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EXHIBIT 10.10
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made as of December 06, 1999,
between Sprint Spectrum L.P., a Delaware limited partnership, WirelessCo, L.P.,
a Delaware limited partnership, and Alamosa Wisconsin Limited Partnership a
Wisconsin limited partnership (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.
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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.
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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.
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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:
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(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
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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.
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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.
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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
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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.
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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:
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(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 4.3. 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.
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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
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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
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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.
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7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 CONFORMANCE TO SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS.
(a) Manager must meet or exceed the Sprint PCS Technical
Program Requirements established by Sprint PCS from time to time for the Sprint
PCS Network Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a
level equal to or better than the lower of the Operational Level of
Sprint PCS or the operational level contemplated by the Sprint PCS
Technical Program Requirements; or
(ii) Sprint PCS is responsible under the Services
Agreement to ensure the Service Area Network complies with the Sprint
PCS Technical Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has
complied with the Sprint PCS Technical Program Requirements prior to connecting
the Service Area Network to the rest of the Sprint PCS Network. Once the Service
Area Network is connected to the Sprint PCS Network, Manager must continue to
comply with the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the Sprint PCS Technical Program Requirements adopted for Manager will be
the same Sprint PCS Technical Program Requirements applied by Sprint PCS to the
Sprint PCS Network.
7.2 ESTABLISHMENT OF SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS. Sprint
PCS has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements, attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS
Technical Program Requirements to ensure a minimum, base-line level of quality
for the Sprint PCS Network. The Sprint PCS 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:
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(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
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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.
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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.
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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.
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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
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(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
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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 nonrenewal 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
nonrenewal of this agreement;
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(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:
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(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 nonbreaching 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)
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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;
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(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;
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(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:
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(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),
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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:
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(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.
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(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
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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
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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
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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;
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(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
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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
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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.
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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
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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 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
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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.
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(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, rulemaking 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
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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.
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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.
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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 noncompliance 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
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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
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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.
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(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
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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:
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(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.
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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) Cox 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.
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SPRINT PCS/ALAMOSA PCS LLC
MASTER SIGNATURE PAGE
This Master Signature Page is dated and effective as of December 06,
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, 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
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WIRELESSCO, L.P.
For and in consideration of the covenants contained in the Management
Agreement and Addendum I to the Management (collectively, the "Executed
Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, WirelessCo, 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
WirelessCo, L.P. of this Master Signature Page has the same force and effect as
if WirelessCo, L.P. executed individually each of the Executed Agreements.
WIRELESSCO, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Senior Vice President and
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/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior Vice President - Consumer Market
Strategy and Communications
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ALAMOSA WISCONSIN LIMITED PARTNERSHIP
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, Alamosa Wisconsin Limited
Partnership 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. ne execution by Alamosa Wisconsin Limited Partnership of this
Master Signature Page has the same force and effect as if Alamosa Wisconsin
Limited Partnership executed individually each of the Executed Agreements.
ALAMOSA WISCONSIN LIMITED PARTNERSHIP
By: /s/ Xxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx, President
of Alamosa Wisconsin GP, LLC,
General Partner of Alamosa
Wisconsin Limited Partnership
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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. AND WIRELESSCO., 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
XXXXXXX WISCONSIN LIMITED PARTNERSHIP
0000 Xxxxx Xxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: Chairman
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SCHEDULE OF DEFINITIONS
This Schedule of Definitions is the "SCHEDULE OF DEFINITIONS" referred
to in and incorporated by reference under the Management Agreement, Services
Agreement, and Trademark License Agreements (as such agreements are defined
below). Whenever the phrase "this agreement" is used below, such phrase refers
to the particular agreement under whose terms this Schedule of Definitions is
being applied in that instance. If citations to sections or exhibits of
different agreements are included in a definition, the citation to the
particular agreement under whose terms this Schedule of Definitions is being
applied controls to the exclusion of the citations to different agreements.
The following words and phrases used in this agreement have the
following meanings:
"ADDENDUM" means any addendum attached to this agreement that contains
the amendments to this agreement; such Addendum is expressly incorporated as a
part of this agreement.
"AFFILIATION AGREEMENT" means any and all of the agreements, known as
Sprint PCS Affiliation Agreements, whereby an affiliate and Sprint PCS and/or
one or more of Sprint PCS' Related Parties agree to the terms and conditions
under which such affiliate will manage the Service Area Network identified in
such agreement, using such Affiliate's own PCS license issued by the FCC and any
documents incorporated by reference in such agreement.
"AGENT" has the meaning set forth in Section 3.1 of the Sprint Spectrum
Trademark and Service Xxxx License Agreement or Section 3.1 of the Sprint
Trademark and Service Xxxx License Agreement.
"ARBITER" has the meaning set forth in Section 12.1.3 of the Management
Agreement or Section 5.1.3 of the Services Agreement.
"AVAILABLE SERVICES" means those categories of services listed on
Exhibit 2.1.1 to the Services Agreement (as the same may be amended from time to
time by Sprint Spectrum and made available to Manager under the terms of the
Services Agreement).
"AVAILABLE SERVICES AND FEES SCHEDULE" means that schedule set forth on
Exhibit 2.1.1 to the Services Agreement, which sets forth the Available Services
offered from time to time and the fees charged for such Available Services.
"BANKRUPTCY" means, for the purposes of the Trademark License
Agreements, either a Voluntary Bankruptcy or an Involuntary Bankruptcy.
"BRANDS" means the Sprint PCS Brands and the Sprint Brands.
"BTA" means a Basic Trading Area for which a Basic Trading Area (BTA)
license is issued by the FCC.
"BUILD-OUT PLAN" means the plan agreed upon by Manager and Sprint PCS,
along with any modifications and updates to the plan, respecting the
construction and design of the Service Area Network, a copy of which is attached
as Exhibit 2.1 to the Management Agreement.
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"BUSINESS DAY" means a day of the year that banks are not required or
authorized to close in the State of New York.
"CANCELLED SERVICE" has the meaning set forth in Section 3.2 of the
Services Agreement.
"CDMA" means code division multiple access.
"CHANGE OF CONTROL" has the meaning set forth in Section 17.15.3 of the
Management Agreement.
"COLLECTED REVENUES" has the meaning, set forth in Section 10.4 of the
Management Agreement.
"CONFIDENTIAL INFORMATION" means all Program Requirements, guidelines,
standards, and programs, the technical, marketing, financial, strategic and
other information provided by each party under the Management Agreement,
Services Agreement, and Trademark License Agreements, and any other information
disclosed by one party to the other party pursuant to the Management Agreement,
Services Agreement, and Trademark License Agreements that is not specifically
excluded by Section 12.2 of the Management Agreement. In addition to the
preceding sentence, "Confidential Information" has the meaning set forth in
Section 3.1 of the Sprint Spectrum Trademark and Service Xxxx License Agreement
or Section 3.1 of the Sprint Trademark and Service Xxxx License Agreement.
"CONTROLLED RELATED PARTY" means the Parent of any Person and each
Subsidiary of such Parent. As used in Section 1.2 and Article 3 of the Sprint
Spectrum Trademark and Service Xxxx License Agreement or Section 1.2 and Article
3 of the Sprint Trademark and Service Xxxx License Agreement, the term
"Controlled Related Party" will also include any Related Party of a Person that
such Person or its Parent can directly or indirectly unilaterally cause to take
or refrain from taking any of the actions required, prohibited or otherwise
restricted by such Section, whether through ownership of voting securities,
contractually or otherwise.
"DEFAULT RATE" means the rate per annum (computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as applicable),
compounded monthly, equal to the Prime Rate (adjusted as and when changes in the
Prime Rate occur) plus five percent (5%).
"DISAGGREGATED LICENSE" means that portion of the License that Manager
may or is required to purchase under Section 11 of the Management Agreement from
Sprint PCS under certain circumstances, after Sprint PCS' receipt of FCC
approval of the necessary disaggregation and partition, which portion comprises
no less than the amount of spectrum sufficient to operate one duplex CDMA
carrier (including the required guard bands) within the PCS Spectrum, and no
more than 10 MHz of the Spectrum (at Manager's designation) covering the Service
Area, and which includes the frequencies then in use in the Service Area Network
and, if applicable, adjacent frequencies, so long as such frequencies in the
aggregate do not exceed 10 MHz.
"DISPUTE NOTICE" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"DISPUTE NOTICE DATE" has the meaning set forth in Section 12.1.3 of
the Management Agreement or Section 5.1.3 of the Services Agreement.
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"ENCUMBRANCES" has the meaning set forth in Section 5.1 (a) of the
Sprint Spectrum Trademark and Service Xxxx License Agreement or Section 5.1 (a)
of the Sprint Trademark and Service Xxxx License Agreement.
"ENTIRE BUSINESS VALUE" has the meaning set forth in Section 11.7.3 of
the Management Agreement.
"EVENT OF TERMINATION" means any of the events described in Section
11.3 of the Management Agreement. For the purposes of the Sprint Spectrum
Trademark and Service Xxxx License Agreement only, "Event of Termination" has
the meaning set forth in Section 13.2 of that agreement. For the purposes of the
Sprint Trademark and Service Xxxx License Agreement only, "Event of Termination"
has the meaning set forth in Section 13.2 of that agreement.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FINANCIAL LENDER" means any and all of those commercial and financial
institutions that provide material credit to Manager for the purpose of
assisting Manager with the fulfillment of its obligations and duties under this
agreement.
"FIXED WIRELESS LOCAL LOOP" has the meaning set forth in Section 2.4 of
the Management Agreement.
"HOME SERVICE AREA" means the geographic area within which a customer
can make a local call on the customer's PCS phone (i.e., the customer does not
incur an extra charge).
"INBOUND ROAMING" means calls placed by a non-Sprint PCS Network
customer on the Sprint PCS Network.
"INDEMNITEE" and "INDEMNITOR" have the meanings set forth in Section
13.3.1 of the Management Agreement or Section 6.3.1 of the Services Agreement.
"INITIAL TERM" has the meaning set forth in Section 11. 1 of the
Management Agreement.
"INVOLUNTARY BANKRUPTCY" has the meaning set forth in Section 11.3.7 of
the Management Agreement.
"LAW" means all laws (statutory or otherwise), ordinances, rules,
regulations, bylaws, Orders and codes of all governmental and regulatory
authorities, whether United States Federal, state or local, which are applicable
to the Sprint PCS Products and Services.
"LICENSE" means the PCS license(s) issued by the FCC described on the
Service Area Exhibit to the Management Agreement.
"LICENSED MARKS" means the trademarks and service marks referred to in
the Recitals section of the Trademark License Agreement under whose terms this
definition is being applied, and such other marks as may be adopted and
established under said agreement from time to time.
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"LICENSEE" has the meaning set forth in the introductory paragraph to
the particular agreement under whose terms this definition is being applied.
"LICENSOR" has the meaning set forth in the introductory paragraph to
the particular agreement under whose terms this definition is being applied.
"LOCAL CALLING AREA" means the geographic area within which a customer
can make a local call on the customer's PCS handset without incurring a long
distance charge.
"LOSS" means any and all damage, loss, liability, claim, out-of-pocket
cost and expense, including reasonable expenses of investigation and reasonable
attorneys' fees and expenses, but excluding consequential or special damages.
"MANAGEMENT AGREEMENT" means that certain Sprint PCS Management
Agreement executed by Manager and Sprint PCS and any documents incorporated by
reference in said agreement.
"MANAGER" means the party to this agreement as indicated in the
introductory paragraph of this agreement.
"MANAGER MANAGEMENT REPORT" has the meaning set forth in Section 12.1.2
of the Management Agreement.
"MANAGER'S PRODUCTS AND SERVICES" means all types and categories of
wireless communications services and associated products that are offered by
Manager in the Service Area under Section 3.2 of the Management Agreement.
"MARKETING COMMUNICATIONS GUIDELINES" means the guidelines issued by
Sprint or Sprint PCS in accordance with Section 5.2 of the Management Agreement
with respect to the marketing, promotion, advertising, distribution, lease and
sale of Sprint PCS Products and Services, as they may be amended from time to
time by Sprint or Sprint PCS in accordance with the terms of the Trademark
License Agreements.
"MASTER SIGNATURE PAGE" means the document that the parties to the
Management Agreement, Services Agreement and/or one or more of the Trademark
License Agreements sign to evidence their agreement to execute, become a party
to and be bound by each of the agreements, or parts thereof, listed above the
particular party's signature on such Master Signature Page.
"MFN PRICE" or "MOST FAVORED NATION PRICE" means, with respect to
resale, the best local market price offered to any third party for the purchase
of air time on Manager's network including but not limited to any third party
who may use the air time for its own wireless communications services or resell
the air time, and, with respect to roaming, the lowest roaming charge of Manager
to other wireless carriers when their customers roam on the Service Area
Network.
"MIN" means the 24-bit mobile identification number corresponding to
the 7-digit telephone number assigned to the handset, used for both billing and
receiving calls.
"MTA" means a Major Trading Area for which a MTA license is issued by
the FCC.
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"NEW COVERAGE" means the build-out in the Service Area that is in
addition to the build-out required under the then-existing Build-out Plan, which
build-out Sprint PCS or Manager decides should be built-out.
"NOTICE ADDRESS SCHEDULE" means the schedule attached to the Master
Signature Page that provides the mailing and courier delivery addresses, and the
facsimile number, for giving notices to each of the parties signing the Master
Signature Page. The Notice Address Schedule may include supplemental addresses
that serve as additional or alternate notice addresses for use by the parties in
specifically prescribed situations.
"NPA-NXX" means as follows: "NPA" means numbering plan area, which is
the area code for a telephone number. "NXX" refers to the first three digits of
a telephone number, which identify the specific telephone company central office
that serves that number.
"OFFER" means an offer received by Manager to sell substantially all of
the assets comprising or used in connection with the operation and management of
the Service Area Network or any portion of the Service Area Network.
"OFFER NOTICE" means a written notice given by Manager to Sprint PCS
that sets forth in detail the terms and conditions of an Offer and the name and
address of the person or entity making the Offer.
"OFFERED INTEREST" means the assets that Manager proposes to sell
pursuant to an Offer.
"OPERATING ASSETS" means the assets Manager or its Related Parties owns
and uses in connection with the operation of the Service Area Network, at the
time of termination, to provide the Sprint PCS Products and Services. Operating
Assets does not include items such as furniture, fixtures and buildings that
Manager or its Related Parties use in connection with other businesses. Examples
of Operating Assets include without limitation: switches, towers, cell sites,
systems, records and retail stores.
"OPERATIONAL LEVEL OF SPRINT PCS" means the average operational level
of all the service area networks operated by Sprint PCS and its Related Parties
without the use of a manager or affiliate, as measured by Sprint PCS, unless the
operational level, as measured by Sprint PCS, of all of the service area
networks operated by Sprint PCS and its Related Parties without the use of a
manager or affiliate that are contiguous to the Service Area are below the
national average, in which case "Operational Level of Sprint PCS" means the
average operational level of those contiguous service area networks.
"ORDER" means any order, writ, injunction, decree, judgment, award or
determination of any court or governmental or regulatory authority.
"OTHER MANAGERS" means any person or entity with which Sprint PCS has
entered into an agreement similar to this agreement or an Affiliation Agreement,
including without limitation an affiliate under an Affiliation Agreement or a
manager under another Management Agreement, under which the person or entity
designs, constructs and manages a service area network and offers and promotes
Sprint PCS Products or Services.
"OUTBOUND ROAMING" means calls placed by a Sprint PCS Network customer
on a non-Sprint PCS network.
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"PARENT" means, with respect to any Person, the ultimate parent entity
(as determined in accordance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976 and the rules and regulations promulgated thereunder) of such
Person; except that if such ultimate parent entity is an individual, the Parent
will be the highest entity in the ownership chain from the ultimate parent
entity to and including such Person that is not an individual.
"PARTIES" means, with respect to the Management Agreement, Sprint PCS
and Manager. For the purpose of the services Agreement only, "parties" means
Sprint Spectrum and Manager. Sprint is not a party to the Management Agreement,
except to the limited extent described on the signature page executed on behalf
of Sprint. For the purpose of the Trademark License Agreements only, "parties"
means Licensor and Licensee.
"PCS" means a radio communication system authorized under the rules for
broadband personal communications services designated as Subpart E of Part 24 of
the FCC's rules, including the network, marketing, distribution, sales, customer
interface and operations functions relating thereto.
"PCS SPECTRUM" means the range of frequencies that Sprint PCS is
authorized to use under the License.
"PERMITTED ASSIGNEE" means any assignee of the rights and obligations
of Licensee pursuant to an assignment consented to in writing by Licensor, in
its sole discretion, in accordance with Section 14.1 of the Sprint Spectrum
Trademark and Service Xxxx License Agreement or Section 14.1 of the Sprint
Trademark and Service Xxxx License Agreement, or any subsequent permitted
assignee of any such permitted assignee.
"PERSON" means any individual, partnership, limited partnership,
limited liability company, corporation, trust, other business association or
business entity, estate, or other entity.
"POPS" means the population covered by a license or group of licenses.
Unless otherwise noted, as used in the Management Agreement, pops means the most
recent Xxxx-XxXxxxx Population Survey estimate of the population of a geographic
area.
"PREMIUM AND PROMOTIONAL ITEMS" means all items, including clothing,
memorabilia and novelties, used to display the Licensed Marks for the purpose of
promoting the awareness, sale or image of the Sprint PCS Products and Services;
provided, however, that Premium and Promotional Items does not include marketing
and advertising materials prepared by Licensee that are subject to the Marketing
Communications Guidelines (e.g. printed materials such as xxxx stuffers,
brochures and similar materials).
"PRIME RATE" means the rate announced from time to time by The Chase
Manhattan Bank, or its successor(s), as its prime rate.
"PROGRAM REQUIREMENTS" means the standards, guidelines, plans, policies
and programs established by Sprint PCS from time to time regarding the operation
and management of the Service Area Network and the Sprint PCS business operated
using the Service Area Network, including the Program Requirements set forth in
Sections 4.1, 4.2, 4.3, 7.2 and 8.1 of the Management Agreement. Sprint PCS may
also implement Program Requirements respecting a voluntary resale program, as
defined in Section 3.5.2 of the Management Agreement.
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"PURCHASE NOTICE" has the meaning set forth in Section 1.2 of Exhibit
11.8 to the Management Agreement.
"QUALITY STANDARDS" has the meaning set forth in Section 2.1 (a) of the
Sprint Spectrum Trademark and Service Xxxx License Agreement or Section 2.1 (a)
of the Sprint Trademark and Service Xxxx License Agreement.
"XXXX-XXXXXXX POPULATION SURVEY" means the most recent population
survey published by Xxxx- XxXxxxx or, if Xxxx-XxXxxxx no longer publishes the
surveys, then the most recent population survey published by any successor
organization to Xxxx-XxXxxxx or, if no such organization exists, an organization
selected by Sprint PCS that provides surveys similar to the Xxxx-XxXxxxx
surveys.
"RECEIVING PARTY" has the meaning, set forth in Section 3. 1 of the
Sprint Spectrum Trademark and Service Xxxx License Agreement or Section 3.1 of
the Sprint Trademark and Service Xxxx License Agreement.
"RELATED EQUIPMENT" means customer-controlled equipment for use in
connection with the Sprint PCS Products and Services including telephones,
wireless handsets and related accessories, PCMCIA cards, "smart" cards, PDA's,
PBX's, set-top boxes and data terminals.
"RELATED PARTY" means, with respect to any Person, any other Person
that directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the Person. For purposes of the
Management Agreement, Sprint Spectrum, SprintCom, American PCS Communications,
LLC, PhillieCo Partners I, L.P., and Xxx Communications PCS, L.P. will be deemed
to be Related Parties. For purposes of this definition, the term "controls"
(including its correlative meanings "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"RESTRICTED PARTY" has the meaning set forth in Section 3.1 of the
Sprint Spectrum Trademark and Service Xxxx License Agreement or Section 3.1 of
the Sprint Trademark and Service Xxxx License Agreement.
"SELECTED SERVICES" means those Available Services selected by Manager
to be provided by Sprint Spectrum under Section 2.1 of the Services Agreement.
An Available Service will not be treated as a Selected Service until Sprint
Spectrum begins providing that service.
"SERVICE AREA" means the geographic area described on the Service Area
Exhibit to the Management Agreement.
"SERVICE AREA NETWORK" means the network and business activities
managed by Manager under the Management Agreement in the Service Area under the
License.
"SERVICES AGREEMENT" means that certain Sprint PCS Services Agreement
executed by Manager and Sprint Spectrum and any documents incorporated by
reference in said agreement, whereby Manager may delegate the performance of
certain services to Sprint PCS for fees that represent an adjustment of the fees
paid by Sprint PCS to Manager under Section 10 of the Management Agreement.
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"SITING REGULATIONS" means:
(1) FCC regulations governing tower siting, lighting, marking
monitoring, and reporting of lighting malfunctions as set forth in 47
CFR Sections 17.1 through 17.58, and as may be amended;
(2) FAA regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 14
CFR Sections 77.1 through 77.75, and as may be amended;
(3) FCC land use regulations as set forth in 47 CFR Sections
1.1301 through 1.1319, and as may be amended; and
(4) FCC radio frequency exposure regulations as set forth in
47 CFR Sections 1. 1301 through 1. 1319, and as may be amended.
"SPECTRUM" has the same meaning as PCS Spectrum.
"SPRINT" means Sprint Communications Company, L.P., a Delaware limited
partnership.
"SPRINT BRANDS" means the "Licensed Marks" as that term is defined
under the Sprint Trademark and Service Xxxx License Agreement.
"SPRINT PCS" means any or all of the following Related Parties who are
License holders and signatories to the Management Agreement: Sprint Spectrum
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation,
PhillieCo Partners I, L.P., a Delaware limited partnership, Xxx Communications
PCS, L.P., a Delaware limited partnership, and American PCS Communications, LLC,
a Delaware limited liability company. Each entity listed above is a Related
Party to each of the other listed entities.
"SPRINT PCS AFFILIATION AGREEMENT" has the same meaning as Affiliation
Agreement.
"SPRINT PCS BRANDS" means the "Licensed Marks" as that term is defined
under the Sprint Spectrum Trademark and Service Xxxx License Agreement.
"SPRINT PCS COMMUNICATIONS POLICIES" means the policies established in
accordance with Section 6.4 of the Management Agreement with respect to public
relations development, maintenance and management, as they may be amended from
time to time by Sprint PCS in accordance with the terms of the Management
Agreement.
"SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS" means the program
and requirements established in accordance with Section 8.1 of the Management
Agreement with respect to customer service development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"SPRINT PCS CUSTOMER SERVICE STANDARDS" means those customer service
standards developed by Sprint PCS with respect to customer service and
maintenance as described in Section 8.1 of the Management
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Agreement, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"SPRINT PCS INSURANCE REQUIREMENTS" means the insurance requirements
developed by Sprint PCS as described in Section 12.3 of the Management
Agreement, as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"SPRINT PCS MANAGEMENT AGREEMENT" has the same meaning as Management
Agreement.
"SPRINT PCS NATIONAL ACCOUNTS PROGRAM REQUIREMENTS" means the program
and requirements established in accordance with Section 4.2 of the Management
Agreement with respect to national accounts development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"SPRINT PCS NATIONAL OR REGIONAL DISTRIBUTION PROGRAM REQUIREMENTS"
means any distribution program and requirements established in accordance with
Section 4.1 of the Management Agreement, as it may be amended from time to time
by Sprint PCS in accordance with the terms of the Management Agreement, and
entered into by Sprint PCS or its Related Parties and a third-party distributor
(for example, a national chain of retail electronics stores) from time to time,
under which the third party will distribute, lease, or sell Sprint PCS Products
and Services on a national or regional basis. The term "distributor" means a
reseller of Sprint PCS Products and Services, or an agent of Sprint PCS
authorized to sell Sprint PCS Products and Services on behalf of Sprint PCS, or
a person engaged in any other means of wholesale or retail distribution of
Sprint PCS Products and Services.
"SPRINT PCS NETWORK" means the national wireless network and business
activities to be developed by Sprint PCS, Manager and Other Managers in the
United States and certain of its territories and possessions, which network
includes the Service Area Network.
"SPRINT PCS PRODUCTS AND SERVICES" means all types and categories of
wireless communications services and associated products that are designated by
Sprint PCS (whether now existing or developed and implemented in the future) as
products and services to be offered by Sprint PCS, Manager and all Other
Managers as the products and services of the Sprint PCS Network for fixed and
mobile voice, short message and other data services under the FCC's rules for
broadband personal communications services, including all local area service
plans. Sprint PCS Products and Services do not include wireline products or
services, including local exchange service, wireline long distance service, and
wireline based Internet access.
"SPRINT PCS ROAMING AND INTER SERVICE AREA PROGRAM REQUIREMENTS" means:
(i) the roaming program and requirements established in
accordance with Section 4.3 of the Management Agreement, as amended from time to
time by Sprint PCS in accordance with the terms of the Management Agreement, to
provide for customers from a carrier not associated with the Sprint PCS Network
to operate the customer's handset on the Sprint PCS Network and for customers
from the Sprint PCS Network (whether customers of Sprint PCS, Manager or an
Other Manager) to operate the customer's handset on a network of a carrier not
associated with the Sprint PCS Network, and
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(ii) the program established in accordance with Section 4.3 of
the Management Agreement, as amended from time to time by Sprint PCS in
accordance with the terms of the Management Agreement, to provide for customers
from one Service Area on the Sprint PCS Network, whether managed by Sprint PCS,
Manager, or an Other Manager, to operate the customer's handsets and otherwise
receive seamless service, regardless of whether the customer makes its call to
or from the Sprint PCS Network and regardless of whether the customer is a
customer of Sprint PCS, Manager or an Other Manager.
"SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS" means the operating and
technical performance standards established by Sprint PCS, in accordance with
Section 7.2 of the Management Agreement, as amended from time to time by Sprint
PCS in accordance with the terms of the Management Agreement, for the Sprint PCS
Network as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"SPRINT SPECTRUM" means Sprint Spectrum L.P., a Delaware limited
partnership.
"SPRINT SPECTRUM BRANDS" means the "Licensed Marks" as that term is
defined under the Sprint Spectrum Trademark and Service Xxxx License Agreement.
"SPRINT SPECTRUM TRADEMARK AND SERVICE XXXX LICENSE AGREEMENT" means
that certain Sprint Spectrum Trademark and Service Xxxx License Agreement
executed by Manager and Sprint Spectrum and any documents incorporated by
reference in said agreement.
"SPRINT TRADEMARK AND SERVICE XXXX LICENSE AGREEMENT" means that
certain Sprint Trademark and Service Xxxx License Agreement executed by Manager
and Sprint and any documents incorporated by reference in said agreement.
"SPRINTCOM" means SprintCom, Inc., a Kansas corporation.
"SUBSIDIARY" of any Person as of any relevant date means a corporation,
company or other entity (i) more than 50% of whose outstanding shares or equity
securities are, as of such date, owned or controlled, directly or indirectly
through one or more Subsidiaries, by such Person, and the shares or securities
so owned entitle such Person and/or Subsidiaries to elect at least a majority of
the members of the board of directors or other managing authority of such
corporation, company or other entity notwithstanding the vote of the holders of
the remaining shares or equity securities so entitled to vote or (ii) which does
not have outstanding shares or securities, as may be the case in a partnership,
joint venture or unincorporated association, but more than 50% of whose
ownership interest is, as of such date, owned or controlled, directly or
indirectly through one or more Subsidiaries, by such Person, and in which the
ownership interest so owned entitles such Person and/or Subsidiaries to make the
decisions for such corporation, company or other entity.
"SUCCESSOR NOTICE" has the meaning set forth in Section 17.15.2(e) of
the Management Agreement.
"TERM" means during the term of the Management Agreement, including the
Initial Term and any renewal terms.
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"TRADEMARK AND SERVICE XXXX USAGE GUIDELINES" means the rules governing
the depiction and presentation of the Licensed Marks then generally in use by
Licensor, to be furnished by Licensor to Licensee, as the same may be amended
and updated from time to time by Licensor.
"TRADEMARK LICENSE AGREEMENTS" means the Sprint Trademark and Service
Xxxx License Agreement and the Sprint Spectrum Trademark and Service Xxxx
License Agreement.
"TYPE II REPORT" has the meaning set forth in Section 12.1.2 of the
Management Agreement.
"VOLUNTARY BANKRUPTCY" has the meaning set forth in Section 11.3.7 of
the Management Agreement.
"WIRELESS MOBILITY COMMUNICATIONS NETWORK" means a radio communications
system operating in the 1900 MHz spectrum range under the rules designated as
Subpart E of Part 24 of the FCC's rules.
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ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
(WISCONSIN)
MANAGER: ALAMOSA WISCONSIN LIMITED PARTNERSHIP
SERVICE AREA:
o Appleton-0shkosh BTA 18,
o Eau Claire BTA 000,
x Xxxx xx Xxx XXX 000,
x Xxxxx Xxx BTA 173,
o La Crosse-Winona BTA 234,
o Madison BTA 272 (Only Columbia, Juneau, Marquette, Sauk Counties and those
portions of Dane County where Manager will meet Sprint PCS coverage along
Highway 151 and I-90/94 north of Madison),
o Manitowoc BTA 276,
o Milwaukee BTA 297 (Only those portions of Dodge County not currently
covered by Sprint PCS along Highway 41 and the City of Watertown),
o Minneapolis-St. Xxxx BTA 298 (Only Xxxxxx County and those portions of Polk
County not currently covered by Sprint PCS along Highway 8 near the city of
St. Croix Falls),
o Sheboygan BTA 417,
o Stevens Point-Marshfield-Wisconsin Rapids BTA 432,
o Wausau-Rhinelander BTA 466.
This Addendum contains certain additional and supplemental terms and
provisions of that certain Sprint PCS Management Agreement (the "Management
Agreement") entered into contemporaneously with and by the same parties as the
Addendum to the Management Agreement. The terms and provisions of this Addendum
control supersede and amend any conflicting terms and provisions contained in
the Management Agreement. Except for express modifications made in this
Addendum, the 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 that certain 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:
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1. COVERAGE ENHANCEMENT. Section 2.5 is deleted in its entirety and
replaced by the following language:
2.5 MANAGER'S RIGHT OF FIRST REFUSAL FOR NEW AREA BUILD-OUT.
Sprint PCS grants to Manager the first right of first refusal to
build-out New Areas. Sprint PCS will give to Manager a written notice
of a New Area within the Service Area that Sprint PCS decides should
be built-out. Manager must communicate to Sprint PCS within 90 days
after receipt of the notice whether it will build-out the New Area,
otherwise Manager's right of first refusal terminates with regard to
the New Area described in the notice.
If Manager decides to build-out the New Area then Manager and
Sprint PCS will diligently negotiate and execute an amendment to the
Build-out Plan and proceed as set forth in Sections 2.1 and 2.2. The
amendment Build-out Plan will contain critical milestones that provide
Manager a commercially reasonable period in which to implement coverage
in the New Area. In determining what constitutes a "commercially
reasonable period" as used in this paragraph, the parties will consider
several factors, including local zoning processes and other legal
requirements, weather conditions, equipment delivery schedules, the
need to arrange additional financing, and other construction already in
progress by the Manager. Manager will construct and operate the network
in the New Area in accordance with the terms of this agreement.
If Manager declines to exercise its right of first refusal or
Manager fails to build-out the New Area in accordance with the amended
Build-out Plan then Sprint PCS may construct the New Area itself or
allow a Sprint PCS Related Party or an Other Manager to construct the
New Area. Sprint PCS has the right, in a New Area that it constructs or
that is constructed by a third party, to manage the network, allow
Sprint PCS Related Party to manage the network, or hire a manager to
operate the network in the New Area. Any New Area that Sprint PCS or a
third party builds-out is deemed removed from the Service Area and the
Service Area Exhibit is deemed amended to reflect the change in the
Service Area. If Manager does not exercise its right of first refusal
with respect to a New Area, Manager's right of first refusal does not
terminate with respect to the remainder of the Service Area.
2. 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 (1) 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 (2) Manager's response is not requested by
Sprint PCS."
3. COMPLIANCE. Sprint PCS acknowledges that smaller population centers
within the Service Area may merit an adjusted application of Sprint PCS' Retail
Store requirements and its Customer Service requirements in order to preserve
the economic benefits of this agreement for Manager and Sprint PCS. Accordingly,
with respect to cities located within the Service Area having a population of
less than 100,000 according to the most recently completed United States
government census), Sprint PCS will exercise commercial reasonableness with
respect to its Retail Store requirements and its Customer Service requirements.
4. VOLUNTARY RESALE OF PRODUCTS AND SERVICES. Section 3.5.2 is modified
by amending the second sentence of the second paragraph in its entirety to read
as follows: "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."
5. FINANCING. (a) The word "and" is inserted between the words
"thereto" and "before" in the last sentence of Section 1.7.
(b) The following paragraph is added at the end of Section 1.7:
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.
6. 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 the agreement and/or 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. Manager will be
charged the same price for such long-distance service as Sprint PCS is
charged by Sprint (excluding interservice area long-distance travel
rates) plus an additional administrative fee to cover Sprint PCS'
processing costs.
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(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."
7. RIGHT OF LAST OFFER. Section 3.7 is modified by adding the following
language: "(other than backhaul services relating to national platform and IT
application connections, which Manager must purchase from Sprint)" both between
(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.
8. NON-TERMINATION OF AGREEMENT. The following language is added at the
end of 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 second sentence: "are
described on Exhibit 17.25, and photocopies of any such written agreements have
been delivered to Sprint PCS".
11. FEDERAL CONTRACTOR COMPLIANCE. A new Section 17.28, the text of
which is attached as Exhibit A " is added and incorporated by this reference.
When and to the extent required by applicable law, Manager will comply with the
requirement of this Section 17.28.
12. YEAR 2000 COMPLIANCE. The following Section 17.29 is added:
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 systems or equipment
selected by Sprint PCS (including systems or equipment of third party
vendors and subcontractors that 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") that perform and otherwise process, date- arithmetic,
display, print or pass date/time data in a consistent manner,
regardless of the date in time
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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.
13. PAYMENT OF FEES UNDER SERVICES 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.
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