AFFILIATION AGREEMENT
THIS AFFILIATION AGREEMENT (this "Agreement") is made as of February 28,
1997, by and among XXXXXX COMMUNICATIONS CORPORATION, an Oklahoma corporation
("DCC"), and XXXXXX CELLULAR OF ARIZONA, INC., an Oklahoma corporation ("DCA" or
"Operator"), and WMC PARTNERS, L.P., a Delaware limited partnership ("WMC").
WITNESSETH:
WHEREAS, WMC seeks, through operating its own Systems (as defined below)
and through affiliation, roaming and other arrangements with other operators of
Systems, to establish and maintain a seamless wireless communications network
and to establish among participants therein certain minimum levels of common
customer service and technical capabilities; and
WHEREAS, DCC and Operator have determined that certain benefits of affilia
tion, including but not limited to those arising from increased scale and scope
of services, would inure to Operator by aligning itself with a larger scale
provider of wireless communications services.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms have
the following meanings:
"AFFILIATE" means any Person that, directly or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with the Person specified.
"AFFILIATED SYSTEM" means a WMC System or any other System that offers
Services under the Brands.
"BRANDS" mean the service marks, trademarks, trade names, symbols or
designs used, from time to time, by the WMC Systems in connection with the offer
and sale of Products and Services.
"CELLULAR SYSTEM" means a radio communications system authorized under
the rules for the domestic public cellular
radio telecommunications service designated as Subpart K of Part 22 of the
FCC Rules in effect as of the date hereof or any revision thereto or
successor thereof which may be in effect from time to time, including the
network, marketing, distribution, sales, customer interface and operations
functions relating thereto.
"CONTROL" (including the terms "controlling," "controlled by" and
"under common control with") of a Person means (i) the possession, direct or
indirect, of the power to vote 50% or more of the voting securities or other
voting interests of such Person, or (ii) the possession, directly or
indirectly, of the affirmative power to direct, or cause the direction of,
the management and policies of such Person, whether through the ownership of
voting securities or other voting interests, by contract or otherwise.
"EFFECTIVE DATE" means the date on which the closing of the
transactions contemplated by the Purchase Agreement occurs.
"ESMR SYSTEM" means any commercial mobile radio system authorized
under the rules for Enhanced Specialized Mobile Radio services designated
under Subpart S of Part 90 of the FCC Rules in effect as of the date hereof
or any revision or successor thereof, which may be in effect from time to
time, including the network, marketing, distribution, sales, customer
interface and operations functions relating thereto.
"FCC" means the Federal Communications Commission or any successor
agency or entity performing substantially the same functions.
"FEATURES" means the dialing plans, feature codes and other
technical capabilities related to the provision of Services.
"LICENSE" means any permit, license, waiver or authorization from any
governmental body having jurisdiction over a Person required for conduct of an
activity, including, without limitation, any FCC license or any certificate of
public convenience and necessity.
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"OPERATOR'S SERVICE AREA" or "ARIZONA RSA # 5" means the rural
service area designated by the FCC as Cellular Market No. Arizona 5.
"OPERATOR'S SYSTEM" means the Cellular System controlled by
Operator in Arizona RSA # 5.
"PARTNER" means any general or limited partner of WMC.
"PCS SYSTEM" means a radio communications system authorized under
the rules for broadband personal communications services designated as
Subpart E of part 24 of the FCC Rules as of the date hereof, or any revision
thereto or successor thereof which may be in effect from time to time,
including the network, marketing, distribution, sales, customer interface and
operations functions relating thereto.
"PERSON" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company,
trust, estate, unincorporated organization, governmental or regulatory body
or other entity.
"PLANS" means subscriber purchasing plans for Products and/or
Services.
"PRODUCTS" means subscriber equipment offered for sale or lease and
any goods and other property ancillary thereto.
"PURCHASE AGREEMENT" means that certain agreement dated as of
February _, 1997 among U S WEST New Vector Group, DCA, AZTEL, Inc., Gila
River Telecommunications, Inc. and Tohono X'xxxxx Utility Authority, as such
agreement may be amended from time to time.
"SERVICE AREA" means, as to any Person, the geographic territory in
which such Person provides Services.
"SERVICES" means commercial mobile radio services provided by Systems,
including, without limitation, voice and data transport, and the services
ancillary thereto.
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"SYSTEM" means a Cellular System, an ESMR System or a PCS System.
"TRADEMARK SUBLICENSE AGREEMENT" means the trademark sublicense
agreement in the form attached as Exhibit A to be entered into between WMC and
Operator on the Effective Date, as amended from time to time, and any other
Brand license or sublicense agreement executed in substitution therefor.
"WMC SYSTEMS" means those Systems controlled by WMC.
2. PERFORMANCE STANDARDS.
(a) PERFORMANCE STANDARDS. WMC may establish minimum standards
for various aspects of the WMC Systems and for the operations thereof (the
"Performance Standards"), including but not limited to certain minimum
Features, Plans, Products and Services to be offered by the WMC Systems. WMC
may revise the Performance Standards from time to time in its reasonable
discretion. The Performance Standards will be generally consistent with
industry practices and capabilities. Set forth on Exhibit B are the initial
Performance Standards (the "Initial Performance Standards").
(b) COMPLIANCE WITH PERFORMANCE STANDARDS. Operator will cause
Operator's System to comply with the Initial Performance Standards and any
revised Performance Standards of which WMC has notified Operator and to which
Operator has not reasonably objected by notice to WMC within 10 days after
receiving notification of the revised Performance Standard. Operator shall
be deemed to comply with a Performance Standard so long as Operator's
performance with such Performance Standard equals or exceeds the median
performance recorded in respect thereto for the same date or period by the
WMC Systems. Subject to Section 7, upon request of Operator and solely for
the purpose of confirming the median performance of the WMC Systems with a
Performance Standard, WMC shall furnish Operator with summary information for
the applicable date or period in respect of the performance of the WMC
Systems for any Performance Standard as to which Operator fails to equal or
exceed the median performance of the WMC Systems.
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(c) SURVEYS.
(i) The parties recognize that Operator and WMC may wish
to obtain market research data or other information related to Operator's
System or to Features, Plans, Products or Services. To this end, WMC agrees
to conduct or cause a third party to conduct surveys of subscribers or other
Persons within Operator's Service Area (each a "Survey") at least on an
annual basis (the "Annual Survey") and may, in its sole discretion, conduct
or cause a third party to conduct additional Surveys from time to time.
(ii) Annually and at such other times as WMC determines to
conduct a Survey or cause a Survey to be conducted, Operator will, upon WMC's
request, furnish promptly to WMC or such third party a complete and accurate
list of its subscribers in such a format as may be reasonably requested by
WMC or such third party, together with such other information as WMC or such
third party organization determines is reasonably necessary to conduct the
Surveys. Operator authorizes WMC or such third party to contact any and all
of its subscribers solely for the purposes of conducting the Surveys. WMC
will furnish or cause any such third party to furnish Operator with copies of
such Surveys, the results therefrom and any market data so obtained with
respect to Operator's Service Area. WMC will treat and will cause any third
party to treat Operator's list of subscribers and the information obtained or
generated in connection with such Surveys in accordance with the provisions
of Section 7 hereof. All Annual Surveys shall be at Operator's expense.
(d) INSPECTION. In order to determine the compliance of
Operator's System with the Performance Standards referred to in Section 2(a),
WMC and its representatives will have the right to meet with Operator's
employees and officers and to inspect the operations of Operator's System,
including conducting reasonable on-site tests. Such inspections will be
conducted on reasonable prior notice, during normal business hours and will
be performed in a manner which does not unreasonably interfere with the
operations of Operator's System. The costs of any such inspection will be
borne by WMC. If WMC determines that Operator's System is not in compliance
with any such Performance Standard, it will notify Operator in writing of (A)
the nature of the noncompliance and (B) the action (or omission) necessary to
cure the noncompliance. In such event, WMC may also specify within such
notice or by separate no-
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xxxx, a date not less than 60 days after such notice is delivered to
Operator, by which such noncompliance must be remedied.
3. BRANDS; ADVERTISING.
(a) BRANDS. All Products and Services offered and sold by
Operator's System will be offered and sold exclusively under the Licensed
Marks (as defined in the Trademark Sublicense Agreement) pursuant to the
terms and conditions of the Trademark Sublicense Agreement, except for any
Product that Operator is prohibited from offering or selling under the
Licensed Marks under the terms of the purchase agreement therefor, in which
case such Product may be offered and sold under the brand of the manufacturer
or distributor thereof. WMC will have the right, in its sole discretion, to
substitute other Brand(s) for the Licensed Marks or to require Operator's
System to use additional Brand(s) in connection with some or all of the
Products and Services; provided that any Brand to be used by and licensed to
Operator will be substantially the same as a Brand used in the State of
Arizona by the WMC Systems. If WMC designates any substitute or additional
Brand, Operator will enter into a license agreement in respect of such Brand
in such form as will be reasonably prescribed by WMC and will use such Brand
only in compliance with the terms and conditions set forth in such license
agreement; provided, however, that Operator will not be required to enter
into any license agreement that provides for compensation thereunder that is
in addition to that provided herein or the Trademark Sublicense Agreement.
(b) ADVERTISING.
(i) WMC and the Affiliated Systems may from time to time
implement or participate in advertising programs that directly or indirectly
promote the Brands on a national or regional basis ("Advertising"). Such
Advertising may include, but is not limited to, (A) newspaper, magazine and
written periodical advertising; (B) radio scripts, tape recordings and audio
advertising; (C) television scripts, videotape recording and electronic
advertising; (D) telephone directories; (E) billboards, in-store point of
purchase or other display advertising; (F) flyers or similar advertising; and
(G) direct mail materials.
(ii) For each calendar year or portion thereof after the
Effective Date, Operator will pay WMC an amount equal to
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$0.15 multiplied by the total population of the Operator's Service Area as of
the end of the immediately preceding calendar year as estimated by Rand
XxXxxxx to support the activities of WMC and its Affiliates in connection
with the development, design, production, placement, printing, publishing,
display, distribution, mailing and airing of Advertising. WMC will use
reasonable efforts to coordinate with Operator in respect of the placement,
publication, display, distribution, mailing or airing of Advertising in
Operator's Service Area. Operator acknowledges and agrees that WMC is not
obligated to insure that Operator benefits directly from any expenditures
made by WMC with respect to such activities.
(iii) The payment required under Section 3(b)(ii) will be
payable within 30 days after the first day of each calendar year (or in the
case of 1997, within 30 days after the Effective Date). Notwithstanding the
foregoing, Operator will not be required to pay the amount due with respect
to 1997 until the first day of the seventh full calendar month following the
Effective Date. Unpaid amounts (including any amount deferred pursuant to the
preceding sentence) will accrue interest at the "prime rate" (i.e., the rate
reported, from time to time, by the Wall Street Journal as the base rate on
corporate loans posted by at least 75% of the 30 largest banks in the United
States) plus 2% or, if lower, the highest rate permitted by applicable law.
(iv) Operator will use reasonable efforts to coordinate its
promotional activities (including without limitation promotion of Plans) with
Affiliated Systems in-Service Areas which are adjacent to Operator's Service
Area and shall bear the costs and expenses of its own promotional activities.
4. ROAMING AGREEMENTS.
(a) RECIPROCAL AGREEMENTS. Operator will enter into and maintain
in effect during the term of this Agreement (and thereafter to the extent
provided in Section 4(b)), roaming agreements for Operator's System with each
WMC System having a Service Area within the State of Arizona, which
agreements will provide for mutual roaming rights between Operator's System
and each such WMC System. Such roaming agreements will (i) contain no pricing
elements other than for airtime used, (ii) provide initial reciprocal prices
for airtime during the five-year period commencing on the Effective Date of
$.60 per minute of airtime used and (iii) provide
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reciprocal prices for airtime for periods thereafter that do not exceed $0.60
per minute of airtime used. Notwithstanding the foregoing, if the reciprocal
price pursuant to subsections 4(a)(ii) and (iii) for airtime used in any such
agreement exceeds the price available from one or more other service
providers in the Operator's Service Area, Operator and WMC shall use their
respective best efforts promptly to reduce such price so that the applicable
price under such agreement for airtime used is competitive with the price
available from such other service provider(s).
(b) CONTINUATION OF ROAMING AGREEMENTS. If this Agreement is
terminated for any reason prior to the fifth anniversary of the Effective
Date (the "Five Year Date"), Operator and DCC agree that WMC may, if it so
elects in its sole discretion, continue any or al! of the roaming agreements
entered into pursuant to Section 4(a) until the Five Year Date. Operator and
DCC further agree that if Operator or DCC proposes to effect a Transfer (as
defined below) prior to the Five Year Date that would result in a Change of
Control of Operator's System, if WMC so elects in its sole discretion, such
Transfer will be subject to the condition (which may not be waived) that the
transferee assume and agree to perform any or all of the roaming agreements
entered into pursuant to Section 4(a) and that any such roaming agreements
continue until the Five Year Date notwithstanding any termination of this
Agreement.
5. REPRESENTATIONS AND WARRANTIES OF WMC. WMC represents to Operator and
DCC that:
(a) ORGANIZATION. It is duly organized, validly existing and in
good standing under the laws of the state of its organization and has all
requisite power and authority to carry out its business as now conducted, and
to enter into this Agreement and to perform its obligations hereunder. It is
duly qualified or licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary.
(b) AUTHORITY. This Agreement has been duly authorized by all
necessary partnership action on the part of WMC. It has been duly executed
and delivered by one of its duly authorized officers or partners and
constitutes its valid and binding obliga-
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tion, enforceable against it in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforceability of creditors' rights generally and except that
the remedy of specific performance or similar equitable relief may be subject
to equitable defenses and to the discretion of the court before which
enforcement is sought.
(c) AUTHORIZATIONS AND CONSENTS: NO VIOLATION.
(i) Neither its execution and delivery of this Agreement nor
its performance hereunder will conflict with, or result in any breach or
violation of, any provision of any of its formative organizational or
governance agreements; or constitute, with or without notice or the passage
of time or both, a breach, violation or default, create a lien or give rise
to any right of termination, modification, cancellation, prepayment or
acceleration under any order, writ, injunction, decree, law, statute, rule or
regulation, franchise, License or any mortgage, indenture, lease, agreement
or other instrument by which it is bound or to which its properties are
subject, except for breaches, violations, defaults, liens or rights of
termination, modification, cancellation, prepayment or acceleration which
would not, singly or in the aggregate, materially adversely affect its
ability to perform the obligations contemplated by this Agreement.
(ii) No authorizations are required to be obtained from any
governmental body with respect to its execution of this Agreement and its
performance hereunder.
(iii) No consents are reasonably anticipated to be required to
be obtained pursuant to any partnership, joint venture or other similar
agreement or any material contract, agreement, License or instrument to which
is a party with respect to its execution of this Agreement and its
performance hereunder.
(d) AGREEMENTS WITH THIRD PARTIES; EMPLOYMENT AND NON-COMPETITION
AGREEMENTS. Neither it nor any of its Affiliates is a party to any
employment agreement or a party to or otherwise bound by any non-competition,
non-solicitation or other similar agreement relating to the provision of
Services or that would otherwise be inconsistent with the performance of its
obligations under this Agreement.
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6. REPRESENTATIONS AND WARRANTIES OF OPERATOR AND DCC. Each of Operator
and DCC, jointly and severally, represent and warrant to WMC that:
(a) ORGANIZATION. It is duly organized, validly existing and in
good standing under the laws of the state of its organization and has all
requisite power and authority to carry out its business as now conducted, and
to enter into this Agreement and to perform its obligations hereunder. It is
duly qualified or licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary.
(b) AUTHORITY. This Agreement has been duly authorized by all
necessary partnership or corporate action, as applicable, on the part of
Operator and DCC. It has been duly executed and delivered by one of its duly
authorized officers or partners and constitutes its valid and binding
obligation, enforceable against it in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, reorganization or other
laws affecting the enforceability of creditors' rights generally and except
that the remedy of specific performance or similar equitable relief may be
subject to equitable defenses and to the discretion of the court before which
enforcement is sought.
(c) AUTHORIZATIONS AND CONSENTS: NO VIOLATION.
(i) Neither its execution and delivery of this Agreement nor
its performance hereunder will conflict with, or result in any breach or
violation of, any provision of any of its formative organizational or
governance agreements; or constitute, with or without notice or the passage
of time or both, a breach, violation or default, create a lien or give rise
to any right of termination, modification, cancellation, prepayment or
acceleration under any order, writ, injunction, decree, law, statute, rule or
regulation, franchise, License or any mortgage, indenture, lease, agreement
or other instrument by which it is bound or to which its properties are
subject, except for breaches, violations, defaults, liens or rights of
termination, modification, cancellation, prepayment or acceleration which
would not, singly or in the aggregate,
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materially adversely affect its ability to perform the obligations
contemplated by this Agreement.
(ii) No authorizations are required to be obtained from any
governmental body with respect to its execution of this Agreement and its
performance hereunder.
(iii) No consents are reasonably anticipated to be required to
be obtained pursuant to any partnership, joint venture or other similar
agreement or any material contract, agreement, License or instrument to which
is a party with respect to its execution of this Agreement and its
performance hereunder.
(d) AGREEMENTS WITH THIRD PARTIES; EMPLOYMENT AND NON-COMPETITION
AGREEMENTS. Neither it nor any of its Affiliates is a party to any
employment agreement or a party to or otherwise bound by any non-competition,
non-solicitation or other similar agreement relating to the provision of
Services or that would otherwise be inconsistent with the performance of its
obligations under this Agreement.
(e) OWNERSHIP. DCC is the sole record and beneficial owner of all
of the outstanding equity in and voting interests of DCA. On the Effective
Date, Operator will be the sole owner of all of the assets of Operator's
System.
7. CONFIDENTIAL INFORMATION.
(a) Each of DCC, Operator and WMC will, and will cause its
respective partners, shareholders, directors, officers, employees, and agents
(collectively, when used with respect to any party, its "Representatives"),
to keep secret and retain in strictest confidence, except as provided in
Section 7(b) hereof, any and all Confidential Information and will not
distribute, disseminate or disclose such Confidential Information, and will
cause its Representatives not to distribute, disseminate or disclose such
Confidential Information, except to (i) any Representative of WMC or Operator
on a "need to know" basis in connection with this Agreement or the operation
of Operator's System, the WMC Systems (or the Affiliated Systems) and their
respective businesses or (ii) to any lender to Operator or WMC on a "need to
know" basis in connection with the financing of the Operator's System or the
WMC Systems, and any such Person receiving Confidential Information pursuant
to this
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Section 7(a) will use, and will cause its Representatives or lenders to use,
such Confidential Information only for the benefit of DCC, Operator, WMC and
the WMC Systems (or the Affiliated Systems) or for any other specific
purposes for which it was disclosed to such party. All Confidential
Information disclosed pursuant to this Agreement will remain the property of
the Person whose property it was prior to such disclosure.
(b) In the event that DCC, Operator, WMC or any Person to whom any
of them transmits any Confidential Information becomes legally compelled (by
oral questions, interrogatories, requests for information or documents,
subpoena, investigative demand or similar process) to disclose any of the
Confidential Information, such Person will use its best efforts to provide
WMC and Operator with prompt written notice prior to disclosure (not less
than 24 hours) so that WMC, Operator, as applicable, may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions
of this Agreement. In the event that such protective order or other remedy
is not obtained, or that DCC, Operator or WMC, as applicable, waives
compliance with the provisions of Section 7(a), the Person who is compelled
to disclose such Confidential Information will furnish only that portion of
the Confidential Information which (based on the advice of counsel) it is
legally required to disclose and will exercise its best efforts to obtain
reliable assurance that protective treatment will be accorded the
Confidential Information.
(c) Upon termination of this Agreement, Operator, DCC and WMC will,
and will cause their respective Representatives to, return to the appropriate
party all documents that contain Confidential Information or, if the party so
requests, cause such documents to be destroyed.
(d) For purposes of this Section, "Confidential Information" means
all confidential documents and information (including, without limitation,
confidential commercial information and information with respect to customers
and proprietary technologies or processes and the design and development of
new products and services) concerning Operator, Operator's System, WMC, its
Partners or other Affiliates, the WMC Systems or the Affiliated Systems,
furnished to or obtained by a party to this Agreement by or from the other
parties or their Representatives (as such term is defined in Section 7(a)
hereof) in connection with this Agreement
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or the operation of Operator's System, the Affiliated Systems or the parties'
respective businesses, except to the extent that such information is (i)
generally available to the public other than as a result of a breach by the
receiving Person of the provisions of Section 7 hereof; (ii) already in the
possession of the receiving Person or its Representatives without restriction
and prior to any disclosure pursuant to any of the terms of this Agreement;
(iii) lawfully disclosed to the receiving Person or its Representatives by a
third party who is free lawfully to disclose the same; or (iv) independently
developed by the receiving Person or its Representatives without use of any
Confidential Information obtained in connection with this Agreement or the
operation of Operator's System, the Affiliated Systems or the parties'
respective businesses.
8. INDEMNIFICATION.
(a) INDEMNIFICATION BY OPERATOR OR DCC. DCC and Operator jointly
and severally will, to the fullest extent permitted by law, indemnify, defend
and hold harmless WMC, its Partners, officers, directors, employees, agents
and control Persons from any and all losses, claims, damages, liabilities,
costs and expenses (including reasonable attorneys' fees and expenses)
(collectively "Losses") arising from claims by Persons other than WMC and its
Affiliates and their respective officers, directors, employees, partners,
agents and control Persons and which relate to the performance or
non-performance of Operator or DCC of their respective duties or breach of
their representations hereunder, except where such Losses are due to the
negligence or willful misconduct of WMC, its partners, officers, directors,
employees, agents and control Persons or where such Losses have been
reimbursed to WMC directly by Operator's or DCC's insurer.
(b) INDEMNIFICATION BY WMC. WMC will, to the fullest extent
permitted by law, indemnify, defend and hold harmless Operator, its partners,
officers, directors, employees, agents and control Persons from any and all
Losses arising from claims by Persons other than Operator, DCC or their
respective Affiliates and their respective officers, directors, employees,
agents and control Persons and which relate to the performance or
non-performance of WMC of its duties or breaches of its representations
hereunder, except where such Losses are due to the negligence or willful
misconduct of Operator, its shareholders, officers, directors, employ-
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ees, agents and control Persons or where such Losses have been reimbursed to
Operator directly by WMC's insurer.
(c) THIRD PARTY CLAIMS. Promptly after receipt by an indemnified party
under this Section 8 of notice of any claim or the commencement of any action
(including any governmental action), such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party under this
Section 8, deliver to the indemnifying party a written notice of the claim or
action and the indemnifying party will have the right to participate in, and,
to the extent the indemnifying party so desires and promptly notifies the
indemnified party in writing of such desire, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party; provided, however,
that an indemnified party will only have the right to retain its own counsel,
with the fees, disbursements and other charges to be paid by the indemnifying
party, if (i) representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate (based on the
reasonable advice of counsel to the indemnified party) due to actual or
potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding (provided that if such
other party is the indemnifying party, the indemnifying party will not have
the right to direct the defense of such action on the part of the indemnified
party), (ii) the indemnified party has reasonably concluded (based on the
reasonable advice of counsel) that there may be legal defenses available to
it or other indemnified parties that are different from or in addition to
those available to the indemnifying party, (iii) the indemnifying party has
not in fact employed counsel reasonably satisfactory to the indemnified party
within a reasonable time after receiving notice of the claim or commencement
of the action or (iv) the employment of counsel at the indemnifying party's
expense by the indemnified party has been authorized in writing by the
indemnifying party specifying that it will pay for such counsel. If, and only
to the extent that, the failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action results
in the forfeiture of substantive rights or defenses of the indemnifying party
in such action, such failure will relieve such indemnifying party of
liability to the indemnified party under this Section 8, but the omission so
to deliver written notice to the indemnifying party will
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not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 8.
9. TERM; TERMINATION.
(a) TERM. The initial term of this Agreement will expire on the
twentieth anniversary of the Effective Date. Thereafter, the term will
automatically be extended for additional five-year periods unless either
Operator or WMC makes a valid election not to renew this Agreement. An
election not to renew will be valid only if in writing and delivered to the
other at least one year prior to the expiration of the then current term.
(b) TERMINATION BY OPERATOR. This Agreement may be terminated by
Operator at any time following the occurrence of any of the following events:
(i) a material breach of this Agreement by WMC which has
not been cured within 90 days after Operator has delivered written notice to
WMC of such breach;
(ii) a Change of Control of Operator's System;
(iii) a termination of the Trademark Sublicense Agreement;
(iv) dissolution, liquidation or winding-up of WMC unless
an Affiliate of WMC or of AirTouch Communications, Inc. (or any successor
thereto whether by merger, spin-off or otherwise) assumes WMC's obligations
hereunder;
(v) the suspension, revocation, or surrender of
the FCC License for the Phoenix Service Area that is currently held by U S
West New Vector Group (unless such FCC License is promptly thereafter awarded
to WMC or a permitted assignee of WMC hereunder) or the sale or other
disposition of such FCC License to a Person other than WMC or a permitted
assignee of WMC hereunder;
(vi) the entry by a court having jurisdiction of (A) a
decree or order for relief in respect of WMC in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudicating WMC
bankrupt or insolvent or approv-
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ing as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of WMC under any applicable
federal or state law, or appointing a custodian, receiver, liquidator,
assignee, trustee or other similar official of WMC or of any substantial part
of its property; or
(vii) the commencement by WMC of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of WMC in any involuntary case or
proceeding under applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy
or insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state law or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or other similar official of WMC or
any substantial part of its property, or the making by it of an assignment
for the benefit of creditors.
(c) TERMINATION BY WMC. This Agreement may be terminated
by WMC at any time following the occurrence of any of the following events:
(i) a payment default which has not been cured within
60 days or other material breach of this Agreement by Operator which has not
been cured within 90 days after WMC has delivered written notice to Operator
of such breach;
(ii) upon termination of the Trademark Sublicense
Agreement;
(iii) dissolution, liquidation or winding-up of Operator;
(iv) the suspension, revocation or other loss of, or
surrender, sale or other disposition of, Operator's FCC License for
Operator's Service Area;
(v) Operator's failure to consent to any revised
Performance Standard;
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(vi) the occurrence of any event which is, or after
notice or passage of time or both would be an "event of default" under any
material debt of Operator or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any debt by Operator, whether such debt now exists or will hereafter be
created, provided that such event will not permit termination hereof unless
either (A) such event will remain uncured at the earlier of the end of any
cure period available under the applicable loan agreement or other instrument
or six months from the first occurrence thereof or (B) the lender, obligee or
other beneficiary will assert any remedies under the applicable loan
agreement or other instrument;
(vii) the entry by a court having jurisdiction of (A) a
decree or order for relief in respect of Operator in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudicating
Operator bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of Operator under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee or other similar of
official of Operator or of any substantial part of its property;
(viii) the commencement by Operator of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of Operator in any involuntary case or
proceeding under applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy
or insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state law or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or other similar of official of
Operator or any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or its failure to pay its debts
generally as they become due; or
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(ix) a Change of Control of Operator's System.
(d) For purposes of this Section 9, a "Change of Control"
of Operator's System will be deemed to have occurred at such time as: (i)
DCC no longer beneficially owns directly or indirectly (whether as a result
of merger, consolidation, sale, assignment, lease or otherwise, in one
transaction or series of related transactions) equity of Operator
constituting a majority of the outstanding equity in and voting interests of
Operator, (ii) any Person other that DCC, or group of Persons acting in
concert, acquires beneficial ownership, directly or indirectly, of 50% or
more of the outstanding equity in or voting interests of Operator or DCC or
(iii) Operator sells or otherwise disposes of (including, without limitation
in connection with the formation of a joint venture that is not controlled by
DCC) all or substantially all of the assets of Operator's System (including,
without limitation in connection with the sale or other deposition of all or
substantially all of the assets of Operator).
10. FUTURE SALE OF ARIZONA RSA # 5. In the event that (i) Operator
proposes to transfer, sell, assign or otherwise dispose of all or substantially
all of the assets of Operator's System, including but not limited to any
transfer of its FCC License for Operator's Service Area, or (ii) DCC proposes to
transfer, sell, assign or otherwise dispose of, directly or indirectly, a
majority of the outstanding equity in or voting interests of DCA or Operator
(the transactions referred to in clauses (i) and (ii) being referred to as a
Transfer), other than (x) a Transfer to an Affiliate of DCC, (y) a Transfer
resulting from a Change of Control of Operator's System as a result of the
circumstances set forth in subsection 9(d)(ii) with respect to DCC or (z) a
Transfer in connection with the direct or indirect sale by DCC and/or Operator
of the Operator's System and Cellular Systems for two or more other metropolitan
or rural service areas, the following will apply:
(a) DCC and/or Operator will send a written notice of the proposed
Transfer (a "Transfer Notice") to WMC, which notice will describe the assets
or equity securities (the "Interest") proposed to be Transferred.
(b) During the 20-day period following delivery of the Transfer
Notice to WMC, Operator will not contact or initiate discussions with (or
entertain any approach from), or conduct nego-
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tiations with any Person other than WMC with respect to any Transfer of the
Interest.
(c) WMC will have 20 days from its receipt of the Transfer Notice
to deliver to Operator its written offer to purchase the Interest subject to
the Transfer Notice (a "WMC Offer").
(d) If WMC makes a WMC Offer, DCC or Operator as applicable will
have the right to accept or reject the WMC Offer. If DCC or Operator as
applicable accepts the WMC Offer, the Interest will be transferred to WMC
subject to the terms and conditions contained in the WMC Offer. If DCC or
Operator rejects the WMC Offer, DCC or Operator, as applicable, will be free
to Transfer the Interest during the 12-month period after the date of the
Transfer Notice to any other Person for consideration having a fair market
value that is no less than the fair market value of the consideration set
forth in the WMC Offer.
(e) If WMC does not make a WMC Offer, DCC or Operator, as
applicable, will be free to Transfer the Interest during the 12-month period
after the date of the Transfer Notice to any other Person without limitation
as to the amount of the consideration paid in respect of the Transfer.
11. MISCELLANEOUS PROVISIONS.
(a) NOTICES. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement will
be in writing and will be deemed to have been duly given to any party (i)
when delivered personally (by courier service or otherwise), (ii) when
delivered by telecopy and confirmed by return telecopy, (iii) on the business
day after the date sent by a nationally recognized overnight courier service,
or (iv) seven days after being mailed by first-class, registered or certified
mail, postage prepaid and return receipt requested, in each case to the
applicable addresses set forth below:
If to DCC/Operator:
Xxxxxx Communications, Inc.
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President
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With a copy to:
Xxxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
If to WMC:
WMC Partners, L.P.
Legal Department
0000 Xxx Xxxx
Xxxxxx Xxxxx, XX 00000
Attention: Vice President-Legal
or to such other address or telecopy number as any party may have furnished
to the other parties in writing in accordance with this Section 11(a).
(b) GOVERNING LAW. This Agreement will be governed by Arizona law
without regard to the conflicts of laws principles thereof.
(c) AMENDMENTS. Except as provided herein, this Agreement may be
modified or amended only by an instrument in writing signed by the parties
hereto.
(d) ENTIRE AGREEMENT. This Agreement, the Exhibits and the
Trademark Sublicense Agreement constitute the entire agreement between the
parties with respect to the matters covered hereby and supersede all prior
agreements, understandings, offers and negotiations, oral or written, with
regard to the subject matter hereof. In the event of any conflict between
the terms of this Agreement and the terms of the Trademark Sublicense
Agreement, the terms of the Trademark Sublicense Agreement shall control.
(e) ASSIGNMENT: SUCCESSORS AND ASSIGNS.
(i) Except as set forth in subsection 11(e)(ii) below, no
party will be entitled to sell, assign, or transfer this Agreement or any
right or obligation hereunder without the written consent of the other party.
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(ii) WMC may assign this Agreement to any Affiliate of WMC or
of AirTouch Communications, Inc. (or any successor thereto whether by merger,
spin-off or otherwise). Operator may assign this Agreement to any Affiliate
of DCC in connection with the transfer, sale, assignment or other disposition
of all or substantially all of the assets of Operator's System (including
Operator's FCC License for Operator's Service Area) to such Affiliate and may
assign its rights under this Agreement to any lender as collateral security
for financing provided to Operator or DCC. If this Agreement is assigned by
WMC or by Operator in accordance with the provisions of this subsection 1
l(e)(ii), the assignor will be released from its obligations hereunder upon,
and to the extent of, the assumption of such obligations by the assignee. In
the event all of WMC's prospective obligations hereunder are assumed by an
assignee, all references herein to WMC will be deemed references to the
Person that assumes the prospective obligations of WMC hereunder after the
date of such assumption and in the event all of Operator's prospective
obligations hereunder are assumed by an Affiliate of DCC all references
herein to Operator will be deemed references to the Affiliate of DCC that
assumes the prospective obligations of Operator hereunder after the date of
such assumption; each such assignee shall be required to execute and deliver
a counterpart of this Agreement as of the date of the assignment and shall be
deemed to have made the representations and warranties of its assignor
contained herein as of the date thereof. WMC may also assign its rights and
delegate its duties under any portion of this Agreement to other entities.
(iii) Subject to subsections (i) and (ii) above, all rights
and duties of the parties hereunder will inure to the benefit of their
respective successors and assigns.
(f) SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof (unless such prohibition on
unenforceability materially alters the intent of the parties or the relative
economic benefits of the parties, in which case the materially affected party
will have the right to terminate this Agreement), and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render unenforceable
such provision in any other jurisdiction.
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(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which will
constitute one and the same instrument.
(h) THIRD PARTY BENEFICIARIES. Nothing contained in this
Agreement is intended to, or will, confer upon any Person other than the
parties hereto any rights or remedies hereunder.
(i) WAIVER. The observance of any term of this Agreement may be
waived only with the written consent of the party against whom such waiver is
sought to be enforced. No waiver by any party of any default with respect to
any provision, condition or requirement hereof will be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof.
(j) SETOFF. WMC and Operator will have the right to set off any
amounts it would otherwise be required to remit to the other under this
Agreement or otherwise against amounts due to it hereunder
(k) NO AGENCY OR OTHER RELATIONSHIP. Neither Operator nor DCC
will have any authority, express or implied, to act as an agent of WMC, the
Affiliated Systems or any of their respective Affiliates for any purpose; and
WMC will have no authority, express or implied, to act as agent of Operator
or DCC or their respective Affiliates. Further, nothing in this Agreement
will be construed to create a partnership, agency, reseller or other
relationship between the parties, or to make either party liable for any
debts or obligations incurred by the other.
(l) INSURANCE.
(i) REQUIREMENTS. Operator will procure, and will maintain
in full force and effect, at Operator's expense, an insurance policy or
policies protecting Operator against any demand or claim with respect to
personal injury, death or property damage, or any loss, liability, or expense
whatsoever arising or occurring upon or in connection with Operator's
business, the minimum forms and amounts of which are set forth in Exhibit C.
All insurance policies must provide for severability of interest or cross
liability; designate WMC and its partners, officers, directors, employees and
agents as additional insureds; provide that such insurance is
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non-contributing primary coverage with respect to all insureds; contain a
waiver of subrogation; and augment the contractual indemnity to assign the
employer's statutory lien to WMC.
(ii) CERTIFICATES OF INSURANCE. On the Effective Date and
thereafter at least 30 days prior to the expiration of any such policy or
upon the request of WMC, Operator shall deliver to WMC certificates of
insurance evidencing the proper coverage with limits not less than those
required hereunder. All certificates will expressly provide that not less
than 30 days' prior written notice shall be given WMC in the event of
material alteration to, or cancellation of, the coverages evidenced by such
certificates.
(m) DISPUTE RESOLUTION. Any dispute, controversy or claim between
the parties hereto arising out of or relating to this Agreement or any breach,
termination or claim of invalidity of this Agreement will be resolved as
follows:
(i) The dispute shall first be referred to the president of
Operator or DCC, as applicable, and WMC's general manager for the Southwest
Region (or their respective designees). Such Persons will confer in an
attempt to reach a resolution.
(ii) Any dispute which is not resolved by such Persons (other
than a dispute, controversy, or claim arising out of or in connection with
the exercise by any party of its right to approve or consent to any action
under this Agreement, which will not be appealable to, or reviewable by, any
court or arbitrator) within 30 days of referral of such dispute shall be
resolved by binding arbitration. To the fullest extent permitted by law, the
arbitration will be conducted in accordance with the United States
Arbitration Act (Title 9, U.S. Code) and under the Commercial Rules of the
American Arbitration Association ("AAA"), and not the law of any state. The
arbitration shall be administered by the AAA and, notwithstanding Rule 11 of
the AAA Commercial Rules or any other rule, the locale of the hearing will be
in Phoenix, Arizona unless all parties to the arbitration agree to a
different locale. A single neutral arbitrator will preside over the
arbitration and decide the dispute, controversy or claim. The parties will
cooperate with each other in causing the arbitration to be held in as
efficient and expeditious a manner as practicable and in this connection
furnish such documents and make available such of their
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respective personnel as the arbitrator may request. Any controversy
concerning whether an issue is arbitrable will be determined by the
arbitrator. The arbitrator will have the power to set discovery limits, to
award specific performance, and to affirm or reject the exercise of
termination rights, but will not have the authority to award damages other
than actual damages. The decision of the arbitrator will be binding and
nonappealable. Judgment upon the arbitration award may be entered in any
court having jurisdiction. The arbitrator will render a decision within 90
days after accepting an appointment to serve as arbitrator unless the parties
otherwise agree or the arbitrator makes a finding that a party has carried
the burden of showing good cause for a longer period.
(n) EQUITABLE RELIEF. The parties agree that notwithstanding
anything to the contrary contained herein, any party may seek a temporary
restraining order or a preliminary injunction from any court of competent
jurisdiction in order to prevent immediate and irreparable injury, loss or
damage pending the selection of an arbitrator to render a decision on the
ultimate merits of any dispute, controversy or claim.
(o) ATTORNEYS' FEES. The "non-prevailing party" in any
arbitration conducted hereunder (as determined by the arbitrator) will pay
all costs and expenses incurred by the "prevailing party" in preparing for
and conducting the arbitration. If a party commences an action in court
against another party with respect to this Agreement, then the prevailing
party in such action (including appeals) will be entitled to an award of
reasonable costs and expenses of litigation, including attorneys' fees, to be
paid by the non-prevailing party. In the event the parties settle a dispute,
no party will be deemed a "prevailing party."
(p) DOCUMENTS. Each party agrees to execute and, if necessary
file with the appropriate governmental entities, such documents as any other
party reasonably requests in order to carry out the purposes of this
Agreement.
(q) FORCE MAJEURE. Neither Operator nor WMC will be liable or
deemed to be in default for a delay in or failure of performance of its
obligations, that results from any of the following causes beyond the
reasonable control of such party: strikes, work stoppages, shortages of
equipment, supplies or energy, malfunction or breakdown of a third Person's
equipment or tele-
-24-
communications network, war, insurrection, acts of God or the public enemy,
or governmental action (whether in its sovereign or contractual capacity).
Any delay resulting from any such cause will extend performance accordingly
or excuse performance, in whole or in part, for such time as may be
reasonable; provided, however, that (i) such causes will not excuse payment
of any amounts due or owed at the time of such occurrence or thereafter, (ii)
the party asserting any such cause will promptly commence and diligently
pursue action to remedy its inability or failure to perform hereunder, and
(iii) in no event will such causes extend or excuse performance for more than
120 consecutive days. Any party asserting this Section 11(q) will promptly
notify the other parties of the occurrence and nature of any such cause and
will thereafter regularly inform the other parties of the progress of actions
to remedy its inability or failure to perform hereunder.
(r) OPERATOR RESPONSIBILITY. Operator will be solely responsible
for any and all costs, expenses, taxes and other liabilities incurred in
connection with its operations.
(s) COVENANTS AND ACKNOWLEDGEMENTS.
(i) LEGAL COMPLIANCE. Operator agrees to comply with all
applicable laws and regulations, including but not limited to the rules and
regulations promulgated by the FCC under the Communications Act of 1934, as
amended, and to obtain and maintain all appropriate government Licenses
necessary to the operation of Operator's System. Operator agrees to notify
WMC in writing within five days after Operator becomes aware of the
commencement of any action, suit or proceeding, or of the issuance of any
order, writ, injunction, award or decree of any court, agency or other
governmental instrumentality, which could have a material effect on the
operations of the Affiliated Systems or the operations or financial condition
of Operator.
(ii) NO WARRANTY. WMC expressly disclaims the making of, and
Operator acknowledges that it has not received from WMC or any Person acting on
WMC's behalf, any warranty or guarantee, express or implied, as to the extent of
the market for Products or Services, or the earnings or success resulting from
Operator's operation of Operator's System pursuant to this Agreement, or any
representation, inducement, promise or agreement, orally or
-25-
otherwise, respecting this Agreement, which is not set forth herein.
(iii) TELECOMMUNICATIONS ACT. Operator agrees not to take any
actions that would, in the reasonable judgment of WMC, cause Operator, WMC,
any Partner or any of their respective Affiliates to be in violation of the
Telecommunications Act of 1996, as amended.
(iv) NO OTHER DUTIES. DCC and Operator acknowledge and agree
that WMC will have no duties to Operator in the course of performance of this
Agreement except as specifically provided herein.
(v) NO PROMISE OF RENEWAL. DCC and Operator acknowledge that
the term of this Agreement is set forth in Section 9(a) hereof with no
promise or representation as to the renewal thereof or the execution of a new
Agreement.
(t) SURVIVAL. The provisions of Sections 4 and 7 will survive the
termination or expiration of this Agreement without limitation except as
provided therein. All indemnities and payment or reimbursement obligations
made hereunder will survive the termination or expiration of this Agreement
until expiration of the longest applicable statute of limitations (including
extensions and waivers) with respect to the matter for which a party would be
entitled to be indemnified, paid or reimbursed, as the case may be.
(u) EFFECTIVENESS. The provisions of Articles 2, 3 and 4 and
Section 11(1) will be effective only on the Effective Date. This Agreement
will terminate automatically in the event of the termination of the Purchase
Agreement prior to the Effective Date. The parties hereto agree to execute
and deliver the Trademark Sublicense Agreement on the Effective Date.
(v) EXPENSES. Each party to this Agreement will bear its
respective expenses incurred in connection with the negotiation, preparation
and execution of this Agreement, including all fees and expenses of agents,
representatives. counsel and accountants.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
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XXXXXX COMMUNICATIONS CORPORATION,
an Oklahoma corporation
By /SIGNED/
--------------------------------
Its
--------------------------------
XXXXXX CELLULAR OF ARIZONA, INC.
an Oklahoma corporation
By /SIGNED/
--------------------------------
Its
--------------------------------
WMC PARTNERS, L.P., a Delaware
limited partnership
By /SIGNED/
--------------------------------
Its
--------------------------------
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