AGREEMENT
THIS AGREEMENT made and entered this 6th day of January, 1989, by and
between CELLULAR XXX XX XXXXXX XXXX, XXXXXXX, LIMITED, a Florida limited
partnership, referred to herein as "CELLULAR ONE," and XXXXXX COMMUNICATIONS
INDUSTRIES, INC., hereafter referred to as "XXXXXX."
RECITALS
A. CELLULAR ONE is the licensee of the non-wireline cellular
telecommunication system in the Panama City Metropolitan Statistical Area (MSA),
which is MSA Xx. 000 (xxxxxxxxx XXXXXXX XXXX) that consists of Bay County,
Florida,
X. XXXXXX has been in the communications business in the LICENSE AREA for
more than 20 years, and has acquired considerable business experience, name
familiarity and a business knowledge in the telecommunications business in the
LICENSE AREA,
X. XXXXXX is President of the Florida Radio Telephone Association, and has
business contacts in the telecommunications industry in the LICENSE AREA.
X. XXXXXX has control of communications assets which will be leased to
CELLULAR ONE under the terms of this Agreement,
E. CELLULAR ONE wishes to engage XXXXXX, consistent with the rules and
regulations of the Federal Communications Commission (hereafter "FCC"), as an
independent contractor to manage the operation, periodic redesign and
maintenance of a cellular telecommunications system and business for the LICENSE
AREA,
F. During the one year period lending June 6, 1987, XXXXXX has served as
Manager of CELLULAR ONE and both parties to this Management Agreement are
generally satisfied with the performance of each other pursuant to this contract
and desire to extend the relationship as set forth herein.
G. CELLULAR ONE and XXXXXX desire to enter into this contract for the
purpose of advancing their mutual financial interests by utilizing together the
LICENSE, knowledge and assets of CELLULAR ONE and the knowledge, experience,
business and community contacts, and assets of XXXXXX in order to engage in the
business of providing cellular telecommunications services in the LICENSE AREA;
and
X. XXXXXX and CELLULAR ONE desire that XXXXXX market cellular telephones,
accessories and peripheral equipment in the LICENSE AREA which activity is
expected to benefit CELLULAR ONE.
IN CONSIDERATION of the above recitals and the mutual agreements and
covenants herein contained, CELLULAR ONE and XXXXXX do hereby agree as follows:
1. Terms.
(a) The term of this Management Agreement shall be one (1) year
commencing on the sixth day of January, 1989, and terminating on the sixth day
of January, 1990.
(b) This Management Agreement is subject to renewal, on a one year
basis, provided that both parties agree to renewal in writing by October 31,
1989.
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2. General Duties of XXXXXX.
x. XXXXXX shall perform all services under this Management Agreement
under a fiduciary relationship with CELLULAR ONE in accordance with the highest
standards of honesty, integrity and fair dealing, and in a professional manner
that will best serve the financial and business interests of CELLULAR ONE in the
LICENSE AREA. XXXXXX'x performance under this Management Agreement shall comply
in all material respects with good business practice in the industry, and shall
be in compliance with all applicable federal, state, and local laws, rules and
regulations.
b. Subject to CELLULAR ONE's exclusive right of unfettered control
over business assets facilities and operations, XXXXXX shall manage and
implement all business activities for the operation of the said business,
including but not necessarily limited to the following: operation of physical
assets such as antennae, towers, cell sites, switches, transmission lines, spare
parts, terminals and test instruments; billing and collection of payment from
customers; cellular system maintenance and repair; cellular system expansion
activities; negotiation and implementation of cost-effective interconnection
arrangements with local wireline telephone systems, long distance carriers and
other carriers; development and implementation of marketing programs for new
customers and retention of existing customers; provision of such assistance as
CELLULAR ONE may require in preparing reports to the FCC or state and local
regulatory authorities;
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price negotiations with suppliers; generation of purchase orders, approval of
payments to suppliers and verification of receipt of materials; formulation and
implementation of standard operating procedures, including programs and policies
to assure adherence to safety, environmental and other requirements under
applicable federal, state and local laws and regulations; coordination of
engineering approval of selected vendor products; negotiation and acquisition of
appropriate insurance policies; and the performance of all other functions
consistent with the purposes of this Management Agreement.
3. Specific Duties of XXXXXX: For the benefits conferred and the
compensation to be paid to XXXXXX as hereinafter stated, XXXXXX shall at his own
expense, unless otherwise specifically stated, and subject always to CELLULAR
ONE's right of continuing control and approval, diligently perform the following
services for CELLULAR ONE:
a. Facilities Location and Acquisition. XXXXXX shall be responsible
for the location and acquisition of space on towers and other associated
facilities (including microwave facilities) reasonably required to accommodate
equipment for the operation of cellular telecommunications services hereby
defined to include, but not be limited to, local exchange and interexchange
voice and/or data services, voice mail services, monitoring services as well as
other related services which may lawfully be provided
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under CELLULAR ONE's LICENSE as it presently exists or as it and any associated
licenses may be lawfully extended or amended. XXXXXX shall negotiate on behalf
of CELLULAR ONE for additional tower sites and associated facilities, including
all terms and conditions of lease agreements or other agreements, subject always
to CELLULAR ONE's final approval of any and all agreements. At CELLULAR ONE's
cost XXXXXX shall recommend and arrange for purchase and installation of all
reserve, all battery, and such generator equipment as is necessary and
reasonable for all other equipment and facilities.
b. Marketing and Sales Services:
(1) XXXXXX shall use his best efforts to promote, sell and
market the cellular services in the LICENSE AREA for CELLULAR ONE's best
interest. XXXXXX shall organize and put in place a complete marketing, sales and
service organization for the cellular telecommunications business in the LICENSE
AREA. XXXXXX shall prepare and provide to CELLULAR ONE by January 15, 1989 a
comprehensive plan illustrating the activities of such organization for the term
of this Management Agreement. Such efforts shall include, but not limited to,
the appointment of a sales manager, marketing personnel and others necessary to
conduct a first-class sales and marketing program for cellular
telecommunications services.
(2) XXXXXX shall make use of his existing customer list for
CELLULAR ONE's benefit.
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(3) XXXXXX shall maintain quality advertising of the cellular
system in the LICENSE AREA. The marketing and advertising program for the one
year period of this agreement, which provides for, but is not limited to, the
selection of media, the use and employment of advertising assistants or
consultants, the preparation and adoption of an advertising and marketing
budget, and a methodology for review and study of the effectiveness of the
proposed marketing and advertising program for the cellular services in the
LICENSE AREA is provided as Attachment A.
c. Data Processing, Billing and Collection Services:
(1) XXXXXX shall provide data processing services and billing
and collection services which shall itemize and account for all cellular
services rendered to customers in the LICENSE AREA. XXXXXX shall obtain from the
MTSO output as is necessary for the generation of bills to CELLULAR ONE's
customers. The MTSO programming for billing will be provided in an RS-232 serial
format to be captured by XXXXXX'x system.
(2) XXXXXX shall maintain software necessary for capturing and
transmitting this information to the billing system. Actual billing tapes for
Southern Xxxx and Roamer billing will be provided and paid for by CELLULAR ONE.
(3) The form of the billing statements for services to be
mailed by XXXXXX shall be consistent with industry standards. Draft statements
shall be prepared on the 28th day of each
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month for the preceding 30-day period ending on the 25th day of that month.
Statements shall be mailed, under the name of CELLULAR ONE, by the 1st day of
the following month.
(4) XXXXXX shall xxxx all service charges in advance, and
shall xxxx overtime and long distance charges for the previous month.
(5) All collections made by XXXXXX for cellular service shall
be deposited daily as received by XXXXXX to Bay Bank & Trust Company in the
account of CELLULAR XXX XX XXXXXX XXXX, XXXXXXX, LIMITED, Account No.
2506905501, or such other account as may be designated in writing by CELLULAR
ONE.
d. Implementation of Business and Financial Plans. XXXXXX shall
implement a comprehensive three-year business and financial plan, including but
not limited to, projected income and expense of the business as set forth in
Attachment B, and shall assist CELLULAR ONE in the generation of required
information and in all other steps for obtaining system financing.
e. Collections Efforts. XXXXXX shall implement a comprehensive
system for the control, prevention and collection of delinquent accounts and
customer fraud. The System shall be patterned after that set forth in Attachment
X. XXXXXX shall implement and maintain such credit practices as are customary in
the cellular industry in order to minimize losses due to lack of credit
worthiness. Credit report forms and appropriate customer contract forms as set
forth in Attachment D shall be authorized,
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and newly created forms shall be presented by XXXXXX to CELLULAR ONE prior to
use. All such forms shall be signed by each customer. Costs of all such systems,
forms preparation, practices and collection services shall be borne by XXXXXX.
f. Sales and Installation Training. XXXXXX shall require all
personnel associated and employed by him in connection with the marketing, sale,
installation and servicing of cellular telephones specified in this contract, as
a condition of employment, to complete training pertinent to cellular systems
and cellular services such that said personnel are fully qualified and
knowledgeable about the products and services they are marketing. Such employees
shall continue said training and updating of their technical qualifications as
required. XXXXXX shall design and/or identify such training programs. The cost
of such training programs shall be borne by XXXXXX. Unless otherwise mutually
agreed to in writing, which agreement shall not be unreasonably withheld, the
initial training shall be patterned after the programs that were successfully
utilized for training during the term of the Agreement expiring January 6, 1989,
and which are identified and summarized on Attachment E.
g. Reporting. On or before the 10th day of each month during the
term of this Agreement, XXXXXX shall prepare in writing and post to an address
designated by CELLULAR ONE detailed informational reports for the preceding
calendar month which shall include:
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(1) an itemization of units put in service for the immediately
preceding month,
(2) an itemization of units disconnected for the immediately
preceding month,
(3) the itemization by category of the services billed during the
preceding month,
(4) an itemization of revenues deposited to CELLULAR ONE's bank
account as required elsewhere in this Management Agreement,
(5) a useful and comprehensive report concerning accounts
receivable with information concerning aging, delinquent
account identification, and corrective and collection efforts
being undertaken, and
(6) other reports customarily generated in the cellular service
industry.
Such informational reports shall be patterned after that report set forth in
Attachment F, and successfully utilized during the term of the Agreement
expiring January 6, 1989.
h. Sale and Installation of Customer Equipment. XXXXXX shall
continue to operate an ongoing and competitive first-class business for the sale
and installation of cellular telephones, accessories and perpherials during the
term of this Management Agreement.
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i. Management of Maintenance Services. XXXXXX shall assist all
management services on behalf of CELLULAR ONE in connection with the negotiation
and implementation of a Maintenance Contract to be executed by CELLULAR ONE for
both routine and emergency maintenance and repair service required for the
operation of the cellular telecommunications system. After execution services
provided by XXXXXX shall include, but not be limited to, the monitoring of the
maintenance performed on CELLULAR ONE's system, analysis and review of costs,
fees and charges, supervision of the actual maintenance work on the cellular
system, on-line monitoring of traffic through the system, routine daily checks
and inspections and comprehensive regular periodic checks on the system
operation, and monitoring the performance by the maintenance contractor as
necessary to maintain first-class cellular system operation and service. At
three month intervals, XXXXXX shall submit to CELLULAR ONE a short statement,
patterned after Attachment G, attesting to the adequacy (or inadequacy) of such
maintenance.
j. Weekly Staff Meetings. XXXXXX and CELLULAR ONE shall participate
in weekly staff meetings addressing all issues having both long-range and
short-term significance to CELLULAR ONE. The meetings, which are expected to
have a duration of one-half business day or less, shall be conducted in
accordance with the following general procedures:
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(i) In order to efficiently utilize time both CELLULAR ONE and
XXXXXX shall, to the extent practical, limit to two the number
of their representatives attending these meetings;
(ii) An agenda will be prepared before each meeting that includes a
listing of all (1) significant activities surfacing during the
preceding week; (2) unresolved matters addressed during
previous weekly meetings; (3) issues of medium range and long
range significance that may reasonably be expected to be of
interst to CELLULAR ONE; and (4) any other items deemed of
sufficient interest to warrant attention on at weekly staff
meetings.
(iii) At each meeting an Action Item Listing will be updated, in
order to provide current information regarding task assigned,
progress made against previously assigned due dates, personnel
responsible for various tasks, and tasks warranting further
effort or direction. This Action Items list shall be formatted
after Attachment H.
k. Transition Services. As required by CELLULAR ONE, XXXXXX shall
provide assistance, counsel, advice and cooperation concerning any transfer or
relocation of equipment and/or operations that may be necessitated by
termination of this Management Agreement.
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l. Complaint Handling. XXXXXX shall maintain in chronological order
and indexed according to subject matter all complaints received by XXXXXX or his
employees which pertain to the operation of the cellular system, cellular
services, or cellular equipment as addressed by this Management Agreement. Such
information shall be continuously made available to CELLULAR ONE. XXXXXX shall
take affirmative constructive responsive action with respect to each complaint
received and shall advise CELLULAR ONE as to all action taken in response to
customer complaints, provided, however, that CELLULAR ONE shall also have the
right to respond personally to any such complaints.
m. Customer Listings and Records. XXXXXX shall have be responsible
for assembling and maintaining a current and complete list of all customers of
the cellular system in a form patterned after Attachment H, which was used
successfully during the term of the Management Agreement expiring on January 6,
1989, or such other form as may be mutually agreed to by CELLULAR ONE and
XXXXXX. Updated copies of each list shall be provided to CELLULAR ONE on a
monthly basis, and CELLULAR ONE shall have access to the customer list at all
times, individually or by designated agents of CELLULAR ONE. Both parties agree
that the customer list shall be the sole property of CELLULAR ONE and upon the
termination of this Management Agreement, it shall have the sole and exclusive
right to possession and control of said customer list, as well as all other
listings and records of the system's
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customers, including any copies in whatever form and wherever the same may be
located.
n. Insurance. XXXXXX shall maintain comprehensive casualty and
liability insurance for all activities and equipment which are the subject of
this Management Agreement. XXXXXX shall be named as an insured and CELLULAR ONE
as an additional insured. CELLULAR ONE shall pay all necessary costs for such
coverage. Insurance policies shall be consistent with those set forth on
Attachment I, or in a form acceptable to CELLULAR ONE. XXXXXX shall assure that
CELLULAR ONE is provided with copies of all current policies within ten (10)
days of their effectiveness. Liability limits shall be not less than $3,000,000
per occurrence. Property shall be insured to full replacement value. CELLULAR
ONE's name shall be placed on policy as a loss payee as its interest may appear.
o. State and Local Approvals. XXXXXX shall timely and in writing
advise CELLULAR ONE of all necessary state and local authority required for
continuing operation or additional construction of the system, and take all
necessary actions to obtain such authority.
p. Interconnection. XXXXXX shall take all actions necessary to
maintain system interconnection with the landline exchange and interexchange
carriers in the most prompt manner possible. As appropriate, XXXXXX shall advise
CELLULAR ONE of desired charges or advances in existing arrangement.
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q. Construction Supervision. XXXXXX shall supervise construction of
the cellular radio and microwave components of the system, and at all times keep
CELLULAR ONE apprized of the status of such activities.
r. Access to Pertinent Business Records. XXXXXX and CELLULAR ONE
recognize that XXXXXX is presently engaged in an ongoing communications business
that is presently not competitive with the cellular service contemplated in this
Management Agreement of CELLULAR ONE. Therefore, the records and information on
XXXXXX'x other communications business shall not be available to CELLULAR ONE
unless that information, business records or other data might be both relevant
and reasonably calculated to impact on CELLULAR ONE's business. Should this
situation change, either by effective change in the rules and regulations of the
FCC or otherwise, XXXXXX shall make such information available to CELLULAR ONE
on a continuing basis. XXXXXX recognizes CELLULAR ONE's need to have the right
to conduct full and complete audits without limitation, all at CELLULAR ONE's
expense. Any information acquired during the course of such audits shall be
protected as confidential information under Section 10 of this Management
Agreement.
4. Resources To Be Devoted to the System. In order to fulfill the
obligations set forth in paragraphs 2 and 3 above, XXXXXX shall devote, at a
minimum, the following resources to the system:
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x. XXXXXX shall devote 90 percent of the time of its President,
Xxxxx Xxxxxx, to design and construction of the System until the License is
issued and 90 percent of his time to management of the maintenance and operation
of CELLULAR ONE, which time shall be reasonably split among the duties set forth
on Page 3 and otherwise necessary to accomplish the objectives of this
Management Agreement.
x. XXXXXX, at its own expense, shall employ a sales manager who
shall devote 80 percent of his or her time to the operation of CELLULAR ONE.
x. XXXXXX, at its own expense, shall hire two fulltime salespeople
who shall devote 100 percent of their time to the operation of CELLULAR ONE.
x. XXXXXX shall be solely responsible for all payments to dealers
involved in the dealer (agency) network that XXXXXX shall develop in order to
promote and market cellular services in the LICENSE AREA.
x. XXXXXX shall, at its own expense, provide a telephone line with a
unique telephone number listed in the local telephone listings as the telephone
number of the Cellular Business. (CELLULAR ONE will designate the name of the
Cellular Business which shall appear in the local telephone listing.) Such
telephone line shall ring into XXXXXX'x current system at its current business
location. XXXXXX'x employees shall insure the
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Cellular Business telephone line "Cellular One," or such other name designated
by CELLULAR ONE.
x. XXXXXX shall, at its own expense, add additional CELLULAR ONE
telephone lines, if XXXXXX'x current telephone system is not sufficient to
handle the volume of CELLULAR ONE's telephone calls.
x. XXXXXX shall utilize its current business' customer service
personnel to answer CELLULAR ONE's telephone calls, and to service potential
subscribers' and subscribers' inquiries and complaints.
x. XXXXXX shall implement an advertising campaign, patterned after
that set forth on Attachment J and used successfully throughout the term of the
Management Agreement expiring January 6, 1989, and contribute at least
Twenty-Five Thousand Dollars ($25,000.00) in direct advertising expenses.
CELLULAR ONE shall review and approve the advertising campaign, and all
advertising material to be used in the advertising campaign.
x. XXXXXX shall provide at least 10,000 Cellular Business brochures
and System coverage maps.
5. Responsibilities of CELLULAR ONE. XXXXXX'x responsibility for overall
system management shall be only limited by the enumerated responsibilities of
CELLULAR ONE in this Section 5. CELLULAR ONE shall undertake and diligently
perform the following in connection with this contract:
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a. Site Selection and Acquisition. CELLULAR ONE shall assist XXXXXX
in the location and acquisition, including negotiation and contracting, of space
on towers to locate equipment for the rendering of cellular telecommunications
services in the LICENSE AREA, including but not limited to, preparing and
executing all contracts and leases and other related documents, and purchasing
and installing all equipment required for by CELLULAR ONE.
b. Contract Execution. CELLULAR ONE shall execute such contracts as
are recommended by XXXXXX and which are thereafter approved by CELLULAR ONE for
the construction, maintenance and lawful operation of the cellular
telecommunications system in the LICENSE AREA.
c. Payments. CELLULAR ONE shall make lease payments and debt
payments for telecommunications equipment necessary for the providing of
cellular service in the LICENSE AREA except for charges to be paid or costs to
be provided for by XXXXXX pursuant to Sections 2, 3, 4 and 6 hereunder.
d. Maintenance. CELLULAR ONE shall, with assistance from XXXXXX,
negotiate and execute all contracts for maintenance and repairs in connection
with the system. CELLULAR ONE shall pay for all necessary and required
maintenance and repairs on the cellular telecommunications system during the
operation thereof, save and except for the services rendered by XXXXXX in the
super-
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vision of system maintenance and repair as required by other provisions of this
Management Agreement.
e. Technical Training. CELLULAR ONE shall pay all costs of technical
training to be organized, implemented and arranged by XXXXXX pertinent to the
MTSO and associated cellular site equipment; provided, however, that XXXXXX
shall utilize, if feasible, the sales training, personnel and paraphernalia
furnished by cellular system equipment suppliers. All training hereunder shall
be approved in writing by CELLULAR ONE and shall be held in Panama City,
Florida, unless otherwise agreed to by both parties to this Management
Agreement.
f. Access to Cellular System. CELLULAR ONE shall provide XXXXXX ten
(10) numbers for XXXXXX'x use in the performance of its obligations under this
Management Agreement in the cellular system. XXXXXX shall pay all costs
associated with such ten (10) numbers except local airtime and local access
charges. XXXXXX shall not sell, lease or otherwise derive any revenue or other
benefit from the use of said ten (10) numbers.
g. System Equipment Acquisition or Lease. CELLULAR ONE shall acquire
by purchase or lease the equipment necessary to implement the non-wireline
cellular telecommunications system in the LICENSE AREA, and such equipment shall
be made available to XXXXXX for his use in the performance of his obligations
under this contract.
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h. Sale or Transfer of System. In the event that CELLULAR ONE
decides to sell, transfer or otherwise dispose of a majority of its interest in
the System, except to a corporation or other business entity owned or controlled
by CELLULAR ONE or Xxxxx X. X'Xxxxx, or a close family member or as part of any
professional estate plan, CELLULAR ONE shall advise XXXXXX of such inclination
to sell and provide XXXXXX an opportunity to purchase CELLULAR ONE's interest in
the LICENSE. If XXXXXX is interested in acquiring CELLULAR ONE's interest, the
parties shall negotiate in good faith for such period of time as CELLULAR ONE
determines in his sole discretion to be warranted. Thereafter, CELLULAR ONE may
market and/or sell any or all interest in the LICENSE without further
restriction.
6. Compensation.
a. As compensation for full and proper compliance with the terms of
this Management Agreement, XXXXXX shall be entitled to the following:
(1) A service fee of One Hundred Fifty Thousand Dollars
($150,000.00), of which Eighty Seven Thousand Five Hundred Dollars
($87,500.00) to be paid upon commencement of the term of this Management
Agreement, and the remainder to be paid via monthly installments of Five
Thousand Two Hundred Eight Dollars and Thirty-Three Cents ($5,208.33),
payable on the 15th day of each month during the term of this Management
Agreement.
(2) Ten percent of gross revenues from the system, after deduction
for all federal, state and local taxes due
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and owing, which sum shall be paid on the 15th day of each month, and
cover the entire prior calendar month.
(3) Subject to the restrictions and limitations of this subparagrah
and subparagraph 2, if CELLULAR ONE sells the System during the term of
this Management Agreement, XXXXXX shall be entitled to a payment equal to
four percent (4%) of the net sales price. Net Sales Price shall mean the
net proceeds received by CELLULAR ONE reduced by the amount of any
brokers' fees or legal fees associated with the sale, the amount of any
transfer fee or tax on the transfer of the System or the Cellular
Business, the amount of any money or capital invested in the Cellular
Business, any money spent on application costs or obtaining the Permit or
License, and reduced by the amount of any debt (including accrued
interest) utilized for construction or maintenance of the System, or
operation of the Cellular Business. Notwithstanding the foregoing,
CELLULAR ONE may convey, transfer, or assign all or any part of its
interest in the System to any corporation or other business entity
controlled by it, by Xxxxx X. X'Xxxxx, or as a part of any professional
estate plan prepared for Xxxxx X. X'Xxxxx by attorneys or other planners,
provided, however, such transfer or conveyance or assignment shall not
materially impair CELLULAR ONE's ability to perform its obligations under
this contract. If XXXXXX is
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the purchaser of the System or the Cellular Business or, if XXXXXX enters
into an agreement with the transferee within one (1) year from the closing
of the sale from CELLULAR ONE to such transferee, under which agreement
XXXXXX renders services similar to those provided herein, the foregoing
sums shall not be due, or if paid, shall be repaid promptly by XXXXXX to
CELLULAR ONE.
(4) XXXXXX shall be entitled to the following compensation based
upon the number of subscribers added to the System on a (calendar) monthly
basis:
Number of Activations Activation Fees
--------------------- ---------------
1-11 Subscribers $150 per Subscriber Activation
12-24 Subscribers $200 per Subscriber Activation
25-36 Subscribers $250 per Subscriber Activation
37-49 Subscribers $300 per Subscriber Activation
50 or more Subscribers $400 per Subscriber Activation
Adjustments required to XXXXXX'x compensation shall be deducted from the
monthly amounts owed to XXXXXX pursuant to this Management Agreement. The
amount shall be computed under the above schedule by recalculating the
amount to which XXXXXX would have been entitled under the schedule by
reducing the number of monthly subscribers by the number of subscribers
during that month that failed to remain on the System and pay their bills
for 90 days. Any subscriber for whom XXXXXX receives compensation shall
not be counted for
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compensation purposes again if the subscriber terminates services after 90
days and later resubscribes within a one-year period of the termination
date.
(5) CELLULAR ONE shall pay to XXXXXX additional sums up to the
amount of $5,000.00 for XXXXXX'x time required in the generation of Roamer tapes
and Xxxx South tapes.
b. Each party shall reimburse the other for out-of-pocket expenses
incurred by such party which are the responsibility, under this Management
Agreement, of the other, and which expenses have been incurred at the request of
the other party. Such reimbursement shall occur within ten (10) days after
submission of proof of payment.
7. Competition:
a. In consideration of the expenditure of time, money and effort by
XXXXXX in establishing his business for the sale and installation of cellular
telephones as required in paragraph 3(i) above during the term of this contract,
CELLULAR ONE shall not engage in any business directly or indirectly in
competition with XXXXXX in the sale and installation of cellular telephones,
either as an individual, partner, joint venturer, employee, agent, officer,
director, shareholder or otherwise, in the LICENSE AREA, provided that XXXXXX is
satisfying all of his contractual obligations hereunder.
b. As a condition of their employment, XXXXXX shall require its
employees who work in furtherance of XXXXXX'x obliga-
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tions to CELLULAR ONE under this Management Agreement to sign an agreement in a
form consistent with Attachment K and proposed by CELLULAR ONE to the effect
that such employees shall not accept for a period of one (1) year after the
termination of their employment with XXXXXX, or the termination of this
Management Agreement, employment offered by an employer who directly or
indirectly competes with CELLULAR ONE.
x. XXXXXX and CELLULAR ONE recognize that XXXXXX is now operating a
communications business that is not in direct competition with CELLULAR ONE's
business as presently permitted under the applicable rules and statutes of the
FCC and the State of Florida. CELLULAR ONE and XXXXXX recognize that due to a
change in the applicable statutes and rules after the date of this Management
Agreement, there may in the future be a possibility of competition between
XXXXXX'x present and future additional expansion business and CELLULAR ONE's
expansion and/or additional business opportunities made available by such
changes or amendments to the present rules and statutes of the FCC and the State
of Florida. In such event and due to the foregoing, the parties hereunder may
come to
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be in competition. Should this transpire, CELLULAR ONE and XXXXXX shall, outside
of this Management Agreement, make every effort to negotiate in good faith and
consummate a separate agreement between them to cover such a competitive
situation. The negotiations of such agreement shall not, directly or indirectly,
interfere with, suspend, or relate in any manner to the duties, responsibilities
or contractual obligations of each party to the other set forth in this
Management Agreement. If CELLULAR ONE elects to subsequently enter into
competition with XXXXXX'x present or future business, the parties shall continue
to perform their obligations under this Management Agreement in the same manner
as actually performed prior to said event.
d. During the term of this Management Agreement, XXXXXX shall
refrain from entering into any agreement directly or indirectly through an
entity with which XXXXXX is associated for the provision of cellular, BETRS, or
any other two-way radio telecommunications services, or related service, in the
LICENSE AREA or in any market contiguous to the LICENSE AREA, without obtaining
a prior written consent of CELLULAR ONE.
x. XXXXXX shall not, for a period of one year following the
termination of this Management Agreement, either directly or indirectly, engage
in any business activity which offers or provides to the public in the LICENSE
AREA cellular telephone services, BETRS, or any other two-way radio
telecommunications service, or any related service, including the sale and
installa-
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tion of cellular telephones, unless the sale and installation of such telephones
is done as an authorized agent of CELLULAR ONE. Accordingly, the allegations set
forth in this paragraph shall survive for one one (1) year period the
termination of the Management Agreement regardless of such termination.
x. XXXXXX and CELLULAR ONE understand that XXXXXX has an existing
IMTS system, and XXXXXX has agreed to place all existing two-way customers on
CELLULAR ONE's System, subject to such actions being consistent with the FCC's
rules and regulations.
8. Insurance Benefits. XXXXXX shall use its best efforts to make available
to Xxxxx X. X'Xxxxx and Xxxxxx Xxx, and any other employee of CELLULAR ONE or a
business entity formed and controlled by Xxxxx X'Xxxxx, at CELLULAR ONE's cost,
the right to participate in XXXXXX'x life insurance, dental insurance and
medical insurance plans.
9. Confidential Information including this Management Agreement: Both
parties recognize that in performing the Management Agreement that it will be
necessary for each to become conversant with certain information regarding the
business of the other that is not generally available or known to the public, or
to potential or actual competitors, including but not limited to, information
regarding the identity and individual needs of customers and prospective
customers of CELLULAR ONE and XXXXXX, trade secrets, confidential marketing
techniques and certain other confidential information concerning the business
affairs of both
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parties. Each party expressly recognizes and agrees that it would be unfair and
irreparably damaging to the other were it to disclose and/or make use of such
confidential information. Each party covenants and agrees that during the term
of this Management Agreement, and for a period one year thereafter, whether
termination is voluntary or involuntary, that it will refrain from disclosing
and/or making use of any such confidential information, except as may be
necessary in the performance of obligations hereunder or except for disclosures
to counsel. The covenants in this section are in addition to any other
restriction on the dissemination of confidential information, including this
Agreement generally, which may be recognized under any applicable law.
Accordingly, the allegations set forth in this paragraph shall sruvive for one
one (1) year period the termination of the Management Agreement regardless of
the basis for such termination.
10. Law Governing: This Management Agreement shall be interpreted
according to the substantive laws of Washington, D.C. The venue of any
proceeding, arbitration or otherwise shall be the District of Columbia.
11. Termination:
a. This Management Agreement shall terminate upon the earliest of
any of the following:
(1) The date of termination specified in Section 1 of this
Management Agreement;
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(2) A transfer or sale of the subject System, as defined in
Section 5(h) of this Management Agreement;
(3) A material breach of this Management Agreement that is not
cured consistent with subparagraph b of this Section 11; or
(4) Any other change that materially impairs the ability of
either party to comply with the terms of this contract.
b. In the event of a breach of this contract by either party hereto,
the non-breaching party shall serve on the party alleged to be committing, or
alleged to have committed, a breach notice specifying all breaches of the
contract claimed to have occurred up to that time and the date of termination of
the contract which shall be not later than forty (40) days after date of mailing
of said notice to the breaching party. Said notice shall permit the breaching
party twenty (20) days to cure or remedy any breach therein noticed. If the cure
is effected or is in the process of being effected with commercially reasonable
dispatch, this Management Agreement shall not be terminated on account of such
breach. Otherwise the party giving the notice shall have the right to terminate
all of its obligations under this contract (except those provided for in Section
10) pursuant to said notice. In all cases, the non-breaching party shall be
compensated by the other for damages occasioned by any breach.
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c. In the event of an impending sale, transfer, assignment,
assignment for the benefit of creditors, bankruptcy, or any other disposition by
XXXXXX of all or part of his interests under this Management Agreement, XXXXXX
shall notify CELLULAR ONE within five (5) days of intent of such transfer, and,
at CELLULAR ONE's option, this Management Agreement shall automatically
terminate and CELLULAR ONE shall have no further obligation to XXXXXX under this
Management Agreement, except the obligations for unpaid money earned by and due
to XXXXXX pursuant to this Management Agreement up to the date of the
termination, and except those provided for in Section 10. Notwithstanding the
foregoing, XXXXXX may convey, transfer or assign all or any part of his interest
in this Management Agreement to any corporation or other business entity
controlled by him, or as a part of any professional estate plan prepared for
XXXXXX by his attorneys or other planners provided, however, any such transfer
or conveyance or assignment shall not materially impair XXXXXX'x ability to
perform its obligations under this contract. In such event, XXXXXX shall give
CELLULAR ONE written notice of the details of the proposed transfer, and the
facts concerning the same.
12. Dispute Resolution: All disputes in connection with this contract
shall be settled by means of mandatory binding arbitration under the laws of the
District of Columbia. Arbitration shall be initiated by a notice demanding
arbitration, specifying the noticing party's appointed arbitrator, designating
28
with particularity the facts supporting the demand for arbitration and
constituting the alleged breach, the legal basis therefor and the relief
requested. Such notice shall be personally served on the other party. The other
party, upon receipt of such notice shall, within thirty (30) days after the
mailing of the notice of termination, serve on the initiating party a response
to the notice of arbitration and shall also appoint and designate an arbitrator.
Within thirty (30) days after the designation of the two (2) arbitrators above
stated, the two (2) arbitrators shall meet and agree on a third arbitrator.
Unless otherwise agreed, the three arbitrators by majority vote shall settle the
dispute. In selecting the third arbitrator, the two appointed arbitrators shall
attempt to agree on a third arbitrator who has experience in the
telecommunications industry. All costs of arbitration and reasonable attorney's
fees billed shall be paid by the non-prevailing party.
13. Control and Authority.
a. Nothing contained in this contract shall be deemed to constitute
a surrender or transfer of control of CELLULAR ONE of the right to operate the
Panama City, Florida cellular system or a sale or assignment or option to
purchase any interest in the cellular system in Panama City, Florida, by XXXXXX.
Notwithstanding anything to the contrary in this Management Agreement, CELLULAR
ONE shall have the sole and exclusive right to set rates for the cellular system
and to exercise final authority over all
29
decisions concerning the construction, operation and maintenance of the system
in the LICENSE AREA.
b. For the duration of this Management Agreement, CELLULAR ONE
agrees and specifically disclaims any right, title, claim or interest in and to
the business of the sale and installation of cellular telephones, recognizing
that said business shall be the sole property of XXXXXX.
c. No persons working in furtherance of the performance of XXXXXX'x
duties hereunder shall be the employees of CELLULAR ONE. All such persons shall
be XXXXXX'x employees, representatives, consultants or agents.
d. Notwithstanding anything to the contrary in this Management
Agreement, CELLULAR ONE shall have (i) unfettered use of all cellular business
facilities and equipment; (ii) control over daily operations; (iii) authority to
determine and carry out policy decisions; (iv) responsibility over CELLULAR ONE
employees; (v) responsibility for payment of financing obligations incurred by
CELLULAR ONE; and (vi) entitlement to monies and profits derived from operation
of the cellular facilities, except for fees due and owing to XXXXXX under this
Management Agreement.
14. Specific Performance as an Additional and/or Alternative Remedy: In
addition to any other remedies available in law or equity to the parties in
arbitration, the parties may have the right to enforce the decision of the
arbitration panel or any other decision of competent authority through specific
performance
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as an alternative and/or additional remedy. Both parties recognizing that the
unique services contemplated pursuant to this Management Agreement demand the
availability of such remedy.
15. Notices: All notices, demands, requests, offers or responses permitted
or required hereunder shall be deemed sufficient if mailed by registered or
certified mail or by reputable overnight delivery services, postage prepaid,
addressed as follows:
TO XXXXXX:
Xxxxxx X. Xxxxxx, Xx.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
AND TO:
XXXXXX'x designated counsel
Xxxxxx Xxxxxxx, Esq.
X.0. Xxx 0000
Xxxxxx Xxxx, Xxxxxxx 00000
TO CELLULAR ONE:
Xxxxx X. X'Xxxxx
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
AND TO:
Xxxxxx Xxxxxxxxx, Esq.
Lukas, McGowan, Xxxx and Xxxxxxxxx
The Federal Bar Building West
0000 X Xxxxxx, X.X.
Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
16. Severability: The invalidity or unenforceability of any particular
provision of this Management Agreement shall not
31
affect the other provisions hereof and this Management Agreement and shall be
construed in all respects as if such invalid or unenforceable provision were
omitted, provided, however, that both parties shall use their best efforts to
modify the offending provision to conform to the rules and regulations while
preserving the essential benefits of this Management Agreement to each party.
17. No Waiver of Default. No failure by either party to take action on
account of any default by the other party shall constitute a waiver of any
rights set forth in this Management Agreement as they relate to future
performance under the Agreement.
18. Successors. This Management Agreement shall be binding on and shall
operate for the benefit of all parties hereto and their respective heirs,
designees, assigness and successors in interest, including legal
representatives. However, this Management Agreement shall not be assigned
without the written consent of all parties.
19. Headings. Paragraph headings are provided for convenience only and are
not a part of this Management Agreement.
20. Integration. This Agreement contains the entire Agreement between the
Parties and supercedes all other agreements whether written or oral, except for
the lease referenced in Section 3a. This Agreement can be amended only in
writing signed by all parties hereto.
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21. Compliance with FCC Rules. Notwithstanding anything in this Management
Agreement to the contrary, both Parties agree that if any provision shall be
deemed to be inconsistent with or in violation of the FCC's rules, such
provision shall be null and void. In such event, both Parties agree to use best
efforts to modify the offending provision to conform to the FCC rules while
preserving the essential benefits of this Management Agreement to each party.
22. Related Parties. Either party may enter into any reasonable agreement
with a related party or affiliate for the performance of services or the
acquisition of equipment or other property; however, each such agreement shall
be on terms no less favorable to the other party than could readily be obtained
if it was made with a person who is not the related person or affiliate or
partner of the other party.
CELLULAR XXX XX XXXXXX XXXX, XXXXXXX,
LIMITED
By /s/ Xxxxx X. X'Xxxxx
-----------------------------------
Xxxxx X. X'Xxxxx, President
XXXXXX COMMUNICATIONS INDUSTRIES,
INC.
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx, Xx., President
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