MANAGEMENT AGREEMENT
THIS AGREEMENT is entered into as of the 30th day of September 1997,
between Pacwest Network, Inc. ("Pacwest") and GST Telecom Hawaii, Inc.
("Manager"). This Agreement, together with the Service Agreement dated September
30, 1997, supersedes the Restated and Amended Traffic Agreement and the Restated
and Amended Usage Agreement, each dated as of June 21, 1994 and restated and
amended as of November 1, 1995.
W I T N E S S E T H
WHEREAS, Pacwest is an authorized common carrier that provides long
distance telephone service by access to a network of long distance facilities
(the "Network") including microwave transmission facilities ("the Facilities")
under licenses ("the Licenses") issued to Pacwest by the Federal Communications
Commission ("FCC") set forth in Schedule A; and
WHEREAS, Manager and Pacwest desire to enter into an arrangement under
which Pacwest will maintain control of the operation of the Facilities while the
day-to-day operation and management of the Facilities will be performed by
Manager under the direction of Pacwest in accordance with the Communications Act
of 1934, as amended (the "Communications Act") and the rules and regulations
promulgated thereunder by the FCC, and in coordination with the operation of the
entire Network.
NOW THEREFORE, in consideration of the foregoing premises, the mutual
promises and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Manager Duties and Compensation.
(a) Subject Pacwest's oversight, review, supervision and
control as provided in Paragraph 2 of this Agreement, Manager shall manage and
perform the day-to-day administrative and technical operations of the
Facilities, including, but not limited to, operating and maintaining the
Facilities, implementing the terms of leases or other arrangements entered into
between Pacwest and customers pursuant to which, subject to Paragraph l(b)
below, capacity over the Facilities is made available to customers of Pacwest
(the "Leases"), and assuring compliance with the Communications Act, FCC rules
and regulations and the conditions relating to the Licenses. Manager shall
maintain such Facilities and equipment and hire and supervise such employees as
are necessary for the fulfillment of its responsibilities hereunder.
(b) Receipts from the lease of capacity over the Network
pursuant to the Leases between Pacwest and its customers shall be collected by
Manager and paid to Pacwest. Pacwest shall pay Manager the amount of $3,000 per
month as compensation for the services rendered hereunder.
2. CONTROL BY PACWEST.
(a) Pacwest shall at all times exercise ultimate direction and
control over the operation and maintenance of the Facilities and shall oversee,
review, supervise and control all of the activities of Manager. Manager shall
provide Pacwest with such books of account, records and reports, and any
information with respect to the Facilities or Manager's performance of its
duties hereunder, as Pacwest may request and shall afford Pacwest and its
-2-
officers and employees unfettered access at all times to the Facilities and to
the operation thereof.
(b) To the extent that employees of the Manager are utilized
in any aspect of the operation of the system, any such employees of the Manager
shall be immediately removed upon Pacwest's reasonable finding that good cause
for removal exists. The Manager agrees to maintain appropriate workmen's
compensation and disability insurance to satisfy the potential claims of any and
all employees and/or agents of Manager or its affiliates.
(c) Notwithstanding anything to the contrary contained in this
Section, without the prior written approval of Pacwest, Manager shall not be
authorized to do any of the following on behalf of Pacwest:
(i) grant a security interest in any of the assets of
Pacwest associated with the Facilities:
(ii) sell, lease, trade, exchange or otherwise dispose of
any property of Pacwest, including Pacwest's Licenses;
(iii) Make any FCC filings regarding the Facilities or
Pacwest's Licenses with the FCC.
3. OPERATION OF FACILITIES AND COMPLIANCE WITH LAW. (a) Manager
shall maintain the overall network quality of the Facilities, consistent with
common carrier industry standards, government regulations and sound business
practices.
-3-
(b) Manager shall at all times operate the Facilities in
compliance with the Communications Act and any other federal, state or local
rules, regulations and policies of other governmental agencies with authority
over Pacwest and/or the Facilities, as such laws, rules, regulations and
policies are in effect from time to time.
4. MODIFICATION OF FACILITIES. Manager may initiate modification
to the Facilities from time to time, at Manager's expense, subject to Pacwest's
express written approval of any proposed modifications. If prior FCC approval of
such modifications is required, Manager shall, at its expense, prepare an
appropriate application for Pacwest to approve, sign and file with the FCC, and
no such change shall be implemented prior to the grant of FCC consent. Any
application for a license to cover any construction permit shall similarly be
prepared by Manager for approval and filing by Pacwest.
5. FCC FILINGS. Manager shall cooperate with Pacwest in
furnishing any information which may be requested by the FCC in connection with
the operation of the Facilities, including, but not limited to, any technical
and/or engineering information. Manager shall prepare for Pacwest's approval and
filing with the FCC, appropriate license renewal applications and such other
reports, documents, and filings as may be necessary from time to time to keep
the Licenses in full force and effect for operation of the Facilities. Pacwest
shall cooperate with Manager in signing and filing such application and other
reports, documents and filings as Manager shall from time to time prepare and
submit to Pacwest.
6. NOTICES. All notices and other communications hereunder shall
be given in writing and shall be deemed to have been duly given if delivered
personally, if transmitted by telecopier to the number (s) designated below, or
if mailed by first class United States
-4-
mail, postage prepaid, to the address(es) designed below, or to such other
address as either party may specify from time to time. All notices and other
communications hereunder shall be deemed to have been given on the date of
receipt.
If to Pacwest:
Pacwest Network, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopier: (000) 000-0000
If to Manager:
GST Telecom Hawaii, Inc.
0000 X.X. Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopier: (000) 000-0000
7. TERM. The term of this Agreement shall begin as of the date
hereof, and shall terminate upon the occurrence of any of the following events
(unless earlier terminated pursuant to the provisions of Paragraph 8 hereof):
(a) revocation or expiration without renewal of all of the
Licenses for operation of the Facilities:
(b) mutual agreement of the parties to terminate this
Agreement. 8. TERMINATION FOR CAUSE. Pacwest shall have the right to terminate
this Agreement upon notice to Manager at any time during the term hereof upon
the occurrence of any of the following events:
(a) any material failure by Manager to perform any of its
obligations under this Agreement;
-5-
(b) the filing of a voluntary or involuntary petition by
or against Manager under the Bankruptcy laws of the United States;
(c) the foreclosure of any lien or security interest in,
or the placement of or issuance of any levy, writ of attachment, writ of
garnishment, writ of execution or similar process against Manager or any
property of Manager or securities representing an ownership interest in Manager;
(d) the refusal by the FCC, any other state, federal, or
local regulatory agency having jurisdiction over the consummation of
transactions contemplated hereby; or any third party whose consent is required
to permit the consummation of transactions contemplated hereby to grant any
consent or approval necessary to permit the parties to consummate such
transactions, and, in the case of the FCC or any other regulatory agency, such
refusal is no longer subject to administrative or judicial reconsideration or
review;
(e) the determination of a third party with expertise in
FCC regulation mutually selected by Pacwest and Manager, that the acts of
Manager or the terms of this Agreement have been or are likely to be determined
to be inconsistent with the rules and policies of the FCC or any other
government agency having jurisdiction over the Licenses as such rules and
policies apply to the Licenses.
9. INDEMNIFICATION.
(a) Each party shall indemnify and hold harmless the other
party against any and all damages, claims, actions or suits by third parties
arising out of or in connection with such indemnifying party's performance of
its obligations hereunder.
-6-
(b) In no event will either party hereto be liable to the
other party for any indirect, special, incidental or consequential losses or
damages, including, without limitation, loss of revenue, loss of customers or
clients, loss of goodwill or loss of profits arising in any manner from this
Agreement or the performance of nonperformance of obligations hereunder.
10. NO-WAIVER. No term or provision of this Agreement shall be
deemed waived and no breach or default shall be deemed excused unless such
waiver or consent shall be in writing and signed by the party granting waiver or
consent. No consent by any party to, or waiver of, a breach or default by the
other, whether express or implied, shall constitute a consent to, waiver of, or
excuse for any different or subsequent breach or default.
11. CESSATION OF MANAGEMENT SERVICES. On the effective date of
termination of this Agreement under either Paragraph 7 or 8 hereof, Manager
shall cease provision of all management and operational services related to the
Facilities. Pacwest and Manager shall use their best efforts to ensure a smooth
transition in the event of termination of this Agreement.
12. ASSIGNMENT. Neither party shall assign this Agreement or any
of its rights or obligations under this Agreement without the prior written
consent of the other party, and any attempted assignment or transfer by either
party not in compliance with this provision shall be null and void AD INITIO,
provided however that Manager shall be permitted to assign this Agreement and
its rights and obligations hereunder to any affiliate of Manager and/or Tomen
Corporation or any of its affiliates. This Agreement shall bind and inure to the
benefit of any permitted successors and assigns of the parties.
-7-
13. APPLICABLE LAW. This Agreement shall be construed in
accordance with the laws of the State of Delaware, not including the conflicts
of laws principles of that States.
14. CONSTRUCTION. It is the intent of the parties that operation
of the Facilities under this Agreement comply with the Communications Act, and
all provisions of this Agreement shall be so construed.
15. SEVERABILITY. If any provision of this Agreement shall be
declared illegal, invalid or unenforceable by any governmental authority with
jurisdiction over Manager, Pacwest, and/or the Facilities, then the remainder of
this Agreement shall remain in full force and effect without the offending
provision, provided that such remainder substantially reflects the original
agreement of the parties.
16. AMENDMENTS. This Agreement represents the entire
understanding of the parties hereto with respect to the subject matter hereof,
supersedes any and all prior negotiations, understandings and agreements with
respect thereto, and may be amended only by a writing signed by both parties.
17. NO JOINT VENTURE. Nothing in this Agreement shall be
construed to make Pacwest and Manager joint venturers or to impose upon either
of them any liability as such.
18. LIMITATION ON LIABILITY. Neither Manager nor Pacwest shall
have any liability for failure to comply with this Agreement if such failure
results from the occurrence of any contingency beyond the reasonable control of
such party.
19. COUNTERPART . This Agreement may be executed in any number of
counterparts, each of which shall be considered an original and all of which
taken together
-8-
shall constitute one Agreement binding on both of the parties hereto,
notwithstanding that both parties shall not have signed the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
PACWEST NETWORK, INC. ("Pacwest")
By: /s/ Xxxx Xxxxx
----------------------------------
Xxxx Xxxxx
President
GST TELECOM HAWAII, INC. ("Manager")
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxx
Vice President
-9-
The undersigned hereby agree that the foregoing agreement and the
Service Agreement of even date therewith supersede the Restated and Amended
Traffic Agreement and the Restated and Amended Usage Agreement, each dated as of
June 21, 1994 and restated and amended as of November 1, 1995.
GST Pacwest Telecom
Hawaii, Incorporated
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxx
Vice President
GST Telecom Inc.
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxx
Vice President
-10-
SCHEDULE A
SEPTEMBER 22, 1997
PACWEST MICROWAVE LICENSE CHART
--------------------------------------------------------------------------------
CALL SIGN SITE FCC FILE NO.
--------------------------------------------------------------------------------
WNTM 942 Xxxxxxxx, XX 000000
C703102
--------------------------------------------------------------------------------
WNTM 943 Xxxxxxxx, XX 000000
C703101
--------------------------------------------------------------------------------
WMJ 000 Xxxxxxxxx Xxxxxx, XX 00000-XX-X-00
94-13239
--------------------------------------------------------------------------------
WMJ 475 2121 Ala Wai, HI 18183-CF-P-91
94-13239
--------------------------------------------------------------------------------
WMJ 476 Waterfront, HI 18184-CF-P-91
94-13239
--------------------------------------------------------------------------------
WMJ 477 Pacific Tower, HI 18185-CF-P-91
94-13239
--------------------------------------------------------------------------------
WMJ 478 Xxxxxxxxxx, HI 18186-CF-P-91
94-13239
--------------------------------------------------------------------------------
WMJ 000 Xxxxxxx Xxxxx, XX 00000-XX-X-00
94-13239
--------------------------------------------------------------------------------
WHO 653 Xxxxxxxx, XX 00-00000
--------------------------------------------------------------------------------
WHO 654 Mauna Kapu, HI 1242-CF-1-87
30024-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 657 Wahiawa, HI 11406-CF-L-86
30013-CF-R-91
94-13240
--------------------------------------------------------------------------------
-11-
--------------------------------------------------------------------------------
WHO 658 Pearlridge, HI 11407-CF-L-86
30014-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 659 Grosvenor, HI 00000-XX-X-00
00000-XX-X-00
94-13240
--------------------------------------------------------------------------------
WHO 660 Ala Wai, HI 11409-CF-L-86
30016-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 661 Koko Head, HI 11410-CF-L-86
30017-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 662 Kahala, HI 94-13240
--------------------------------------------------------------------------------
WHO 664 Puu Nana, HI 11417-CF-L-86
30026-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 665 Kailua, HI 1243-CF-L-87
30019-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 666 Waimanalo, HI 1244-CF-L-87
30020-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 000 Xxxxxxxxxx, XX 00000-XX-X-0
30010-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 669 Kaanapali, HI 94-13240
--------------------------------------------------------------------------------
-12-
--------------------------------------------------------------------------------
WHO 670 Keonehunehune, HI 00000-XX-X-00
0000-XX-X-00
00000-XX-X-00
94-13240
--------------------------------------------------------------------------------
WHO 671 Kahuludi, HI 11415-CF-L-86
30011-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 672 Kihei, HI 11416-CF-L-86
30012-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 673 Huehue, HI 1246-CF-L-87
30021-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 674 Kona, HI 1247-CF-L-87
30022-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 675 Sheep Station, HI 1248-CF-L-87
30023-CF-R-91
94-13240
--------------------------------------------------------------------------------
WHO 676 Hilo, HI 1249-CF-L-87
30025-CF-R-91
94-13240
--------------------------------------------------------------------------------
XXX 000 Xxxxxx Xxx, XX 00-00000
--------------------------------------------------------------------------------
WPJD 398 Xxxxx, XX 0000000
--------------------------------------------------------------------------------
WPJD 399 Xxxxxxxxx, XX 0000000
--------------------------------------------------------------------------------
-13-
