EXHIBIT 10.14
Sprint PCS
Management Agreement
BETWEEN
Sprint Spectrum L.P.
SprintCom, INC.
AND
Georgia PCS Management LLC
June 8, 1998
TABLE OF CONTENTS
Page
----
1. MANAGER ................................................................................2
1.1 Hiring of Manager ..............................................................2
1.2 Program Requirements ...........................................................3
1.3 Vendor Purchase Agreements .....................................................3
1.4 Interconnection ................................................................3
1.5 Seamlessness ...................................................................4
1.6 Forecasting ....................................................................4
1.7 Financing ......................................................................4
1.8 Ethical Conduct and Related Covenants ..........................................4
2. BUILD-OUT OF NETWORK ...................................................................4
2.1 Build-out Plan .................................................................4
2.2 Compliance with Regulatory Rules ...............................................5
2.3 Exclusivity of Service Area ....................................................5
2.4 Restriction ....................................................................6
2.5 Manager's Right of First Refusal for New Area Build-out ........................6
2.6 Purchase of Assets by Manager ..................................................7
2.7 Microwave Relocation ...........................................................7
2.8 Determination of pops ..........................................................7
3. PRODUCTS AND SERVICES; IXC SERVICES ....................................................7
3.1 Sprint PCS Products and Services ...............................................7
3.2 Other Products and Services ....................................................8
3.3 Cross-selling with Sprint ......................................................8
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 ..............................9
3.6 Non-competition ...............................................................10
3.7 Right of Last Offer ...........................................................10
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 .........................................11
4.1.3 Use of Third-Party Distributors .......................................12
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4.2 Sprint PCS National Accounts Program Requirements .............................12
4.3 Sprint PCS Roaming and Inter Service Area .....................................12
4.4 Pricing .......................................................................12
4.5 Home Service Area .............................................................13
5. USE OF BRANDS .........................................................................13
5.1 Use of Brands .................................................................13
5.2 Conformance to Marketing Communications Guidelines ............................14
5.3 Joint Marketing With Third Parties ............................................14
5.4 Prior Approval of Use of Brands ...............................................15
5.5 Duration of Use of Brand ......................................................15
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 .................................16
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 ....................17
7.3 Handoff to Adjacent Networks ..................................................18
8. SPRINT PCS CUSTOMER SERVICE PROGRAM ...................................................18
8.1 Compliance With Sprint PCS Customer Service Program Requirements ..............18
9. SPRINT PCS PROGRAM REQUIREMENTS .......................................................18
9.1 Program Requirements Generally ................................................18
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 ........................................20
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 Revenue.........................................21
10.1.2 Payment of Universal Service Funds ....................................21
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
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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 ......................................26
11.2.2.1 Sprint PCS' Purchase Right ...................................27
11.2.2.2 Sprint PCS' Put Right ........................................27
11.2.2.3 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 .............................33
11.5.1 Manager's Put Right ...................................................33
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 ............................................35
11.6.2 Sprint PCS' Put Right .................................................35
11.6.3 Sprint PCS' Right to Cause A Cure .....................................36
11.6.4 Sprint PCS' Action for Damages or Other Relief ........................38
11.7 Determination of Entire Business Value .........................................38
11.7.1 Appointment of Appraisers .............................................38
11.7.2 Manager's Operating Assets ............................................38
11.7.3 Entire Business Value .................................................39
11.7.4 Calculation of Entire Business Value ..................................39
11.8 Closing Terms and Conditions ...................................................40
11.9 Contemporaneous and Identical Application ......................................40
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12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE ................................40
12.1 Books and Records .............................................................40
12.1.1 General ...............................................................40
12.1.2 Audit .................................................................40
12.1.3 Contesting an Audit ...................................................41
12.2 Confidential Information ......................................................42
12.3 Insurance .....................................................................43
12.3.1 General ...............................................................43
12.3.2 Waiver of Subrogation .................................................43
12.3.3 Certificates of Insurance .............................................44
13. INDEMNIFICATION .......................................................................44
13.1 Indemnification by Sprint PCS .................................................44
13.2 Indemnification by Manager ....................................................44
13.3 Procedure .....................................................................45
13.3.1 Notice ................................................................45
13.3.2 Defense by Indemnitor .................................................45
13.3.3 Defense by Indemnitee .................................................45
13.3.4 Costs .................................................................46
14. DISPUTE RESOLUTION ....................................................................46
14.1 Negotiation ...................................................................46
14.2 Unable to Resolve .............................................................46
14.3 Attorneys and Intent ..........................................................47
14.4 Tolling of Cure Periods .......................................................48
15. REPRESENTATIONS AND WARRANTIES ........................................................48
15.1 Due Incorporation or Formation; Authorization of Agreements ...................48
15.2 Valid and Binding Obligation ..................................................48
15.3 No Conflict; No Default .......................................................48
15.4 Litigation ....................................................................48
16. REGULATORY COMPLIANCE .................................................................49
16.1 Regulatory Compliance .........................................................49
16.2 FCC Compliance ................................................................49
16.3 Marking and Lighting ..........................................................51
16.4 Regulatory Notices ............................................................51
16.5 Regulatory Policy-Setting Proceedings .........................................51
17. GENERAL PROVISIONS ....................................................................51
17.1 Notices .......................................................................51
17.2 Construction ..................................................................52
17.3 Headings ......................................................................52
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17.4 Further Action ................................................................52
17.5 Counterpart Execution .........................................................52
17.6 Specific Performance ..........................................................52
17.7 Entire Agreement; Amendments ..................................................52
17.8 Limitation on Rights of Others ................................................53
17.9 Waivers .......................................................................53
17.9.1 Waivers--General ......................................................53
17.9.2 Waivers--Managers .....................................................53
17.9.3 Force Majeure .........................................................53
17.10 Waiver of Jury Trial ..........................................................54
17.11 Binding Effect ................................................................54
17.12 Governing Law .................................................................54
17.13 Severability ..................................................................54
17.14 Limitation of Liability .......................................................54
17.15 No Assignment; Exceptions .....................................................54
17.15.1 General ...............................................................54
17.15.2 Assignment Right of Manager to Financial Lender .......................55
17.15.3 Change of Control Rights ..............................................56
17.15.4 Right of First Refusal ................................................58
17.15.5 Transfer of Sprint PCS Network ........................................58
17.16 Provision of Services by Sprint Spectrum ......................................58
17.17 Number Portability ............................................................58
17.18 Disclaimer of Agency ..........................................................59
17.19 Independent Contractors .......................................................59
17.20 Expense .......................................................................59
17.21 General Terms .................................................................59
17.22 Conflicts with Other Agreements ...............................................60
17.23 Announced Transaction .........................................................60
17.24 Additional Terms and Provisions ...............................................60
17.25 Master Signature Page .........................................................60
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SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made June 8, 1998, between
SprintCom, Inc., a Kansas corporation, and Georgia PCS Management LLC, a Georgia
limited liability company (but not any Related Party) ("Manager"). The
definitions for this agreement are set forth on the attached "Schedule of
Definitions."
RECITALS
A. Sprint Spectrum L.P., a Delaware limited partnership, SprintCom, Inc., a
Kansas corporation, American PCS Communications, LLC, a Delaware limited
liability company, PhillieCo Partners I, L.P., a Delaware limited partnership,
and Xxx Communications PCS, L.P., a Delaware limited partnership, hold and
exercise, directly or indirectly, control over licenses to operate wireless
services networks.
B. The entity or entities named in Recital A that execute this agreement
hold, directly or indirectly, the Licenses for the areas identified on the
Service Area Exhibit and are referred to in this agreement as "Sprint PCS."
Because this agreement addresses the rights and obligations of each license
holder with respect to each of its Licenses, each reference in this agreement to
"Sprint PCS" refers to the entity that owns, directly or indirectly, the License
referred to in that particular instance or application of the provision of this
agreement. If Sprint Spectrum does not own the License, it will provide on
behalf of Sprint PCS most or all of the services required under this agreement
to be provided by Sprint PCS.
C. The Sprint PCS business was established to use the Sprint PCS Network, a
nationwide wireless services network, to offer seamless, integrated voice and
data services using wireless technology. Sprint PCS offers the services to
customers under a single national brand.
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. 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.
F. All managers of a portion of the business of Sprint PCS, including
Manager, must construct facilities and operate in accordance with Program
Requirements established by Sprint PCS with respect to certain aspects of the
development and offering of wireless products and services and the presentation
of the products and services to customers, to establish and operate the Sprint
PCS Network successfully by providing seamless, integrated voice and data
services, using wireless technology.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. MANAGER
1.1 Hiring of Manager. Sprint PCS hires Manager:
(a) to construct and manage the Service Area Network in compliance
with the License and in accordance with the terms of this agreement;
(b) to distribute continuously during the Term the Sprint PCS Products
and Services and to establish distribution channels in the Service Area;
(c) to conduct continually during the Term advertising and promotion
activities in the Service Area (including mutual decisions to "go dark", with
respect to advertising and promotion activities, for reasonable periods of
time); and
(d) to manage that portion of the customer base of Sprint PCS that has
the NPA-NXX assigned to the Service Area Network.
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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 Manager's utilization of the Service Area
Network, sales and marketing costs, management of the Service Area Network, and
for all other 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 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 Revenue for the Sprint PCS
Products and Services. The forecasts are for planning purposes only and do not
constitute Manager's obligation to meet the quantities forecast.
1.7 Financing. The construction and operation of the Service Area Network
requires a substantial financial commitment by Manager. The manner in which
Manager will finance the build-out of the Service Area Network and provide the
necessary working capital to operate the business is described in detail on
Exhibit 1.7. Manager will allow Sprint PCS an opportunity to review before
filing any registration statement or prospectus or any amendment or supplement
thereto before distributing any offering memorandum or amendment or supplement
thereto, and agrees not to file or distribute any such document if Sprint PCS
reasonably objects in writing on a timely basis to any portion of the document
that refers to Sprint PCS, its Related Parties, their respective businesses,
this agreement or the Services Agreement.
1.8 Ethical Conduct and Related Covenants. Each party must perform its
obligations under this agreement in a diligent, legal, ethical, and professional
manner.
2. BUILD-OUT OF NETWORK
2.1 Build-out Plan. Manager will build-out the Service Area Network in the
Service Area in accordance with a Build-out Plan. Sprint PCS and Manager will
jointly develop each Build-out Plan, except Sprint PCS must approve the final
Build-out Plan. 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.
Any modifications, additions or expansions to a Build-out Plan will be
subject to prior written approval by Sprint PCS. The Build-out Plan in effect as
of the date of this agreement is attached as Exhibit 2.1. Each new or amended
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 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;
(c) Sprint PCS may build-out and sell Sprint PCS Products and Services
in a New Area, or permit a third party to do so, if Manager has chosen not to
build-out the New Area; and
(d) 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 one of them owns an incumbent local exchange
carrier as of the date of this agreement.
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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 to be the exclusive distributor of the fixed wireless local loop
product in the territory served by the local exchange carrier, even if a portion
of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product under the
terms and conditions specified by Sprint PCS (e.g., including designation by
Sprint PCS of an exclusive distribution agent for the territory).
This restriction exists with respect to a particular geographic area only so
long as Sprint PCS or its Related Party owns such incumbent local exchange
carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS
Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on Exhibit
2.4.
2.5 Manager's Right of First Refusal for New Area Build-out. Sprint PCS
grants to Manager the right of first refusal to build-out New Areas. Sprint PCS
will give to Manager a written notice of a New Area within the Service Area that
Sprint PCS decides should be built-out. Manager must communicate to Sprint PCS
within 90 days after receipt of the notice whether it will build-out the New
Area, otherwise Manager's right of first refusal terminates with regard to the
New Area described in the notice.
If Manager decides to build-out the New Area then Manager and Sprint PCS
will diligently negotiate and execute an amendment to the Build-out Plan and
proceed as set forth in Sections 2.1 and 2.2. The amended Build-out Plan will
contain critical milestones that provide Manager a commercially reasonable
period in which to implement coverage in the New Area. In determining what
constitutes a "commercially reasonable period" as used in this paragraph, the
parties will consider several factors, including local zoning processes and
other legal requirements, weather conditions, equipment delivery schedules, the
need to arrange additional financing, and other construction already in progress
by the Manager. Manager will construct and operate the network in the New Area
in accordance with the terms of this agreement.
If Manager declines to exercise its right of first refusal or Manager fails
to build-out the New Area in accordance with the amended Build-out Plan then
Sprint PCS may construct the New Area itself or allow a Sprint PCS Related Party
or an Other Manager to construct the New Area. Sprint PCS has the right, in a
New Area that it constructs or that is constructed by a third party, to manage
the network, allow a Sprint PCS Related Party to manage the network,
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or hire a manager to operate the network in the New Area. Any New Area that
Sprint PCS or a third party builds-out is deemed removed from the Service Area
and the Service Area Exhibit is deemed amended to reflect the change in the
Service Area. If Manager does not exercise its right of first refusal with
respect to a New Area, Manager's right of first refusal does not terminate with
respect to the remainder of the Service Area.
2.6 Purchase of Assets by Manager. If Sprint PCS has assets located in the
Service Area that Manager could reasonably use in its construction of the
Service Area Network and if Sprint PCS is willing to sell such assets, then
Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to
Manager the assets in accordance with the terms and conditions of the asset
purchase agreement attached as Exhibit 2.6.
2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one carrier
at a time. The parties will share equally all costs associated with clearing
spectrum under this Section 2.7.
2.8 Determination of pops. If any provision in this agreement requires the
determination of pops in a given area, then the pops will be determined using
the census block group pop forecast then used by Sprint PCS, except that a
different forecast will be used for any FCC filing and in preparing the
Build-out Plan if required by the FCC. Sprint PCS presently uses the forecast of
Equifax/NDS, but it may choose in its sole discretion to use another service
that provides comparable data.
3. PRODUCTS AND SERVICES; IXC SERVICES
3.1 Sprint PCS Products and Services. Manager must offer for sale, promote
and support all Sprint PCS Products and Services within the Service Area, unless
the parties otherwise agree in advance in writing. Within the Service Area,
Manager may only sell, promote and support wireless products and services that
are Sprint PCS Products and Services or are other products and services
authorized under Section 3.2. The Sprint PCS Products and Services as of the
date of this agreement are attached as Exhibit 3.1. Sprint PCS may modify the
Sprint PCS Products and Services from time to time in its sole discretion by
delivering to Manager a new Exhibit 3.1.
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3.2 Other Products and Services. Manager may offer wireless products and
services that are not Sprint PCS Products and Services, on the terms Manager
determines, if the offer of the additional products and services:
(a) does not violate the obligations of Manager under this agreement;
(b) does not cause distribution channel conflict with or consumer
confusion regarding Sprint PCS' regional and national offerings of Sprint PCS
Products and Services;
(c) complies with the Trademark License Agreements; and
(d) does not materially impede the development of the Sprint PCS
Network.
Manager will not offer any products or services under this Section 3.2 that
are confusingly similar to Sprint PCS Products and Services. Manager must
request that Sprint PCS determine whether Sprint PCS considers a product or
service to be confusingly similar to any Sprint PCS Products and Services by
providing advance written notice to Sprint PCS that describes those products and
services that could be interpreted to be confusingly similar to Sprint PCS
Products and Services. If Sprint PCS fails to provide a response to Manager
within 30 days after receiving the notice, then the products and services are
deemed to create confusion with the Sprint PCS Products and Services and the
request therefore rejected. In rejecting any request Sprint PCS must provide the
reasons for the rejection. If the rejection is based on Sprint PCS' failure to
respond within 30 days and Manager requests an explanation for the deemed
rejection, then Sprint PCS must provide within 30 days the reasons for the
rejection.
3.3 Cross-selling with Sprint. Manager and Sprint and Sprint's Related
Parties may enter into arrangements to sell Sprint's services, including long
distance service (except those long distance services governed by Section 3.4),
Internet access, customer premise equipment, prepaid phone cards, and any other
services that Sprint or its Related Parties make available from time to time.
Sprint's services may be packaged with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet access or
competitive local telephony 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.
Within the Service Area, Manager will facilitate sales by Sprint of the
Sprint PCS Products and Services, including the packaging of wireless, local
exchange and other products and services with Sprint products and services.
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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 must,
under FCC rules, permit Sprint PCS' service plans to be resold by a purchaser of
the service plan. Sprint PCS will not grant the purchaser of a service plan the
right to use any of the support services offered by Sprint PCS, including
customer care, billing, collection, and advertising, nor the right to use the
Brands. The reseller only has the right to use the service purchased.
Consequently, Manager agrees not to interfere with any purchaser of the Sprint
PCS Products or Services who resells the service plans in accordance with this
agreement and applicable law. Manager will notify purchaser that the purchaser
does not have a right to use the Brands or Sprint PCS' support services. In
addition, Manager will notify Sprint PCS if it reasonably believes a reseller of
retail service plans is using the support services or Brands.
3.5.2 Voluntary Resale of Products and Services. Sprint PCS may choose
to offer a resale product under which resellers will resell Sprint PCS Products
and Services under brand names other than the Brands, except Sprint PCS may
permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The resellers
may also provide their own support services (e.g., customer care and billing) or
may purchase the support services from Sprint PCS. If Sprint PCS chooses to
offer a voluntary resale product, it will adopt a program that will be a Program
Requirement under this agreement and that addresses the manner in which Manager
and Other Managers interact with the resellers. Sprint PCS will discuss such
program with Manager during development.
Manager must not sell Sprint PCS Products and Services for resale unless
Sprint PCS consents to such sales in advance in writing, except as required
under the regulations and rules concerning mandatory resale.
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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 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, except no
brand of a significant competitor of Sprint PCS or its Related Parties in the
telecommunications business may be used by Manager's Related Parties on these
products and services;
(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related Parties,
except no brand of a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business may be used by Manager's Related Parties on
these products and services.
If Manager or any of its Related Parties has licenses to provide broadband
personal communication services outside the Service Area, neither Manager nor
such Related Party may utilize the spectrum to offer Sprint PCS Products and
Services without prior written consent from Sprint PCS. Additionally, when
Manager's customers from inside the Service Area travel or roam to other
geographic areas, Manager will route the customers' calls, both incoming and
outgoing, according to the Sprint PCS Network Roaming and Inter Service Area
Program Requirements, without regard to any wireless networks operated by
Manager or its Related Parties. For example, Manager will program the preferred
roaming list for handsets sold in the Service Area to match the Sprint PCS
preferred roaming list.
3.7 Right of Last Offer. Manager will offer to Sprint the right to make to
Manager the last offer to provide backhaul and transport services for call
transport for the Service Area Network, if Manager decides to use third parties
for backhaul and transport services rather than self-provisioning the services
or purchasing the services from Related Parties of Manager. Sprint will have a
reasonable time to respond to Manager's request for last offer to provide
backhaul and transport pricing and services, which will be no greater than 5
Business Days after receipt of the request for the services and pricing from
Manager.
If Manager has an agreement in effect as of the date of this agreement for
these services and the agreement was not made in anticipation of this agreement,
then the requirements of this Section 3.7 do not apply during the term of the
other agreement. If the other agreement terminates for any reason then the
requirements of this Section 3.7 do apply.
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4. MARKETING AND SALES ACTIVITIES
4.1 Sprint PCS National or Regional Distribution Program Requirements.
During the term of this agreement, Manager must participate in any Sprint PCS
National or Regional Distribution Program (as in effect from time to time), and
will pay or receive compensation for its participation in accordance with the
terms and conditions of that program. The Sprint PCS National or Regional
Distribution Program Requirements in effect as of the date of this agreement are
attached as Exhibit 4.l.
4.1.1 Territorial Limitations on Manager's Distribution Activities.
Neither Manager nor any of its Related Parties will market, sell or distribute
Sprint PCS Products and Services outside of the Service Area, except:
(a) as otherwise agreed upon by the parties in advance in writing; or
(b) Manager may place advertising in media that has distribution
outside of the Service Area, so long as that advertising is intended by Manager
to reach primarily potential customers within the Service Area.
Manager may establish direct local distribution programs in accordance with
the Sprint PCS 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.
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 and 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.
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4.1.3 Use of Third-Party Distributors. 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.
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:
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(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area. If
Sprint PCS fails to respond to Manager within 20 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 Sprint PCS
will incur 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,
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trade name or trade dress other than the Brands, except (i) for sales to
resellers required under this agreement, or (ii) as permitted under the
Trademark License Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager from
including Sprint PCS Products and Services under the Brands within the Service
Area as part of a package with its other products and services that bear a
different brand or trademark. The provisions of this Section 5.1 do not apply to
the extent that they are inconsistent with applicable law or in conflict with
the Trademark License Agreements.
5.2 Conformance to Marketing Communications Guidelines. Manager must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of the
Sprint PCS Products and Services. The Marketing Communications Guidelines in
effect as of the date of this agreement have been provided to Manager. 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
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(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 those joint marketing activities that may:
(i) cause confusion between the Brands and any other trademark or
service xxxx used in connection with the proposed activities; or
(ii) give rise to the perception that the Sprint PCS Products and
Services are being advertised, marketed or promoted under any trademark or
service xxxx other than the Brands, except as provided in the Trademark
License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within 20
days after receiving such notice, then the proposed activities are deemed, as
the case may be:
(i) not to create confusion between the Brands and any other
trademark or service xxxx; or
(ii) not to give rise to the perception that Manager's products
and services are being advertised, marketed or promoted under any trademark
or service xxxx other than the Brands, except as provided in the Trademark
License Agreements.
5.4 Prior Approval of Use of Brands. Manager must obtain advance written
approval from Sprint for use of the Sprint Brands to the extent required by the
Sprint Trademark License Agreement and from Sprint PCS for use of the Sprint PCS
Brands to the extent required by the Sprint PCS Trademark 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 their
termination.
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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 a Manager.
6.2 In-Territory Advertising and Promotion. Manager must advertise and
promote the Sprint PCS Products and Services in the Service Area (and may do so
in the areas adjacent to the Service Area so long as Manager intends that such
advertising or promotion primarily reach potential customers within the Service
Area). Manager must advertise and promote the Sprint PCS Products and Services
in accordance with the terms and conditions of this agreement, the Trademark
License Agreements and the Marketing Communication Guidelines. Manager is
responsible for the costs and expenses incurred by Manager with respect to
Manager's advertising and promotion activities in the Service Area.
Manager will be responsible for a portion of the cost of any promotion or
advertising done by third party retailers in the Service Area (e.g., Best Buy)
in accordance with any cooperative advertising arrangements based on per unit
handset sales.
Sprint PCS has the right to use in any promotion or advertising done by
Sprint PCS any promotion or advertising materials developed by Manager from time
to time with respect to the Sprint PCS Products and Services. Sprint PCS will
reimburse Manager for the reproduction costs related to such use.
Sprint PCS will make available to Manager the promotion or advertising
materials developed by Sprint PCS from time to time with respect to Sprint PCS
Products and Services in current use by Sprint PCS (e.g., radio ads, television
ads, design of print ads, design of point of sale materials, retail store
concepts and designs, design of collateral). Manager will bear the cost of using
such materials (e.g., cost of local radio and television ad placements, cost of
printing collateral in quantity, and building out and finishing retail stores).
6.3 Review of Advertising and Promotion Campaigns. Sprint PCS and Manager
will jointly review the upcoming marketing and promotion campaigns of Manager
with respect to Sprint PCS Products and Services (including advertising and
promotion expense budgets) and will use good faith efforts to coordinate
Manager's campaign with Sprint PCS' campaign to maximize the market results of
both parties. Sprint PCS and Manager may engage in cooperative advertising or
promotional activities during the term of this agreement as the parties may
agree in writing.
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6.4 Public Relations. If Manager conducts local public relations efforts,
then Manager must conduct the local public relations efforts consistent with the
Sprint PCS Communications Policies. The Sprint PCS Communications Policies as of
the date of this agreement are attached as Exhibit 6.4. Sprint PCS may modify
the Sprint PCS Communications Policies from time to time by delivering to
Manager a new Exhibit 6.4.
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
7.1 Conformance to Sprint PCS Technical Program Requirements.
(a) Manager must meet or exceed the Sprint PCS Technical Program
Requirements established by Sprint PCS from time to time for the Sprint PCS
Network. Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a level equal to
or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Sprint PCS Technical Program
Requirements; or
(ii) Sprint PCS is responsible under the Services Agreement to
ensure the Service Area Network complies with the Sprint PCS Technical
Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has complied
with the Sprint PCS Technical Program Requirements prior to connecting the
Service Area Network to the rest of the Sprint PCS Network. Once the Service
Area Network is connected to the Sprint PCS Network, Manager must continue to
comply with the Sprint PCS Technical Program Requirements. Sprint PCS agrees
that the Sprint PCS Technical Program Requirements adopted for Manager will be
the same Sprint PCS Technical Program Requirements applied by Sprint PCS to the
Sprint PCS Network.
7.2 Establishment of Sprint PCS Technical Program Requirements. Sprint PCS
has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements, attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS
Technical Program Requirements to ensure a minimum, base-line level of quality
for the Sprint PCS Network. The Sprint PCS Technical Program Requirements
include standards relating to voice quality, interoperability, consistency
(seamlessness) of coverage, RF design parameters, system design, capacity, and
call blocking ratio. Sprint PCS has selected code division multiple access as
the initial air interface technology for the Sprint PCS Network (subject to
change in accordance with Section 7.3).
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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 Affiliate. Manager will be deemed to meet the
standards if:
(a) Manager operates the Service Area Network at a level equal to or
better than the lower of the Operational Level of Sprint PCS or the operational
level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services Agreement
responsibility to ensure the Service Area Network complies with the Sprint PCS
Customer Service Standards.
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit 8.1.
9. SPRINT PCS PROGRAM REQUIREMENTS
9.1 Program Requirements Generally. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements.
Sprint PCS may unilaterally amend from time to time in the manner described in
Section 9.2 all Program Requirements, guidelines and policies mentioned in this
agreement. The most current version of the requirements programs, guidelines and
policies mentioned in the first sentence of this Section 9.1 have been provided
to Manager.
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9.2 Amendments to Program Requirements. Sprint PCS may amend any of the
Sprint PCS 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 Program
Requirements, Sprint PCS may provide for reasonable transition periods and,
where appropriate, grandfathering provisions for existing activities by Manager
that were permitted under the applicable Program Requirements before the
amendment;
(d) Sprint PCS must give Manager reasonable, written notice of the
amendment, but in any event the notice will be given at least 30 days prior to
the effective date of the amendment; and
(e) Manager must implement any changes in the Program Requirements
within a commercially reasonable period of time unless otherwise consented to by
Sprint PCS. Sprint PCS will determine what constitutes a commercially reasonable
period of time taking into consideration relevant business factors, including
the strategic significance of the changes to the Sprint PCS Network, the
relationship of the changes to the yearly marketing cycle, and the financial
demands on and capacity generally of Other Managers. Notwithstanding the
preceding two sentences, Manager will not be required to implement any change in
the Service Area Network or the business of Manager required by an amendment to
a Program Requirement until Sprint PCS has implemented the required changes in
substantially all of that portion of the Sprint PCS Network that Sprint PCS
operates without the use of a manager, 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.
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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. If after the review and decision by the
Vice President, Manager is still dissatisfied, then Manager may ask that the
Chief Officer to whom the Vice President reports review the matter. If Sprint
PCS still requires Manager to implement the change to the Program Requirement,
then upon Manager's failure to implement the change Sprint PCS will have the
rights under Section 11.
9.4 Sprint PCS' Right to Implement Changes. If Manager requests Sprint PCS
to reconsider a change to a Program Requirement as permitted under Section 9.3
and Sprint PCS decides it will not require Manager to make the change, Sprint
PCS may, but is not required to, implement the change at Sprint PCS' expense, in
which event Manager will be required to operate the Service Area Network, as
changed, but Sprint PCS will be entitled to any revenue derived from the change.
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9.5 Rights of Inspection. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility operated
by or for Manager at any time, with reasonable advance notice to Manager if
possible, to inspect, monitor and test in a reasonable manner the Service Area
Network, including the facilities, equipment, books and records of Manager, to
ensure that Manager has complied or is in compliance with all covenants and
obligations of Manager under this agreement, including Manager's obligation to
conform to the Program Requirements. The inspection, monitoring and testing may
not disrupt the operations of the office or facility, nor impede Manager's
access to the Service Area Network.
9.6 Manager's Responsibility to Interface with Sprint PCS. Manager will use
platforms fully capable of interfacing with the Sprint PCS platforms in
operating the Service Area Network and in providing Sprint PCS Products and
Services. Manager will pay the expense of making its platforms fully capable of
interfacing with Sprint PCS, including paying for the following:
(i) Connectivity;
(ii) Any changes that Manager requests Sprint PCS to make to
Sprint PCS systems to interconnect with Manager's systems that Sprint PCS,
in its sole discretion, agrees to make;
(iii) Equipment to run Manager's software;
(iv) License fees for Manager's software; and
(v) Manager upgrades or changes to its platforms.
10. FEES
10.1 Fees and Payments.
10.1.1 Fee Based on Collected Revenue. Sprint PCS will pay to Manager
a weekly fee equal to 92% of Collected Revenues for the week for: (a)
utilization of the Service Area Network; (b) sales and marketing costs; (c)
Manager's management of the Service Area Network; and (d) all other obligations
of Manager under this Agreement. The fee will be due on Thursday of the week
following the week for which the fee is calculated.
10.1.2 Payment of Universal Service Funds. Sprint PCS and Manager will
share any federal and state subsidy funds (e.g., payments by a state of
universal service fund subsidies to Sprint PCS or Manager), if any, received by
Sprint PCS or Manager for customers who reside in the portion of the Service
Area served by the Service Area Network. Manager is
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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 Revenue received directly by the Manager (e.g., customer mails
payment to the business address of Manager rather than to the lockbox or a
customer pays a direct sales force representative in cash). Sprint PCS will on a
monthly basis true up the fees and payments due under Section 10.1 against the
actual payments made by Sprint PCS to Manager. Sprint PCS will provide to
Manager a true up report each month showing the true up and the net amount due
from one party to the other, if any. If the weekly payments made to Manager
exceed the actual fees and payments due to Manager, then Manager will remit the
amount of the overpayment to Sprint PCS within 5 Business Days after receiving
the true up report from Sprint PCS. If the weekly payments made to Manager are
less than the actual fees and
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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.
10.4 Collected Revenues Definition. "Collected Revenues" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others including the customers whose NPA-NXX is the
same as that for the portion of the Service Area served by the Service Area
Network. In determining Collected Revenues the following principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from federal and
state subsidy funds; they are handled separately as noted in Section
10.1.2;
(ii) Collected Revenues do include any amounts received for the
payment of Inbound Roaming charges and interconnect fees when calls are
carried on the Service Area Network; and
(iii) Collected Revenues do not include any amounts received with
respect to any changes made by Sprint PCS under Section 9.4.
(b) The following items are not Collected Revenues; Sprint PCS is
obligated to remit the amounts received with respect to such items, if any, to
Manager, as follows:
(i) Inter service area payments will be paid as provided under
Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as
provided under Section 10.1.5;
23
(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); and
(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.
(c) The following items are not Collected Revenues; neither party will
collect 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 Revenue); 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 is no Collected Revenue
on which a fee is due to Manager).
10.5 Late Payments. Any amount due under this Section 10 that is not paid
by one party to the other party in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 3rd day
after the due date until (and including) the date paid.
10.6 Setoff Right If Failure To Pay Amounts Due. If Manager fails to pay
any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this
agreement, the Services Agreement, or any other agreement with Sprint PCS or a
Related Party, then Sprint PCS may setoff against standard payment intervals
(e.g. weekly) against the amounts paid to Manager under Section 10.1 until such
time as Manager pays any such unpaid amounts.
Sprint PCS. may setoff 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
24
payment to Manager an amount Sprint PCS reasonably estimates will be due Sprint
PCS under the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts deducted
against the actual amounts due Sprint PCS. If the estimated amounts deducted by
Sprint PCS exceed the actual amounts due to Sprint PCS, 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. This right of setoff is in addition to
any other right that Sprint PCS may have under this agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
11.1 Initial Term. This agreement commences on the date of execution and,
unless terminated earlier in accordance with the provisions of this Section 11,
continues for a period of 20 years (the "Initial Term").
11.2 Renewal Terms. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods (for
a maximum of 50 years including the Initial Term), unless at least 2 years prior
to the commencement of any renewal period either party notifies the other party
in writing that it does not wish to renew this agreement.
11.2.1 Non-renewal Rights of Manager. If this agreement will terminate
because Sprint PCS gives Manager timely written notice of non-renewal of this
agreement, then Manager may exercise its rights under Section 11.2.1.1 or, if
applicable, its rights under Section 11.2.1.2.
11.2.1.1 Manager's Put Right. Manager may within 30 days after
the date Sprint PCS gives notice of non-renewal put to Sprint PCS all of
the Operating Assets. Sprint PCS will pay to Manager for the Operating
Assets an amount equal to 80% of the Entire Business Value. The closing of
the purchase of the Operating Assets will occur within 20 days after the
later of (a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value provided by the appraisers under
Section 11.7 or (b) the receipt of all materials required to be delivered
to Sprint PCS under Section 11.8. Upon closing the purchase of the
Operating Assets this agreement will be deemed terminated. The exercise of
the put, the determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and the
business, and the process for closing the purchase will be subject to the
terms and conditions set forth in Section 11.8.
25
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, subject to receipt of FCC approval of the necessary
disaggregation and partition, 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
well be deemed terminated. The closing of the purchase of the
Disaggregated License well 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 well allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 Non-renewal Rights of Sprint PCS. If this agreement well
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;
26
(b) both parties give timely written notices of non-renewal;
(c) this agreement expires with neither party giving a
written notice of non-renewal;
(d) either party elects to terminate this agreement under
Section 11.3.4(a); or
(e) Manager elects to terminate this agreement under Section
11.3.4(b).
11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an
amount equal to 80% of the Entire Business Value. The closing of the
purchase of the Operating Assets will occur within 20 days after the later
of (a) the receipt by Sprint PCS of the written notice of determination of
the Entire Business Value provided by the appraisers under Section 11.7 or
(b) the receipt of all materials required to be delivered to Sprint PCS
under Section 11.8. Upon closing the purchase of the Operating Assets this
agreement will be deemed terminated. The exercise of the purchase right,
the determination of the Operating Assets, the representations and
warranties made by Manager with respect to the Operating Assets and the
business, and the process for closing the purchase will be subject to the
terms and conditions set forth in Section 11.8.
11.2.2.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval, put
to Manager the Disaggregated License for a purchase price equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
27
(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.
11.2.2.3 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:
29
(a) Manager may terminate this agreement if the Trademark
License Agreement terminated because of a breach of the Trademark
License Agreement by Sprint PCS or Sprint; and
(b) Sprint PCS may terminate this agreement if the Trademark
License Agreement terminated because of a breach of the Trademark
License Agreement by Manager.
11.3.6 Financing Considerations. At the election of Sprint PCS this
agreement may be terminated upon the failure of Manager to obtain the financing
described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit.
11.3.7 Bankruptcy of a Party. At the election of the non-bankrupt
party, this agreement may be terminated upon the occurrence of a Voluntary
Bankruptcy or an Involuntary Bankruptcy of the other party.
"Voluntary Bankruptcy" means:
(a) The inability of a party generally to pay its debts as
the debts become due, or an admission in writing by a party of its
inability to pay its debts generally or a general assignment by a
party for the benefit of creditors;
(b) The filing of any petition or answer by a party seeking
to adjudicate itself a bankrupt or insolvent, or seeking any
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition for itself or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian
or other similar official for itself or for substantially all of its
property; or
(c) Any action taken by a party to authorize any of the
actions set forth above.
"Involuntary Bankruptcy" means, without the consent or acquiescence of
a party:
(a) The entering of an order for relief or approving a
petition for relief or reorganization;
(b) Any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar
relief under
30
any present or future bankruptcy, insolvency or similar statute, law
or regulation;
(c) The filing of any petition against a party, which
petition is not dismissed within 90 days; or
(d) Without the consent or acquiescence of a party, the
entering of an order appointing a trustee, custodian, receiver or
liquidator of party or of all or any substantial part of the property
of the party, which order is not dismissed within 90 days.
11.4 Effect of an Event of Termination.
(a) Upon the occurrence of an Event of Termination, the party with the
right to terminate this agreement or to elect the remedy upon the Event of
Termination, as the case may be, may:
(i) in the case of an Event of Termination under Sections 11.3.1
(a) or 11.3.7, give the other party written notice that the agreement is
terminated effective as of the date of the notice, in which case neither
party will have any other remedy or claim for damages (except any claim the
non-bankrupt party has against the bankrupt party and any claims permitted
under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than under
Section 11.3.1(a), give the other party written notice that the party is
exercising one of its rights, if any, under Section 11.5 or Section 11.6.
(b) If the party terminates this agreement under Section 11.4(a)(i)
then all rights and obligations of each party under this agreement will
immediately cease, except that:
(i) Any rights arising out of a breach of any terms of this
agreement will survive any termination of this agreement;
(ii) The provisions of this Section 11.4 and of Sections 12.2,
13, 14 and 16 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;
31
(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) The parties will use all commercially reasonable efforts to
cease immediately all of their respective efforts to market, sell, promote
or distribute the Sprint PCS Products and Services;
(vi) Sprint PCS has the option to buy from Manager any new unsold
subscriber equipment and accessories, at the prices charged to Manager;
(vii) The parties will immediately stop making any statements or
taking any action that might cause third parties to infer that any business
relationship continues to exist between the parties, and where necessary or
advisable, the parties will inform third parties that the parties no longer
have a business relationship; and
(viii) If subscriber equipment and accessories are in transit
when this agreement is terminated, Sprint PCS may, but does not have the
obligation to, cause the freight carrier to not deliver the subscriber
equipment and accessories to Manager but rather to deliver the subscriber
equipment and accessories to Sprint PCS.
(c) If the party exercises its rights under Section 11.4(a)(ii), this
agreement will continue in full force and effect until otherwise terminated.
(d) If this agreement terminates for any reason other than Manager's
purchase of the Disaggregated License, Manager will not, for 3 years after the
date of termination compile, create, or use for the purpose of selling
merchandise or services similar to the Sprint PCS Products or Services, or sell,
transfer or otherwise convey to a third party, a list of customers who
purchased, leased or used Sprint PCS Products or 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.
32
11.5 Manager's Event of Termination Rights and Remedies. In addition to any
other right or remedy that Manager may have under this agreement, the parties
agree that Manager will have the rights and remedies set forth in this Section
11.5 and that such rights and remedies will survive the termination of this
agreement. If Manager has a right to terminate this agreement as the result of
the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3, 11.3.5
or 11.3.7 (if Manager is the non-bankrupt party), then Manager has the right to
elect one of the following three (3) remedies, except Manager cannot elect its
remedies under Sections 11.5.1 or 11.5.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11.3.3.
11.5.1 Manager's Put Right. Manager may put to Sprint PCS within 30
days after the Event of Termination all of the Operating Assets. Sprint PCS will
pay to Manager an amount equal to 80% of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers under
Section 11.7; or
(b) the receipt of all materials required to be delivered to
Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the put, the determination of the Operating
Assets, the representations and warranties made by the Manager with respect to
the Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.5.2 Manager's Purchase Right.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in the
Service Area under the License on the date this agreement is executed,
then Manager may, subject to receipt of FCC approval, purchase from
Sprint PCS the Disaggregated License for the greater of (1) the
original cost of the License to Sprint PCS (pro rated on a pops and
spectrum basis) plus the microwave relocation costs paid by Sprint PCS
or (2) 9% (10% minus a 10% penalty) of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
33
(1) 20 days after the receipt by Manager of the written
notice of determination of the Entire Business Value by the
appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
(c) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Product and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 Manager's Action for Damages or Other Relief. Manager may seek
damages or other appropriate relief in accordance with the dispute resolution
process in Section 14.
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.
34
11.6.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount
equal to 72% (80% minus a 10% penalty) of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of
determination of the Entire Business Value by the appraisers pursuant
to Section 11.7; or
(b) the receipt of all materials required to be delivered to
Sprint PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.6.2 Sprint PCS' Put Right.
(a) Sprint PCS may, subject to receipt of FCC approval, put
to Manager the Disaggregated License for a purchase price equal to the
greater of (1) the original cost of the License to Sprint PCS (pro
rated on a pops and spectrum basis) plus the microwave relocation
costs paid by Sprint PCS or (2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License
this agreement will be deemed terminated. The closing of the purchase
of the Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the
written notice of determination of the Entire Business Value by
the appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the put, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will
be subject to the terms and conditions set forth in Section 11.8.
35
(d) Manager may, within 10 days after it receives notice of
Sprint PCS' exercise of its put, advise Sprint PCS of the amount of
spectrum (not to exceed 10 MHz) it wishes to purchase. After the
closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's
network; and
(2) Sprint PCS to resell Manager's Products and
Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 Sprint PCS' Right to Cause A Cure.
(a) Sprint PCS' Right. Sprint PCS may, but is not obligated
to, take such action as it deems necessary to cure Manager's breach of
this agreement, including assuming operational responsibility for the
Service Area Network to complete construction, continue operation,
complete any necessary repairs, implement changes necessary to comply
with the Program Requirements and terms of this agreement, or take
such other steps as are appropriate under the circumstances, or Sprint
PCS may designate a third party or parties to do the same, to assure
uninterrupted availability and deliverability of Sprint PCS Products
and Services in the Service Area, or to complete the build-out of the
Service Area Network in accordance with the terms of this agreement.
In the event that Sprint PCS elects to exercise its right under this
Section 11.6.3, Sprint PCS will give Manager written notice of such
election. Upon giving such notice:
(1) Manager will collect and make available at a
convenient, central location at its principal place of business,
all documents, books, manuals, reports and records related to the
Build-out Plan and required to operate and maintain the Service
Area Network; and
(2) Sprint PCS, its employees, contractors and
designated third parties will have the unrestricted right to
enter the facilities and offices of Manager for the purpose of
curing the breach and, if Sprint PCS deems necessary, operate the
Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the extent
requested by Sprint PCS to enable Sprint PCS to exercise its rights
under this Section 11.6.3.
36
(b) Liability. Sprint PCS' exercise of its rights under this
Section 11.6.3 will not be deemed an assumption by Sprint PCS of any
liability attributable to Manager or any other party, except that,
without limiting the provisions of Section 13, during the period that
Sprint PCS is curing a breach under this agreement or operating any
portion of the Service Area Network pursuant to this Section 11.6.3,
Sprint PCS will indemnify and defend Manager and its directors,
partners, officers, employees and agents from and against, and
reimburse and pay for, all claims, demands, damages, losses,
judgments, awards, liabilities, costs and expenses (including
reasonable attorneys' fees, court costs and other expenses of
litigation), whether or not arising out of third party claims, in
connection with any suit, claim, action or other legal proceeding
relating to the bodily injury, sickness or death of persons or the
damage to or destruction of property, real or personal, resulting from
or arising out of Sprint PCS' negligence or willful misconduct in
curing the breach or in the operation of the Service Area Network.
Sprint PCS' obligation under this Section 11.6.3(b) will not apply to
the extent of any claims, demands, damages, losses, judgments, awards,
liabilities, costs and expenses resulting from the negligence or
willful misconduct of Manager or arising from any contractual
obligation of Manager.
(c) Costs and Payments. During the period that Sprint PCS is
curing a breach or operating the Service Area Network under this
Section 11.6.3, Sprint PCS and Manager will continue to make any and
all payments due to the other party and to third parties under this
agreement, the Services Agreement and any other agreements to which
such party is bound, except that Sprint PCS may deduct from its
payments to Manager all reasonable costs and expenses incurred by
Sprint PCS in connection with the exercise of its right under this
Section 11.6.3. Sprint PCS' operation of the Service Area Network
pursuant to this Section 11.6.3 is not a substitution for Manager's
performance of its obligations under this agreement and does not
relieve Manager of its other obligations under this agreement.
(d) Length of Right. Sprint PCS may continue to operate the
Service Area Network in accordance with Section 11.6.3 until (i)
Sprint PCS cures all breaches by Manager under this agreement; (ii)
Manager cures all breaches and demonstrates to Sprint PCS'
satisfaction that it is financially and operationally willing, ready
and able to perform in accordance with this agreement and resumes such
performance; (iii) Sprint PCS consummates the purchase of the
Operating Assets under Section 11.6.1 or the sale of the Disaggregated
License under Section 11.6.2; or (iv) Sprint PCS terminates this
agreement.
37
(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 may
seek damages or other appropriate relief in accordance with the dispute
resolution process in Section 14.
11.7 Determination of Entire Business Value.
11.7.1 Appointment of Appraisers. Sprint PCS and Manager must each
designate an independent appraiser within 30 days after giving the Purchase
Notice under Exhibit 11.8. Sprint PCS and Manager will direct the two appraisers
to jointly select a third appraiser within 15 days after the day the last of
them is appointed. Each appraiser must be an expert in the valuation of wireless
telecommunications businesses. Sprint PCS and Manager must direct the three
appraisers to each determine, within 45 days after the appointment of the last
appraiser, the Entire Business Value. Sprint PCS and Manager will each bear the
costs of the appraiser appointed by it, and they will share equally the costs of
the third appraiser.
11.7.2 Manager's Operating Assets. The following assets are included
in the Operating Assets (as defined in the Schedule of Definitions):
(a) network assets, including all personal property, real
property interests in cell sites and switch sites, leasehold
interests, collocation agreements, easements, and rights of way;
(b) all of the real, personal, tangible and intangible
property and contract rights that Manager owns and uses in conducting
the business of providing the Sprint PCS Products and Services,
including the goodwill resulting from Manager's customer base;
(c) sale and distribution assets primarily dedicated (i.e.,
at least 80% of their revenue is derived from the sale of Sprint PCS
Products and Services) to the sale by Manager of Sprint PCS Products
and Services. For example, a retail store that derives at least 80% of
its revenue from the sale of Sprint PCS Products and Services is an
operating asset. A store that derives 65 % of its revenue from Sprint
PCS Products and Services is not an operating asset;
(d) customers, if any, that use both the other products and
services approved under Section 3.2 and the Sprint PCS Products and
Services;
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(e) handset inventory;
(f) books and records of the wireless business, including
all engineering drawings and designs and financial records;
(g) all contracts used by Manager in operating the wireless
business including T1 service agreements, service contracts,
interconnection agreements, distribution agreements, software license
agreements, equipment maintenance agreements, sales agency agreements
and contracts with all equipment suppliers.
11.7.3 Entire Business Value. Utilizing the valuation principles set
forth below and in Section 11.7.4, "Entire Business Value" means the fair market
value of Manager's wireless business in the Service Area, valued on a going
concern basis.
(a) The fair market value is based on the price a willing
buyer would pay a willing seller for the entire on-going business.
(b) The appraisers will use the then-current customary means
of valuing a wireless telecommunications business.
(c) The business is conducted under the Brands and existing
agreements between the parties and their respective Related Parties.
(d) Manager owns the Disaggregated License (in the case
where Manager will be buying the Disaggregated License under Sections
11.2.1.2, 11.2.2.2, 11.5.2 or, 11.6.2) or Manager owns the spectrum
and the frequencies actually used by Manager under this agreement (in
the case where Sprint PCS will be buying the Operating Assets under
Sections 11.2.1.1, 11.2.2.1, 11.5.1 or 11.6.1).
(e) The valuation will not include any value for the
business represented by Manager's Products and Services or any
business not directly related to Sprint PCS Products and Services.
11.7.4 Calculation of Entire Business Value. The Entire Business Value
to be used to determine the purchase price of the Operating Assets or the
Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by the
appraisers is within 10% of the lowest fair market value, then the
Entire
39
Business Value used to determine the purchase price under this
agreement will be the arithmetic mean of the three appraised fair
market values.
(b) If two of the fair market values determined by the
appraisers are within 10% of one another, and the third value is not
within 10% of the other fair market values, then the Entire Business
Value used to determine the purchase price under this agreement will
be the arithmetic mean of the two more closely aligned fair market
values.
(c) If none of the fair market values is within 10% of the
other two fair market values, then the Entire Business Value used to
determine the purchase price under this agreement will be the middle
value of the three fair market values.
11.8 Closing Terms and Conditions. The closing terms and conditions for the
transactions contemplated in this Section 11 are attached as Exhibit 11.8.
11.9 Contemporaneous and Identical Application. The parties agree that any
action regarding renewal or non-renewal and any Event of Termination will occur
contemporaneously and identically with respect to all Licenses. For example, if
Manager exercises its purchase right under Section 11.5.2, it must exercise such
right with respect to all of the Licenses under this agreement. The Term of this
agreement will be the same for all Licenses; Manager will not be permitted to
operate a portion of the Service Area Network with fewer than all of the
Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 Books and Records.
12.1.1 General. Each party must keep and maintain books and records to
support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
12.1.2 Audit. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for purposes of auditing the amount of fees, costs, expenses or other
charges payable in connection with the Service Area with respect to the period
audited. The auditing party will conduct the audit no more frequently than
annually. If the audit shows that Sprint PCS was underpaid then, unless the
amount is contested, Manager will pay to Sprint PCS the amount of the
underpayment within 10 Business Days after Sprint PCS gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint PCS was overpaid then, unless the
40
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.
Notwithstanding the above provisions of this Section 12.1.2, Sprint PCS may
elect to have its own independent auditors certify to the accuracy of the
charges with respect to Manager, rather than allow Manager's independent
auditors access to Sprint PCS' records.
12.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction. The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the
non-contesting party will pay the costs and expenses of the Arbiter, otherwise
the contesting party will pay the costs and expenses of the Arbiter.
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12.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the Term and 3 years after the date of termination of this
agreement, keep confidential, not disclose to others and use only for the
purposes authorized in this agreement, all Confidential Information disclosed by
the other party to the party in connection with this agreement, except that the
foregoing obligation will not apply to the extent that any Confidential
Information:
(i) is or becomes, after disclosure to a party, publicly known by
any means other than through unauthorized acts or omissions of the party or
its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
(v) is required by the receiving party to be produced under order
of a court of competent jurisdiction or other similar requirements of a
governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held confidential
for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the receiving
party's securities (or those of its Related Parties) are or may become
listed; or
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(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.
(c) Notwithstanding the foregoing, Manager authorizes Sprint PCS to
disclose to the public in public relations announcements and regulatory filings
Manager's identity and the Service Area to be developed and managed by Manager.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as is
reasonably necessary to enable the disclosing party to take action to, and use
the party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(e) Manager will not except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if Manager
operates a wireless company in a different license area, Manager may not use any
of the Confidential Information received under or in connection with this
agreement in operating the other wireless business.
12.3 Insurance
12.3.1 General. During the term of this agreement, Manager must obtain
and maintain, and will cause any subcontractors to obtain and maintain, with
financially reputable insurers licensed to do business in all jurisdictions
where any work is performed under this agreement and who are reasonably
acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance
Requirements. The Sprint PCS Insurance Requirements as of the date of this
agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS
Insurance Requirements as is commercially reasonable from time to time by
delivering to Manager a new Exhibit 12.3.
12.3.2 Waiver of Subrogation. Manager must look first to any insurance
in its favor before making any claim against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives for
recovery resulting from injury to any person (including Manager's or its
subcontractor's employees) or damage to any property arising from any cause,
regardless of negligence. Manager does hereby release and waive to the fullest
extent permitted by law, and will cause its respective insurers to waive, all
rights of recovery by subrogation against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives.
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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 its Related Parties and
Manager or its 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 its Related Parties and Sprint PCS and its Related
Parties, Manager's ownership of the operating assets or the operation of the
Service Area Network, or the actions or failure to act of any of Manager's
contractors, subcontractors, agents, directors, managers, officers, employees
and representatives of any of them in the performance of any work under this
agreement, except where and to the extent the claim, demand, cause of action,
loss, action, damage, liability and expense results solely from the negligence
or willful misconduct of Sprint PCS or Sprint, as the case may be.
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13.3 Procedure.
13.3.1 Notice. Any party being indemnified ("Indemnitee") will give
the party making the indemnification ("Indemnitor") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(a) Any claim or demand is made or liability is asserted
against Indemnitee; or
(b) Any suit, action, or administrative or legal proceeding
is instituted or commenced in which Indemnitee is involved or is named
as a defendant either individually or with others.
Failure to give notice as described in this Section 13.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indemnitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
13.3.2 Defense by Indemnitor. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indemnitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
13.3.3 Defense by Indemnitee. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section
13.3.3. Indemnitee is not permitted to settle the dispute or claim without the
prior written approval of Indemnitor, which approval will not be unreasonably
withheld.
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13.3.4 Costs. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
14. DISPUTE RESOLUTION
14.1 Negotiation. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 14.1.
14.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, either party may continue to operate under
this agreement and xxx the other party for damages or seek other appropriate
remedies as provided in this agreement. If, and only if, this agreement does not
provide a remedy (as in the case of Sections 3.4 and 4.5, where the parties are
supposed to reach an agreement), then either party may give the other party
written notice that it wishes to resolve the dispute or claim arising out of the
parties' inability to agree under such Sections of this agreement by using the
arbitration procedure set forth in this Section 14.2. Such arbitration will
occur in Kansas City, Missouri, unless the parties otherwise mutually agree,
with the precise location being as agreed upon by the parties or, absent such
agreement, at a location in Kansas City, Missouri selected by Sprint PCS. Such
arbitration will be conducted pursuant to the procedures prescribed by the
Missouri Uniform Arbitration Act, as amended from time to time, or, if none,
pursuant to the rules then in effect of the American Arbitration Association (or
at any other place and by any other form of arbitration mutually acceptable to
the parties). Any award rendered in such arbitration will be confidential
46
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.
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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.
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16. REGULATORY COMPLIANCE
16.1 Regulatory Compliance. Manager will construct, operate, and manage the
Service Area Network in compliance with applicable federal, state, and local
laws and regulations, including Siting Regulations. Nothing in this Section 16.1
will limit Manager's obligations under Section 2.2 and the remainder of this
Section 16. Manager acknowledges that failure to comply with applicable federal,
state, and local laws and regulations in its construction, operation, and
management of the Service Area Network may subject the parties and the License
to legal and administrative agency actions, including forfeiture penalties and
actions that affect the License, such as license suspension and revocation, and
accordingly, Manager agrees that it will cooperate with Sprint PCS to maintain
the License in full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those Siting
Regulations practices and procedures as may be requested by Sprint PCS. Every
six months, and at the request of Sprint PCS, Manager will provide a written
certification from one of Manager's chief officers that Manager's Service Area
Network complies with Siting Regulations. Manager's first certification of
compliance with Siting Regulations will be provided to Sprint PCS six months
after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service Area
Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear
the cost of Siting Regulations compliance audits and physical inspections
requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records. Manager
will make those records available upon request to Sprint PCS for production,
inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will
bear the cost of production, inspection, and copying.
16.2 FCC Compliance. The parties agree to comply with all applicable FCC
rules governing the License or the Service Area Network and specifically agree
as follows:
(a) The party billing a customer will advise the customer that service
is provided over spectrum licensed to Sprint PCS. Neither Manager nor Sprint PCS
will represent itself as the legal representative of the other before the FCC or
any other third party, but will cooperate with each other with respect to FCC
matters concerning the License or the Service Area Network.
49
(b) Sprint PCS will use commercially reasonable efforts to maintain
the License in accordance with the terms of the License and all applicable laws,
policies and regulations and to comply in all material respects with all other
legal requirements applicable to the operation of the Sprint PCS Network and its
business. Sprint PCS has sole responsibility, except as specifically provided
otherwise in Section 2.2, for keeping the License in full force and effect and
for preparing submissions to the FCC or any other relevant federal, state or
local authority of all reports, applications, interconnection agreements,
renewals, or other filings or documents. Manager must cooperate and coordinate
with Sprint PCS' actions to comply with regulatory requirements, which
cooperation and coordination must include, without limitation, the provision to
Sprint PCS of all information that Sprint PCS deems necessary to comply with the
regulatory requirements. Manager must refrain from taking any action that could
impede Sprint PCS from fulfilling its obligations under the preceding sentence,
and must not take any action that could cause Sprint PCS to forfeit or cancel
the License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and applicable
FCC rules. Nothing in this agreement is intended to diminish or restrict Sprint
PCS' obligations as an FCC Licensee and both parties desire that this agreement
and each party's obligations under this agreement be in compliance with the FCC
rules.
(d) Nothing in this agreement will preclude Sprint PCS from permitting
or facilitating resale of Sprint PCS Products and Services to the extent
required or elected under applicable FCC regulations. Manager will take the
actions necessary to facilitate Sprint PCS' compliance with FCC regulations. To
the extent permitted by applicable regulations, Sprint PCS will not authorize a
reseller that desires to sell services and products in only the Service Area to
resell Sprint PCS wholesale products and services, unless Manager agrees in
advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to obtain
FCC consent for the implementation, continuation or further effectuation of any
term or provision of this agreement, Sprint PCS will use all commercially
reasonable efforts diligently to prepare, file and prosecute before the FCC all
petitions, waivers, applications, amendments, rule-making comments and other
related documents necessary to secure and/or retain FCC approval of all aspects
of this agreement. Manager will use commercially reasonable efforts to provide
to Sprint PCS any information that Sprint PCS may request from Manager with
respect to any matter involving Sprint PCS, the FCC, the License, the Sprint PCS
Products and Services or any other products and services approved under Section
3.2. Each party will bear its own costs of preparation of the documents and
prosecution of the actions.
(f) If the FCC determines that this agreement is inconsistent with the
terms and conditions of the License or is otherwise contrary to FCC policies,
rules and regulations,
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or if regulatory or legislative action subsequent to the date of this agreement
alters the permissibility of this agreement under the FCC's rules or other
applicable law, rules or regulations, then the parties must use best efforts to
modify this agreement as necessary to cause this agreement (as modified) to
comply with the FCC policies, rules, regulations and applicable law and to
preserve to the extent possible the economic arrangements set forth in this
agreement.
16.3 Marking and Lighting. Manager will conform to applicable FAA standards
when Siting Regulations require marking and lighting of Manager's Service Area
Network cell sites. Manager will cooperate with Sprint PCS in reporting lighting
malfunctions as required by Siting Regulations.
16.4 Regulatory Notices. Manager will, within 2 Business Days after its
receipt, give Sprint PCS written notice of all oral and written communications
it receives from regulatory authorities (including but not limited to the FCC,
the FAA, state public service commissions, environmental authorities, and
historic preservation authorities) and complaints respecting Manager's
construction, operation, and management of the Service Area Network that could
result in actions affecting the License as well as written notice of the details
respecting such communications and complaints, including a copy of any written
material received in connection with such communications and complaints. Manager
will cooperate with Sprint PCS in responding to such communications and
complaints received by Manager. Sprint PCS has the right to respond to all such
communications and complaints, with counsel and consultants of its own choice.
If Sprint PCS chooses to respond to such communications and complaints, Manager
will not respond to them without the consent of Sprint PCS, and Manager will pay
the costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs, and
all other reasonable costs and expenses incurred by Sprint PCS.
16.5 Regulatory Policy-Setting Proceedings. Manager will not intervene in
or otherwise participate in a rulemaking, investigation, inquiry, contested
case, or similar regulatory policy setting proceedings before a regulatory
authority concerning the License or construction, operation, and management of
the Service Area Network and the Sprint PCS business operated using the Service
Area Network.
17. GENERAL PROVISIONS
17.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed as described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
51
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 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 on the signature page for Sprint, the persons
or entities authorized to bind Sprint.
52
17.8 Limitation on Rights of Others. Except as set forth on the 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--Managers. 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 have occurred as a result of the occurrence of the event, 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.
53
17.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.11 Binding Effect. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Service Area Network or of
the License. The parties intend that this agreement bind only the party signing
this agreement and that the agreement is not binding on the Related Parties of a
party unless the agreement expressly provides that Related Parties are bound.
17.12 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
17.13 Severability. The parties intend every provision of this agreement to
be severable. If any provision of this agreement is held to be illegal, invalid,
or unenforceable for any reason, the parties intend that a court enforce the
provision to the maximum extent permissible so as to effect the intent of the
parties (including the enforcement of the remaining provisions). If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable provision with an enforceable
provision that reflects the original intent of the parties.
17.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT
OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR
LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION
AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY
ANOTHER PARTY TO THIS AGREEMENT.
17.15 No Assignment; Exceptions.
17.15.1 General. Neither party will, directly or indirectly, assign
this agreement or any of the party's rights or obligations under this agreement
without the prior written consent of the other party, except as otherwise
specifically provided in this Section 17. Sprint PCS may deny its consent to any
assignment or transfer in its sole discretion except as otherwise provided in
this Section 17.
Any attempted assignment of this agreement in violation of this Section
17.15 will be void and of no effect.
54
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;
55
(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
56
(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) does not constitute a Change of Control.
(e) "Change of Control" means that 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 its Related Parties in the telecommunications business.
57
17.15.4 Right of First Refusal. Notwithstanding any other provision in
this agreement, Manager grants Sprint PCS the right of first refusal described
below. If Manager determines it wishes to sell an Offered Interest, upon
receiving any Offer to purchase an Offered Interest, Manager agrees to promptly
deliver to Sprint PCS an Offer Notice. The Offer Notice is deemed to constitute
an offer to sell to Sprint PCS, on the terms set forth in the Offer, all but not
less than all of the Offered Interest. Sprint PCS will have a period of 60 days
from the date of the Offer Notice to notify Manager that it agrees to purchase
the Offered Interest on such terms. If Sprint PCS timely agrees in writing to
purchase the Offered Interest, the parties will proceed to consummate such
purchase not later than the 180th day after the date of the Offer Notice. If
Sprint PCS does not agree within the 60-day period to purchase the Offered
Interest, Manager will have the right, for a period of 120 days after such 60th
day, subject to the restrictions set forth in this Section 17, to sell to the
person or entity identified in the Offer Notice all of the Offered Interest on
terms and conditions no less favorable to Manager than those set forth in the
Offer. If Manager fails to sell the Offered Interest to such person or entity on
such terms and conditions within such 120-day period, Manager will again be
subject to the provisions of this Section 17.15.4 with respect to the Offered
Interest.
17.15.5 Transfer of Sprint PCS Network. Sprint PCS may sell, transfer
or assign the Sprint PCS Network, 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 its 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.
58
17.18 Disclaimer of Agency. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
17.19 Independent Contractors. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither party
to this agreement has any fiduciary duty to the other party.
17.20 Expense. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The parties
must not allocate any employee cost or other cost to the other party, except as
otherwise provided in the Program Requirements or to the extent the parties
expressly agree in advance to the allocation.
17.21 General Terms. (a) This agreement is to be interpreted in accordance
with the following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context otherwise
requires.
(ii) The words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation".
(iii) All references in this agreement to Sections and Exhibits are
references to Sections of, and Exhibits to, this agreement, unless otherwise
specified; and
(iv) All references to any agreement or other instrument or statute or
regulation are to it as amended and supplemented from time to time (and, in the
case of a statute or regulation, to any corresponding provisions of successor
statutes or regulations), unless the context otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "Business") is a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and the calendar day is not a Business Day,
then the action or notice may be taken or given on the next Business Day.
59
17.22 Conflicts with Other Agreements. The provisions of the Management
Agreement govern over those of the Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Services
Agreement. The provisions of each Trademark License Agreement governs over those
of this agreement if the provisions contained in this agreement conflict with
analogous provisions in a Trademark License Agreement.
17.23 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.
17.24 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)).
17.25 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.
60
Sprint PCS/Georgia PCS Management LLC
Master Signature Page
This Master Signature Page is dated and effective as of June 8, 1998
(the "Effective Date"). This document provides the means by which each of the
undersigned entities executes and becomes a party to and bound by, to the extent
set forth above such party's signature, the Management Agreement, Services
Agreement, Sprint Trademark and Service Xxxx License Agreement, Sprint Spectrum
Trademark and Service Xxxx License Agreement, and Addendum I to the Management
Agreement. This document may be executed in one or more counterparts. The Notice
Address Schedule attached to this document sets forth the addresses to which
notices should be sent under the agreements.
THE MANAGEMENT AGREEMENT AND THE SERVICES AGREEMENT
CONTAIN BINDING ARBITRATION PROVISIONS THAT MAY BE
ENFORCED BY THE PARTIES TO THOSE AGREEMENTS
Sprint Spectrum L.P.
For and in consideration of the covenants contained in the Services
Agreement and Sprint Spectrum Trademark and Service Xxxx License Agreement
(collectively, the "Executed Agreements"), and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Sprint Spectrum L.P. executes, becomes a party to, and agrees to be bound by and
to perform its obligations under each of the Executed Agreements as of the
Effective Date. The execution by Sprint Spectrum L.P. of this Master Signature
Page has the same force and effect as if Sprint Spectrum L.P. executed
individually each of the Executed Agreements.
Sprint Spectrum L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxx,
Chief Business Development Officer
1
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
Sprint Communications Company, L.P.
For and in consideration of the covenants contained in the Management
Agreement, Sprint Trademark and Service Xxxx License Agreement, and Addendum I
to the Management Agreement (collectively, the "Executed Agreements"), and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sprint Communications Company, L.P. executes, becomes a party to,
and agrees to be bound by and to perform its obligations under each of the
Executed Agreements as of the Effective Date; provided, that Sprint
Communications Company, L.P. only agrees to be bound by and perform its
obligations under, and will enjoy the benefits given to it under the Management
Agreement, with respect to only those provisions that expressly apply to Sprint
Communications Company, L.P., including its obligations and benefits under
Sections 2, 3 and 10. The execution by Sprint Communications Company, L.P. of
this Master Signature Page has the same force and effect as if Sprint
Communications Company, L.P. executed individually each of the Executed
Agreements.
Sprint Communications Company, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President, Wireless
2
Georgia PCS Management 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, Georgia PCS Management 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 Georgia PCS Management LLC of this Master Signature Page has the
same force and effect as if Georgia PCS Management LLC executed individually
each of the Executed Agreements.
Georgia PCS Management LLC
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
3
Notice Address Schedule
The addresses to which notice is to be sent pursuant to Section 17.1
of the Management Agreement, Section 9.1 of the Services Agreement, Section 15.1
of the Sprint Trademark and Service Xxxx License Agreement, or Section 15.1 of
the Sprint Spectrum Trademark and Service Xxxx License Agreement are as follows:
Sprint Spectrum L.P.
4900 Main, 12/th/ Floor with a copy to: 0000 Xxxx, 00/xx/ Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000 Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone:(000) 000-0000 Telephone: (000) 000-0000
Telecopier:(000) 000-0000 Telecopier: (000) 000-0000
Attention: Chief Executive Officer Attention: General Counsel
SprintCom, INC. AND
Sprint Communications Company, L.P. (and notices regarding the Sprint Brands)
c/o Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Telephone:000-000-0000
Telecopier:000-000-0000
Attention: Corporate Secretary
Mail Stop: XXXXXX0000
Xxxxxxx PCS Management LLC
0000 Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Telephone:(000) 000-0000
Telecopier:(000) 000-0000
Attention: Chief Executive Officer
4
Sprint Spectrum
Trademark and Service Xxxx
License Agreement
BETWEEN
Sprint Spectrum L.P.
AND
Georgia PCS Management LLC
JUNE 8, 1998
SPRINT SPECTRUM TRADEMARK AND
SERVICE XXXX LICENSE AGREEMENT
THIS AGREEMENT is made as of the 8th day of June, 1998, by and between
Sprint Spectrum L.P., a Delaware limited partnership, as licensor ("Licensor"),
and Georgia PCS Management LLC, a Georgia limited liability company, as licensee
("Licensee"). The definitions for this agreement are set forth on the attached
"Schedule of Definitions."
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"THE CLEAR ALTERNATIVE TO CELLULAR" and "EXPERIENCE THE CLEAR ALTERNATIVE TO
CELLULAR TODAY" and such other marks as may be adopted and established from time
to time and the goodwill of the business symbolized thereby; and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE XXXX RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor,
for the term of this agreement, a non-transferable, royalty-free
license to use the Licensed Marks solely for and in connection with
the marketing, promotion, advertisement, distribution, lease or sale
of Sprint PCS Products and Services and Premium and Promotional Items
in the Service Area.
(b) Related Equipment. The rights granted hereunder to Licensee shall not
include the right to manufacture equipment under the Licensed Marks.
However, subject to the terms and conditions hereof, Licensor hereby
grants to Licensee, and Licensee hereby accepts from Licensor, for the
term of this agreement, a non-transferable, royalty-free license to
market, promote, advertise, distribute and resell and lease Related
Equipment in connection with the marketing, promotion, advertisement,
distribution, lease or sale by Licensee of Sprint PCS Products and
Services, and to furnish services relating to such Related Equipment
(including installation, repair and maintenance of Related Equipment),
under the Licensed Marks.
Sprint Spectrum Proprietary Information - RESTRICTED
ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law.
Such Quality Standards are designed to ensure that the quality of the
Sprint PCS Products and Services and Premium and Promotional Items
marketed, promoted, advertised, distributed, leased and sold under the
Licensed Marks are consistent with the high reputation of the Licensed
Marks and are in conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Management Agreement
as Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall
(i) be consistent with the reputation for quality associated with the
Licensed Marks and (ii) be commensurate with a high level of quality
(taking into account Licensee's fundamental underlying technology and
standards), consistent with the level of quality being offered in the
market for products and services of the same kind as the Sprint PCS
Products and Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to
change the Quality Standards, it will notify Licensee in writing of
such proposed amendments, and will afford Licensee a reasonable time
period in which to adopt such changes as may be required in order for
Licensee to conform to the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking; Compliance with Trademark Laws. Licensee shall cause
the appropriate designation "(TM)" or "(SM)" or the registration symbol "(R)" to
be placed adjacent to the Licensed Marks in connection with the use thereof and
to indicate such additional information as Licensor shall reasonably specify
from time to time concerning the license rights under which
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Licensee uses the Licensed Marks. Licensee shall place the following notice on
all printed or electronic materials on which the Licensed Marks appear: "THE
CLEAR ALTERNATIVE TO CELLULAR", "EXPERIENCE THE CLEAR ALTERNATIVE TO CELLULAR
TODAY", and such other marks as may be adopted and established from time to
time, are trademarks and/or service marks of Sprint Spectrum L.P., "used under
license" or such other notice as Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the Licensed
Marks in any manner that would reflect adversely on the image of quality
symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and Licensee
and their respective Controlled Related Parties (each a "Restricted Party")
shall cause their respective officers and directors (in their capacity as such)
to, and shall take all reasonable measures to cause their respective employees,
attorneys, accountants, consultants and other agents and advisors (collectively,
and together with their respective officers and directors, "Agents") to, keep
secret and maintain in confidence the terms of this agreement and all
confidential and proprietary information and data of the other party or its
Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently
comes into the public domain, through no fault of the receiving party;
(ii) prior to receipt hereunder was property within the legitimate
possession of the Receiving Party or, subsequent to receipt hereunder
is lawfully received from a third party having rights therein without
restriction of the third party's right to disseminate the Confidential
Information and without notice of any restriction against its further
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disclosure.
(iii)is independently developed by the Receiving Party through Persons who
have not had, either directly or indirectly, access to or knowledge of
such Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such
Confidential Information shall cease to be confidential and
proprietary information covered by this agreement only to the extent
of the disclosure so consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by a
protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for purpose
of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of
its Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of
a protective order or other appropriate remedy or receipt of a waiver hereunder,
the Receiving Party shall furnish only that portion of the Confidential
Information which it is advised by opinion of its
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counsel is legally required to be furnished and shall exercise all commercially
reasonable efforts to obtain reliable assurance that confidential treatment
shall be accorded such Confidential Information, it being understood that such
reasonable efforts shall be at the cost and expense of the disclosing party
whose Confidential Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall survive,
as to any party, until two (2) years following the date of termination of this
agreement, and, as to any Controlled Related Party of a party, until two (2)
years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i)
Licensee will not at any time challenge Licensor's rights, title or interest in
the Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and warrants
that:
(a) Licensor has good title to the Licensed Marks and has the right to
grant the licenses provided for hereunder in accordance with the terms
and conditions hereof, free of any liabilities, charges, liens,
pledges, mortgages, restrictions, adverse claims, security interests,
rights of others, and encumbrances of any kind (collectively,
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"Encumbrances"), other than Encumbrances which will not restrict or
interfere in any material respect with the exercise by Licensee of the
rights granted to Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending or,
to the knowledge of Licensor, threatened with respect to Licensor's
ownership of the Licensed Marks or which, if adversely determined,
would restrict or otherwise interfere in any material respect with the
exercise by Licensee of the rights purported to be granted to Licensee
hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6. 1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation: Authorization of Agreement. Such party
is a corporation duly organized, a limited liability company duly
organized or a partnership duly formed, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate, company or
partnership power and authority to own its property and carry on its
business as owned and carried on at the date hereof and as
contemplated hereby. Such party is duly licensed or qualified to do
business and, if applicable, is in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder. Such party has the
corporate, company or partnership power and authority to execute and
deliver this agreement and to perform its obligations hereunder and
the execution, delivery and performance of this agreement have been
duly authorized by all necessary corporate, company or partnership
action.
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Assuming the due execution and delivery by the other party hereto,
this agreement constitutes the legal, valid and binding obligation of
such party enforceable against such party in accordance with its
terms, subject as to enforceability to limits imposed by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
the availability of equitable remedies.
(b) No Conflict with Restrictions: No Default. Neither the execution,
delivery and performance of this agreement nor the consummation by
such party of the transactions contemplated hereby (i) will conflict
with, violate or result in a breach of any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree,
determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any
arbitrator, applicable to such party or any of its Controlled Related
Parties, (ii) will conflict with, violate, result in a breach of or
constitute a default under any of the terms, conditions or provisions
of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited
liability company agreement, or partnership agreement of such party or
any of its Controlled Related Parties or of any material agreement or
instrument to which such party or any of its Controlled Related
Parties is a party or by which such party or any of its Controlled
Related Parties is or may be bound or to which any of its material
properties or assets is subject (other than any such conflict,
violation, breach or default that has been validly and unconditionally
waived), (iii) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or
both), accelerate or permit the acceleration of the performance
required by, give to others any material interests or rights or
require any consent, authorization or approval under any indenture,
mortgage, lease agreement or instrument to which such party or any of
its Controlled Related Parties is a party or by which such party or
any of its Controlled Related Parties is or may be bound, or (iv) will
result in the creation or imposition of any lien upon any of the
material properties or assets of such party or any of its Controlled
Related Parties, which in any such case could reasonably be expected
to materially impair such party's ability to perform its obligations
under this agreement or to have a material adverse effect on the
consolidated financial condition of each party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing
with, or consent, approval, license, permit or other authorization or
order by, any governmental or regulatory authority, domestic or
foreign, that is required to be obtained by such party in connection
with the valid execution, delivery, acceptance and performance by such
party under this agreement or the consummation by such party of any
transaction contemplated hereby has been completed, made or obtained,
as the case may be.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or
affecting such party or any of its Controlled Related Parties or any
of their properties, assets or businesses in any court
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or before or by any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which could,
if adversely determined (or, in the case of an investigation could
lead to any action, suit or proceeding, which if adversely determined
could), reasonably be expected to materially impair such party's
ability to perform its obligations under this agreement or to have a
material adverse effect on the consolidated financial condition of
such party or its parent; and such party or any of its Controlled
Related Parties has not received any currently effective notice of any
default, and such party or any of its Controlled Related Parties is
not in default, under any applicable order, writ, injunction, decree,
permit, determination or award of any court, any governmental
department, board, agency or instrumentality, domestic or foreign, or
any arbitrator, which default could reasonably be expected to
materially impair such party's ability to perform its obligations
under this agreement or to have a material adverse effect on the
consolidated financial condition of such party or its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify the
other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
(i) the material breach of any representation or warranty made
by-such party in this agreement; and
(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
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(b) In addition to the indemnification provided for in Section 8.1(a),
Licensee agrees to indemnify Licensor against and hold it harmless
from any Loss suffered or incurred by Licensor or its Controlled
Related Parties by reason of a third party claim arising out of or
relating to (i) the use of the Licensed Marks by Licensee; or (ii) the
marketing, promotion, advertisement, distribution, lease or sale by
Licensee (or any permitted sublicensee) or by any additional Licensee
(or any permitted sublicensee) of any Sprint PCS Products and
Services, Related Equipment or Premium and Promotional Items under the
Licensed Marks pursuant to this agreement, including unfair or
fraudulent advertising claims, warranty claims and product defect or
liability claims, pertaining to the Sprint PCS Products and Services,
Related Equipment or Premium and Promotional Items. Notwithstanding
the foregoing, Licensee will not be required under this paragraph (b)
to indemnify any Loss arising solely out of Licensee's use of the
Licensed Marks in compliance with the terms of the Trademark and
Service Xxxx Usage Guidelines; provided that Licensor shall have no
obligation to indemnify for third-party claims alleged to arise from
the specifics of uses of third-party trademarks or service marks, or
the specifics of claims made, in marketing materials prepared by or
for Licensee, which marketing materials have not been approved by
Licensor prior to the publication out of which such claims are alleged
to have arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as set
forth in this agreement shall be unconditional and irrevocable, and shall not be
subject to any defense or be released, discharged or otherwise affected by any
matter, including impossibility, illegality, impracticality, frustration of
purpose, force majeure, act of government, the bankruptcy or insolvency of any
party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make any
use of the Licensed Marks in connection with products or services other than the
Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related Equipment and Premium and Promotional
Items, nor to make any use of the Licensed Marks directed outside of the Service
Area.
Section 10.2 Adherence to Trademark and Service Xxxx Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Xxxx Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed Marks
on any type of marketing, advertising or promotional materials, Licensee agrees
to submit samples of such materials to Licensor for
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approval. Licensor shall have fourteen (14) days from the date Licensor receives
such materials to approve or object to any such materials submitted to Licensor
for review. In the event Licensor does not object to such materials within such
fourteen (14) day period, such materials shall be deemed approved by Licensor.
Thereafter, Licensee shall not be obligated to submit to Licensor materials
prepared in accordance with the samples previously approved by Licensor and the
Trademark and Service Xxxx Usage Guidelines; provided, however, Licensee shall,
at the reasonable request of Licensor, continue to furnish samples of such
marketing, advertising and promotional materials to Licensor from time to time
during the term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee agrees
not to use (a) any trademark or service xxxx which is confusingly similar to, or
a colorable imitation of, the Licensed Marks or any part thereof, or (b) any
work, symbol, character, or set of words, symbols, or characters, which in any
language would be identified as the equivalent of the Licensed Marks or that are
otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1 Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee shall
use the Licensed Marks in a manner that is consistent with the brand image and
principles established by Licensor, and mechanics to ensure consistency will be
included in the Marketing Communications Guidelines.
Section 11.3. Management of Brand Image. Licensor shall be responsible for
the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing Communications
Guidelines shall establish reasonable principles to be followed in the
development of advertising, marketing and promotional campaigns in order to
ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns
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conducted by Licensee shall be conducted in a manner consistent with the
Marketing Communications Guidelines.
Section 11.4. Advertising Agencies; Promotions. Licensee may select its own
advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall conduct
ongoing reviews of upcoming advertising, marketing and promotional campaigns of
each party and shall use good faith efforts to coordinate their respective
campaigns in a manner that will maximize the advertising, marketing and
promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition, Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5 Ownership of Advertising Materials. All agreements entered
into by Licensee with advertising agencies shall provide that Licensor shall own
all advertising materials (including concepts, themes, characters and the like)
created or developed thereunder. Subject to the terms and conditions set forth
herein, Licensee shall receive a perpetual, non-exclusive, royalty-free license
to use such materials in connection with advertising and promotional materials
developed by Licensee; provided, however, that the rights granted under such
perpetual license shall be limited solely to the use of such materials and shall
not extend the term of the license with respect to the Licensed Marks provided
for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of the
parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of, or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee agrees,
and shall require its permitted sublicensees to agree, not to incur or contract
any debt or obligation on behalf of Licensor, or commit any act, make any
representation, or advertise in any manner that may adversely affect any right
of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
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Section 13.1. Term. This agreement commences on the date of execution and
continues until the Management Agreement terminates, unless earlier terminated
in accordance with the terms set forth in this Article 13. This agreement
automatically terminates upon termination of the Management Agreement.
Section 13.2. Events of Termination. If any of the following events shall
occur with respect to Licensee, each such occurrence shall be deemed an "Event
of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with any
of the material terms and conditions contained herein in any material
respect.
(c) Material Misrepresentation. Licensee breaches any material
representation or warranty of Licensee made in Section 4.2 or Article
6 in any material respect.
(d) Termination of Management Agreement. The termination of the Management
Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4 Licensee's Right to Terminate. Licensee may, at its option,
without prejudice to any other remedies it may have, terminate this agreement by
giving written notice of such termination to Licensor as follows: (a)
immediately, in the event that Licensor abandons the Licensed Marks or otherwise
ceases to support the Licensed Marks in Licensor's business; or (b) immediately
in the event of the occurrence of a Bankruptcy with respect to Licensor; or (c)
immediately in the event of an occurrence of termination pursuant to Section
13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within thirty (30) days following the date on which
this agreement terminates (except in the case of a termination resulting from an
Event of Termination described in Section 13.2(b), (c) or (d), in which case
such rights to use the Licensed Marks will terminate immediately upon the date
of termination); provided, however, that Licensee may thereafter sell, transfer
or otherwise dispose
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of any Related Equipment and Premium and Promotional Items that are then in
Licensee's inventory (or which Licensee has purchased or is then legally
obligated to purchase) for an additional reasonable period not to exceed three
(3) months. Licensee's right of disposal under this Section 13.5 shall not
prohibit Licensor from granting to third parties during the disposal period
licenses and other rights with respect to the Licensed Marks. The provisions of
Articles 3, 4, 5, 6 and 8 will survive any termination of this agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior written
consent of Licensor (in its sole discretion), shall have no right to assign any
of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing herein
shall be construed to limit the right of the Licensor to transfer or assign its
interests in the Licensed Marks, subject to the agreement of the assignee to be
bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees; Sublicenses; Licenses to
Additional Licensees. Licensee shall not sublicense (or attempt to sublicense)
any of its rights hereunder without the prior written consent of Licensor, in
the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written notice
to the other party in accordance with the provisions of this Section 15.1. All
notices and other communications given to a party in accordance with the
provisions of this agreement shall be deemed to have been given and received (i)
four (4) Business Days after the same are sent by certified or registered mail,
postage prepaid, return receipt requested, (ii) when delivered by hand or
transmitted by facsimile (with acknowledgment received and, in the case of a
facsimile only, a copy of such notice is sent no later than the next Business
Day by a reliable overnight courier service, with acknowledgment of receipt) or
(iii) one (1) Business Day after the same are sent by a reliable overnight
courier service, with acknowledgment of receipt.
Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
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Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this agreement.
Section 15.5. Table of Contents; Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is intended
to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this agreement. If necessary to effect the intent
of the parties, the parties will negotiate in good faith to amend this agreement
to replace the unenforceable language with enforceable language which as closely
as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request of
the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of Missouri
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other party
that the other party would be irreparably damaged if any of the provisions of
this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled to
injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.10. Entire Agreement. The provisions of this agreement set forth
the entire agreement and understanding between the parties as to the subject
matter hereof and supersede all prior agreements, oral or written, and other
communications between the parties relating to the subject matter hereof.
Section 15.11. Limitation on Rights of Others. Nothing in this agreement,
whether express or implied, shall be construed to give any party other than the
parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
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Section 15.12. Waivers; Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction: Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any Missouri
State court sitting in the County of Xxxxxxx or any Federal court of
the United States of America sitting in the Western District of
Missouri, and any appellate court from any such court, in any suit
action or proceeding arising out of or relating to this agreement, or
for recognition or enforcement of any judgment, and each party hereby
irrevocably and unconditionally agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in
such Missouri State Court or, to the extent permitted by law, in such
Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement in Missouri
State court sitting in the County of Xxxxxxx or any Federal court
sitting in the Western District of Missouri. Each party hereby
irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court and further waives the right to
object, with respect to such suit, action or proceeding, that such
court does not have jurisdiction over such party.
(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement,
provided that such service shall be deemed to have been given only
when actually received by such party. Nothing in this agreement shall
affect the right of a party to serve process in another manner
permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
agreement.
Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
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Section 15.16. 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 in
incorporated herein by this reference.
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Sprint
Trademark and Service Xxxx
License Agreement
BETWEEN
Sprint Communications Company, L.P.
AND
Georgia PCS Management LLC
June 8, 1998
SPRINT TRADEMARK AND
SERVICE XXXX LICENSE AGREEMENT
THIS AGREEMENT is made as of the 8th day of June, 1998, by and between
Sprint Communications Company, L.P., a Delaware limited partnership, as licensor
("Licensor"), and Georgia PCS Management LLC, a Georgia limited liability
company, as licensee ("Licensee"). The definitions for this agreement are set
forth on the attached "Schedule of Definitions."
RECITALS:
WHEREAS, Licensor is the owner of the U.S. trademarks and service marks
"Sprint", together with related "Diamond" logo, "Sprint PCS", "Sprint Personal
Communications Services" and the goodwill of the business symbolized thereby;
and
WHEREAS, Licensee desires to use the trademarks and service marks in
commerce;
NOW, THEREFORE, the parties, in consideration of the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, do hereby agree as follows:
ARTICLE 1
GRANT OF TRADEMARK AND SERVICE XXXX RIGHTS; EXCLUSIVITY
Section 1.1. License.
(a) Grant of License. Subject to the terms and conditions hereof, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor,
for the term of this agreement, a non-transferable, royalty-free
license to use the Licensed Marks solely for and in connection with
the marketing, promotion, advertisement, distribution, lease or sale
of Sprint PCS Products and Services and Premium and Promotional Items
in the Service Area.
(b) Related Equipment. The rights granted hereunder to Licensee shall not
include the right to manufacture equipment under the Licensed Marks.
However, subject to the terms and conditions hereof, Licensor hereby
grants to Licensee, and Licensee hereby accepts from Licensor, for the
term of this agreement, a non-transferable, royalty-free license to
market, promote, advertise, distribute and resell and lease Related
Equipment in connection with the marketing, promotion, advertisement,
distribution, lease or sale by Licensee of Sprint PCS Products and
Services, and to furnish services relating to such Related Equipment
(including installation, repair and maintenance of Related Equipment),
under the Licensed Marks.
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ARTICLE 2
QUALITY STANDARDS, MAINTENANCE
Section 2.1. Maintenance of Quality.
(a) Adherence to Quality Standards. In the course of marketing, promoting,
advertising, distributing, leasing and selling Sprint PCS Products and
Services and Premium and Promotional Items under the Licensed Marks,
Licensee shall maintain and adhere to standards of quality and
specifications that conform to or exceed those quality standards and
technical and operational specifications adopted and/or amended in the
manner provided below ("Quality Standards") and those imposed by Law.
Such Quality Standards are designed to ensure that the quality of the
Sprint PCS Products and Services and Premium and Promotional Items
marketed, promoted, advertised, distributed, leased and sold under the
Licensed Marks are consistent with the high reputation of the Licensed
Marks and are in conformity with applicable Laws.
(b) Establishment of Quality Standards. The parties acknowledge that the
initial Quality Standards for the Sprint PCS Products and Services and
Premium and Promotional Items are attached to the Management Agreement
as Exhibits 4.1, 4.2, 4.3, 7.2, and 8.1. The Quality Standards shall
(i) be consistent with the reputation for quality associated with the
Licensed Marks and (ii) be commensurate with a high level of quality
(taking into account Licensee's fundamental underlying technology and
standards), consistent with the level of quality being offered in the
market for products and services of the same kind as the Sprint PCS
Products and Services.
(c) Changes in Quality Standards. In the event that Licensor wishes to
change the Quality Standards, it will notify Licensee in writing of
such proposed amendments, and will afford Licensee a reasonable time
period in which to adopt such changes as may be required in order for
Licensee to conform to the amended Quality Standards.
Section 2.2. Rights of Inspection. In order to ensure that the Quality
Standards are maintained, Licensor and its authorized agents and representatives
shall have the right, but not the obligation, with prior notice to Licensee, to
enter upon the premises of any office or facility operated by or for Licensee
with respect to Sprint PCS Products and Services and Premium and Promotional
Items at all reasonable times, to inspect, monitor and test in a reasonable
manner facilities and equipment used to furnish Sprint PCS Products and Services
and Premium and Promotional Items and, with prior written notice to Licensee, to
inspect the books and records of Licensee in a manner that does not unreasonably
interfere with the business and affairs of Licensee, all as they relate to the
compliance with the Quality Standards maintained hereunder.
Section 2.3. Marking; Compliance with Trademark Laws. Licensee shall cause
the appropriate designation "(TM)" or "(SM)" or the registration symbol "(R)" to
be placed adjacent to the Licensed Marks in connection with the use thereof and
to indicate such additional information as
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2
Licensor shall reasonably specify from time to time concerning the license
rights under which Licensee uses the Licensed Marks. Licensee shall place the
following notice on all printed or electronic materials on which the Licensed
Marks appear: "SPRINT", the "DIAMOND" logo and "Sprint PCS", "Sprint Personal
Communications Services" are trademarks and/or service marks of Sprint
Communications Company, L.P., "used under license" or such other notice as
Licensor may specify from time to time.
Section 2.4. Other Use Restrictions. Licensee shall not use the Licensed
Marks in any manner that would reflect adversely on the image of quality
symbolized by the Licensed Marks.
ARTICLE 3
CONFIDENTIAL INFORMATION
Section 3.1. Maintenance of Confidentiality. Each of Licensor and Licensee
and their respective Controlled Related Parties (each a "Restricted Party")
shall cause their respective officers and directors (in their capacity as such)
to, and shall take all reasonable measures to cause their respective employees,
attorneys, accountants, consultants and other agents and advisors (collectively,
and together with their respective officers and directors, "Agents") to, keep
secret and maintain in confidence the terms of this agreement and all
confidential and proprietary information and data of the other party or its
Related Parties disclosed to it (in each case, a "Receiving Party") in
connection with the performance of its obligations under this agreement (the
"Confidential Information") and shall not, and shall cause their respective
officers and directors not to, and shall take all reasonable measures to cause
their respective other Agents not to, disclose Confidential Information to any
Person other than the parties, their Controlled Related Parties and their
respective Agents that need to know such Confidential Information. Each party
further agrees that it shall not use the Confidential Information for any
purpose other than determining and performing its obligations and exercising its
rights under this agreement. Each party shall take all reasonable measures
necessary to prevent any unauthorized disclosure of the Confidential Information
by any of their respective Controlled Related Parties or any of their respective
Agents. The measures taken by a Restricted Party to protect Confidential
Information shall be not deemed unreasonable if the measures taken are at least
as strong as the measures taken by the disclosing party to protect such
Confidential Information.
Section 3.2. Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives and which:
(i) has been published or is in the public domain, or which subsequently
comes into the public domain, through no fault of the receiving party;
(ii) prior to receipt hereunder was property within the legitimate
possession of the Receiving Party or, subsequent to receipt hereunder
is lawfully received from a third party having rights therein without
restriction of the third party's right to disseminate
Sprint Proprietary Information - RESTRICTED
3
the Confidential Information and without notice of any restriction
against its further disclosure.
(iii)is independently developed by the Receiving Party through Persons who
have not had, either directly or indirectly, access to or knowledge of
such Confidential Information;
(iv) is disclosed to a third party with the written approval of the party
originally disclosing such information, provided that such
Confidential Information shall cease to be confidential and
proprietary information covered by this agreement only to the extent
of the disclosure so consented to;
(v) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by a
protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for purpose
of this agreement; or
(vi) subject to the Receiving Party's compliance with Section 3.4 below, is
required to be disclosed by applicable Law or a stock exchange or
association on which such Receiving Party's securities (or those of
its Related Party) are listed.
Section 3.3. Financial Institutions. Notwithstanding this Article 3, any
party may provide Confidential Information to any financial institution in
connection with borrowings from such financial institution by such party or any
of its Controlled Related Parties, so long as prior to any such disclosure such
financial institution executes a confidentiality agreement that provides
protection substantially equivalent to the protection provided the parties in
this Article 3.
Section 3.4. Procedures. In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with applicable Law or the
requirements of a stock exchange or association on which such Receiving Party's
securities or those of its Related Parties are listed or (ii) becomes legally
compelled (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demand or otherwise) to disclose any
Confidential Information, the Receiving Party shall provide the disclosing party
with prompt written notice so that in the case of clause (i), the disclosing
party can work with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations or in the case of clause (ii),
the disclosing party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this agreement. In the case of a clause
(ii), (A) if the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy at
the disclosing party's reasonable expense, and (B) failing the entry of a
protective
Sprint Proprietary Information - RESTRICTED
4
order or other appropriate remedy or receipt of a waiver hereunder, the
Receiving Party shall furnish only that portion of the Confidential Information
which it is advised by opinion of its counsel is legally required to be
furnished and shall exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment shall be accorded such
Confidential Information, it being understood that such reasonable efforts shall
be at the cost and expense of the disclosing party whose Confidential
Information has been sought.
Section 3.5. Survival. The obligations under this Article 3 shall survive,
as to any party, until two (2) years following the date of termination of this
agreement, and, as to any Controlled Related Party of a party, until two (2)
years following the earlier to occur of (A) the date that such Person is no
longer a Controlled Related Party of a party, or (B) the date of the termination
of this agreement; provided that such obligations shall continue indefinitely
with respect to any trade secret or similar information which is proprietary to
a party or its Controlled Related Parties and provides such party or its
Controlled Related Parties with an advantage over its competitors.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSEE
Section 4.1. Licensor's Ownership. Licensee acknowledges Licensor's
exclusive right, title and interest in and to the Licensed Marks and
acknowledges that nothing herein shall be construed to accord to Licensee any
rights in the Service Area in the Licensed Marks except as expressly provided,
herein. Licensee acknowledges that its use in the Service Area of the Licensed
Marks shall not create in Licensee any right, title or interest in the Service
Area in the Licensed Marks and that all use in the Service Area of the Licensed
Marks and the goodwill symbolized by and connected with such use of the Licensed
Marks will inure solely to the benefit of the Licensor.
Section 4.2. No Challenge by Licensee. Licensee covenants that (i) Licensee
will not at any time challenge Licensor's rights, title or interest in the
Licensed Marks (other than to assert the specific rights granted to Licensee
under this agreement), (ii) Licensee will not do or cause to be done or omit to
do anything, the doing, causing or omitting of which would contest or in any way
impair or tend to impair the rights of Licensor in the Licensed Marks, and (iii)
Licensee will not represent to any third party that Licensee has any ownership
or rights in the Service Area with respect to the Licensed Marks other than the
specific rights conferred by this agreement.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR
Section 5.1. Title to the Licensed Marks. Licensor represents and warrants
that:
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(a) Licensor has good title to the Licensed Marks and has the right to
grant the licenses provided for hereunder in accordance with the terms
and conditions hereof, free of any liabilities, charges, liens,
pledges, mortgages, restrictions, adverse claims, security interests,
rights of others, and encumbrances of any kind (collectively,
"Encumbrances"), other than Encumbrances which will not restrict or
interfere in any material respect with the exercise by Licensee of the
rights granted to Licensee hereunder.
(b) There is no claim, action, proceeding or other litigation pending or,
to the knowledge of Licensor, threatened with respect to Licensor's
ownership of the Licensed Marks or which, if adversely determined,
would restrict or otherwise interfere in any material respect with the
exercise by Licensee of the rights purported to be granted to Licensee
hereunder.
Except as expressly provided above in this Section 5.1, Licensor makes no
representation or warranty of any kind or nature whether express or implied with
respect to the Licensed Marks (including freedom from third party infringement
of the Licensed Marks).
The representations and warranties provided for in this Section 5.1 shall
survive the execution and delivery of this agreement.
Section 5.2. Other Licensees. In the event Licensor grants to any third
party any licenses or rights with respect to the Licensed Marks, Licensor shall
not, in connection with the grant of any such license or rights, take any
actions, or suffer any omission that would adversely affect the existence or
validity of the Licensed Marks or conflict with the rights granted to Licensee
hereunder.
Section 5.3. Abandonment. Licensor covenants and agrees that, during the
term of this agreement, it will not abandon the Licensed Marks.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES
Section 6.1. Representations and Warranties. Each party hereby represents
and warrants to the other party as follows:
(a) Due Incorporation or Formation: Authorization of Agreement. Such party
is a corporation duly organized, a limited liability company duly
organized or a partnership duly formed, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate, company or
partnership power and authority to own its property and carry on its
business as owned and carried on at the date hereof and as
contemplated hereby. Such party is duly licensed or qualified to do
business and, if applicable, is in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified
Sprint Proprietary Information - RESTRICTED
6
would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder. Such party has the
corporate, company or partnership power and authority to execute and
deliver this agreement and to perform its obligations hereunder and
the execution, delivery and performance of this agreement have been
duly authorized by all necessary corporate, company or partnership
action. Assuming the due execution and delivery by the other party
hereto, this agreement constitutes the legal, valid and binding
obligation of such party enforceable against such party in accordance
with its terms, subject as to enforceability to limits imposed by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and the availability of equitable remedies.
(b) No Conflict with Restrictions: No Default. Neither the execution,
delivery and performance of this agreement nor the consummation by
such party of the transactions contemplated hereby (i) will conflict
with, violate or result in a breach of any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree,
determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any
arbitrator, applicable to such party or any of its Controlled Related
Parties, (ii) will conflict with, violate, result in a breach of or
constitute a default under any of the terms, conditions or provisions
of the articles of incorporation, articles of organization or
certificate of formation, bylaws, operating agreement or limited
liability company agreement, or partnership agreement of such party or
any of its Controlled Related Parties or of any material agreement or
instrument to which such party or any of its Controlled Related
Parties is a party or by which such party or any of its Controlled
Related Parties is or may be bound or to which any of its material
properties or assets is subject (other than any such conflict,
violation, breach or default that has been validly and unconditionally
waived), (iii) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or
both), accelerate or permit the acceleration of the performance
required by, give to others any material interests or rights or
require any consent, authorization or approval under any indenture,
mortgage, lease agreement or instrument to which such party or any of
its Controlled Related Parties is a party or by which such party or
any of its Controlled Related Parties is or may be bound, or (iv) will
result in the creation or imposition of any lien upon any of the
material properties or assets of such party or any of its Controlled
Related Parties, which in any such case could reasonably be expected
to materially impair such party's ability to perform its obligations
under this agreement or to have a material adverse effect on the
consolidated financial condition of each party or its Parent.
(c) Governmental Authorizations. Any registration, declaration or filing
with, or consent, approval, license, permit or other authorization or
order by, any governmental or regulatory authority, domestic or
foreign, that is required to be obtained by such party in connection
with the valid execution, delivery, acceptance and performance by such
party under this agreement or the consummation by such
Sprint Proprietary Information - RESTRICTED
7
party of any transaction contemplated hereby has been completed, made
or obtained, as the case may be.
(d) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of such party, threatened against or
affecting such party or any of its Controlled Related Parties or any
of their properties, assets or businesses in any court or before or by
any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely
determined (or, in the case of an investigation could lead to any
action, suit or proceeding, which if adversely determined could),
reasonably be expected to materially impair such party's ability to
perform its obligations under this agreement or to have a material
adverse effect on the consolidated financial condition of such party
or its parent; and such party or any of its Controlled Related Parties
has not received any currently effective notice of any default, and
such party or any of its Controlled Related Parties is not in default,
under any applicable order, writ, injunction, decree, permit,
determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any
arbitrator, which default could reasonably be expected to materially
impair such party's ability to perform its obligations under this
agreement or to have a material adverse effect on the consolidated
financial condition of such party or its Parent.
Section 6.2. Survival. The representations and warranties provided for
under this Article 6 will survive the execution and delivery of this agreement.
ARTICLE 7
PROSECUTION OF INFRINGEMENT CLAIMS
Section 7.1. Notice and Prosecution of Infringement. Licensee agrees to
notify Licensor promptly, in writing, of any alleged, actual or threatened
infringement of any of the Licensed Marks within the Service Area of which
Licensee becomes aware. Licensor has the sole right to determine whether or not
to take any action on such infringements. Licensor has the sole right to employ
counsel of its choosing and to direct any litigation and settlement of
infringement actions. Any recoveries, damages and costs recovered through such
proceedings shall belong exclusively to Licensor, and Licensor shall be solely
responsible for all costs and expenses (including attorney fees) of prosecuting
such actions. Licensee agrees to provide Licensor with all reasonably requested
assistance in connection with such proceedings.
ARTICLE 8
LICENSEE DEFENSE AND INDEMNIFICATION OF LICENSOR
Section 8.1. Indemnification. (a) Each party hereby agrees to indemnify the
other party against and agrees to hold it harmless from any Loss incurred or
suffered by such other party arising out of or in connection with:
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8
(i) the material breach of any representation or warranty made
by such party in this agreement; and
(ii) the material breach of any covenant or agreement by such party
contained in this agreement.
(b) In addition to the indemnification provided for in Section 8.1(a),
Licensee agrees to indemnify Licensor against and hold it harmless
from any Loss suffered or incurred by Licensor or its Controlled
Related Parties by reason of a third party claim arising out of or
relating to (i) the use of the Licensed Marks by Licensee; or (ii) the
marketing, promotion, advertisement, distribution, lease or sale by
Licensee ( or any permitted sublicensee) or by any additional Licensee
(or any permitted sublicensee) of any Sprint PCS Products and
Services, Related Equipment or Premium and Promotional Items under the
Licensed Marks pursuant to this agreement, including unfair or
fraudulent advertising claims, warranty claims and product defect or
liability claims, pertaining to the Sprint PCS Products and Services,
Related Equipment or Premium and Promotional Items. Notwithstanding
the foregoing, Licensee will not be required under this paragraph (b)
to indemnify any Loss arising solely out of Licensee's use of the
Licensed Marks in compliance with the terms of the Trademark and
Service Xxxx Usage Guidelines; provided that Licensor shall have no
obligation to indemnify for third-party claims alleged to arise from
the specifics of uses of third-party trademarks or service marks, or
the specifics of claims made, in marketing materials prepared by or
for Licensee, which marketing materials have not been approved by
Licensor prior to the publication out of which such claims are alleged
to have arisen.
ARTICLE 9
OBLIGATIONS/SETOFF
Section 9.1. Obligations/Setoff. The obligations of the parties as set
forth in this agreement shall be unconditional and irrevocable, and shall not be
subject to any defense or be released, discharged or otherwise affected by any
matter, including impossibility, illegality, impracticality, frustration of
purpose, force majeure, act of government, the bankruptcy or insolvency of any
party hereto, and the obligations of each party shall not be subject to any
right of setoff or recoupment which such party may not or hereafter have against
the other party.
ARTICLE 10
LIMITATION ON USE OF LICENSED MARKS
Section 10.1. Restrictions on Use. Licensee is not permitted to make any
use of the Licensed Marks in connection with products or services other than the
Sprint PCS Products and Services, and as specifically authorized in Sections
1.1(b) above with respect to Related
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9
Equipment and Premium and Promotional Items, nor to make any use of the Licensed
Marks directed outside of the Service Area.
Section 10.2 Adherence to Trademark and Service Xxxx Usage Guidelines.
Licensee agrees to comply with and adhere to Trademark and Service Xxxx Usage
Guidelines for the depiction or presentation of the Licensed Marks, as furnished
by Licensor. Prior to Licensee depicting or presenting any of the Licensed Marks
on any type of marketing, advertising or promotional materials, Licensee agrees
to submit samples of such materials to Licensor for approval. Licensor shall
have fourteen (14) days from the date Licensor receives such materials to
approve or object to any such materials submitted to Licensor for review. In the
event Licensor does not object to such materials within such fourteen (14) day
period, such materials shall be deemed approved by Licensor. Thereafter,
Licensee shall not be obligated to submit to Licensor materials prepared in
accordance with the samples previously approved by Licensor and the Trademark
and Service Xxxx Usage Guidelines; provided, however, Licensee shall, at the
reasonable request of Licensor, continue to furnish samples of such marketing,
advertising and promotional materials to Licensor from time to time during the
term hereof at the request of Licensor.
Section 10.3. Use of Similar Trademarks and Service Marks. Licensee agrees
not to use (a) any trademark or service xxxx which is confusingly similar to, or
a colorable imitation of, the Licensed Marks or any part thereof, or (b) any
work, symbol, character, or set of words, symbols, or characters, which in any
language would be identified as the equivalent of the Licensed Marks or that are
otherwise confusingly similar to, or a colorable imitation of, the Licensed
Marks, whether during the term of this agreement or at any time following
termination of this agreement. Licensee shall not knowingly engage in any
conduct which may place the Sprint PCS Products and Services, the Licensed Marks
or Licensor in a negative light or context.
Section 10.4. Services of Public Figures. Licensee agrees to obtain
Licensor's prior written approval (which approval will not be unreasonably
withheld) before engaging the services of any celebrity or publicly known
individual for endorsement of any Sprint PCS Products and Services or Premium
and Promotional Items.
ARTICLE 11
CONTROL OF BRAND IMAGE
Section 11.1 Exclusive Use of Licensed Marks. The Sprint PCS Products and
Services shall be marketed by Licensee solely under the Licensed Marks.
Section 11.2. Consistency With Brand Image and Principles. Licensee shall
use the Licensed Marks in a manner that is consistent with the brand image and
principles established by Licensor, and mechanics to ensure consistency will be
included in the Marketing Communications Guidelines.
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Section 11.3 Management of Brand Image. Licensor shall be responsible for
the overall management of the brand image for the Licensed Marks. All
advertising, marketing and promotional materials using the Licensed Marks
prepared by Licensee shall, in addition to the provisions set forth in Section
11.2 above, comply with the Marketing Communications Guidelines to be furnished
by Licensor to Licensee as such Marketing Communications Guidelines may be
amended and updated by Licensor from time to time. Such Marketing Communications
Guidelines shall establish reasonable principles to be followed in the
development of advertising, marketing and promotional campaigns in order to
ensure a consistent and coherent brand image. All advertising, marketing and
promotional campaigns conducted by Licensee shall be conducted in a manner
consistent with the Marketing Communications Guidelines.
Section 11.4. Advertising Agencies: Promotions. Licensee may select its own
advertising agencies for development of its advertising and promotional
campaigns; provided, however, that all media buys shall be coordinated by
Licensee with the buying agency of Licensor. Licensee and Licensor shall conduct
ongoing reviews of upcoming advertising, marketing and promotional campaigns of
each party and shall use good faith efforts to coordinate their respective
campaigns in a manner that will maximize the advertising, marketing and
promotional efforts of the parties and be consistent with the Marketing
Communications Guidelines. Licensee shall not initiate any products or
promotions under names which are confusingly similar to any names of national
product offerings or promotions by Licensor. Neither Licensor nor any of its
Controlled Related Parties shall initiate any products or promotions under names
which are confusingly similar to any names of national product offerings or
promotions by Licensee. In addition, Licensor will use its commercially
reasonable efforts to ensure that no third party licensee under the Licensed
Marks initiates any products or promotions in the Service Area under names which
are confusingly similar to any names of national product offerings or promotions
by Licensee.
Section 11.5 Ownership of Advertising Materials. All agreements entered
into by Licensee with advertising agencies shall provide that Licensor shall own
all advertising materials (including concepts, themes, characters and the like)
created or developed thereunder. Subject to the terms and conditions set forth
herein, Licensee shall receive a perpetual, non-exclusive, royalty-free license
to use such materials in connection with advertising and promotional materials
developed by Licensee; provided, however, that the rights granted under such
perpetual license shall be limited solely to the use of such materials and shall
not extend the term of the license with respect to the Licensed Marks provided
for hereunder.
ARTICLE 12
RELATIONSHIP OF PARTIES
Section 12.1. Relationship of Parties. It is the express intention of the
parties that Licensee is and shall be an independent contractor and no
partnership shall exist between Licensee and Licensor pursuant hereto. This
agreement shall not be construed to make Licensee the agent or legal
representative of Licensor for any purpose whatsoever (except as expressly
Sprint Proprietary Information - RESTRICTED
11
provided in Articles 7 and 8), and Licensee is not granted any right or
authority to assume or create any obligations for, on behalf of or in the name
of Licensor (except as expressly provided in Articles 7 and 8). Licensee agrees,
and shall require its permitted sublicensees to agree, not to incur or contract
any debt or obligation on behalf of Licensor, or commit any act, make any
representation, or advertise in any manner that may adversely affect any right
of Licensor in or with respect to the Licensed Marks or be detrimental to
Licensor's image.
ARTICLE 13
TERM; TERMINATION; EFFECTS OF TERMINATION
Section 13.1. Term. This agreement commences on the date of execution and
continues until the Management Agreement terminates, unless earlier terminated
in accordance with the terms set forth in this Article 13. This agreement
automatically terminates upon termination of the Management Agreement.
Section 13.2. Events of Termination. If any of the following events shall
occur with respect to Licensee, each such occurrence shall be deemed an "Event
of Termination":
(a) Bankruptcy. The occurrence of a "Bankruptcy" with respect to Licensee.
(b) Breach of Agreements. Licensee fails to perform in accordance with any
of the material terms and conditions contained herein in any material
respect.
(c) Material Misrepresentation. Licensee breaches any material
representation or warranty of Licensee made in Section 4.2 or Article
6 in any material respect.
(d) Termination of Management Agreement. The termination of the Management
Agreement, for whatever reason.
Section 13.3. Licensor's Right to Terminate Upon Event of Termination.
Licensor may, at its option, without prejudice to any other remedies it may
have, terminate this agreement by giving written notice of such termination to
Licensee as follows: (a) immediately, upon the occurrence of any Event of
Termination pursuant to Section 13.2(a) with respect to Licensee; or (b) after
the expiration of thirty (30) days from Licensee's receipt of written notice
from Licensor of the occurrence of any Event of Termination pursuant to Sections
13.2(b) or 13.2(c), if such failure to perform or breach is then still uncured;
or (c) immediately upon the repeated or continuing occurrence of Events of
Termination pursuant to Section 13.2(b) (regardless of whether such continuing
failures to perform or breaches have been cured by Licensee in accordance with
the provisions of clause (b) or this Section 13.3); or (d) immediately upon the
occurrence of a termination pursuant to Section 13.2(d).
Section 13.4 Licensee's Right to Terminate. Licensee may, at its
option, without prejudice to any other remedies it may have, terminate this
agreement by giving written notice of
Sprint Proprietary Information - RESTRICTED
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such termination to Licensor as follows: (a) immediately, in the event that
Licensor abandons the Licensed Marks or otherwise ceases to support the Licensed
Marks in Licensor's business; or (b) immediately in the event of the occurrence
of a Bankruptcy with respect to Licensor; or (c) immediately in the event of an
occurrence of termination pursuant to Section 13.2(d).
Section 13.5. Effects of Termination. Upon the termination of this
agreement for any reason, all rights of Licensee in and to the Licensed Marks in
the Service Area shall cease within thirty (30) days following the date on which
this agreement terminates (except in the case of a termination resulting from an
Event of Termination described in Section 13.2(b), (c) or (d), in which case
such rights to use the Licensed Marks will terminate immediately upon the date
of termination); provided, however, that Licensee may thereafter sell, transfer
or otherwise dispose of any Related Equipment and Premium and Promotional Items
that are then in Licensee's inventory (or which Licensee has purchased or is
then legally obligated to purchase) for an additional reasonable period not to
exceed three (3) months. Licensee's right of disposal under this Section 13.5
shall not prohibit Licensor from granting to third parties during the disposal
period licenses and other rights with respect to the Licensed Marks. The
provisions of Articles 3, 4, 5, 6 and 8 will survive any termination of this
agreement.
ARTICLE 14
ASSIGNMENT; SUBLICENSING
Section 14.1. Licensee Right to Assign. Licensee, without the prior written
consent of Licensor (in its sole discretion), shall have no right to assign any
of its rights or obligations hereunder.
Section 14.2. Licensor Right to Assign the Licensed Marks. Nothing herein
shall be construed to limit the right of the Licensor to transfer or assign its
interests in the Licensed Marks, subject to the agreement of the assignee to be
bound by the terms and conditions of this agreement.
Section 14.3. Licenses to Additional Licensees: Sublicenses: Licenses to
Additional Licensees. Licensee shall not sublicense (or attempt to sublicense)
any of its rights hereunder without the prior written consent of Licensor, in
the sole discretion of Licensor.
ARTICLE 15
MISCELLANEOUS
Section 15. 1. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this agreement shall be in
writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as described on the
Notice Address Schedule attached to the Master Signature Page, or to such other
address or number as such party may from time to time specify by written notice
to the other-party. All notices and other communications given to a party in
accordance with the provisions of this
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agreement shall be deemed to have been given and received (i) four (4) Business
Days after the same are sent by certified or registered mail, postage prepaid,
return receipt requested, (ii) when delivered by hand or transmitted by
facsimile (with acknowledgment received and, in the case of a facsimile only, a
copy of such notice is sent no later than the next Business Day by a reliable
overnight courier service, with acknowledgment of receipt) or (iii) one (1)
Business Day after the same are sent by a reliable overnight courier service,
with acknowledgment of receipt.
Section 15.2. Binding Effect. Except as otherwise provided in this
agreement, this agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, transferees, and assigns.
Section 15.3. Construction. This agreement shall be construed simply
according to its fair meaning and not strictly for or against any party.
Section 15.4. Time. Time is of the essence with respect to this agreement.
Section 15.5. Table of Contents: Headings. The table of contents and
section and other headings contained in this agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope, extent or intent of this agreement.
Section 15.6. Severability. Every provision of this agreement is intended
to be severable. If any term or provision hereof is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the parties, and
such illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this agreement. If necessary to effect the intent
of the parties, the parties will negotiate in good faith to amend this agreement
to replace the unenforceable language with enforceable language which as closely
as possible reflects such intent.
Section 15.7. Further Action. Each party, upon the reasonable request of
the other party, agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the intent and purposes of this agreement.
Section 15.8. Governing Law. The internal laws of the State of Missouri
(without regard to principles of conflict of law) shall govern the validity of
this agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
Section 15.9. Specific Performance. Each party agrees with the other party
that the other party would be irreparably damaged if any of the provisions of
this agreement are not performed in accordance with their specific terms and
that monetary damages would not provide an adequate remedy in such event.
Accordingly, in addition to any other remedy to which the nonbreaching party may
be entitled, at law or in equity, the nonbreaching party shall be entitled
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14
to injunctive relief to prevent breaches of this agreement and specifically to
enforce the terms and provisions hereof.
Section 15.10. Entire Agreement. The provisions of this agreement set forth
the entire agreement and understanding between the parties as to the subject
matter hereof and supersede all prior agreements, oral or written, and other
communications between the parties relating to the subject matter hereof.
Section 15.11. Limitation on Rights of Others. Nothing in this agreement,
whether express or implied, shall be construed to give any party other than the
parties any legal or equitable right, remedy or claim under or in respect of
this agreement.
Section 15.12. Waivers: Remedies. The observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled to enforce such
term, but any such waiver shall be effective only if in writing signed by the
party or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any party in exercising any
power or right under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
further exercise thereof or the exercise of any other right or power.
Section 15.13. Jurisdiction: Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any Missouri
State court sitting in the County of Xxxxxxx or any Federal court of
the United States of America sitting in the Western District of
Missouri, and any appellate court from any such court, in any suit
action or proceeding arising out of or relating to this agreement, or
for recognition or enforcement of any judgment, and each party hereby
irrevocably and unconditionally agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in
such Missouri State Court or, to the extent permitted by law, in such
Federal court.
(b) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement in Missouri
State court sitting in the County of Xxxxxxx or any Federal court
sitting in the Western District of Missouri. Each party hereby
irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court and further waives the right to
object, with respect to such suit, action or proceeding, that such
court does not have jurisdiction over such party.
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15
(c) Each party irrevocably consents to service of process in the manner
provided for the giving of notices pursuant to this agreement,
provided that such service shall be deemed to have been given only
when actually received by such party. Nothing in this agreement shall
affect the right of a party to serve process in another manner
permitted by law.
Section 15.14. Waiver of Jury Trial. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
agreement.
Section 15.15. Consents. Whenever this agreement requires or permits
consent by or on behalf of a party, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in Section 15.13, with appropriate notice in accordance with Section 15.1 of
this agreement.
Section 15.16. 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.
[The remainder of this page is intentionally left blank.]
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Sprint PCS
Services Agreement
BETWEEN
Sprint Spectrum L.P.
AND
Georgia PCS Management LLC
June 8, 1998
TABLE OF CONTENTS
Page
----
1. ENGAGEMENT OF SPRINT SPECTRUM .......................................................1
1.1 Engagement of Sprint Spectrum ...............................................1
1.2 Reliance on Manager .........................................................2
1.3 Non-exclusive Service .......................................................2
2. SERVICES ............................................................................2
2.1 Available Services; Selected Services .......................................2
2.1.1 Available Services ....................................................2
2.1.2 Selected Services .....................................................3
2.1.3 Changes to Selected Services ..........................................3
2.1.4 Performance of Selected Services ......................................3
2.2 Third Party Vendors..........................................................3
2.3 Contracts ...................................................................4
3. FEES FOR SELECTED SERVICES ..........................................................4
3.1 Payment of Fees .............................................................4
3.2 Adjustment of Fees ..........................................................4
3.3 Late Payments ...............................................................5
4. TERM; TERMINATION; EFFECT OF TERMINATION ............................................5
4.1 Term ........................................................................5
4.2 Effect of Termination .......................................................5
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION .........................................5
5.1 Books and Records ...........................................................5
5.1.1 General ...............................................................5
5.1.2 Audit .................................................................5
5.1.3 Contesting an Audit ...................................................6
5.2 Confidential Information ....................................................7
6. INDEMNIFICATION .....................................................................8
6.1 Indemnification by Sprint Spectrum ..........................................8
6.2 Indemnification by Manager ..................................................9
6.3 Procedure ...................................................................9
6.3.1 Notice ................................................................9
6.3.2 Defense by Indemnitor .................................................9
6.3.3 Defense by Indemnitee ................................................10
6.3.4 Costs ................................................................10
i
7. DISPUTE RESOLUTION .................................................................10
7.1 Negotiation ................................................................10
7.2 Unable to Resolve ..........................................................11
7.3 Attorneys and Intent .......................................................11
8. REPRESENTATIONS AND WARRANTIES .....................................................11
8.1 Due Incorporation or Formation; Authorization of Agreements ................11
8.2 Valid and Binding Obligation ...............................................12
8.3 No Conflict; No Default ....................................................12
8.4 Litigation .................................................................12
9. GENERAL PROVISIONS .................................................................12
9.1 Notices ....................................................................12
9.2 Construction ...............................................................13
9.3 Headings ...................................................................13
9.4 Further Action .............................................................13
9.5 Specific Performance .......................................................13
9.6 Entire Agreement; Amendments ...............................................13
9.7 Limitation on Rights of Others .............................................13
9.8 Waivers; Remedies ..........................................................13
9.9 Waiver of Jury Trial .......................................................14
9.10 Binding Effect .............................................................14
9.11 Governing Law ..............................................................14
9.12 Severability ...............................................................14
9.13 Limitation of Liability ....................................................15
9.14 No Assignment; Exceptions ..................................................15
9.15 Disclaimer of Agency .......................................................15
9.16 Independent Contractors ....................................................15
9.17 Expense ....................................................................15
9.18 General Terms ..............................................................15
9.19 Conflicts with Management Agreement ........................................16
9.20 Master Signature Page ......................................................16
ii
SPRINT PCS SERVICES AGREEMENT
This SERVICES AGREEMENT is made June 8, 1998, by and between Sprint
Spectrum L.P., a Delaware limited partnership ("Sprint Spectrum"), and Georgia
PCS Management LLC, a Georgia limited liability company (but not any Related
Party) ("Manager"). The definitions for this agreement are set forth on the
attached "Schedule of Definitions."
RECITALS
A. Manager and the holder of the License ("Sprint PCS") are entering into a
Management Agreement contemporaneously with the execution of this agreement,
under which Manager will design, construct, operate, manage and maintain a
wireless services network in the Service Area in accordance with Sprint PCS
standards and will offer and promote Sprint PCS Products and Services that
operate on the Sprint PCS Network.
B. Manager desires to enter into this agreement with Sprint Spectrum, under
which Sprint Spectrum may furnish certain services to Manager to assist Manager
to build out, operate, manage and maintain the Service Area Network under the
License.
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. ENGAGEMENT OF SPRINT SPECTRUM
1.1 Engagement of Sprint Spectrum. Manager engages Sprint Spectrum to
assist Manager with certain specified services in connection with the operations
of Manager and in building out, operating, managing and maintaining the Service
Area Network, subject to the terms and conditions of this agreement. Sprint
Spectrum accepts the engagement and will use the same effort and demonstrate the
same care in performing its obligations under this agreement as it uses in
conducting its own business. Manager will use the efforts and demonstrate the
care necessary for Sprint Spectrum to meet its obligations under this agreement.
When providing the Selected Services, Sprint Spectrum will provide those
services to Manager in the same manner it provides those services to its own
business, including the use of third party vendors to provide certain Selected
Services.
1.2 Reliance on Manager. Manager understands that Sprint Spectrum's ability
to provide the Selected Services will depend largely on Manager's compliance
with the Sprint PCS Program Requirements under the Management Agreement and
cooperation with Sprint Spectrum. Manager agrees to comply with such
requirements and to cooperate with Sprint Spectrum to enable Sprint Spectrum to
perform its obligations under this agreement.
1.3 Non-exclusive Service. Nothing contained in this agreement confers upon
Manager an exclusive right to any of the Available Services. Sprint Spectrum may
contract with others to provide expertise and services identical or similar to
those to be made available or provided to Manager under this agreement.
1.4 Manager's Use of Services. Manager agrees it will only use the Selected
Services in connection with its Service Area Network. Manager will not use the
Selected Services in connection with any other business or outside the Service
Area.
2. SERVICES
2.1 Available Services; Selected Services.
2.1.1 Available Services. Subject to the terms of this agreement,
Manager may obtain any of the Available Services from Sprint Spectrum in
accordance with the provisions of this Section 2.1. The Available Services
offered from time to time and the fees charged for such Available Services will
be set forth on the then current Exhibit 2.1.1 (the "Available Services and Fees
Schedule"). If Sprint Spectrum offers any new Available Service, it will deliver
a new Exhibit 2.1.1 indicating the new service and the fee for the new service.
Manager may select one or more of the categories of Available
Services. If Manager selects a particular category of services it must take and
pay for all of the services under the category selected; Manager may not select
only particular services within that category.
If Sprint Spectrum determines to no longer offer an Available Service
and the service is not a Selected Service, then Sprint Spectrum may give Manager
written notice at any time during the term of this agreement that Sprint
Spectrum no longer offers the Available Service.
Sprint Spectrum may modify Exhibit 2.1.1 from time to time. Exhibit
2.1.1 will be deemed amended upon delivery of the new Exhibit 2.1.1 to Manager.
2
2.1.2 Selected Services. During the term of this agreement, and
subject to the terms of this agreement, Manager has selected, and Sprint
Spectrum has agreed to furnish or cause to be furnished to Manager, the
Available Services listed on Exhibit 2.1.2 (which listed services will be the
Selected Services). Sprint Spectrum may require from time to time that certain
Available Services be Selected Services where necessary to comply with legal or
regulatory requirements (e.g., mandatory provision of emergency 911 service) or
applicable operating constraints (e.g., delivery of merchandise to the regional
distribution centers of national retail distributors).
2.1.3 Changes to Selected Services. If Manager determines it no longer
requires a Selected Service, then Manager must give Sprint Spectrum written
notice at least 3 months prior to the date on which Manager wishes to
discontinue its use of such Selected Service.
If Sprint Spectrum determines to no longer offer an Available Service
and such service is one of Manager's Selected Services, then Sprint Spectrum
must give Manager written notice at least 9 months prior to its discontinuance
of such Available Service that Sprint Spectrum will no longer offer such
Available Service. If the Available Service to be discontinued is required by
Sprint Spectrum to be a Selected Service, then Sprint Spectrum will use
commercially reasonable efforts to (a) help Manager provide the service itself
or find another vendor to provide the service, and (b) facilitate Manager's
transition to the new service provider.
2.1.4 Performance of Selected Services. Sprint Spectrum may select the
method, location and means of providing the Selected Services. If Sprint
Spectrum wishes to use Manager's facilities to provide the Selected Services,
Sprint Spectrum must obtain Manager's prior written consent.
2.2 Third Party Vendors. Some of the Available Services might be provided
by third party vendors under arrangements between Sprint Spectrum and the third
party vendors. In some instances, Manager may receive Available Services from a
third party vendor under the same terms and conditions that Sprint Spectrum
receives such services. In other instances, Manager may receive Available
Services under the terms and conditions set forth in an agreement between
Manager and the third party vendor. If Manager wishes to engage a third party
vendor to provide Available Services, Selected Services, or Available Services
that Sprint Spectrum will no longer offer, Manager must first obtain Sprint
Spectrum's prior written consent, which consent will not be unreasonably
withheld. Before Manager may obtain from the third party vendor any Available
Services, Selected Services, or Available Services that Sprint Spectrum will no
longer offer, such vendor must execute an agreement prepared by Sprint Spectrum
that obligates the vendor to maintain the confidentiality of any proprietary
information and that prohibits the vendor from using any proprietary technology,
information or methods for its benefit or the benefit of any other person or
3
entity. Manager's use of a third party vendor that is not providing Available
Services to Manager on behalf of Sprint PCS under the Management Agreement will
not qualify for assumed compliance with the Program Requirements under Sections
7.1(a)(ii) or 8.1(b) of the Management Agreement.
2.3 Contracts. Manager will notify Sprint Spectrum of any contract or other
arrangement Manager has with any other party that will affect how Sprint
Spectrum is to provide the Selected Services.
3. FEES FOR SELECTED SERVICES
3.1 Payment of Fees. Sprint Spectrum and Manager agree that the fees for
the Available Services will initially be those set forth on Exhibit 2.1.1. 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. Manager agrees
to pay the fees to Sprint Spectrum within 20 days after the date of the invoice.
If Manager enters into an agreement with a third party vendor under Section 2.2,
Manager agrees to pay the fees for the services rendered by the third party
vendor in accordance with the terms and conditions of such agreement.
3.2 Adjustment of Fees. Sprint Spectrum may change the fee for any service
it provides once during any 12-month period by delivering a new Exhibit 2.1.1 to
Manager. Exhibit 2.1.1 will be deemed amended on the effective date noted on the
new Exhibit 2.1.1, which will be at least 30 days after delivering the new
Exhibit 2.1.1. Manager must notify. Sprint Spectrum in writing before the
effective date of the new Exhibit 2.1.1 if Manager wishes to discontinue a
Selected Service for which the price is being increased (a "Cancelled Service").
If Manager discontinues a Selected Service under this Section 3.2, Sprint
Spectrum will, at Manager's option, continue to provide the Cancelled Service
and to charge Manager the current fee (i.e., the fee under the Exhibit 2.1.1 in
effect on the date Manager gives its cancellation notice to Sprint Spectrum) for
the Cancelled Service for up to 9 months from the date Sprint Spectrum gives
Manager notice of the price change or until Manager no longer needs the
Cancelled Service, whichever occurs first. If Sprint Spectrum continues to
provide the Cancelled Service after the 9-month period, Sprint Spectrum will
apply the new fee, under the new Exhibit 2.1.1, and such fee will be applied
retroactively as of the effective date of the new schedule. Manager agrees to
pay such retroactive charge within 10 days after the date of the invoice for
such charge.
4
3.3 Late Payments. Any payment due under this Section 3 that is not paid by
Manager to Sprint Spectrum in accordance with the terms of this agreement will
bear interest at the Default Rate beginning (and including) the 6th day after
the due date until (and including) the date on which such payment is made.
4. TERM; TERMINATION; EFFECT OF TERMINATION
4.1 Term. This agreement commences on the date of execution and continues
until the Management Agreement terminates. This agreement automatically
terminates upon termination of the Management Agreement. Neither party may
terminate this agreement for any reason other than the termination of the
Management Agreement.
4.2 Effect of Termination. Upon the termination of this agreement, all
rights and obligations of each party under this agreement will immediately
cease, except that:
(a) Any rights arising out of a breach of any terms of this agreement
will survive any termination of this agreement;
(b) The provisions of this Section 4.2 and Sections 5.2, 6, 7, and 9
will survive any termination of this agreement; and
(c) The payment obligations under Section 3 will survive any
termination of this agreement if, and to the extent, any fees have accrued or
are otherwise due and owing from Manager to Sprint Spectrum or any Sprint
Spectrum Related Party as of the date of termination of this agreement.
5. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION
5.1 Books and Records.
5.1.1 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.
5.1.2 Audit. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for
5
purposes of auditing the amount of fees, costs, expenses or other charges
payable in connection with the Selected Services with respect to the period
audited. The auditing party will conduct the audit no more frequently than
annually. If the audit shows that Sprint Spectrum was underpaid then, unless the
amount is contested, Manager will pay to Sprint Spectrum the amount of the
underpayment within 10 Business Days after Sprint Spectrum gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint Spectrum was overpaid then, unless the amount is contested, Sprint
Spectrum will pay to Manager the amount of the overpayment within 10 Business
Days after Sprint Spectrum determines Sprint Spectrum was overpaid.
Notwithstanding the above provisions of this Section 5.1.2, Sprint Spectrum
may elect to have its own independent auditors certify to the accuracy of the
charges with respect to Manager, rather than allow Manager's independent
auditors access to Sprint Spectrum's records.
5.1.3 Contesting an Audit. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"Dispute Notice Date." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "Arbiter")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having jurisdiction: The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
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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.
5.2 Confidential Information.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the term of this agreement and 3 years after the date of
termination of this agreement, keep confidential, not disclose to others and use
only for the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this agreement,
except that the foregoing obligation will not apply to the extent that any
Confidential Information:
(i) is or becomes, after disclosure to a party, publicly known by
any means other than through unauthorized acts or omissions of the party or
its agents; or
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent to
the effective date of this agreement, is lawfully received from a third
party having rights to publicly disseminate the Confidential Information
without any restriction and without notice to the recipient of any
restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly, access
to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the information;
(v) is required by the receiving party to be produced under order
of a court of competent jurisdiction or other similar requirements of a
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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 5.
(c) The party making a disclosure under Sections 5.2(b)(v), 5.2(b)(vi)
or 5.2(b)(vii) must inform the non-disclosing party as promptly as is reasonably
necessary to enable the non-disclosing party to take action to, and use the
disclosing party's reasonable best efforts to, limit the disclosure and maintain
confidentiality to the extent practicable.
(d) 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 licensed area, Manager may not use
any of the Confidential Information received under or in connection with this
agreement in operating its other wireless business.
6. INDEMNIFICATION
6.1 Indemnification by Sprint Spectrum. Sprint Spectrum agrees to
indemnify, defend and hold harmless Manager, its directors, managers, officers
and employees 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 and
employees arising from or relating to the violation by Sprint Spectrum, its
directors, officers, employees, contractors, subcontractors, agents or
representatives of any law, regulation or ordinance applicable to Sprint
Spectrum in its performance of the Selected Services, or by Sprint Spectrum's,
or its directors', officers', employees', contractors', subcontractors', agents'
or representatives' breach of any representation, warranty or covenant contained
in this agreement, except where and to the extent the claim, demand, cause of
action, loss, action, damage, liability and expense results from the negligence
or willful misconduct of Manager, its directors, managers, officers,
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employees, agents or representatives. Sprint Spectrum's indemnification
obligations under this Section 6.1 do not apply to any third party vendors that
provide services (including Selected Services) directly to Manager or its
Related Parties under a separate agreement.
6.2 Indemnification by Manager. Manager agrees to indemnify, defend and
hold harmless Sprint Spectrum, its directors, officers and employees 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 Spectrum, its directors, officers and employees arising from or relating
to Manager's, or its directors', managers', officers', employees', contractors',
subcontractors', agents' or representatives' violation of any law, regulation or
ordinance applicable to Manager, or by Manager's, or its directors', managers',
officers', employees', contractors', subcontractors', agents' or
representatives' breach of any representation, warranty or covenant contained in
this agreement, Manager's ownership of the Operating Assets or the operation of
the Service Area Network, except where and to the extent the claim, demand,
cause of action, loss, action, damage, liability and expense results from the
negligence or willful misconduct of Sprint Spectrum, its directors, officers,
employees, contractors, subcontractors, agents or representatives.
6.3 Procedure.
6.3.1 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 6.3.1 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.
6.3.2 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
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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.
6.3.3 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 6.
Indemnitee is not permitted to settle the dispute or claim without the prior
written approval of Indemnitor, which approval will not be unreasonably
withheld.
6.3.4 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.
7. DISPUTE RESOLUTION
7.1 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.
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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 5.1.2 and 5.1.3, 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 7.1.
7.2 Unable to Resolve. If a dispute has not been resolved within 60 days
after the notifying party's notice, the parties will continue to operate under
this agreement and xxx the other party for damages or seek other appropriate
remedies as provided in this agreement, except neither party may bring a suit
for damages based on an event that occurs during the first two years of this
agreement.
7.3 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 this Section 7 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.
8. REPRESENTATIONS AND WARRANTIES
Each party for itself makes the following representations and warranties to
the other party:
8.1 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.
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8.2 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.
8.3 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, or (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.
8.4 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.
9. GENERAL PROVISIONS
9.1 Notices. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed 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.
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9.2 Construction. This agreement will be construed simply according to its
fair meaning and not strictly for or against either party.
9.3 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.
9.4 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.
9.5 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.
9.6 Entire Agreement; Amendments. The provisions of this agreement and the
Management Agreement (if Sprint Spectrum is a party to that agreement)
(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 Spectrum's right to amend the Available Services and the fees charged for
such services as shown on Exhibit 2.1.1, and Manager's right to amend the
Selected Services listed on Exhibit 2.1.2, this agreement may be modified or
amended only by a written amendment signed by persons or entities authorized to
bind each party.
9.7 Limitation on Rights of Others. 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.
9.8 Waivers; Remedies. 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.
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Sprint Spectrum is not in breach of any covenant in this agreement, if the
occurrence of the event or Sprint Spectrum's non-compliance with the covenant
results primarily from:
(i) any FCC order or any other injunction issued by any
governmental authority impeding the 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 service; 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 Sprint Spectrum.
9.9 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
9.10 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 Management Agreement. 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 provides that Related Parties are bound.
9.11 Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
9.12 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
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unenforceable provision with an enforceable provision that reflects the original
intent of the parties.
9.13 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.
9.14 No Assignment; Exceptions. This agreement may only be assigned in
conjunction with and to the same party or parties to whom the Management
Agreement has been validly assigned under the Management Agreement's terms and
conditions.
9.15 Disclaimer of Agency. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
9.16 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.
9.17 Expense. Each party bears the expense of complying with this agreement
except as otherwise expressly provided in this agreement.
9.18 General Terms.
(a) This agreement, including the attached Schedule of Definitions, 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";
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(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.
9.19 Conflicts with Management Agreement. The provisions of the Management
Agreement govern over those of this Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Management
Agreement.
9.20 Master Signature Page. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
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