitute an offer to sell to Sprint PCS, on the terms set
forth in the Offer, all but not less than all of the Offered Interest.
Sprint PCS will have a period of 60 days from the date of the Offer Notice
to notify Manager that it agrees to purchase the Offered Interest on such
terms. If Sprint PCS timely agrees in writing to purchase the Offered
Interest, the parties will proceed to consummate such purchase not later
than the 180th day after the date of the Offer Notice. If Sprint PCS does
not agree within the 60-day period to purchase the Offered Interest,
Manager will have the right, for a period of 120 days after such 60th day,
subject to the restrictions set forth in this Section 17, to sell to the
person or entity identified in the Offer Notice all of the Offered Interest
on terms and conditions no less favorable to Manager than those set forth
in the Offer. If Manager fails to sell the Offered Interest to such person
or entity on such terms and conditions within such 120-day period, Manager
will again be subject to the provisions of this Section 17.15.4 with
respect to the Offered Interest.
17.15.5 TRANSFER OF SPRINT PCS NETWORK. Sprint PCS may sell,
transfer or assign the Sprint PCS Network or any of the Licenses, including
its rights and obligations under this agreement, the Services Agreement and
any related agreements, to a third party without Manager's consent so long
as the third party assumes the rights and obligations under this agreement
and the Services Agreement. Manager agrees that Sprint PCS and Sprint PCS'
Related Parties will be released from any and all obligations under and
with respect to any and all such agreements upon such sale, transfer or
assignment in accordance with this Section 17.15.5, without the need for
Manager to execute any document to effect such release.
17.16 PROVISION OF SERVICES BY SPRINT SPECTRUM. As described in the
Recitals, the party or parties to this agreement that own the Licenses are
referred to in this agreement as "SPRINT PCS." Sprint Spectrum will provide
most or all of the services required to be provided by Sprint PCS under
this agreement on behalf of Sprint PCS, other than the services to be
rendered by Manager. For example, Sprint Spectrum is the party to the
contracts relating to the national distribution network, the roaming and
long distance services, and the procurement arrangements. Accordingly,
Sprint PCS and Manager will deal with Sprint Spectrum to provide many of
the attributes of the Sprint PCS Network.
17.17 NUMBER PORTABILITY. Manager understands that the manner in
which customers are assigned to the Service Area Network could change as
telephone numbers become portable without any relation to the service area
in which they are initially activated. To the extent the relationship
between NPA-NXX and the Service Area changes, Sprint PCS will develop an
alternative system to attempt to assign customers who primarily live and
work in the Service Area to the Service Area. The terms of this agreement
will be deemed to be amended to reflect the new system that Sprint PCS
develops.
17.18 DISCLAIMER OF AGENCY. Neither party by this agreement makes the
other party a legal representative or agent of the party, nor does either
party have the right to obligate the other party in any manner, except if
the other party expressly permits the obligation by the party or except for
provisions in this agreement expressly authorizing one party to obligate
the other.
17.19 INDEPENDENT CONTRACTORS. The parties do not intend to create
any partnership, joint venture or other profit-sharing arrangement,
landlord-tenant or lessor-lessee relationship, employer-employee
relationship, or any other relationship other than that expressly provided
in this agreement. Neither party to this agreement has any fiduciary duty
to the other party.
17.20 EXPENSE. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The
parties must not allocate any employee cost or other cost to the other
party, except as otherwise provided in the Program Requirements or to the
extent the parties expressly agree in advance to the allocation.
17.21 GENERAL TERMS. (a) This agreement is to be interpreted in
accordance with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires.
(ii) The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation".
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless
otherwise specified; and
(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to
time (and, in the case of a statute or regulation, to any corresponding
provisions of successor statutes or regulations), unless the context
otherwise requires.
(b) Any reference in this agreement to a "day" or number of
"days" (without the explicit qualification of "BUSINESS") is a reference to
a calendar day or number of calendar days. If any action or notice is to be
taken or given on or by a particular calendar day, and the calendar day is
not a Business Day, then the action or notice may be taken or given on the
next Business Day.
17.22 CONFLICTS WITH OTHER AGREEMENTS. The provisions of this
Management Agreement govern over those of the Services Agreement if the
provisions contained in this agreement conflict with analogous provisions
in the Services Agreement. The provisions of each Trademark License
Agreement governs over those of this agreement if the provisions contained
in this agreement conflict with analogous provisions in a Trademark License
Agreement.
17.23 SURVIVAL UPON TERMINATION. The provisions of Sections 10, 11.4,
11.5, 11.6, 12.2, 13, 14, 16 and 17 of this agreement will survive any
termination of this agreement.
17.24 ANNOUNCED TRANSACTION. Sprint Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership
have executed a Restructuring and Merger Agreement and related agreements
that provide for restructuring the ownership of Sprint Spectrum L.P.,
SprintCom, Inc., PhillieCo Partners I, L.P., and Xxx Communications PCS,
L.P. Upon consummation of the transactions contemplated by those
agreements, Sprint would control each of the four entities. While Sprint
and Sprint PCS anticipate the proposed transactions will be consummated,
there can be no assurances.
17.25 ADDITIONAL TERMS AND PROVISIONS. Certain additional and
supplemental terms and provisions of this agreement, if any, are set forth
in the Addendum to Sprint PCS Management Agreement attached hereto and
incorporated herein by this reference. Manager represents and warrants that
the Addendum also describes all existing contracts and arrangements
(written or verbal) that relate to or affect the rights of Sprint PCS or
Sprint under this agreement (e.g., agreements relating to long distance
telephone services (Section 3.4) or backhaul and transport services
(Section 3.7)).
17.26 MASTER SIGNATURE PAGE. Each party agrees that it will execute
the Master Signature Page that evidences such party's agreement to execute,
become a party to and be bound by this agreement, which document is
incorporated herein by this reference.
17.27 AGENT AUTHORIZATION. Because of the close operational
relationship between the parties listed together below, each entity
authorizes the other entity to act on its behalf in every capacity under
this agreement: (a) WirelessCo, L.P. and Sprint Spectrum L.P.; (b) Xxx PCS
License, L.L.C. and Xxx Communications PCS, L.P.; (c) APC PCS, LLC and
American PCS Communications, LLC; and (d) PhillieCo, L.P. and PhillieCo
Partners I, L.P.
[the remainder of this page is intentionally left blank]
SPRINT PCS/WASHINGTON OREGON WIRELESS, LLC
MASTER SIGNATURE PAGE
This Master Signature Page is dated and effective as of
January 25, 1999 (the "Effective Date"). This document provides the means
by which each of the undersigned entities executes and becomes a party to
and bound by, to the extent set forth above such party's signature, the
Management Agreement, Services Agreement, Sprint Trademark and Service Xxxx
License Agreement, Sprint Spectrum Trademark and Service Xxxx License
Agreement, and Addendum I to the Management Agreement. This document may be
executed in one or more counterparts. The Notice Address Schedule attached
to this document sets forth the addresses to which notices should be sent
under the agreements.
THE MANAGEMENT AGREEMENT AND THE SERVICES AGREEMENT
CONTAIN BINDING ARBITRATION PROVISIONS THAT MAY BE
ENFORCED BY THE PARTIES TO THOSE AGREEMENTS
SPRINT SPECTRUM L.P.
For and in consideration of the covenants contained in the
Management Agreement, Services Agreement and Sprint Spectrum Trademark and
Service Xxxx License Agreement, and Addendum I to the Management Agreement
(collectively, the "Executed Agreements"), and for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Sprint Spectrum L.P. executes, becomes a party to, and agrees
to be bound by and to perform its obligations under each of the Executed
Agreements as of the Effective Date. The execution by Sprint Spectrum L.P.
of this Master Signature Page has the same force and effect as if Sprint
Spectrum L.P. executed individually each of the Executed Agreements.
SPRINT SPECTRUM L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxx,
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY L.P.
For and in consideration of the covenants contained in the
Management Agreement, Sprint Trademark and Service Xxxx License Agreement,
and Addendum I to the Management Agreement (collectively, the "Executed
Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sprint Communications
Company, L.P. executes, becomes a party to, and agrees to be bound by and
to perform its obligations under each of the Executed Agreements as of the
Effective Date; provided, that Sprint Communications Company, L.P. only
agrees to be bound by and perform its obligations under, and will enjoy the
benefits given to it under the Management Agreement with respect to only
those provisions that expressly apply to Sprint Communications Company,
L.P., including its obligations and benefits under Sections 2, 3 and 10.
The execution by Sprint Communications Company, L.P. of this Master
Signature Page has the same force and effect as if Sprint Communications
Company, L.P. executed individually each of the Executed Agreements.
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President, Wireless
WASHINGTON OREGON WIRELESS, LLC
For and in consideration of the covenants contained in the
Management Agreement, Services Agreement, Sprint Trademark and Service Xxxx
License Agreement, Sprint Spectrum Trademark and Service Xxxx License
Agreement, and Addendum I to the Management Agreement (collectively, the
"Executed Agreements"), and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Washington Oregon
Wireless, LLC executes, becomes a party to, and agrees to be bound by and
to perform its obligations under each of the Executed Agreements as of the
Effective Date. The execution by Washington Oregon Wireless, LLC of this
Master Signature Page has the same force and effect as if Washington Oregon
Wireless, LLC. executed individually each of the Executed Agreements.
WASHINGTON OREGON WIRELESS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & Chief Executive Officer
NOTICE ADDRESS SCHEDULE
The addresses to which notice is to be sent pursuant to
Section 17.1 of the Management Agreement, Section 9.1 of the Services
Agreement, Section 15.1 of the Sprint Trademark and Service Xxxx License
Agreement, or Section 15.1 of the Sprint Spectrum Trademark and Service
Xxxx License Agreement are as follows:
SPRINT SPECTRUM, L.P.
0000 Xxxx, 00xx Xxxxx with a copy to: 0000 Xxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000 Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
Attention: Chief Executive Officer Attention: General Counsel
SPRINT COMMUNICATIONS COMPANY, L.P. (and notices regarding the Sprint Brands)
-----------------------------------
c/o Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Corporate Secretary
Mail Stop: XXXXXX0000
XXXXXXXXXX XXXXXX WIRELESS, LLC
-------------------------------
0000 XX Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Chief Executive Officer
ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Washington-Oregon Wireless, L.L.C.
Service Area: Bend, OR (BTA #00)
Xxxx Xxx-Xxxxx Xxxx, XX (XXX #97)
Kennewick-Pasco-Richland, WA (BTA #228)
Medford-Grants Pass, OR (BTA #288)
Klamath Falls, OR (BTA #231)
Roseburg, OR (BTA #385)
Walla Walla, WA-Pendleton, OR (BTA #460)
Wenatchee, WA (BTA #468)
Yakima, WA (BTA #482)
This Addendum contains certain additional and supplemental terms and
provision of that certain Sprint PCS Management Agreement (the "MANAGEMENT
AGREEMENT") entered into contemporaneously with and by the same parties as
this Addendum. The terms and provisions of the Addendum control, supersede
and amend any conflicting terms and provisions contained in the Management
Agreement. Except for express modifications made in this Addendum, the
Management Agreement continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum
have the meaning ascribed to them in the Schedule of Definitions. Section
and Exhibit references are to Sections and Exhibits of the Management
Agreement unless otherwise noted.
The Management Agreement is modified as follows:
1. EXCLUSIVITY OF SERVICE AREA. The first sentence of Section 2.3 is
amended by amending the phrase "will own, operate, build or manage another
wireless mobility communications network" to read as follows: "will
directly or indirectly own, operate, build, or manage another wireless
mobility communications network or sell Sprint PCS Products and Services".
2. COVERAGE ENHANCEMENT. The following language is added to Section
2.5:
Sprint PCS hereby confirms that Manager will be required to build-out
New Coverage in the Service Area under this Section 2.5 only to the
extent that each cell will provide radio frequency coverage for a
minimum of 10,000 covered pops per cell site and provide for coverage
of all interstate and major highways. Manager will not be required
under this Section 2.5 to build coverage of lesser density than
10,000 covered pops per cell site until the adoption of less dense
build-out requirements under and pursuant to the terms of Section
2.5.
The following cities (i) have been identified as meeting this
build-out requirement of greater than 10,000 pops per cell site as of
the signing of this Agreement, (ii) are the only cities in the
Service Area not included in the initial Build Plan Exhibit 2.1 that
meet this build-out requirement, and (iii) will be exempted from this
Section 2.5 build-out requirement until January 1, 2003:
CITY POPULATION BTA
---- ---------- ---
La Grande TBD 460
This is also to confirm that the highway coverage to be built by
Manager as provided for in Exhibit 2.1 of the Management Agreement
meets the interstate and major highway coverage requirements as
required under this Section 2.5.
3. IXC SERVICES. The first sentence of Section 3.4 is deleted and, in
its place, the following is inserted:
Manager must purchase from Sprint long distance telephony services
for the Sprint PCS Products and Services at wholesale rates, except
that Manager may purchase long distance telephony services that
utilize the networks of one or more of AT&T or MCI/WorldCom (or their
successors) if Sprint fails to exercise a right of last offer within
30 days after Manager gives Sprint a copy of the wholesale rate
proposal. Manager may also purchase long distance telephony services
that utilize the network of another inter-exchange carrier (IXC) (or
its successors) (alone or in conjunction with AT&T or MCI/WorldCom
networks) under the circumstances described in the preceding
sentence, so long as such IXC (or its successors) substantially meets
Sprint's network reliability and voice quality standards in force at
the time Sprint receives the proposal. Manager agrees it will not
submit a wholesale rate proposal to Sprint more often than once
during any twelve month period.
4. NON-COMPETITION. Section 3.6 is replaced in its entirety with the
following language:
3.6. NON-COMPETITION. Neither Manager nor any of its Related
Parties may offer Sprint PCS Products and Services outside of the Service
Area without the prior written approval of Sprint PCS.
Within the Service Area, Manager may offer, market or promote
telecommunications products or services only under the following brands:
a) Products or services with the Brands;
b) Other products and services approved under Section 3.2;
c) Products or services with Manager's brand; or
d) Products or services with the brands of Manager's Related
Parties;
except no brand of a significant competitor of Sprint PCS or its
Related Parties in the telecommunications business may be used by Manager
on these products and services. Within the Service Area, if a Related Party
of Manager offers a product or service of a significant competitor of
Sprint PCS or its Related Parties in the telecommunications business or of
Manager, then Manager will not allow such Related Party of Manager to offer
any Sprint PCS Products or Services.
If Manager or any of its Related Parties has licenses to provide
broadband personal communication services outside the Service Area, neither
Manager nor such Related Party may utilize the spectrum to offer Sprint PCS
Products and Services without prior written consent from Sprint PCS.
Additionally, when Manager's customers from inside the Service Area travel
or roam to other geographic areas, Manager will route the customers' calls,
both Program Requirements, without regard to any wireless networks operated
by Manager or its Related Parties. For example, Manager will program the
preferred roaming list for handsets sold in the Service Area to match the
Sprint PCS preferred roaming list.
5. TAXES AND FEES. The following Section 10.4(d) is added to the
Management Agreement:
(d) TAXES. It is the intention of Sprint PCS and Manager that taxes
and fees imposed by federal, state and local governments and their
agencies upon customer service revenues (for example, sales and use
taxes, gross receipts taxes, telecommunication surcharges, utility
fees, right-of way fees which are not charged on property value or
property cost and universal service fees) be passed through to
customers in their entirety and be excluded from Collected Revenues
under Section 10.4(b)(v) of the Sprint PCS Management Agreement. In
the event that any such taxes or fees assessed on services provided
to customers are not passed through to customers, Sprint PCS and
Manager will bear the cost of such taxes and fees in a ratio of 8%
and 92%, respectively.
6. REGULATORY NOTICES (RESPONSE PERIOD). In the first sentence of
Section 16.4, the phrase "2 Business Days" is replaced by the phrase "5
Business Days".
7. REGULATORY NOTICES (COSTS). The following two sentences replace
the last sentence of Section 16.4:
If Sprint PCS chooses to respond to such communications and
complaints, Manager will not respond to them without the consent of
Sprint PCS. Sprint PCS will bear the cost of responding to any such
communications and complaints unless (i) such response is primarily
the result of Manager's acts or omissions that constitute negligence,
willful misconduct, or breach of any provision of this agreement (in
which case Manager will pay the costs of Sprint PCS' response), or
(ii) Manager's response is not requested by Sprint PCS.
8. NUMBER PORTABILITY. The following sentence replaces the second
sentence of Section 17.17:
To the extent the relationship between NPA-NXX and the Service Area
changes, Sprint PCS will develop an alternative system to attempt to
assign customers who primarily live and work in the Service Area to
the Service Area, in a manner that preserves the economic benefits of
this agreement to each party.
9. FINANCING ARRANGEMENTS. Sprint PCS agrees to propose modifications
to the Management Agreement, and perhaps to the Schedule of Definitions,
the Services Agreement, the Sprint Trademark and Service Xxxx License
Agreement, and the Sprint Spectrum Trademark and Service Xxxx License
Agreement, that will enhance Manager's ability to obtain financing for the
Service Area Network. Sprint PCS will not be required to offer the Manager
subsequent modifications offered or agreed to with Other Managers
subsequent to the initial set of modifications.
10. FEDERAL CONTRACTOR COMPLIANCE. A new Section 17.28, the text of
which is attached to this Addendum as Exhibit A, is added to the agreement.
For purposes of this provision, contracts and subcontracts not exceeding
$10,000 are exempt from these requirements. However, where the contracts or
subcontracts in any 12 month period have an aggregate value (or can
reasonably be expected to have an aggregate total value) exceeding $10,000,
the exemption does not apply.
11. YEAR 2000 COMPLIANCE. The following Section 17.29 is added to the
agreement:
SECTION 17.29 YEAR 2000 COMPLIANCE. Sprint PCS and Manager each
separately represents and warrants that any system or equipment
acquired, operated or designated by it for use in the Service Area
Network or for use to support the Service Area Network, including
(without limitation) billing, ordering and customer service systems,
will be capable of correctly processing and receiving date data, as
well as properly exchanging date data with all products (for example,
hardware, software and firmware) with which the Service Area Network
is designed to be used, and will not malfunction or fail to function
due to an inability to process correctly date data in conformance
with Sprint PCS requirements for "Year 2000 Compliance." If the
Service Area Network or any system used to support the Service Area
Network fails to operate as warranted due to defects or failures in
any system or equipment selected by Manager (including systems or
equipment of third party vendors and subcontractors selected by
Manager rather than by Sprint PCS) Manager will, at its own expense,
make the repairs, replacements or upgrades necessary to correct the
failure and provide a Year 2000 Compliant Service Area Network. If
the Service Area Network or any system used to support the Service
Area Network fails to operate as warranted due to defects or failures
in any system or equipment selected by Sprint PCS (including systems
or equipment of third party vendors and subcontractors which Sprint
PCS selects and requires Manager to use), Sprint PCS will, at its own
expense, make the repairs, replacements or upgrades necessary to
correct the failure and provide a Year 2000 Compliant Service Area
Network.
"Year 2000 Compliance" means the functions, calculations, and
other computing processes of the Service Area Network (collectively
"Processes") which perform and otherwise process, date arithmetic,
display, print or pass date/time data in a consistent manner,
regardless of the date in time on which the Processes are actually
performed or the dates used in such data or the nature of the
date/time data input, whether before, during or after January 1, 2000
and whether or not the date/time data is affected by leap years. To
the extent any part of the Service Area Network is intended to be
used in combination with other software, hardware or firmware, it
will properly exchange date/time data with such software, hardware or
firmware. The Service Area Network will accept and respond to
two-digit year-date input, correcting or supplementing as necessary,
and store, print, display or pass date/time data in a manner that is
unambiguous as to century. No date/time data will cause any part of
the Service Area Network to perform an abnormally ending routine or
function within the Processes or generate incorrect final values or
invalid results.
12. CHANGE REGARDING PAYMENT FEES IN SERVICE AGREEMENT. The second
sentence of Section 3.1 of the Services Agreement is deleted in its
entirety and replaced by the following two sentences: "Except with respect
to fees paid for billing-related services, the monthly charge for any fees
based on the number of subscribers of the Service Area Network will be
determined based on the number of subscribers as of the 15th day of the
month for which the charge is being calculated. With respect to fees paid
for billing-related services, the monthly charge for any fees based on the
number of subscribers will be based on the number of gross activations in
the month for which the charge is being calculated plus the number of
subscribers of the Service Area Network on the last day of the prior
calendar month.
ADDENDUM II
TO
SPRINT PCS MANAGEMENT AGREEMENT
MANAGER: WASHINGTON OREGON WIRELESS, LLC
SERVICE AREAS: Bend, OR (BTA #00)
Xxxx Xxx-Xxxxx Xxxx, XX (XXX #97)
Kennewick-Pasco-Richland, WA (BTA #228)
Klamath Falls, OR (BTA #231)
Medford-Grants Pass, OR (BTA #288)
Roseburg, OR (BTA #385)
Walla Walla, WA-Pendleton, OR (BTA #460)
Wenatchee, WA (BTA #468)
Yakima, WA (BTA #482)
This Addendum II (this "ADDENDUM") dated as of April 12, 2000,
contains certain additional and supplemental terms and provisions to that
certain Sprint PCS Management Agreement entered into January 25, 1999, by
the same parties as this Addendum, which Sprint PCS Management Agreement
was further amended by Addendum I to Sprint PCS Management Agreement
entered into as of January 25, 1999 ("ADDENDUM I") (the Sprint PCS
Management Agreement, as amended by Addendum I, being the "MANAGEMENT
AGREEMENT"). The terms and provisions of this Addendum control, supersede
and amend any conflicting terms and provisions contained in the Management
Agreement. Except for express modifications made by this Addendum, the
Management Agreement continues in full force and effect.
Capitalized terms used and not otherwise defined in this
Addendum have the meanings ascribed to them in the Management Agreement.
Section and Exhibit references are to Sections of, and Exhibits to, the
Management Agreement, unless otherwise noted.
The Management Agreement is modified as follows:
1. EXPANSION OF SERVICE AREA. Sprint PCS and Manager agree that,
prior to August 1, 1999, Manager exercised its right under Addendum I to
build out the additional coverage area known as I-84 West from I-82 to meet
the current Sprint PCS coverage at approximately the western boundary of
the Skamania County line in Washington (the "I-84 EXPANSION AREA"). Manager
has agreed to purchase the sites built and under construction by Sprint PCS
in the I-84 Expansion Area (the "COLUMBIA RIVER GORGE SITES") under the
terms of that certain Asset Purchase Agreement being executed as of the
date of this Addendum. The I-84 Expansion Area will be included in the
Service Area from and after the closing of the purchase of the Columbia
River Gorge Sites by Manager.
2. DECLINE OF BUILD OUT RIGHT. Manager agrees that, effective August
1, 1999, Manager declined to exercise, and thereby waived, its right under
Addendum I to build out certain additional coverage areas known as (a) US
Hwy 2 West from Leavenworth to the Western BTA 468 border and continuing
into the Seattle-Tacoma BTA 413 along US Hwy 2 to meet the current Sprint
PCS coverage, (b) OR Hwy 126 from Sisters West to Western Jefferson County
Line (Western border of BTA 38) and continuing into the
Salem-Albany-Corvalis BTA 000 xxxxx Xxx 000 and only along Hwy 126 in BTA
395 to meet the current Sprint PCS coverage, and (c) US 26 from Madras
North to Northern Jefferson County line (Northern border of BTA 38) and
continuing into the Portland BTA 358 on US 26 and only along US 26 in BTA
358 to meet the current Sprint PCS coverage and along OR Hwy 35 in BTA 358
to I-84.
3. MODIFICATION OF BUILD OUT PLAN. Exhibit 2.1 is hereby superseded
and replaced in its entirety by an Amended Exhibit 2.1 attached to this
Addendum. The parties recognize that the Phase 4 sites set forth in Amended
Exhibit 2.1 may present extraordinary site development challenges. The
parties agree that so long as Manager exercises its best efforts to
complete the development of the Phase 4 sites as set forth in Amended
Exhibit 2.1, failure of Manager to complete these sites in the time frames
set forth on Amended Exhibit 2.1 as a result of delays permitted under
Section 17.9.3, shall not be deemed to be a breach of the Management
Agreement if Manager completes the development of the Phase 4 sites within
a reasonable time after the event or circumstances causing the delay is no
longer continuing, ceases or terminates.
4. EXPEDITE FEES. If Sprint PCS and Manager agree to pay additional
fees to a third party for any efforts associated with expediting completion
of any portion of Manager's Build Out Plan or Switch Integration to meet a
Network Ready Date (the "NRD") including, but not limited to, payment of
expedited fees for microwave relocation, and the NRD is later extended due
to Manager's action or lack of action, Manager will pay all of such fees.
5. LONG-DISTANCE PRICING. (a) The first sentence of Section 3.4 is
deleted in its entirety and replaced by the following language:
"Manager must purchase long-distance telephony services from Sprint
through Sprint PCS both (i) to provide long-distance telephony
service to users of the Sprint PCS Network and (ii) to connect the
Service Area Network with the national platforms used by Sprint PCS
to provide services to Manager under this agreement and/or the
Services Agreement. Pricing for such long-distance telephony services
will be set forth in Exhibit 2.1.1 to the Services Agreement. Sprint
will xxxx Sprint PCS for such services rendered to Sprint PCS,
Manager and all Other Managers, and in turn, Sprint PCS will xxxx
Manager for the services used by Manager."
(b) The following sentence is added as a second paragraph in Section
3.4:
"Manager may not resell the long-distance telephony services acquired
from Sprint under this Section 3.4."
6. RIGHT OF LAST OFFER. Section 3.7 is modified by adding the
following language between both (i) "Service Area Network" and "if Manager
decides to use" in the first sentence of the first paragraph and (ii) "for
these services" and "and the agreement was not made" in the first sentence
of the second paragraph:
"(other than backhaul services relating to national platform and IT
application connections, which Manager must purchase from Sprint)"
7. VOLUNTARY RESALE OF PRODUCTS AND SERVICES. Section 3.5.2 is
modified by replacing the second sentence of the second paragraph with the
following language:
"If Manager wants handsets of subscribers of resellers with NPA-NXXs
of Manager to be activated, Manager must agree to comply with the
terms of the program, including its pricing provisions."
8. NON-TERMINATION OF AGREEMENT. The following language is added
immediately preceding the last period in the final sentence of both Section
11.5.3 and Section 11.6.4:
"but such action does not terminate this agreement"
9. ANNOUNCED TRANSACTIONS. Section 17.24 is deleted in its entirety.
10. ADDITIONAL TERMS AND PROVISIONS. The phrase "the Addendum also
describes" is deleted from the second sentence of Section 17.25, and the
following language is inserted at the end of that sentence:
"are described on Exhibit 17.25, and photocopies of any such written
agreements have been delivered to Sprint PCS".
11. USE OF LOAN PROCEEDS. Sprint PCS is entering into that certain
Consent and Agreement with CoBank, ACB (which Consent and Agreement, as
amended and modified from time to time, is referred to as the "COBANK
CONSENT AND AGREEMENT") to enable Manager to obtain loans (the "LOANS")
from CoBank and its successors and assigns (collectively, the "LENDERS").
Manager agrees that notwithstanding the permitted uses of the proceeds of
the Loans, it will not use the proceeds from any loan or other obligation
to which the CoBank Consent and Agreement relates for any purpose other
than to construct and operate the Service Area Network within the Service
Area (as may be amended from time to time) as contemplated under the
Management Agreement.
12. CONSENT AND AGREEMENT NOT ASSIGNABLE. Except as expressly
required or permitted in the CoBank Consent and Agreement, Manager may not
assign the CoBank Consent and Agreement.
13. NOTICES. Manager agrees to promptly give Sprint PCS a copy of any
notice Manager receives from the Administrative Agent or any Lender (as
those terms are defined in the CoBank Consent and Agreement) and a copy of
any notice Manager gives to the Administrative Agent or any Lender. Sprint
PCS agrees to promptly give Manager a copy of any notice that Sprint PCS
gives to any of such persons.
14. FINANCIAL INFORMATION. Manager agrees to give Sprint PCS a copy
of all financial information it gives the Administrative Agent or any
Lender.
15. NO DEFAULTS UNDER CREDIT DOCUMENTS OR SPRINT AGREEMENTS. Manager
warrants and represents that as of the date hereof, no Default or Event of
Default under any of the Credit Documents (as those terms are defined in
the CoBank Consent and Agreement) has occurred, and no Event of Termination
under the Management Agreement or event that if not cured, or if notice
were to be provided, would constitute an Event of Termination under the
Management Agreement, has occurred.
16. SHARING CONFIDENTIAL INFORMATION WITH LENDERS. Section
12.2(b)(vii) of the Management Agreement is amended by inserting the
words "or has provided" between the words "is considering providing"
and "financing."
17. FINANCING. A revised and amended Exhibit 1.7, in the form
attached to this Addendum, is approved by Sprint PCS and Manager and is
expressly made a part of the Management Agreement.
18. REAFFIRMATION OF SPRINT AGREEMENTS. Each of the undersigned
reaffirms in their entirety, together with their respective rights and
obligations thereunder, the Management Agreement, the Services Agreement
and the License Agreements.
19. COUNTERPARTS. This Addendum may be executed in two or more
counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one agreement.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Addendum to be executed by their respective authorized officers as of the
date and year first above written.
SPRINT SPECTRUM L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Senior Vice President and
Chief Business Development Officer - Sprint PCS
WIRELESSCO, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Senior Vice President and
Chief Business Development Officer - Sprint PCS
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Xxx X. Xxxxxx
--------------------------------------
Xxx X. Xxxxxx
Vice President - Law
WASHINGTON OREGON WIRELESS, LLC
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------
Xxxxxxxx Xxxxx
President and Chief Executive Officer
ADDENDUM III
TO
SPRINT PCS MANAGEMENT AGREEMENT
DATED AS OF FEBRUARY 14, 2001
MANAGER: WASHINGTON-OREGON WIRELESS, L.L.C.
SERVICE AREA BTAS:
Bend, OR # 38
Coos Bay-North Bend, OR # 97
Kennewick-Pasco-Richland, WA # 228
Medford-Grants Pass, OR # 000
Xxxxxxx Xxxxx, XX # 000
Xxxxxxxx, XX # 000
Xxxxx Xxxxx, XX-Xxxxxxxxx, XX # 000
Xxxxxxxxx, XX # 000
Xxxxxx, XX # 482
Columbia River Gorge, OR # 358
This Addendum III (this "ADDENDUM") contains certain additional and
supplemental terms and provisions of that certain Sprint PCS Management
Agreement entered into as of January 25, 1999 by the same parties as this
Addendum as modified from time to time (the "MANAGEMENT AGREEMENT").
The terms and provisions of the Addendum control, supersede and amend
any conflicting terms and provisions contained in the Management Agreement.
Except for express modifications made in this Addendum, the Management
Agreement and all prior addenda continue in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum
have the meaning ascribed to them in the Schedule of Definitions. Section
and Exhibit references are to Sections and Exhibits of the Management
Agreement unless otherwise noted.
The Management Agreement is modified as follows:
1. USE OF LOAN PROCEEDS. Sprint PCS is entering into that certain Consent
and Agreement with Citicorp USA, Inc., dated as of February 14, 2001
("CITICORP") (which Consent and Agreement, as amended and modified from
time to time, is referred to as the "CONSENT AND AGREEMENT") to enable
Manager to obtain a loan (the "LOAN") from Citicorp, its successors, and
other lenders who from time to time are parties to the Consent and
Agreement (collectively, the "LENDERS"). Manager agrees that
notwithstanding the permitted uses of the proceeds of the Loan, it will not
use the proceeds from the Loan or any other loan, extension of credit or
other obligation to which the Consent and Agreement relates, for any
purpose other than to (a) construct and operate the Service Area Network
within the Service Area (as may be amended from time to time) as
contemplated under the Management Agreement, (b) pay the cash portion of
the merger consideration to the Targets (as defined in that certain
Commitment Letter dated November 22, 2000, between Citicorp North America,
Inc., Xxxxxxx Xxxxx Xxxxxx, Inc., TD Securities (USA) Inc., Export
Development Corporation and Alamosa Holdings, Inc., as amended on January
30, 2001 (the "COMMITMENT LETTER")) (c) refinance existing indebtedness
under the EDC Facility, the Xxxxxxx Facility and the WOW Facility (as those
terms are defined in the Commitment Letter), and (d) pay the Transaction
Costs (as that term is defined in the Commitment Letter).
2. CROSS-DEFAULT. The following Section 17.30 is added:
17.30 CROSS-DEFAULT. A breach or Event of Termination under any of
the Sprint Agreements (as that term is defined in the Consent and
Agreement) by Texas Telecommunications, L.P., a Texas limited partnership,
Xxxxxxx Wireless Communications, L.L.C., a Missouri limited liability
company, or Alamosa Wisconsin Limited Partnership, a Wisconsin limited
Partnership, or their respective successors or assigns (collectively the
"OTHER AFFILIATES") also constitutes a breach or Event of Termination, as
the case may be, by the Manager of the same provision of the applicable
Sprint Agreement to which the Manager is a party, and the Sprint Parties
(as that term is defined in the Consent and Agreement) shall have the same
rights under the Sprint Agreements and the Consent and Agreement to which
the Manager is a party as if the same breach or Event of Termination had
occurred under such Sprint Agreement. The Manager has no right to cure any
breach or Event of Termination with respect to an Other Affiliate. Such
breach or Event of Termination by an Other Affiliate shall not qualify as a
force majeure under the Sprint Agreements or the Consent and Agreement.
3. PERFORMANCE/PAYMENT OF OTHER AFFILIATES' OBLIGATIONS. The following
Section 17.31 is added:
17.31 PERFORMANCE/PAYMENT OF OTHER AFFILIATES' OBLIGATIONS. To induce
the Sprint Parties to enter into the Consent and Agreement with Citicorp,
Manager absolutely and unconditionally guarantees the prompt and punctual
performance and payment of the Obligations (as that term is defined in the
Consent and Agreement) of the Other Affiliates and their respective
successors or assigns when due and payable pursuant to the terms of the
Other Affiliates' Sprint Agreements as they may be amended and modified.
Manager agrees that the Sprint Parties shall not be required first to
collect from any other guarantor of any such obligation or to proceed
against or exhaust any collateral or security for any obligation before
requiring Manager to perform or pay the obligation guaranteed under this
Section. Any Sprint Party may bring suit against Manager without joining
the Other Affiliates or any other guarantor. Manager agrees that notice
given by a Sprint Party to any Other Affiliate under such Other Affiliate's
Sprint Agreements or the Consent and Agreement constitutes notice to the
Manager.
4. BUSINESS VALUATION. The following subsection 11.7.4(f) is added:
(f) In the event the Entire Business Value of the Manager is being
determined, the entire value of any Operating Asset may be allocated among
the Manager and one or more of the Other Affiliates, where appropriate, but
the sum of the values attributed to such Operating Asset in determining the
Entire Business Value of the Manager and the Other Affiliates shall not
exceed the value of such Operating Asset if it were used to calculate only
the Manager's Entire Business Value (i.e. "double counting" is prohibited).
5. EXCLUSIVITY OF SERVICE AREA. In Section 2.3 and the Schedule of
Definitions, the phrase "wireless mobility communications network" is
replaced by the phrase "Wireless Mobility Communications Network".
6. EXPIRATION OF LIMITED REMEDIES PERIOD. Sprint PCS and Manager agree that
the limited remedies period provided for in Sections 11.5 and 11.6 expired
on January 25, 2001.
7. REVISED FINANCING PLAN. Exhibit 1.7 attached to this Addendum supersedes
and replaces in it entirety Exhibit 1.7 attached to the Management
Agreement.
8. EXCLUSIVITY OF SERVICE AREA. Section 1 of Addendum I is deleted in its
entirety.
9. TRANSFER OF SPRINT PCS NETWORK.
(a) The following language is added at the beginning of the first
sentence of Section 17.15.5:
"In conjunction with the sale of the Sprint PCS
Network,"
(b) The phrase "Sprint PCS Network or any of the Licenses," in
the first sentence of Section 17.15.5 is replaced in its
entirety with the following language:
"Sprint PCS Network and any of the Licenses,"
10. REAFFIRMATION OF SPRINT AGREEMENTS. Each of the undersigned reaffirms
in their entirety, together with the respective rights and obligations
thereunder, the Management Agreement, the Services Agreement and the
License Agreements.
11. COUNTERPARTS. This Addendum may be executed in two or more
counterparts, each of which shall constitute an original but all which when
taken together shall constitute but one agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Addendum III to be
executed as of the date first above written.
SPRINT SPECTRUM L.P.
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
Vice President - Affiliations
WIRELESSCO, L.P.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
Vice President - Affiliations
SPRINT COMMUNICATIONS
COMPANY, L.P.
By: /s/ Xx Xxxxxx
------------------------------
Xx Xxxxxx,
Senior Vice President - Public Affairs
WASHINGTON OREGON WIRELESS, LLC
a Delaware limited liability company
By: ALAMOSA HOLDINGS, LLC
a Delaware limited liability company,
as the sole equity holder
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx,
President
