EXHIBIT 10.1
SPRINT PCS
MANAGEMENT AGREEMENT
BETWEEN
WIRELESSCO, L.P.
SPRINT SPECTRUM L.P.
and
ILLINOIS PCS, LLC
Dated as of January 22, 1999
TABLE OF CONTENTS
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Page
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1. MANAGER................................................................. 2
1.1 Hiring of Manager........................................... 2
1.2 Program Requirements........................................ 3
1.3 Vendor Purchase Agreements.................................. 3
1.4 Interconnection............................................. 3
1.5 Seamlessness................................................ 4
1.6 Forecasting................................................. 4
1.7 Financing................................................... 4
1.8 Ethical Conduct and Related Covenants....................... 4
2. BUILD-OUT OF NETWORK.................................................... 4
2.1 Build-out Plan.............................................. 4
2.2 Compliance with Regulatory Rules............................ 4
2.3 Exclusivity of Service Area................................. 5
2.4 Restriction................................................. 5
2.5 Coverage Enhancement........................................ 6
2.6 Purchase of Assets by Manager............................... 7
2.7 Microwave Relocation........................................ 8
2.8 Determination of pops....................................... 8
3. PRODUCTS AND SERVICES; IXC SERVICES..................................... 8
3.1 Sprint PCS Products and Services............................ 8
3.2 Other Products and Services................................. 8
3.3 Cross-selling with Sprint................................... 9
3.4 IXC Services................................................ 9
3.5 Resale of Products and Services............................. 9
3.5.1 Mandatory Resale of Products and Services............ 9
3.5.2 Voluntary Resale of Products and Services............ 10
3.6 Non-competition............................................. 10
3.7 Right of Last Offer......................................... 11
4. MARKETING AND SALES ACTIVITIES.......................................... 11
4.1 Sprint PCS National or Regional Distribution
Program Requirements........................................ 11
4.1.1 Territorial Limitations on Manager's
Distribution Activities.............................. 11
4.1.2 Settlement of Equipment Sales........................ 12
4.1.3 Use of Third-Party Distributors...................... 12
4.2 Sprint PCS National Accounts Program Requirements........... 13
(ii)
4.3 Sprint PCS Roaming and Inter Service Area Program
Requirements................................................ 13
4.4 Pricing..................................................... 13
4.5 Home Service Area........................................... 14
5. USE OF BRANDS........................................................... 14
5.1 Use of Brands............................................... 14
5.2 Conformance to Marketing Communications Guidelines.......... 15
5.3 Joint Marketing With Third Parties.......................... 15
5.4 Prior Approval of Use of Brands............................. 16
5.5 Duration of Use of Brand.................................... 16
6. ADVERTISING AND PROMOTION............................................... 16
6.1 National Advertising and Promotion.......................... 16
6.2 In-Territory Advertising and Promotion...................... 16
6.3 Review of Advertising and Promotion Campaigns............... 17
6.4 Public Relations............................................ 17
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS............................... 17
7.1 Conformance to Sprint PCS Technical Program Requirements.... 17
7.2 Establishment of Sprint PCS Technical Program Requirements.. 18
7.3 Handoff to Adjacent Networks................................ 18
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS........................ 18
8.1 Compliance With Sprint PCS Customer Service Program
Requirements................................................ 18
9. SPRINT PCS PROGRAM REQUIREMENTS......................................... 19
9.1 Program Requirements Generally.............................. 19
9.2 Amendments to Program Requirements.......................... 19
9.3 Manager's Right to Request Review of Changes................ 20
9.4 Sprint PCS' Right to Implement Changes...................... 21
9.5 Rights of Inspection........................................ 21
9.6 Manager's Responsibility to Interface with Sprint PCS....... 21
10. FEES.................................................................... 21
10.1 Fees and Payments........................................... 21
10.1.1 Fee Based on Collected Revenues..................... 21
10.1.2 Payment of Universal Service Funds.................. 22
10.1.3 Inter Service Area Fees............................. 22
10.1.4 Interconnect Fees................................... 22
10.1.5 Outbound Roaming Fees............................... 22
10.1.6 Reimbursements...................................... 22
(iii)
10.2 Monthly True Up............................................. 22
10.3 Taxes....................................................... 23
10.4 Collected Revenues Definition............................... 23
10.5 Late Payments............................................... 24
10.6 Setoff Right If Failure To Pay Amounts Due.................. 24
11. TERM; TERMINATION; EFFECT OF TERMINATION................................ 25
11.1 Initial Term................................................ 25
11.2 Renewal Terms............................................... 25
11.2.1 Non-renewal Rights of Manager........................ 25
11.2.1.1 Manager's Put Right........................ 25
11.2.1.2 Manager's Purchase Right................... 26
11.2.2 Non-renewal Rights of Sprint PCS........... 27
11.2.2.1 Sprint PCS' Purchase Right................. 27
11.2.2.2 Sprint PCS' Put Right...................... 27
11.2.3 Extended Term Awaiting FCC Approval.................. 28
11.3 Events of Termination....................................... 28
11.3.1 Termination of License.............................. 28
11.3.2 Breach of Agreement: Payment of Money Terms......... 29
11.3.3 Breach of Agreement: Other Terms.................... 29
11.3.4 Regulatory Considerations........................... 29
11.3.5 Termination of Trademark License Agreements......... 29
11.3.6 Financing Considerations............................ 30
11.3.7 Bankruptcy of a Party............................... 30
11.4 Effect of an Event of Termination........................... 31
11.5 Manager's Event of Termination Rights and Remedies.......... 32
11.5.1 Manager's Put Right................................. 32
11.5.2 Manager's Purchase Right............................ 33
11.5.3 Manager's Action for Damages or Other Relief........ 34
11.6 Sprint PCS' Event of Termination Rights and Remedies........ 34
11.6.1 Sprint PCS' Purchase Right.......................... 34
11.6.2 Sprint PCS' Put Right............................... 34
11.6.3 Sprint PCS' Right to Cause A Cure................... 35
11.6.4 Sprint PCS' Action for Damages or Other Relief...... 37
11.7 Determination of Entire Business Value...................... 37
11.7.1 Appointment of Appraisers........................... 37
11.7.2 Manager's Operating Assets.......................... 37
11.7.3 Entire Business Value............................... 38
11.7.4 Calculation of Entire Business Value................ 39
11.8 Closing Terms and Conditions................................ 39
11.9 Contemporaneous and Identical Application................... 39
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE.................. 39
(iv)
12.1 Books and Records........................................... 39
12.1.1 General.............................................. 39
12.1.2 Audit................................................ 40
12.1.3 Contesting an Audit.................................. 40
12.2 Confidential Information.................................... 41
12.3 Insurance .................................................. 42
12.3.1 General.............................................. 42
12.3.2 Waiver of Subrogation................................ 43
12.3.3 Certificates of Insurance............................ 43
13. INDEMNIFICATION........................................................ 43
13.1 Indemnification by Sprint PCS............................... 43
13.2 Indemnification by Manager.................................. 43
13.3 Procedure................................................... 44
13.3.1 Notice............................................... 44
13.3.2 Defense by Indemnitor................................ 44
13.3.3 Defense by Indemnitee................................ 44
13.3.4 Costs................................................ 45
14. DISPUTE RESOLUTION..................................................... 45
14.1 Negotiation................................................. 45
14.2 Unable to Resolve........................................... 45
14.3 Attorneys and Intent........................................ 46
14.4 Tolling of Cure Periods..................................... 47
15. REPRESENTATIONS AND WARRANTIES......................................... 47
15.1 Due Incorporation or Formation; Authorization of Agreements. 47
15.2 Valid and Binding Obligation................................ 47
15.3 No Conflict; No Default..................................... 47
15.4 Litigation.................................................. 47
16. REGULATORY COMPLIANCE.................................................. 47
16.1 Regulatory Compliance....................................... 47
16.2 FCC Compliance.............................................. 48
16.3 Marking and Lighting........................................ 50
16.4 Regulatory Notices.......................................... 50
16.5 Regulatory Policy-Setting Proceedings....................... 50
17. GENERAL PROVISIONS..................................................... 50
17.1 Notices..................................................... 50
17.2 Construction................................................ 51
17.3 Headings.................................................... 51
17.4 Further Action.............................................. 51
(v)
17.5 Counterpart Execution....................................... 51
17.6 Specific Performance........................................ 51
17.7 Entire Agreement; Amendments................................ 51
17.8 Limitation on Rights of Others.............................. 52
17.9 Waivers..................................................... 52
17.9.1 Waivers--General.................................... 52
17.9.2 Waivers--Manager.................................... 52
17.9.3 Force Majeure....................................... 52
17.10 Waiver of Jury Trial........................................ 52
17.11 Binding Effect.............................................. 53
17.12 Governing Law............................................... 53
17.13 Severability. ............................................. 53
17.14 Limitation of Liability..................................... 53
17.15 No Assignment; Exceptions................................... 53
17.15.1 General............................................. 53
17.15.2 Assignment Right of Manager to Financial Lender..... 54
17.15.3 Change of Control Rights............................ 55
17.15.4 Right of First Refusal.............................. 56
17.15.5 Transfer of Sprint PCS Network...................... 57
17.16 Provision of Services by Sprint Spectrum.................... 57
17.17 Number Portability.......................................... 57
17.18 Disclaimer of Agency........................................ 57
17.19 Independent Contractors..................................... 58
17.20 Expense..................................................... 58
17.21 General Terms............................................... 58
17.22 Conflicts with Other Agreements............................. 58
17.23 Survival Upon Termination................................... 59
17.24 Announced Transaction....................................... 59
17.25 Additional Terms and Provisions............................. 59
17.26 Master Signature Page....................................... 59
17.27 Agent Authorization......................................... 59
(vi)
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made January 22, 1999, between
WirelessCo., L.P., a Delaware limited partnership, Sprint Spectrum L.P., a
Delaware limited partnership, SprintCom, Inc., a Kansas corporation, and
Illinois PCS, LLC, an Illinois limited liability company (but not any Related
Party) ("Manager"). The definitions for this agreement are set forth on the
"Schedule of Definitions".
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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."
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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:
. The design, construction and management of the Service Area Network;
. Offering and promoting products and services designated by Sprint PCS
as the Sprint PCS Products and Services of the Sprint PCS Network;
. Adherence to Program Requirements established by Sprint PCS to ensure
seamless interoperability throughout the Sprint PCS Network and
uniform and consistent quality of product and service offerings;
. Adherence to Customer Service Program Requirements established by
Sprint PCS to ensure consistency in interactions with customers
(including billing, customer care, etc.); and
. Adherence to Program Requirements relating to the marketing, promotion
and distribution of Sprint PCS Products and Services.
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;
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(c) to conduct continually during the Term advertising and promotion
activities in the Service Area (including mutual decisions to "go dark",
with respect to advertising and promotion activities, for reasonable
periods of time); and
(d) to manage that portion of the customer base of Sprint PCS that
has the NPA-NXXs assigned to the Service Area Network.
Sprint PCS has the right to unfettered access to the Service Area Network
to be constructed by Manager under this agreement. The fee to be paid to
Manager by Sprint PCS under Section 10 is for all obligations of Manager under
this agreement.
1.2 Program Requirements. Manager must adhere to the Program
Requirements established by Sprint PCS and as modified from time to time, to
ensure uniform and consistent operation of all wireless systems within the
Sprint PCS Network and to present the Sprint PCS Products and Services to
customers in a uniform and consistent manner under the Brands.
1.3 Vendor Purchase Agreements. Manager may participate in discounted
volume-based pricing on wireless-related products and services and in the
warranties Sprint PCS receives from its vendors, as is commercially reasonable
and to the extent permitted by applicable procurement agreements (e.g.,
agreements related to network infrastructure equipment, subscriber equipment,
interconnection, and collocation). Sprint PCS will use commercially reasonable
efforts to obtain for managers the same price Sprint PCS receives from vendors;
this does not prohibit Sprint PCS from entering into procurement agreements that
do not provide managers with the Sprint PCS prices.
Manager must purchase subscriber and infrastructure equipment from a Sprint
PCS approved list of products, which will include a selection from a variety of
manufacturers. Where required, the products must include proprietary software
developed by the manufacturers for Sprint PCS or by Sprint PCS to allow seamless
interoperability in the Sprint PCS Network. Sprint PCS or the vendor may require
Manager to execute a separate license agreement for the software prior to
Manager's use of the software.
Manager may only make purchases under this Section 1.3 for items to be used
exclusively in the Service Area (e.g., Manager may not purchase base stations
under a Sprint PCS contract for use in a system not affiliated with Sprint PCS).
1.4 Interconnection. If Manager desires to interconnect a portion of the
Service Area Network with another carrier and Sprint PCS can interconnect with
that carrier at a lower rate, then to the extent permitted by applicable laws,
tariffs and contracts, Sprint PCS may arrange for the interconnection under its
agreements with the carrier and if it does so, Sprint PCS will xxxx the
interconnection fees to Manager.
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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
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filing any registration statement or prospectus or any amendment or supplement
thereto before distributing any offering memorandum or amendment or supplement
thereto, and agrees not to file or distribute any such document if Sprint PCS
reasonably objects in writing on a timely basis to any portion of the document
that refers to Sprint PCS, its Related Parties, their respective businesses,
this agreement or the Services Agreement.
1.8 Ethical Conduct and Related Covenants. Each party must perform its
obligations under this agreement in a diligent, legal, ethical, and professional
manner.
2. BUILD-OUT OF NETWORK
2.1 Build-out Plan. Manager will build-out the Service Area Network in
the Service Area in accordance with a Build-out Plan. Sprint PCS and Manager
will jointly develop each Build-out Plan, except the initial Build-out Plan and
any modifications, additions or expansions of the Build-out Plan will be subject
to prior written approval by Sprint PCS. Manager will report to Sprint PCS its
performance regarding the critical milestones included in the Build-out Plan on
a periodic basis as mutually agreed to by the parties, but no less frequently
than quarterly. The Build-out Plan and the Service Area Network as built must
comply with Sprint PCS Program Requirements and federal and local regulatory
requirements.
Sprint PCS approves the Build-out Plan in effect as of the date of this
agreement, which Build-out Plan is attached as Exhibit 2.1. Each new or amended
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Build-out Plan will also become part of Exhibit 2.1.
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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
4
of any contact by a regulatory agency including the FCC with Manager or
Manager's site acquisition company regarding any filing. Sprint PCS has the
right to direct any proceeding, inquiry, dispute, appeal or other activity with
a regulatory or judicial authority regarding any filing made on behalf of Sprint
PCS. Manager will amend, modify, withdraw, refile and otherwise change any
filing as Sprint PCS requires. Notwithstanding the preceding sentences in this
Section 2.2, and in conjunction with Section 16, Sprint PCS is solely
responsible for making any and all filings with the FCC regarding the build-out.
Manager will notify Sprint PCS of any activity, event or condition related to
the build-out that might require an FCC filing.
2.3 Exclusivity of Service Area. Manager will be the only person or
entity that is a manager or operator for Sprint PCS with respect to the Service
Area and neither Sprint PCS nor any of its Related Parties will own, operate,
build or manage another wireless mobility communications network in the Service
Area so long as this agreement remains in full force and effect and there is no
Event of Termination that has occurred giving Sprint PCS the right to terminate
this agreement, except that:
(a) Sprint PCS may cause Sprint PCS Products and Services to be sold
in the Service Area through the Sprint PCS National Accounts Program
Requirements and Sprint PCS National or Regional Distribution Program
Requirements;
(b) A reseller of Sprint PCS Products and Services may sell its
products and services in the Service Area so long as such resale is not
contrary to the terms and conditions of this agreement; and
(c) Sprint PCS and its Related Parties may engage in the activities
described in Sections 2.4(a) and 2.4(b) with Manager in the geographic
areas within the Service Area in which Sprint PCS or any of its Related
Parties owns an incumbent local exchange carrier as of the date of this
agreement.
2.4 Restriction. In geographic areas within the Service Area in which
Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier as of the date of this agreement, Manager must not offer any Sprint PCS
Products or Services specifically designed for the competitive local exchange
market ("fixed wireless local loop"), except that:
(a) Manager may designate the local exchange carrier that is a
Related Party of Sprint PCS to be the exclusive distributor of the fixed
wireless local loop product in the territory served by the local exchange
carrier, even if a portion of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product under the
terms and conditions specified by Sprint PCS (e.g., including designation
by Sprint PCS of an exclusive distribution agent for the territory).
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This restriction exists with respect to a particular geographic area only
so long as Sprint PCS or its Related Party owns such incumbent local exchange
carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS
Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on Exhibit
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2.4.
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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
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under Section 11.3.3, Manager will not have a right to cure such breach, and
Sprint PCS may exercise its rights and remedies under Section 11.2.2.1.
Notwithstanding the preceding paragraphs in this Section 2.5, the capacity
and footprint parameters contained in the amended Build-out Plan will not be
required to exceed the parameters adopted by Sprint PCS in building out all of
its comparable service areas, unless such build-out relates to an obligation
regarding the Service Area Network mandated by law. When necessary for reasons
related to new technical standards, new equipment or strategic reasons, Sprint
PCS can require Manager to build-out the New Coverage concurrently with Sprint
PCS' build-out, in which case Sprint PCS will reimburse Manager for its costs
and expenses if Sprint PCS discontinues its related build-out.
If Sprint PCS requires build-out of New Coverage that will:
(a) cause the Manager to spend an additional amount greater than 5%
of Manager's shareholder's equity or capital account plus Manager's long-
term debt (i.e., notes that mature more than one year from the date
issued), as reflected on Manager's books; or
(b) cause the long-term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net
present value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the required New Coverage.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the New
Coverage. If after the review and decision by the Vice President or designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
still requires Manager to complete the New Coverage following the Chief
Officer's review, then if Manager and Sprint PCS fail to agree to an amended
Build-out Plan within 15 days after completion of the reconsideration process
described above in this paragraph or the end of the 90-day period described in
the second paragraph of this Section 2.5, whichever occurs first, then an Event
of Termination will be deemed to have occurred under Section 11.3.3, Manager
will not have a right to cure such breach, and Sprint PCS may exercise its
rights and remedies under Section 11.2.2.1.
2.6 Purchase of Assets by Manager. If Sprint PCS has assets located in
the Service Area that Manager could reasonably use in its construction of the
Service Area Network and if Sprint PCS is willing to sell such assets, then
Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to
Manager the assets in accordance with the terms and conditions of the asset
purchase agreement attached as Exhibit 2.6.
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2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one
carrier at a time. The parties will share equally all costs associated with
clearing spectrum under this Section 2.7.
2.8 Determination of 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
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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
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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
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determine whether Sprint PCS considers a product or service to be confusingly
similar to any Sprint PCS Products and Services by providing advance written
notice to Sprint PCS that describes those products and services that could be
interpreted to be confusingly similar to Sprint PCS Products and Services. If
Sprint PCS fails to provide a response to Manager within 30 days after receiving
the notice, then the products and services are deemed to create confusion with
the Sprint PCS Products and Services and the request therefore rejected. In
rejecting any request Sprint PCS must provide the reasons for the rejection. If
the rejection is based on Sprint PCS' failure to respond within 30 days and
Manager requests an explanation for the deemed rejection, then Sprint PCS must
provide within 30 days the reasons for the rejection.
3.3 Cross-selling with Sprint. Manager and Sprint and Sprint's Related
Parties may enter into arrangements to sell Sprint's services, including long
distance service (except those long distance services governed by Section 3.4),
Internet access, customer premise equipment, prepaid phone cards, and any other
services that Sprint or its Related Parties make available from time to time.
Sprint's services may be packaged with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet access or
competitive local telephone services including prepaid phone cards, of third
parties (other than Manager's Related Parties), Manager will give Sprint the
right of last offer to provide those services on the same terms and conditions
as the offer to which Manager is prepared to agree, subject to the terms of any
existing agreements Manager was subject to prior to execution of this agreement.
If Sprint sells Sprint PCS Products and Services in the Service Area,
Manager will provide such Sprint PCS Products and Services to such customers in
accordance with the terms and conditions of the Sprint PCS National or Regional
Distribution Program Requirements.
3.4 IXC Services. Manager must purchase from Sprint long distance
telephony services for the Sprint PCS Products and Services at wholesale rates.
Long distance telephone calls are those calls between the local calling area for
the Service Area Network and areas outside the local calling area. The local
calling area will be defined by mutual agreement of Sprint PCS and Manager. If
the parties cannot agree on the extent of the local calling area they will
resolve the matter through the dispute resolution process in Section 14. Any
arrangement must have terms at least as favorable to Manager (in all material
respects) as those offered by Sprint to any wholesale customer of Sprint in
comparable circumstances (taking into consideration volume, traffic patterns,
etc.). If Manager is bound by an agreement for these services and the agreement
was not made in anticipation of this agreement, then the requirements of this
Section 3.4 do not apply during the term of the other agreement. If the other
agreement terminates for any reason then the requirements of this Section 3.4 do
apply.
3.5 Resale of Products and Services
3.5.1 Mandatory Resale of Products and Services. Sprint PCS is
subject to FCC rules that require it to allow its service plans to be resold by
a purchaser of the service plan. Sprint PCS will not grant the purchaser of a
service plan the right to use any of the support
9
services offered by Sprint PCS, including customer care, billing, collection,
and advertising, nor the right to use the Brands. The reseller only has the
right to use the service purchased. Consequently, Manager agrees not to
interfere with any purchaser of the Sprint PCS Products or Services who resells
the service plans in accordance with this agreement and applicable law. Manager
will notify purchaser that the purchaser does not have a right to use the Brands
or Sprint PCS' support services. In addition, Manager will notify Sprint PCS if
it reasonably believes a reseller of retail service plans is using the support
services or Brands.
3.5.2 Voluntary Resale of Products and Services. Sprint PCS may
choose to offer a resale product under which resellers will resell Sprint PCS
Products and Services under brand names other than the Brands, except Sprint PCS
may permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The resellers
may also provide their own support services (e.g., customer care and billing) or
may purchase the support services from Sprint PCS.
If Sprint PCS chooses to offer a voluntary resale product, it will adopt a
program that will be a Program Requirement under this agreement and that
addresses the manner in which Manager and Other Managers interact with the
resellers. Manager must agree to comply with the terms of the program,
including its pricing provisions, if Manager wants handsets of subscribers of
resellers with NPA-NXXs of Manager to be activated. Usage of telecommunications
services while in the Service Area by subscribers of resellers with NPA-NXXs
from outside the Service Area will be subject to the pricing provisions of the
Sprint PCS Roaming and Inter Service Area Program for roaming and inter service
area pricing between Manager and Sprint PCS unless Manager agrees in writing to
different pricing.
Except as required under the regulations and rules concerning mandatory
resale, Manager may not sell Sprint PCS Products and Services for resale unless
Sprint PCS consents to such sales in advance in writing.
3.6 Non-competition. Neither Manager nor any of its Related Parties may
offer Sprint PCS Products and Services outside of the Service Area without the
prior written approval of Sprint PCS.
Within the Service Area, Manager and Manager's Related Parties may offer,
market or promote telecommunications products or services only under the
following brands:
(a) products or services with the Brands;
(b) other products and services approved under Section 3.2;
(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related
Parties,
10
except no brand of a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business may be used by Manager or Manager's Related
Parties on these products and services.
If Manager or any of its Related Parties has licenses to provide broadband
personal communication services outside the Service Area, neither Manager nor
such Related Party may utilize the spectrum to offer Sprint PCS Products and
Services without prior written consent from Sprint PCS. Additionally, when
Manager's customers from inside the Service Area travel or roam to other
geographic areas, Manager will route the customers' calls, both incoming and
outgoing, according to the Sprint PCS Network Roaming and Inter Service Area
Program Requirements, without regard to any wireless networks operated by
Manager or its Related Parties. For example, Manager will program the preferred
roaming list for handsets sold in the Service Area to match the Sprint PCS
preferred roaming list.
3.7 Right of Last Offer. Manager will offer to Sprint the right to make
to Manager the last offer to provide backhaul and transport services for call
transport for the Service Area Network, if Manager decides to use third parties
for backhaul and transport services rather than self-provisioning the services
or purchasing the services from Related Parties of Manager. Sprint will have a
reasonable time to respond to Manager's request for last offer to provide
backhaul and transport pricing and services, which will be no greater than 5
Business Days after receipt of the request for the services and pricing from
Manager.
If Manager has an agreement in effect as of the date of this agreement for
these services and the agreement was not made in anticipation of this agreement,
then the requirements of this Section 3.7 do not apply during the term of the
other agreement. If the other agreement terminates for any reason then the
requirements of this Section 3.7 do apply.
4. MARKETING AND SALES ACTIVITIES
4.1 Sprint PCS National or Regional Distribution Program Requirements.
During the term of this agreement, Manager must participate in any Sprint PCS
National or Regional Distribution Program (as in effect from time to time), and
will pay or receive compensation for its participation in accordance with the
terms and conditions of that program. The Sprint PCS National or Regional
Distribution Program Requirements in effect as of the date of this agreement are
attached as Exhibit 4.1.
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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
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(b) Manager may place advertising in media that has distribution
outside of the Service Area, so long as that advertising is intended by
Manager to reach primarily potential customers within the Service Area.
4.1.2 Settlement of Equipment Sales. Sprint PCS will establish a
settlement policy and process that will be included in the Sprint PCS National
or Regional Distribution Program Requirements to:
(a) reconcile sales of subscriber equipment made in the service areas
of Sprint PCS or Other Managers of Sprint PCS, that result in activations
in the Service Area; and
(b) reconcile sales of subscriber equipment made in the Service Area
that result in activations in service areas of Sprint PCS or Other
Managers.
In general, the policy will provide that the party in whose service area
the subscriber equipment is activated will be responsible for the payment of any
subsidy (i.e., the difference between the price paid to the manufacturer and the
suggested retail price for direct channels or the difference between the price
paid to the manufacturer and the wholesale price for third party retailers) and
for other costs associated with the sale, including logistics, inventory
carrying costs, direct channel commissions and other retailer compensation.
4.1.3 Use of Third-Party Distributors.
(a) Manager may request that Sprint PCS and a local distributor enter
into Sprint PCS' standard distribution agreement regarding the purchase
from Sprint PCS of handsets and accessories. Sprint PCS will use
commercially reasonable efforts to reach agreement with the local
distributor. Sprint PCS may refuse to enter into a distribution agreement
with a distributor for any reasonable reason, including that the
distributor fails to pass Sprint PCS' then current credit and background
checks or the distributor fails to agree to the standard terms of the
Sprint PCS distribution agreement. Any local distributor will be subject
to the terms of the Trademark License Agreements or their equivalent.
Manager will report to Sprint PCS the activities of any local distributor
that Manager believes to be in violation of the distribution agreement.
(b) Manager may establish direct local distribution programs in
accordance with the Sprint PCS National or Regional Distribution Program
Requirements, subject to the terms and conditions of the Trademark License
Agreements and the non-competition and other provisions contained in this
agreement. If Manager sells Sprint PCS handsets and accessories directly
to a local distributor:
(i) Sprint PCS has the right to approve or disapprove a
particular distributor,
12
(ii) Manager is responsible for such distributor's compliance
with the terms of the Trademark License Agreements and the other provisions
contained in this agreement, and
(iii) Manager must retain the right to terminate the distribution
rights of the local distributor when so instructed by Sprint PCS (even if
Sprint PCS initially approved or did not exercise its right to review the
distributor).
4.2 Sprint PCS National Accounts Program Requirements. During the term of
this agreement, Manager must participate in the Sprint PCS National Accounts
Program (as in effect from time to time), and will be entitled to compensation
for its participation and will be required to pay the expenses of the program in
accordance with the terms and conditions of that program. The Sprint PCS
National Accounts Program Requirements in effect as of the date of this
agreement are attached as Exhibit 4.2.
-----------
4.3 Sprint PCS Roaming and Inter Service Area Program Requirements.
Manager will participate in the Sprint PCS Roaming and Inter Service Area
Program established and implemented by Sprint PCS, including roaming price plans
and inter-carrier settlements. The Sprint PCS Roaming and Inter Service Area
Program Requirements in effect as of the date of this agreement are attached as
Exhibit 4.3.
-----------
As part of the Sprint PCS Roaming and Inter Service Area Program
Requirements, Sprint PCS will establish a settlement policy and process to
equitably distribute between the members making up the Sprint PCS Network (i.e.,
Sprint PCS, Manager and all Other Managers) the revenues received by one member
for services used by its customers when they travel into other members' service
areas.
4.4 Pricing. Manager will offer and support all Sprint PCS pricing plans
designated for regional or national offerings of Sprint PCS Products and
Services (e.g., national inter service area rates, regional home rates, and
local price points). The Sprint PCS pricing plans as of the date of this
agreement are attached as Exhibit 4.4. Sprint PCS may modify the Sprint PCS
-----------
pricing plans from time to time in its sole discretion by delivering to Manager
a new Exhibit 4.4.
-----------
Additionally, with prior approval from Sprint PCS, which approval will not
be unreasonably withheld, Manager may establish price plans for Sprint PCS
Products and Services that are only offered in its local market, subject to:
(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
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(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area.
If Sprint PCS fails to respond to Manager within 10 Business Days after
receiving such notice, then the price proposed for those Sprint PCS Products or
Services is deemed approved.
At the time Sprint PCS approves a pricing proposal submitted by Manager,
Sprint PCS will provide Manager an estimate of the costs and expenses and
applicable time frames required for Sprint PCS to implement the proposed pricing
plan. Manager agrees to promptly reimburse Sprint PCS for any cost or expense
incurred by Sprint PCS to implement such a pricing plan, which will not exceed
the amount estimated by Sprint PCS if Manager waited for Sprint PCS' response to
Manager's proposal.
4.5 Home Service Area. Sprint PCS and Manager will agree to the initial
home service area for each base station in the Service Area Network prior to the
date the Service Area Network goes into commercial operation. If the parties
cannot agree to the home service area for each base station in the Service Area
Network, then the parties will use the dispute resolution process in Section 14
of this agreement to assign each base station to a home service area.
5. USE OF BRANDS
5.1 Use of Brands.
(a) Manager must enter into the Trademark License Agreements on or
before the date of this agreement.
(b) Manager must use the Brands exclusively in the marketing,
promotion, advertisement, distribution, lease or sale of any Sprint PCS
Products and Services within the Service Area, except Manager may use other
brands to the extent permitted by the Trademark License Agreements and not
inconsistent with the terms of this agreement.
(c) Neither Manager nor any of its Related Parties may market,
promote, advertise, distribute, lease or sell any of the Sprint PCS
Products and Services or Manager's Products and Services on a non-branded,
"private label" basis or under any brand, trademark, trade name or trade
dress other than the Brands, except (i) for sales to resellers required
under this agreement, or (ii) as permitted under the Trademark License
Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager from
including Sprint PCS Products and Services under the Brands within the
Service Area as part of a package with its other products and services that
bear a different brand or trademark.
14
The provisions of this Section 5.1 do not apply to the extent that they are
inconsistent with applicable law or in conflict with the Trademark License
Agreements.
5.2 Conformance to Marketing Communications Guidelines. Manager must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of the
Sprint PCS Products and Services. The Marketing Communications Guidelines in
effect as of the date of this agreement are attached as Exhibit 5.2. Sprint and
-----------
Sprint Spectrum may amend the Marketing Communications Guidelines from time to
time in accordance with the terms of the Trademark License Agreements.
5.3 Joint Marketing With Third Parties.
(a) Manager may engage in various joint marketing activities (e.g.,
promotions with sports teams and entertainment providers or tournament
sponsorships) with third parties in the Service Area from time to time
during the term of this agreement with respect to the Sprint PCS Products
and Services, except that Manager may engage in the joint marketing
activities only if the joint marketing activities:
(i) are conducted in accordance with the terms and conditions
of the Trademark License Agreements and the Marketing Communications
Guidelines;
(ii) do not violate the terms of this agreement;
(iii) are not likely (as determined by Sprint PCS, in its sole
discretion) to cause confusion between the Brands and any other trademark
or service xxxx used in connection with the activities;
(iv) are not likely (as determined by Sprint, in its sole
discretion) to cause confusion between the Sprint Brands and any other
trademark or service xxxx used in connection with the activities; and
(v) are not likely (as determined by Sprint PCS, in its sole
discretion) to give rise to the perception that the Sprint PCS Products and
Services are being advertised, marketed or promoted under any trademark or
service xxxx other than the Brands, except as provided in the Trademark
License Agreements. Manager will not engage in any activity that includes
co-branding involving use of the Brands (that is, the marketing, promotion,
advertisement, distribution, lease or sale of any of the Sprint PCS
Products and Services under the Brands and any other trademark or service
xxxx), except as provided in the Trademark License Agreements.
(b) Manager must provide advance written notice to Sprint PCS
describing any joint marketing activities that may:
15
(i) cause confusion between the Brands and any other trademark
or service xxxx used in connection with the proposed activities; or
(ii) give rise to the perception that the Sprint PCS Products
and Services are being advertised, marketed or promoted under any trademark
or service xxxx other than the Brands, except as provided in the Trademark
License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within 20
days after receiving such notice, then the proposed activities are deemed,
as the case may be:
(i) not to create confusion between the Brands and any other
trademark or service xxxx; or
(ii) not to give rise to the perception that Manager's products
and services are being advertised, marketed or promoted under any trademark
or service xxxx other than the Brands, except as provided in the Trademark
License Agreements.
5.4 Prior Approval of Use of Brands. Manager must obtain advance written
approval from Sprint for use of the Sprint Brands to the extent required by the
Sprint Trademark and Service Xxxx License Agreement and from Sprint PCS for use
of the Sprint PCS Brands to the extent required by the Sprint Spectrum Trademark
and Service Xxxx License Agreement. Sprint PCS will use commercially reasonable
efforts to facilitate any review of Manager's use of the Brands, if Sprint PCS
is included in the review process.
5.5 Duration of Use of Brand. Manager is entitled to use the Brands only
during the term of the Trademark License Agreements and any transition period
during which Manager is authorized to use the Brands following the termination
of the Trademark License Agreements.
6. ADVERTISING AND PROMOTION
6.1 National Advertising and Promotion. Sprint PCS is responsible for (a)
all national advertising and promotion of the Sprint PCS Products and Services,
including the costs and expenses related to national advertising and promotions,
and (b) all advertising and promotion of the Sprint PCS Products and Services in
the markets where Sprint PCS operates without the use of an Other Manager.
6.2 In-Territory Advertising and Promotion. Manager must advertise and
promote the Sprint PCS Products and Services in the Service Area (and may do so
in the areas adjacent to the Service Area so long as Manager intends that such
advertising or promotion primarily reach potential customers within the Service
Area). Manager must advertise and promote the Sprint PCS Products and Services
in accordance with the terms and conditions of this agreement, the Trademark
License Agreements and the Marketing Communication Guidelines. Manager is
responsible for the costs and expenses incurred by Manager with respect to
Manager's advertising and promotion activities in the Service Area.
16
Manager will be responsible for a portion of the cost of any promotion or
advertising done by third party retailers in the Service Area (e.g., Best Buy)
in accordance with any cooperative advertising arrangements based on per unit
handset sales.
Sprint PCS has the right to use in any promotion or advertising done by
Sprint PCS any promotion or advertising materials developed by Manager from time
to time with respect to the Sprint PCS Products and Services. Sprint PCS will
reimburse Manager for the reproduction costs related to such use.
Sprint PCS will make available to Manager the promotion or advertising
materials developed by Sprint PCS from time to time with respect to Sprint PCS
Products and Services in current use by Sprint PCS (e.g., radio ads, television
ads, design of print ads, design of point of sale materials, retail store
concepts and designs, design of collateral). Manager will bear the cost of
using such materials (e.g., cost of local radio and television ad placements,
cost of printing collateral in quantity, and building out and finishing retail
stores).
6.3 Review of Advertising and Promotion Campaigns. Sprint PCS and Manager
will jointly review the upcoming marketing and promotion campaigns of Manager
with respect to Sprint PCS Products and Services (including advertising and
promotion expense budgets) and will use good faith efforts to coordinate
Manager's campaign with Sprint PCS' campaign to maximize the market results of
both parties. Sprint PCS and Manager may engage in cooperative advertising or
promotional activities during the term of this agreement as the parties may
agree in writing.
6.4 Public Relations. If Manager conducts local public relations
efforts, then Manager must conduct the local public relations efforts consistent
with the Sprint PCS Communications Policies. The Sprint PCS Communications
Policies as of the date of this agreement are attached as Exhibit 6.4. Sprint
-----------
PCS may modify the Sprint PCS Communications Policies from time to time by
delivering to Manager a new Exhibit 6.4.
-----------
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 Conformance to Sprint PCS Technical Program Requirements.
(a) Manager must meet or exceed the Sprint PCS Technical Program
Requirements established by Sprint PCS from time to time for the Sprint PCS
Network. Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a level equal
to or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Sprint PCS Technical Program
Requirements; or
17
(ii) Sprint PCS is responsible under the Services Agreement to
ensure the Service Area Network complies with the Sprint PCS Technical
Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has complied
with the Sprint PCS Technical Program Requirements prior to connecting the
Service Area Network to the rest of the Sprint PCS Network. Once the
Service Area Network is connected to the Sprint PCS Network, Manager must
continue to comply with the Sprint PCS Technical Program Requirements.
Sprint PCS agrees that the Sprint PCS Technical Program Requirements
adopted for Manager will be the same Sprint PCS Technical Program
Requirements applied by Sprint PCS to the Sprint PCS Network.
7.2 Establishment of Sprint PCS Technical Program Requirements. Sprint
PCS has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements, attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS
-----------
Technical Program Requirements to ensure a minimum, base-line level of quality
for the Sprint PCS Network. The Sprint PCS Technical Program Requirements
include standards relating to voice quality, interoperability, consistency
(seamlessness) of coverage, RF design parameters, system design, capacity, and
call blocking ratio. Sprint PCS has selected code division multiple access as
the initial air interface technology for the Sprint PCS Network (subject to
change in accordance with Section 9.1).
7.3 Handoff to Adjacent Networks. If technically feasible and
commercially reasonable, Manager will operate the Service Area Network in a
manner that permits a seamless handoff of a call initiated on the Service Area
Network to any adjacent PCS network that is part of the Sprint PCS Network, as
specified in the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the terms and conditions for seamless handoffs adopted for the Service Area
Network will be the same as the terms Sprint PCS applies to the other parts of
the Sprint PCS Network for similar configurations of equipment.
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS
8.1 Compliance With Sprint PCS Customer Service Program Requirements.
Manager must comply with the Sprint PCS Customer Service Program Requirements in
providing the Sprint PCS Products and Services to any customer of Manager,
Sprint PCS or any Sprint PCS Related Party. Manager will be deemed to meet the
standards if:
(a) Manager operates the Service Area Network at a level equal to or
better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services Agreement
responsibility to ensure the Service Area Network complies with the Sprint
PCS Customer Service Standards.
18
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit 8.1.
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9. SPRINT PCS PROGRAM REQUIREMENTS
9.1 Program Requirements Generally. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements. 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
19
PCS. Sprint PCS will determine what constitutes a commercially reasonable
period of time taking into consideration relevant business factors,
including the strategic significance of the changes to the Sprint PCS
Network, the relationship of the changes to the yearly marketing cycle, and
the financial demands on and capacity generally of Other Managers.
Notwithstanding the preceding two sentences, Manager will not be required
to implement any change in the Service Area Network or the business of
Manager required by an amendment to a Program Requirement until Sprint PCS
has implemented the required changes in substantially all of that portion
of the Sprint PCS Network that Sprint PCS operates without the use of a
manager or affiliate, unless the amendment to the Program Requirement
relates to an obligation regarding the Service Area Network mandated by
law. When necessary for reasons related to new technical standards, new
equipment or strategic reasons, Sprint PCS can require Manager to implement
the changes in the Service Area Network or Manager's business concurrently
with Sprint PCS, in which case Sprint PCS will reimburse Manager for its
costs and expenses if Sprint PCS discontinues the Program Requirement
changes prior to implementation.
Sprint PCS may grant Manager appropriate waivers and variances from the
requirements of any Program Requirements. Sprint PCS has the right to adopt any
Program Requirements that implement any obligation regarding the Service Area
Network mandated by law.
Any costs and expenses incurred by Manager in connection with conforming to
any change to the Program Requirements during the term of this agreement are the
responsibility of Manager.
9.3 Manager's Right to Request Review of Changes. If Sprint PCS announces
a change to a Program Requirement that will:
(a) cause the Manager to spend an additional amount greater than 5% of
Manager's shareholder's equity or capital account plus Manager's long-term
debt (i.e., notes that mature more than one year from the date issued), as
reflected on Manager's books; or
(b) cause the long term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net
present value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the change.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the
change. If after the review and decision by the Vice President or designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
still requires Manager to implement the change to the Program Requirement
following the Chief Officer's
20
review, then upon Manager's failure to implement the change an Event of
Termination will be deemed to have occurred under Section 11.3.3, Manager will
not have a right to cure such breach, and Sprint PCS may exercise its rights and
remedies under Section 11.6.
9.4 Sprint PCS' Right to Implement Changes. If Manager requests Sprint
PCS to reconsider a change to a Program Requirement as permitted under Section
9.3 and Sprint PCS decides it will not require Manager to make the change,
Sprint PCS may, but is not required to, implement the change at Sprint PCS'
expense, in which event Manager will be required to operate the Service Area
Network, as changed, but Sprint PCS will be entitled to any revenue derived from
the change.
9.5 Rights of Inspection. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility operated
by or for Manager at any time, with reasonable advance notice to Manager if
possible, to inspect, monitor and test in a reasonable manner the Service Area
Network, including the facilities, equipment, books and records of Manager, to
ensure that Manager has complied or is in compliance with all covenants and
obligations of Manager under this agreement, including Manager's obligation to
conform to the Program Requirements. The inspection, monitoring and testing may
not disrupt the operations of the office or facility, nor impede Manager's
access to the Service Area Network.
9.6 Manager's Responsibility to Interface with Sprint PCS. Manager will
use platforms fully capable of interfacing with the Sprint PCS platforms in
operating the Service Area Network and in providing Sprint PCS Products and
Services. Manager will pay the expense of making its platforms fully capable of
interfacing with Sprint PCS, including paying for the following:
(i) connectivity;
(ii) any changes that Manager requests Sprint PCS to make to
Sprint PCS systems to interconnect with Manager's systems that Sprint PCS,
in its sole discretion, agrees to make;
(iii) equipment to run Manager's software;
(iv) license fees for Manager's software; and
(v) Manager's upgrades or changes to its platforms.
10. FEES
10.1 Fees and Payments.
10.1.1 Fee Based on Collected Revenues. Sprint PCS will pay to
Manager a weekly fee equal to 92% of Collected Revenues for the week for all
obligations of Manager
21
under this Agreement. The fee will be due on Thursday of the week following the
week for which the fee is calculated.
10.1.2 Payment of Universal Service Funds. Sprint PCS and Manager
will share any federal and state subsidy funds (e.g., payments by a state of
universal service fund subsidies to Sprint PCS or Manager), if any, received by
Sprint PCS or Manager for customers who reside in the portion of the Service
Area served by the Service Area Network. Manager is entitled to 92% of any
amount received by either party and Sprint PCS is entitled to 8% of such
amounts.
10.1.3 Inter Service Area Fees. Sprint PCS will pay to Manager
monthly a fee as set out in the Sprint PCS Roaming and Inter Service Area
Program, for each minute of use that a customer of Sprint PCS or one of the
Other Managers whose NPA-NXX is not assigned to the Service Area Network uses
the Service Area Network. Manager will pay to Sprint PCS a fee, as set out in
the Sprint PCS Roaming and Inter Service Area Program, for each minute of use
that a customer whose NPA-NXX is assigned to the Service Area Network uses a
portion of the Sprint PCS Network other than the Service Area Network. Manager
acknowledges that the manner in which the NPA-NXX is utilized could change,
which will require a modification in the manner in which the inter service area
fees, if any, will be calculated.
10.1.4 Interconnect Fees. Manager will pay to Sprint PCS (or to
other carriers as appropriate) monthly the interconnect fees, if any, as
provided under Section 1.4.
10.1.5 Outbound Roaming Fees. If not otherwise provided under any
Program Requirement:
(a) Sprint PCS will pay to Manager monthly the amount of Outbound
Roaming fees that Sprint PCS collects for the month from end users whose
NPA-NXX is assigned to the Service Area; and
(b) Manager will pay to Sprint PCS (or to a clearinghouse or other
carrier as appropriate) the direct cost of providing the capability for the
Outbound Roaming, including any amounts payable to the carrier that handled
the roaming call and the clearinghouse operator.
10.1.6 Reimbursements. Manager will pay to or reimburse Sprint PCS
for any amounts that Sprint PCS is required to pay to a third party (e.g., a
telecommunications carrier) to the extent Sprint PCS already paid such amount to
Manager under this Section 10.
10.2 Monthly True Up. Manager will report to Sprint PCS monthly the
amount of Collected Revenues received directly by the Manager (e.g., customer
mails payment to the business address of Manager rather than to the lockbox or a
customer pays a direct sales force representative in cash). Sprint PCS will on
a monthly basis true up the fees and payments due under Section 10.1 against the
actual payments made by Sprint PCS to Manager. Sprint PCS
22
will provide to Manager a true up report each month showing the true up and the
net amount due from one party to the other, if any. If the weekly payments made
to Manager exceed the actual fees and payments due to Manager, then Manager will
remit the amount of the overpayment to Sprint PCS within 5 Business Days after
receiving the true up report from Sprint PCS. If the weekly payments made to
Manager are less than the actual fees and payments due to Manager, then Sprint
PCS will remit the shortfall to Manager within 5 Business Days after sending the
true up report to Manager.
If a party disputes any amount on the true up report, the disputing party
must give the other party written notice of the disputed amount and the reason
for the dispute within 90 days after it receives the true up report. The
dispute will be resolved through the dispute resolution process in Section 14.
The parties must continue to pay to the other party any undisputed amounts owed
under this agreement during the dispute resolution process. The dispute of an
item does not stay or diminish a party's other rights and remedies under this
agreement.
10.3 Taxes. Manager will pay or reimburse Sprint PCS for any sales, use,
gross receipts or similar tax, administrative fee, telecommunications fee or
surcharge for taxes or fees levied by a governmental authority on the fees and
charges payable by Sprint PCS to Manager.
Manager will report all taxable property to the appropriate taxing
authority for ad valorem tax purposes. Manager will pay as and when due all
taxes, assessments, liens, encumbrances, levies, and other charges against the
real estate and personal property owned by Manager or used by Manager in
fulfilling its obligations under this agreement.
Manager is responsible for paying all sales, use, or similar taxes on the
purchase and use of its equipment, advertising, and other goods or services in
connection with this agreement.
10.4 Collected Revenues Definition. "Collected Revenues" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others, including the customers, whose NPA-NXX is the
same as that for the portion of the Service Area served by the Service Area
Network. In determining Collected Revenues the following principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from federal
and state subsidy funds; they are handled separately as noted in Section
10.1.2;
(ii) Collected Revenues do include any amounts received for the
payment of Inbound Roaming charges and interconnect fees when calls are
carried on the Service Area Network; and
(iii) Collected Revenues do not include any amounts received
with respect to any changes made by Sprint PCS under Section 9.4.
23
(b) The following items are not Collected Revenues; Sprint PCS is
obligated to remit the amounts received with respect to such items, if any,
to Manager, as follows:
(i) inter service area payments will be paid as provided under
Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as
provided under Section 10.1.5;
(iii) proceeds from the sale or lease of subscriber equipment
and accessories will be paid to Manager, subject to the equipment
settlement process in Section 4.1.2;
(iv) proceeds from sales not in the ordinary course of business
(e.g., sales of switches, cell sites, computers, vehicles or other fixed
assets);
(v) any amounts collected with respect to sales and use taxes,
gross receipts taxes, transfer taxes, and similar taxes, administrative
fees, telecommunications fees, and surcharges for taxes and fees that are
collected by a carrier for the benefit of a governmental authority, subject
to Manager's obligation under Section 10.3; and
(vi) Manager will be entitled to 100% of all revenues received
by Sprint PCS with respect to sales of Manager's Products and Services.
(c) The following items are not Collected Revenues; neither party is
obligated to remit any amounts respecting such items:
(i) reasonable adjustments of a customer's account (e.g., if
Sprint PCS or Manager reduces a customer's xxxx, then the amount of the
adjustment is not Collected Revenues); and
(ii) amount of bad debt and fraud associated with customers
whose NPA-NXX is assigned to the Service Area (e.g., if Sprint PCS or
Manager writes off a customer's xxxx as a bad debt, there are no Collected
Revenues on which a fee is due to Manager).
10.5 Late Payments. Any amount due under this Section 10 that is not paid
by one party to the other party in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 3rd day
after the due date until (and including) the date paid.
10.6 Setoff Right If Failure To Pay Amounts Due. If Manager fails to pay
any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this
agreement, the
24
Services Agreement, or any other agreement with Sprint PCS or a Related Party of
Sprint PCS, then Sprint PCS may setoff against its payments to Manager under
this Section 10, the following amounts:
(a) any amount that Manager owes to Sprint PCS or a Related Party of
Sprint PCS, including amounts due under the Services Agreement; and
(b) any amount that Sprint PCS reasonably estimates will be due to
Sprint PCS for the current month under the Services Agreement (e.g., if
under the Services Agreement customer care calls are billed monthly, Sprint
PCS can deduct from the weekly payment to Manager an amount Sprint PCS
reasonably estimates will be due Sprint PCS on account of such customer
care calls under the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts deducted
against the actual amounts due Sprint PCS and Sprint PCS' Related Parties. If
the estimated amounts deducted by Sprint PCS exceed the actual amounts due to
Sprint PCS and Sprint PCS' Related Parties, then Sprint PCS will remit the
excess to Manager with the next weekly payment. If the estimated amounts
deducted are less than the actual amounts due to Sprint PCS and its Related
Parties, then Sprint PCS may continue to setoff the payments to Manager against
the amounts due to Sprint PCS and Sprint PCS' Related Parties. This right of
setoff is in addition to any other right that Sprint PCS may have under this
agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
11.1 Initial Term. This agreement commences on the date of execution and,
unless terminated earlier in accordance with the provisions of this Section 11,
continues for a period of 20 years (the "Initial Term").
11.2 Renewal Terms. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods (for
a maximum of 50 years including the Initial Term), unless at least 2 years prior
to the commencement of any renewal period either party notifies the other party
in writing that it does not wish to renew this agreement.
11.2.1 Non-renewal Rights of Manager. If this agreement will
terminate because Sprint PCS gives Manager timely written notice of non-renewal
of this agreement, then Manager may exercise its rights under Section 11.2.1.1
or, if applicable, its rights under Section 11.2.1.2.
11.2.1.1 Manager's Put Right. Manager may within 30 days
after the date Sprint PCS gives notice of non-renewal put to Sprint PCS all
of the Operating Assets. Sprint PCS will pay to Manager for the Operating
Assets an amount equal to 80% of the Entire Business Value. The closing of
the purchase of the Operating Assets will occur within 20 days after the
later of (a) the receipt by Sprint PCS of the written
25
notice of determination of the Entire Business Value provided by the
appraisers under Section 11.7 or (b) the receipt of all materials required
to be delivered to Sprint PCS under Section 11.8. Upon closing the purchase
of the Operating Assets this agreement will be deemed terminated. The
exercise of the put, the determination of the Operating Assets, the
representations and warranties made by Manager with respect to the
Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.2.1.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum
in the Service Area under the License on the date this agreement is
executed, then Manager may within 30 days after the date Sprint PCS
gives notice of non-renewal declare its intent to purchase the
Disaggregated License. Subject to receipt of FCC approval of the
necessary disaggregation and partition, Manager may purchase from
Sprint PCS the Disaggregated License for an amount equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the spectrum this
agreement will be deemed terminated. The closing of the purchase of
the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the purchase right, the
determination of the geographic extent of the Disaggregated License
coverage, the representations and warranties made by Sprint PCS with
respect to the Disaggregated License, and the process for closing the
purchase will be subject to the terms and conditions set forth in
Section 11.8.
(d) After the closing of the purchase Manager will
allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products and
Services.
26
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 Non-renewal Rights of Sprint PCS. If this agreement will
terminate because of any of the following five (5) events, then Sprint PCS may
exercise its rights under Section 11.2.2.1 or, if applicable, its rights under
Section 00.0.0.0:
(a) Manager gives Sprint PCS timely written notice of non-renewal
of this agreement;
(b) both parties give timely written notices of non-renewal;
(c) this agreement expires with neither party giving a written
notice of non-renewal;
(d) either party elects to terminate this agreement under Section
11.3.4(a); or
(e) Manager elects to terminate this agreement under Section
11.3.4(b).
11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may
purchase from Manager all of the Operating Assets. Sprint PCS will pay to
Manager an amount equal to 80% of the Entire Business Value. The closing of
the purchase of the Operating Assets will occur within 20 days after the
later of (a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value provided by the appraisers under
Section 11.7 or (b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8. Upon closing the purchase of the
Operating Assets this agreement will be deemed terminated. The exercise of
the purchase right, the determination of the Operating Assets, the
representations and warranties made by Manager with respect to the
Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.2.2.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC
approval, put to Manager the Disaggregated License for a purchase
price equal to the greater of (1) the original cost of the License to
Sprint PCS (pro rated on a pops and spectrum basis) plus the microwave
relocation costs paid by Sprint PCS or (2) 10% of the Entire Business
Value.
(b) Upon closing the purchase of the Disaggregated
License this agreement will be deemed terminated. The closing of the
purchase of the Disaggregated License will occur within the later of:
27
(1) 20 days after the receipt by Sprint PCS of
the written notice of determination of the Entire Business
Value by the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives
notice of Sprint PCS' exercise of its put, advise Sprint PCS of the
amount of spectrum (not to exceed 10 MHz) it wishes to purchase. After
the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on
Manager's network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.3 Extended Term Awaiting FCC Approval. If Manager is buying
the Disaggregated License as permitted or required under Sections 11.2.1.2 or
11.2.2.2, then the Term of this agreement will extend beyond the original
expiration date until the closing of the purchase of the Disaggregated License.
The parties agree to exercise their respective commercially reasonable efforts
to obtain FCC approval of the transfer of the Disaggregated License.
11.3 Events of Termination. An "Event of Termination" is deemed to occur
when a party gives written notice to the other party of the Event of Termination
as permitted below:
11.3.1 Termination of License.
(a) At the election of either party this agreement may be
terminated at the time the FCC revokes or fails to renew the License.
Unless Manager has the right to terminate this agreement under Section
11.3.1(b), neither party has any claim against the other party if the FCC
revokes or fails to renew the License, even if circumstances would
otherwise permit one party to terminate this agreement based on a different
Event of Termination, except that the parties will have the right to pursue
claims against each other as permitted under Section 11.4(b).
28
(b) If the FCC revokes or fails to renew the License because of a
breach of this agreement by Sprint PCS, then Manager has the right to
terminate this agreement under Section 11.3.3 and not this Section 11.3.1.
11.3.2 Breach of Agreement: Payment of Money Terms. At the election
of the non-breaching party this agreement may be terminated upon the failure by
the breaching party to pay any amount due under this agreement or any other
agreement between the parties or their respective Related Parties, if the breach
is not cured within 30 days after the breaching party's receipt of written
notice of the nonpayment from the non-breaching party.
11.3.3 Breach of Agreement: Other Terms. At the election of the non-
breaching party this agreement may be terminated upon the material breach by the
breaching party of any material term contained in this agreement that does not
regard the payment of money, if the breach is not cured within 30 days after the
breaching party's receipt of written notice of the breach from the non-breaching
party, except the cure period will continue for a reasonable period beyond the
30-day period, but will under no circumstances exceed 180 days after the
breaching party's receipt of written notice of the breach, if it is unreasonable
to cure the breach within the 30-day period, and the breaching party takes
action prior to the end of the 30-day period that is reasonably likely to cure
the breach and continues to diligently take action necessary to cure the breach.
11.3.4 Regulatory Considerations.
(a) At the election of either party this agreement may be
terminated if this agreement violates any applicable law in any material
respect where such violation (i) is classified as a felony or (ii) subjects
either party to substantial monetary fines or other substantial damages,
except that before causing any termination the parties must use best
efforts to modify this agreement, as necessary to cause this agreement (as
modified) to comply with applicable law and to preserve to the extent
possible the economic arrangements set forth in this agreement.
(b) At the election of Manager this agreement may be terminated
if the regulatory action described under 11.3.4(a) is the result of a
deemed change of control of the License and the parties are unable to agree
upon a satisfactory resolution of the matter with the regulatory authority
without a complete termination of this agreement.
11.3.5 Termination of Trademark License Agreements. If either
Trademark License Agreement terminates under its terms, then:
(a) Manager may terminate this agreement if the Trademark License
Agreement terminated because of a breach of the Trademark License Agreement
by Sprint PCS or Sprint; and
29
(b) Sprint PCS may terminate this agreement if the Trademark
License Agreement terminated because of a breach of the Trademark License
Agreement by Manager.
11.3.6 Financing Considerations. At the election of Sprint PCS this
agreement may be terminated upon the failure of Manager to obtain the financing
described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit.
-----------
11.3.7 Bankruptcy of a Party. At the election of the non-bankrupt
party, this agreement may be terminated upon the occurrence of a Voluntary
Bankruptcy or an Involuntary Bankruptcy of the other party.
"Voluntary Bankruptcy" means:
(a) the inability of a party generally to pay its debts as
the debts become due, or an admission in writing by a party of its
inability to pay its debts generally or a general assignment by a
party for the benefit of creditors;
(b) the filing of any petition or answer by a party seeking
to adjudicate itself a bankrupt or insolvent, or seeking any
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition for itself or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian
or other similar official for itself or for substantially all of its
property; or
(c) any action taken by a party to authorize any of the
actions set forth above.
"Involuntary Bankruptcy" means, without the consent or acquiescence of
a party:
(a) the entering of an order for relief or approving a
petition for relief or reorganization;
(b) any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar
relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation;
(c) the filing of any petition against a party, which
petition is not dismissed within 90 days; or
(d) without the consent or acquiescence of a party, the
entering of an order appointing a trustee, custodian, receiver or
liquidator of the party or of
30
all or any substantial part of the property of the party, which order
is not dismissed within 90 days.
11.4 Effect of an Event of Termination.
(a) Upon the occurrence of an Event of Termination, the party with
the right to terminate this agreement or to elect the remedy upon the Event
of Termination, as the case may be, may:
(i) in the case of an Event of Termination under Sections
11.3.1(a) or 11.3.7, give the other party written notice that the agreement
is terminated effective as of the date of the notice, in which case neither
party will have any other remedy or claim for damages (except any claim the
non-bankrupt party has against the bankrupt party and any claims permitted
under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than under
Section 11.3.1(a), give the other party written notice that the party is
exercising one of its rights, if any, under Section 11.5 or Section 11.6.
(b) If the party terminates this agreement under Section 11.4(a)(i)
then all rights and obligations of each party under this agreement will
immediately cease, except that:
(i) any rights arising out of a breach of any terms of this
agreement will survive any termination of this agreement;
(ii) the provisions described in Section 17.23 will survive any
termination of this agreement;
(iii) the payment obligations under Section 10 will survive any
termination of this agreement if, and to the extent, any costs or fees have
accrued or are otherwise due and owing as of the date of termination of
this agreement from Manager to Sprint PCS or any Sprint PCS Related Party
or from Sprint PCS to Manager or any Manager Related Party;
(iv) either party may terminate this agreement in accordance
with the terms of this agreement without any liability for any loss or
damage arising out of or related to such termination, including any loss or
damage arising out of the exercise by Sprint PCS of its rights under
Section 11.6.3;
(v) Manager will use all commercially reasonable efforts to
cease immediately all of their respective efforts to market, sell, promote
or distribute the Sprint PCS Products and Services;
31
(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
32
amount equal to 80% of the Entire Business Value. The closing of the purchase of
the Operating Assets will occur within 20 days after the later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers under Section
11.7; or
(b) the receipt of all materials required to be delivered to
Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the put, the determination of the Operating
Assets, the representations and warranties made by the Manager with respect to
the Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.5.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in the
Service Area under the License on the date this agreement is executed, then
Manager may, subject to receipt of FCC approval, purchase from Sprint PCS
the Disaggregated License for the greater of (1) the original cost of the
License to Sprint PCS (pro rated on a pops and spectrum basis) plus the
microwave relocation costs paid by Sprint PCS or (2) 9% (10% minus a 10%
penalty) of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the written
notice of determination of the Entire Business Value by the appraisers
under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
The exercise of the purchase right, the determination of the geographic
extent of the Disaggregated License coverage, the representations and
warranties made by Sprint PCS with respect to the Disaggregated License,
and the process for closing the purchase will be subject to the terms and
conditions set forth in Section 11.8.
(c) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's network;
and
33
(2) Sprint PCS to resell Manager's Product and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 Manager's Action for Damages or Other Relief. Manager, in
accordance with the dispute resolution process in Section 14, may seek damages
or other appropriate relief.
11.6 Sprint PCS' Event of Termination Rights and Remedies. In addition to
any other right or remedy that Sprint PCS may have under this agreement, the
parties agree that Sprint PCS will have the rights and remedies set forth in
this Section 11.6 and that such rights and remedies will survive the termination
of this agreement. If Sprint PCS has a right to terminate this agreement as the
result of the occurrence of an Event of Termination under Sections 11.3.2,
11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if Sprint PCS is the non-bankrupt party), then
Sprint PCS has the right to elect one of the following four (4) remedies, except
that (i) if Sprint PCS elects the remedies under Sections 11.6.1, 11.6.2 or
11.6.4, Sprint PCS may pursue its rights under Section 11.6.3 concurrently with
its pursuit of one of the other three remedies, (ii) Sprint PCS cannot elect its
remedies under Sections 11.6.1 or 11.6.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11.3.3 (unless the
Event of Termination is caused by a breach related to the Build-out Plan or the
build-out of the Service Area Network), and (iii) Sprint PCS cannot elect its
remedy under Section 11.6.2 during the first 2 years of the Initial Term with
respect to an Event of Termination under Section 11.3.6.
11.6.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount
equal to 72% (80% minus a 10% penalty) of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers pursuant to
Section 11.7; or
(b) the receipt of all materials required to be delivered to
Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.6.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval, put to
Manager the Disaggregated License for a purchase price equal to the greater
of (1) the original cost of
34
the License to Sprint PCS (pro rated on a pops and spectrum basis) plus the
microwave relocation costs paid by Sprint PCS or (2) 10% of the Entire
Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the written
notice of determination of the Entire Business Value by the appraisers
under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the put, the determination of the geographic
extent of the Disaggregated License coverage, the representations and
warranties made by Sprint PCS with respect to the Disaggregated License,
and the process for closing the purchase will be subject to the terms and
conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice of Sprint
PCS' exercise of its put, advise Sprint PCS of the amount of spectrum (not
to exceed 10 MHz) it wishes to purchase. After the closing of the purchase
Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's network;
and
(2) Sprint PCS to resell Manager's Products and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 Sprint PCS' Right to Cause A Cure.
(a) Sprint PCS' Right. Sprint PCS may, but is not
obligated to, take such action as it deems necessary to cure Manager's
breach of this agreement, including assuming operational
responsibility for the Service Area Network to complete construction,
continue operation, complete any necessary repairs, implement changes
necessary to comply with the Program Requirements and terms of this
agreement, or take such other steps as are appropriate under the
circumstances, or Sprint PCS may designate a third party or parties to
do the same, to assure uninterrupted availability and deliverability
of Sprint PCS Products and Services in the Service Area, or to
complete the build-out of the Service Area Network in accordance with
the terms of this agreement. In the event that Sprint PCS elects to
exercise its right under this Section 11.6.3, Sprint PCS will give
Manager written notice of such election. Upon giving such notice:
35
(1) Manager will collect and make available at a
convenient, central location at its principal place of business,
all documents, books, manuals, reports and records related to the
Build-out Plan and required to operate and maintain the Service
Area Network; and
(2) Sprint PCS, its employees, contractors and
designated third parties will have the unrestricted right to
enter the facilities and offices of Manager for the purpose of
curing the breach and, if Sprint PCS deems necessary, operate the
Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the extent
requested by Sprint PCS to enable Sprint PCS to exercise its rights
under this Section 11.6.3.
(b) Liability. Sprint PCS' exercise of its rights under
this Section 11.6.3 will not be deemed an assumption by Sprint PCS of
any liability attributable to Manager or any other party, except that,
without limiting the provisions of Section 13, during the period that
Sprint PCS is curing a breach under this agreement or operating any
portion of the Service Area Network pursuant to this Section 11.6.3,
Sprint PCS will indemnify and defend Manager and its directors,
partners, officers, employees and agents from and against, and
reimburse and pay for, all claims, demands, damages, losses,
judgments, awards, liabilities, costs and expenses (including
reasonable attorneys' fees, court costs and other expenses of
litigation), whether or not arising out of third party claims, in
connection with any suit, claim, action or other legal proceeding
relating to the bodily injury, sickness or death of persons or the
damage to or destruction of property, real or personal, resulting from
or arising out of Sprint PCS' negligence or willful misconduct in
curing the breach or in the operation of the Service Area Network.
Sprint PCS' obligation under this Section 11.6.3(b) will not apply to
the extent of any claims, demands, damages, losses, judgments, awards,
liabilities, costs and expenses resulting from the negligence or
willful misconduct of Manager or arising from any contractual
obligation of Manager.
(c) Costs and Payments. During the period that Sprint PCS
is curing a breach or operating the Service Area Network under this
Section 11.6.3, Sprint PCS and Manager will continue to make any and
all payments due to the other party and to third parties under this
agreement, the Services Agreement and any other agreements to which
such party is bound, except that Sprint PCS may deduct from its
payments to Manager all reasonable costs and expenses incurred by
Sprint PCS in connection with the exercise of its right under this
Section 11.6.3. Sprint PCS' operation of the Service Area Network
pursuant to this Section 11.6.3 is not a substitution for Manager's
performance of its obligations under this agreement and does not
relieve Manager of its other obligations under this agreement.
36
(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;
37
(c) sale and distribution assets primarily dedicated
(i.e., at least 80% of their revenue is derived from the sale of
Sprint PCS Products and Services) to the sale by Manager of Sprint
PCS Products and Services. For example, a retail store that derives
at least 80% of its revenue from the sale of Sprint PCS Products and
Services is an Operating Asset. A store that derives 65% of its
revenue from Sprint PCS Products and Services is not an Operating
Asset;
(d) customers, if any, that use both the other
products and services approved under Section 3.2 and the Sprint PCS
Products and Services;
(e) handset inventory;
(f) books and records of the wireless business,
including all engineering drawings and designs and financial records;
and
(g) all contracts used by Manager in operating the
wireless business including T1 service agreements, service contracts,
interconnection agreements, distribution agreements, software license
agreements, equipment maintenance agreements, sales agency agreements
and contracts with all equipment suppliers.
11.7.3 Entire Business Value. Utilizing the valuation principles
set forth below and in Section 11.7.4, "Entire Business Value" means the fair
market value of Manager's wireless business in the Service Area, valued on a
going concern basis.
(a) The fair market value is based on the price a
willing buyer would pay a willing seller for the entire on-going
business.
(b) The appraisers will use the then-current customary
means of valuing a wireless telecommunications business.
(c) The business is conducted under the Brands and
existing agreements between the parties and their respective Related
Parties.
(d) Manager owns the Disaggregated License (in the
case where Manager will be buying the Disaggregated License under
Sections 11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2) or Manager owns the
spectrum and the frequencies actually used by Manager under this
agreement (in the case where Sprint PCS will be buying the Operating
Assets under Sections 11.2.1.1, 11.2.2.1, 11.5.1 or 11.6.1).
38
(e) The valuation will not include any value for the
business represented by Manager's Products and Services or any
business not directly related to Sprint PCS Products and Services.
11.7.4 Calculation of Entire Business Value. The Entire Business
Value to be used to determine the purchase price of the Operating Assets or the
Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by the
appraisers is within 10% of the lowest fair market value, then the
Entire Business Value used to determine the purchase price under this
agreement will be the arithmetic mean of the three appraised fair
market values.
(b) If two of the fair market values determined by the
appraisers are within 10% of one another, and the third value is not
within 10% of the other fair market values, then the Entire Business
Value used to determine the purchase price under this agreement will
be the arithmetic mean of the two more closely aligned fair market
values.
(c) If none of the fair market values is within 10% of
the other two fair market values, then the Entire Business Value used
to determine the purchase price under this agreement will be the
middle value of the three fair market values.
11.8 Closing Terms and Conditions. The closing terms and conditions for
the transactions contemplated in this Section 11 are attached as Exhibit 11.8.
------------
11.9 Contemporaneous and Identical Application. The parties agree that
any action regarding renewal or non-renewal and any Event of Termination will
occur contemporaneously and identically with respect to all Licenses. For
example, if Manager exercises its purchase right under Section 11.5.2, it must
exercise such right with respect to all of the Licenses under this agreement.
The Term of this agreement will be the same for all Licenses; Manager will not
be permitted to operate a portion of the Service Area Network with fewer than
all of the Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 Books and Records.
12.1.1 General. Each party must keep and maintain books and
records to support and document any fees, costs, expenses or other charges due
in connection with the provisions set forth in this agreement. The records must
be retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
39
12.1.2 Audit. On reasonable advance notice, each party must
provide access to appropriate records to the independent auditors selected by
the other party for purposes of auditing the amount of fees, costs, expenses or
other charges payable in connection with the Service Area with respect to the
period audited. The auditing party will conduct the audit no more frequently
than annually. If the audit shows that Sprint PCS was underpaid then, unless the
amount is contested, Manager will pay to Sprint PCS the amount of the
underpayment within 10 Business Days after Sprint PCS gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint PCS was overpaid then, unless the amount is contested, Sprint PCS will
pay to Manager the amount of the overpayment within 10 Business Days after
Sprint PCS determines Sprint PCS was overpaid. The auditing party will pay all
costs and expenses related to the audit unless the amount owed to the audited
party is reduced by more than 10% or the amount owed by the audited party is
increased by more than 10%, in which case the costs and expenses related to the
audit will be paid by the audited party.
Notwithstanding the above provisions of this Section 12.1.2, rather than
allow Manager's independent auditors access to Sprint PCS' records, Sprint PCS
may provide a report issued in conformity with Statement of Auditing Standard
No. 70 "Reports on the Processing of Transactions by Service Organizations"
("Type II Report" or "Manager Management Report"). Such report will be prepared
by independent auditors and will provide an opinion on the controls placed in
operation and tests of operating effectiveness of those controls in effect at
Sprint PCS over the Manager Management Processes. "Manager Management Processes"
include those services generally provided within the Management Agreement,
primarily billing and collection of Collected Revenues.
12.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final
40
and binding and may be enforced by any court having jurisdiction. The parties
will cooperate fully in assisting the Arbiter and will take such actions as are
necessary to expedite the completion of and to cause the Arbiter to expedite its
assignment.
If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the non-
contesting party will pay the costs and expenses of the Arbiter, otherwise the
contesting party will pay the costs and expenses of the Arbiter.
12.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the Term and 3 years after the date of termination of
this agreement, keep confidential, not disclose to others and use only for
the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this
agreement, except that the foregoing obligation will not apply to the
extent that any Confidential Information:
(i) is or becomes, after disclosure to a party, publicly known
by any means other than through unauthorized acts or omissions of the party
or its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
41
(v) is required by the receiving party to be produced under
order of a court of competent jurisdiction or other similar requirements of
a governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule 501(a)
under the Securities Act of 1933) that is considering providing financing
to the receiving party and which financial institution or accredited
investor has agreed to keep the Confidential Information confidential in
accordance with an agreement at least as restrictive as this Section 12.2.
(c) Notwithstanding the foregoing, Manager and Sprint PCS authorize
each other to disclose to the public in regulatory filings the other's
identity and the Service Area to be developed and managed by Manager, and
Manager authorizes Sprint PCS to mention Manager and the Service Area in
public relations announcements.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as
is reasonably necessary to enable the disclosing party to take action to,
and use the party's reasonable best efforts to, limit the disclosure and
maintain confidentiality to the extent practicable.
(e) Manager will not except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if
Manager operates a wireless company in a different license area, Manager
may not use any of the Confidential Information received under or in
connection with this agreement in operating the other wireless business.
12.3 Insurance
12.3.1 General. During the term of this agreement, Manager must
obtain and maintain, and will cause any subcontractors to obtain and maintain,
with financially reputable insurers licensed to do business in all jurisdictions
where any work is performed under this agreement and who are reasonably
acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance
Requirements. The Sprint PCS Insurance Requirements as of the date of this
agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS
------------
Insurance Requirements as is commercially reasonable from time to time by
delivering to Manager a new Exhibit 12.3.
------------
42
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
43
Operating Assets or the operation of the Service Area Network, or the actions or
failure to act of any of Manager's contractors, subcontractors, agents,
directors, managers, officers, employees and representatives of any of them in
the performance of any work under this agreement, except where and to the extent
the claim, demand, cause of action, loss, action, damage, liability and expense
results solely from the negligence or willful misconduct of Sprint PCS or
Sprint, as the case may be.
13.3 Procedure.
13.3.1 Notice. Any party being indemnified ("Indemnitee") will
give the party making the indemnification ("Indemnitor") written notice as soon
as practicable but no later than 5 Business Days after the party becomes aware
of the facts, conditions or events that give rise to the claim for
indemnification if:
(a) any claim or demand is made or liability is
asserted against Indemnitee; or
(b) any suit, action, or administrative or legal
proceeding is instituted or commenced in which Indemnitee is involved
or is named as a defendant either individually or with others.
Failure to give notice as described in this Section 13.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
13.3.2 Defense by Indemnitor. If within 30 days after giving
notice Indemnitee receives written notice from Indemnitor stating that
Indemnitor disputes or intends to defend against the claim, demand, liability,
suit, action or proceeding, then Indemnitor will have the right to select
counsel of its choice and to dispute or defend against the claim, demand,
liability, suit, action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
13.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section
44
13.3.3. Indemnitee is not permitted to settle the dispute or claim without the
prior written approval of Indemnitor, which approval will not be unreasonably
withheld.
13.3.4 Costs. Indemnitor's indemnity obligation includes
reasonable attorneys' fees, investigation costs, and all other reasonable costs
and expenses incurred by Indemnitee from the first notice that any claim or
demand has been made or may be made, and is not limited in any way by any
limitation on the amount or type of damages, compensation, or benefits payable
under applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
14. DISPUTE RESOLUTION
14.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 14.1.
14.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, either party may continue to operate under
this agreement and xxx the other party for damages or seek other appropriate
remedies as provided in this agreement. If, and only if, this agreement does not
provide a remedy (as in the case of Sections 3.4 and 4.5, where the parties are
supposed to reach an agreement), then either party may give the other party
written notice that it wishes to resolve the dispute or claim arising out of the
parties' inability to agree under such Sections of this agreement by using the
arbitration procedure set forth in this Section 14.2. Such arbitration will
occur in Kansas City, Missouri, unless the parties otherwise mutually agree,
with the precise location being as agreed upon by the parties or, absent such
agreement, at a location in Kansas City, Missouri selected by Sprint PCS. Such
arbitration will be conducted pursuant to the procedures prescribed by the
Missouri Uniform Arbitration Act, as amended from time to time, or, if none,
pursuant to the rules then in effect of the American Arbitration Association (or
at any other place and by any other form of arbitration mutually
45
acceptable to the parties). Any award rendered in such arbitration will be
confidential and will be final and conclusive upon the parties, and a judgment
on the award may be entered in any court of the forum, state or federal, having
jurisdiction. The expenses of the arbitration will be borne equally by the
parties to the arbitration, except that each party must pay for and bear the
cost of its own experts, evidence, and attorneys' fees.
The parties must each, within 30 days after either party gives notice to
the other party of the notifying party's desire to resolve a dispute or claim
under the arbitration procedure in this Section 14.2, designate an independent
arbitrator, who is knowledgeable with regard to the wireless telecommunications
industry, to participate in the arbitration hearing. The two arbitrators thus
selected will select a third independent arbitrator, who is knowledgeable with
regard to the wireless telecommunications industry, who will act as chairperson
of the board of arbitration. If, within 15 days after the day the last of the
two named arbitrators is appointed, the two named arbitrators fail to agree upon
the third, then at the request of either party, the third arbitrator shall be
selected pursuant to the rules then in effect of the American Arbitration
Association. The three independent arbitrators will comprise the board of
arbitration, which will preside over the arbitration hearing and will render all
decisions by majority vote. If either party refuses or neglects to appoint an
independent arbitrator within such 30-day period, the independent arbitrator who
has been appointed as of the 31st day after the notifying party's notice will be
the sole independent arbitrator and will solely preside over the arbitration
hearing. The arbitration hearing will commence no sooner than 30 days after the
date the last arbitrator is appointed and no later than 60 days after such date.
The arbitration hearing will be conducted during normal working hours on
Business Days without interruption or adjournment of more than 2 Business Days
at any one time or 6 Business Days in the aggregate.
The arbitrators will deliver their decision to the parties in writing
within 10 days after the conclusion of the arbitration hearing. The arbitration
award will be accompanied by findings of fact and a statement of reasons for the
decision. There will be no appeal from the written decision, except as permitted
by applicable law. The arbitration proceedings, the arbitrators' decision, the
arbitration award, and any other aspect, matter, or issue of or relating to the
arbitration are confidential, and disclosure of such confidential information is
an actionable breach of this agreement.
Notwithstanding any other provision of this agreement, arbitration will not
be required of any issue for which injunctive relief is properly sought by
either party.
14.3 Attorneys and Intent. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under Section 14.1 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
46
14.4 Tolling of Cure Periods. Any cure period under Section 11.3 that is
less than 90 days will be tolled during the pendency of the dispute resolution
process. Any cure period under Section 11.3 that is 90 days or longer will not
be tolled during the pendency of the dispute resolution process.
15. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
15.1 Due Incorporation or Formation; Authorization of Agreements. The
party is either a corporation, limited liability company, or limited partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
15.2 Valid and Binding Obligation. This agreement constitutes the valid
and binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
15.3 No Conflict; No Default. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, (b) any term, condition or provision of the articles
of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
15.4 Litigation. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to 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
47
regulations, including Siting Regulations. Nothing in this Section 16.1 will
limit Manager's obligations under Section 2.2 and the remainder of this Section
16. Manager acknowledges that failure to comply with applicable federal, state,
and local laws and regulations in its construction, operation, and management of
the Service Area Network may subject the parties and the License to legal and
administrative agency actions, including forfeiture penalties and actions that
affect the License, such as license suspension and revocation, and accordingly,
Manager agrees that it will cooperate with Sprint PCS to maintain the License in
full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those Siting
Regulations practices and procedures as may be requested by Sprint PCS. Every
six months, and at the request of Sprint PCS, Manager will provide a written
certification from one of Manager's chief officers that Manager's Service Area
Network complies with Siting Regulations. Manager's first certification of
compliance with Siting Regulations will be provided to Sprint PCS six months
after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service Area
Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear
the cost of Siting Regulations compliance audits and physical inspections
requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records. Manager
will make those records available upon request to Sprint PCS for production,
inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will
bear the cost of production, inspection, and copying.
16.2 FCC Compliance. The parties agree to comply with all applicable FCC
rules governing the License or the Service Area Network and specifically agree
as follows:
(a) The party billing a customer will advise the customer that
service is provided over spectrum licensed to Sprint PCS. Neither Manager
nor Sprint PCS will represent itself as the legal representative of the
other before the FCC or any other third party, but will cooperate with each
other with respect to FCC matters concerning the License or the Service
Area Network.
(b) Sprint PCS will use commercially reasonable efforts to maintain
the License in accordance with the terms of the License and all applicable
laws, policies and regulations and to comply in all material respects with
all other legal requirements applicable to the operation of the Sprint PCS
Network and its business. Sprint PCS
48
has sole responsibility, except as specifically provided otherwise in
Section 2.2, for keeping the License in full force and effect and for
preparing submissions to the FCC or any other relevant federal, state or
local authority of all reports, applications, interconnection agreements,
renewals, or other filings or documents. Manager must cooperate and
coordinate with Sprint PCS' actions to comply with regulatory requirements,
which cooperation and coordination must include, without limitation, the
provision to Sprint PCS of all information that Sprint PCS deems necessary
to comply with the regulatory requirements. Manager must refrain from
taking any action that could impede Sprint PCS from fulfilling its
obligations under the preceding sentence, and must not take any action that
could cause Sprint PCS to forfeit or cancel the License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and
applicable FCC rules. Nothing in this agreement is intended to diminish or
restrict Sprint PCS' obligations as an FCC Licensee and both parties desire
that this agreement and each party's obligations under this agreement be in
compliance with the FCC rules.
(d) Nothing in this agreement will preclude Sprint PCS from
permitting or facilitating resale of Sprint PCS Products and Services to
the extent required or elected under applicable FCC regulations. Manager
will take the actions necessary to facilitate Sprint PCS' compliance with
FCC regulations. To the extent permitted by applicable regulations, Sprint
PCS will not authorize a reseller that desires to sell services and
products in only the Service Area to resell Sprint PCS wholesale products
and services, unless Manager agrees in advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to obtain
FCC consent for the implementation, continuation or further effectuation of
any term or provision of this agreement, Sprint PCS will use all
commercially reasonable efforts diligently to prepare, file and prosecute
before the FCC all petitions, waivers, applications, amendments, rule-
making comments and other related documents necessary to secure and/or
retain FCC approval of all aspects of this agreement. Manager will use
commercially reasonable efforts to provide to Sprint PCS any information
that Sprint PCS may request from Manager with respect to any matter
involving Sprint PCS, the FCC, the License, the Sprint PCS Products and
Services or any other products and services approved under Section 3.2.
Each party will bear its own costs of preparation of the documents and
prosecution of the actions.
(f) If the FCC determines that this agreement is inconsistent with
the terms and conditions of the License or is otherwise contrary to FCC
policies, rules and regulations, or if regulatory or legislative action
subsequent to the date of this agreement alters the permissibility of this
agreement under the FCC's rules or other applicable law, rules or
regulations, then the parties must use best efforts to modify this
agreement as necessary to cause this agreement (as modified) to comply with
the
49
FCC policies, rules, regulations and applicable law and to preserve to the
extent possible the economic arrangements set forth in this agreement.
(g) Manager warrants and represents to Sprint PCS that Manager is
and at all times during the Term of this agreement will be in compliance
with FCC rules and regulations regarding limits on classes and amounts of
spectrum that may be owned by Manager. Manager agrees that in the event
that Manager is or at any time becomes in violation of such rules and
regulations, Manager will promptly take all action necessary and
appropriate (other than terminating this agreement) to cure such violation
and comply with such rules and regulations, including without limitation
disposing of its direct or indirect interests in cellular licenses.
16.3 Marking and Lighting. Manager will conform to applicable FAA
standards when Siting Regulations require marking and lighting of Manager's
Service Area Network cell sites. Manager will cooperate with Sprint PCS in
reporting lighting malfunctions as required by Siting Regulations.
16.4 Regulatory Notices. Manager will, within 2 Business Days after its
receipt, give Sprint PCS written notice of all oral and written communications
it receives from regulatory authorities (including but not limited to the FCC,
the FAA, state public service commissions, environmental authorities, and
historic preservation authorities) and complaints respecting Manager's
construction, operation, and management of the Service Area Network that could
result in actions affecting the License as well as written notice of the details
respecting such communications and complaints, including a copy of any written
material received in connection with such communications and complaints.
Manager will cooperate with Sprint PCS in responding to such communications and
complaints received by Manager. Sprint PCS has the right to respond to all such
communications and complaints, with counsel and consultants of its own choice.
If Sprint PCS chooses to respond to such communications and complaints, Manager
will not respond to them without the consent of Sprint PCS, and Manager will pay
the costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs, and
all other reasonable costs and expenses incurred by Sprint PCS.
16.5 Regulatory Policy-Setting Proceedings. Manager will not intervene in
or otherwise participate in a rulemaking, investigation, inquiry, contested
case, or similar regulatory policy setting proceedings before a regulatory
authority concerning the License or construction, operation, and management of
the Service Area Network and the Sprint PCS business operated using the Service
Area Network.
17. GENERAL PROVISIONS
17.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or
50
overnight courier, or sent by facsimile (with acknowledgment received and a copy
sent by overnight courier), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to any other
address or number as the person or entity may from time to time specify by
written notice to the other parties.
All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
17.2 Construction. This agreement will be construed simply according to
its fair meaning and not strictly for or against either party.
17.3 Headings. The table of contents, section and other headings
contained in this agreement are for reference purposes only and are not intended
to describe, interpret, define, limit or expand the scope, extent or intent of
this agreement.
17.4 Further Action. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
17.5 Counterpart Execution. This agreement will be executed by affixing
the parties' signatures to the Master Signature Page, which Master Signature
Page, and thus this agreement, may be executed in any number of counterparts
with the same effect as if both parties had signed the same document. All
counterparts will be construed together and will constitute one agreement.
17.6 Specific Performance. Each party agrees with the other party that
the party would be irreparably damaged if any of the provisions of this
agreement were not performed in accordance with their specific terms and that
monetary damages alone would not provide an adequate remedy. Accordingly, in
addition to any other remedy to which the non-breaching party may be entitled,
at law or in equity, the non-breaching party will be entitled to injunctive
relief to prevent breaches of this agreement and specifically to enforce the
terms and provisions of this agreement.
17.7 Entire Agreement; Amendments. The provisions of this agreement, the
Services Agreement and the Trademark License Agreements (including the exhibits
to those agreements) set forth the entire agreement and understanding between
the parties as to the subject matter of this agreement and supersede all prior
agreements, oral or written, and other communications between the parties
relating to the subject matter of this agreement. Except for Sprint PCS' right
to amend the Program Requirements in accordance with Section 9.2 and its right
to unilaterally modify and amend certain other provisions as expressly provided
in this agreement, this agreement may be modified or amended only by a written
amendment signed by persons or entities authorized to bind each party and, with
respect to the sections set forth for Sprint on the Master Signature Page, the
persons or entities authorized to bind Sprint.
51
17.8 Limitation on Rights of Others. Except as set forth on the Master
Signature Page for Sprint, nothing in this agreement, whether express or
implied, will be construed to give any person or entity other than the parties
any legal or equitable right, remedy or claim under or in respect of this
agreement.
17.9 Waivers.
17.9.1 Waivers--General. The observance of any term of this
agreement may be waived (whether generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce the
term, but any waiver is effective only if in a writing signed by the party
against which the waiver is to be asserted. Except as otherwise provided in this
agreement, no failure or delay of either party in exercising any power or right
under this agreement will operate as a waiver of the power or right, nor will
any single or partial exercise of any right or power preclude any other or
further exercise of the right or power or the exercise of any other right or
power.
17.9.2 Waivers--Manager. Manager is not in breach of any covenant
in this agreement and no Event of Termination will have occurred as a result of
the occurrence of any event, if Manager had delegated to Sprint Spectrum under
the Services Agreement (or any successor to that agreement) responsibility for
taking any action necessary to ensure compliance with the covenant or to prevent
the occurrence of the event.
17.9.3 Force Majeure. Neither Manager nor Sprint PCS, as the case
may be, is in breach of any covenant in this agreement and no Event of
Termination will occur as a result of the failure of such party to comply with
such covenant, if such party's non-compliance with the covenant results
primarily from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the party's ability to comply with the
covenant;
(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part of any
governmental authority in granting any consent, approval, waiver or
authorization;
(iii) the failure of any vendor to deliver in a timely
manner any equipment or services; or
(iv) any act of God, act of war or insurrection, riot,
fire, accident, explosion, labor unrest, strike, civil unrest, work
stoppage, condemnation or any similar cause or event not reasonably within
the control of such party.
17.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
52
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
to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
17.13 Severability. The parties intend every provision of this agreement
to be severable. If any provision of this agreement is held to be illegal,
invalid, or unenforceable for any reason, the parties intend that a court
enforce the provision to the maximum extent permissible so as to effect the
intent of the parties (including the enforcement of the remaining provisions).
If necessary to effect the intent of the parties, the parties will negotiate in
good faith to amend this agreement to replace the unenforceable provision with
an enforceable provision that reflects the original intent of the parties.
17.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT
OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR
LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION
AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY
ANOTHER PARTY TO THIS AGREEMENT.
17.15 No Assignment; Exceptions.
17.15.1 General. Neither party will, directly or indirectly, assign
this agreement or any of the party's rights or obligations under this agreement
without the prior written consent of the other party, except as otherwise
specifically provided in this Section 17.15. Sprint PCS may deny its consent to
any assignment or transfer in its sole discretion except as otherwise provided
in this Section 17.15.
Any attempted assignment of this agreement in violation of this Section
17.15 will be void and of no effect.
53
A party may assign this agreement to a Related Party of the party, except
that Manager cannot assign this agreement to a Related Party that is a
significant competitor of Sprint, Sprint PCS or their respective Related Parties
in the telecommunications business. Except as provided in Section 17.15.5, an
assignment does not release the assignor from its obligations under this
agreement unless the other party to this agreement consents in writing in
advance to the assignment and expressly grants a release to the assignor.
Except as provided in Section 17.15.5, Sprint PCS must not assign this
agreement to any entity that does not also own the License covering the Service
Area directly or indirectly through a Related Party. Manager must not assign
this agreement to any entity (including a Related Party), unless such entity
assumes all rights and obligations under the Services Agreement, the Trademark
License Agreements and any related agreements.
17.15.2 Assignment Right of Manager to Financial Lender. If Manager
is no longer able to satisfy its financial obligations and other duties, then
Manager has the right to assign its obligations and rights under this agreement
to its Financial Lender, if:
(a) Manager or Financial Lender provides Sprint PCS at least 10 days
advance written notice of such assignment;
(b) Financial Lender cures or commits to cure any outstanding
material breach of this agreement by Manager prior to the end of any
applicable cure period. If Financial Lender fails to make a timely cure
then Sprint PCS may exercise its rights under Section 11;
(c) Financial Lender agrees to serve as an interim trustee for the
obligations and duties of Manager under this agreement for a period not to
exceed 180 days. During this interim period, Financial Lender must identify
a proposed successor to assume the obligations and rights of Manager under
this agreement;
(d) Financial Lender assumes all of Manager's rights and obligations
under the Services Agreement, the Trademark License Agreements and any
related agreements; and
(e) Financial Lender provides to Sprint PCS advance written notice
of the proposed successor to Manager that Financial Lender has identified
("Successor Notice"). Sprint PCS may give to Financial Lender written
notice of Sprint PCS' decision whether to consent to such proposed
successor within 30 days after Sprint PCS' receipt of the Successor Notice.
Sprint PCS may not unreasonably withhold such consent, except that Sprint
PCS is not required to consent to a proposed successor that:
(i) has, in the past, materially breached prior agreements
with Sprint PCS or its Related Parties;
54
(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
55
(v) the final controlling entity or its Related Parties refuse
to assume the obligations of Manager under this agreement.
(c) In the event that Sprint PCS provides notice that it does not
consent to the Change of Control, Manager is entitled to either:
(i) contest such determination pursuant to the dispute
resolution procedure in Section 14; or
(ii) abandon the proposed Change of Control.
(d) Nothing in this agreement requires Sprint PCS' consent to:
(i) a public offering of Manager that does not result in a
Change of Control (i.e., a shift from one party being in control to no
party being in control is not a Change of Control); or
(ii) a recapitalization or restructuring of the ownership
interests of Manager that Manager determines is necessary to:
(A) facilitate the acquisition of commercial financing
and lending arrangements that will support Manager's operations and
efforts to fulfill its obligations under this agreement; and
(B) that does not constitute a Change of Control.
(e) "Change of Control" means a situation where in any one
transaction or series of related transactions occurring during any 365-day
period, the ultimate parent entity of the Manager changes. The ultimate
parent entity is to be determined using the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 rules. A Change of Control does not occur if:
(i) a party changes the form of its organization without
materially changing their ultimate ownership (e.g., converting from a
limited partnership to a limited liability company); or
(ii) one of the owners of the party on the date of this
agreement or on the date of the closing of Manager's initial equity
offering for purposes of financing its obligations under this agreement
ultimately gains control over the party, unless such party is a significant
competitor of Sprint PCS or Sprint PCS' Related Parties in the
telecommunications business.
17.15.4 Right of First Refusal. Notwithstanding any other provision
in this agreement, Manager grants Sprint PCS the right of first refusal
described below. If Manager
56
determines it wishes to sell an Offered Interest, upon receiving any Offer to
purchase an Offered Interest, Manager agrees to promptly deliver to Sprint PCS
an Offer Notice. The Offer Notice is deemed to constitute an offer to sell to
Sprint PCS, on the terms set forth in the Offer, all but not less than all of
the Offered Interest. Sprint PCS will have a period of 60 days from the date of
the Offer Notice to notify Manager that it agrees to purchase the Offered
Interest on such terms. If Sprint PCS timely agrees in writing to purchase the
Offered Interest, the parties will proceed to consummate such purchase not later
than the 180th day after the date of the Offer Notice. If Sprint PCS does not
agree within the 60-day period to purchase the Offered Interest, Manager will
have the right, for a period of 120 days after such 60th day, subject to the
restrictions set forth in this Section 17, to sell to the person or entity
identified in the Offer Notice all of the Offered Interest on terms and
conditions no less favorable to Manager than those set forth in the Offer. If
Manager fails to sell the Offered Interest to such person or entity on such
terms and conditions within such 120-day period, Manager will again be subject
to the provisions of this Section 17.15.4 with respect to the Offered Interest.
17.15.5 Transfer of Sprint PCS Network. Sprint PCS may sell,
transfer or assign the Sprint PCS Network or any of the Licenses, including its
rights and obligations under this agreement, the Services Agreement and any
related agreements, to a third party without Manager's consent so long as the
third party assumes the rights and obligations under this agreement and the
Services Agreement. Manager agrees that Sprint PCS and Sprint PCS' Related
Parties will be released from any and all obligations under and with respect to
any and all such agreements upon such sale, transfer or assignment in accordance
with this Section 17.15.5, without the need for Manager to execute any document
to effect such release.
17.16 Provision of Services by Sprint Spectrum. As described in the
Recitals, the party or parties to this agreement that own the Licenses are
referred to in this agreement as "Sprint PCS." Sprint Spectrum will provide most
or all of the services required to be provided by Sprint PCS under this
agreement on behalf of Sprint PCS, other than the services to be rendered by
Manager. For example, Sprint Spectrum is the party to the contracts relating to
the national distribution network, the roaming and long distance services, and
the procurement arrangements. Accordingly, Sprint PCS and Manager will deal with
Sprint Spectrum to provide many of the attributes of the Sprint PCS Network.
17.17 Number Portability. Manager understands that the manner in which
customers are assigned to the Service Area Network could change as telephone
numbers become portable without any relation to the service area in which they
are initially activated. To the extent the relationship between NPA-NXX and the
Service Area changes, Sprint PCS will develop an alternative system to attempt
to assign customers who primarily live and work in the Service Area to the
Service Area. The terms of this agreement will be deemed to be amended to
reflect the new system that Sprint PCS develops.
17.18 Disclaimer of Agency. Neither party by this agreement makes the
other party a legal representative or agent of the party, nor does either party
have the right to obligate the
57
other party in any manner, except if the other party expressly permits the
obligation by the party or except for provisions in this agreement expressly
authorizing one party to obligate the other.
17.19 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither party
to this agreement has any fiduciary duty to the other party.
17.20 Expense. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The parties
must not allocate any employee cost or other cost to the other party, except as
otherwise provided in the Program Requirements or to the extent the parties
expressly agree in advance to the allocation.
17.21 General Terms. (a) This agreement is to be interpreted in accordance
with the following rules of construction:
(i) The definitions in this agreement apply equally to both
the singular and plural forms of the terms defined unless the context
otherwise requires.
(ii) The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation".
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless
otherwise specified; and
(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to
time (and, in the case of a statute or regulation, to any corresponding
provisions of successor statutes or regulations), unless the context
otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a
calendar day or number of calendar days. If any action or notice is to be
taken or given on or by a particular calendar day, and the calendar day is
not a Business Day, then the action or notice may be taken or given on the
next Business Day.
17.22 Conflicts with Other Agreements. The provisions of this Management
Agreement govern over those of the Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Services
Agreement. The provisions of each Trademark License Agreement governs over those
of this agreement if the provisions contained in this agreement conflict with
analogous provisions in a Trademark License Agreement.
58
17.23 Survival Upon Termination. The provisions of Sections 10, 11.4,
11.5, 11.6, 12.2, 13, 14, 16 and 17 of this agreement will survive any
termination of this agreement.
17.24 Announced Transaction. Sprint Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership have
executed a Restructuring and Merger Agreement and related agreements that
provide for restructuring the ownership of Sprint Spectrum L.P., SprintCom,
Inc., PhillieCo Partners I, L.P., and Xxx Communications PCS, L.P. Upon
consummation of the transactions contemplated by those agreements, Sprint would
control each of the four entities. While Sprint and Sprint PCS anticipate the
proposed transactions will be consummated, there can be no assurances.
17.25 Additional Terms and Provisions. Certain additional and supplemental
terms and provisions of this agreement, if any, are set forth in the Addendum to
Sprint PCS Management Agreement attached hereto and incorporated herein by this
reference. Manager represents and warrants that the Addendum also describes all
existing contracts and arrangements (written or verbal) that relate to or affect
the rights of Sprint PCS or Sprint under this agreement (e.g., agreements
relating to long distance telephone services (Section 3.4) or backhaul and
transport services (Section 3.7)).
17.26 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
17.27 Agent Authorization. Because of the close operational relationship
between the parties listed together below, each entity authorizes the other
entity to act on its behalf in every capacity under this agreement: (a)
WirelessCo, L.P. and Sprint Spectrum L.P.; (b) Xxx PCS License, L.L.C. and Xxx
Communications PCS, L.P.; (c) APC PCS, LLC and American PCS Communications, LLC;
and (d) PhillieCo, L.P. and PhillieCo Partners I, L.P.
59
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 with respect to only
those provisions that expressly apply to Sprint Communications Company, L.P.,
including its obligations and benefits under Sections 2, 3, and 10. The
execution by Sprint Communications Company, L.P. of this Master Signature Page
has the same force and effect as if Sprint Communications Company, L.P. executed
individually each of the Executed Agreements.
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President, Wireless
ILLINOIS PCS, LLC
-----------------
For and in consideration of the covenants contained in the Management
Agreement, Services Agreement, Sprint Trademark and Service Xxxx License
Agreement, Sprint Spectrum Trademark and Service Xxxx License Agreement, and
Addendum I to the Management Agreement (collectively, the "Executed
Agreements"), and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Illinois PCS, LLC executes,
becomes a party to, and agrees to be bound by and to perform its obligations
under each of the Executed Agreements as of the Effective Date. The execution by
Illinois PCS, LLC of this Master Signature Page has the same force and effect as
if SprintCom, Inc. executed individually each of the Executed Agreements.
ILLINOIS PCS, LLC
By: /s/ Xxx Xxxxx
--------------------------------
Xxx Xxxxx
President
SPRINTCOM, INC.
---------------
For and in consideration of the covenants contained in the Management
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, SprintCom, Inc. 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
SprintCom, Inc. of this Master Signature Page has the same force and effect as
if SprintCom, Inc. executed individually each of the Executed Agreements.
SPRINTCOM, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President, Wireless
B
Schedule of Definitions
(Management, Services,
and Trademark License Agreements)
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.
-----------
"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
2
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.
"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.
3
"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.
"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.
4
"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.
"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.
5
"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.
"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.
6
"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.
7
"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.
8
"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.
"Siting Regulations" means:
(1) FCC regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 47 CFR
(S)(S)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
(S)(S)77.1 through 77.75, and as may be amended;
(3) FCC land use regulations as set forth in 47 CFR (S)(S)1.1301
through 1.1319, and as may be amended; and
(4) FCC radio frequency exposure regulations as set forth in 47 CFR
(S)(S)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,
9
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 8.2 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.
"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
10
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
(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.
11
"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.
"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.
12
C
Build-out of Network
(custom exhibits)
1.7 Build-out and Working Capital
Financing (custom exhibit)
2.1 Build-out Plan (custom exhibit)
2.4 Restricted Markets (custom exhibit)
2.6 Purchase of Assets by Manager
(custom exhibit)
Exhibit 2.1
Build Out Plan
Illinois PCS
Phase 1 Coverage - December 1999
BTA 46 Bloomington
Coverage includes the cities of Bloomington, Lincoln, and Pontiac. I-55 coverage
from Springfield BTA to Chicago BTA.
BTA 86 Xxxxxxx-Xxxxxxxx
Coverage includes city of Sterling. I-88 coverage from Xxxxxxxxx-Xxxxxx BTA to
Chicago BTA.
BTA 105 Xxxxxxxxx-Xxxxxx
Coverage of "Quad Cities" metro area. I-80 coverage from Cedar Rapids BTA to
LaSalle-Peru BTA.
BTA 161 Galesburg
Coverage of Galesburg. I-74 from Xxxxxxxxx-Xxxxxx BTA to Peoria BTA.
BTA 213 Jacksonville
Coverage of Jacksonville. I-72 from Jacksonville to Springfield BTA.
BTA 243 LaSalle-Peru-Ottawa-Streator
Coverage of LaSalle, Peru, Ottowa, and Mendota. I-80 from Xxxxxxxxx-Xxxxxx BTA
to Chicago BTA and Hwy 39 from Chicago BTA to Peoria BTA.
BTA 344 Peoria
Coverage of Peoria and Pekin. I-74 from Galesburg BTA to Bloomington BTA and I-
155 from Peoria to Bloomington BTA.
BTA 394 St. Louis (Macoupin County only)
Coverage of southern third of Macoupin County. I-55 from border of Macoupin
county and St. Louis BTA to Springfield BTA.
BTA 000 Xxxxxxxxxxx
Xxxxxxxx xx Xxxxxxxxxxx, Xxxxxxx, and Litchfield. I-55 from St. Louis BTA to
Bloomington BTA and I-72 from Jacksonville BTA to Decatur-Effingham BTA.
Phase 1 - December 2000
BTA 46 Bloomington
Coverage of city of Clinton. Xxx 00 from Bloomington to Decatur BTA and I-74
from Bloomington to Champaign-Urbana BTA.
BTA 71 Champaign-Urbana
Coverage of Champaign and Urbana. I-74 from Bloomington BTA to Danville BTA, I-
72 from Decatur-Effingham BTA to Champaign, and I-57 from Kankakee BTA to
Mattoon BTA.
BTA 103 Danville
Coverage of city of Danville. I-74 from Champaign-Urbana BTA to Lafayette BTA.
BTA 109 Decatur-Effingham
Coverage of cities of Decatur, Effingham, and Vandalia. I-72 from Springfield
BTA to Champaign-Urbana BTA, I-70 from St. Louis BTA to Mattoon BTA, and I-57
from Mattoon BTA to Mt. Xxxxxx-Centralia BTA.
BTA 225 Kankakee
Coverage of city of Kankakee. I-57 from Chicago BTA to Champaign-Urbana BTA.
BTA 286 Mattoon
Coverage of cities of Mattoon and Charleston. I-57 from Champaign-Urbana BTA to
Decatur-Effingham BTA and I-70 from Decatur-Effingham BTA to Terre Haute BTA.
BTA 308 Mt. Xxxxxx-Centralia BTA
Coverage of cities of Mt. Xxxxxx, Centralia, and Salem. I-64 from St. Louis BTA
to Evansville BTA and I-57 from Decatur-Effingham BTA to Carbondale-Xxxxxx BTA.
Phase 2 - December 2002
BTA 86 Xxxxxxx-Xxxxxxxx
Coverage of city of Clinton. Xxx 00 from Xxxxxxxxx-Xxxxxx BTA to Dubuque BTA.
BTA 105 Xxxxxxxxx-Xxxxxx
Coverage of cities of Muscatine and Kewanee. Hwy 61 from Davenport to Burlington
BTA.
BTA Decatur-Effingham
Coverage of city of Olney.
BTA 225 Kankakee
Coverage of city of Watseka.
BTA 243 LaSalle-Peru-Ottawa-Streator
Coverage of city of Streator.
BTA 344 Peoria
Coverage of cities of Macomb and Canton.
BTA 426 Springfield
Coverage of cities of Taylorville and Pana. Hwy 29 from Springfield to Decatur-
Effingham BTA.
Exhibit 2.1
IL PCS POP Matrix
---------------------------------------------------------------------------------------------------------------------------------
Total Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 2 Total % of
BTA Licensed Covered Covered Area Covered Covered Area Covered Licensed
Number License BTA Name POPs POPs (Sq Mi) POPs (Sq Mi) POPs POPs
---------------------------------------------------------------------------------------------------------------------------------
46 D Bloomington 230,919 204,023 1,628 204,023 88%
71 D Champaign-Urbana 220,271 186,615 1,123 186,615 85%
00 X Xxxxxxx, Xxxxxxxx 144,881 38,092 230 57,423 389 95,515 66%
103 D,E Danville 110,501 65,604 348 65,604 59%
105 B Davenport, Moline 432,990 316,749 786 57,322 438 374,071 86%
109 D Decatur-Effingham 248,452 157,077 1,059 11,873 70 168,950 68%
161 D Galesburg 73,288 42,113 247 42,113 57%
213 D Jacksonville 68,988 28,988 238 28,988 42%
225 D,E Kankakee 135,003 82,640 437 10,099 107 92,739 69%
243 D,E LaSalle-Peru-Ottawa-Streator 152,765 96,217 731 22,672 128 118,889 78%
286 D Mattoon 63,362 55,092 466 55,092 87%
308 B Mount Xxxxxx-Centralia 121,639 57,393 873 57,393 47%
344 D Peoria 464,192 270,130 724 40,322 144 310,452 67%
394 B St. Louis (Macoupin County) 46,685 20,358 221 20,358 44%
426 D Springfield 264,606 184,692 775 25,018 292 209,710 79%
--------- --------- ----- ------- ----- --------- --
2,778,542 1,805,783 9,886 224,729 1,568 2,030,512 73%
Page 1
Service Area Exhibit
SERVICE AREA EXHIBIT
--------------------
Illinois PCS
------------
BTA Name BTA # License Holder License
-------- ----- -------------- -------
Bloomington, IL 46 SprintCom D
Champaign-Urbana, IL 00 XxxxxxXxx X
Xxxxxxx, XX - Xxxxxxxx, XX 00 XxxxxxXXX X
Xxxxxxxx, XX 000 XxxxxxXxx X,X
Davenport, IA - Moline, IL 000 XxxxxxXXX X
Xxxxxxx - Xxxxxxxxx, XX 000 XxxxxxXxx X
Xxxxxxxxx, XX 000 XxxxxxXxx X
Xxxxxxxxxxxx, XX 213 SprintCom D
Kankakee, IL 000 XxxxxxXxx X,X
LaSalle-Peru-Ottawa-Streator, IL 000 XxxxxxXxx X,X
Mattoon, IL 000 XxxxxxXxx X
Xx. Xxxxxx - Xxxxxxxxx, XX 000 XxxxxxXXX X
Xxxxxx, XX 000 XxxxxxXxx X
Xx. Xxxxx, XX (Macoupin County, IL only) 000 XxxxxxXXX X
Xxxxxxxxxxx, XX 426 SprintCom D
Page 1
D
Products and Services
3.1 Listing of Products and Services
4.4 Sprint PCS Pricing Plans for Regional
or National Offering
6.4 Sprint PCS Communications Policies
E
4.1 Sprint PCS Regional or National
Distribution Program Requirements
Retail Store Guidelines (under development)
Handset Logistics and Distribution Requirements
(under development)
F
4.2 Sprint PCS National Accounts
Program Requirements
. Attachment I - Segmentation and Roles and Responsibilities &
Customer Decision Making Matrix
. Methods and Procedures to Provide Transfer of Service (under
development)
. Sales Reporting Form
. Sprint PCS National Term Service Agreement
G
4.3 Sprint PCS Roaming and Inter Service Area Program
Requirements
H
7.2 Sprint PCS Technical Program
Requirements
I
8.1 Sprint PCS Customer Service
Program Requirements
. Minimum Standards, Requirements and Metrics for Customer Care
. Minimum Standards, Requirements and Metrics for Revenue
Operations
. Attachment I - Invoice Presentation (Mandatory Elements)
. Attachment II - Billing Cycles and Intervals and Taffic
Reconciliation
. Attachment III - Cycle Processing Timeliness and Accuracy
. Attachment IV - Required Monthly Revenue Reports
. Minimum Standards, Requirements and Metrics for Fraud/Receivables
Management
. Attachment I - Collections Treatment Schedule
. Attachment II - Process & Time Frames for Responding to
Suspicious Usage Activity
. Minimum Standards and Requirements for IT Management
. Attachment I - Disaster Recovery Plan
. Attachment II - Data Backup
J
11.8 Closing Terms and Conditions
K
12.3 Insurance Requirements
ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Illinois PCS, LLC
Service Area: Bloomington, IL BTA # 46
Champaign-Urbana, IL BTA # 71
Clinton, IA-Sterling, IL BTA # 86
Danville, IL BTA #103
Davenport, IA-Moline, IL BTA #000
Xxxxxxx-Xxxxxxxxx, XX XXX #000
Xxxxxxxxx, XX BTA #161
Jacksonville, IL BTA #213
Kankakee, IL BTA #000
XxXxxxx-Xxxx-Xxxxxx-Xxxxxxxx, XX XXX #000
Xxxxxxx, XX BTA #286
Mt. Xxxxxx-Centralia, IL BTA #000
Xxxxxx, XX XXX #000
Xx. Xxxxx, XX (Macoupin County, IL only) BTA #000
Xxxxxxxxxxx, XX BTA #426
This Addendum contains certain additional and supplemental terms and
provisions of that certain Sprint PCS Management Agreement (the "Management
Agreement") entered into contemporaneously with and by the same parties as this
Addendum. The terms and provisions of the Addendum control, supersede and amend
any conflicting terms and provisions contained in the Management Agreement.
Except for express modifications made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have the
meaning ascribed to them in the Schedule of Definitions. Section and Exhibit
references are to Sections and Exhibits of the Management Agreement unless
otherwise noted.
The Management Agreement is modified as follows:
1. Exclusivity of Service Area. The first sentence of Section 2.3 is
amended by amending the phrase "will own, operate, build or manage another
wireless mobility communications network" to read as follows: "will directly or
indirectly own, operate, build or manage another wireless mobility
communications network or sell Sprint PCS Products and Services".
2. Coverage Enhancement. The following language is added to Section 2.5:
Sprint PCS hereby confirms that Manager will be required to build-out New
Coverage in the Service Area under this Section 2.5 only to the extent that
each cell will provide radio frequency coverage for a minimum of 10,000
covered pops per cell site and provide for coverage of all interstate and
major highways. Manager will not be required under this Section 2.5 to
build coverage of lesser density than 10,000 covered pops per cell site
until the adoption of less dense build-out requirements under and pursuant
to the terms of Section 2.5.
The following cities (i) have been identified as meeting this build-out
requirement of greater than 10,000 pops per cell site as of the signing of
this Agreement, (ii) are the only cities in the Service Area not included
in Phase 1 of the initial Build Plan Exhibit 2.1 that meet this build-out
requirement, and (iii) will be exempted from this Section 2.5 build-out
requirement until January 1, 2003:
City Pops Covered BTA
---- ------------ ---
Clinton, IA 36,891 00 Xxxxxxx-Xxxxxxxx
Xxxxxxx, XX 14,013 000 Xxxxxxxxx-Xxxxxx
Xxxxxxxxx, XX 26,120 000 Xxxxxxxxx-Xxxxxx
Xxxxx, XX 11,873 000 Xxxxxxx-Xxxxxxxxx
Xxxxxxx, XX 10,099 000 Xxxxxxxx
Xxxxxxxx, XX 21,560 000 XxXxxxx-Xxxx-Xxxxxx-Xxxxxxxx
Xxxxxx, XX 17,155 000 Xxxxxx
Xxxxxx, XX 23,167 000 Xxxxxx
Xxxxxxxxxxx, XX 13,379 426 Springfield
This is also to confirm that the highway coverage to be built by Manager as
provided for in Exhibit 2.1 of the Management Agreement meets the
interstate and major highway coverage requirements as required under this
Section 2.5.
3. IXC Services. The first sentence of Section 3.4 is deleted and, in
its place, the following is inserted:
Manager must purchase from Sprint long distance telephony services for the
Sprint PCS Products and Services at wholesale rates, except that Manager
may purchase long distance telephony services that utilize the networks of
one or more of AT&T or MCI/WorldCom (or their successors) if Sprint fails
to exercise a right of last offer within 30 days after Manager gives Sprint
a copy of the wholesale rate proposal. Manager may also purchase
long distance telephony services that utilize the network of another inter-
exchange carrier (IXC) (or its successors) (alone or in conjunction with
AT&T or MCI/WorldCom networks) under the circumstances described in the
preceding sentence, so long as such IXC (or its successors) substantially
meets Sprint's network reliability and voice quality standards in force at
the time Sprint receives the proposal. Manager agrees it will not submit a
wholesale rate proposal to Sprint more often than once during any twelve
month period.
4. Taxes and Fees. The following Section 10.4(d) is added to the
Management Agreement:
(d) Taxes. It is the intention of Sprint PCS and Manager that taxes and
fees imposed by federal, state and local governments and their agencies
upon customer service revenues (for example, sales and use taxes, gross
receipts taxes, telecommunication surcharges, utility fees, right-of way
fees which are not charged on property value or property cost and universal
service fees) be passed through to customers in their entirety and be
excluded from Collected Revenues under Section 10.4(b)(v) of the Sprint PCS
Management Agreement. In the event that any such taxes or fees assessed on
services provided to customers are not passed through to customers, Sprint
PCS and Manager will bear the cost of such taxes and fees in a ratio of 8%
and 92%, respectively.
5. Regulatory Notices (Response Period). In the first sentence of
Section 16.4, the phrase "2 Business Days" is replaced by the phrase "5 Business
Days".
6. Regulatory Notices (Costs). The following two sentences replace the
last sentence of Section 16.4:
If Sprint PCS chooses to respond to such communications and complaints,
Manager will not respond to them without the consent of Sprint PCS. Sprint
PCS will bear the cost of responding to any such communications and
complaints unless (i) such response is primarily the result of Manager's
acts or omissions that constitute negligence, willful misconduct, or breach
of any provision of this agreement (in which case Manager will pay the
costs of Sprint PCS' response), or (ii) Manager's response is not requested
by Sprint PCS.
7. Number Portability. The following sentence replaces the second
sentence of Section 17.17:
To the extent the relationship between NPA-NXX and the Service Area
changes, Sprint PCS will develop an alternative system to attempt to assign
customers who primarily live and work in the Service Area to the Service
Area, in a manner that preserves the economic benefits of this Agreement to
each party.
8. Subsequent Acquisition of Additional Spectrum. In BTAs where Sprint
PCS owns 10MHz of spectrum or less, if Sprint PCS acquires additional spectrum
in the entirety of those BTAs in the Service Area, then Sprint PCS may amend the
Service Area Exhibit to the Management Agreement, in its sole discretion, to add
--------------------
such newly acquired spectrum to said Exhibit. Such additional spectrum will,
-------
upon inclusion in the Service Area Exhibit, become part of the License, as such
--------------------
term is defined in the Schedule of Definitions. If additional spectrum is
included in the Service Area Exhibit and the License is then for 20MHz or more
--------------------
of PCS spectrum in the Service Area, then the word "executed" is replaced by the
word "terminated" in the first sentence of each of Sections 11.2.1.2 and 11.5.2
of the Management Agreement. Further, Sprint PCS and Manager may exercise any
and all rights under the Management Agreement, and in particular Section
11.2.2.2 and 11.6.2 thereof, that are available to the parties when a
Disaggregated License is sold to Manager. If the stipulations of this paragraph
are met then the reference in Section 11.5.1 to 80% will remain 80% (i.e., the
change from 80% to 88% pursuant to paragraph 9 of this Addendum is amended).
9. Manager's Put Right. The reference in Section 11.5.1 to 80% is
changed to 88%, except as provided in paragraph 8 of this Addendum.
10. Financing Arrangements. Sprint PCS agrees to propose modifications to
the Management Agreement, and perhaps to the Schedule of Definitions, the
Services Agreement, the Sprint Trademark and Service Xxxx License Agreement, and
the Sprint Spectrum Trademark and Service Xxxx License Agreement, that will
enhance Manager's ability to obtain financing for the Service Area Network.
Sprint PCS will not be required to offer the Manager subsequent modifications
offered or agreed to with Other Managers subsequent to the initial set of
modifications.
11. Federal Contractor Compliance. A new Section 17.28, the text of which
is attached to this Addendum as Exhibit A, is added to the agreement.
---------
12. Year 2000 Compliance. The following Section 17.29 is added to the
agreement:
Section 17.29 Year 2000 Compliance. Sprint PCS and Manager each
separately represents and warrants that any system or equipment acquired,
operated or designated by it for use in the Service Area Network or for use
to support the Service Area Network, including (without limitation)
billing, ordering and customer service systems, will be capable of
correctly processing and receiving date data, as well as properly
exchanging date data with all products (for example, hardware, software and
firmware) with which the Service Area Network is designed to be used, and
will not malfunction or fail to function due to an ability to process
correctly date data in conformance with Sprint PCS requirements for "Year
2000 Compliance." If the Service Area Network or any system used to support
the Service Area Network fails to operate as warranted due to defects or
failures in any system or equipment selected by Manager (including systems
or equipment of third party vendors and subcontractors selected by Manager
rather than by Sprint PCS) Manager will, at its own expense, make the
repairs, replacements or upgrades necessary
to correct the failure and provide a Year 2000 Compliant Service Area
Network. If the Service Area Network or any system used to support the
Service Area Network fails to operate as warranted due to defects or
failures in any system or equipment selected by Sprint PCS (including
systems or equipment of third party vendors and subcontractors which Sprint
PCS selects and requires Manager to use), Sprint PCS will, at its own
expense, make the repairs replacements or upgrades necessary to correct the
failure and provide a Year 2000 Compliant Service Area Network.
"Year 2000 Compliance" means the functions, calculations, and other
computing processes of the Service Area Network (collectively "Processes")
which perform and otherwise process, date arithmetic, display, print or
pass date/time data in a consistent manner, regardless of the date in time
on which the Processes are actually performed or the dates used in such
data or the nature of the date/time data input, whether before, during or
after January 1, 2000 and whether or not the date/time data is affected by
leap years. To the extent any part of the Service Area Network is intended
to be used in combination with other software, hardware or firmware, it
will properly exchange date/time data with such software, hardware or
firmware. The Service Area Network will accept and respond to two-digit
year-date input, correcting or supplementing as necessary, and store,
print, display or pass date/time data in a manner that is unambiguous as to
century. No date/time data will cause any part of the Service Area Network
to perform an abnormally ending routine or function within the Processes or
generate incorrect final values or invalid results.
13. Inter Service Area Fees. In Exhibit 4.3, the first sentence under the
heading Inter Service Area Requirements is amended to read as follows: "The
reciprocal fee per minute for Inter Service Area usage will be $0.20 through
December 31, 2001, but thereafter is subject to amendment pursuant to Section
9.2 of the Management Agreement."
14. Change regarding Payment Fees in Service Agreement. The second
sentence of Section 3.1 of the Services Agreement is deleted in its entirety and
replaced by the following two sentences: "Except with respect to fees paid for
billing-related services, the monthly charge for any fees based on the number of
subscribers of the Service Area Network will be determined based on the number
of subscribers as of the 15th day of the month for which the charge is being
calculated. With respect to fees paid for billing-related services, the monthly
charge for any fees based on the number of subscribers will be based on the
number of gross activations in the month for which the charge is being
calculated plus the number of subscribers of the Service Area Network on the
last day of the prior calendar month.
Exhibit A
---------
Section 17.28. Federal Contractor Compliance. (1) The Manager will not
discriminate against any employee or applicant for employment because of race,
color, religion, sex, or national origin. The Manager will take affirmative
action to ensure that applicants are employed, and that employees are treated
during employment without regard to their race, color, religion, sex, or
national origin. Such action shall include, but not be limited to the following:
Employment, upgrading, demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of compensation;
and selection for training, including apprenticeship. The Manager agrees to post
in conspicuous places, available to employees and applicants for employment,
notices to be provided setting forth the provisions of this nondiscrimination
clause.
(2) The Manager will, in all solicitations or advertisements for employees
placed by or on behalf of the Manager, state that all qualified applicants will
receive considerations for employment without regard to race, color, religion,
sex, or national origin.
(3) The Manager will send to each labor union or representative of workers
with which he has a collective bargaining agreement or other contract or
understanding, a notice to be provided advising the said labor union or workers'
representatives of the Manager's commitments under this section, and shall post
copies of the notice in conspicuous places available to employees and applicants
for employment.
(4) The Manager will comply with all provisions of Executive Order 11246
of September 24, 1965, and of the rules, regulations, and relevant orders of the
Secretary of Labor.
(5) The Manager will furnish all information and reports required by
Executive Order 11246 of September 24, 1965, and by rules, regulations, and
orders of the Secretary of Labor, or pursuant thereto, and will permit access to
his books, records, and accounts by the administering agency and the Secretary
of Labor for purposes of investigation to ascertain compliance with such rules,
regulations, and orders.
(6) In the event of the Manager's noncompliance with the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or orders,
this contract may be canceled, terminated, or suspended in whole or in part and
the Manager may be declared ineligible for further Government contracts or
federally assisted construction contracts in accordance with procedures
authorized in Executive Order 11246 of September 24, 1965, and such other
sanctions may be imposed and remedies invoked as provided in Executive Order
11246 of September 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
(7) The Manager will include the portion of the sentence immediately
preceding paragraph (1) and the provisions of paragraphs (1) through (7) in
every subcontract or purchase order unless exempted by rules, regulations, or
orders of the Secretary of Labor issued pursuant to section 204 of Executive
Order 11246 of September 24, 1965, so that such provisions will be
binding upon each subcontractor or vendor. The Manager will take such action
with respect to any subcontract or purchase order as the administering agency
may direct as a means of enforcing such provisions, including sanctions for
noncompliance. Provided, however, that in the event a Manager becomes involved
in, or is threatened with, litigation with a subcontractor or vendor as a result
of such direction by the administering agency the Manager may request the United
States to enter into such litigation to protect the interests of the United
States.
(8) In consideration of contracts with Sprint PCS, the Manger agrees to
execute the Certificate of Compliance attached hereto as Attachment I and
------------
further agrees that this certification shall be part of each contract between
Sprint PCS and Manager. The Manager will include Attachment I in every
------------
subcontract or purchase order, so that such provisions will be binding upon each
subcontractor.
ADDENDUM II
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: ILLINOIS PCS, L.L.C.
Service Area BTAs: Bloomington, IL BTA# 46
Champaign-Urbana, IL BTA# 00
Xxxxxxx, XX-Xxxxxxxx, XX BTA# 866
Danville, IL BTA# 000
Xxxxxxxxx, XX-Xxxxxx, XX BTA# 000
Xxxxxxx-Xxxxxxxxx, XX BTA# 000
Xxxxxxxxx, XX BTA# 000
Xxxxxxxxxxxx, XX BTA# 213
Kankakee, IL BTA# 225
LaSalle-Peru-Ottawa-Streator, IL BTA# 000
Xxxxxxx, XX BTA# 286
Mt. Xxxxxx-Centralia, IL BTA# 000
Xxxxxx, XX BTA# 000
Xx. Xxxxx, XX (Macoupin County, IL only) BTA# 000
Xxxxxxxxxxx, XX BTA# 426
This Addendum II ("this Addendum"), dated as of August 3, 1999,
contains certain additional and supplemental terms and provisions of that
certain Sprint PCS Management Agreement entered into as of January 26, 1999, by
the same parties as this Addendum, which Management Agreement was further
amended by that certain Addendum I entered into as of January 26, 1999 (the
Management Agreement, as amended by Addendum I, being the "Management
Agreement"). The terms and provisions of this Addendum control, supersede and
amend any conflicting terms and provisions contained in the Management
Agreement. Except for express modifications made in this Addendum, the
Management Agreement continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have
the meanings ascribed to them in the Management Agreement. Section and Exhibit
references are to Sections and Exhibits of the Management Agreement unless
otherwise noted.
The Management Agreement is modified as follows:
1. Use of Loan Proceeds. Sprint PCS is entering into that certain
Consent and Agreement with Nortel Networks Inc. ("Nortel") (which Consent
and Agreement, as amended and modified from time to time, is referred to as
the "Consent and Agreement") to enable Manager to obtain loans from Nortel
and its successors and
assigns (collectively, the "Lenders"). Manager agrees that it will not use
the proceeds from any loan made to Manager to which the Consent and
Agreement relates or from any other loan or extension of credit to which
the Consent and Agreement relates for any purpose other than (a) to
construct and operate the wireless service within the Service Area (as may
be amended from time to time) as contemplated under the Management
Agreement, or (b) as expressly permitted under Section 2.10 of the Credit
Agreement between Nortel, Manager and certain other entities dated as of
May 14, 1999 (the "Credit Agreement"), as in effect as of the date of
execution thereof (a copy of which is attached to this Addendum as Exhibit
-------
A) without giving effect to any subsequent amendment, modification or
-
waiver of any term, condition, definition or other provision of the Credit
Agreement or to any course of dealing between Nortel and Manager that now
exists or may hereafter be established allowing a use of loan proceeds not
allowed under in Sections 2.10 of the Credit Agreement as in effect as of
the date hereof.
2. Consent and Agreement Not Assignable. Except as expressly
required or permitted in the Consent and Agreement, Manager may not assign
the Consent and Agreement.
3. Notices. Manager agrees to promptly give Sprint PCS a copy of
any notice Manager receives from the Administrative Agent or any Lender (as
those terms are defined in the Consent and Agreement), and a copy of any
notice Manager gives to the Administrative Agent or any Lender. Sprint PCS
agrees to promptly give Manager a copy of any notice Sprint PCS receives
from the administrative Agent or any Lender, and a copy of any notice that
Sprint PCS gives to the Administrative Agent or any Lender.
4. No Default Under Credit Agreement or Management Agreement.
Manager warrants and represents that as of the date hereof, no Default or
Event of Default under the Credit Agreement has occurred, and no Event of
Termination under the Management Agreement or event that if not cured, or
it notice were to be provided, would constitute an Event of Termination
under the Management Agreement, has occurred.
5. No Known Breach Under Management Agreement. Sprint PCS warrants
and represents that, to the knowledge of its officers, as of the date
hereof, no Event of Termination under the Management Agreement has
occurred.
6. Sharing Confidential Information with Lenders. Section
12.2(b)(vii) of the Management Agreement is amended by inserting the words
"or has provided" between the words "is considering providing" and
"financing."
[The remainder of this page is intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Addendum II to be
executed by their respective authorized officers as of the date and year first
above written.
SPRINT SPECTRUM L.P.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: President
----------------------------
WIRELESSCO, L.P.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: CEO
----------------------------
SPRINT COMMUNICATIONS COMPANY, L.P.
By: __________________________________
Xxxxxx X. Xxxxxxx
Senior Vice President, Consumer
Market Strategy and Communications
SPRINTCOM, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: President
----------------------------
ILLINOIS PCS, L.L.C.
By: __________________________________
Name:_____________________________
Title:____________________________
EXECUTION COPY
--------------
AMENDED AND RESTATED ADDENDUM III
TO
SPRINT PCS MANAGEMENT AGREEMENT
Dated as of March 8, 2000
Affiliate: Illinois PCS, LLC
New Service Area:
Nebraska Omaha, NE (partial)* BTA No. 332
--------
Lincoln, NE (partial)* BTA No. 000
Xxxxxxxx, XX BTA No. 000
Xxxxxxx, XX BTA No. 000
Xxxxx Xxxxxx - Xxxxxxx, XX BTA No. 000
Xxxx Xxxx Xxxxx, XX BTA No. 000
----
Xxxxxxxx-Xxxxx Xxxxx, XX BTA Xx. 000
Xxxxxxx, XX BTA No. 000
Xxxxxxxxxx, XX BTA Xx. 00
Xxxxxxx, XX BTA No. 337
Des Moines, IA (partial)* BTA No. 000
Xxxxxxxxxxxx, XX BTA No. 283
Mason City, IA BTA No. 000
Xxxxxxxx Xxxxxxxx Xxxx, XX BTA No. 446
--------
Saginaw-Bay City, MI BTA No. 000
Xxxxxxxx, XX BTA No. 000
Xxxxx Xxxxxx, XX BTA No. 000
Xxxxx Xxxxxxxx, XX BTA No. 307
Lansing, MI (partial)* BTA No. 241
Battle Creek, MI (partial)* BTA No. 33
This Amended and Restated Addendum III, dated as of March 8, 2000,
contains certain additional and supplemental terms and provisions to that
certain Sprint PCS Management Agreement entered into as of January 22, 1999, as
amended by that certain Addendum I to Sprint PCS Management Agreement dated
January 22, 1999, and Addendum II to Sprint PCS Management Agreement dated as of
August 3, 1999 (such agreement, as amended being the "Management Agreement").
This Amended and Restated Addendum III replaces and supersedes the previous
Addendum III executed by the parties on February 4, 2000, which is hereby made
void and of no force and effect.
The terms and provisions of this Addendum control, supersede and amend any
conflicting terms and provisions contained in the Management Agreement. Except
for express modifications made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have the
meanings ascribed to them in the Management Agreement. Section and Exhibit
references in this Addendum are to Sections and Exhibits of the Management
Agreement unless otherwise noted.
1. Expansion of Service Area. Sprint PCS and Manager agree that Manager
will develop the BTAs set forth above in addition to the prior committed build
out of Manager in the following BTAs:
Bloomington, IL (BTA #46)
Champaign-Urbana, IL (BTA #71)
Clinton, IA-Sterling, IL (BTA #86)
Danville, IL (BTA #103)
Davenport, IA-Moline, IL (BTA #105)
Decatur-Effingham, IL (BTA #109)
Galesburg, IL (BTA #161)
Jacksonville, IL (BTA #213)
Kankakee, IL (BTA #225)
LaSalle-Peru-Ottawa-Streator, IL (BTA #243)
Mattoon, IL (BTA #286)
Mt. Xxxxxx-Centralia, IL (BTA #308)
Peoria, IL (BTA #344)
Springfield, IL (BTA #426)
St Louis (BTA #394 Macoupin County, IL only)
(the combined new areas being called the "New Service Area" and the prior
committed build out being called the "Original Service Area"). Manager and
Sprint PCS agree that, subject to certain financing conditions as set forth
below in Section 2 of this Addendum, the Service Area is expanded to include
all, but not less than all, of the New Service Area.
As consideration for having its Service Area expanded to include the New
Service Area, Manager agrees that, on the earlier to occur of (i) the date on
which Manager, or if Manager is not the issuer, Manager's parent company that is
issuing public equity (either Manager or such issuing entity being referred to
as the "Issuer"), closes its initial public offering ("IPO"), (ii) the date on
which the Issuer completes a private placement of equity in an amount equal to
at least $70,000,000 ("Private Placement"), or (iii) the "Financing Date", as
defined in Section 2(c) below, the Issuer will grant to Sprint Spectrum L.P., or
any of its designees controlled by, or under common control with, Sprint
Spectrum L.P., the right to acquire the number of shares of common stock that
represent two percent (2%) of the value of the Issuer, pursuant to a warrant
agreement substantially in the form of the warrant agreement attached hereto as
Exhibit A. In the
---------
2
case of an IPO of the Issuer's sole outstanding class of equity, the warrant
shares will represent two percent (2%) of the outstanding shares of the Issuer
at the time of the IPO. The purchase price for the shares under the warrant
agreement will be equal to 90% of the value of such shares. In the event of an
IPO or a Private Placement the value of the shares will be equal to the issuance
price of the shares. The value of the shares will be determined by the appraisal
process set forth on Exhibit B if the warrant agreement is entered into prior to
---------
an IPO or Private Placement.
2. Financing. (a) The word "and" is inserted between the words "thereto"
and "before" in the last sentence of Section 1.7.
(b) A revised and amended Exhibit 1.7, in the form attached to this Addendum,
-----------
is approved by Sprint PCS and Manager and is expressly made a part of the
Management Agreement.
(c) The parties agree that the Manager's closing of the financing described in
amended Exhibit 1.7 (the "New Service Area Financing") by July 15, 2000 (the
-----------
"Financing Date") is a material term of this Addendum to the Management
Agreement and that upon Manager's failure to obtain the New Service Area
Financing by the Financing Date Sprint PCS may declare Manager to be in breach
of the Management Agreement pursuant to Section 11.3.6 thereof; provided,
--------
however, that if, as of the Financing Date, Manager has financing sufficient to
-------
complete the build-out of the Original Service Area, Sprint PCS may not use such
breach as a basis to terminate the Management Agreement with respect to the
Original Service Area. The parties further agree that, except for any
modification to the Service Area, the terms of this Addendum will survive any
termination with respect to the New Service Area. If Sprint PCS terminates
Manager's right to build out the New Service Area, then Sprint PCS will not be
entitled to any warrants under the warrant agreement described in paragraph 1.
3. Build-out Plan. A revised and amended Build-out Plan is incorporated
into Exhibit 2.1, in the form attached to this Addendum, and such revised and
-----------
amended Build-out Plan is approved by Sprint PCS and Manager and is expressly
made a part of the Management Agreement.
4. Purchase of Assets. The purchase of certain assets (the "Assets")
from Sprint PCS by Manager is provided for under and pursuant to the terms of
the Asset Purchase Agreement substantially in the form attached as Exhibit C and
---------
incorporated herein by this reference (the "Asset Purchase Agreement"). The
Assets to be purchased are listed on Exhibit A to the Asset Purchase Agreement.
---------
The parties recognize and acknowledge that a due diligence investigation will be
undertaken and completed by Manager as provided for under the terms of the Asset
Purchase Agreement prior to its determination of whether to make the asset
purchase contemplated under the Asset Purchase Agreement. If Manager does not
purchase the Assets pursuant to the terms of the Asset Purchase Agreement, then
the BTAs in which those Assets that are not transferred are located will be
excluded from the New Service Area. Manager shall be responsible for obtaining
any required consents and releases of the various landlords for any leases
acquired or assumed by Manager in connection with the purchase of the Assets.
3
Sprint PCS will use commercially reasonable efforts to facilitate these
transfers. The purchase price for the Assets is set forth in the Asset Purchase
Agreement.
5. Manager's Option -- In addition to the New Service Area, Manager shall
have the option (the "Option"), exercisable in its sole discretion and pursuant
to the terms and conditions of this Section 5, to add to the Service Area both
of the following BTAs (herein, the "Optional Service Area"):
Cedar Rapids, IA BTA Xx. 00
Xxxx Xxxx, XX BTA No. 205
The Option may be exercised by Manager at any time on or prior to January
31, 2001 (after which date the Option shall automatically expire unless
previously extended by mutual agreement of the parties) by executing the Option
Exercise Notice attached as Exhibit D-1 and the Asset Purchase Agreement
-----------
relating to the purchase of certain assets (the "Optional Service Area Assets")
from Sprint PCS by Manager in the Optional Service Area, substantially in the
form attached as Exhibit D-1 (the "Option Asset Purchase Agreement"), and
-----------
delivering the same to Sprint PCS by hand delivery or facsimile. The Option will
automatically expire if Manager loses the right to manage the New Service Area.
If Manager exercises the Option, Manager must add both the Cedar Rapids and Iowa
City BTAs. Upon receipt of the Option Exercise Notice and the Option Asset
Purchase Agreement executed by Manager, the Service Area shall be deemed to have
been expanded to include the Optional Service Area, and Sprint PCS shall
immediately countersign the Option Asset Purchase Agreement and deliver an
original counterpart thereof to Manager. The Optional Service Area Assets to be
purchased if the Option is exercised are listed on Exhibit A to the Option Asset
---------
Purchase Agreement, as the same may be updated by the parties promptly following
its execution to reflect changes and additions to such assets from the date
hereof to the date of its execution. In the event of any such additions, the
purchase price to be paid for the Optional Service Area Assets will increase as
determined in accordance with Exhibit C to the Option Asset Purchase Agreement.
The parties recognize and acknowledge that if the Option is exercised, a due
diligence investigation will be undertaken and completed by Manager as provided
for under the terms of the Option Asset Purchase Agreement prior to its
determination of whether to make the asset purchase contemplated under such
Option Asset Purchase Agreement. If Manager exercises the Option but does not
purchase the Optional Service Area Assets pursuant to the terms of the Option
Asset Purchase Agreement, then the BTAs in the Optional Service Area will be
excluded from the Service Area. Manager shall be responsible for obtaining any
required consents and releases of the various landlords for any leases acquired
or to be assumed by Manager in connection with the purchase of the Optional
Service Area Assets. Sprint PCS agrees that if the Option is exercised, it will
use commercially reasonable efforts to facilitate these transfers.
Unless and until the Option is exercised, Exhibit 2.1 attached hereto shall
-----------
be deemed not to contain any reference to the BTAs that comprise the Optional
Service Area. Upon such exercise, Exhibit 2.1 will be deemed to have been
amended at that time to include the references therein to the BTAs that comprise
the Optional Service Area. If the Option is exercised and the
4
Option Asset Purchase Agreement is executed, the purchase price for the Optional
Service Area Assets (including the right to provide Sprint PCS Services to
Sprint PCS subscribers in the Optional Service Area at Closing) will be as set
forth in the Option Asset Purchase Agreement. In addition, upon the closing of
the Option Asset Purchase Agreement (if executed), Manager agrees to offer
employment to all Sprint Spectrum employees working in the BTAs that comprise
the Optional Service Area on comparable terms.
For each subscriber in the Optional Service Area who receives Sprint PCS
Products and Service using a Sprint PCS handset which is under warranty on the
Closing Date under the Option Asset Purchase Agreement, each such handset shall
be subject to the underlying handset purchase agreement and warranties of Sprint
PCS insofar as provided for in such agreements. From and after such Closing
Date, the cost and risk of loss from defective handsets and warranty exchanges
for any subscribers shall be borne by Manager.
6. Fixed Wireless Local Loop. As of the date of this Addendum, there are
no geographic areas within the New Service Area or the Optional Service Area in
which Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier.
7. Build-Out of Des Moines and Omaha MTAs. Manager's obligation to
complete the network build-out as described in Exhibit 2.1 for the Des Moines
and Omaha MTAs is material to Sprint PCS' compliance with the 10-year minimum
pops coverage requirement under the License for such MTAs, as required by the
FCC and, therefore, is a material term of the Management Agreement.
8. Expedite Fees. If Sprint PCS and Manager agree to pay additional fees
to a third party for any efforts associated with expediting completion of any
portion of Manager's Build Out Plan or Switch Integration to meet a Network
Ready Date (the "NRD") including, but not limited to, payment of expedited fees
for microwave relocation, and the NRD is later extended due to Manager action or
lack of action, then Manager will have full responsibility for the payment of
such fees.
9. 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.
5
(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."
10. 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."
11. 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.
12. 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."
13. Announced Transactions. Section 17.24 is deleted in its entirety.
14. 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: "have been
disclosed verbally or in writing to Sprint PCS, and photocopies of any such
written agreements will be delivered to Sprint PCS upon its request".
6
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
executed as of the date first above written.
Illinois PCS, LLC
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
WirelessCo, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Chief Business Development Officer
Sprint Spectrum L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Chief Business Development Officer
Sprint Communications Company, L.P.
By: /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
Vice President - Law
7
EXECUTION COPY
--------------
Exhibit B
---------
Method for Determining Equity Value Prior to an IPO by Issuer
-------------------------------------------------------------
(i) Each party engages an nationally recognized investment bank to provide a
valuation at the Issuer's fair market value.
(ii) If the higher valuation is equal to or less than 110% of the lower
valuation, the mean of the two valuations is used.
(iii) If the higher valuation is greater than 110% of the lower valuation, and
the selling party's valuation is the lower valuation, the mean of the two
valuations is used.
(iv) If the higher valuation is greater than 110% of the lower valuation, and
the acquiring party's valuation is the lower valuation, the respective
investment banks engaged by the parties will agree upon a third
independent investment bank to provide a third valuation.
(v) If the third valuation falls outside of the two initial valuations, the
initial valuation closest to the third valuation is used.
(vi) If the third valuation falls within the initial valuation range and is
within 5% of the mean of the initial valuations, the third valuation is
used.
(vii) If the third valuation falls within the initial valuation range, but is
not within 5% of the mean of the initial valuations, the mean of the third
valuation and the nearest initial valuation is taken.
Exhibit 2.1
Illinois PCS Addendum III
Limited Service Areas
---------------------
Manager has partial responsibility, or Limited Service Area, in selected BTAs in
the Service Area. The Manager's Limited Service Area BTAs are defined below. In
all areas where it is noted that Manager will meet Sprint PCS current or planned
coverage, Manager will work with Sprint PCS RF staff to determine the exact
location of Manager's sites in order to provide contiguous coverage with Sprint
PCS.
Des Moines, IA BTA 111
. Xxxxx County
. Xxxxxx County
. Union County
. Ringgold County
. Xxxxxx County
. Decatur County
. Xxxxx County
. Xxxxx County
. Xxxxxx and Madison Counties only area along I-35 on the boundaries of these
counties
. Xxxxxxx County
. Xxxxxx County
. Audubon County excluding Sprint PCS current coverage
. Story County excluding Sprint PCS current coverage and the small area
Southwest of Sprint PCS coverage near the city of Huxley
. Xxxxxx County
. Xxxxxx County
. Jasper County along IA 163 from Sprint PCS current coverage towards the
city of Pella
Omaha, NE BTA 332
. Colfax County
. Xxxxxx County
. Cuming County
. Xxxx County
. Xxxxxxxx County only along US 30 from Columbus, NE East to Freemont, NE
. Dodge County
. Washington County excluding Sprint PCS current coverage
. Xxxxxxxx County excluding Sprint PCS current coverage
. Xxxxxxxx County
. Otoe County
. Nemaha County
. Freemont County
. Xxxxx County excluding Sprint PCS current coverage
. Xxxxxxxxxx County
. Page County
. Platte County
. Polk County
. Cass County only as it borders along I-29 to meet Sprint PCS current
coverage
. Xxxxxxxxxx County
Lincoln, NE BTA 256
. All counties except Lancaster County. Lancaster County only includes areas
----
along I-80 from Western Lancaster County border to Sprint PCS current
coverage
Battle Creek, MI BTA 33
. Xxxxx County only
Lansing, MI BTA 241
. Ionia County only
Phase I - To be completed by 7/1/2001
-------------------------------------
Grand Rapids BTA 169
. Major Cities covered include: Grand Haven, Grand Rapids, Wyoming, Xxxxxxx,
Xxxxxxx
. Major traffic arteries covered include: US 131 from Southern BTA border to
MI 57; I-96 from Eastern BTA border to Western BTA border; I-196 from
Southern BTA border to US 131
Muskegon BTA 310
. Major Cities covered include: Muskegon
. Major traffic arteries covered include: I-96 from US 31 to Eastern BTA
border
Saginaw-Bay City BTA 390
. Major Cities covered include: Saginaw, Bay City, Midland, Birch Run
. Major traffic arteries covered include: 1-75 from the Southern BTA border
to US 10; US 10 from Xxxxxxx to Essexville
Lansing BTA 241
. Major Cities covered include: Ionia
. Major traffic arteries covered include I-96 from coverage Phase I Grand
Rapids BTA 169 to Eastern Ionia County border; MI 21 from I-96 to and
including Ionia
Battle Creek BTA 33
. Major Cities Covered include: Hastings
. Major traffic arteries covered include: MI 37 from coverage in Phase I
Grand Rapids BTA 169 to MI 43 in Hastings
Cedar Rapids BTA 70 *
. Expansion and fill in of Cedar Rapids metropolitan area
. Major Cities covered include: Cedar Rapids, Xxxxxx
. I-80 from Southwestern BTA border (Xxxx xx Xxxx Xxxx xx "xxxxx xxx" xx XXX)
to Southeastern BTA border (East of Iowa City in "right leg" of BTA); I-80
from Southwestern BTA border (West of Iowa City in "left leg" of BTA) to
Southeastern BTA border (West of Iowa City in "left leg" of BTA)
Iowa City BTA 205 *
. Expansion and fill in of Iowa City metropolitan area
. Major Cities covered include: Iowa City
. I-80 from Western BTA border to Eastern BTA border; I-380 from Iowa City to
IA 22
Phase II - To be completed by 10/1/2001
---------------------------------------
Grand Rapids BTA 169
. Major Cities covered include: Big Rapids
. Major traffic arteries covered include: US 131 from MI 57 (Phase I build)
to Northern BTA border
Traverse City BTA 446
. Major Cities covered include: Traverse City, Cadillac, Elk Rapids
. Major traffic arteries covered include: US 131 from Southern BTA border to
MI 72; US 31 from MI 37 to Grand Traverse County line; MI 72 from Traverse
City to Eastern BTA border; US 31 north out of Traverse City to Elk Rapids
Saginaw-Bay City BTA 390
. Major Cities covered include: Grayling; Roscommon
. Major traffic arteries covered include: I-75 from Phase I build at US 10 to
MI 72; MI 72 from Western BTA border to I-75; US 27 from I-75 to Southern
BTA border
Mount Pleasant BTA 307
. Major Cities covered include: Xxxx, Mount Pleasant
. major traffic arteries covered include: US 27 from Northern BTA border to
Southern BTA border
Cedar Rapids BTA 70 *
. Major Cities covered include: Anamosa, Independence
. Major traffic arteries covered include: I-380 from Cedar Rapids to Northern
BTA border; US 151 Out of Cedar Rapids to Northern BTA border; US 20 from
Northwestern BTA border to Northeastern BTA border
Waterloo-Cedar Falls BTA 462
. Major Cities covered include: Waterloo, Cedar Falls, Waverly
. Major traffic arteries covered include: I-380 from Southern BTA border to
US 20; US 218 from Waterloo to Waverly; US 20 from Waterloo/Cedar Falls to
Eastern BTA border
Dubuque BTA 118
. Major Cities covered include: Dubuque, Platteville
. Major traffic arteries covered include: US 20 from Western BTA border to
Dubuque; US 151 from Southern BTA border to Eastern BTA border
Phase III - To be completed by 10/01/2001
-----------------------------------------
Iowa City BTA 205 *
. Major Cities covered include: Washington
. Major traffic arteries covered include: US 218 from IA 22 to Southern BTA
border
Burlington BTA 61
. Major Cities covered include: Keokuk; Burlington, Mount Pleasant
. Major traffic arteries covered include: US 218 from Northern BTA border to
US 34; US 34 from Western BTA border to Burlington; US 61 from Burlington
to Keokuk
Ottumwa BTA 337
. Major Cities covered include: Prairie City, Ottumwa, Fairfield; Oskaloosa,
Pella, Monroe
. Major traffic arteries covered include: US 34 from Eastern BTA border to
Ottumwa; IA 163 from Western BTA border to Oskaloosa
Des Moines BTA 111
. Major Cities covered include: Pella, Knoxville
. Major traffic arteries covered include: IA 163 from Eastern BTA border to
current Sprint PCS coverage; US 30 from Eastern BTA border to current
Sprint PCS coverage
Marshalltown BTA 283
. Major Cities covered include: Marshalltown
. Major traffic arteries covered include: US 30 from Marshalltown to Western
BTA border
Phase IV - To be completed by 12/1/2001
---------------------------------------
Norfolk BTA 323
. Major Cities covered include: Norfolk
. Major traffic arteries covered include: US 81 from Southern BTA border to
Norfolk; US 275 from Norfolk to Eastern BTA border
Omaha BTA 332
. Major Cities covered include: Fremont, Columbus
. Major traffic arteries covered include: I 29 from Southern BTA border to
current Sprint PCS coverage; I 29 from Northern BTA border to current
Sprint PCS coverage; XX 000 xxxx Xxxxx xxxxxxxxxxxx xxxx to Fremont; US 30
from Fremont to Columbus; US 81 from Columbus to Northern BTA border; US
275 from Xxxxxxx/Fremont to Western BTA border
Des Moines BTA 111
. Major Cities covered include:
. Major traffic arteries covered include: I-35 from Northern BTA border to
current Sprint PCS coverage; I 35 from Southern BTA border to current
Sprint PCS coverage
Xxxxx City BTA 285
. Major Cities covered include: Clear Lake
. Major traffic arteries covered include: I 35 from Southern BTA border to
Northern BTA border
Fort Dodge BTA 150
. Major Cities covered include:
. Major traffic arteries covered include: I 35 from Southern BTA border to
Eastern BTA border
Phase V - To be completed no later than 12/31/2004
--------------------------------------------------
Xxxxx City BTA 285
. Major Cities covered include: Iowa Falls, Xxxxx City
. Major traffic arteries covered include: US 20 from I 35 to Iowa Falls; US
18 from I 35 to Xxxxx City
Fort Dodge BTA 150
. Major Cities covered include: Ft Dodge, Xxxxxxx City
. Major traffic arteries covered include: US 20 from I 35 to Ft Dodge
Des Moines BTA 111
. Major Cities covered include: Xxxxxxx
. Major traffic arteries covered include US 71 from I 80 to Xxxxxxx
Xxxxxxx BTA 256
. Major Cities covered include: York
. Major traffic arteries covered include: I 80 from current Sprint PCS
coverage to Western BTA border
Grand Island-Kearney BTA 167
. Major Cities covered include: Grand Island, Xxxxxxx, Xxxxxx
. Major traffic arteries covered include: I 80 from Eastern BTA border to
Western BTA border; US 281 from Grand Island to Southern BTA border
Hastings BTA 185
. Major Cities covered include: Hastings, Minden, Holdrege
. Major traffic arteries covered include: US 281 from Northern BTA border to
Hastings; US 183 from I 80 to Holdrege; NE 10 from I 80 to Minden; I 80
within Hastings BTA
Des Moines MTA
As a material term of this Exhibit 2.1 and the Management Agreement Manager
shall, in addition to the pops covered in the foregoing build plan, cover an
additional 18,000 pops within the Des Moines MTA on or before 12/31/2004.
Lansing BTA 241
Sprint PCS shall retain the right to build coverage in the Lansing BTA along US
27 from it's current coverage to the Northern border of the Lansing BTA or to
direct Illinois PCS to build this coverage. Sprint PCS shall provide to Illinois
PCS written notice of it's determination of which party shall build this area on
or before 6/1/2000. Upon direction by Sprint PCS to Illinois PCS requiring
Illinois PCS to build this area Illinois PCS shall complete the build of this
area on or before 7/01/2001.
* To be completed by 12/1/01 if related asset purchase agreement closes after
1/1/01.