Exhibit 99C
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MAJORCO, L.P.,
A DELAWARE LIMITED PARTNERSHIP
dated as of January 31, 1996
among
SPRINT SPECTRUM, L.P.
TCI NETWORK SERVICES
COMCAST TELEPHONY SERVICES
and
COX TELEPHONY PARTNERSHIP
TABLE OF CONTENTS
SECTION 1. THE PARTNERSHIP 1
1.1 Continuation of the Partnership 1
1.2 Name 2
1.3 Purpose 2
1.4 Principal Executive Office 2
1.5 Term 3
1.6 Filings; Agent for Service of Process 3
1.7 Title to Property 3
1.8 Payments of Individual Obligations 4
1.9 Independent Activities 4
1.10 Definitions 4
1.11 Additional Definitions 26
1.12 Terms Generally 30
SECTION 2. PARTNERS' CAPITAL CONTRIBUTIONS 30
2.1 Percentage Interests; Preservation of
Percentages of Interests Held as General
Partners and as Limited Partners 30
2.2 Partners' Original Capital Contributions 31
2.3 Additional Capital Contributions 31
2.4 Failure to Contribute Capital 35
2.5 Other Additional Capital Contributions 43
2.6 Partnership Funds 43
2.7 Partner Loans; Other Borrowings 43
2.8 Other Matters 45
SECTION 3. ALLOCATIONS 45
3.1 Profits 45
3.2 Losses 46
3.3 Special Allocations 46
3.4 Curative Allocations 48
3.5 Loss Limitation 49
3.6 Other Allocation Rules 49
3.7 Tax Allocations: Code Section 704c 49
SECTION 4. DISTRIBUTIONS 50
4.1 Available Cash 50
4.2 Tax Distributions 50
4.3 Amounts Withheld 51
SECTION 5. MANAGEMENT 51
5.1 Authority of the Partnership Board 51
5.2 Business Plan and Annual Budget 56
5.3 Employees 59
5.4 Limitation of Agency 59
5.5 Liability of Partners, Representatives and
Partnership Employees 60
5.6 Indemnification 60
5.7 Temporary Investments 62
5.8 Deadlocks 62
5.9 Conversion to Corporate Form 63
SECTION 6. PARTNERSHIP OPPORTUNITIES;
CONFIDENTIALITY 65
6.1 Competitive Activities 65
6.2 Enforceability and Enforcement 68
6.3 General Exceptions to Section 6.1 68
6.4 Comcast Exceptions 72
6.5 Freedom of Action 77
6.6 Confidentiality 77
SECTION 7. ROLE OF EXCLUSIVE LIMITED PARTNERS 80
7.1 Rights or Powers 80
7.2 Voting Rights 80
SECTION 8. TRANSACTIONS WITH PARTNERS;
OTHER AGREEMENTS 80
8.1 Sprint Cellular 80
8.2 Sprint Brand Licensing Agreement 81
8.3 Marketing; Branding of Partnership Services. 81
8.4 Preferred Provider 83
8.5 MFJ 84
8.6 Interested Party Transactions 84
8.7 Access to Technical Information 84
8.8 Parent Undertaking 85
8.9 Certain Additional Covenants 85
8.10 PioneerCo Preemptive Rights 86
8.11 Foreign Ownership 86
8.12 Product Integration 88
8.13 Provision of Services 91
8.14 Comcast Representative 91
8.15 Purchasing 92
8.16 Advertising Reimbursement 92
SECTION 9. REPRESENTATIONS AND WARRANTIES 93
9.1 Representations and Warranties by Partners 93
9.2 Representation and Warranty of Sprint 95
SECTION 10. ACCOUNTING, BOOKS AND RECORDS 95
10.1 Accounting, Books and Records. 95
10.2 Reports. 95
10.3 Tax Returns and Information 97
10.4 Proprietary Information 98
SECTION 11. ADVERSE ACT 99
11.1 Remedies 99
11.2 Adverse Act Purchase 101
11.3 Net Equity 104
11.4 Gross Appraised Value 105
11.5 Extension of Time 106
SECTION 12. DISPOSITIONS OF INTERESTS 106
12.1 Restriction on Dispositions 106
12.2 Permitted Transfers 106
12.3 Conditions to Permitted Transfers 107
12.4 Right of First Refusal 110
12.5 Tagalong Rights 114
12.6 Offer and Registration Rights 116
12.7 Right of First Offer 123
12.8 Prohibited Dispositions 128
12.9 Representations Regarding Transfers 128
12.10 Distributions and Allocations in Respect of 128
SECTION 13. CONVERSION OF INTERESTS 129
13.1 Termination of Status as General Partner 129
13.2 Restoration of Status as General Partner 129
SECTION 14. DISSOLUTION AND WINDING UP 130
14.1 Liquidating Events 130
14.2 Winding Up 131
14.3 Compliance With Certain Requirements
of Regulations 132
14.4 Deemed Distribution and Recontribution 133
14.5 Rights of Partners 133
14.6 Notice of Dissolution 133
14.7 Buy/Sell Arrangements 133
SECTION 15. MISCELLANEOUS 136
15.1 Notices 136
15.2 Binding Effect 137
15.3 Construction 137
15.4 Time 137
15.5 Table of Contents; Headings 137
15.6 Severability 137
15.7 Incorporation by Reference 137
15.8 Further Action 137
15.9 Governing Law 138
15.10 Waiver of Action for Partition; No Xxxx For 138
15.11 Counterpart Execution 138
15.12 Sole and Absolute Discretion 138
15.13 Specific Performance 138
15.14 Entire Agreement 139
15.15 Limitation on Rights of Others 139
15.16 Waivers; Remedies 139
15.17 Jurisdiction; Consent to Service of Process 139
15.18 Waiver of Jury Trial 140
15.19 No Right of Set-Off 140
*****
SCHEDULES
Schedule Number
Excluded Businesses; Non-Exclusive Services
and Wireless Exclusive Services 1.10(a)
Sprint Cellular Service Area 1.10(b)
Initial Percentage Interests 2.1
Notice Addresses 2.2
Simple Majority Vote 5.1(i)
Required Majority Vote 5.1(j)
Unanimous Vote 5.1(k)
Unanimous Partner Vote 5.1(l)
Temporary Investments Guidelines 5.7
EXHIBITS
Exhibit Number
Form of Amended and Restated Parent
Undertaking 1.10(a)
Form of Parents Agreement 1.10(b)
Form of Default Loan Promissory Note 2.4(c)(ii)
Form of Partner Loan Promissory Note 2.7
Form of Amended and Restated Sprint
Trademark License Agreement 8.2
******
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MAJORCO, L.P.,
A DELAWARE LIMITED PARTNERSHIP
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
is entered into as of the 31st day of January, 1996, by and among
Sprint Spectrum, L.P., a Delaware limited partnership ("Sprint"),
TCI Network Services, a Delaware general partnership ("TCI"),
Comcast Telephony Services, a Delaware general partnership
("Comcast"), and Cox Telephony Partnership, a Delaware general
partnership ("Cox"), each as a General Partner and a Limited
Partner, pursuant to the provisions of the Delaware Revised
Uniform Limited Partnership Act, on the following terms and
conditions:
WHEREAS, Sprint, TCI, Comcast and Cox entered into that
certain Agreement of Limited Partnership of MajorCo, L.P., dated
as of March 28, 1995 (as amended by that certain First Amendment
to Agreement of Limited Partnership dated as of August 31, 1995,
the "Prior Partnership Agreement"), providing for the formation
of the Partnership by the filing of a Certificate of Limited
Partnership with the Secretary of State of Delaware;
WHEREAS, Sprint, TCI, Comcast and Cox wish to further amend
the Prior Partnership Agreement and to restate the Prior
Partnership Agreement, as so amended, in its entirety; and
WHEREAS, Sprint, TCI, Comcast and Cox wish to continue the
Partnership upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements contained herein, and in order to set
forth the respective rights, obligations, and interests of the
parties to one another, the parties, intending to be legally
bound, hereby agree as follows:
SECTION 1. THE PARTNERSHIP
1.1 Continuation of the Partnership.
The Partnership was formed on March 28, 1995. The Partners
hereby agree to continue the Partnership as a limited partnership
pursuant to the provisions of the Act and upon the terms and
conditions set forth in this Agreement. This Agreement
completely amends, restates and supersedes the Prior Partnership
Agreement.
1.2 Name.
The name of the Partnership shall be MajorCo, L.P., and all
business of the Partnership shall be conducted in such name or,
in the discretion of the Partnership Board, under any other names
(but excluding a name that includes the name of a Partner unless
such Partner has consented thereto).
1.3 Purpose.
(a) Subject to, and upon the terms and conditions of
this Agreement, the purposes of the Partnership shall be to
engage in the Wireless Business and in the provision of
Non-Exclusive Services, either directly or through one or more
Subsidiaries, and to perform such activities in the furtherance
of such Wireless Business and provision of Non-Exclusive Services
as may be approved from time to time by the Partnership
Board. Without a Unanimous Partner Vote, the Partnership shall
not engage in any other business, including any of the Excluded
Businesses. Notwithstanding the preceding sentence, the Partners
acknowledge that (i) pursuant to the Prior Partnership Agreement,
the Partnership conducted certain activities relating to the
provision of wireline telecommunications services, (ii) such
activities will be terminated in an orderly manner as soon as
practicable following the date of this Agreement, but in no event
earlier than the end of such period as the Partnership Board may
determine is needed to ensure an orderly disposition by the
Partnership of any assets or rights relating exclusively to such
activities and (iii) any assets or other rights relating
exclusively to such activities that are owned by the Partnership
shall be disposed of in such a manner as determined by a
Unanimous Vote of the Partnership Board.
(b) The Partnership shall have all the powers now or
hereafter conferred by the laws of the State of Delaware on
limited partnerships formed under the Act and, subject to the
limitations of this Agreement, may do any and all lawful acts or
things that are necessary, appropriate, incidental or convenient
for the furtherance and accomplishment of the purposes of the
Partnership. Without limiting the generality of the foregoing,
and subject to the terms of this Agreement, the Partnership may
enter into, deliver and perform all contracts, agreements and
other undertakings and engage in all activities and transactions
as may be necessary or appropriate to carry out its purposes and
conduct its business.
1.4 Principal Executive Office.
The principal executive office of the Partnership shall be
located in such place as determined by the Partnership Board, and
the Partnership Board may change the location of the principal
executive office of the Partnership to any other place within or
without the State of Delaware upon ten (10) Business Days prior
notice to each of the Partners, provided that such principal
executive office shall be located in the United States. The
Partnership Board may establish and maintain such additional
offices and places of business of the Partnership, within or
without the State of Delaware, as it deems appropriate.
1.5 Term.
The term of the Partnership commenced on the date the
certificate of limited partnership described in Section 17-201 of
the Act (the "Certificate") was filed in the office of the
Secretary of State of Delaware in accordance with the Act and
shall continue until the winding up and liquidation of the
Partnership and its business is completed following a Liquidating
Event, as provided in Section 14.
1.6 Filings; Agent for Service of Process.
(a) The General Partners caused the Certificate to be
filed in the office of the Secretary of State of Delaware in
accordance with the Act. The Partnership Board shall take any
and all other actions reasonably necessary to perfect and
maintain the status of the Partnership as a limited partnership
under the laws of Delaware. The General Partners shall cause
amendments to the Certificate to be filed whenever required by
the Act. The Partners shall be provided with copies of each
document filed or recorded as contemplated by this Section 1.6
promptly following the filing or recording thereof.
(b) The General Partners shall execute and cause to be
filed original or amended Certificates and shall take any and all
other actions as may be reasonably necessary to perfect and
maintain the status of the Partnership as a limited partnership
or similar type of entity under the laws of any other states or
jurisdictions in which the Partnership engages in business.
(c) The registered agent for service of process on the
Partnership shall be The Corporation Trust Company or any
successor as appointed by the Partnership Board in accordance
with the Act. The registered office of the Partnership in the
State of Delaware is located at Corporation Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
1.7 Title to Property.
No Partner shall have any ownership interest in its
individual name or right in any real or personal property owned,
directly or indirectly, by the Partnership, and each Partner's
Interest shall be personal property for all purposes. The
Partnership shall hold all of its real and personal property in
the name of the Partnership or its nominee and not in the name of
any Partner.
1.8 Payments of Individual Obligations.
The Partnership's credit and assets shall be used solely for
the benefit of the Partnership, and no asset of the Partnership
shall be Transferred or encumbered for, or in payment of, any
individual obligation of any Partner.
1.9 Independent Activities.
Each Partner and any of its Affiliates shall be required to
devote only such time to the affairs of the Partnership as such
Partner determines in its sole discretion may be necessary to
manage and operate the Partnership to the extent contemplated by
this Agreement, and each such Person, except as expressly
provided herein, shall be free to serve any other Person or
enterprise in any capacity that it may deem appropriate in its
discretion.
1.10 Definitions.
Capitalized words and phrases used in this Agreement have
the following meanings:
"Accountants" means, as of any time, such firm of
nationally recognized independent certified public accountants
that, as of such time, has been appointed by the Partnership
Board as the accountants for the Partnership.
"Act" means the Delaware Revised Uniform Limited
Partnership Act, as set forth in Del. Code Xxx. tit. 6, 17-101 to
17-1109.
"Additional Capital Contributions" means, with respect
to each Partner, the Capital Contributions made by such Partner
pursuant to Section 2.3 of the Prior Partnership Agreement on or
after January 1, 1996 and prior to the date of this Agreement,
and the Capital Contributions made by such Partner pursuant to
Sections 2.3 (except as otherwise provided in Sections 2.3(a)(i)
and (ii)), 2.4, 2.5 and 8.10, but excluding Special
Contributions, reduced in each case by the amount of any
liabilities of such Partner assumed by the Partnership in
connection with such Capital Contribution or any Nonrecourse
Liabilities of such Partner that are secured by any property
contributed by such Partner as a part of such Capital
Contribution. In the event all or a portion of an Interest is
Transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Additional Capital Contributions
of the transferor to the extent they relate to the Transferred
Interest.
"Additional Contribution Agreement" means a
contribution agreement the terms of which have been approved by
the Unanimous Vote of the Partnership Board pursuant to which a
Partner makes an Additional Capital Contribution to the
Partnership pursuant to Section 2.5.
"Additional Contribution Notice" means a written notice
given to all Partners, which shall (i) state the Additional
Contribution Amount being requested of all Partners and each
Partner's proportionate share thereof determined as provided in
Section 2.3(b)(i) (or, in the case of a required Additional
Capital Contribution in respect of a Declined Accelerated
Contribution, as provided in Section 2.3(b)(ii)(B)), (ii) if
applicable, state that the Additional Capital Contribution being
requested is a Second Tranche Call, (iii) specify in reasonable
detail the purposes for which the Additional Contribution Amount
is required, (iv) identify a date (the "Contribution Date"), not
more than forty-five (45) days nor less than thirty (30) days
after the date of such notice, upon which the Additional Capital
Contributions are to be made, (v) specify the account of the
Partnership to which the contribution is to be made and (vi) if
the Additional Capital Contribution is being requested at such
time as the aggregate amount of Original Capital Contributions
and Additional Capital Contributions (including the Additional
Capital Contribution being requested) made or requested to be
made in accordance with this Agreement (excluding any PioneerCo
Contribution) exceeds Five Billion Dollars ($5,000,000,000),
state the Base Value, the estimated Gross Appraised Value and the
estimated aggregate Adjusted Net Equity of all Partners as of the
applicable Contribution Date.
"Adjusted Capital Account Deficit" means, with respect
to any Exclusive Limited Partner, the deficit balance, if any, in
such Exclusive Limited Partner's Capital Account as of the end of
the relevant Allocation Year, after giving effect to the
following adjustments:
(i) Credit to such Capital Account any amounts
which such Exclusive Limited Partner is obligated to restore
pursuant to any provision of this Agreement or is deemed to be
obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items
described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-
1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section 1.704-
1(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
"Adverse Act" means, with respect to any Partner, any
of the following:
(i) Such Partner becomes a Defaulting Partner;
(ii) Such Partner Disposes of all or any part of
its Interest except as required or permitted by this Agreement;
provided, however, that no Adverse Act shall be considered to
have occurred until thirty (30) days following the involuntary
encumbrance of all or any part of such Interest if during such
thirty (30) day period the affected Partner acts diligently to,
and prior to the end of such thirty (30) day period does, remove
any such encumbrance, including effecting the posting of a bond
to prevent foreclosure where necessary;
(iii) Such Partner has committed a material
breach of any material covenant contained in this Agreement
(other than as otherwise expressly enumerated in this definition)
or a material default on any material obligation provided for in
this Agreement (other than as otherwise expressly enumerated in
this definition) and such breach or default continues for thirty
(30) days after the date written notice thereof has been given to
such Partner by any General Partner (with a copy to the
Partnership Board and each other Partner); provided that if such
breach or default is not a failure to pay money and is of such a
nature that it cannot reasonably be cured within such thirty (30)
day period, but is curable and such Partner in good faith begins
efforts to cure it within such thirty (30) day period and
continues diligently to do so, such Partner shall have a
reasonable additional period thereafter to effect the cure (which
shall not exceed an additional ninety (90) days unless otherwise
approved by the Partnership Board by Required Majority Vote); and
provided further that if, within thirty (30) days after the date
written notice of such breach or default has been given to such
Partner, such Partner delivers written notice (the "Contest
Notice") to the Partnership Board and all other Partners that it
contests such notice of breach or default, such breach or default
shall not constitute an Adverse Act unless and until (and
assuming that such breach or default has not theretofore been
cured in full and that any applicable cure period has expired)
(A) the disinterested Representatives determine in good faith by
Required Majority Vote that such Partner has committed such a
breach or default or (B) there is a Final Determination that such
Partner's actions or failures to act constituted such a breach or
default; and provided further that this clause (iii) shall not
apply in the event of a breach of Section 8.5 hereof, which
breach shall constitute an Adverse Act (if at all) pursuant to
clause (vii) below;
(iv) The Bankruptcy of such Partner or the
occurrence of any other event which would permit a trustee or
receiver to acquire control of the affairs or assets of such
Partner;
(v) The occurrence of a Change in Control of
such Partner without the unanimous written consent of the other
General Partners;
(vi) An IXC Transaction has occurred with
respect to such Partner;
(vii) The occurrence of any event with respect
to such Partner (A) that causes such Partner or the Partnership
or any of its Subsidiaries to become a BOC or (B) that causes the
Partnership or any of its Subsidiaries to become a BOC Affiliated
Enterprise or an entity subject to any restriction or limitation
under Section II of the MFJ, provided, however, that (a) the
circumstances that constitute an Adverse Act under clause (B)
above must have a material adverse effect on the business,
assets, liabilities, results of operations, financial condition
or prospects of the Partnership and its Subsidiaries and (b) no
Adverse Act shall be considered to have occurred if such Partner
has taken actions which have cured the circumstances that would
otherwise have constituted an Adverse Act under clause (A) or
(B), as applicable, of this clause (vii) within ninety (90) days
following the date written notice of the occurrence of such event
has been given to such Partner by any General Partner (with a
copy to the Partnership Board and each other Partner); and
provided further that if, within ninety (90) days after the date
written notice of such occurrence has been given to such Partner,
such Partner delivers a Contest Notice to the Partnership Board
and all other Partners that it contests such occurrence (or
contests whether such occurrence constitutes an Adverse Act under
this clause (vii)), such occurrence shall not constitute an
Adverse Act unless and until (and assuming that such
circumstances have not theretofore been cured in full and that
the applicable cure period has expired) (a) the disinterested
Representatives determine in good faith by Required Majority Vote
that such occurrence constitutes an Adverse Act under this clause
(vii) or (b) there is a Final Determination that such occurrence
constitutes an Adverse Act under this clause (vii); or
(viii) Such Partner otherwise causes a
dissolution of the Partnership in contravention of the terms of
this Agreement (other than solely by reason of the Bankruptcy of
such Partner).
An "Adverse Partner" is any Partner with respect to
which an Adverse Act has occurred.
"Affiliate" means, with respect to any Person, any
other Person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common
control with such Person. For purposes of this definition, the
term "controls" (including its correlative meanings "controlled
by" and "under common control with") shall mean the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, (i) neither the
Partnership nor MinorCo, nor any Person controlled by the
Partnership or MinorCo (including WirelessCo), shall be deemed to
be an Affiliate of any Partner or of any Affiliate of any Partner
and (ii) no Partner or any Affiliate thereof shall be deemed to
be an Affiliate of any other Partner or any Affiliate thereof
solely by virtue of the ownership by such Partner or any of its
Affiliates of any equity interest in the Partnership, MinorCo or
PhillieCo.
"Agreed Value" means the agreed upon value of a Capital
Contribution by a Partner of the Property identified below,
determined as provided below:
(i) with respect to the Property included in the
Original Capital Contribution of such Partner, the amount set
forth next to such Partner's name in Schedule 2.2 to the Prior
Partnership Agreement;
(ii) with respect to the License Contribution by
Cox, $17,647,059; and
(iii) with respect to the Omaha License, an
amount equal to the sum of (A) $995,564.00, together with
interest at the rate of 13.4% per annum computed from November
17, 1994 through the date that the Omaha License is contributed
to the Partnership pursuant to Section 2.3(a)(ii) plus (B)
$4,062,400.00, together with interest at the rate of 13.4% per
annum computed from June 30, 1995 through the date that the Omaha
License is contributed to the Partnership pursuant to Section
2.3(a)(ii).
"Agreement" or "Partnership Agreement" means this
Amended and Restated Agreement of Limited Partnership, including
all Schedules hereto, as amended from time to time.
"Allocation Year" means (i) the period commencing on
the date of the Prior Partnership Agreement and ending on
December 31, 1995, (ii) any subsequent twelve (12) month period
commencing on January 1 and ending on December 31, or (iii) any
portion of the period described in clauses (i) or (ii) for which
the Partnership is required to allocate Profits, Losses, and
other items of Partnership income, gain, loss or deduction
pursuant to Section 3.
"Available Cash" means as of any date the cash of the
Partnership as of such date less such portion thereof as the
Partnership Board determines to reserve for Partnership expenses,
debt payments, capital improvements, replacements, and
contingencies.
"Bankruptcy" means, with respect to any Person, a
"Voluntary Bankruptcy" or an "Involuntary Bankruptcy." A
"Voluntary Bankruptcy" means, with respect to any Person, the
inability of such Person generally to pay its debts as such debts
become due (other than any obligation of such Person to make
capital contributions under this Agreement), or an admission in
writing by such Person of its inability to pay its debts
generally or a general assignment by such Person for the benefit
of creditors; the filing of any petition or answer by such Person
seeking to adjudicate it bankrupt or insolvent, or seeking for
itself any liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of such Person or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking, consenting to,
or acquiescing in the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for such Person or for any substantial part of its
property; or corporate action taken by such Person to authorize
any of the actions set forth above. An "Involuntary Bankruptcy"
means, with respect to any Person, without the consent or
acquiescence of such Person, the entering of an order for relief
or approving a petition for relief or reorganization or any other
petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or other similar relief
under any present or future bankruptcy, insolvency or similar
statute, law or regulation, or the filing of any such petition
against such Person which petition shall not be dismissed within
ninety (90) days, or, without the consent or acquiescence of such
Person, the entering of an order appointing a trustee, custodian,
receiver or liquidator of such Person or of all or any
substantial part of the property of such Person which order shall
not be dismissed within sixty (60) days.
"BOC" means a "BOC" or one of the "Xxxx Operating
Companies" as defined in Section IV.C of the MFJ.
"BOC Affiliated Enterprise" has the same meaning as the
term "affiliated enterprise" as used with respect to "BOC" or
"Xxxx Operating Companies" in Section II.D of the MFJ.
"BTA" means a Basic Trading Area, as defined in the FCC
rules to be codified at 47 C.F.R. 24.13.
"Business Day" means a day of the year on which banks
are not required or authorized to close in the State of New York.
"Cable Partners" means Comcast, Cox and/or TCI, as the
context may require.
"Cable Subsidiary" has the meaning set forth in the
form of Parents Agreement attached as Exhibit 1.10(b).
"Capital Account" means, with respect to any Partner,
the Capital Account maintained for such Partner in accordance
with the following provisions:
(i) To each Partner's Capital Account there
shall be credited such Partner's Capital Contributions, such
Partner's distributive share of Profits and any items in the
nature of income or gain which are specially allocated pursuant
to Section 3.3 or Section 3.4, and the amount of any Partnership
liabilities which are assumed by such Partner or secured by any
Property distributed to such Partner as permitted by this
Agreement.
(ii) To each Partner's Capital Account there
shall be debited the amount of cash and the Gross Asset Value of
any Property distributed or deemed to be distributed to such
Partner pursuant to any provision of this Agreement, such
Partner's distributive share of Losses and any items in the
nature of expenses or losses which are specially allocated
pursuant to Section 3.3 or Section 3.4, and the amount of any
liabilities of such Partner assumed by the Partnership or any
Nonrecourse Liabilities of such Partner that are secured by any
Property contributed by such Partner to the Partnership.
(iii) In the event all or a portion of an
Interest is Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent it relates to the Transferred
Interest.
(iv) In determining the amount of any liability
for purposes of the definitions of "Additional Capital
Contributions" and "Original Capital Contribution" and
subparagraphs (i) and (ii) of this definition of "Capital
Account," there shall be taken into account Code Section 752(c)
and any other applicable provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such
Regulations. In the event the Partnership Board determines that
it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including debits or credits
relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership or
any Partner), are computed in order to comply with such
Regulations, the Partnership Board may make such modification,
provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Section 14 upon
the dissolution and winding up of the Partnership. The
Partnership Board also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital
reflected on the Partnership's balance sheet, as computed for
book purposes, in accordance with Regulations Section 1.704-
1(b)(2)(iv)(q), and (ii) make any appropriate modifications in
the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b). Any
such decision or action permitted to be taken by the Partnership
Board under this paragraph shall require the Unanimous Vote of
the Partnership Board.
"Capital Commitment" of any Partner means (i) with
respect to the first Fiscal Year in the Initial Two-Year Period,
an amount equal to the product of (A) such Partner's initial
Percentage Interest and (B) the Planned Capital Amount for such
Fiscal Year, and (ii) with respect to the last Fiscal Year in the
Initial Two-Year Period, an amount equal to the excess, if any,
of (A) the product of (1) such Partner's initial Percentage
Interest and (2) the sum of (a) the Planned Capital Amount for
such Fiscal Year plus (b) any Prior Year's Carryforward, over (B)
that portion of the cumulative Accelerated Contribution Amounts
requested of and made by such Partner in the first Fiscal Year in
the Initial Two-Year Period that the Partnership Board has
determined pursuant to Section 2.3(b)(i) shall be applied to
reduce the Planned Capital Amount for such last Fiscal Year. In
the event all or a portion of an Interest is Transferred in
accordance with this Agreement, the transferee shall succeed to
the Capital Commitment of the transferor to the extent it relates
to the Transferred Interest and has not been called in full.
"Capital Contribution" means, with respect to any
Partner, the amount of money and the Gross Asset Value at the
time of contribution of any Property (other than money)
contributed to the Partnership with respect to the Interest held
by such Partner (including any contribution expressly excluded
from the definition of Additional Capital Contribution). The
principal amount of a promissory note which is not readily traded
on an established securities market and which is contributed to
the Partnership by the maker of the note (or a Partner related to
the maker of the note within the meaning of Regulations Section
1.704-1(b)(2)(ii)(c)) shall not be included in the Capital
Account of any Partner until the Partnership makes a taxable
disposition of the note or until (and to the extent) principal
payments are made on the note, all in accordance with Regulations
Section 1.704-1(b)(2)(iv)(d)(2).
"Carrier" has the meaning set forth in the definition
of "IXC" below.
"Change in Control" means, with respect to any Partner
that has a Parent other than itself, such Partner's ceasing to be
a Subsidiary of its Parent other than in connection with a
Permitted Transaction.
"Chief Executive Officer" means the chief executive
officer of the Partnership, including any interim chief executive
officer.
"Code" means the Internal Revenue Code of 1986.
"Comcast Parent" means Comcast Corporation, a
Pennsylvania corporation and any successor (by merger,
consolidation, Transfer or otherwise) to all or substantially all
of its business and assets.
"Consumer Price Index" means the Consumer Price Index
"All Urban Consumers: U.S. city average, all items" (1982-1984 =
100) published by the Bureau of Labor Statistics of the United
States Department of Labor, or any equivalent successor or
substitute index selected by the Partnership Board and published
by the Bureau of Labor Statistics or a successor or substitute
governmental agency selected by the Partnership Board.
"Contest Notice" has the meaning set forth in clause
(iii) of the definition of "Adverse Act."
"Contribution Date" has the meaning set forth in the
definition of "Additional Contribution Notice."
"Controlled Affiliate" of any Person means the Parent
of such Person and each Subsidiary of such Parent. As used in
Sections 6, 8.5, 8.9 and 8.11 the term "Controlled Affiliate"
shall also include any Affiliate of a Person that such Person or
its Parent can directly or indirectly unilaterally cause to take
or refrain from taking any of the actions required, prohibited or
otherwise restricted by such Section, whether through ownership
of voting securities, contractually or otherwise. As used in
Sections 2.4, 5.1(c), 11.2, 12.4 and 12.5 the term "Controlled
Affiliate" shall also include any Affiliate of a Person that such
Person or its Parent can directly or indirectly unilaterally
cause to take or refrain from taking any action regarding the
Partnership, whether through ownership of voting securities,
contractually or otherwise.
"Cox Parent" means Xxx Communications, Inc., a Delaware
corporation, and any successor (by merger, consolidation,
Transfer or otherwise) to all or substantially all of its
business and assets.
"Cox Pioneer Partnership" means a general partnership
to be formed by a Subsidiary of Cox Parent and a Subsidiary of
Xxx Enterprises, Inc., a Delaware corporation.
"Cox Pioneer Preference License" means the 00 XXx "X"
xxxxx PCS license granted to Cox Parent on December 14, 1994, for
the MTA encompassing Los Angeles and San Diego, California, which
MTA is identified in the FCC Public Notice regarding the PCS
Auction as Market No. M-2 (Report No. AUC-94-04, Auction No. 4).
"Cut-Off Time" means the earlier to occur of (i) the
end of the last Fiscal Year covered by the Initial Business Plan
and (ii) such time as the aggregate amount of Original Capital
Contributions and Additional Capital Contributions made or
requested to be made (excluding any PioneerCo Contribution) first
equals or exceeds the Total Mandatory Contributions.
"Debt" means (i) any indebtedness for borrowed money or
deferred purchase price of property whether or not evidenced by a
note, bond, or other debt instrument, (ii) obligations to pay
money as lessee under capital leases, (iii) obligations to pay
money secured by any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind existing on any asset
owned or held by the Partnership whether or not the Partnership
has assumed or become liable for the obligations secured thereby,
(iv) any obligation under any interest rate swap agreement (the
principal amount of such obligation shall be deemed to be the
notional principal amount on which such swap is based), and (v)
obligations under direct or indirect guarantees of (including
obligations (contingent or otherwise) to assure a creditor
against loss in respect of) indebtedness or obligations of the
kinds referred to in clauses (i), (ii), (iii) and (iv) above,
provided that Debt shall not include obligations in respect of
any accounts payable that are incurred in the ordinary course of
the Partnership's business and are not delinquent or are being
contested in good faith by appropriate proceedings.
"Depreciation" means, for each Allocation Year, an
amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such
Allocation Year, except that if the Gross Asset Value of an asset
differs from its adjusted basis for federal income tax purposes
at the beginning of such Allocation Year, Depreciation shall be
an amount which bears the same ratio to such beginning Gross
Asset Value as the federal income tax depreciation, amortization,
or other cost recovery deduction for such Allocation Year bears
to such beginning adjusted tax basis; provided, that if the
adjusted basis for federal income tax purposes of an asset at the
beginning of such Allocation Year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value
using any reasonable method selected by the Partnership Board;
and provided, further, that, consistent with Section 3.7,
Depreciation with respect to Subsidiary Partnership Property
shall not be determined with regard to the distributive share of
depreciation expense directly or indirectly allocated to the
Partnership by the Subsidiary Partnership, but shall be computed
with respect to the initial Gross Asset Value of the Subsidiary
Partnership interest contributed to the Partnership as if such
Subsidiary Partnership Property (or the equivalent percentage
thereof) were owned directly by the Partnership and were
contributed by the Partners who contributed the Subsidiary
Partnership interests.
"Dispose" (including its correlative meanings,
"Disposed of", "Disposition" and "Disposed"), with respect to any
Interest means to Transfer, pledge, hypothecate or otherwise
dispose of such Interest, in whole or in part, voluntarily or
involuntarily, except by operation of law in connection with a
merger, consolidation or other business combination of the
Partnership and except that such term shall not include any
pledge or hypothecation of, or granting of a security interest
in, an Interest that is approved by the Partnership Board in
connection with any financing obtained on behalf of the
Partnership.
"Excluded Businesses" has the meaning set forth in
Schedule 1.10(a).
"Exclusive Limited Partner" means any Limited Partner
that is not also a General Partner.
"FCC" means the Federal Communications Commission.
"Final Determination" means (i) a determination set
forth in a binding settlement agreement between the Partnership
and the Partner alleged to have committed the Adverse Act, which
has been approved by a Required Majority Vote of the Partnership
Board pursuant to Section 8.6 or (ii) a final judicial
determination, not subject to further appeal, by a court of
competent jurisdiction.
"Fiscal Year" means (i) the period commencing on the
date of the Prior Partnership Agreement and ending on December
31, 1995, (ii) any subsequent twelve (12) month period commencing
on January 1, and ending on December 31, or (iii) the period
commencing on the immediately preceding January 1 and ending on
the date on which all Property is distributed to the Partners
pursuant to Section 14.2.
"GAAP" means generally accepted accounting principles
in effect in the United States of America from time to time.
"General Partner" means any Person who (i) is referred
to as such in the first paragraph of this Agreement or has become
a General Partner pursuant to the terms of this Agreement, and
(ii) has not, at any given time, ceased to be a General Partner
pursuant to the terms of this Agreement. "General Partners"
means all such Persons.
"Gross Asset Value" means, with respect to any asset,
the asset's adjusted basis for federal income tax purposes,
except as follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross
fair market value of such asset, as determined by the
contributing Partner and the Partnership Board in accordance with
Section 8.6, provided that the initial Gross Asset Value of the
Property contributed by the Partners pursuant to Section 2.2 or
either of clauses (i) or (ii) of Section 2.3(a) shall be the sum
of (1) the Agreed Value of such Property plus (2) the amount of
any liabilities of the contributing Partner assumed by the
Partnership in connection with such contribution or any
Nonrecourse Liabilities of such Partner that are secured by the
contributed Property;
(ii) The Gross Asset Value of all Partnership
assets shall be adjusted to equal their gross fair market value,
as determined by the Partnership Board, as of the following
times: (A) the acquisition of an Interest by any new Partner in
exchange for more than a de minimis Capital Contribution; (B) the
distribution by the Partnership to a Partner of more than a de
minimis amount of Property as consideration for an Interest; (C)
the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); (D) the conversion of a
General Partner to an Exclusive Limited Partner if, and only if,
in the judgment of the Partnership Board, such adjustment would
either cause the Person who is being converted to an Exclusive
Limited Partner to have a deficit balance in its Capital Account
or increase the amount of such a deficit balance; and (E) the
adjustment of the Percentage Interests of the Partners pursuant
to Section 2.4(d)(ii);
(iii) The Gross Asset Value of any Partnership
asset distributed to any Partner shall be adjusted to equal the
gross fair market value of such asset on the date of distribution
as determined by the distributee and the Partnership Board in
accordance with Section 8.6;
(iv) The Gross Asset Values of Partnership
assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulation Section
1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of
"Profits" and "Losses" and Section 3.3(g); provided, however,
that Gross Asset Values shall not be adjusted pursuant to this
subparagraph (iv) to the extent that an adjustment pursuant to
subparagraph (ii) hereof is made in connection with a transaction
that would otherwise result in an adjustment pursuant to this
subparagraph (iv); and
(v) If Gross Asset Value is required to be
determined for the purpose of Section 11.2 or 14.7, Gross Asset
Value shall be determined in the manner set forth in such
Sections.
If the Gross Asset Value of an asset has been
determined or adjusted pursuant to clause (i), (ii) or (iv) of
this definition, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
"Hypothetical Federal Income Tax Amount" means for any
Fiscal Year the product of (A) the daily weighted average highest
marginal federal income tax rate applicable to domestic
corporations in effect for such Fiscal Year expressed as a
percentage and (B) the excess, if any, of (i) the cumulative
amount of taxable income and gain reported by the Partnership on
its Internal Revenue Service Forms 1065 over its life determined
as of the end of such Fiscal Year, over (ii) the larger of zero
(0) or the cumulative amount of taxable income and gain reported
by the Partnership on its Internal Revenue Service Forms 1065
over its life determined as of the beginning of such Fiscal Year.
"Initial Two-Year Period" means the period from January
1, 1996 through December 31, 1997.
"Intermediate Subsidiary" means, with respect to any
Parent of a Partner, a Subsidiary of such Parent that holds a
direct or indirect equity interest in such Partner.
"Interest" means, as to any Partner, all of the
interests of such Partner in the Partnership, including any and
all benefits to which the holder of an interest in the
Partnership may be entitled as provided in this Agreement and
under the Act, together with all obligations of such Partner to
comply with the terms and provisions of this Agreement.
"IXC" means each of AT&T Corp., MCI Communications
Corporation and British Telecommunications plc (each, a
"Carrier"), each successor to the long distance
telecommunications business of any of the foregoing entities and
each respective Affiliate of each such Carrier or successor.
"IXC Transaction" means, with respect to any Partner,
that (i) an IXC has become the beneficial owner of an equity
interest in such Partner or an equity interest in any
Intermediate Subsidiary (other than a Publicly Held Intermediate
Subsidiary) of the Parent of such Partner, (ii) an IXC has become
the beneficial owner of securities representing fifteen percent
(15%) or more of the voting power of the outstanding voting
securities of the Parent of such Partner or any Publicly Held
Intermediate Subsidiary of such Parent, and, if such Parent or
Publicly Held Intermediate Subsidiary is subject to a State
Statute or has a shareholder rights plan, such Parent or Publicly
Held Intermediate Subsidiary or the board of directors or other
governing body of such Parent or Publicly Held Intermediate
Subsidiary has approved such beneficial ownership or otherwise
has taken action to waive any applicable restrictions with
respect to such ownership or the exercise by the IXC of its
rights arising from such ownership under such State Statute or
shareholder rights plan, (iii) an IXC has become the beneficial
owner of securities representing twenty-five percent (25%) or
more of the voting power of the outstanding voting securities of
any such Parent or Publicly Held Intermediate Subsidiary,
provided that, if such IXC is an Affiliate of a Carrier, such
Affiliate has identified a Carrier as a Person controlling such
Affiliate either (a) pursuant to General Instruction C to
Schedule 13D, in a Schedule 13D (filed with the Securities and
Exchange Commission in accordance with Section 13(d) of the
Securities Exchange Act of 1934) or (b) pursuant to General
Instruction C to Schedule 14D-1, in a Schedule 14D-1 (filed with
the Securities and Exchange Commission in accordance with Section
14(d) of the Securities Exchange Act of 1934), (iv) any such
Parent or Publicly Held Intermediate Subsidiary has sold or
issued beneficial ownership in any equity interest in such Parent
or Publicly Held Intermediate Subsidiary to an IXC or granted to
an IXC any rights with respect to the governance of such Parent
or Publicly Held Intermediate Subsidiary that are not possessed
generally by the owners of outstanding equity interests in such
Parent or Publicly Held Intermediate Subsidiary; or (v) such
Partner has otherwise become an Affiliate of an IXC. Solely for
the purposes of this definition the terms "beneficial owner" and
"beneficial ownership" shall have the same meaning as in Rule
13d-3 under the Securities Exchange Act of 1934, as amended.
"Joint Venture Formation Agreement" means the Second
Amended and Restated Joint Venture Formation Agreement of even
date herewith among each of the Parents providing for the
formation of PioneerCo and certain other matters.
"LEC" means a local exchange carrier.
"Limited Partner" means any Person (i) who is referred
to as such in the first paragraph of this Agreement or who has
become a Limited Partner pursuant to the terms of this Agreement,
and (ii) who, at any given time, holds an Interest. "Limited
Partners" means all such Persons.
"Local Joint Venture" means any joint venture or other
entity formed by, or any agreement or arrangement entered into
between or among, as applicable, Sprint or its Controlled
Affiliates and one or more Cable Partners or their respective
Controlled Affiliates for purposes of providing or offering local
wireline telecommunications services under the Sprint Brand as
contemplated under a Parents Agreement.
"Mandatory Contribution" of any Partner means an amount
equal to the product of (i) such Partner's initial Percentage
Interest times (ii) the Total Mandatory Contributions.
"MFJ" means the Modification of Final Judgment agreed
to by the American Telephone and Telegraph Company and the
U.S. Department of Justice and approved by the U.S. District
Court for the District of Columbia on August 24, 1982, as
reported in United States v. Western Electric Company, Inc., et
al., 552 F. Supp. 131 (D.D.C. 1982), aff'd sub nom Maryland
v. Xxxxxx Xxxxxx, 000 X.X. 0000 (1983) and any subsequent orders
or amendments issued in connection therewith. Any reference in
this Agreement to Section II of the MFJ shall also include any
subsequent statute, rule, regulation, order or decree which
modifies or supersedes Section II of the MFJ (or any material
portion thereof) and imposes any restriction(s) substantially
similar to any of the material restrictions imposed by Section II
of the MFJ.
"Minimum Ownership Requirement" means, with respect to
(i) any Original Partner, as of any date, that the ratio
(expressed as a percentage) of such Original Partner's Percentage
Interest to the aggregate Percentage Interests of all Original
Partners is at least eight percent (8%) or (ii) any Partner not
an Original Partner, as of any date, that such Partner's
Percentage Interest is at least eight percent (8%).
"MinorCo" means MinorCo, L.P., the Delaware limited
partnership formed by the Partners for the purpose of holding a
limited partnership interest in WirelessCo and one or more other
Subsidiaries of the Partnership.
"MinorCo Interest" means, as to any Partner, all of the
interests of such Partner in MinorCo, including any and all
benefits to which the holder of an interest in MinorCo may be
entitled as provided in the partnership agreement of MinorCo and
under the Act, together with all obligations of such Partner to
comply with the terms and provisions of the partnership agreement
of MinorCo.
"MSA" means a Metropolitan Statistical Area, as
determined by the U.S. Department of Commerce.
"MTA" means a Major Trading Area as defined in FCC
rules to be codified at 47 C.F.R. 24.13.
"Non-Exclusive Services" has the meaning set forth in
Schedule 1.10(a) hereto.
"Nonrecourse Deductions" has the meaning set forth in
Section 1.704-2(b)(1) of the Regulations.
"Nonrecourse Liability" has the meaning set forth in
Section 1.704-2(b)(3) of the Regulations.
"Omaha License" means the 30 MHz PCS license acquired
by Cox Parent in the PCS Auction for the MTA encompassing Omaha,
Nebraska, which MTA is identified in the FCC Public Notice
regarding the PCS Auction as Market No. M-45 (Report
No. AUC-94-04, Auction No. 4).
"Original Capital Contribution" means, with respect to
each Partner, the Capital Contributions made by such Partner
prior to January 1, 1996. In the event all or a portion of an
Interest is Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Original Capital
Contribution of the transferor to the extent it relates to the
Transferred Interest.
"Original Partners" means collectively Comcast, Cox,
TCI and Sprint and any successors or transferees thereof to the
extent such successors or transferees acquired their Interest in
accordance with this Agreement.
"Parent" means, except as otherwise provided below with
respect to a Permitted Transaction, (i) with respect to Cox (and
its Controlled Affiliates), Cox Parent, (ii) with respect to
Comcast (and its Controlled Affiliates), Comcast Parent, (iii)
with respect to TCI (and its Controlled Affiliates), TCI Parent
and (iv) with respect to Sprint (and its Controlled Affiliates),
Sprint Parent. With respect to any other Person hereafter
admitted to the Partnership as a Partner, the Parent with respect
to such Partner shall be the Person identified as such in a
Schedule to be attached to this Agreement in connection with the
admission of such Partner. In the event of a Permitted
Transaction, the new Parent of the applicable Partner immediately
following such Permitted Transaction will be the ultimate parent
entity (as determined in accordance with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 and the rules and regulations
promulgated thereunder (the "HSR Act")) of such Partner (or such
Partner if it is its own ultimate parent entity); provided that
if such ultimate parent entity is not a Publicly Held Person then
the next highest corporate entity in the ownership chain from
such ultimate parent entity to and including such Partner which
is a Publicly Held Person shall be deemed to be the new
Parent. If there is no intermediate Publicly Held Person, the
Parent shall be the highest entity in the ownership chain from
the ultimate parent entity to and including such Partner which is
not an individual. For purposes of the definition of Controlled
Affiliate, the Parent of a Person that is neither a Partner nor a
Controlled Affiliate of a Partner is the ultimate parent entity
(as determined in accordance with the HSR Act) of such Person.
"Parent Undertaking" means a written instrument in
substantially the form of Exhibit 1.10(a) executed simultaneously
with the execution of this Agreement by each Parent of a Partner.
"Parents Agreement" means, individually and
collectively, the separate agreements between Sprint Parent and
each of TCI Parent, Comcast Parent and Cox Parent, substantially
in the form of Exhibit 1.10(b), executed simultaneously with the
execution and delivery of this Agreement.
"Partner Nonrecourse Debt" has the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Debt Minimum Gain" means an
amount, with respect to each Partner Nonrecourse Debt, equal to
the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the
Regulations.
"Partner Nonrecourse Deductions" has the meaning set
forth in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the
Regulations.
"Partners" means all General Partners and all Limited
Partners. "Partner" means any one of the Partners.
"Partnership" means the partnership formed pursuant to
that certain Agreement of Limited Partnership of MajorCo, L.P.
dated as of March 28, 1995, and continued pursuant to this
Agreement, and the partnership continuing the business of this
Partnership in the event of dissolution as herein provided.
"Partnership Board" means the committee of
Representatives that will have the authority and powers set forth
in Section 5.1.
"Partnership Minimum Gain" has the meaning set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.
"PCS" means a radio communications system authorized
under the rules for broadband personal communications services
designated as Subpart E of Part 24 of the FCC's rules, including
the network, marketing, distribution, sales, customer interface
and operations functions relating thereto.
"PCS Auction" means the series of simultaneous multiple
round auctions for broadband PCS licenses to be conducted by the
FCC under the authority of Section 309(j) of the Communications
Act of 1934, 47 U.S.C. 309(j) (1993), in accordance with the
rules promulgated thereunder by the FCC.
"Percentage Interest" means, with respect to any
Partner as of any relevant date, the ratio (expressed as a
percentage) of the sum of such Partner's Original Capital
Contribution and aggregate Additional Capital Contributions as of
such date to the sum of the aggregate Original Capital
Contributions and Additional Capital Contributions of all
Partners as of such date; provided, however, that if any Partner
fails for any reason to make its Requested Contribution or any
Preemptive Contribution after such time as the aggregate amount
of Original Capital Contributions and Additional Capital
Contributions made or requested to be made in accordance with
this Agreement (including any Additional Capital Contribution
then being made or requested, but excluding any PioneerCo
Contribution) first equals Five Billion Dollars ($5,000,000,000),
then effective as of the Contribution Date for such Requested
Contribution or, with respect to any Preemptive Contribution, the
applicable PioneerCo Contribution Date, and at all times
thereafter, the Percentage Interest of each Partner shall be
determined in accordance with Section 2.4(d)(ii). Additional
Capital Contributions of Premium Dollars pursuant to Section
2.4(a)(v) shall be valued at their Premium Dollar value for
purposes of calculating Percentage Interests. Such Capital
Contributions will be determined after giving effect to all
Capital Contributions made prior to and on the date as of which
the determination of Percentage Interests is made, subject to the
provisions regarding the adjustment of Percentage Interests set
forth in Section 2.4(d). In the event all or any portion of an
Interest is Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Percentage
Interest of the transferor to the extent it relates to the
Transferred Interest. In the case of an adjustment of Gross
Asset Value pursuant to clause (ii) of the definition of such
term or an adjustment of Percentage Interests pursuant to Section
2.4(d)(ii), any references in Section 3 to "Percentage Interest"
shall be deemed to refer to the Percentage Interests of the
Partners as of the day immediately preceding the date of any such
adjustment.
"Permitted Brand" means a trademark, trade name,
service xxxx and/or logo of a Cable Partner, Teleport or their
respective Controlled Affiliates, other than any trademark, trade
name, service xxxx or logo of any RBOC or IXC (as each such term
is defined in the form of Parents Agreement attached as Exhibit
1.10(b)).
"Permitted Transaction" with respect to a Partner means
a transaction or series of related transactions in which (i) such
Partner ceases to be a Subsidiary of its Parent or such Partner
Transfers its Interest to a Person that is not a Controlled
Affiliate of such Partner and (ii) the new Parent of such Partner
(or such Partner if it is its own Parent) or the Parent of the
transferee of the Interest after giving effect to such
transaction, or the last transaction in a series of related
transactions, owns, directly and indirectly through its
Controlled Affiliates, all or a Substantial Portion of the cable
television system assets (in the case of a Cable Partner) or long
distance telecommunications business assets (in the case of
Sprint) owned by the Parent of such Partner, directly and
indirectly through its Controlled Affiliates, immediately prior
to the commencement of such transaction or series of
transactions. As used herein, "Substantial Portion" means (x) in
the case of a Cable Partner, cable television systems serving 75%
or more of the aggregate number of basic subscribers served by
cable television systems in the United States of America
(including its territories and possessions other than Puerto
Rico) owned by the Parent of such Cable Partner, directly and
indirectly through its Controlled Affiliates, and (y) in the case
of Sprint, long distance telecommunications business assets
serving 75% or more of the aggregate number of customers served
by the long distance telecommunications business in the United
States of America (including its territories and possessions
other than Puerto Rico) owned by the Parent of Sprint, directly
and indirectly through its Controlled Affiliates.
"Person" means any individual, partnership,
corporation, trust, or other entity.
"PioneerCo" means the Delaware limited partnership to
be formed by Cox Pioneer Partnership and WirelessCo to own the
Cox Pioneer Preference License and to operate a Wireless Business
in connection therewith.
"PioneerCo Contribution" means a Capital Contribution
of all or any portion of Cox Pioneer Partnership's interest in
PioneerCo as contemplated under Section 8.10.
"PioneerCo Contribution Date" means a date on which a
PioneerCo Contribution is made.
"PioneerCo Partnership Agreement" means the Agreement
of Limited Partnership of PioneerCo to be entered into between
WirelessCo and Cox Pioneer Partnership.
"Planned Capital Amount" means, with respect to the
first Fiscal Year in the Initial Two-Year Period, $1,131,000,000,
and with respect to the last Fiscal Year in the Initial Two-Year
Period, $767,000,000, as such amount may be revised by the
Unanimous Vote of the Partnership Board or reduced pursuant to
Section 2.3(b)(i).
"Premium Call" means a Second Tranche Call that has
been converted by a Simple Majority Vote of the Partnership Board
to a Premium Call pursuant to Section 2.4(a)(v).
"Premium Call Contribution Date" has the meaning set
forth in the definition of "Premium Call Notice."
"Premium Call Notice" means a written notice given to
all Partners, which shall state (i) the amount of the Second
Tranche Call originally requested in the corresponding Additional
Contribution Notice, (ii) that such Second Tranche Call has been
converted to a Premium Call, (iii) the Premium Dollar amount for
each dollar to be contributed in response to the Premium Call
Notice, (iv) the date upon which the Premium Call contributions
are to be made (the "Premium Call Contribution Date"), which date
shall not be more than forty-five (45) days nor less than thirty
(30) days after the date of such notice and (v) the account of
the Partnership to which such contribution is to be made.
"Premium Dollar" means, except as otherwise provided in
Section 2.4(a)(v), each dollar contributed by a Partner in
response to a Premium Call Notice or a Premium Call Shortfall
Notice, each of which dollars will be valued for the purposes of
calculating Percentage Interests at an amount equal to (i) one
dollar ($1.00) divided by (ii) the quotient of (x) the aggregate
Adjusted Net Equity of all Partners (provided that for purposes
of determining Adjusted Net Equity pursuant to this definition,
Gross Appraised Value shall be determined by a Simple Majority
Vote of the Partnership Board in connection with the giving of a
Premium Call Notice) divided by (y) the aggregate amount of the
Original Capital Contributions and Additional Capital
Contributions made to the Partnership prior to the date of the
Premium Call Notice.
"Prime Rate" means the rate announced from time to time
by Citibank, N.A. as its prime rate.
"Prior Year's Carryforward" means the amount by which
the aggregate amount of Additional Capital Contributions actually
requested of the Partners pursuant to Section 2.3(b)(i) with
Contribution Dates during the first Fiscal Year in the Initial
Two-Year Period was less than the Planned Capital Amount during
such Fiscal Year.
"Profits" and "Losses" means, for each Allocation Year,
an amount equal to the Partnership's taxable income or loss for
such Allocation Year, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss, or
deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments (without duplication):
(i) Any income of the Partnership that is exempt
from federal income tax and not otherwise taken into account in
computing Profits or Losses pursuant to this definition of
"Profits" and "Losses" shall be added to such taxable income or
loss;
(ii) Any expenditures of the Partnership
described in Code Section 705(a)(2)(B) or treated as Code Section
705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-
1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses pursuant to this definition of "Profits" and
"Losses," shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to subparagraph (ii) or
(iii) of the definition of Gross Asset Value, the amount of such
adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or
Losses;
(iv) Gain or loss resulting from any disposition
of Property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the
Gross Asset Value of the Property disposed of, notwithstanding
that the adjusted tax basis of such Property differs from its
Gross Asset Value;
(v) In lieu of the depreciation, amortization,
and other cost recovery deductions taken into account in
computing such taxable income or loss, there shall be taken into
account Depreciation for such Allocation Year, computed in
accordance with the definition of Depreciation;
(vi) To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Code Section
734(b) is required pursuant to Regulations Section 1.704-
1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation
of a Partner's Interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of the asset and shall be taken
into account for purposes of computing Profits or Losses; and
(vii) Notwithstanding any other provision of
this definition of "Profits" or "Losses," any items which are
specially allocated pursuant to Section 3.3 or Section 3.4 shall
not be taken into account in computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss or
deduction available to be specially allocated pursuant to
Sections 3.3 and 3.4 shall be determined by applying rules
analogous to those set forth in this definition of "Profits" and
"Losses."
"Property" means all real and personal property
acquired by the Partnership and any improvements thereto, and
shall include both tangible and intangible property.
"Publicly Held" means, with respect to any Person, that
such Person has a class of equity securities registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934.
"Publicly Held Intermediate Subsidiary" means, with
respect to any Parent of a Partner, an Intermediate Subsidiary of
such Parent that is Publicly Held.
"Regulations" means the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code.
"Representative" means an individual designated by a
General Partner as a member of the Partnership Board.
"Second Tranche Call" means the first Eight Hundred
Million Dollars ($800,000,000) of Additional Capital
Contributions requested in accordance with Section 2.3(b) after
the Cut-Off Time; provided that in no event may a Second Tranche
Call be made after December 31, 2002.
"Sprint Brand" means the trademark "Sprint" together
with the related "Diamond" logo.
"Sprint Cellular Service Area" means the areas serviced
as of October 24, 1994 by the cellular operations of Controlled
Affiliates of Sprint, as listed in Schedule 1.10(b).
"Sprint Communications" means Sprint Communications
Company, L.P., a Delaware limited partnership.
"Sprint Parent" means Sprint Corporation, a Kansas
corporation, and any successor (by merger, consolidation,
Transfer or otherwise) to all or substantially all of its
business and assets.
"State Statutes" means any business combination
statute, anti-takeover statute, fair price statute, control share
acquisition statute or any other state statute or regulation that
contains any similar prohibition, limitation, obligation,
restriction or other provision adopted and in effect in the
jurisdiction of organization of a Person that affects the rights
of any other Person that acquires a specified percentage
ownership interest in such Person without the consent or approval
of the board of directors or other governing body of such other
Person, and, includes (i) with respect to Cox Parent and TCI
Parent, Section 203 of the Delaware General Corporation Law; (ii)
with respect to Comcast Parent, Subchapters E, F and G of Chapter
25 of the Pennsylvania Business Corporation Law of 1988; and
(iii) with respect to Sprint Parent, Sections 17-12,100 and
17-1286 through 1298, et seq. of the Kansas Corporations Statute.
"Subsidiary" of any Person as of any relevant date
means a corporation, company or other entity (i) more than fifty
percent (50%) of whose outstanding shares or equity securities
are, as of such date, owned or controlled, directly or indirectly
through one or more Subsidiaries, by such Person, and the shares
or securities so owned entitle such Person and/or its
Subsidiaries to elect at least a majority of the members of the
board of directors or other managing authority of such
corporation, company or other entity notwithstanding the vote of
the holders of the remaining shares or equity securities so
entitled to vote or (ii) which does not have outstanding shares
or securities, as may be the case in a partnership, joint venture
or unincorporated association, but more than fifty percent (50%)
of whose ownership interest is, as of such date, owned or
controlled, directly or indirectly through one or more
Subsidiaries, by such Person, and in which the ownership interest
so owned entitles such Person and/or Subsidiaries to make the
decisions for such corporation, company or other entity.
"Subsidiary Partnership Property" means all property,
other than interests in other Subsidiary Partnerships, held by
any Subsidiary Partnership on the date on which the interests in
such Subsidiary Partnership are contributed to the Partnership.
"Substantial Portion" has the meaning set forth in the
definition of "Permitted Transaction."
"TCI Parent" means Tele-Communications, Inc., a
Delaware corporation, and any successor (by merger,
consolidation, Transfer or otherwise) to all or substantially all
of its business and assets.
"Technical Information" means all technical
information, regardless of form and however transmitted and shall
include, among other forms, computer software, including computer
program code, and system and user documentation, drawings,
illustrations, diagrams, reports, designs, specifications,
formulae, know-how, procedural protocols and methods and manuals.
"Technical Information Rights" means all intellectual
property rights which protect or cover Technical Information.
"Teleport" means Teleport Communications Group Inc., a
Delaware corporation, TCG Partners, a New York general
partnership, and their respective Controlled Affiliates, as well
as each local joint venture that is managed by any of the
foregoing entities and in which the foregoing entities
collectively own an equity interest of at least thirty percent
(30%), and any successor (by merger, consolidation, Transfer or
otherwise) to all or substantially all of the business and assets
of any of the foregoing.
"Total Mandatory Contributions" of the Partners means
an amount equal to the sum of $4.2 billion plus the Agreed Values
of the License Contribution and the Omaha License.
"Trading Day" means, with respect to any security, a
day on which the principal national securities exchange on which
such security is listed or admitted to trading, or the Nasdaq
Stock Market, such security is listed or admitted to trading
thereon, is open for the transaction of business (unless such
trading shall have been suspended for the entire day) or, if such
security is not listed or admitted to trading on any national
securities exchange or the Nasdaq Stock Market, any day other
than a Business Day.
"Transfer" means, as a noun, any sale, exchange
assignment or transfer and, as a verb, to sell, exchange, assign
or transfer.
"Voluntary Bankruptcy" has the meaning set forth in the
definition of "Bankruptcy."
"Voting Percentage Interest" means, as of any date and
with respect to any Partner that as of such date is entitled to
designate one or more members of the Partnership Board, the ratio
(expressed as a percentage) of such Partner's Percentage Interest
to the aggregate Percentage Interests of all Partners that are
entitled to designate one or more members of the Partnership
Board.
"Wireless Affiliate" means any Person that is an
affiliate of the Partnership's Wireless Business by entering into
an Affiliation Agreement with WirelessCo.
"Wireless Business" means the business of providing
Wireless Exclusive Services.
"WirelessCo" means WirelessCo, L.P., the Delaware
limited partnership formed by the Partners pursuant to that
certain Agreement of Limited Partnership dated as of October 24,
1994, as amended and restated as of March 28, 1995 to cause
WirelessCo to become a Subsidiary of the Partnership.
"Wireless Exclusive Services" has the meaning set forth
in Schedule 1.10(a).
1.11 Additional Definitions.
Defined Term Defined in
"1933 Act" Section 5.9(a)
"Accelerated Contribution Amount" Section 2.3(b)(i)
"Accepting Offerees" Section 12.4(d)
"Accepting Partner Note" Section 12.7(e)
"Accepting Partners" Section 12.7(e)
"Additional Contribution Amount" Section 2.3(b)(i)
"Adjusted Net Equity" Section 2.4(d)(ii)
"Adjusted Percentage Interest" Section 2.4(a)(iv)
"Affiliation Agreement" Section 6.1(d)
"Agents" Section 6.6(a)
"Aggregate Contributions" Section 2.4(d)(iv)
"Annual Budget" Section 5.2(c)
"Approved Business Plan" Section 5.2(c)
"Attribution Cap" Section 8.11(a)(v)
"Base Value" Section 2.4(d)(iii)(A)
"Bidding Partner" Section 14.7(e)
"Blocking Limited Partner" Section 5.1(l)(ii)
"Brief" Section 5.8(a)(ii)
"Business Plan" Section 5.2(a)
"Business-Related Information" Section 8.12(b)
"Buy-Sell Price" Section 11.2(a)
"Cable Services" Section 8.3(b)
"Certificate" Section 1.5
"Comcast Area" Section 6.4(g)
"Competitive Activity" Section 6.1(a)
"Confidential Information" Section 6.6(a)
"Contributing Partner" Section 2.4(a)(ii)
"Control Notice" Section 12.5(b)
"Control Offer" Section 12.5(b)
"Control Offer Period" Section 12.5(b)
"Controlling Partner" Section 12.5(b)
"Covered Licensee" Section 8.11(a)(ii)
"Cure Date" Section 2.4(c)(iii)
"Damages" Section 11.1(a)
"Deadlock Event" Section 5.8(b)
"Declining Partner" Section 2.4(a)(i)
"Declined Accelerated Contribution" Section 2.3(b)(ii)(B)
"Default Budget" Section 5.2(d)
"Default Loan" Section 2.4(c)(ii)
"Default Loan Notice" Section 2.4(c)(ii)
"Defaulting Partner" Section 2.4(c)(i)
"Delinquent Partner" Section 2.4(b)
"Designated Matters" Section 8.14
"Election Notice" Section 11.2(a)
"Election Period" Section 11.2(b)
"Excess Contribution Amount" Section 2.3(b)(i)
"extension period" Section 12.6(f) and 12.7(e)
"Firm Offer" Section 12.4(b)
"Firm Offer Commencement Notice" Section 12.6(c)
"First Appraiser" Section 11.4
"First Offer Period" Section 12.7(c)
"First Offer Sale Notice" Section 12.7(e)
"First Public Appraiser" Section 12.6(a)
"Floating Rate" Section 2.4(f)
"Foreign Ownership Restriction" Section 8.11(a)(i)
"Foreign Ownership Safe Harbor" Section 8.11(a)(iv)
"Foreign Ownership Threshold" Section 8.11(a)(iii)
"Free to Sell Period" Section 12.4(f)
"Funding Commitment" Section 2.4(a)(ii)
"General Partner Percentage
Interests" Section 2.1
"Grace Period" Section 2.4(b)
"Gross Appraised Value" Section 11.4
"In-Territory Customers" Section 6.4(e)
"In-Territory Distributors" Section 6.4(e)
"Initial Business Plan" Section 5.2(a)
"Initial Offer" Section 14.7(e)
"Initial Participating Partner" Section 8.12(c)
"Initiating Partner" Section 8.12(b)
"Interested Person" Section 8.6
"Issuance Items" Section 3.3(h)
"Lending Commitment" Section 2.4(c)(ii)
"Lending Partner" Section 2.4(c)(ii)
"License Contribution" Section 2.3(a)(i)
"Liquidating Events" Section 14.1(a)
"Limited Partner Percentage
Interests" Section 2.1
"Loan Date" Section 2.4(c)(ii)
"Make-up Amount" Section 2.4(c)(iii)
"MajorCorp" Section 12.6(a)
"MajorCorp Stock" Section 12.6(a)
"Market Value" Section 12.7(g)
"Mediator" Section 5.8(a)(ii)
"Minimum Offering Amount" Section 12.6(a)
"Minimum Secondary Offering
Amount" Section 12.7(b)
"Net Equity" Section 11.3
"Net Equity Notice" Section 11.3
"Nextel" Section 6.4(f)
"Non-Adverse Partners" Section 11.1(a)
"Non-Selling Partners" Section 12.7(a)
"Notice Partner" Section 12.6(a)
"Offer" Section 6.1(c)
"Offered Interest" Section 12.4
"Offerees" Section 12.4(b)
"Offer Notice" Section 12.4(b)
"Offer Period" Section 12.4(c)
"Offer Price" Section 12.4(a)
"Offer Statement" Section 14.7(b)
"Ownership Restrictions" Section 8.11
"Overlap Cellular Area" Section 8.1
"Partner Loan" Section 2.7
"Partnership's Businesses" Section 6.4(b)
"Partnership Services" Section 8.3(b)
"Partnership Technical Information" Section 8.7
"Paying Partner" Section 2.4(a)(ii)
"Payment Default" Section 2.4(c)(i)
"Penalty Amount" Section 2.4(b)
"Permitted Period" Section 12.7(f)
"Permitted Transfer" Section 12.2
"PhillieCo" Section 6.3(e)
"PMCI Shares" Section 6.4(f)
"PMV Notice" Section 12.6(b)
"Preemptive Contribution" Section 2.3(c)
"Premium Call Shortfall Notice" Section 2.4(a)(v)
"Premium Call Paying Partner" Section 2.4(a)(v)
"Prior Partnership Agreement" Recitals
"Proposed Budget" Section 5.2(c)
"Proposed Business Plan" Section 5.2(c)
"Proprietary Technical Information" Section 8.12(b)
"Public Appraiser" Section 12.6(a)
"Public Market Value" Section 12.6(b)
"Public Offering" Section 5.9(c)
"purchase commitment" Section 11.2(b),
12.4(d), 12.6(e)
and 12.7(d)
"Purchase Notice" Section 11.2(b)
"Purchase Offer" Section 12.4(a)
"Purchaser" Section 12.4(a)
"Purchasing Partner" Section 11.2(b)
"Receiving Party" Section 6.6(a)
"Registered Offering" Section 12.7
"Registering Partner" Section 12.6(c)
"Registration Accepting Offerees" Section 12.6(e)
"Registration Firm Offer" Section 12.6(c)
"Registration Interest" Section 12.6(a)
"Registration Note" Section 12.6(f)
"Registration Notice" Section 12.6(a)
"Registration Offer" Section 12.7(b)
"Registration Offer Period" Section 12.6(d)
"Registration Offerees" Section 12.6(c)
"Registration Sale Notice" Section 12.6(f)
"Regulatory Allocations" Section 3.4
"Related Group" Section 5.1(c)
"Representative" Section 5.1(c)
"Requested Contribution" Section 2.3(b)(i)
"Requested Premium Call Contribution" Section 2.4(a)(v)
"Required Majority Vote" Section 5.1(j)
"Restricted Area" Section 8.14
"Restricted Time" Section 8.14
"Restricted Party" Section 6.6(a)
"Sale Notice" Section 12.4(e)
"Rule 144 Notice" Section 12.7(a)
"Rule 144 Offer" Section 12.7(a)
"Rule 144 Sale" Section 12.7
"Second Appraiser" Section 11.4
"Secondary Registration Notice" Section 12.7(b)
"Second Public Appraiser" Section 12.6(a)
"Section 5.1 Election Period" Section 5.1(l)(ii)
"Seller" Section 12.4
"Selling Partner" Section 12.7
"Senior Credit Agreement" Section 2.7
"Shortfall" Section 2.4(a)(ii)
"Shortfall Notice" Section 2.4(a)(ii)
"Simple Majority Vote Section 5.1(i)
"Special Contribution" Section 2.4(b)
"Sprint Cellular Business" Section 8.1
"Sprint LD" Section 8.3(b)
"Sprint LD Services" Section 8.3(b)
"Subsidiary Partnership" Section 3.7
"Tagalong Notice" Section 12.5(a)
"Tagalong Offer" Section 12.5(a)
"Tagalong Period" Section 12.5(a)
"Tagalong Purchaser" Section 12.5(a)
"Tagalong Transaction" Section 12.5(a)
"Tax Matters Partner" Section 10.3(a)
"Tendering Offeree" Section 12.6(f)
"Tendering Partner" Section 12.7(e)
"Third Appraiser" Section 12.4
"Third Party Provider" Section 8.14
"Timely Partner" Section 2.4(b)
"Trademark License" Section 8.2
"Transferring Partner" Section 12.5(a)
"Unanimous Partner Vote" Section 5.1(l)(i)
"Unanimous Vote" Section 5.1(k)
"Unfunded Shortfall" Section 2.3(b)(ii)(B)
"Unpaid Amount" Section 2.4(b)
"Unreturned Capital" Section 11.2(a)
1.12 Terms Generally.
The definitions in Section 1.10 and elsewhere in this
Agreement shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation." The words "herein", "hereof" and "hereunder" and
words of similar import refer to this Agreement (including the
Schedules) in its entirety and not to any part hereof unless the
context shall otherwise require. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise
require. Unless the context shall otherwise require, any
references to any agreement or other instrument or statute or
regulation are to it as amended and supplemented from time to
time (and, in the case of a statute or regulation, to any
corresponding provisions of successor statutes or regulations).
Any reference in this Agreement to a "day" or number of "days"
(without the explicit qualification of "Business") shall be
interpreted as a reference to a calendar day or number of
calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and such calendar day is not
a Business Day, then such action or notice shall be deferred
until, or may be taken or given on, the next Business Day.
SECTION 2. PARTNERS' CAPITAL CONTRIBUTIONS
2.1 Percentage Interests; Preservation of Percentages of
Interests Held as General Partners and as Limited
Partners.
The initial Percentage Interest of each Partner as of the
date of this Agreement is set forth on Schedule 2.1 and
represents the sum of the "General Partner Percentage Interest"
and "Limited Partner Percentage Interest" of such Partner as set
forth in such Schedule 2.1. Except as expressly provided in this
Agreement, or as may result from a Transfer of Interests required
or permitted by this Agreement, the Percentage Interest of a
Partner shall not be subject to increase or decrease without such
Partner's prior consent. For purposes of this Agreement, each
Partner is treated as though it holds a single Interest, even
though such Partner (unless and until it becomes an Exclusive
Limited Partner) holds ninety-nine percent (99.0%) of its
Interest as a General Partner and one percent (1.0%) of its
Interest as a Limited Partner. Each Partner, unless and until it
becomes an Exclusive Limited Partner, will hold ninety-nine
percent (99.0%) of its Interest as a General Partner and one
percent (1.0%) of its Interest as a Limited Partner and the
amount of any Capital Contributions made by a Partner pursuant to
Section 2 and any allocations and distributions to a Partner
pursuant to Section 3 or Section 4 shall, except as otherwise
provided therein, be allocated ninety-nine percent (99.0%) to the
Interest held by the Partner as a General Partner and one percent
(1.0%) to the Interest held by the Partner as a Limited Partner.
In the event that a Partner Transfers all or any portion of its
Interest pursuant to this Agreement, ninety-nine percent (99.0%)
of the aggregate Interest so acquired by any Person shall be
treated as attributable to the Interest held by the transferring
Partner as a General Partner and one percent (1.0%) of the
aggregate Interest so acquired shall be treated as attributable
to the Interest held by the transferring Partner as a Limited
Partner. In the event that the Interest of a Partner is
otherwise increased or decreased pursuant to this Agreement, the
amount of the increase or decrease, as the case may be, shall be
allocated ninety-nine percent (99.0%) to the Interest held by
such Partner as a General Partner and one percent (1.0%) to the
Interest held by such Partner as a Limited Partner.
2.2 Partners' Original Capital Contributions.
The Original Capital Contribution of each Partner consists
of the contributions of cash and Property made by such Partner
pursuant to the terms of the Prior Partnership Agreement prior to
January 1, 1996.
2.3 Additional Capital Contributions.
(a) Contributions of Certain Property by Cox.
(i) License Contribution by Xxx. Xxx shall
contribute to the Partnership an undivided fractional interest in
the Cox Pioneer Preference License and certain associated assets
(the "License Contribution"), which the Partnership in turn shall
contribute through its Subsidiaries to the capital of PioneerCo.
Such contribution shall be made concurrently with the
contribution by Cox Pioneer Partnership to PioneerCo of the
remaining undivided fractional interest in the Cox Pioneer
Preference License and such associated assets, which shall be
made at the date and time provided in, and in accordance with,
the PioneerCo Partnership Agreement. For purposes hereof, such
contributions to the Partnership and then to PioneerCo may be
effected through the direct conveyance by Cox Parent of the Cox
Pioneer Preference License to PioneerCo. The Agreed Value of the
License Contribution shall be credited against the next
Additional Capital Contribution to be made in cash by Cox under
this Agreement to the same extent as if Cox had contributed cash
in the amount of such Agreed Value, and until so credited the
License Contribution shall not constitute an Additional Capital
Contribution for purposes of this Agreement.
(ii) Omaha License Contribution by Cox. As soon
as practicable (taking into account any FCC approval that may be
required in connection with such contribution) following the
divestiture by Sprint and its Controlled Affiliates of their
ownership interests in the Sprint Cellular Businesses, Cox shall
contribute the Omaha License to the Partnership. The Agreed
Value of the Omaha License shall be credited against the next
Additional Capital Contribution to be made in cash by Cox under
this Agreement to the same extent as if Cox had contributed cash
in the amount of such Agreed Value, and until so credited the
contribution of the Omaha License shall not constitute an
Additional Capital Contribution for purposes of this Agreement.
(b) Additional Capital Contributions of Cash.
(i) Additional Cash Contributions Generally.
Subject to the limitations of this Agreement, the Partnership
Board (or the Chief Executive Officer pursuant to (x) the
authority to be granted in each Annual Budget to make requests
for Additional Capital Contributions in the amounts, during the
periods and subject to the limitations set forth therein, and (y)
such authority as may be delegated to the Chief Executive Officer
from time to time by the Partnership Board (which delegation may
occur only by a vote of the members of the Partnership Board
required to take the action so delegated)) may in accordance with
the following procedures request the Partners to make Additional
Capital Contributions to the Partnership in cash from time to
time to fund the cash needs of the Partnership in conformity with
the Annual Budget then in effect, as it may be modified from time
to time in accordance with this Agreement. The aggregate amount
of the Additional Capital Contributions requested pursuant to
this Section 2.3(b)(i) to be made as of any Contribution Date
(the "Additional Contribution Amount") (A) shall be set forth in
an Additional Contribution Notice given to each Partner, (B)
shall not exceed the amount reasonably anticipated by the
Partnership Board to be required to fund the cash needs of the
Partnership for the ensuing six (6) months or such shorter period
as may be determined by the Partnership Board, and (C) when added
to the Additional Contribution Amounts stated in all prior
Additional Contribution Notices with Contribution Dates in the
then-current Fiscal Year, (I) shall not exceed the cumulative
amount of Additional Capital Contributions contemplated to be
required of the Partners during such Fiscal Year as set forth in
the Annual Budget for such Fiscal Year unless otherwise approved
by a Required Majority Vote of the Partnership Board, and (II) if
such Fiscal Year falls within the Initial Two-Year Period, also
shall not exceed, unless otherwise approved by a Unanimous Vote
of the Partnership Board, (a) with respect to the first Fiscal
Year in the Initial Two-Year Period, the product of (1) 150%
times (2) the Planned Capital Amount for such Fiscal Year, and
(b) with respect to the last Fiscal Year in the Initial Two-Year
Period, the sum of (1) the product of (x) 150% times (y) the
Planned Capital Amount for such Fiscal Year (provided that the
amount determined in accordance with this clause (y) will be
decreased by any portion thereof the payment of which the
Partnership Board has previously determined as provided below to
accelerate into the first Fiscal Year in the Initial Two-Year
Period), plus (2) 100% of any Prior Year's Carryforward. For
purposes of this Agreement, amounts contributed on or after
January 1, 1996 pursuant to Section 2.3 of the Prior Partnership
Agreement shall be deemed to be Additional Capital Contributions
made pursuant to an Additional Contribution Notice under this
Section 2.3(b)(i).
To the extent that the cumulative Additional Contribution
Amounts stated in Additional Contribution Notices pursuant to
this Section 2.3(b)(i) with Contribution Dates in any given
Fiscal Year in the Initial Two-Year Period exceed (i) with
respect to the first Fiscal Year in the Initial Two-Year Period,
the Planned Capital Amount for such Fiscal Year and (ii) with
respect to the last Fiscal Year in the Initial Two-Year Period,
the sum of (A) the Planned Capital Amount for such Fiscal Year
plus (B) any Prior Year's Carryforward minus (C) any portion of
such Planned Capital Amount that was accelerated to the prior
Fiscal Year, such excess shall constitute an "Excess Contribution
Amount." The Partnership Board may by Required Majority Vote
designate any Excess Contribution Amount with a Contribution Date
in the first Fiscal Year of the Initial Two-Year Period as an
"Accelerated Contribution Amount." The amount of any Excess
Contribution Amount that the Partnership Board may designate as
an Accelerated Contribution Amount pursuant to the preceding
sentence shall not exceed the Planned Capital Amount for the last
Fiscal Year in the Initial Two-Year Period (after giving effect
to any reduction to such Planned Capital Amount pursuant to the
following sentence with respect to any prior Excess Contribution
Amount). Any Accelerated Contribution Amount will be applied to
reduce the Planned Capital Amount for the last Fiscal Year in the
Initial Two-Year Period.
The amount of the Additional Capital Contribution requested
of any Partner pursuant to this Section 2.3(b)(i) in an
Additional Contribution Notice (the "Requested Contribution")
shall be equal to (i) with respect to Requested Contributions
with Contribution Dates during any Fiscal Year in the Initial
Two-Year Period, that amount which represents the same
percentage of the Additional Contribution Amount specified in
such Additional Contribution Notice as such Partner's initial
Percentage Interest and (ii) with respect to Requested
Contributions with Contribution Dates during any Fiscal Year
after the end of the Initial Two-Year Period, that amount which
represents the same percentage of the Additional Contribution
Amount specified in such Additional Contribution Notice as such
Partner's Percentage Interest as of the date of such Additional
Contribution Notice; provided that if the aggregate amount of the
Original Capital Contributions and Additional Capital
Contributions made or requested to be made (excluding any
PioneerCo Contribution) prior to the end of the Initial Two-Year
Period is less than the Total Mandatory Contributions, then the
Requested Contributions of each Partner shall continue to be the
same percentage of the Additional Contribution Amounts as such
Partner's initial Percentage Interest until the Cut-Off Time.
(ii) Mandatory Additional Capital Contributions.
(A) No Partner may decline to make any of its
Requested Contributions unless, and then only to the extent that,
(I) with respect to Requested Contributions with Contribution
Dates during any Fiscal Year in the Initial Two-Year Period, the
amount of the Requested Contribution of such Partner, when added
to the sum of (a) the cumulative amount of all Requested
Contributions theretofore requested of and made by such Partner
during the same Fiscal Year plus (b) the amount of any Preemptive
Contribution made by such Partner during the same Fiscal Year,
would exceed the sum of (x) such Partner's Capital Commitment
with respect to such Fiscal Year and (y) the product of such
Partner's initial Percentage Interest times any Excess
Contribution Amount for such Fiscal Year if and to the extent
that such Partner's Representative(s) voted for approval of the
Annual Budget pursuant to which the Excess Contribution Amount is
being requested or voted in favor of requesting (or delegating to
the Chief Executive Officer the authority to request) such Excess
Contribution Amount, and (II) with respect to Requested
Contributions with Contribution Dates during any Fiscal Year
after the Initial Two-Year Period, none of such Partner's
Representative(s) voted for approval of the Annual Budget that
provides for the Additional Contribution Amount being requested
and none of such Partner's Representatives voted in favor of
requesting (or delegating to the Chief Executive Officer the
authority to request) such Additional Contribution Amount or such
Partner was an Exclusive Limited Partner at the time of such
vote. Notwithstanding the preceding sentence, a Partner will not
be entitled to decline to make any Requested Contribution with a
Contribution Date during the last Fiscal Year in the Initial Two-
Year Period or in any Fiscal Year thereafter covered by the
Initial Business Plan except to the extent such Requested
Contribution, when added to the aggregate amount of Original
Capital Contributions and Additional Capital Contributions made
or requested to be made by such Partner (excluding any PioneerCo
Contribution) prior to the Contribution Date of such Requested
Contribution, exceeds such Partner's Mandatory Contribution.
(B) Subject to Section 2.3(b)(ii)(A), if a
Partner was a Declining Partner with respect to an Accelerated
Contribution Amount (with respect to any such Partner, its
"Declined Accelerated Contribution"), then, to the extent that
there is a Shortfall in connection with a Requested Contribution
with a Contribution Date during the last Fiscal Year in the
Initial Two-Year Period that is not fully allocated to one or
more Contributing Partners pursuant to Section 2.4(a) (an
"Unfunded Shortfall"), such Partner shall be required to make an
Additional Capital Contribution to the Partnership up to an
amount equal to such Partner's initial Percentage Interest of the
portion of the Planned Capital Amount set forth in the Initial
Business Plan for such last Fiscal Year that was accelerated to
the prior Fiscal Year (but only to the extent of such Declined
Accelerated Contribution and, if there is more than one such
Partner, pro rata in proportion to the aggregate amounts of the
previously unfunded Declined Accelerated Contributions of each
such Partner). Any such required Additional Capital Contribution
shall be contributed by such Partner within ten (10) days of
notice to such Partner by the Chief Executive Officer that there
exists an Unfunded Shortfall with respect to which such Partner
is required to make an Additional Capital Contribution pursuant
to the preceding sentence, which notice shall set forth the
amount of the Additional Capital Contribution required of such
Partner and the applicable Contribution Date and shall otherwise
constitute an Additional Contribution Notice for purposes of this
Agreement.
(c) Additional Contributions Related to PioneerCo
Preemptive Rights. Each of the Partners (other than Cox) may
make Additional Capital Contributions to the Partnership as and
to the extent permitted by Section 8.10 (each a "Preemptive
Contribution").
2.4 Failure to Contribute Capital.
(a) Declining Partners.
(i) Any Partner that is entitled to decline to
make a Requested Contribution as provided in Section 2.3(b)(ii)
may do so by notice given to the Chief Executive Officer (with a
copy to the Partnership Board) within fifteen (15) days of the
date the applicable Additional Contribution Notice was given (any
such Partner that timely exercises such right is herein referred
to as a "Declining Partner").
(ii) If any Partner is a Declining Partner with
respect to an Additional Contribution Notice and the Partnership
Board does not give a Premium Call Notice pursuant to Section
2.4(a)(v), the Chief Executive Officer shall, within five (5)
days after the date notice was required to be received under
Section 2.4(a)(i), give a notice (a "Shortfall Notice") to each
Partner that made its Requested Contribution in full (each a
"Paying Partner") requesting the Paying Partners to make
Additional Capital Contributions in an aggregate amount equal to
the amount not contributed by the Declining Partner(s) in
response to such Additional Contribution Notice (the
"Shortfall"). Each Paying Partner that is willing to commit to
fund all or any portion of the Shortfall (each a "Contributing
Partner") shall so notify the Chief Executive Officer and each
other Paying Partner within ten (10) days after the date the
Shortfall Notice was given, setting forth the maximum amount of
the Shortfall, up to one hundred percent (100%) thereof, that
such Contributing Partner is willing to fund (the "Funding
Commitment"). Except as otherwise provided in Section
2.4(a)(iii), if the aggregate Funding Commitments are less than
or equal to one hundred percent (100%) of the Shortfall, each
Contributing Partner shall be entitled to make an Additional
Capital Contribution to the Partnership in response to a
Shortfall Notice in an amount equal to its Funding Commitment.
If the aggregate Funding Commitments made by the Contributing
Partners exceed one hundred percent (100%) of the Shortfall, then
except as otherwise provided in Section 2.4(a)(iii), each
Contributing Partner shall be entitled to contribute an amount
equal to the same percentage of the Shortfall as such
Contributing Partner's Percentage Interest represents of the
total Percentage Interests of the Contributing Partners (in each
case before giving effect to any adjustments to the Percentage
Interests to be made in connection with the Additional
Contribution Notice with respect to which the Shortfall
occurred), provided that, if any Contributing Partner's Funding
Commitment was for an amount less than its proportionate share of
the Shortfall as so determined, the portion of the Shortfall not
so committed to be funded shall, except as otherwise provided in
Section 2.4(a)(iii), continue to be allocated proportionally, in
the manner provided above in this sentence, among the other
Contributing Partners until each has been allocated by such
process of apportionment an amount equal to its Funding
Commitment or until the entire Shortfall has been allocated among
the Contributing Partners. The amount of the Additional Capital
Contribution to be made by each Contributing Partner in response
to the Shortfall Notice as determined in accordance with this
Section 2.4(a)(ii) shall be specified in a notice delivered by
the Chief Executive Officer to the Contributing Partners and
shall, within ten (10) days after the date of such notice, be
paid to the account of the Partnership designated in the
Shortfall Notice.
(iii) Except as otherwise provided in Section
2.4(a)(iv), if the Declining Partner is a Cable Partner and no
Cable Partner's Percentage Interest, when added to the Percentage
Interests of all Controlled Affiliates of such Partner, is equal
to or greater than Sprint's Percentage Interest, when added to
the Percentage Interests of all Controlled Affiliates of Sprint
(in each case determined without regard to any Additional Capital
Contribution made by any Partner pursuant to the Additional
Contribution Notice with respect to which the Shortfall
occurred), the Shortfall shall be allocated first among those of
the Contributing Partners that are Cable Partners in the manner
provided in Section 2.4(a)(ii) as though Sprint were not a
Contributing Partner, and if and to the extent that the aggregate
Funding Commitments made by such Cable Partners are less than one
hundred percent (100%) of the Shortfall, the balance of the
Shortfall up to Sprint's Funding Commitment shall be allocated to
Sprint.
(iv) The Shortfall shall be allocated among the
Cable Partners in the manner set forth in Section 2.4(a)(iii)
until any Cable Partner would have a Percentage Interest, when
added to the Percentage Interests of all Controlled Affiliates of
such Partner, that is equal to Sprint's Percentage Interest, when
added to the Percentage Interests of all Controlled Affiliates of
Sprint, calculated in each case after giving effect to the
adjustments to the Percentage Interests to be made in connection
with the Additional Contribution Notice with respect to which the
Shortfall occurred assuming that the Additional Capital
Contributions to be made pursuant to this Section 2.4(a) were
made up to the aggregate amount that would yield such result (as
to each Partner, its "Adjusted Percentage Interest"). Any
portion of the Shortfall not yet allocated shall continue to be
allocated proportionately among all of the Contributing Partners
(including Sprint, if applicable) in the manner provided in
Section 2.4(a)(ii) without regard to Section 2.4(a)(iii), but
substituting the Adjusted Percentage Interests of the
Contributing Partners for the Percentage Interests that would
otherwise be used to determine such allocation, until each has
been allocated by such process an amount equal to its Funding
Commitment or until the entire Shortfall has been allocated among
the Contributing Partners.
(v) Notwithstanding the foregoing, if (A) any
Partner is a Declining Partner with respect to an Additional
Contribution Notice that requests a Second Tranche Call and (B)
the Partnership Board determines by Simple Majority Vote that the
aggregate Adjusted Net Equity of all Partners (provided that for
purposes of determining Adjusted Net Equity pursuant to this
Section 2.4(a)(v), Gross Appraised Value shall be determined by a
Simple Majority Vote of the Partnership Board) is less than the
aggregate amount of Original Capital Contributions and Additional
Capital Contributions made to the Partnership through the date of
the applicable Additional Contribution Notice (but excluding the
amount set forth in the Additional Contribution Notice), the
Partnership Board may elect to convert such Second Tranche Call
to a Premium Call by giving a Premium Call Notice (which shall
supercede such Additional Contribution Notice) to each Partner
within five (5) days after the date notice was required to be
received from the Declining Partner under Section 2.4(a)(i).
Each Partner, including the Declining Partner, shall have the
right to make an Additional Capital Contribution in response to a
Premium Call in an amount which represents the same percentage of
the amount of the Second Tranche Call requested in the Premium
Call Notice as such Partner's Percentage Interest as of the date
of such Premium Call Notice (the "Requested Premium Call
Contribution"). If each Partner makes its Requested Premium Call
Contribution, the amounts so contributed will not be treated as
Premium Dollars. If any Partner fails to make its Requested
Premium Call Contribution, then all amounts contributed pursuant
to this Section 2.4(a)(v) with respect to such Premium Call shall
be treated as Premium Dollars. In addition, if any Partner fails
to make its Requested Premium Call Contribution, the Chief
Executive Officer shall, within five (5) days after the Premium
Call Contribution Date, give a notice (a "Premium Call Shortfall
Notice") to each Partner that made its Requested Premium Call
Contribution in full (each a "Premium Call Paying Partner")
requesting the Premium Call Paying Partners to make Additional
Capital Contributions in an aggregate amount equal to the amount
not contributed by the Declining Partner (the "Premium Call
Shortfall"). The amount of the Premium Call Shortfall that each
Premium Call Paying Partner shall be entitled to make to the
Partnership in response to a Premium Call Shortfall Notice shall
be determined in the same manner as provided in Sections
2.4(a)(ii), (iii) and (iv) for the determination of the amount of
the Additional Capital Contribution that each Contributing
Partner is entitled to make in response to a Shortfall Notice.
The amount of the Premium Call Shortfall to be made by each
Premium Call Paying Partner in response to the Premium Call
Shortfall Notice as so determined shall be specified in a notice
delivered by the Chief Executive Officer to the Premium Call
Paying Partners and shall, within ten (10) days after the date of
such notice, be paid to the account of the Partnership designated
in the Premium Call Shortfall Notice and all amounts so paid
shall be treated as Premium Dollars. Any Partner that fails to
make a contribution in response to a Premium Call Notice shall
not be treated as a Delinquent Partner or a Defaulting Partner.
(b) Delinquent Partners. In the event that any Partner
other than a Declining Partner (a "Delinquent Partner") fails to
make all or any portion of its Requested Contribution on or
before the related Contribution Date, an additional amount shall
accrue as a penalty with respect to such unpaid amount (the
"Unpaid Amount") at the applicable Floating Rate from and
including the Contribution Date until the Unpaid Amount and the
full amount of the penalty accrued thereon (as of any date of
determination, the "Penalty Amount") are paid as provided in this
Section 2.4 or the failure to pay the same results in such
Partner becoming a Defaulting Partner. If the Delinquent Partner
pays the Unpaid Amount to the Partnership at any time during the
period ending at the close of business on the tenth (10th) day
following the related Contribution Date (the "Grace Period"), the
Delinquent Partner shall, at the time of such payment, pay to
each other Partner, if any, that made its Requested Contribution
in full on or before the related Contribution Date and has no
uncured Payment Defaults (each a "Timely Partner"), a pro rata
portion of the Penalty Amount (based on the percentage that the
amount of each Timely Partners' Requested Contribution represents
of the total amount of the Timely Partner's Requested
Contributions), but in no event more than the amount that such
Timely Partner would have earned as interest on the amount of its
Requested Contribution, from and including the Contribution Date
to the date the Delinquent Partner pays the Unpaid Amount to the
Partnership, if the Timely Partner had made a loan in such amount
to the Partnership with interest at the Floating Rate applicable
during the Grace Period. The balance of the Penalty Amount, if
any, shall be paid by the Delinquent Partner to the Partnership
and the amount so paid shall be deemed to be a "Special
Contribution" by the Delinquent Partner to the capital of the
Partnership. The portion of the Penalty Amount paid to the
Timely Partners shall not, for any purpose, be deemed to be a
Capital Contribution.
(c) Defaulting Partners.
(i) If a Delinquent Partner fails to pay the
Unpaid Amount together with the Penalty Amount to the Partnership
or the Timely Partners as provided in Section 2.4(b) on or before
the expiration of the Grace Period, such failure shall constitute
a "Payment Default" and, if such Payment Default is not
thereafter cured in full as provided in Section 2.4(c)(iii), the
Delinquent Partner shall for all purposes hereof be considered a
"Defaulting Partner" with the effect described herein.
(ii) If a Payment Default occurs, the Chief
Executive Officer shall, within five (5) days after the
expiration of the related Grace Period, give a notice (a "Default
Loan Notice") to each Partner that was a Paying Partner with
respect to such Additional Contribution Notice requesting the
Paying Partners to make loans (each a "Default Loan") to the
Partnership in an aggregate amount equal to the Unpaid Amount.
Each Paying Partner that is willing to commit to make a Default
Loan (each a "Lending Partner") shall so notify the Chief
Executive Officer and each other Paying Partner within ten (10)
days after the date the Default Loan Notice was given, setting
forth the maximum portion of the Unpaid Amount, up to one hundred
percent (100%) thereof, that such Lending Partner is willing to
lend to the Partnership (the "Lending Commitment"). The amount
of the Default Loan that each Lending Partner shall be entitled
to make to the Partnership in response to a Default Loan Notice
shall be determined in the same manner as provided in Section
2.4(a) for the determination of the amount of the Additional
Capital Contribution that each Contributing Partner is entitled
to make in response to a Shortfall Notice. The amount of the
Default Loan to be made by each Lending Partner in response to
the Default Loan Notice as so determined shall be specified in a
notice delivered by the Chief Executive Officer to the Lending
Partners and within ten (10) days of the date of such notice
shall be paid to the account of the Partnership designated in the
Default Loan Notice. Each Default Loan shall bear interest from
the date made (the "Loan Date") until paid in full or contributed
to the Partnership as provided in this Section 2.4 at the
Floating Rate applicable following the Grace Period and shall be
evidenced by a promissory note of the Partnership in the form of
Exhibit 2.4(c)(ii) (with any changes thereto requested by any
lender under any Senior Credit Agreement and consented to by the
Lending Partner, which consent shall not be unreasonably
withheld).
(iii) A Delinquent Partner may cure its Payment
Default at any time prior to the close of business on the
ninetieth (90th) day following the Loan Date (the "Cure Date") by
transferring to an account of the Partnership designated by the
Chief Executive Officer cash in an amount equal to the sum of the
Unpaid Amount and the Penalty Amount accrued thereon to the date
of such transfer (the "Make-up Amount"). The portion of the
Make-up Amount equal to the Penalty Amount shall be deemed to be
a Special Contribution by the Delinquent Partner to the
Partnership and the balance thereof shall constitute an
Additional Capital Contribution by the Delinquent Partner to the
Partnership. The Chief Executive Officer shall cause the
Partnership to apply the funds so received from the Delinquent
Partner to the payment in full of the unpaid principal of and
accrued interest on each Default Loan in accordance with the
terms of the note evidencing the same.
(iv) If a Delinquent Partner has not timely
cured its Payment Default in full in accordance with Section
2.4(c)(iii), then the Lending Partners shall contribute their
respective Default Loans to the Partnership effective as of the
day following the Cure Date and surrender the notes evidencing
the same to the Partnership for cancellation. The unpaid
principal amount of a Lending Partner's Default Loan through the
Cure Date shall constitute an Additional Capital Contribution
(and the accrued interest on such Default Loan shall constitute a
Special Contribution) by the Lending Partner to the Partnership
as of the effective date of such contribution.
(d) Adjustments to Percentage Interests. The
Percentage Interests of the Partners shall be adjusted in
accordance with this Section 2.4(d). The Partnership Board shall
provide notice of each adjustment to all Partners and Schedule
2.1 shall be revised to reflect such adjustment.
(i) Except as otherwise provided in clause (ii) of
this Section 2.4(d), the Percentage Interests of the Partners
shall be adjusted in accordance with the definition of
"Percentage Interest" to give effect to Additional Capital
Contributions made (or deemed to be made) pursuant to Section
2.3, Section 2.5 (if applicable) and this Section 2.4, provided
that if there are any Declining Partners or Delinquent Partners
with respect to any Additional Contribution Notice, the
determination of the amount of the adjustment of the Percentage
Interests for Additional Capital Contributions made in response
to such notice will be deferred until the later of the last day
for the making of Additional Capital Contributions in connection
with any Shortfall and the expiration of the Grace Period,
provided, however, that such adjustment, whenever determined,
shall be effective as of the Contribution Date. The Percentage
Interests of the Partners will be further adjusted as and when
Additional Capital Contributions, if any, are made as
contemplated by clause (iii) or (iv), as applicable, of Section
2.4(c).
(ii) If any Partner fails for any reason (x) to
make its Requested Contribution with respect to an Additional
Contribution Notice that requests Additional Capital
Contributions in an amount that, when added to the aggregate
amount of Original Capital Contributions and Additional Capital
Contributions made or requested to be made in accordance with
this Agreement (excluding any PioneerCo Contribution), would
exceed Five Billion Dollars ($5,000,000,000), or (y) to make a
Preemptive Contribution at such time as the aggregate amount of
Original Capital Contributions and Additional Capital
Contributions made or requested to be made in accordance with
this Agreement (excluding any PioneerCo Contribution but
including all Preemptive Contributions made or to be made in
connection with the PioneerCo Contribution with respect to which
such Partner failed to make its Preemptive Contribution) exceed
Five Billion Dollars ($5,000,000,000), the Percentage Interests
of the Partners shall be adjusted and thereafter determined in
accordance with this Section 2.4(d)(ii). Such determination
shall be made on the later of the last day for the making of
Additional Capital Contributions in connection with any Shortfall
and the tenth (10th) day following the applicable Contribution
Date (or, with respect to a Preemptive Contribution, such other
date as may be determined by the Partnership Board in connection
with the related PioneerCo Contribution) and shall be effective
as of the Contribution Date (or, with respect to a Preemptive
Contribution, the applicable PioneerCo Contribution Date). The
adjusted Percentage Interest of a Partner shall be equal to a
fraction (expressed as a percentage) the numerator of which shall
be the sum of (A) the Adjusted Net Equity of such Partner plus
(B) either (1) with respect to a Requested Contribution, the
Additional Capital Contribution made by such Partner with respect
to such Additional Contribution Notice (including any Additional
Capital Contributions made by such Partner in connection with any
Shortfall) or (2) with respect to a Preemptive Contribution, the
Preemptive Contribution or PioneerCo Contribution made by such
Partner, as applicable, and the denominator of which shall be the
sum of (C) the aggregate Adjusted Net Equity of all Partners plus
(D) either (i) with respect to a Requested Contribution, the
aggregate Additional Capital Contributions made by all Partners
with respect to such Additional Contribution Notice (including
any Additional Capital Contributions made in connection with any
Shortfall) or (2) with respect to a Preemptive Contribution, the
aggregate Preemptive Contributions made by all Partners and the
PioneerCo Contribution to which such Preemptive Contributions
relate. The "Adjusted Net Equity" of a Partner shall be the
amount that would be distributed as of the applicable
Contribution Date or PioneerCo Contribution Date to such Partner
in liquidation of the Partnership pursuant to Section
14.2(a)(iii) if (I) all of the Partnership's business and assets
(including its partnership interests in WirelessCo, but excluding
the amounts of any Additional Capital Contributions made pursuant
to such Additional Contribution Notice or, with respect to a
Preemptive Contribution, the Preemptive Contributions and
PioneerCo Contribution to which such Preemptive Contribution
relates) were sold substantially as an entirety for Gross
Appraised Value (determined in accordance with Section
2.4(d)(iii)), (II) Profits and Losses and items specially
allocated in accordance with Sections 3.3 and 3.4 for the
Allocation Year ending on the date of such determination,
including any gain or loss resulting from the deemed sale
described in clause (I), were allocated in accordance with
Section 3, (III) the Partnership paid its accrued, but unpaid,
liabilities and established reserves pursuant to Section 14.2 for
the payment of reasonably anticipated contingent or unknown
liabilities and (IV) the Partnership distributed the remaining
proceeds to the Partners in liquidation, all as of such
Contribution Date or applicable PioneerCo Contribution Date.
(iii) (A) Except as otherwise will be provided in
the PioneerCo Partnership Agreement to reflect the principles set
forth in Item 8(c) of Exhibit 1.1(b) to the Joint Venture
Formation Agreement, whenever Adjusted Net Equity is required to
be determined pursuant to Section 2.4(d)(ii), Gross Appraised
Value shall be determined by the Partnership Board by a Simple
Majority Vote based upon the most recent determination of Gross
Appraised Value (the "Base Value") pursuant to Section
2.4(d)(iii)(B). In making its determination of Gross Appraised
Value pursuant to this Section 2.4(d)(iii)(A), the Partnership
Board shall adjust the Base Value for any Capital Contributions
by and distributions to the Partners and for the operating
results and other transactions of the Partnership from the date
as of which the Base Value was determined to the applicable
Contribution Date.
(B) Gross Appraised Value shall be determined
as of December 31 of the Fiscal Year immediately preceding the
Fiscal Year in which the amount of Additional Capital
Contributions contemplated under the Annual Budget (or Default
Budget, if applicable) for the forthcoming Fiscal Year, when
added to the aggregate amount of Original Capital Contributions
and Additional Capital Contributions theretofore made or
requested to be made in accordance with this Agreement (excluding
any PioneerCo Contribution), would exceed Five Billion Dollars
($5,000,000,000), and thereafter shall be determined as of
December 31 of each Fiscal Year. Gross Appraised Value shall be
determined as provided in Section 11.4, and the General Partner
that (together with its Controlled Affiliates) holds the largest
Voting Percentage Interest shall designate the First Appraiser
not less than twenty (20) days prior to the date as of which
Gross Appraised Value is to be determined, and the General
Partner that (together with its Controlled Affiliates) holds the
smallest Voting Percentage Interest shall appoint the Second
Appraiser within ten (10) Business Days of receiving notice of
the appointment of the First Appraiser. The Partnership Board
shall, by Simple Majority Vote, estimate Gross Appraised Value
and the Adjusted Net Equity of the Partners from time to time as
necessary to comply with the notice requirement set forth in
clause (vi) of the definition of Additional Contribution Notice.
(iv) If any Requested Contributions are requested
to be made or any PioneerCo Contribution is made at such time as
the aggregate amount of Original Capital Contributions and
Additional Capital Contributions previously made in accordance
with this Agreement (excluding all PioneerCo Contributions)
(collectively, the "Aggregate Contributions") is less than Five
Billion Dollars ($5,000,000,000), but the aggregate amount of
such Requested Contributions or the aggregate amount of
Preemptive Contributions permitted to be made pursuant to Section
2.3(c) in response to such PioneerCo Contribution, as applicable,
when added to the Aggregate Contributions, exceeds Five Billion
Dollars ($5,000,000,000), then any adjustment of the Percentage
Interests of the Partners pursuant to this Section 2.4(d) shall
be determined (A) with respect to that portion of the amount of
such Requested Contributions or Preemptive Contributions, as
applicable, that, when added to the Aggregate Contributions
equals Five Billion Dollars ($5,000,000,000), in accordance with
Section 2.4(d)(i), and (B) with respect to that portion of the
amount of such Requested Contributions or Preemptive
Contributions, as applicable, that, when added to the Aggregate
Contributions exceeds Five Billion Dollars ($5,000,000,000), in
accordance with Section 2.4(d)(ii).
(e) Paying Partners. A Paying Partner that declines to
make a Funding Commitment or Lending Commitment as contemplated
by this Section 2.4 shall not be deemed to be a Delinquent
Partner or Defaulting Partner as a result thereof, nor shall the
failure to make such a commitment constitute a Payment Default
with respect to such Partner.
(f) Floating Rate. Subject to the last two sentences
of Section 2.7(b), the term "Floating Rate" means the rate per
annum (computed on the basis of the actual number of days elapsed
in a year of 365 or 366 days, as applicable), compounded monthly,
equal to the greater of (i) the Prime Rate (adjusted as and when
changes in the Prime Rate occur) plus (x) during the Grace
Period, two percent (2%) and (y) following the Grace Period, five
percent (5%), and (ii) the rate per annum applicable to
borrowings by the Partnership under its principal credit
facility, if any, or, if a choice of rates is then available to
the Partnership, the highest such rate (in either case adjusted
as and when changes in such applicable rate occur) plus,
following the Grace Period, two percent (2%).
2.5 Other Additional Capital Contributions.
Each Partner may contribute from time to time such
additional cash or other Property as the Partnership Board may
approve by Unanimous Vote or as may be expressly contemplated by
this Agreement, provided that any Capital Contribution of
Property (other than cash or any PioneerCo Contribution) made
pursuant to this Section 2.5 shall be subject to the terms and
provisions of an Additional Contribution Agreement.
2.6 Partnership Funds.
The funds of the Partnership shall be deposited in such bank
accounts or invested in such investments as shall be designated
by the Partnership Board. Partnership funds shall not be
commingled with those of any Person other than any Subsidiary of
the Partnership in which the Partnership and MinorCo own, in the
aggregate, directly or indirectly, one hundred percent (100%) of
the outstanding equity interests, without a Unanimous Vote of the
Partnership Board. The Partnership shall not lend or advance
funds to, or guarantee any obligation of, a Partner or any
Affiliate thereof without the prior written consent of all
Partners.
2.7 Partner Loans; Other Borrowings.
(a) Partner Loans. In order to satisfy the
Partnership's financial needs, the Partnership may, if so
approved by the requisite vote of the Partnership Board, borrow
from (i) banks, lending institutions or other unrelated third
parties, and may pledge Partnership properties or the production
of income therefrom to secure and provide for the repayment of
such loans and (ii) any Partner or an Affiliate of a Partner.
Loans made by a Partner or an Affiliate of a Partner (a "Partner
Loan") shall be evidenced by a promissory note of the Partnership
in the form attached as Exhibit 2.7 and, subject to the last two
sentences of Section 2.7(b), shall bear interest payable
quarterly from the date made until paid in full at a rate per
annum to be determined by the Partnership Board that is no less
favorable to the Partnership than if the loan had been made by an
independent third party. Unless a Partner declines to make such
loan or is a Defaulting Partner or a Partner subject to
Bankruptcy, Partner Loans shall be made pro rata in accordance
with the respective Percentage Interests of the Partners (or in
such other proportion as the Partnership Board may approve by
Unanimous Vote).
(b) Terms of Partner Loans. Unless otherwise
determined by the Partnership Board, all Partner Loans and
Default Loans shall be unsecured and the promissory notes
evidencing the same shall be non-negotiable and, except as
otherwise provided in this Section 2.7 or Section 12.3(c),
nontransferable. Repayment of the principal amount of and
accrued interest on all Partner Loans and Default Loans shall be
subordinated to the repayment of the principal of and accrued
interest on any indebtedness of the Partnership to third party
lenders to the extent required by the applicable provisions of
the instruments creating such indebtedness to third party lenders
("Senior Credit Agreements"). All amounts required to be paid in
accordance with the terms of such notes and all amounts permitted
to be prepaid shall be applied to the notes held by the Partners
in accordance with the order of payment contemplated by Section
14.2(b)(ii) and (iii). Subject to the terms of applicable Senior
Credit Agreements, Partner Loans shall be repaid to the Partners
at such times as the Partnership has sufficient funds to permit
such repayment without jeopardizing the Partnership's ability to
meet its other obligations on a timely basis. Nothing contained
in this Agreement or in any promissory note issued by the
Partnership hereunder shall require the Partnership or any
Partner to pay interest or any amount as a penalty at a rate
exceeding the maximum amount of interest permitted to be
collected from time to time under applicable usury laws. If the
amount of interest or of such penalty payable by the Partnership
or any Partner on any date would exceed the maximum permissible
amount, it shall be automatically reduced to such amount, and
interest or the amount of the penalty for any subsequent period,
to the extent less than that permitted by applicable usury laws,
shall, to that extent, be increased by the amount of such
reduction.
(c) Purchase of Partner Loans. An election by a
Partner to purchase all or any portion of another Partner's
Interest pursuant to Sections 5.1, 6.4(f), 11, 12.4, 12.5, 12.6
or 14.7 shall also constitute an election to purchase an
equivalent portion of any outstanding Partner Loans held by such
selling Partner, and each purchasing Partner shall be obligated
to purchase a percentage of such Partner Loans equal to the
percentage of the selling Partner's Interest such purchasing
Partner is obligated to purchase for a price equal to the same
percentage of the outstanding principal and accrued and unpaid
interest on such Partner Loans through the date of the closing of
such purchase (except in the case of a Transfer pursuant to
Section 12.4, in which case the terms of the Purchase Offer shall
apply).
2.8 Other Matters.
(a) No Partner shall have the right to demand or,
except as otherwise provided in Sections 4.1 and 14.2, receive a
return of all or any part of its Capital Account or its Capital
Contributions or withdraw from the Partnership without the
consent of all Partners. Under circumstances requiring a return
of all or any part of its Capital Account or Capital
Contributions, no Partner shall have the right to receive
Property other than cash.
(b) Subject to Sections 5.4 and 14.3, the Exclusive
Limited Partners shall not be liable for the debts, liabilities,
contracts or any other obligations of the Partnership. Except as
otherwise provided by any other agreements among the Partners or
mandatory provisions of applicable state law, an Exclusive
Limited Partner shall be liable only to make Capital
Contributions to the extent required by Sections 2.3, 2.5 and
14.3 and shall not be required to lend any funds to the
Partnership or, after such Capital Contributions have been made,
to make any additional Capital Contributions to the Partnership.
(c) No Partner shall have any personal liability for
the repayment of any Capital Contributions of any other Partner.
(d) No Partner shall be entitled to receive interest on
its Capital Contributions or Capital Account except as otherwise
specifically provided in this Agreement.
SECTION 3. ALLOCATIONS
3.1 Profits.
After giving effect to the special allocations set forth in
Sections 3.3 and 3.4, Profits for any Allocation Year shall be
allocated in the following order and priority:
(a) First, one hundred percent (100%) to the Partners,
in proportion to, and to the extent of, an amount equal to the
excess, if any, of (i) the cumulative Losses allocated to each
such Partner pursuant to Section 3.5 for all prior Allocation
Years, over (ii) the cumulative Profits allocated to such Partner
pursuant to this Section 3.1(a) for all prior Allocation Years;
(b) Second, one hundred percent (100%) to the Partners,
in proportion to, and to the extent of, an amount equal to the
excess, if any, of (i) the cumulative Losses allocated to each
such Partner pursuant to Section 3.2(c) for all prior Allocation
Years, over (ii) the cumulative Profits allocated to such Partner
pursuant to this Section 3.1(b) for all prior Allocation Years;
(c) Third, to the extent such Profits arise during or
after the Allocation Year in which all or substantially all of
the Partnership's assets are disposed of (or revalued pursuant to
clause (ii) of the definition of Gross Asset Value), to the
Partners in such ratios and amounts as may be necessary to cause
the balances in their Capital Accounts to be as nearly as
practicable in the same ratio as their respective Percentage
Interests; and
(d) The balance, if any, among the Partners in
proportion to their Percentage Interests.
3.2 Losses.
After giving effect to the special allocations set forth in
Sections 3.3 and 3.4, and subject to Section 3.5, Losses for any
Allocation Year shall be allocated in the following order and
priority:
(a) First, one hundred percent (100%) to the Partners,
in proportion to, and to the extent of, the excess, if any, of
(i) the cumulative Profits allocated to each such Partner
pursuant to Section 3.1(d) for all prior Allocation Years, over
(ii) the cumulative Losses allocated to such Partner pursuant to
this Section 3.2(a) for all prior Allocation Years;
(b) Second, to the extent such Losses arise during or
after the Allocation Year in which all or substantially all of
the Partnership's assets are disposed of, to the Partners in such
ratio and amounts as may be necessary to cause the balances in
their Capital Accounts to be as nearly as practicable in the same
ratio as their respective Percentage Interests; and
(c) The balance, if any, among the Partners in
proportion to their Percentage Interests.
3.3 Special Allocations.
The following special allocations shall be made in the
following order:
(a) Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(f) of the Regulations,
notwithstanding any other provision of this Section 3, if there
is a net decrease in Partnership Minimum Gain during any
Allocation Year, each Partner shall be specially allocated items
of Partnership income and gain for such Allocation Year (and, if
necessary, subsequent Allocation Years) in an amount equal to
such Partner's share of the net decrease in Partnership Minimum
Gain, determined in accordance with Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Sections
1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section
3.3(a) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as
otherwise provided in Section 1.704-2(i)(4) of the Regulations,
notwithstanding any other provision of this Section 3, if there
is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any Allocation
Year, each Partner who has a share of the Partner Nonrecourse
Debt Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Section 1.704-2(i)(5) of the
Regulations, shall be specially allocated items of Partnership
income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Partner's
share of the net decrease in Partner Nonrecourse Debt Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.704-2(i)(4) and
1.704-2(j)(2) of the Regulations. This Section 3.3(b) is
intended to comply with the minimum gain chargeback requirement
in Section 1.704-2(i)(4) of the Regulations and shall be
interpreted consistently therewith.
(c) Qualified Income Offset. In the event any
Exclusive Limited Partner unexpectedly receives any adjustments,
allocations, or distributions described in Sections 1.704-
1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-
1(b)(2)(ii)(d)(6) of the Regulations, items of Partnership income
and gain shall be specially allocated to each such Exclusive
Limited Partner in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Exclusive Limited Partner as quickly as
possible, provided that an allocation pursuant to this Section
3.3(c) shall be made only if and to the extent that such
Exclusive Limited Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Section
3 have been tentatively made as if this Section 3.3(c) were not
in the Agreement.
(d) Gross Income Allocation. In the event any
Exclusive Limited Partner has a deficit Capital Account at the
end of any Allocation Year which is in excess of the sum of (i)
the amount such Exclusive Limited Partner is obligated to restore
pursuant to any provision of this Agreement, and (ii) the amount
such Exclusive Limited Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such
Exclusive Limited Partner shall be specially allocated items of
Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this
Section 3.3(d) shall be made only if and to the extent that such
Exclusive Limited Partner would have a deficit Capital Account in
excess of such sum after all other allocations provided for in
this Section 3 have been made as if Section 3.3(c) and this
Section 3.3(d) were not in the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for
any Allocation Year shall be specially allocated among the
Partners in proportion to their Percentage Interests.
(f) Partner Nonrecourse Deductions. Any Partner
Nonrecourse Deductions for any Allocation Year shall be specially
allocated to the Partner who bears the economic risk of loss with
respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(1).
(g) Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Partnership asset
pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2)
or 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as the result of a distribution to a
Partner in complete liquidation of its Interest, the amount of
such adjustment to Capital Accounts shall be treated as an item
of gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases such basis) and such gain or
loss shall be specially allocated to the Partners in accordance
with their interests in the Partnership in the event Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to
whom such distribution was made in the event Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(h) Special Interest Allocation. In the event that the
Partnership makes any payment in respect of interest accrued on
any Default Loan in any Allocation Year, the deduction
attributable to such payment shall be specially allocated to the
Delinquent Partner with respect to which such Default Loan was
made.
3.4 Curative Allocations.
The allocations set forth in Sections 3.3(a), 3.3(b),
3.3(c), 3.3(d), 3.3(e), 3.3(f), 3.3(g) and 3.5 (the "Regulatory
Allocations") are intended to comply with certain requirements of
the Regulations. It is the intent of the Partners that, to the
extent possible, all Regulatory Allocations shall be offset
either with other Regulatory Allocations or with special
allocations of other items of Partnership income, gain, loss or
deduction pursuant to this Section 3.4. Therefore,
notwithstanding any other provision of this Section 3 (other than
the Regulatory Allocations), the Partnership Board shall make
such offsetting special allocations of Partnership income, gain,
loss or deduction in whatever manner it determines appropriate so
that, after such offsetting allocations are made, each Partner's
Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Partner would have had if the
Regulatory Allocations were not part of the Agreement and all
Partnership items were allocated pursuant to Sections 3.1, 3.2
and 3.3(h). In exercising its discretion under this Section 3.4,
the Partnership Board shall take into account future Regulatory
Allocations under Sections 3.3(a) and 3.3(b) that, although not
yet made, are likely to offset other Regulatory Allocations
previously made under Section 3.3(e) and 3.3(f).
3.5 Loss Limitation.
The Losses allocated pursuant to Section 3.2 shall not
exceed the maximum amount of Losses that can be so allocated
without causing (or increasing the amount of) any Exclusive
Limited Partner to have an Adjusted Capital Account Deficit at
the end of any Allocation Year. All Losses in excess of such
limitation shall be allocated to the Partners who are not
Exclusive Limited Partners in proportion to their Percentage
Interests.
3.6 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or
any other items allocable to any period, Profits, Losses, and any
such other items shall be determined on a daily, monthly, or
other basis, as determined by a Required Majority Vote of the
Partnership Board using any permissible method under Code Section
706 and the Regulations thereunder.
(b) The Partners are aware of the income tax
consequences of the allocations made by this Section 3 and hereby
agree to be bound by the provisions of this Section 3 in
reporting their shares of Partnership income and loss for income
tax purposes.
(c) Solely for purposes of determining a Partner's
proportionate share of the "excess nonrecourse liabilities" of
the Partnership within the meaning of Section 1.752-3(a)(3) of
the Regulations, the Partners' interests in Partnership profits
are in proportion to their Percentage Interests.
(d) To the extent permitted by Section 1.704-2(h)(3) of
the Regulations, the Partnership Board shall endeavor to treat
distributions of cash as having been made from the proceeds of a
Nonrecourse Liability or a Partner Nonrecourse Debt only to the
extent that such distributions would cause or increase an
Adjusted Capital Account Deficit for any Exclusive Limited
Partner.
3.7 Tax Allocations: Code Section 704(c).
In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Partners so as to
take account of any variation between the adjusted basis of such
property to the Partnership for federal income tax purposes and
its initial Gross Asset Value using the traditional method with
curative allocations as described in Section 1.704-3 of the
Regulations, applied as necessary in any reasonable manner not
expressly precluded by Section 1.704-3 of the Regulations. In
making such allocations, Section 704(c) shall be applied as if
the Partnership's proportionate share of the assets owned by any
partnership, interests in which are contributed to the
Partnership ("Subsidiary Partnership"), were owned directly by
the Partnership and were contributed by the Partners who
contributed the Subsidiary Partnership interests.
In the event the Gross Asset Value of any Partnership asset
is adjusted pursuant to subparagraph (ii) of the definition of
Gross Asset Value, subsequent allocations of income, gain, loss,
and deduction with respect to such asset shall take account of
any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations
thereunder.
Any elections or other decisions relating to such
allocations shall be made by the Partnership Board in any manner
that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 3.7 are solely
for purposes of federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any
Partner's Capital Account or share of Profits, Losses, other
items, or distributions pursuant to any provision of this
Agreement.
SECTION 4. DISTRIBUTIONS
4.1 Available Cash.
From time to time the Partnership Board by a Required
Majority Vote may determine to distribute Available Cash to the
Partners. Except as otherwise provided in Section 14.2,
Available Cash, if any, shall be distributed to the Partners in
proportion to their respective Percentage Interests in such
amounts and at such times as the Partnership Board shall
determine by Required Majority Vote. Prior to making any cash
distributions to the Partners pursuant to this Section 4.1, the
Partnership shall have paid in full all Partner Loans (in
accordance with the order of payment contemplated by Section
14.2(b)).
4.2 Tax Distributions.
(a) Subject to Section 4.2(b), Available Cash shall be
distributed to the Partners in proportion to their Percentage
Interests within one hundred thirty-five (135) days after the end
of each Fiscal Year of the Partnership in an aggregate amount
equal to the Hypothetical Federal Income Tax Amount for such
Fiscal Year.
(b) Prior to making any cash distributions to the
Partners pursuant to Section 4.2(a), the Partnership shall have
paid in full all Partner Loans (in accordance with the order of
payment contemplated by Section 14.2(b)).
4.3 Amounts Withheld.
All amounts withheld pursuant to the Code or any provision
of any state or local tax law from any payment or distribution to
a Partner shall be treated as amounts paid or distributed to such
Partner pursuant to this Section 4 for all purposes under this
Agreement. The Partnership is authorized to withhold from
payments and distributions to any Partner and to pay over to any
federal, state, or local government any amounts required to be so
withheld pursuant to the Code or any provisions of any other
federal, state, or local law.
SECTION 5. MANAGEMENT
5.1 Authority of the Partnership Board.
(a) General Authority. Subject to the limitations and
restrictions set forth in this Agreement, the General Partners
shall conduct the business and affairs of the Partnership, and
all powers of the Partnership, except those specifically reserved
to the Partners by the Act or this Agreement, are hereby granted
to and vested in the General Partners, which shall conduct such
business and exercise such powers through their Representatives
on the Partnership Board.
(b) Delegation. The Partnership Board shall have the
power to delegate authority to such officers, employees, agents
and representatives of the Partnership as it may from time to
time deem appropriate. Any delegation of authority to take any
action must be approved in the same manner as would be required
for the Partnership Board to approve such action directly.
(c) Number and Term of Office. The Partnership Board
initially shall have six voting members, one of which shall be
designated by each Cable Partner and three of which shall be
designated by Sprint. The Chief Executive Officer shall be a
non-voting member of the Partnership Board. During the term of
this Agreement, except as otherwise provided below, each General
Partner shall be entitled to designate one Representative to the
Partnership Board, provided that (i) for so long as Sprint is
entitled to representation on the Partnership Board (except as
otherwise provided below), Sprint shall be entitled to designate
three Representatives to the Partnership Board; provided,
however, that at any time any other Partner holds a greater
Voting Percentage Interest than Sprint (except as otherwise
provided below), Sprint shall be entitled to designate only two
Representatives to the Partnership Board; and provided, further,
that at any time any other Partner holds a greater Voting
Percentage Interest than Sprint and Sprint's Percentage Interest
is less than twenty percent (20%), Sprint shall be entitled to
designate only one Representative to the Partnership Board, and
(ii) those Partners, if any, that are Controlled Affiliates of
the same Parent (a "Related Group") shall collectively be
entitled to designate only the largest number of Representatives
as is entitled to be designated by any single member of the
Related Group, which Representative(s) shall be designated by the
Partner that has the largest Percentage Interest of the Partners
in the Related Group. Any Partner whose Percentage Interest,
together with the Percentage Interest(s) of each other Partner,
if any, that is a member of the same Related Group, is, in the
aggregate, less than the Minimum Ownership Requirement shall, for
so long as its Percentage Interest or the aggregate Percentage
Interest of its Related Group, as applicable, is less than the
Minimum Ownership Requirement, not be entitled to designate a
Representative to the Partnership Board, and the Representative
of such Partner or Related Group, as applicable, shall
immediately cease to be a member of the Partnership Board,
without any further act by the affected Partner.
Any Partner who becomes an Adverse Partner shall immediately
forfeit the right to designate a member of the Partnership Board,
and the Representative(s) of the affected Partner shall
immediately cease to be a member of the Partnership Board,
without any further act by the affected Partner; provided that if
a Partner becomes an Adverse Partner as the result of the
occurrence of an Adverse Act described in clause (iii), (iv),
(vi) or (vii) of the definition of such term in Section 1.10,
such Partner will regain (or its transferee will be entitled to,
as applicable) the right to designate a Representative on the
Partnership Board (if otherwise so entitled thereto under this
Agreement) if (i) in the case of a Partner that is an Adverse
Partner other than as a result of the occurrence of an Adverse
Act described in clause (iii) of the definition of such term in
Section 1.10, such Partner Transfers its Interest in compliance
with Section 12 to a Person that is not an Adverse Partner and
does not become an Adverse Partner as a result of such Transfer,
(ii) in the case of a Partner that is an Adverse Partner as a
consequence of the occurrence of an Adverse Act described in
clause (iii) of the definition of such term in Section 1.10,
there is a Final Determination that such Partner's actions or
failure to act did not constitute such an Adverse Act, (iii) in
the case of a Partner that is an Adverse Partner as a consequence
of Bankruptcy, such Partner ceases to be in a state of
Bankruptcy, (iv) in the case of a Partner that is an Adverse
Partner as a consequence of the occurrence of any IXC
Transaction, such Partner ceases to have the relationship with
the IXC which caused such IXC Transaction to occur, or (v) in the
case of a Partner that is an Adverse Partner as a consequence of
the occurrence of an event described in clause (vii) of the
definition of the term "Adverse Act" in Section 1.10, such
Partner takes actions that eliminate the circumstances that
constituted such an Adverse Act within the meaning of such clause
(vii). The membership of the Partnership Board shall be
increased or decreased from time to time in accordance with the
foregoing provisions of this Section 5.1(c).
Each Representative shall hold office at the pleasure of the
Partner that designated such Representative. Any Partner may at
any time, and from time to time, by written notice to the other
Partners remove any or all of the Representatives designated by
such Partner, with or without cause, and appoint substitute
Representatives to serve in their stead. Each Partner shall be
entitled to name one or more alternate Representatives to serve
in the place of any Representative appointed by such Partner
should any such Representative not be able to attend a meeting or
meetings or any portion thereof, including in the case of a
Representative of Comcast not being able to attend a meeting to
the extent required in order to comply with the provisions of
Section 8.14. Each such alternate shall be deemed to be a
Representative hereunder with respect to any action taken at such
meeting or meetings or any portion thereof. Each Partner shall
bear the costs incurred by each Representative or alternate
designated by it to serve on the Partnership Board, and no
Representative or alternate shall be entitled to compensation
from the Partnership for serving in such capacity.
The written notice of a Partner's appointment of a
Representative or alternate shall in each case set forth such
Representative's or alternate's business and residence addresses
and business telephone number. Each Partner shall promptly give
written notice to the other Partners of any change in the
business or residence address or business telephone number of any
of its Representatives. Each Partner shall cause its
Representatives on the Partnership Board to comply with the terms
of this Agreement. In the absence of prior written notice to the
contrary, any action taken by a Representative of a Partner shall
be deemed to have been duly authorized by the Partner that
appointed such Representative.
(d) Vacancy. In the event any Representative dies or
is unwilling or unable to serve as such or is removed from office
by the Partner that designated him or her, such Partner shall
promptly designate a successor to such Representative.
(e) Place of Meeting/Action by Written Consent. The
Partnership Board may hold its meetings at such place or places
within or outside the State of Delaware as the Partnership Board
may from time to time determine or as may be designated in the
notice calling the meeting. If a meeting place is not so
designated, the meeting shall be held at the Partnership's
principal office. Notwithstanding anything to the contrary in
this Section 5.1, the Partnership Board may take without a
meeting any action contemplated to be taken by the Partnership
Board under this Agreement if such action is approved by the
unanimous written consent of a Representative of each of the
Partners then entitled to designate a Representative to the
Partnership Board (which may be executed in counterparts). The
Partnership Board may meet in person or by means of conference
telephone or similar communications equipment. Each
Representative shall have the right to participate in any meeting
by means of conference telephone or similar communications
equipment.
(f) Regular Meetings. The Partnership Board shall hold
regular meetings no less frequently than quarterly and shall
establish meeting times, dates and places and requisite notice
requirements and adopt rules or procedures consistent with the
terms of this Agreement. At such meetings the members of the
Partnership Board shall transact such business as may properly be
brought before the meeting.
(g) Special Meetings. Special meetings of the
Partnership Board may be called by any Representative. Notice of
each such meeting shall be given to each member of the
Partnership Board by telephone, telecopy, telegram or similar
method (in which case notice shall be given at least twenty-four
(24) hours before the time of the meeting) or sent by first-class
mail (in which case notice shall be given at least five (5) days
before the meeting), unless a longer notice period is established
by the Partnership Board. Each such notice shall state (i) the
time, date, place (which shall be at the principal office of the
Partnership unless otherwise agreed to by all Representatives) or
other means of conducting such meeting and (ii) the purpose of
the meeting to be so held. Any Representative may waive notice
of any meeting in writing before, at or after such meeting. The
attendance of a Representative at a meeting shall constitute a
waiver of notice of such meeting, except when a Representative
attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting was not properly
called.
(h) Voting. The Representative(s) of each General
Partner or of the General Partners in a Related Group shall
together have voting power equal to the Voting Percentage
Interest held by such General Partner or the aggregate Voting
Percentage Interest of the General Partners in such Related
Group, as applicable, as in effect from time to time. If a
General Partner or a Related Group designates only one
Representative, such Representative shall be entitled to vote the
entire voting power held by such General Partner or the General
Partners in such Related Group, as applicable. If a General
Partner or Related Group designates more than one Representative,
such Representatives shall vote the entire voting power of such
General Partner or the General Partners in such Related Group as
a single unit. None of the Partners (other than the Partners in
a Related Group) shall enter into any agreements with any other
Partner or such other Partner's Controlled Affiliates regarding
the voting of their Interests or such other Partner's
Representatives on the Partnership Board.
(i) Simple Majority Vote. No action may be taken by
the Partnership in connection with any of the matters listed on
Schedule 5.1(i) without the prior approval of the Partnership
Board, at a duly called meeting, of Representatives with voting
power of more than fifty percent (50%) of the Voting Percentage
Interests of all Partners whose Representatives are not required
by Section 8.6 or any other express provision of this Agreement
to abstain from such vote (a "Simple Majority Vote").
(j) Required Majority Vote. Except as provided in
Section 5.1(i) or 5.1(k) or as otherwise expressly provided in
this Agreement, all actions required or permitted to be taken by
the Partnership Board (including the matters listed on Schedule
5.1(j)) must be approved by the affirmative vote, at a duly
called meeting, of Representatives with voting power of seventy-
five percent (75%) or more of the Voting Percentage Interests of
all Partners whose Representatives are not required by Section
8.6 or any other express provision of this Agreement to abstain
from such vote (a "Required Majority Vote").
(k) Unanimous Vote (Partnership Board). No action may
be taken by the Partnership in connection with any of the matters
listed on Schedule 5.1(k) without the prior approval of the
Partnership Board by the unanimous vote of all of the
Representatives who are not required to abstain from the vote
with respect to the particular matter as provided for in Section
8.6 of this Agreement or any other express provision of this
Agreement, whether or not present at a Partnership Board meeting
(a "Unanimous Vote").
(l) Unanimous Decisions (Partners).
(i) No action may be taken by the Partnership in
connection with any of the matters listed on Schedule 5.1(l)
without the prior consent of all of the Partners (including
Exclusive Limited Partners) other than any Partner required to
abstain from the vote with respect to a particular matter by
Section 8.6 or any other express provision of this Agreement (a
"Unanimous Partner Vote").
(ii) If any matter listed on Schedule 5.1(l) or
otherwise required by this Agreement to be approved by the
unanimous consent of the Partners is not approved solely as a
result of the failure of one or more Exclusive Limited Partners
to consent to such action (each, a "Blocking Limited Partner"),
the remaining Partners (other than any Exclusive Limited Partner)
may purchase all but not less than all of the respective
Interests of the Blocking Limited Partner(s) pursuant to this
Section 5.1(l)(ii) if the Partnership Board elects to initiate
the procedures in this Section. For a period ending at 11:59
p.m. (local time at the Partnership's principal office) on the
thirtieth (30th) day following the date on which such Blocking
Limited Partner failed to consent to such matter, the Partnership
Board may elect to cause the Net Equity of the Blocking Limited
Partner's Interest to be determined in accordance with Section
11.3. For purposes of such determination of Net Equity, the
Partnership Board shall designate the First Appraiser as required
by Section 11.4 and the Blocking Limited Partner shall designate
the Second Appraiser within ten (10) days of receiving notice of
the First Appraiser. For a period ending at 11:59 p.m. (local
time at the Partnership's principal office) on the thirtieth
(30th) day following the date on which notice of the Net Equity
of the Blocking Limited Partner's Interest is given pursuant to
Section 11.3 (the "Section 5.1 Election Period"), except as
otherwise provided in Section 11.2(b), each of the Partners
(other than any Exclusive Limited Partner) may elect to purchase
all or any portion of the Interest of the Blocking Limited
Partner. Such elections shall be made, and the purchase of the
Blocking Limited Partner's Interest shall occur, in the manner
and pursuant to the procedures set forth in Section 11.2 as if
the Blocking Limited Partner were an Adverse Partner and the
Election Period referred to in Section 11.2 was the Section 5.1
Election Period; provided that the Buy-Sell Price of the Blocking
Limited Partner's Interest shall be equal to the Net Equity
thereof. Notwithstanding the foregoing, the Blocking Limited
Partner will not be subject to the buy-out provisions of this
Section 5.1(l)(ii) if the matter to which the Blocking Limited
Partner refused to consent would, if approved, have adversely
affected the rights and obligations under this Agreement of such
Blocking Limited Partner or the Exclusive Limited Partners (taken
as a group) in a manner different from the other Partners.
(m) Proxies; Minutes. Each Representative entitled to
vote at a meeting of the Partnership Board may authorize another
Person to act for him by proxy; provided that such proxy must be
signed by the Representative and shall be revocable by such
Representative any time prior to such meeting. Minutes of each
meeting of the Partnership Board shall be prepared by the Chief
Executive Officer or his or her designee and circulated to the
Representatives. Written consents to any action taken by the
Partnership Board shall be filed with the minutes.
5.2 Business Plan and Annual Budget.
(a) At the January 11, 1996 meeting of the Partnership
Board, the Partners adopted by Unanimous Partner Vote (i) a
business plan ("Business Plan") of the Partnership and its
Subsidiaries covering the Fiscal Year ending December 31, 1996
and the succeeding Fiscal Years through the Fiscal Year ending
December 31, 1999, which the Partners hereby agree is the
"Initial Business Plan" for all purposes under this Agreement,
and (ii) the Annual Budget for the Fiscal Year ending December
31, 1996. The Partners contemplate the Partnership's achieving a
capital structure in which debt (including Partner Loans)
represents an equal or greater proportion of the Partnership's
total capitalization than the aggregate Original Capital
Contributions and Additional Capital Contributions and, unless
otherwise approved by Required Majority Vote, the first Proposed
Business Plan presented to the Partnership Board for approval
subsequent to the Initial Business Plan will set forth the means
by which the Partnership proposes to achieve such capital
structure.
(b) Nothing contained in the Initial Business Plan (or
any subsequent Business Plan) shall be binding upon the Partners
or the Partnership, except to the extent specifically set forth
in the applicable provisions of this Agreement. Notwithstanding
anything to the contrary set forth in the Initial Business Plan
(or any subsequent Business Plan) or this Agreement, in the event
of any conflict or inconsistency between the Initial Business
Plan (or any subsequent Business Plan) and this Agreement, such
conflict or inconsistency shall be resolved in favor of the
applicable terms and provisions of this Agreement to the extent
required to give full effect to such applicable terms and
provisions. For example, by voting to approve the Initial
Business Plan (or any subsequent Business Plan), a Partner will
not have thereby agreed that any assumption or set of assumptions
contained in the Initial Business Plan (or any subsequent
Business Plan) (i) is the basis for any agreement by or among the
Partners and/or the Partnership (or any of their respective
Affiliates), (ii) cannot be changed (to the extent any such
change would not thereby become inconsistent with the applicable
terms and provisions of this Agreement), or (iii) is binding with
respect to any transaction or other course of dealing or
otherwise between the Partnership and such Partner or between or
among any of the Partners other than as specifically set forth in
this Agreement.
(c) The Chief Executive Officer shall submit annually
to the Partnership Board at least ninety (90) days prior to the
start of each Fiscal Year after the Fiscal Year ending December
31, 1996, (i) a proposed capital expenditure and operating budget
(the "Proposed Budget") for the forthcoming Fiscal Year including
an income statement prepared on an accrual basis which shall show
in reasonable detail the revenues and expenses projected for the
business of the Partnership and its Subsidiaries for the
forthcoming Fiscal Year and a cash flow statement which shall
show in reasonable detail the receipts and disbursements
projected for the business of the Partnership and its
Subsidiaries for the forthcoming Fiscal Year and the amount of
any corresponding cash deficiency or surplus, and the projected
Additional Capital Contributions, if any, and any contemplated
borrowings of the Partnership and its Subsidiaries and (ii) a
proposed revised Business Plan ("Proposed Business Plan") for the
Fiscal Year covered by the Proposed Budget and the succeeding
four Fiscal Years. Such Proposed Budget and Proposed Business
Plan shall be prepared on a basis consistent with the
Partnership's audited financial statements. If such Proposed
Budget or such Proposed Business Plan is approved by the
Partnership Board, then such Proposed Budget or such Proposed
Business Plan, as the case may be, shall be considered approved
and shall constitute the "Annual Budget" or the "Approved
Business Plan," as the case may be, for all purposes of this
Agreement and shall supersede any previously approved Annual
Budget or Approved Business Plan, as the case may be. Except as
provided in Schedule 5.1(k), the approval of each Proposed Budget
and Proposed Business Plan and action by the Partnership or any
of its Subsidiaries constituting any material deviation from any
Annual Budget or Approved Business Plan shall require the
Required Majority Vote of the Partnership Board. No Approved
Business Plan or Annual Budget shall be inconsistent with the
provisions of this Agreement, nor shall this Agreement be deemed
amended by any provision of an Approved Business Plan or Annual
Budget. If a Proposed Budget or Proposed Business Plan is not
approved by the Required Majority Vote of the Partnership Board,
then the General Partners shall cause their Representatives to
cooperate in good faith and confer with the Chief Executive
Officer and other senior officers of the Partnership for the
purpose of attempting to arrive at a Proposed Budget or Proposed
Business Plan, as the case may be, that can secure the approval
of the Partnership Board.
(d) If, notwithstanding the foregoing procedures, on
January 1 of any Fiscal Year no Proposed Budget has been approved
by the Partnership Board for such Fiscal Year, then the Annual
Budget for the prior Fiscal Year, adjusted (without duplication)
to reflect increases or decreases resulting from the following
events, shall govern until such time as the Partnership Board
approves a new Proposed Budget:
(i) the operation of escalation or de-escalation
provisions in contracts in effect at the time of approval of the
prior Fiscal Year's Annual Budget solely as a result of the
passage of time or the occurrence of events beyond the control of
the Partnership to the extent such contracts are still in effect;
(ii) elections made in any prior Fiscal Year
under contracts contemplated by the Annual Budget for the prior
Fiscal Year regardless of which party to such contracts made such
elections;
(iii) increases or decreases in expenses
attributable to the annualized effect of employee additions or
reductions during the prior Fiscal Year contemplated by the
Annual Budget for the prior Fiscal Year;
(iv) changes in interest expense attributable to
any loans made to or retired by the Partnership or its
Subsidiaries (including Partner Loans);
(v) increases in overhead expenses in an amount
equal to the total of overhead expenses reflected in the Annual
Budget for the prior Fiscal Year multiplied by the increase in
the Consumer Price Index for the prior year, but in no event more
than five percent (5%);
(vi) the anticipated incurrence of costs during
such Fiscal Year for any legal, accounting and other professional
fees or disbursements in connection with events or changes not
contemplated at the time of preparation of the Proposed Budget
for the prior Fiscal Year;
(vii) the continuation of the effects of a
decision made by the Partnership Board or the Partners in the
prior Fiscal Year with respect to any of the matters referred to
on Schedules 5.1(j), 5.1(k) or 5.1(l) that are not reflected in
the Annual Budget for the prior Fiscal Year; and
(viii) decreases in expense attributable to
non-recurring items reflected in the prior Fiscal Year's Annual
Budget.
Any budget established pursuant to this Section 5.2(d) is
herein referred to as a "Default Budget."
(e) If a Proposed Business Plan is submitted for
approval pursuant to this Section 5.2 and is not approved by the
requisite vote of the Partnership Board, the Business Plan most
recently approved by the Partnership Board pursuant to Section
5.2(c) shall remain in effect as the Approved Business Plan;
provided, that, if a Proposed Budget is approved pursuant to
Section 5.2(c) (and the corresponding Proposed Business Plan is
not so approved), the Approved Business Plan then in effect shall
be deemed to be amended so that the Fiscal Year therein
corresponding to the Fiscal Year for which such Annual Budget has
been approved shall be consistent with such Annual Budget.
(f) The day-to-day business and operations of the
Partnership and its Subsidiaries shall be conducted in accordance
with the Approved Business Plan and the Annual Budget (or Default
Budget) then in effect and the policies, strategies and standards
established by the Partnership Board. The Partnership Board and
the officers and employees of the Partnership and its
Subsidiaries shall implement the Annual Budget and Approved
Business Plan.
5.3 Employees.
The Partnership Board will appoint the senior management of
the Partnership and its Subsidiaries and will establish policies
and guidelines for the hiring of employees by the Partnership and
its Subsidiaries. The Partnership Board may adopt appropriate
management incentive plans and employee benefit plans.
5.4 Limitation of Agency.
The Partners agree not to exercise any authority to act for
or to assume any obligation or responsibility on behalf of the
Partnership or any of its Subsidiaries except (i) as approved by
the Partnership Board by Required Majority Vote, (ii) as approved
by written agreement among the General Partners and (iii) as
expressly provided herein. No Partner shall have any authority
to act for or to assume any obligations or responsibility on
behalf of another Partner under this Agreement except (i) as
approved by written agreement among the Partners and (ii) as
expressly provided herein. Subject to Section 5.6, in addition
to the other remedies specified herein, each Partner agrees to
indemnify and hold the Partnership and the other Partners
harmless from and against any claim, demand, loss, damage,
liability or expense (including reasonable attorneys' fees and
disbursements and amounts paid in settlement, but excluding any
indirect, special or consequential damages) incurred by or
against such other Partners or the Partnership and arising out of
or resulting from any action taken by the indemnifying Partner in
violation of this Section 5.4.
5.5 Liability of Partners, Representatives and
Partnership Employees.
No Partner, former Partner or Representative or former
Representative, no Affiliate of any thereof, no partner,
shareholder, director, officer, employee or agent of any of the
foregoing, nor any officer or employee of the Partnership, shall
be liable in damages for any act or failure to act in such
Person's capacity as a Partner or Representative or otherwise on
behalf of the Partnership or any of its Subsidiaries unless such
act or omission constituted bad faith, gross negligence, fraud or
willful misconduct of such Person or a violation by such Person
of this Agreement or an agreement between such Person and the
Partnership or a Subsidiary thereof. Subject to Section 5.6,
each Partner, former Partner, Representative and former
Representative, each Affiliate of any thereof, each partner,
shareholder, director, officer, employee and agent of any of the
foregoing, and each officer and employee of the Partnership,
shall be indemnified and held harmless by the Partnership, its
receiver or trustee from and against any liability for damages
and expenses, including reasonable attorneys' fees and
disbursements and amounts paid in settlement, resulting from any
threatened, pending or completed action, suit or proceeding
relating to or arising out of such Person's acts or omissions in
such Person's capacity as a Partner or Representative or (except
as provided in Section 5.4) otherwise involving such Person's
activities on behalf of the Partnership or any of its
Subsidiaries, except to the extent that such damages or expenses
result from the bad faith, gross negligence, fraud or willful
misconduct of such Person or a violation by such Person of this
Agreement or an agreement between such Person and the Partnership
or any of its Subsidiaries. Any indemnity by the Partnership,
its receiver or trustee under this Section 5.5 shall be provided
out of and to the extent of Partnership Property only.
5.6 Indemnification.
Any Person asserting a right to indemnification under
Section 5.4 or 5.5 shall so notify the Partnership or the other
Partners, as the case may be, in writing. If the facts giving
rise to such indemnification shall involve any actual or
threatened claim or demand by or against a third party, the
indemnified Person shall give such notice promptly (but the
failure to so notify shall not relieve the indemnifying Person
from any liability which it otherwise may have to such
indemnified Person hereunder except to the extent the
indemnifying Person is actually prejudiced by such failure to
notify). The indemnifying Person shall be entitled to control
the defense or prosecution of such claim or demand in the name of
the indemnified Person, with counsel satisfactory to the
indemnified Person, if it notifies the indemnified Person in
writing of its intention to do so within twenty (20) days of its
receipt of such notice, without prejudice, however, to the right
of the indemnified Person to participate therein through counsel
of its own choosing, which participation shall be at the
indemnified Person's expense unless (i) the indemnified Person
shall have been advised by its counsel that use of the same
counsel to represent both the indemnifying Person and the
indemnified Person would present a conflict of interest (which
shall be deemed to include any case where there may be a legal
defense or claim available to the indemnified Person which is
different from or additional to those available to the
indemnifying Person), in which case the indemnifying Person shall
not have the right to direct the defense of such action on behalf
of the indemnified Person, or (ii) the indemnifying Person shall
fail vigorously to defend or prosecute such claim or demand
within a reasonable time. Whether or not the indemnifying Person
chooses to defend or prosecute such claim, the Partners shall
cooperate in the prosecution or defense of such claim and shall
furnish such records, information and testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals
as may reasonably be requested in connection therewith. The
indemnifying Person may not control the defense of any claim or
demand that involves any material risk of the sale, forfeiture or
loss of, or the creation of any lien (other than a judgment lien)
on, any material property of the indemnified Person or could
entail a risk of criminal liability to the indemnified Person,
without the consent of such indemnified Person.
The indemnified Person shall not settle or permit the
settlement of any claim or action for which it is entitled to
indemnification without the prior written consent of the
indemnifying Person (which shall not be unreasonably withheld),
unless the indemnifying Person shall have been entitled to assume
the defense thereof pursuant to this Section 5.6 but failed to do
so after the notice and in the manner provided in the preceding
paragraph.
The indemnifying Person may not without the consent of the
indemnified Person agree to any settlement (i) that requires such
indemnified Person to make any payment that is not indemnified
hereunder, (ii) does not grant a general release to such
indemnified Person with respect to the matters underlying such
claim or action, or (iii) that involves the sale, forfeiture or
loss of, or the creation of any lien on, any material property of
such indemnified Person. Nothing contained in this Section 5.6
is intended to authorize the indemnifying Person, in connection
with any defense or settlement as to which it has assumed
control, to take or refrain from taking, without the consent of
the indemnified Person, any action which would reasonably be
expected to materially impair the indemnification of such
indemnified Person hereunder or would require such indemnified
Person to take or refrain from taking any action or to make any
public statement, which such indemnified Person reasonably
considers to materially adversely affect its interests.
Upon the request of any indemnified Person, the indemnifying
Person shall use reasonable efforts to keep such indemnified
Person reasonably apprised of the status of those aspects of such
defense controlled by the indemnifying Person and shall provide
such information with respect thereto as such indemnified Person
may reasonably request. If the defense is controlled by the
indemnified Person, such indemnified Person, upon the request of
the indemnifying Person, shall use reasonable efforts to keep the
indemnifying Person reasonably apprised of the status of those
aspects of such defense controlled by such indemnified Person and
shall provide such information with respect thereto as the
indemnifying Person may reasonably request.
5.7 Temporary Investments.
All Property in the form of cash not otherwise invested
shall be deposited for the benefit of the Partnership in one or
more accounts of the Partnership, WirelessCo or any other
Subsidiary of the Partnership in which the Partnership and
MinorCo own, in the aggregate, directly or indirectly, one
hundred percent (100%) of the outstanding equity interests,
maintained in such financial institutions as the Partnership
Board shall determine, or shall be invested in accordance with
the guidelines set forth in Schedule 5.7 hereto (which guidelines
may be modified from time to time by the Partnership Board), or
shall be left in escrow, and withdrawals shall be made only for
Partnership purposes on such signature or signatures as the
Partnership Board may determine from time to time.
5.8 Deadlocks.
(a) Escalation Procedures. Upon the occurrence of a
Deadlock Event, the General Partners shall first use their good
faith efforts to resolve such matter in a mutually satisfactory
manner. If, after such efforts have continued for twenty (20)
days, no mutually satisfactory solution has been reached, the
General Partners shall resolve the Deadlock Event as provided
herein:
(i) The General Partners shall (at the
insistence of any of them) refer the matter to the chief
executive officers of their respective Parents for resolution.
(ii) Should the chief executive officers of the
Parents fail to resolve the matter within ten (10) days after it
is referred to them, each General Partner (or any group of
General Partners electing to act together) shall prepare a brief
(a "Brief"), which includes a summary of the issue, its proposed
resolution of the issue and considerations in support of such
proposed resolution, not later than ten (10) days following the
failure of the chief executive officers to resolve such dispute,
and such Briefs shall be submitted to such reputable and
experienced mediation service as is selected by the Partnership
Board by Required Majority Vote or, failing such selection, by
the Chief Executive Officer (the "Mediator"). During a period of
twenty (20) days, the Mediator and the General Partners shall
attempt to reach a resolution of the Deadlock Event.
(iii) In the event that after such twenty (20)
day period (or such longer period as the Partnership Board may
approve by Required Majority Vote), the General Partners are
still unable to reach resolution of the Deadlock Event (such
resolution to be evidenced by the requisite vote of the
Partnership Board with respect to the underlying matters), the
Deadlock Event shall constitute a Liquidating Event as provided
in Section 14.1(a)(iii) unless the Partnership Board determines
by Required Majority Vote not to dissolve.
(b) Deadlock Event. A "Deadlock Event" shall be deemed
to have occurred if (i) after failing to approve a Proposed
Budget or Proposed Business Plan for one Fiscal Year, the
Partnership Board has failed to approve a Proposed Budget or
Proposed Business Plan for the next succeeding Fiscal Year prior
to the commencement of such succeeding Fiscal Year, or (ii) the
position of Chief Executive Officer is vacant for a period of
more than sixty (60) days after at least two Partners with an
aggregate of at least thirty-three percent (33%) of the Voting
Percentage Interests have proposed a candidate to fill such
vacancy.
5.9 Conversion to Corporate Form.
(a) Procedures. In the event that (i) the Partnership
Board shall determine by Required Majority Vote (or such other
vote as may be required by Item B. of Schedule 5.1(j)) that it is
desirable or helpful for the business of the Partnership to be
conducted in a corporate rather than in a partnership form (for
the purposes of conducting a public offering or otherwise) or
(ii) conversion to corporate form is required pursuant to an
election made by a Registering Partner under Section 12.6(c), the
Partnership Board shall incorporate the Partnership in Delaware.
In connection with any incorporation of the Partnership pursuant
to the preceding sentence, the Partnership and MinorCo shall be
consolidated and the Partners shall receive, in exchange for
their Interests and MinorCo Interests, shares of capital stock of
such corporation having the same relative economic interests and
other rights as such Partners hold in the Partnership as set
forth in this Agreement, subject in each case to (i) any
modifications required solely as a result of the conversion to
corporate form and (ii) modifications to the provisions of
Section 5.1 to conform to the provisions relating to actions of
stockholders and a board of directors set forth in the Delaware
General Corporation Law; provided, that the relative number of
representatives on the board of directors and relative voting
power of the outstanding equity interests of such corporation of
each General Partner shall be as nearly as practicable in
proportion to the relative Voting Percentage Interests of the
General Partners immediately prior to such incorporation. For
purposes of the preceding sentence, each Partner's relative
economic interest in the Partnership shall equal such Partner's
Net Equity as compared to the Net Equity of all of the Partners,
as determined in accordance with Section 11.3 except that the
Partnership Board shall by Required Majority Vote select a single
Appraiser to determine Gross Appraised Value. At the time of
such conversion, the Partners shall enter into a stockholders'
agreement providing for (i) rights of first refusal and other
restrictions on Transfer equivalent to those set forth in
Sections 12.1 through 12.5 and Section 12.7, provided that (x)
the restrictions on Transfer set forth in Sections 12.1 through
12.4 shall not apply, following the initial Public Offering by
the corporate successor to the Partnership, to sales in broadly
disseminated Public Offerings or sales in accordance with Rule
144 under the Securities Act of 1933 (the "1933 Act") or Rule 145
under the 1933 Act (in accordance with the applicable provisions
of Rule 144) (or any successor to either of such Rules), in a
transaction that satisfies the manner of sale requirements of
Rule 144 or Rule 145 (whether or not applicable to such sale) and
(y) the restrictions on Transfer set forth in Section 12.5 shall
not apply following the initial Public Offering by the corporate
successor to the Partnership; and (ii) an agreement to vote all
shares of capital stock held by them with respect to the election
of directors of the corporation so as to duplicate as closely as
possible the management structure of the Partnership as set forth
in Section 5.1, modified as contemplated by the second sentence
of this Section 5.9(a).
(b) Registration Rights. Upon conversion to corporate
form, the corporate successor to the Partnership shall grant to
each of the Partners certain rights to require such successor to
register under the 1933 Act the shares of capital stock received
by the Partners in exchange for their Interests. Such rights
shall be as approved by the Required Majority Vote of the
Partnership Board, provided that the registration rights of each
Partner shall be identical on a proportionate basis and, if the
conversion to corporate form was required by Section 12.6(g),
shall consist of not less than two demand registrations on
customary terms and subject to customary conditions.
(c) Preemptive Rights. Each Partner shall have
preemptive rights, exercisable in accordance with procedures to
be established by the Partnership Board in connection with and
following the conversion of the Partnership to corporate form, to
purchase equity securities proposed to be issued from time to
time by a corporate successor to the Partnership or its
successor; provided, however, that no Partner shall have any such
preemptive right with respect to any equity securities which, by
a vote of the board of directors of such corporate successor that
is equivalent to a Required Majority Vote, have been approved for
issuance by such corporate successor in connection with (i) a
Public Offering or (ii) any acquisition (including by way of
merger or consolidation) by the corporate successor of the equity
interests or assets of another entity that is not a Partner or
its Affiliate in a transaction pursuant to which the purchase
price is paid by delivery of such equity securities to the
seller. A "Public Offering" means an offering of the securities
of the corporate successor to the Partnership pursuant to a
registration statement on a form applicable to the sale of
securities to the general public (including an offering by a
Registering Partner pursuant to a registration statement as
contemplated under Section 12.6(g)).
SECTION 6. PARTNERSHIP OPPORTUNITIES; CONFIDENTIALITY
6.1 Competitive Activities.
(a) In General. For so long as any Person is a
Partner, neither such Person nor any of its Controlled Affiliates
shall engage in any Competitive Activity in the United States of
America (including its territories and possessions other than
Puerto Rico) except (i) through the Partnership and its
Subsidiaries, (ii) subject to Section 6.1(d), as provided in
Section 6.1(b) or 6.1(c), (iii) as permitted or contemplated
under Section 8.3, or (iv) as permitted by Section 6.1(f), 6.3,
6.4 or 8.1. The term "Competitive Activity" means to bid on,
acquire or, directly or indirectly, own, manage, operate, join,
control or finance, or participate in the management, operation,
control or financing of, or be connected as a principal, agent,
representative, consultant, beneficial owner of an interest in
any Person, or otherwise with, or use or permit its name to be
used in connection with, any business or enterprise which (i)
engages in the bidding for or acquisition of any Wireless
Business license or engages in any Wireless Business, or (ii)
provides, offers, promotes or brands services that are within the
Wireless Exclusive Services.
(b) Bidding for Wireless Business Licenses. Except as
permitted by Section 6.4, no Partner nor any of its Controlled
Affiliates shall bid in the PCS Auction for any Wireless Business
licenses unless (i) the Partnership Board consents to such bid
following consultation by such Partner with the Representatives
of the other Partners; or (ii) (A) WirelessCo has entered a bid
or bids for such license, but a third-party bid has been entered
which equals or exceeds the maximum amount that WirelessCo has
determined to bid for such license, (B) if a vote was taken, such
Partner's Representative(s) voted in favor of WirelessCo's
increasing the amount it would bid for such license, and (C)
WirelessCo has determined not to increase its bid in response to
such third party bid. This Section 6.1(b) will not permit a
Partner or its Affiliate to bid for or acquire a Wireless
Business license if the bidding for or acquisition of such
license by a Partner or its Affiliate would otherwise violate (or
cause the Partnership or any of the other Partners or their
respective Affiliates to be in violation of) the FCC's rules or
orders relating to Wireless Business license cross-ownership,
license attribution standards, and/or spectrum attribution or
aggregation requirements, including Sections 20.6, 24.204 and
24.229(c) of the FCC's rules to be codified at 47 C.F.R. 20.6,
24.204 and 24.229(c).
(c) Engaging in Wireless Businesses. If any Partner or
any of its Controlled Affiliates proposes to engage in any
Competitive Activity other than as permitted by Section 6.1(b)
(or through a Wireless Business license acquired as permitted by
Section 6.1(b)), 6.3, 6.4 or 8.1, then such Partner shall first
offer to the Partnership the opportunity for the Partnership or
any of its Subsidiaries to engage, in lieu of such Partner and
its Affiliates, in such Competitive Activity (whether by
acquiring such interest itself or itself providing, offering,
promoting or branding such services) (the "Offer"), which Offer
shall be made in writing and shall set forth in reasonable detail
the nature and scope of the activity proposed to be engaged in,
including all material terms of any proposed acquisition. The
Partnership, for itself or any of its Subsidiaries (by Required
Majority Vote of the Partnership Board pursuant to Section 8.6),
shall have thirty (30) days from receipt of the Offer to accept
or reject it. If the Partnership does not accept (for itself or
any of its Subsidiaries), the Offer within such thirty (30) day
period, it shall be deemed to have rejected the Offer, and the
offering Partner or its Controlled Affiliate shall be permitted
to engage in such Competitive Activity on terms no more favorable
to such Partner or its Controlled Affiliate than those described
in the Offer. If the Partnership, for itself or any of its
Subsidiaries, accepts the Offer, the offering Partner and its
Controlled Affiliates shall not pursue such opportunity to engage
in such Competitive Activity; provided, however, that if the
Partnership or such Subsidiary, as applicable, does not within a
commercially reasonable period of time after such acceptance take
reasonable steps to pursue such opportunity, other than as a
result of a violation of this Agreement or wrongful acts or bad
faith on the part of the offering Partner or its Controlled
Affiliates, then the offering Partner or its Controlled Affiliate
shall be permitted to pursue such opportunity on terms no more
favorable to the offering Partner or its Controlled Affiliate
than the terms of the Offer. If the offering Partner or its
Controlled Affiliate does not take reasonable steps to pursue
such opportunity contemplated by the Offer within a reasonable
period of time after acquiring the right to do so in accordance
with the foregoing provisions of this Section 6.1(c) (including,
in the case of an acquisition, by entering into a definitive
agreement (subject solely to obtaining the requisite regulatory
approvals and other customary closing conditions) with respect to
such acquisition within one hundred twenty (120) days
thereafter), then it shall lose its right to pursue such
opportunity and thereafter be required to reoffer the opportunity
to the Partnership in accordance with, and shall otherwise comply
with, this Section 6.1(c). Notwithstanding the foregoing, a
Partner shall not be permitted to present an Offer to the
Partnership (or, except for Competitive Activities relating to an
Offer previously rejected by the Partnership, otherwise engage in
any Competitive Activity in reliance on this Section 6.1(c)) in
any license area (or portion thereof) in which the Partnership or
any of its Subsidiaries is otherwise offering, promoting or
branding Wireless Exclusive Services (or in which the Partnership
or any of its Subsidiaries plans to offer, promote or brand
Wireless Exclusive Services pursuant to or as set forth in the
Initial Business Plan or Approved Business Plan then in effect,
as applicable, or pursuant to any Wireless Business license
acquired by the Partnership or an Affiliation Agreement entered
into with the holder of a Wireless Business license subsequent to
the approval of such Initial Business Plan or Approved Business
Plan, as applicable), including pursuant to an Affiliation
Agreement, without a Unanimous Vote of the Partnership Board
pursuant to Section 8.6.
(d) Wireless Business Affiliation Agreements. (i) Any
Partner or Controlled Affiliate thereof that acquires or owns a
Wireless Business license, or directly engages in a Wireless
Business, as permitted by the exceptions provided by Sections
6.1(b), 6.1(c), 6.3(e), 6.3(h) and 8.1 to the prohibitions on
Competitive Activities contained in Section 6.1(a), shall,
subject to applicable law, as a condition to the availability of
such exceptions, offer to enter into an affiliation agreement
with respect to such Wireless Business with WirelessCo on terms
and conditions comparable to those which WirelessCo offers to
other affiliated Wireless Businesses in similar situations (or if
no such agreement then exists, such terms and conditions shall
include a provision for competitive pricing), under which such
Wireless Business will provide its services to the public as an
affiliate of WirelessCo's business (as entered into with a
Partner or its Controlled Affiliate or any other Person, an
"Affiliation Agreement"). The Partnership Board may waive
compliance with all or any part of this Section 6.1(d) with
respect to any transaction by Required Majority Vote of the
Partnership Board pursuant to Section 8.6.
(ii) Each Partner and its Controlled Affiliates
shall also use all commercially reasonable efforts to cause any
Affiliate of such Partner which acquires or owns a Wireless
Business license, or otherwise engages in any Wireless Business,
and provides services within the Wireless Exclusive Services, to
(if WirelessCo so desires) enter into an Affiliation Agreement
with WirelessCo.
(e) Geographic Restrictions on Wireless Business.
Unless approved by a Unanimous Partner Vote, the Partnership and
its Subsidiaries will not engage in any Competitive Activities in
the Philadelphia, Charlotte, Cleveland, El Paso, Jacksonville,
Knoxville, Omaha or Richmond MTAs, including bidding for or
acquiring any PCS licenses therein; provided that, to the extent
permitted by law, the Partnership and its Subsidiaries may (or,
as provided in Sections 6.3(e) and 8.1, shall) enter into
Affiliation Agreements with Persons engaged in Competitive
Activities in such MTAs; and provided further, that the
Partnership and its Subsidiaries may engage in Competitive
Activities in any MTA (other than Philadelphia) listed in this
Section 6.1(e) from and after the time that Sprint and its
Controlled Affiliates have divested of their ownership interests
in any of the Sprint Cellular Businesses in such MTA.
(f) Unrestricted Activities. Nothing in this Section 6
shall prevent any Person from (i) providing any Non-Exclusive
Services or engaging in any Excluded Business or (ii) complying
with any applicable laws, rules or regulations, including those
requiring that any facilities be made available to any other
Person.
6.2 Enforceability and Enforcement.
(a) The Partners acknowledge and agree that the time,
scope, geographic area and other provisions of Section 6.1 have
been specifically negotiated by sophisticated parties and agree
that such time, scope, geographic area, and other provisions are
reasonable under the circumstances. If, despite this express
agreement of the Partners, a court should hold any portion of
Section 6.1 to be unenforceable for any reason, the maximum
restrictions of time, scope and geographic area reasonable under
the circumstances, as determined by the court, will be
substituted for the restrictions held to be unenforceable.
(b) The Partnership shall be entitled to preliminary
and permanent injunctive relief, without the necessity of proving
actual damages or posting any bond or other security, to prevent
any breach of Section 6.1, which rights shall be cumulative and
in addition to any other rights or remedies to which the
Partnership may be entitled.
6.3 General Exceptions to Section 6.1.
The restrictions set forth in Section 6.1 on Competitive
Activities shall not be construed to prohibit any of the
following actions by a Partner and its Controlled Affiliates,
except to the extent any such action would cause the Partnership
(including the ownership of its assets and the conduct of its
business) to be in violation of any law or regulation or
otherwise result in any restriction or other limitation on the
Partnership's and its Subsidiaries' ownership of their respective
assets or conduct of their respective businesses:
(a) The acquisition or ownership of any debt or equity
securities of a Publicly Held Person, provided that such
securities (i) were not acquired from the issuer thereof in a
private placement or similar transaction, (ii) do not represent
more than five percent (5%) of the aggregate voting power of the
outstanding capital stock of any Person that engages in a
Competitive Activity (assuming the conversion, exercise or
exchange of all such securities held by such Partner or its
Controlled Affiliates that are convertible, exercisable or
exchangeable into or for voting stock) and (iii) in the case of
debt securities, entitle the holder to receive only interest or
other returns that are fixed, or vary by reference to an index or
formula that is not based on the value or results of operations
of such Person;
(b) The acquisition (through merger, consolidation,
purchase of stock or assets, or otherwise) of a Person or an
interest in a Person, which engages (directly or indirectly
through an Affiliate that is controlled by such Person) in any
Competitive Activity if either (i) such acquisition results from
a foreclosure or equivalent action with respect to debt
securities permitted to be held under Section 6.3(a) or (ii) the
Competitive Activity does not constitute the principal activity,
in terms of revenues or fair market value, of the businesses
acquired in such acquisition or conducted by the Person in which
such interest is acquired, provided, in each case, that such
Partner or Controlled Affiliate divests itself of the Competitive
Activity or interest therein as soon as is practicable, but in no
event later than twenty-four (24) months, after the acquisition
unless the Partnership Board approves the entering into of an
Affiliation Agreement with respect to such Competitive Activity
pursuant to Section 8.6;
(c) The continued holding of an equity interest in a
Person that commences a Competitive Activity following the
acquisition of such equity interest if neither the Partner nor
its Controlled Affiliate has any responsibility or control over
the conduct of such Competitive Activity, does not permit its
name to be used in connection with such Competitive Activity and
uses all commercially reasonable efforts, including voting its
equity interest, to cause such Person either (i) to cease such
Competitive Activity or (ii) to offer to enter into an
Affiliation Agreement with the Partnership and its Subsidiaries;
(d) The conduct of any Competitive Activity that is a
necessary component of or an incidental part of the conduct of
any Excluded Business by a Partner or its Controlled Affiliates
or the entering into of an arrangement with an independent third
party for the provision of any services included in the Wireless
Exclusive Services which is a necessary component of or an
incidental part of the conduct of such Excluded Business, so long
as, in each case, such Partner or Controlled Affiliate shall
first use all commercially reasonable efforts to negotiate
agreements with the Partnership or one of its Subsidiaries, which
are reasonable in the independent judgment of both parties,
pursuant to which the Partnership or such Subsidiary would
provide such services included in the Wireless Exclusive Services
on terms no less favorable to the Partner or such Controlled
Affiliate than such Partner or Controlled Affiliate could obtain
from an independent third party or could provide itself;
(e) The ownership and operation by (i) a partnership of
Sprint, TCI and Cox and/or their respective Affiliates of a PCS
license and an associated Wireless Business in the Philadelphia
MTA ("PhillieCo"), (ii) Cox or its Affiliate of a PCS License and
an associated Wireless Business in the Omaha MTA and (iii) any of
Cox, Comcast and TCI or their Affiliates (acting singly or
jointly through a partnership or other entity) of a PCS license
and an associated Wireless Business in any of the Charlotte,
Cleveland, El Paso, Jacksonville, Knoxville and Richmond MTAs,
provided in each case that, subject to applicable law, such
owners or entities holding the licenses enter into Affiliation
Agreements with the Partnership and its Subsidiaries; and
provided further, that (x) the exception provided in clause (ii)
of this Section 6.3(e) shall terminate at such time as Cox is
obligated to contribute the Omaha License to the Partnership
pursuant to Section 2.3(a)(ii) and (y) except for any Competitive
Activities conducted in the MTAs listed in clause (iii) of this
Section 6.3(e) pursuant to an agreement entered into or PCS
license acquired during the period beginning on July 1, 1996 and
ending on the date that Sprint and its Controlled Affiliates have
divested of their ownership interests in the Sprint Cellular
Businesses, the exception provided in such clause (iii) shall
terminate at such time as Sprint and its Controlled Affiliates
have divested of their ownership interests in the Sprint Cellular
Businesses;
(f) The conduct of any Competitive Activity involving
the provision of any product or service that is an ancillary
value-added addition to a Wireless Business and which does not
itself require an FCC license (including operator services,
location services and weather, sports and other information
services);
(g) The ownership and operation by Sprint's Controlled
Affiliates of their cellular businesses within the Sprint
Cellular Service Area until such time as Sprint and its
Controlled Affiliates have divested of their ownership interests
in the Sprint Cellular Businesses; provided that the entities
succeeding to the Sprint Cellular Businesses shall be entitled to
use the Sprint Brand for a period not to exceed one (1) year
following the closing of such divestiture;
(h) The ownership and operation by Cox or its Affiliate
of PioneerCo, so long as PioneerCo, subject to applicable law,
enters into an Affiliation Agreement with the Partnership prior
to offering or providing any Wireless Exclusive Services;
(i) The continuing ownership by an Affiliate of Sprint
of its current ownership interest in Iridium and the provision of
any services by Iridium so long as Iridium is not an Affiliate of
Sprint;
(j) The ownership by a Controlled Affiliate of Comcast
of any ownership interest in Nextel and the provision of any
services by Nextel, subject to Section 6.4(f) of this Agreement;
(k) The continuing ownership by a Controlled Affiliate
of TCI of its current ownership interest in Nextel and the
provision of any services by Nextel so long as Nextel is not an
Affiliate of TCI;
(l) The continuing ownership by a Controlled Affiliate
of TCI of its current ownership interest in MTS Limited
Partnership ("MTS") and the provision of any services by MTS so
long as MTS is not an Affiliate of TCI;
(m) The continuing ownership by a Controlled Affiliate
of TCI of its current ownership interest in General Communication
Inc. ("GCI") and the provision of any services by GCI so long as
GCI is not an Affiliate of TCI;
(n) The continuing ownership by a Controlled Affiliate
of TCI of its current ownership interest in Western Tele-
Communications, Inc. ("WTCI") and the conduct by WTCI of its
current business;
(o) The continuing ownership and operation by Sprint's
Controlled Affiliates of their IMTS (mobile radio telephony
service) and paging businesses as such businesses currently are
being conducted, so long as the aggregate annual revenue derived
from the operation of such businesses does not exceed
$15,000,000;
(p) The provision by a Partner and its Controlled
Affiliates of Wireless Exclusive Services on a resale basis in
geographic areas where neither the Partnership nor any of its
Subsidiaries or Wireless Affiliates is then providing, offering,
promoting or branding Wireless Exclusive Services and either (i)
with respect to Sprint, a Controlled Affiliate of Sprint owns a
LEC property as of the date of this Agreement in such geographic
area or (ii) in the reasonable judgment of such Partner, such
Partner or its Controlled Affiliate must offer in such geographic
area Wireless Exclusive Services in a package with other products
and services of such Partner or its Controlled Affiliates in
order to compete with an actual or anticipated initiative by a
service provider that is not a Controlled Affiliate of such
Partner; provided in each case that such Partner or its
Controlled Affiliate must (x) first offer, or cause to be
offered, to the Partnership the opportunity to be the provider of
such Wireless Exclusive Services on terms no less favorable to
the Partnership than those made available to such Partner or its
Controlled Affiliate and (y) use its commercially reasonable
efforts to insure that any provision of such Wireless Exclusive
Services is in accordance with the Partnership's technical
requirements in a manner that would facilitate the transition of
such business to the Partnership. At such time as the
Partnership commences providing, offering, promoting or branding
Wireless Exclusive Services within such geographic area, such
Partner shall, promptly following its receipt of written notice
from the Partnership, offer, or cause its Controlled Affiliate to
offer, to Transfer to the Partnership such Partner's or its
Controlled Affiliate's business of providing Wireless Exclusive
Services in such geographic area, and (at the Partnership's
option) to Transfer, lease or otherwise make available (at the
election of such Partner or its Controlled Affiliate) to the
Partnership the assets that are utilized in the provision of such
Wireless Exclusive Services, such offer in each case to be at a
price equal to the costs that the Partnership would incur to
achieve a like business, including the costs associated with the
creation or acquisition of the customer base of such business and
the replacement cost of any assets so Transferred, leased or
otherwise made available;
(q) Prior to the termination of a Parents Agreement,
the offering, promotion and branding by the Cable Partner whose
Parent is a party to such Parents Agreement and its Controlled
Affiliates of the Partnership's Wireless Exclusive Services under
a Permitted Brand at such times and in such geographic areas as
to which Section 2(a)(i) of such Parents Agreement has ceased to
be applicable to the Parent of such Cable Partner pursuant to
Section 4(b) or 4(c) of such Parents Agreement;
(r) Following the termination of a Parents Agreement,
the offering, promotion and branding by the Cable Partner whose
Parent is a party to such Parents Agreement and its Controlled
Affiliates of the Partnership's Wireless Exclusive Services under
a Permitted Brand in any geographic area where (i) neither such
Cable Partner, its Controlled Affiliates nor any Local Joint
Venture between such Cable Partner or its Controlled Affiliate
and Sprint or its Controlled Affiliate is providing Local
Telephony Services (as defined in the Parents Agreement) under
the Sprint Brand and (ii) Sprint Parent has not provided or
caused to be provided to such Cable Partner or its applicable
Controlled Affiliate on competitive economic terms Long Distance
Telephony Services (as defined in the Parents Agreement) under
the Sprint Brand to offer and promote, and package with other
products and services to offer and promote, to its customers, and
for which it is authorized to act as a non-exclusive sales agent
in that geographic area; and
(s) The offering or promotion on a sales agency basis
of any product or service offered by any Wireless Affiliate
pursuant to or in accordance with an Affiliation Agreement.
Notwithstanding anything to the contrary in this Section 6, any
investment fund in which a Partner or any of its Affiliates has
an investment (including pension funds) that invests funds on
behalf of and has a fiduciary duty to third party investors shall
be permitted to engage in or invest in entities engaged in any
activity whatsoever; provided that, neither such Partner nor any
of its Controlled Affiliates, directly or indirectly, exercises
any management or operational control whatsoever in any such
entity engaging in a Wireless Business.
6.4 Comcast Exceptions.
The restrictions set forth in Section 6.1 shall not
apply with respect to the following:
(a) Subject to the limitations set forth in this
Section 6.4, Comcast and its Controlled Affiliates may engage in
any Competitive Activities with respect to any Wireless Business
in the Comcast Area.
(b) Comcast and its Controlled Affiliates may
participate in a bid for and/or acquire any interest in a 10 MHz
PCS license only in any of the BTAs in the Philadelphia MTA or
the Allentown, Pennsylvania BTA. Comcast and its Controlled
Affiliates may acquire any interest in a 10 MHz PCS license in
any of the following cellular license areas in New Jersey:
Hunterdon County, Middlesex County, Monmouth County and Ocean
County; provided, that at the time of such acquisition Comcast
and its Controlled Affiliates own a controlling interest in a
cellular license for such area and further provided, that the
license area of such 10 MHz license shall not extend beyond such
area in other than an immaterial manner. In the event Comcast
and its Controlled Affiliates own a controlling interest in any
such 10 MHz PCS license, then Comcast and its Controlled
Affiliates will, to the extent permitted by applicable law,
provide for their customers receiving services under any such 10
MHz PCS license to receive roaming services from any of
WirelessCo's or its Affiliate's businesses providing services
under any PCS license (the "Partnership's Businesses"), subject
to the conditions that (i) such roaming is technically feasible,
(ii) such roaming is at competitive rates and on other terms and
conditions reasonably acceptable to Comcast and its Controlled
Affiliates, (iii) the Partnership's Businesses support the
features and services provided by Comcast and its Controlled
Affiliates to their customers and (iv) subject to the same
conditions, the Partnership's Businesses will provide for their
customers to receive reciprocal roaming services from Comcast and
its Controlled Affiliates in the areas described above at such
times as neither PhillieCo nor WirelessCo owns or has an
affiliation with respect to a Wireless Business license for such
areas. Notwithstanding the foregoing, if the ownership by
Comcast or any of its Controlled Affiliates of any 10 MHz PCS
license outside of the Philadelphia MTA (A) causes WirelessCo
(including the ownership of its assets and the conduct of its
business) to be in violation of any law or regulation or
otherwise results in any restriction or other limitation on
WirelessCo's ownership of its assets or conduct of its business
or (B) in any way impairs, prevents or delays the ability of
WirelessCo to bid for or acquire a Wireless Business license in
any license area in which WirelessCo plans to engage in a
Competitive Activity pursuant to or as set forth in the Initial
Business Plan or its then-current Approved Business Plan, Comcast
and its Controlled Affiliates will be prohibited from making such
acquisition or, if such acquisition has already occurred, will
cure the circumstances described above (including, if required,
by divesting its ownership of the 10 MHz PCS license) within a
commercially reasonable period of time after its receipt of
notice from WirelessCo of the existence of such circumstances;
provided that, in the event of such divestiture, Comcast and its
Controlled Affiliates will have the right to resell service in
such area provided such resale shall occur using WirelessCo's
facilities if they are available and it is technically feasible
to do so.
(c) The Partnership will, at the request of Comcast and
Affiliates and to the extent permitted by applicable law, (i)
provide for customers receiving Wireless Business services from
Comcast and its Controlled Affiliates in the Comcast Area, to
receive roaming services in areas outside of the Comcast Area at
competitive rates and on commercially reasonable terms and
conditions where the Partnership Businesses own or have an
affiliation with respect to a Wireless Business license, subject
to the condition that such roaming is technically feasible; (ii)
provide Comcast and its Controlled Affiliates' Wireless
Businesses in the Comcast Area with SS7 interconnection to the
Partnership's facilities on commercially reasonable terms and
conditions and (iii) in the event the Partnership or its
Subsidiaries allow or are required by law to allow resale of
their Wireless Exclusive Services in any part of the Comcast
Area, allow Comcast and its Controlled Affiliates to resell such
services in such part of the Comcast Area on commercially
reasonable terms and conditions.
(d) Comcast and its Controlled Affiliates may engage in
any Competitive Activities with respect to any Wireless Business
in the Kankakee, Illinois RSA cellular license area as well as
the cellular license area served by Indiana Cellular Holdings,
Inc., Harrisburg Cellular Telephone Company, Aurora/Elgin
Cellular Telephone Company, Inc. and Joliet Cellular Telephone
Company, Inc.; provided that such Competitive Activities are
confined to the geographic territories of the cellular licenses
currently held by such businesses.
(e) Comcast and its Controlled Affiliates may
participate in regional marketing activities within the Comcast
Area for the purpose of: (i) selling to its "In-Territory
Customers" (as defined below) wireless services within the
Washington, D.C., New York and Philadelphia MTAs; and (ii)
obtaining distribution from its "In-Territory Distributors" (as
defined below) of wireless services within the Washington, D.C.,
New York and Philadelphia MTAs; provided that (A) Comcast and its
Controlled Affiliates do not maintain or deploy any sales
personnel, sales office or other direct sales presence, or
otherwise advertise or promote the Comcast brand or any other
brand, in either the New York MTA or the Washington, D.C. MTA
outside of the Comcast Area, (B) Comcast and its Controlled
Affiliates do not own or lease any wireless transmission
facilities outside of the Comcast Area in connection therewith
and (C) in obtaining the distribution contemplated by Section
6.4(e)(ii), Comcast and its Controlled Affiliates subcontract the
provision of wireless services outside the Comcast Area to a
third party provider only if such services cannot be
subcontracted to WirelessCo without material adverse consequences
for Comcast's and its Controlled Affiliates' ability to
participate in such regional marketing activities. For the
purposes hereof, an "In-Territory Customer" is a customer that
has a business location in the Comcast Area and places the order
for the services described above through Comcast and its
Controlled Affiliates in the Comcast Area. For the purposes
hereof, an "In-Territory Distributor" is a distributor that has a
business location in the Comcast Area and requires a regional
contract be entered into by Comcast and its Controlled Affiliates
in the Comcast Area. For purposes of this Section 6.4(e), the
term "Comcast Area" shall include any area in which Comcast and
its Controlled Affiliates at such time own a controlling interest
in a PCS license which was permitted to be acquired under Section
6.4(b).
(f) Comcast and its Controlled Affiliates may hold an
interest in Nextel Communications, Inc. ("Nextel"), provided that
(i) none of Comcast's or its Controlled Affiliates' Agents
participate in or are present at any discussions, or receive any
information, regarding Nextel's PCS bidding strategies; and (ii)
at the election of Comcast, no later than October 24, 1995,
either (A) Comcast and its Controlled Affiliates shall own
securities representing less than 5.4% of the voting power and
equity of all of the outstanding capital stock of Nextel, (B) no
Agent of Comcast or any of its Controlled Affiliates shall be a
director or officer of Nextel, and no director of Nextel shall be
an appointee of Comcast or its Controlled Affiliates pursuant to
any contractual right of Comcast and its Controlled Affiliates to
appoint any director of Nextel, or (C) Comcast shall elect to
become an Exclusive Limited Partner as of such date by giving
written notice of such election to the Partnership; provided,
however, that if Comcast and its Controlled Affiliates (x) fail
to satisfy either of clauses (A) or (B) above at any time after
October 24, 1995 or (y) acquire any additional common stock or
other voting securities (or securities convertible into or
exchangeable for common stock or other voting securities) of
Nextel (as to (y) only, other than common stock acquired as a
result of (I) the exercise of its stock option to acquire
25,000,000 shares and warrant to acquire 230,000 shares, (II) the
consummation of its sale of the assets of Philadelphia Mobile
Communications, Inc. to Nextel (the "PMCI Shares") or (III) the
exercise by Comcast and its Controlled Affiliates of purchase
rights to maintain, in the event of certain future share
issuances by Nextel, the then current percentage ownership of
Comcast and its Controlled Affiliates in Nextel assuming the
exercise of such stock option and warrant in full and the receipt
of the PMCI Shares (which percentage shall in no event exceed
15%), granted under that certain Stock Purchase Agreement dated
as of September 14, 1992, among Comcast Parent, Comcast FCI, Inc.
and Fleet Call, Inc., as amended; provided, that as a result of
any such purchases pursuant to clauses (I), (II) and (III),
Comcast and its Controlled Affiliates do not own 10% or more of
the common stock of Nextel (determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934)), then Comcast
will automatically (without any action required to be taken by
the Partnership or any Partner) become an Exclusive Limited
Partner. Notwithstanding the second proviso in the preceding
sentence, if (1) such acquisition is the result of the exercise
by Comcast and its Controlled Affiliates of such purchase rights
and as a result thereof Comcast and its Controlled Affiliates own
10% or more of the common stock of Nextel as so determined, (2)
Comcast and its Controlled Affiliates exercise any available
registration rights within thirty (30) days following the
acquisition of common stock pursuant to the exercise of such
purchase rights and otherwise seek to Transfer such common stock
as soon as practicable, and (3) an amount of Nextel common stock
is Transferred within two hundred forty (240) days following the
date of such acquisition such that thereafter Comcast and its
Controlled Affiliates do not own 10% or more thereof as so
determined, then Comcast will automatically (without any action
required by the Partnership or any Partner) be returned to the
status of General Partner if it satisfies either of clauses (A)
or (B) above and is not otherwise required to be an Exclusive
Limited Partner under this Section 6.4(f). If at any time
following the date hereof Comcast and its Controlled Affiliates
own more than 31% of the common stock of Nextel on a fully
diluted basis (provided that at such time Nextel has a total
market capitalization of at least $2,000,000,000), or own 50% or
more of the common stock of Nextel on a fully-diluted basis
(regardless of Nextel's total market capitalization), Comcast
shall provide written notice to the Partnership and to each other
Partner of the acquisition of such ownership interest (or the
occurrence of any event causing Comcast and its Controlled
Affiliates to exceed such ownership threshold) within five (5)
days of such acquisition (or the occurrence of such event). The
other Partners will have the option, exercisable within ninety
(90) days of the date of such notice, to purchase the Interest of
Comcast for a purchase price equal to the Net Equity thereof for
cash at a closing to be held no later than ninety (90) days from
the date such option is exercised. Such purchase shall occur in
accordance with the procedures set forth in Section 11 as if
Comcast were an "Adverse Partner" and each of the other Partners
were a "Purchasing Partner.
(g) The term "Comcast Area" means (i) the following
cellular license areas (or portions thereof) in New Jersey:
Hunterdon NJ1 RSA, New Brunswick MSA, Long Branch MSA, Trenton
MSA, Allentown, PA MSA, Philadelphia MSA, Ocean NJ2 RSA, Atlantic
City MSA, Vineland-Millville MSA, and Wilmington, DE MSA; (ii)
Delaware; (iii) Maryland RSA2; (iv) counties in Pennsylvania in
which Comcast and its Controlled Affiliates engaged in the
cellular business as of October 24, 1994, and all counties in
Pennsylvania contiguous thereto; (v) the Philadelphia MTA; and
(vi) minor overlaps into any territory adjoining any of the areas
included in (i) - (v) required to efficiently provide services in
such area.
(h) The obligations under Section 6.1(d) shall not
apply to Comcast and its Controlled Affiliates with respect to
any Competitive Activities permitted pursuant to this Section
6.4.
(i) Comcast and its Controlled Affiliates may co-brand
or package any Wireless Exclusive Services permitted to be
provided pursuant to this Section 6.4 together with their cable
television offerings; provided that in such event the only brand
name(s) which may be used for any such Wireless Exclusive
Services are any of the following, any combination thereof or any
variants thereof substantially similar thereto: Comcast, Comcast
Cellular, Comcast Metrophone, Metrophone, Comcast Cellular One
and Cellular One, which Comcast represents are currently utilized
by its cellular business in the Comcast Area as of the date
hereof; provided further, however, that Comcast may request that
the Partnership approve the use by Comcast and its Controlled
Affiliates of another brand name (other than that of an inter-
exchange carrier), in which case the Partnership's consent to the
use thereof will not be unreasonably withheld.
6.5 Freedom of Action.
Except as set forth in this Section 6, no Partner or
Affiliate shall have any obligation not to (i) engage in the same
or similar activities or lines of business as the Partnership or
its Subsidiaries or develop or market any products or services
that compete, directly or indirectly, with those of the
Partnership or its Subsidiaries, (ii) invest or own any interest
publicly or privately in, or develop a business relationship
with, any Person engaged in the same or similar activities or
lines of business as, or otherwise in competition with, the
Partnership or its Subsidiaries, (iii) do business with any
client or customer of the Partnership or its Subsidiaries, or
(iv) employ or otherwise engage a former officer or employee of
the Partnership or its Subsidiaries.
6.6 Confidentiality.
(a) Maintenance of Confidentiality. Each Partner and
its Controlled Affiliates and the Partnership (each a "Restricted
Party"), shall cause their respective officers and directors (in
their capacity as such) to, and shall take all reasonable
measures to cause their respective employees, attorneys,
accountants, consultants and other agents and advisors
(collectively, and together with their respective officers and
directors, "Agents") to, keep secret and maintain in confidence
all confidential and proprietary information and data of the
Partnership and the other Partners or their Affiliates disclosed
to it (in each case, a "Receiving Party") in connection with the
formation of the Partnership and the conduct of the Partnership's
business and in connection with the transactions contemplated by
the Joint Venture Formation Agreement (the "Confidential
Information") and shall not, shall cause their respective
officers and directors not to, and shall take all reasonable
measures to cause their respective other Agents not to, disclose
Confidential Information to any Person other than the Partners,
their Controlled Affiliates and their respective Agents that need
to know such Confidential Information, or the Partnership. Each
Partner further agrees that it shall not use the Confidential
Information for any purpose other than monitoring and evaluating
its investment, determining and performing its obligations and
exercising its rights under this Agreement. The Partnership and
each Partner shall take all reasonable measures necessary to
prevent any unauthorized disclosure of the Confidential
Information by any of their respective Controlled Affiliates or
any of their respective Agents. The measures taken by a
Restricted Party to protect Confidential Information shall not be
deemed unreasonable if the measures taken are at least as strong
as the measures taken by the disclosing party to protect such
Confidential Information.
(b) Permitted Disclosures. Nothing herein shall
prevent any Restricted Party or its Agents from using,
disclosing, or authorizing the disclosure of Confidential
Information it receives in the course of the business of the
Partnership which:
(i) has been published or is in the public
domain, or which subsequently comes into the public domain,
through no fault of the Receiving Party; (ii) prior to
receipt hereunder (or under that certain Agreement for Use
and Non-Disclosure of Proprietary Information, dated as of
May 4, 1994, among Affiliates of the Partners) was properly
within the legitimate possession of the Receiving Party or,
subsequent to receipt hereunder (or under such agreement),
is lawfully received from a third party having rights
therein without restriction of the third party's right to
disseminate the Confidential Information and without notice
of any restriction against its further disclosure; (iii) is
independently developed by the Receiving Party through
Persons who have not had, either directly or indirectly,
access to or knowledge of such Confidential Information;
(iv) is disclosed to a third party with the written approval
of the party originally disclosing such information,
provided that such Confidential Information shall cease to
be confidential and proprietary information covered by this
Agreement only to the extent of the disclosure so consented
to; (v) subject to the Receiving Party's compliance with
paragraph (d) below, is required to be produced under order
of a court of competent jurisdiction or other similar
requirements of a governmental agency, provided that such
Confidential Information to the extent covered by a
protective order or its equivalent shall otherwise continue
to be Confidential Information required to be held
confidential for purposes of this Agreement; or (vi) subject
to the Receiving Party's compliance with paragraph (d)
below, is required to be disclosed by applicable law or a
stock exchange or association on which such Receiving
Party's securities (or those of its Affiliate) are listed.
(c) Notwithstanding this Section 6.6, any Partner may
provide Confidential Information (i) to other Persons considering
the acquisition (whether directly or indirectly) of all or a
portion of such Partner's Interest in the Partnership pursuant to
Section 12 of this Agreement, (ii) to other Persons considering
the consummation of a Permitted Transaction with respect to such
Person or (iii) to any financial institution in connection with
borrowings from such financial institution by such Partner or any
of its Controlled Affiliates, so long as prior to any such
disclosure such other Person or financial institution executes a
confidentiality agreement that provides protection substantially
equivalent to the protection provided the Partners and the
Partnership in this Section 6.6.
(d) In the event that any Receiving Party (i) must
disclose Confidential Information in order to comply with
applicable law or the requirements of a stock exchange or
association on which such Receiving Party's securities or those
of its Affiliates are listed or (ii) becomes legally compelled
(by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demands or otherwise)
to disclose any Confidential Information, the Receiving Party
shall provide the disclosing party with prompt written notice so
that in the case of clause (i), the disclosing party can work
with the Receiving Party to limit the disclosure to the greatest
extent possible consistent with legal obligations, or in the case
of clause (ii), the disclosing party may seek a protective order
or other appropriate remedy or waive compliance with the
provisions of this Agreement. In the case of clause (ii), (A) if
the disclosing party is unable to obtain a protective order or
other appropriate remedy, or if the disclosing party so directs,
the Receiving Party shall, and shall cause its employees to,
exercise all commercially reasonable efforts to obtain a
protective order or other appropriate remedy at the disclosing
party's reasonable expense, and (B) failing the entry of a
protective order or other appropriate remedy or receipt of a
waiver hereunder, the Receiving Party shall furnish only that
portion of the Confidential Information which it is advised by
opinion of its counsel is legally required to be furnished and
shall exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment shall be accorded
such Confidential Information, it being understood that such
reasonable efforts shall be at the cost and expense of the
disclosing party whose Confidential Information has been sought.
(e) Any press release concerning the business, affairs
and operation of the Partnership shall be approved in advance by
a Required Majority Vote of the Partnership Board.
(f) The obligations under this Section 6.6 shall
survive for a period of two (2) years from (i) as to all Partners
and their respective Controlled Affiliates, the termination of
the Partnership and (ii) as to any Partner and its Controlled
Affiliates, such Partner's withdrawal therefrom (or otherwise
ceasing to be a Partner); provided that such obligations shall
continue indefinitely with respect to any trade secret or similar
information which is proprietary to the Partnership and provides
the Partnership with an advantage over its competitors.
(g) All references in this Section 6.6 to the
Partnership shall, unless the context otherwise requires, be
deemed to refer also to each Subsidiary of the Partnership.
SECTION 7. ROLE OF EXCLUSIVE LIMITED PARTNERS
7.1 Rights or Powers.
The Exclusive Limited Partners shall not have any right or
power to take part in the management or control of the
Partnership or its business and affairs or to act for or bind the
Partnership in any way.
7.2 Voting Rights.
The Exclusive Limited Partners shall have the right to vote
only on the matters specifically reserved for the vote or
approval of Partners (including the Exclusive Limited Partners)
set forth in this Agreement, including those matters listed on
Schedule 5.1(l).
SECTION 8. TRANSACTIONS WITH PARTNERS; OTHER AGREEMENTS
8.1 Sprint Cellular.
In the event (i) WirelessCo is the winning bidder in the PCS
Auction for a PCS license with respect to a license area and at
such time Sprint and its Controlled Affiliates have an ownership
interest in a cellular business or businesses (a "Sprint Cellular
Business") having a service area which is included within such
license area in whole or in part (an "Overlap Cellular Area") or
(ii) WirelessCo has decided, at any time prior to September 28,
1997, to acquire a PCS license in a license area which includes
an Overlap Cellular Area; and as a result of Sprint's ownership
interest in a Sprint Cellular Business WirelessCo would not be
awarded on an unconditional basis (in the event of clause (i)
above) or be permitted to acquire (in the event of clause (ii)
above) such PCS license under FCC rules and regulations relating
to CMRS spectrum cap limitations, then Sprint agrees that it will
divest such portion of such Sprint Cellular Business, within the
time period provided by FCC rules in the event of clause (i)
above, and as soon as commercially reasonable (e.g., to avoid
"fire sale" prices) in the event of clause (ii) above, or take
any other action as is necessary, so that WirelessCo will not be
impaired from holding or acquiring such PCS license. Nothing
herein prevents one or more Partners from acquiring such PCS
license if Sprint is unable to divest the overlap property in a
timely manner, provided that, subject to applicable law, such
Partner or Partners enter into an Affiliation Agreement with the
Partnership and its Subsidiaries. This Section 8.1 shall not
require Sprint to divest, or take any other action with respect
to, any of the Sprint Cellular Businesses in the Charlotte,
Cleveland, El Paso, Jacksonville, Knoxville, Omaha or Richmond
MTAs.
8.2 Sprint Brand Licensing Agreement.
Simultaneously with the execution and delivery of this
Agreement, the Partnership and Sprint Communications have entered
into an Amended and Restated Trademark License Agreement, a copy
of which is attached hereto as Exhibit 8.2 (the "Trademark
License").
8.3 Marketing; Branding of Partnership Services.
(a) Marketing Channels. The Partnership Services will
be marketed directly by the Partnership and through its marketing
channels, which will include Sprint LD, the Cable Subsidiaries
and other Controlled Affiliates of the Cable Partners, and
Wireless Affiliates. The Partnership may enter into sales agency
agreements with others, including (if and to the extent permitted
by the original agency agreement) sub-agency agreements for
Sprint LD Services and Cable Services; provided, however, that
such appointment shall be subject to all of the terms and
conditions of the original agency agreement (including
performance and quality standards), and the appointing agent
shall be responsible for ensuring compliance by its distributors
and sub-agents with such terms and conditions.
(b) Sales Agency. Sprint LD, the Cable Subsidiaries
and other Controlled Affiliates of the Cable Partners (except for
Cable Subsidiaries and other Controlled Affiliates of Comcast
with respect to the Comcast Area) will be non-exclusive
commission sales agents for the Partnership's Wireless Exclusive
Services and Non-Exclusive Services ("Partnership Services")
pursuant to agency agreements that conform to the provisions of
this Section 8.3 and are otherwise in form and substance
reasonably satisfactory to the parties thereto. The agency
agreements will provide that all Partnership Services will be
made available to each of Sprint LD and the Cable Subsidiaries
and other Controlled Affiliates of the Cable Partners to offer,
promote and package.
The Partnership will be a non-exclusive commission sales
agent for such long distance services of Sprint and its
Affiliates (other than Sprint Cellular and any LEC properties
owned by Controlled Affiliates of Sprint) (collectively, "Sprint
LD") as Sprint LD may agree to make available to the Partnership
("Sprint LD Services") and for such services offered by a Cable
Subsidiary or other Controlled Affiliate of a Cable Partner in
the areas served by its local cable system as such Cable
Subsidiary (or Controlled Affiliate) may agree to make available
to the Partnership ("Cable Services"), in each case pursuant to
agency agreements that conform to the provisions of this Section
8.3 and are otherwise in form and substance reasonably
satisfactory to the parties thereto.
Subject to Section 8.3(a), Sprint LD will be a sub-agent of
the Partnership for Cable Services, and the Cable Subsidiaries
and other Controlled Affiliates of the Cable Partners will be
sub-agents of the Partnership for Sprint LD Services, in each
case only if and to the extent that such sub-agency is permitted
by the original agency agreement relating to such services. The
Partnership will establish the commission structure and level for
its sub-agents, provided that sub-agents that are Partners or
their Controlled Affiliates will be paid commissions on a pass-
through basis without deduction by the Partnership.
No Partner or Controlled Affiliate thereof shall be required
(i) to make any of its product or service offerings available to
the Partnership to offer or promote pursuant to the first
sentence of the second paragraph of this Section 8.3(b), (ii) to
authorize the Partnership to include any product or service
offerings that are made available by such Partner or Controlled
Affiliate in a bilateral package with any Partnership Services or
in a multilateral package with Partnership Services and product
or service offerings of any other Partner or its Controlled
Affiliates, or (iii) to authorize the Partnership to appoint any
distributors or sub-agents for any product or service offerings
that such Partner or its Controlled Affiliates make available to
the Partnership, whether as a condition of its appointment as an
agent for Partnership Services or otherwise.
The sales agency agreements referenced to in this Section
8.3(b) will include appropriate customer and territorial
restrictions. Sprint LD and the Cable Subsidiaries and other
Controlled Affiliates of the Cable Partners will retain the
"retail margins" on the sales of their respective services by the
Partnership, and will pay a sales commission to the Partnership.
(c) Commissions. Commissions payable to the
Partnership under sales agency agreements for Sprint LD Services
and for Cable Services and commissions payable to Sprint LD and
the Cable Subsidiaries and other Controlled Affiliates of the
Cable Partners under sales agency agreements for Partnership
Services will be not less favorable to the agent than those for
comparable agency arrangements (considering churn, marketing
support provided by agent, etc.) of the relevant principal with
third parties, irrespective of volume. The Partners acknowledge
that commission arrangements between Cable Subsidiaries and other
Controlled Affiliates of the Cable Partners and owners of
multiple dwelling units, shared tenant services companies and the
like are not comparable agency arrangements for this purpose.
Commissions will be paid on the basis of net customer growth
(i.e., after taking into account churn) and in the case of a sale
to an existing customer will only be paid on the basis of
incremental sales revenue from such customer resulting from such
sale, if any.
(d) Exclusivity. The Partnership will require as a
condition to its appointment of Sprint LD, each Cable Subsidiary
or other Controlled Affiliate of the Cable Partners and each
Wireless Affiliate as sales agents for the Partnership Services,
that Sprint LD, such Cable Subsidiary or other Controlled
Affiliate of the Cable Partners and such Wireless Affiliate agree
that, except as permitted under Section 6, it will not offer,
promote or package any Wireless Exclusive Services other than the
Partnership Services and, in the case of a Wireless Affiliate,
the products and services of such Wireless Affiliate, during the
term of such agency.
(e) Brand. The Partnership Services will be offered,
promoted and packaged solely under the Licensed Xxxx (as defined
in the Sprint Trademark License Agreement attached as Exhibit
8.2), except that the foregoing shall not preclude (i) the
inclusion of Partnership Services bearing the Licensed Xxxx (or,
if permitted under clause (ii), a Permitted Brand) in a package
with any products or services offered, promoted or packaged by a
Cable Subsidiary or other Controlled Affiliate of a Cable Partner
(whether such package is offered by any of the foregoing or by
any of their respective sub-agents or distributors) that bear a
xxxx or brand other than the Licensed Xxxx or (ii) to the extent
expressly permitted by Sections 6.3(q) and 6.3(r), the offering,
promoting and packaging of Partnership Services under a Permitted
Brand.
(f) Right to Market Own Products. Nothing in this
Section 8.3 shall govern or restrict the right of Sprint LD or
any Cable Subsidiary or other Controlled Affiliate of a Cable
Partner to market, sell or distribute its own products or
services.
8.4 Preferred Provider.
The Partnership and its Subsidiaries shall contract with
each Partner, its Affiliates and third parties, as appropriate,
on a negotiated arms-length basis, for services they may require,
which may include billing and information systems and marketing
and sales services. The Partnership and its Subsidiaries may in
the normal course of their respective businesses enter into
transactions with the Partners and their respective Affiliates,
provided that the Partnership Board by the requisite vote
pursuant to Section 8.6 has determined that the price and other
terms of such transactions are fair to the Partnership and its
Subsidiaries and that the price and other terms of such
transaction are not less favorable to the Partnership and its
Subsidiaries than those generally prevailing with respect to
comparable transactions involving non-Affiliates of Partners.
Subject to the foregoing, the Partnership Board, acting in
accordance with Section 8.6, may in its discretion elect from
time to time to provide rights of first opportunity to various
Partners or their Affiliates to provide services to the
Partnership and its Subsidiaries; provided that the Partnership
Board shall have adopted, by Unanimous Vote, procedures
(including conflict avoidance procedures) relating generally to
such right of first opportunity arrangements, and the provision
of such rights and all matters related to the exercise thereof
shall be subject to and effected in a manner consistent with such
procedures. The Partnership and its Subsidiaries are expressly
authorized to enter into the agreements expressly referred to in
this Section 8.
8.5 MFJ.
Each Partner agrees that neither it nor any of its
Controlled Affiliates shall take any action that (i) causes such
Partner or the Partnership to become a BOC or (ii) causes the
Partnership to become a BOC Affiliated Enterprise or an entity
subject to any restriction or limitation under Section II of the
MFJ, if, in the case of clause (ii) above, the results referred
to in such clause (ii) would have a material adverse effect on
the business, assets, liabilities, results of operations,
financial condition or prospects of the Partnership and its
Subsidiaries.
8.6 Interested Party Transactions.
Any contract, agreement, relationship or transaction between
the Partnership or any of its Subsidiaries, on the one hand, and
any Partner or any Person in which a Partner (or any of its
Controlled Affiliates) has a direct or indirect material
financial interest (other than the Partnership, MinorCo,
PhillieCo and their respective Subsidiaries) or which has a
direct or indirect material financial interest in such Partner
(provided that a Person shall not be deemed to have such an
interest solely as a result of its ownership of less than 10% (by
value) of the outstanding economic interests in a Publicly Held
Parent of a Partner (or a Publicly Held Intermediate Subsidiary
of such Parent)) (each, an "Interested Person") on the other
hand, shall be approved and all decisions with respect thereto
(including a decision to accept or reject an Offer pursuant to
Section 6.1(c), the determination to amend, terminate or abandon
any such contract or agreement, whether there has been a breach
thereof and whether to exercise, waive or release any rights of
the Partnership with respect thereto) shall be made (after full
disclosure by the interested Partner of all material facts
relating to such matter) by the Partnership Board (with the
Representatives of the interested Partner(s) absent from the
deliberations and abstaining from the vote with respect thereto)
by the requisite affirmative vote of the Representatives of the
disinterested General Partners. For purposes of the foregoing, a
disinterested General Partner is a General Partner that is not a
party to, and does not have an Interested Person that is a party
to, the contract, agreement, relationship or transaction in
question.
8.7 Access to Technical Information. Subject to the
provisions of Sections 6 and 10.4 of this Agreement and
to applicable confidentiality restrictions, the
Partnership and its Subsidiaries shall grant to each
Partner and its Controlled Affiliates access to
Technical Information of the Partnership and its
Subsidiaries ("Partnership Technical Information").
Such access shall be granted at such reasonable times
and locations and on such other reasonable terms as the
Partnership Board may approve by Required Majority Vote
pursuant to Section 8.6. Subject to Section 6, the
Partnership and its Subsidiaries shall grant to any
such Partner or its Controlled Affiliate a license to
use any Partnership Technical Information to which it
is granted access pursuant to this Section 8.7 (and to
make copies thereof at such Partner's expense), which
license shall provide for royalties and fees and other
terms and conditions that are generally prevailing with
respect to comparable transactions involving unrelated
third parties and are at least as favorable to such
Partner or its Controlled Affiliate as those generally
prevailing with respect to comparable licenses (if any)
granted to non-Affiliates of Partners; provided that,
except as expressly provided in Section 8.12, the
Partnership shall not grant any Partner or its
Controlled Affiliates access to any Proprietary
Technical Information. The rights of access granted
pursuant to this Section 8.7 shall be subject to the
pre-existing rights of any third party to such
Partnership Technical Information.
8.8 Parent Undertaking.
Simultaneously with the execution and delivery of this
Agreement, each Parent has executed and delivered to the
Partnership and the other Partners a Parent Undertaking.
8.9 Certain Additional Covenants.
(a) Each Cable Partner agrees that for so long as such
Cable Partner is a Partner during the Term (as defined in the
Parents Agreement) of the Parents Agreement to which the Parent
of such Cable Partner is a party, neither it nor any of its
Controlled Affiliates will engage in any transaction or series of
related transactions, other than a Permitted Transaction, in
which cable television system assets owned directly or indirectly
by the Parent of such Partner are Transferred if, after giving
effect to such transaction or the last transaction in such series
of related transactions, the number of basic subscribers served
by the cable television systems in the United States of America
(including its territories and possessions other than Puerto
Rico) owned by the Parent of such Partner, directly and
indirectly through its Controlled Affiliates, is equal to twenty-
five percent (25%) or less of the number of basic subscribers
served by the cable television systems in the United States of
America (including its territories and possessions other than
Puerto Rico) owned by the Parent of such Partner, directly and
indirectly through its Controlled Affiliates, before giving
effect to such transaction or the first transaction in such
series of related transactions.
(b) Sprint agrees that for so long as Sprint is a
Partner during the Term (as defined in the Parents Agreement) of
any Parents Agreement, neither it nor any of its Controlled
Affiliates will engage in any transaction or series of related
transactions, other than a Permitted Transaction, in which long
distance telecommunications business assets owned directly or
indirectly by Sprint Parent are Transferred if, after giving
effect to such transaction or the last transaction in such series
of related transactions, the number of customers served by the
long distance telecommunications business in the United States of
America (including its territories and possessions other than
Puerto Rico) owned by Sprint Parent, directly and indirectly
through its Controlled Affiliates, is equal to twenty-five
percent (25%) or less of the number of customers served by the
long distance telecommunications business in the United States of
America (including its territories and possessions other than
Puerto Rico) owned by Sprint Parent, directly and indirectly
through its Controlled Affiliates, before giving effect to such
transaction or the first transaction in such series of related
transactions.
8.10 PioneerCo Preemptive Rights.
The PioneerCo Partnership Agreement will provide that Cox
Pioneer Partnership and the Partnership (or a Subsidiary of the
Partnership) will have certain put and call rights that may
result in the acquisition by the Partnership of Cox Pioneer
Partnership's interest in PioneerCo in exchange for an additional
Interest in the Partnership. At the time of such exchange, each
of the Partners (other than Cox) will be permitted to make
Additional Capital Contributions in cash up to the amount
necessary to permit such Partner to avoid any reduction in its
Percentage Interest as a consequence of such exchange (assuming
that all such other Partners were to exercise such right).
8.11 Foreign Ownership.
(a) Certain Definitions and Concepts. For purposes of
this Section 8.11:
(i) "Foreign Ownership Restriction" means any
federal law or regulation restricting the amount of ownership or
voting control that may be held by non-citizens of the United
States in holders of licenses or other authorizations issued by
the FCC or in Persons controlling such holders (including 47
U.S.C. 310(b) and the rules and regulations promulgated
thereunder by the FCC). (ii) "Covered Licensee" means any of the
Partnership or any Subsidiary thereof that holds any license or
other authorization issued by the FCC or that controls the holder
of any license or other authorization for purposes of any Foreign
Ownership Restriction.
(iii) "Foreign Ownership Threshold" means, with
respect to any Covered Licensee, the maximum amount of foreign
ownership or foreign voting control of such Covered Licensee that
is permitted by any Foreign Ownership Restriction applicable to
such Covered Licensee, less the amount of foreign ownership or
foreign voting control of such Covered Licensee that is
attributable from any Person other than a Partner.
(iv) "Foreign Ownership Safe Harbor" means, with
respect to any Covered Licensee, ninety percent (90%) of the
Foreign Ownership Threshold of such Covered Licensee.
(v) Except as provided in clause (vi) of this
Section 8.11(a), a Partner's "Attribution Cap" equals, with
respect to the Foreign Ownership Threshold of any Covered
Licensee:
(A) in the case of Sprint, the product of the
Percentage Interest of Sprint times twenty-eight percent (28%),
and
(B) in the case of any Cable Partner, the
product of (x) the Foreign Ownership Threshold of such Covered
Licensee minus Sprint's Attribution Cap times (y) the Percentage
Interest of such Cable Partner divided by the aggregate
Percentage Interests of all Cable Partners.
(vi) Notwithstanding clause (v) of this Section
8.11(a), if (A) the proposed transaction among Deutsche Telekom,
France Telecom and Sprint Parent providing for the purchase by
Deutsche Telekom and France Telecom of certain shares of stock of
Sprint Parent is abandoned without the consummation of all of the
stock purchases contemplated thereby and (B) definitive
agreements with respect to a similar alternative transaction with
a non-citizen of the United States have not been entered into by
Sprint Parent prior to March 28, 1997 or such transaction has not
been consummated prior to March 28, 1998, then, with respect to
any Covered Licensee, each Partner's Attribution Cap shall equal
the product of the Percentage Interest of such Partner times the
Foreign Ownership Threshold of such Covered Licensee.
(vii) Notwithstanding clause (v) of this Section
8.11(a), if the Foreign Ownership Threshold with respect to any
Covered Licensee exceeds 28%, each Partner's Attribution Cap
shall equal the product of the such Partner's Percentage Interest
times the Foreign Ownership Threshold of such Covered Licensee.
(b) Covenant Regarding Foreign Ownership. Subject to
Section 8.11(c), no Partner shall cause or permit the amount of
foreign ownership or foreign voting control attributable to any
Covered Licensee from such Partner and its Controlled Affiliates
(determined in accordance with the method of attribution
prescribed in the applicable Foreign Ownership Restrictions) to
exceed the Attribution Cap of such Partner applicable to such
Covered Licensee, increased by any portion of any other Partner's
applicable Attribution Cap that such other Partner has authorized
such Partner to use for purposes of determining compliance with
this Section 8.11(b), and decreased by any portion of such
Partner's applicable Attribution Cap that such Partner has
authorized any other Partner to use for purposes of determining
compliance with this Section 8.11(b). (c) Right to Cure
Potential Violations. So long as a Partner and its Controlled
Affiliates are using their respective commercially reasonable
efforts to cause the amount of foreign ownership and foreign
voting control attributable to each Covered Licensee from such
Partner and its Controlled Affiliates to be reduced below the
maximum amount permitted by Section 8.11(b) (without regard to
this Section 8.11(c)), such Partner shall not be deemed to be in
violation of its covenant in Section 8.11(b) until the earlier
of:
(i) such time as the aggregate amount of foreign
ownership or foreign voting control attributable to any Covered
Licensee (including the foreign ownership and foreign voting
control attributable from such Partner and its Controlled
Affiliates) exceeds the Foreign Ownership Safe Harbor, or
(ii) thirty (30) days after such Partner
receives written notice from any other Partner that such other
Partner or any of its Controlled Affiliates desires to engage in
any transaction permitted by section 8.11(b) that, if
consummated, would cause the aggregate amount of foreign
ownership or foreign voting control attributable to any Covered
Licensee to exceed the Foreign Ownership Safe Harbor if the
foreign ownership attributable to such Covered Licensee from such
Partner and its Controlled Affiliates continued to exceed the
maximum amount permitted by Section 8.11(b).
(d) Authorization to Use the Attribution Cap of Another
Partner. Any authorization by one Partner to another Partner of
the right to use any portion of the authorizing Partner's
applicable Attribution Cap for purposes of determining compliance
with Section 8.11(b) shall be evidenced by a written instrument
delivered by the authorizing Partner to the Partnership and each
other Partner.
8.12 Product Integration.
(a) The Partnership shall undertake to architect and
design its systems, platforms, networks and products in a manner
that facilitates seamless integration of the Partnership's
Wireless Exclusive Services with the telecommunications products
and services offered by the Partnership and its Subsidiaries,
each Partner and its Controlled Affiliates, Teleport and any
Local Joint Venture. The adoption of all budgets, plans and
procedures by the Partnership regarding the planning, design and
development activities of the Partnership with respect to the
architecture and design of all systems, platforms, networks and
products shall require a Required Majority Vote of the
Partnership Board, and each Partner shall have the right to
participate fully in such planning, design and development
activities and shall have access to and rights to use all
Partnership Technical Information relating to such activities in
accordance with Section 8.7 (except to the extent otherwise
provided in Sections 8.12(b), (c) and (d) below with respect to
any Proprietary Technical Information).
(b) Following July 31, 1996, each Partner shall have
the right to cause the Partnership to undertake, in cooperation
with such Partner and at such Partner's cost and expense, the
development of Technical Information that such Partner reasonably
believes is necessary to integrate the Partnership's Wireless
Exclusive Services with the wireline telecommunications products
and services of (x) Sprint and its Controlled Affiliates, if such
Partner is Sprint, (y) such Partner and its Controlled Affiliates
and/or Teleport, if such Partner is a Cable Partner, or (z) any
Local Joint Venture in which such Partner or its Controlled
Affiliate has an interest (or to which such Partner or its
Controlled Affiliate is a party) ("Proprietary Technical
Information"); provided, that such undertaking by the Partnership
shall not materially interfere with the Partnership's ongoing
planning, design and development activities and any such
integration shall not adversely impact in any material respect
the operating characteristics of the Partnership's existing
systems, platforms, networks or products. The Partner causing
the Partnership to develop any such Proprietary Technical
Information (the "Initiating Partner") shall have the
irrevocable, royalty-free exclusive right and license to make (or
have made), use, sell, copy, modify and sublicense such
Proprietary Technical Information; provided, that (i) the
Initiating Partner shall have no such exclusive right as to any
pre-existing Partnership Technical Information used in the
development of any such Proprietary Technical Information, (ii)
if (A) the Initiating Partner is Sprint, each other Partner that
has, or has a Controlled Affiliate that has, entered a Local
Joint Venture with Sprint or a Controlled Affiliate of Sprint, or
(B) the Initiating Partner is a Cable Partner, each other Cable
Partner and, if Sprint or a Controlled Affiliate of Sprint has
entered a Local Joint Venture with such Initiating Partner or a
Controlled Affiliate of such Initiating Partner, Sprint, shall be
entitled to participate in the development of Proprietary
Technical Information in cooperation with the Initiating Partner
(except that neither Sprint (if a Cable Partner is the Initiating
Partner) nor any of the Cable Partners (if Sprint is the
Initiating Partner) shall be entitled to participate in the
development of any Proprietary Technical Information integrating
the Partnership's Wireless Exclusive Services with
telecommunications products and services designed primarily for
non-residential customers ("Business-Related Information")), and
(iii) if one or more other Partners participates in the
development of any Proprietary Technical Information pursuant to
clause (ii) above, the Initiating Partner and each such other
Partner shall have the exclusive (other than as among the
Initiating Partner and each such other Partner) irrevocable,
royalty-free right and license to make (or have made), use, sell,
copy, modify and sublicense such Proprietary Technical
Information; however, in such case, no Initiating Partner or such
other Partner having the foregoing rights as to any such
Proprietary Technical Information developed pursuant to this
Section 8.12(b) shall sublicense or otherwise grant rights with
respect to such Proprietary Technical Information to any Person
other than such Partner and its Controlled Affiliates, the
Partnership and its Subsidiaries, any Local Joint Venture in
which the Initiating Partner (or its Controlled Affiliate) or
such other Partner (or its Controlled Affiliate) that
participated in the development of such Proprietary Technical
Information has an interest (or to which any of the foregoing is
otherwise a party), and Teleport (if a Cable Partner is the
Initiating Partner) (provided that the restrictions set forth in
this clause (iii) shall apply only to the use of such Proprietary
Technical Information in connection with the provision of
telecommunications products and services to customers located in
the United States and its territories, other than Puerto Rico).
Subject to Section 8.12(c), the costs and expenses incurred in
the development of Proprietary Technical Information shall be
borne by the Initiating Partner and each such other Partner that
elects to participate in the development of such Proprietary
Technical Information ratably in proportion to their respective
Percentage Interests.
(c) To the extent that following the development of any
Business-Related Information, the Initiating Partner or any of
its Controlled Affiliates uses or licenses or permits a sub-
license (or otherwise grants any right) for the use of all or any
portion of such Business-Related Information for an application
thereof to a telecommunications product or service for
residential customers to any material extent (other than the
provision by a non-residential customer of access to any such
product or service solely for business purposes, provided that
such product or service is not offered, promoted or packaged to
residential customers), the Initiating Partner shall promptly
notify each other Partner that would have been entitled to
participate in such development but for the restriction on its
right to participate in the development of Business-Related
Information contained in the second sentence of Section 8.12(b),
and each such other Partner shall be entitled to an irrevocable
right and license to make (or have made), use, sell, copy, modify
or sub-license any such portion of such Business-Related
Information (but subject to the restriction in clause (iii) of
the proviso in the second sentence of Section 8.12(b) above),
subject to the payment by such Partner of a pro rata portion of
the development costs and expenses attributable to the
development of such portion of such Business-Related Information
used for such application for residential customers (which shall
be borne by the Initiating Partner, any other Partner initially
participating in the development of such Business-Related
Information (an "Initial Participating Partner"), and any
Partner(s) exercising rights under this paragraph ratably in
proportion to their respective Percentage Interests). Such
payment shall be made as a direct reimbursement to the Initiating
Partner and each Initial Participating Partner of the applicable
portion of the development costs and expenses previously paid to
the Partnership by the Initiating Partner and the Initial
Participating Partner.
(d) In connection with the proposed development of any
Proprietary Technical Information, the applicable Partners and
the Partnership shall agree in writing to processes and
procedures related to such development and the actual scope of
use, ownership, license and sub-license rights with respect to
such Proprietary Technical Information (including the nature and
extent of any pre-existing Partnership Technical Information to
be used in the development of such Proprietary Technical
Information), which in any such case shall be consistent with
this Section 8.12, unless otherwise agreed by the applicable
Partners and the Partnership. If, in connection with any
development pursuant to Section 8.12, any Partner or the
Partnership develops or invents any technology or other
intellectual property giving rise to any patent rights, subject
to the other provisions of this Section 8.12, common law
principles relating to the ownership of and rights to use
patentable inventions shall govern the ownership of and rights to
use such technology or other intellectual property, unless
otherwise agreed by the parties participating in the development
of such technology or other intellectual property.
Notwithstanding anything in this Agreement to the contrary,
without such Partner's prior written consent, no licenses, either
express or implied, are granted to the Partnership, any other
Partner or any other entity for any Proprietary Technical
Information or other Technical Information Rights owned or solely
developed by a Partner.
8.13 Provision of Services.
To the extent permitted by applicable law, each Partner
agrees that it and its Controlled Affiliates shall use all
commercially reasonable efforts to cause its local cable
television and/or telephone operations to provide appropriate
services to WirelessCo in all its owned and operated markets as
well as markets operating under an Affiliation Agreement with
WirelessCo, including any Affiliation Agreement with PioneerCo.
Such services may include antenna sites and/or strand mounting of
RF and transmission equipment owned by WirelessCo or any
Affiliate thereof and transmission facilities between cell sites
and designated switching locations. Services may also include
provision of primary power, standby power and maintenance.
Pricing of the foregoing services will be negotiated at a local
level and is expected to reflect all relevant costs plus a
reasonable return. Notwithstanding the foregoing, Comcast will
not be required to provide any services to WirelessCo under this
Section 8.13 in any territories in which Comcast or its
Controlled Affiliates operate Wireless Businesses in the Comcast
Area.
8.14 Comcast Representative.
Notwithstanding any other provision of this Agreement, for
such time (the "Restricted Time") as Comcast or any of its
Controlled Affiliates engages in any Competitive Activity in any
portion of the Comcast Area, Comcast agrees to cause any
Representative of Comcast who participates in Designated Matters
(as defined below) not to (i) be involved in any Competitive
Activities engaged in by Comcast or its Controlled Affiliates in
the Restricted Area (as defined below) and (ii) disclose or
discuss the Designated Matters with any Agent of Comcast that is
involved in Competitive Activities in the Restricted Area.
During the Restricted Time, each Partner (other than Comcast) and
its Controlled Affiliates and the Partnership and its
Subsidiaries shall not, shall cause their respective officers and
directors (in their capacity as such) not to, and shall take all
reasonable measures to cause their respective other Agents not
to, disclose any information (including any financial
projections, budgets or other operating or business plans)
regarding the provision, by the Partnership and its Subsidiaries
or by any Third Party Provider (as defined below) of Wireless
Exclusive Services in any portion of the Comcast Area, to Comcast
or any of its Controlled Affiliates or Agents other than such
Representative of Comcast. As used herein, "Designated Matters"
means the participation in any discussions regarding, the
obtaining of any information or the casting of any votes, in each
case with respect to any matter concerning the provision by the
Partnership or its Subsidiaries of Wireless Exclusive Services in
a portion (the "Restricted Area") of the Comcast Area (including
the terms of any Affiliation Agreement with any Person providing
such Wireless Exclusive Services (a "Third Party Provider")).
8.15 Purchasing.
The Partners and their respective Controlled Affiliates will
cooperate with each other in a commercially reasonable manner to
structure arrangements whereby the Partners, their respective
Controlled Affiliates, and the Partnership and its Subsidiaries
would, to the extent permitted by applicable law and regulation,
coordinate their respective buying efforts from third party
vendors in a manner such that the benefits of such coordinated
efforts would be available to the Partnership and its
Subsidiaries, each Partner and each Partner's respective
Controlled Affiliates in making such purchases of equipment and
materials as may be required for (i) the accomplishment of the
purposes of the Partnership and its Subsidiaries and (ii) the
operations of the permitted businesses of any Partner or its
Controlled Affiliates.
8.16 Advertising Reimbursement.
On December 31, 1996, if by such date Sprint and the Cable
Partners have not entered into an agreement regarding Teleport as
contemplated under Section 3(b) of the Parents Agreements between
Sprint and each Parent of the Cable Partners in the form executed
and delivered as of the date hereof, Sprint will pay to each of
the Cable Partners an amount, together with interest thereon at
the rate of six percent (6%) per annum from and including
February 1, 1996 until the date on which such amount is paid, in
cash equal to the sum of (A) the value of the advertising
availability previously made available to the Partnership by such
Partner and its Controlled Affiliates at no charge pursuant to
Section 9.13(b) of the Prior Partnership Agreement and (B) an
amount equal to such Cable Partner's Percentage Interest times
the value of the advertising availability previously purchased by
the Partnership and its Subsidiaries pursuant to Section 9.13(b)
of the Prior Partnership Agreement.
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1 Representations and Warranties by Partners.
Each Partner hereby represents and warrants that as of the
date hereof:
(a) Due Incorporation or Formation; Authorization of
Agreement. Such Partner is a corporation duly organized or a
partnership duly formed, validly existing and, if applicable, in
good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate or partnership
power and authority to own its property and carry on its business
as owned and carried on at the date hereof and as contemplated
hereby. Such Partner is duly licensed or qualified to do
business and, if applicable, in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its financial condition
or its ability to perform its obligations hereunder. Such
Partner has the corporate or partnership power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder and the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate or
partnership action. Assuming the due execution and delivery by
the other parties hereto, this Agreement constitutes the legal,
valid and binding obligation of such Partner enforceable against
such Partner in accordance with its terms, subject as to
enforceability to limits imposed by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and the
availability of equitable remedies.
(b) No Conflict with Restrictions; No Default. Neither
the execution, delivery and performance of this Agreement nor the
consummation by such Partner of the transactions contemplated
hereby (i) will conflict with, violate or result in a breach of
any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or
award of any court, any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator,
applicable to such Partner or any of its Controlled Affiliates,
(ii) will conflict with, violate, result in a breach of or
constitute a default under any of the terms, conditions or
provisions of the articles of incorporation, bylaws or
partnership agreement of such Partner or any of its Controlled
Affiliates or of any material agreement or instrument to which
such Partner or any of its Controlled Affiliates is a party or by
which such Partner or any of its Controlled Affiliates is or may
be bound or to which any of its material properties or assets is
subject (other than any such conflict, violation, breach or
default that has been validly and unconditionally waived), (iii)
will conflict with, violate, result in a breach of, constitute a
default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required
by, give to others any material interests or rights or require
any consent, authorization or approval under any indenture,
mortgage, lease agreement or instrument to which such Partner or
any of its Controlled Affiliates is a party or by which such
Partner or any of its Controlled Affiliates is or may be bound,
or (iv) will result in the creation or imposition of any lien
upon any of the material properties or assets of such Partner or
any of its Controlled Affiliates, which in any such case could
reasonably be expected to have a material adverse effect on the
Partnership or to materially impair such Partner's ability to
perform its obligations under this Agreement or to have a
material adverse effect on the consolidated financial condition
of such Partner or its Parent.
(c) Governmental Authorizations. Any registration,
declaration or filing with, or consent, approval, license, permit
or other authorization or order by, any governmental or
regulatory authority, domestic or foreign, that is required to be
obtained by such Partner in connection with the valid execution,
delivery, acceptance and performance by such Partner under this
Agreement or the consummation by such Partner of any transaction
contemplated hereby has been or will be completed, made or
obtained, except for any FCC or other regulatory approvals,
licenses, permits or other authorizations required to be obtained
by the Partnership in connection with the acquisition and
ownership of Wireless Business licenses relating to PCS.
(d) Litigation. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of
such Partner or its Parent, threatened against or affecting such
Partner or any of its Controlled Affiliates or any of their
properties, assets or businesses in any court or before or by any
governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely
determined (or, in the case of an investigation could lead to any
action, suit or proceeding, which if adversely determined could),
reasonably be expected to materially impair such Partner's
ability to perform its obligations under this Agreement or to
have a material adverse effect on the consolidated financial
condition of such Partner or its Parent; and such Partner or any
of its Controlled Affiliates has not received any currently
effective notice of any default, and such Partner or any of its
Controlled Affiliates is not in default, under any applicable
order, writ, injunction, decree, permit, determination or award
of any court, any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator, which
default could reasonably be expected to materially impair such
Partner's ability to perform its obligations under this Agreement
or to have a material adverse effect on the consolidated
financial condition of such Partner or its Parent.
(e) MFJ. Such Partner is not a BOC, a BOC Affiliated
Enterprise or an entity subject to any restrictions under Section
II of the MFJ.
(f) Subsidiaries. Such Partner is a direct or indirect
wholly owned Subsidiary of its Parent.
9.2 Representation and Warranty of Sprint.
Sprint hereby represents and warrants that as of the date
hereof Sprint Communications is the primary entity through which
Sprint Parent conducts its long distance telecommunications
business in the United States of America (including its
territories and possessions other than Puerto Rico).
SECTION 10. ACCOUNTING, BOOKS AND RECORDS
10.1 Accounting, Books and Records.
The Partnership shall maintain at its principal office
separate books of account for the Partnership which (i) shall
fully and accurately reflect all transactions of the Partnership,
all costs and expenses incurred, all charges made, all credits
made and received, and all income derived in connection with the
conduct of the Partnership and the operation of its business in
accordance with GAAP or, to the extent inconsistent therewith, in
accordance with this Agreement and (ii) shall include all
documents and other materials with respect to the Partnership's
business as are usually entered and maintained by persons engaged
in similar businesses. The Partnership and its Subsidiaries
shall use the accrual method of accounting in preparation of
their annual reports and for tax purposes and shall keep their
books and records accordingly. Subject to Section 10.4, any
Partner or its designated representative shall have the right, at
any reasonable time and for any lawful purpose related to the
affairs of the Partnership and its Subsidiaries or the investment
in the Partnership and its Subsidiaries by such Partner, (i) to
have access to and to inspect and copy the contents of such books
or records, (ii) to visit the facilities of the Partnership and
its Subsidiaries and (iii) to discuss the affairs of the
Partnership and its Subsidiaries with their respective officers,
employees, attorneys, accountants, customers and suppliers.
Neither the Partnership nor its Subsidiaries shall charge such
Partner for such examination and each Partner shall bear its own
expenses in connection with any examination made for any such
Partner's account.
10.2 Reports.
(a) In General. The chief financial officer of the
Partnership shall be responsible for the preparation of financial
reports of the Partnership and the coordination of financial
matters of the Partnership with the Accountants.
(b) Periodic and Other Reports. The Partnership shall
cause to be delivered to each Partner the financial statements
listed in clauses (i) through (iii) below, prepared, in each
case, in accordance with GAAP (and, if required by any Partner
for purposes of reporting under the Securities Exchange Act of
1934, Regulation S-X), and such other reports as any Partner may
reasonably request from time to time, provided that, if the
Partnership Board so determines within thirty (30) days thereof,
such other reports shall be provided at such requesting Partner's
sole cost and expense. Such financial statements shall be
accompanied by an analysis, in reasonable detail, of the variance
between the financial condition and results of operations
reported therein and the corresponding amounts for the applicable
period or periods in the Approved Business Plan. The monthly and
quarterly financial statements referred to in clauses (ii) and
(iii) below may be subject to normal year-end audit adjustments.
(i) As soon as practicable following the end of
each Fiscal Year (and in any event not later than
seventy-five (75) days after the end of such Fiscal Year)
and at such time as distributions are made to the Partners
pursuant to Section 14.2 following the occurrence of a
Liquidating Event, a consolidated balance sheet of the
Partnership and its Subsidiaries as of the end of such
Fiscal Year and the related statements of operations,
Partners' Capital Accounts and changes therein, and cash
flows for such Fiscal Year, together with appropriate notes
to such financial statements and supporting schedules, all
of which shall be audited and certified by the Accountants,
and in each case, to the extent the Partnership was in
existence, setting forth in comparative form the
corresponding figures for the immediately preceding Fiscal
Year (in the case of the balance sheet) and the two (2)
immediately preceding Fiscal Years (in the case of the
statements). (ii) As soon as practicable following the end
of each of the first three calendar quarters of each Fiscal
Year (and in any event not later than forty (40) days after
the end of each such calendar quarter), a consolidated
balance sheet of the Partnership as of the end of such
calendar quarter and the related consolidated statements of
operations, Partners' Capital Accounts and changes therein,
and cash flows for such calendar quarter and for the Fiscal
Year to date, in each case, to the extent the Partnership
was in existence, setting forth in comparative form the
corresponding figures for the prior Fiscal Year's calendar
quarter and interim period corresponding to the calendar
quarter and interim period just completed. (iii) As soon as
practicable following the end of each of the first two
calendar months of each calendar quarter (and in any event
not later than thirty (30) days after the end of such
calendar month), a consolidated balance sheet as of the end
of such month and consolidated statements of operations for
the interim period through such month and the monthly period
then ended, setting forth in comparative form the
corresponding figures from the Business Plan for such month
and the interim period through such month.
The quarterly or monthly statements described in clauses
(ii) and (iii) above shall be accompanied by a written
certification of the chief financial officer of the Partnership
that such statements have been prepared in accordance with GAAP
or this Agreement, as the case may be.
10.3 Tax Returns and Information.
(a) Sprint, acting in its capacity as a General
Partner, shall act as the "Tax Matters Partner" of the
Partnership within the meaning of Section 6231(a)(7) of the Code
(and in any similar capacity under applicable state or local law)
(the "Tax Matters Partner"). If Sprint shall cease to be a
General Partner, then the Partner with the greatest Voting
Percentage Interest, acting in its capacity as a General Partner,
shall thereafter act as the Tax Matters Partner. The Tax Matters
Partner shall take reasonable action to cause each other Partner
to be treated as a "notice partner" within the meaning of Section
6231(a)(9) of the Code. All reasonable expenses incurred by a
Partner while acting in its capacity as Tax Matters Partner shall
be paid or reimbursed by the Partnership. Each Partner shall be
given at least five (5) Business Days advance notice from the Tax
Matters Partner of the time and place of, and shall have the
right to participate (and the Partnership and the Tax Matters
Partner shall take such action as may be necessary to cause the
tax matters partner of any Subsidiary to extend to the Partners
the right to participate) in (i) any material aspect of any
administrative proceeding relating to the determination of
partnership items at the Partnership level (or at the level of
any Subsidiary thereof) and (ii) any material discussions with
the Internal Revenue Service relating to the allocations pursuant
to Section 3 of this Agreement or pursuant to the partnership
agreement of any Subsidiary. The Tax Matters Partner shall not,
and the Partnership shall not permit the tax matters partner of
any Subsidiary to, initiate any action or proceeding in any
court, extend any statute of limitations, or take any other
action contemplated by Sections 6222 through 6232 of the Code
that would legally bind any other Partner, the Partnership or any
Subsidiary without approval of the Partnership Board by a
Required Majority Vote. The Tax Matters Partner shall from time
to time upon request of any other Partner confer, and cause the
Partnership's and any Subsidiary's tax attorneys and Accountants
to confer, with such other Partner and its attorneys and
accountants on any matters relating to a Partnership or
Subsidiary tax return or any tax election.
(b) The Tax Matters Partner shall cause all federal,
state, local and other tax returns and reports (including amended
returns) required to be filed by the Partnership or any
Subsidiary thereof to be prepared and timely filed with the
appropriate authorities and shall cause all income or franchise
tax returns or reports required to be filed by the Partnership or
any Subsidiary thereof to be sent to each Partner for review at
least fifteen (15) Business Days prior to filing. Unless
otherwise determined by the Partnership Board, all such income or
franchise tax returns of the Partnership shall be prepared by the
Accountants. The cost of preparation of any returns by the
Accountants or other outside preparers shall be borne by the
Partnership or the applicable Subsidiary, as the case may be. In
the event of a Transfer of all or part of an Interest, the Tax
Matters Partner shall at the request of the transferee cause the
Partnership to elect, pursuant to Section 754 of the Code, to
adjust the basis of the Partnership's property (and the
Partnership shall cause the tax matters partner of any Subsidiary
to make a corresponding Section 754 election with respect to such
Subsidiary's property); provided, however, that such transferee
shall reimburse the Partnership and any Subsidiary promptly for
all costs associated with such basis adjustment, including
bookkeeping, appraisal and other similar costs. Except as
otherwise expressly provided herein, all other elections required
or permitted to be made by the Partnership or any Subsidiary
under the Code (or applicable state or local tax law) shall be
made in such manner as may be determined by the Partnership Board
to be in the best interests of the Partners as a group.
(c) The Tax Matters Partner shall cause to be provided
to each Partner as soon as possible after the close of each
Fiscal Year (and, in any event, no later than one hundred thirty-
five (135) days after the end of each Fiscal Year), a schedule
setting forth such Partner's distributive share of the
Partnership's income, gain, loss, deduction and credit as
determined for federal income tax purposes and any other
information relating to the Partnership that is reasonably
required by such Partner to prepare its own federal, state, local
and other tax returns. At any time after such schedule and
information have been provided, upon at least two (2) Business
Days' notice from a Partner, the Tax Matters Partner shall also
provide each Partner with a reasonable opportunity during
ordinary business hours to review and make copies of all work
papers related to such schedule and information or to any return
prepared under paragraph (b) above. The Tax Matters Partner
shall also cause to be provided to each Partner, at the time that
the quarterly financial statements are required to be delivered
pursuant to Section 10.2(b)(ii) above, an estimate of each
Partner's share of all items of income, gain, loss, deduction and
credit of the Partnership for the calendar quarter just completed
and for the Fiscal Year to date for federal income tax purposes.
10.4 Proprietary Information.
Notwithstanding anything to the contrary in this Section 10,
an Exclusive Limited Partner shall only have access to such
information regarding the Partnership as is required by
applicable law and shall not have access for such time as the
Partnership Board deems reasonable to such information relating
to the Partnership's business which the Partnership Board
reasonably believes to be in the nature of trade secrets or other
information the disclosure of which the Partnership Board in good
faith believes is not in the best interest of the Partnership or
could damage the Partnership or its business or which the
Partnership is required by law or by agreement with a third party
to keep confidential.
SECTION 11. ADVERSE ACT
11.1 Remedies.
(a) If an Adverse Act has occurred with respect to any
Partner, (x) in the case of an Adverse Act specified in clause
(vii) of the definition of such term in Section 1.10, any General
Partner may elect or (y) in the case of any other Adverse Act,
the Partnership Board (with the Representatives of the affected
Partner abstaining) may elect:
(i) to cause the Partnership to commence the
procedures specified in Section 11.2 for the purchase of the
Adverse Partner's Interest; or (ii) to cause the Partnership
to seek to enjoin such Adverse Act or to obtain specific
performance of the Adverse Partner's obligations or Damages
(as defined and subject to the limitations specified below)
in respect of such Adverse Act. Notwithstanding anything to
the contrary contained in this Section 11, (x) none of the
remedies specified above (nor any other provision of this
Section 11) shall apply to an Adverse Act specified in
clause (vi) of the definition of such term in Section 1.10,
(y) the remedies specified in clause (ii) shall not be
available to the Partners with respect to an Adverse Act
specified in clause (vii) of such definition unless the
circumstances under which such event arose also constituted
a breach by the Adverse Partner of the covenant contained in
Section 8.5 of this Agreement, and (z) the remedy specified
in clause (i) above and the right to seek Damages under
clause (ii) above may not be pursued and Section 11.1(b)
will not apply to an Adverse Act specified in clause (iii)
of the definition of such term until such time as there is a
Final Determination that the Partner's actions or failure to
act constituted an Adverse Act, if the affected Partner
timely delivered a Contest Notice.
In the event of an Adverse Act specified in any clause of
the definition of such term in Section 1.10 other than clause
(vii), the vote of the Partnership Board required to elect to
exercise a remedy specified in clause (i) or (ii) of the first
sentence of this Section 11.1(a) shall be the Required Majority
Vote of Representatives of the Partners that are not actual or
alleged Adverse Partners (the "Non-Adverse Partners"), provided
that in the event more than one (1) Partner is alleged to be an
Adverse Partner, such vote shall be taken separately with respect
to each alleged Adverse Partner excluding from such vote only the
Partner(s) that is alleged to be an Adverse Partner as a result
of the specific facts or circumstances with respect to which such
vote is being taken. The election to pursue a remedy specified
in clause (i) or (ii) of the first sentence of this Section
11.1(a) with respect to an Adverse Act for which such remedy is
available may be exercised by notice given to the Adverse Partner
(x) in the case of an Adverse Act specified in clause (i) of the
definition of the term "Adverse Act" in Section 1.10, within
ninety (90) days after the occurrence of such Adverse Act or (y)
in the case of any other Adverse Act, within ninety (90) days
after the Partnership Board or the Partner making such election,
as the case may be, obtains actual knowledge of the occurrence of
such Adverse Act, including, if applicable, that any cure period
has expired; provided that, if an election pursuant to clause
(ii) of the first sentence of this Section 11.1(a) is made to
seek an injunction, specific performance or other equitable
relief, an action seeking such relief is commenced promptly
thereafter and a final judgment in such action is rendered
denying such equitable remedy and no election was made pursuant
to clause (i) of the first sentence of this Section 11.1(a),
then, by notice given within ten (10) days after such final
judgment is rendered, the Partnership Board may elect to pursue
the remedy specified in clause (i) of the first sentence of this
Section 11.1(a) unless (x) prior to the giving of such notice,
the Adverse Partner has cured in full (or caused to be cured in
full) the Adverse Act in question (other than an Adverse Act
specified in clause (i) of the definition of such term in Section
1.10, which may only be cured with the Unanimous Vote of, and on
the terms prescribed by, the Partnership Board) and no other
Adverse Act with respect to such Partner has occurred and is
continuing or (y) the final judgment denying equitable relief
specifically held that there was no Adverse Act.
The foregoing remedies shall not be deemed to be mutually
exclusive, and, subject to the requirements of this Section
11.1(a) regarding the timing of the election of such remedies,
selection or resort to any thereof shall not preclude selection
or resort to the others. The resort to any remedy pursuant to
this Section 11.1(a) shall not for any purpose be deemed to be a
waiver of any other available remedy. Except as provided in
Section 11.1(b), the failure to elect to pursue a remedy within
the time periods provided in the preceding paragraph shall be
conclusively presumed to be a waiver of the remedies provided in
this Section 11 with respect to the subject Adverse Act.
Unless resort to such remedy has been waived as set forth in
the immediately preceding paragraph, the Partnership shall be
entitled to recover from the Adverse Partner in an appropriate
proceeding any and all damages, losses and expenses (including
reasonable attorneys' fees and disbursements) (collectively,
"Damages") suffered or incurred by the Partnership as a result of
such Adverse Act; provided that the Partnership shall not have or
assert any claim against the Adverse Partner for punitive Damages
or for indirect, special or consequential Damages suffered or
incurred by the Partnership as a result of an Adverse Act; and
provided further, that if an election is made pursuant to clause
(i) of the first sentence of this Section 11.1(a), the amount the
Partnership may recover in any action for Damages shall be
reduced by an amount equal to the difference, if any, between the
Net Equity of the Adverse Partner's Interest determined in
accordance with Section 11.2(a) and the applicable Buy-Sell
Price.
(b) If the Partnership is dissolved pursuant to Section
14.1(a) at any time as a result of a Liquidating Event that
occurs prior to a remedy having been elected pursuant to Section
11.1(a) with respect to any Adverse Partner, the time periods for
such election shall thereupon expire and the Partnership Board
shall deduct from any amounts to be paid to such Adverse Partner
that amount which it reasonably estimates to be sufficient to
compensate the Non-Adverse Partners for Damages incurred by them
as a result of the Adverse Act (subject to the limitations of
Section 11.1(a)) and shall pay the same to the Non-Adverse
Partners.
11.2 Adverse Act Purchase.
(a) Determination of Net Equity of Adverse Partner's
Interest. If the Partnership Board or any General Partner makes
an election pursuant to Section 11.1(a)(i) to commence the
purchase procedures set forth in this Section 11.2, the Net
Equity of the Adverse Partner's Interest shall be determined in
accordance with this Section 11 as of the last day of the
calendar quarter immediately preceding the calendar quarter in
which notice of such election (the "Election Notice") was given
to the Adverse Partner, and the Adverse Partner shall be
obligated to sell to the Purchasing Partners, if any, all but not
less than all of the Adverse Partner's Interest in accordance
with this Section 11.2 at a purchase price (the "Buy-Sell Price")
equal to (A) in the case of any Adverse Act (other than (1) an
Adverse Act identified in clause (i) of the definition of such
term that occurs prior to the Cut-Off Time, (2) an Adverse Act
identified in clause (iv) of the definition of such term or (3)
unless such Adverse Act occurred in connection with any breach by
such Partner of its obligations under Section 8.5, an Adverse Act
identified in clause (vii) of the definition of such term),
ninety percent (90%) of the Net Equity thereof as so determined,
(B) in the case of an Adverse Act specified in clause (iv) or,
unless such Adverse Act occurred in connection with any breach by
such Partner of its obligations under Section 8.5, clause (vii)
of the definition of such term in Section 1.10, the Net Equity
thereof, and (C) in the case of an Adverse Act specified in
clause (i) of the definition of such term in Section 1.10 that
occurred prior to the Cut-Off Time, the lesser of (A) ninety
percent (90%) of the Net Equity thereof as so determined or (B)
eighty percent (80%) of the remainder of (1) the sum of such
Adverse Partner's Original Capital Contribution and aggregate
Additional Capital Contributions minus (2) the cumulative
distributions made to such Partner pursuant to Section 4
("Unreturned Capital"), with the amount of such Unreturned
Capital determined as of the date on which the Adverse Partner's
Interest is purchased. Such Election Notice shall designate the
First Appraiser as required by Section 11.4 and the Adverse
Partner shall appoint the Second Appraiser within ten (10)
Business Days of receiving such notice designating the First
Appraiser.
(b) Election to Purchase Interest of Adverse Partner.
For a period ending at 11:59 p.m. (local time at the
Partnership's principal office) on the thirtieth (30th) day
following the day on which notice of the Adverse Partner's Net
Equity is given pursuant to Section 11.3 (the "Election Period"),
except as otherwise provided in Section 11.2(b)(i), each of the
Partners (other than the Adverse Partner and any Exclusive
Limited Partner) may elect, by notice to the Adverse Partner and
each other Partner (the "Purchase Notice"), to purchase all or
any portion of the Adverse Partner's Interest, which notice shall
state the maximum Percentage Interest that such Partner (a
"Purchasing Partner") is willing to purchase (each a "purchase
commitment"). If the aggregate purchase commitments made by the
Purchasing Partners are equal to at least one hundred percent
(100%) of the Adverse Partner's Interest, then subject to the
following sentence, each Purchasing Partner shall be obligated to
purchase, and the Adverse Partner shall be obligated to sell to
such Purchasing Partner, that portion of the Adverse Partner's
Interest that corresponds to the ratio of the Percentage Interest
of such Purchasing Partner to the aggregate Percentage Interests
of the Purchasing Partners, provided that, if any Purchasing
Partner's purchase commitment was for an amount less than its
proportionate share of the Adverse Partner's Interest as so
determined, then the portion of the Adverse Partner's Interest
not so committed to be purchased shall continue to be allocated
proportionally in the manner provided above in this sentence
among the other Purchasing Partners until each has been
allocated, by such process of apportionment, a percentage of the
Adverse Partner's Interest equal to the maximum percentage such
Purchasing Partner committed to purchase or until the Adverse
Partner's entire Interest has been allocated among the Purchasing
Partners. In the event that the other Partners do not elect to
purchase the entire Interest of the Adverse Partner, the Adverse
Partner shall be under no obligation to sell any portion of its
Interest to any Partner.
(i) Except as otherwise provided in Section
11.2(b)(ii), if an Adverse Partner is a Cable Partner and no
Cable Partner's Percentage Interest, when added to the Percentage
Interests of all Controlled Affiliates of such Partner, is equal
to or greater than Sprint's Percentage Interest when added to the
Percentage Interests of all Controlled Affiliates of Sprint, then
the Adverse Partner's Interest shall be allocated first among
those of the Purchasing Partners that are Cable Partners as
though Sprint were not a Purchasing Partner and if and to the
extent that the aggregate purchase commitments made by such Cable
Partners are less than one hundred percent (100%) of the Adverse
Partner's Interest, the balance of the Adverse Partner's Interest
up to Sprint's purchase commitment shall be allocated to Sprint.
(ii) The Adverse Partner's Interest shall be
allocated among the Cable Partners in the manner set forth in
Section 11.2(b)(i) until any Cable Partner would have a
Percentage Interest, when added to the Percentage Interests of
all Controlled Affiliates of such Partner, equal to Sprint's
Percentage Interest, when added to the Percentage Interests of
all Controlled Affiliates of Sprint, calculated in each case
after giving effect to the adjustments to the Percentage
Interests to be made in connection with the purchases of the
Adverse Partner's Interest by the Cable Partners in accordance
with Section 11.2(b)(i) assuming that such purchases were made up
to the amount that would yield such result (as to each Partner,
its "Adjusted Percentage Interest"). Any portion of the Adverse
Partner's Interest not yet allocated shall continue to be
allocated proportionately among all Purchasing Partners
(including Sprint, if applicable) in the manner set forth in this
Section 11.2(b) without regard to Section 11.2(b)(i), but
substituting the Adjusted Percentage Interests of the Purchasing
Partners for the Percentage Interests that would otherwise be
used to determine such allocation until each has been allocated
an amount equal to its purchase commitment or until the Adverse
Partner's entire Interest has been allocated among the Purchasing
Partners.
(c) Terms of Purchase; Closing. Unless the Purchasing
Partners and the Adverse Partner otherwise agree, the closing of
the purchase and sale of the Adverse Partner's Interest, MinorCo
Interest (as required by Section 12.3(d)) and Partner Loans (as
required by Section 12.3(c)) shall occur at the principal office
of the Partnership at 10:00 a.m. (local time at the place of the
closing) on the first Business Day occurring on or after the
thirtieth (30th) day following the last day of the Election
Period (subject to Section 11.5). At the closing, each
Purchasing Partner shall pay to the Adverse Partner, by cash or
other immediately available funds, that portion of the purchase
price for the Adverse Partner's Interest, MinorCo Interest and
Partner Loans for which such Purchasing Partner is liable
(determined in the case of the MinorCo Interest and Partner Loans
in accordance with Section 12.3) and the Adverse Partner shall
deliver to each Purchasing Partner good title, free and clear of
any liens, claims, encumbrances, security interests or options
(other than those created by this Agreement and those securing
financing obtained by the Partnership), to the portion of the
Adverse Partner's Interest, MinorCo Interest and Partner Loans
thus purchased. Each Purchasing Partner shall be liable to the
Adverse Partner only for its allocable portion of the purchase
price for the Adverse Partner's Interest, MinorCo Interest and
Partner Loans.
At the closing, the Partners shall execute such documents
and instruments of conveyance as may be necessary or appropriate
to effectuate the transactions contemplated hereby, including the
Transfer of the Adverse Partner's Interest, MinorCo Interest and
Partner Loans to the Purchasing Partner and the assumption by
each Purchasing Partner of the Adverse Partner's obligations with
respect to the portion of the Adverse Partner's Interest
Transferred to such Purchasing Partner. The Partnership and each
Partner shall bear its own costs of such Transfer and closing,
including attorneys' fees and filing fees. The cost of
determining Net Equity shall be borne one-half by the Adverse
Partner and one-half by the Partnership and the amount borne by
the Partnership shall be treated as an expense of the Partnership
for purposes of such determination.
In the event that any Purchasing Partner shall fail to
perform its obligation to purchase hereunder on the scheduled
closing date, and no other Purchasing Partner elects to purchase
the portion of the Adverse Partner's Interest, MinorCo Interest
and Partner Loans thus not purchased (such election to be made by
notice given to the Adverse Partner within five (5) Business Days
thereafter), the Adverse Partner will not be obligated to sell
any portion of its Interest, MinorCo Interest or Partner Loans to
any Purchasing Partner. If one or more of the other Purchasing
Partners timely elects to purchase such portion of the Adverse
Partner's Interest, MinorCo Interest and Partner Loans, such
Purchasing Partner(s) shall be provided an additional fifteen
(15) days from the previously scheduled closing date in which to
tender payment therefor.
11.3 Net Equity.
The "Net Equity" of a Partner's Interest, as of any day,
shall be the amount that would be distributed to such Partner in
liquidation of the Partnership pursuant to Section 14.2(a)(iii)
if (i) all of the Partnership's business and assets (including
its partnership interests in WirelessCo) were sold substantially
as an entirety for Gross Appraised Value, (ii) Profits and Losses
and items specially allocated in accordance with Sections 3.3 and
3.4 for the Allocation Year ending on the date that Net Equity is
determined, including any gain or loss resulting from the deemed
sale described in clause (i), were allocated in accordance with
Section 3, (iii) the Partnership paid its accrued, but unpaid,
liabilities and established reserves pursuant to Section 14.2 for
the payment of reasonably anticipated contingent or unknown
liabilities, and (iv) the Partnership distributed the remaining
proceeds to the Partners in liquidation, all as of such day,
provided that in determining such Net Equity, no reserve for
contingent or unknown liabilities shall be taken into account if
such Partner (or its successor in interest) (other than a Partner
that is an Adverse Partner as a result of Bankruptcy) agrees to
indemnify the Partnership and all other Partners for that portion
of any such reserve as would be treated as having been withheld
pursuant to Section 14.3 from the distribution such Partner would
have received pursuant to Section 14.2 if no such reserve were
established.
The Net Equity of a Partner's Interest shall be determined,
without audit or certification, from the books and records of the
Partnership by the Accountants. The Net Equity of a Partner's
Interest shall be determined within thirty (30) days of the day
upon which the Accountants are apprised in writing of the Gross
Appraised Value, and the amount of such Net Equity shall be
disclosed to the Partnership and each of the Partners by written
notice ("Net Equity Notice"). The Net Equity determination of
the Accountants shall be final and binding in the absence of a
showing of manifest error.
11.4 Gross Appraised Value.
"Gross Appraised Value," as of any day, means the price at
which a willing seller would sell, and a willing buyer would buy,
the business and assets of the Partnership (including the
Partnership interests in WirelessCo), free and clear of all liens
and encumbrances, substantially as an entirety and as a going
concern in a single arm's-length transaction for cash, without
time constraints and without being under any compulsion to buy or
sell.
Each provision of this Agreement that requires a
determination of Gross Appraised Value (other than Sections
2.4(a)(v) and 2.4(d)(iii) and the definition of "Premium Dollar"
in Section 1.10) also provides the manner and time for the
appointment of two (2) appraisers (the "First Appraiser" and the
"Second Appraiser"). If the Second Appraiser is not timely
designated, the determination of the Gross Appraised Value shall
be made by the First Appraiser. The First Appraiser, or each of
the First Appraiser and the Second Appraiser if the Second
Appraiser is timely designated, shall submit its determination of
the Gross Appraised Value to the Partnership, the Partners and
the Accountants within forty-five (45) days of the date of its
selection (or the selection of the Second Appraiser, as
applicable). If there are two (2) Appraisers and their
respective determinations of the Gross Appraised Value vary by
less than ten percent (10%) of the higher determination, the
Gross Appraised Value shall be the average of the two
determinations. If such determinations vary by ten percent (10%)
or more of the higher determination, the two Appraisers shall
promptly designate a third appraiser (the "Third Appraiser").
Neither the Partnership nor any Partner shall provide, and the
First Appraiser and Second Appraiser shall be instructed not to
provide, any information to the Third Appraiser as to the
determinations of the First Appraiser and the Second Appraiser or
otherwise influence such Third Appraiser's determination in any
way. The Third Appraiser shall submit its determination of the
Gross Appraised Value to the Partnership, the Partners and the
Accountants within forty-five (45) days of the date of its
selection. The Gross Appraised Value shall be equal to the
average of the two closest of the three determinations, provided
that, if the difference between the highest and middle
determinations is no more than one hundred and five percent
(105%) and no less than ninety-five percent (95%) of the
difference between the middle and lowest determinations, then the
Gross Appraised Value shall be equal to the middle determination.
The determination of the Gross Appraised Value in accordance with
this Section 11.4 shall be final and binding on the Partnership
and each Partner. If any Appraiser is only able to provide a
range in which Gross Appraised Value would exist, the average of
the highest and lowest value in such range shall be deemed to be
such Appraiser's determination of the Gross Appraised Value.
Each Appraiser selected pursuant to the provisions of this
Section 11.4 shall be an investment banking firm or other
qualified Person with prior experience in appraising businesses
comparable to the business of the Partnership and that is not an
Interested Person with respect to any Partner.
11.5 Extension of Time.
If any Transfer of a Partner's Interest in accordance with
this Section 11 or Sections 5.1(l)(ii), 12 or 14.7 requires the
consent, approval, waiver, or authorization of any government
department, board, bureau, commission, agency or instrumentality
as a condition to the lawful and valid Transfer of such Partner's
Interest to the proposed transferee thereof, then each of the
time periods provided in this Section 11 or Sections 5.1(l)(ii),
12 or 14.7, as applicable, for the closing of such Transfer shall
be suspended for the period of time during which any such
consent, approval, waiver, or authorization is being diligently
pursued; provided, however, that in no event shall the suspension
of any time period pursuant to this Section 11.5 extend for more
than three hundred sixty-five (365) days other than in the case
of a purchase of an Adverse Partner's Interest. Each Partner
agrees to use its diligent efforts to obtain, or to assist the
affected Partner or the Partnership Board in obtaining, any such
consent, approval, waiver, or authorization and shall cooperate
and use its diligent efforts to respond as promptly as
practicable to all inquiries received by it, by the affected
Partner or by the Partnership Board from any government
department, board, bureau, commission, agency or instrumentality
for initial or additional information or documentation in
connection therewith.
SECTION 12. DISPOSITIONS OF INTERESTS
12.1 Restriction on Dispositions.
Except as otherwise permitted by this Agreement, no Partner
shall Dispose of all or any portion of its Interest.
12.2 Permitted Transfers.
Subject to the conditions and restrictions set forth in
Section 12.3, a Partner may at any time Transfer all or any
portion of its Interest (a) to any Controlled Affiliate of such
Partner, (b) in connection with a Permitted Transaction involving
such Partner, (c) to the administrator or trustee of such Partner
to whom such Interest is Transferred in an Involuntary
Bankruptcy, (d) pursuant to and in compliance with Section
5.1(l)(ii), 6.4(f), 11.2, 12.4, 12.5, 12.6, 12.7 or 14.7 or (e)
with the prior written consent of the other Partners (each a
"Permitted Transfer").
After any Permitted Transfer, the Transferred Interest shall
continue to be subject to all the provisions of this Agreement,
including the provisions of this Section 12 with respect to the
Disposition of Interests. Except in the case of a Transfer of a
Partner's entire Interest made in compliance herewith, no Partner
shall withdraw from the Partnership, except upon the Unanimous
Vote of the Partnership Board. The withdrawal of a Partner,
whether or not permitted, shall not relieve the withdrawing
Partner of its obligations under Section 5.4 or 6.6 and shall not
relieve such Partner or any of its Affiliates of its obligations
under, or result in a termination of or otherwise affect, any
agreement between the Partnership and such Partner or Affiliate
then in effect, except to the extent provided therein.
12.3 Conditions to Permitted Transfers.
A Transfer shall not be treated as a Permitted Transfer
unless and until the following conditions are satisfied:
(a) Except in the case of a Transfer involuntarily by
operation of law, the transferor and transferee shall execute and
deliver to the Partnership such documents as may be necessary or
appropriate in the opinion of counsel to the Partnership to
effect such Transfer. In the case of a Transfer of an Interest
involuntarily by operation of law, the Transfer shall be
confirmed by presentation to the Partnership of legal evidence of
such Transfer, in form and substance satisfactory to counsel to
the Partnership. In all cases, the Partnership shall be
reimbursed by the transferor and/or transferee for all costs and
expenses that it reasonably incurs in connection with such
Transfer (including reasonable attorneys' fees and expenses, but
excluding the portion of the costs of determining Net Equity that
are to be borne by the Partnership as provided in Section
11.2(b));
(b) Except in the case of a Transfer involuntarily by
operation of law, the transferee of an Interest (other than, with
respect to clauses (A) and (B) below, a transferee that was a
Partner prior to the Transfer) shall, by written instrument in
form and substance reasonably satisfactory to the Partnership
Board (and, in the case of clause (C) below, the transferor
Partner), (A) make representations and warranties to the
nontransferring Partners equivalent to those set forth in Section
9.1, (B) accept and adopt the terms and provisions of this
Agreement, including this Section 12, and (C) assume the
obligations of the transferor Partner under this Agreement with
respect to the Transferred Interest. The transferor Partner
shall be released from all such assumed obligations except (x) as
otherwise provided in Section 6 in the case of a Transfer to a
Controlled Affiliate, (y) those obligations or liabilities of the
transferor Partner arising out of a breach of this Agreement or
pursuant to Section 5.4 or 6.6 and (z) in the case of a Transfer
to any Person other than a Partner or any of its Controlled
Affiliates, those obligations or liabilities of the transferor
Partner based on events occurring, arising or maturing prior to
the date of Transfer;
(c) Except in the case of a Transfer involuntarily by
operation of law, the transferor of any Interest and its
Affiliates will be obligated to sell to the transferee, and the
transferee will be obligated to buy from the transferor and its
Affiliates, a percentage of the Partner Loans (if any) held
directly or indirectly by the transferor or an Affiliate thereof
equal to the percentage of the transferor's Interest being
Transferred to the transferee. If the transferee is a Partner or
a Controlled Affiliate thereof, the terms of such purchase will
be as provided in Section 2.7. In connection with any such
purchase of Partner Loans, the transferee shall surrender to the
Partnership the promissory note or notes evidencing such Partner
Loans in exchange for the issuance by the Partnership of a new
promissory note made payable to the order of the transferee in a
principal amount equal to the outstanding balance of such Partner
Loans and otherwise having the same terms as the promissory note
surrendered therefor;
(d) Except in the case of a Transfer involuntarily by
operation of law, the transferor of an Interest will be obligated
to sell to the transferee, and the transferee will be obligated
to buy from the transferor, a portion of the MinorCo Interest
owned by the transferor representing the same percentage of the
transferor's MinorCo Interest as the percentage of the
transferor's Interest being Transferred to the transferee.
Election by a Partner to purchase all or any portion of another
Partner's Interest pursuant to Section 5.1(l)(ii), 6.4(f), 11,
12.4, 12.5, 12.6 or 14.7 shall also constitute an election to
purchase an equivalent portion of the transferor's MinorCo
Interest, and each purchasing Partner shall be obligated to
purchase a portion of such MinorCo Interest equal to the
percentage of the transferor's Interest such purchasing Partner
is obligated to purchase for a price equal to the "Net Equity" of
the transferor's MinorCo Interest (determined as provided in
Section 11.3 as if all references therein and in any defined term
used therein to the Partnership were deemed references to MinorCo
and all references to Section 14 contained therein were deemed
references to the corresponding provisions of the Agreement of
Limited Partnership of MinorCo dated as of March 28, 1995)
(except in the case of a Transfer pursuant to Section 12.4, in
which case the terms of the Purchase Offer shall apply, and
except in the case of a Transfer pursuant to Section 12.6, in
which case the Public Market Value shall apply);
(e) Except in the case of a Transfer involuntarily by
operation of law, if required by the Partnership Board, the
transferee shall deliver to the Partnership an opinion,
satisfactory in form and substance to the Partnership Board, of
counsel reasonably satisfactory to the Partnership Board to the
effect that the Transfer of the Interest is in compliance with
applicable state and Federal securities laws;
(f) Except in the case of a Transfer involuntarily by
operation of law, if required by the Partnership Board, the
transferee (other than a transferee that was a Partner prior to
the Transfer) shall deliver to the Partnership evidence of the
authority of such Person to become a Partner and to be bound by
all of the terms and conditions of this Agreement, and the
transferee and transferor shall each execute and deliver such
other instruments as the Partnership Board reasonably deems
necessary or appropriate to effect, and as a condition to, such
Transfer, including amendments to the Certificate or any other
instrument filed with the State of Delaware or any other state or
governmental agency;
(g) Unless otherwise approved by the Partnership Board
(with the Representatives of the transferor General Partner
abstaining), no Transfer of an Interest shall be made except upon
terms which would not, in the opinion of counsel chosen by and
mutually acceptable to the Partnership Board and the transferor
Partner, result in the termination of the Partnership within the
meaning of Section 708 of the Code or cause the application of
the rules of Sections 168(g)(1)(B) and 168(h) of the Code or
similar rules to apply to the Partnership. If the immediate
Transfer of such Interest would, in the opinion of such counsel,
cause a termination within the meaning of Section 708 of the
Code, then if, in the opinion of such counsel, the following
action would not precipitate such termination, the transferor
Partner shall be entitled (or required, as the case may be) (i)
immediately to Transfer only that portion of its Interest as may,
in the opinion of counsel to the Partnership, be Transferred
without causing such a termination and (ii) to enter into an
agreement to Transfer the remainder of its Interest, in one or
more Transfers, at the earliest date or dates on which such
Transfer or Transfers may be effected without causing such
termination. The purchase price for the Interest shall be
allocated between the immediate Transfer and the deferred
Transfer or Transfers pro rata on the basis of the percentage of
the aggregate Interest being Transferred, each portion to be
payable when the respective Transfer is consummated, unless
otherwise agreed by the parties to the Transfer. In the case of
a Transfer by one Partner to another Partner, the deferred
purchase price shall be deposited in an interest-bearing escrow
account unless another method of securing the payment thereof is
agreed upon by the transferor Partner and the transferee
Partner(s). In determining whether a particular proposed
Transfer will result in a termination of the Partnership, counsel
to the Partnership shall take into account the existence of prior
written commitments to Transfer made pursuant to this Agreement
and such commitments shall always be given precedence over
subsequent proposed Transfers. Each Partner agrees that, solely
for purposes of this Section 12.3(g), any Transfer of an
ownership interest in a Partner that has the same effect as a
Transfer of such Partner's Interest for purposes of determining
whether the Partnership has been terminated within the meaning of
Section 708 of the Code shall be treated as a Transfer of such
Partner's Interest. Each Partner shall notify the Partnership
and each other Partner in writing not less than five (5) days
prior to any Transfer of an ownership interest in such Partner to
which this Section 12.3(g) applies. No Partner shall be deemed
to have breached this Section 12.3(g) to the extent that such
Partner's failure to comply with the foregoing provisions in
connection with a Transfer of an ownership interest in such
Partner resulted solely from the failure of any other Partner to
comply with the notice obligation set forth in the preceding
sentence;
(h) The transferor or transferee shall furnish the
Partnership with the transferee's taxpayer identification number,
sufficient information to determine the transferee's initial tax
basis in the Interest Transferred, and any other information
reasonably necessary to permit the Partnership to file all
required federal and state tax returns and other legally required
information statements or returns. Without limiting the
generality of the foregoing, the Partnership shall not be
required to make any distribution otherwise provided for in this
Agreement with respect to any Transferred Interest until it has
received such information;
(i) Except in the case of a Transfer of an Interest
involuntarily by operation of law, if the transferor is a General
Partner, the transferor and transferee shall provide the
Partnership with an opinion of counsel, which opinion of counsel
shall be reasonably satisfactory to the other Partners, to the
effect that such Transfer will not cause the Partnership to
become taxable as a corporation for federal income tax purposes;
and
(j) If the Parent of a transferee is not the same
Person as the Parent of the transferring Partner, then the Parent
of the transferee (other than a transferee Partner) shall execute
and deliver to the Partnership and the other Parents a Parent
Undertaking. If a Partner ceases to be a Controlled Affiliate of
its former Parent as a result of a Permitted Transaction, then
the new Parent of such Partner shall execute and deliver a Parent
Undertaking to the Partnership and the other Parents.
Upon completion of any Permitted Transfer and compliance
with the provisions of this Section 12.3, the transferee of the
Interest (if not already a Partner) shall be admitted as a
Partner without any further action.
12.4 Right of First Refusal.
After March 1, 2000, a Partner may Transfer all or any
portion of its Interest (the "Offered Interest") if (i) such
Partner (the "Seller") first offers to sell the Offered Interest
pursuant to the terms of this Section 12.4, and (ii) the Transfer
of the Offered Interest to the Purchaser (as defined below) would
not cause an Adverse Act under clause (vii) of the definition
thereof.
(a) Limitation on Transfers. No Transfer may be made
under this Section 12.4 unless the Seller has received a bona
fide written offer (the "Purchase Offer") from a Person
(including another Partner) who is not a Controlled Affiliate of
such Partner (the "Purchaser") to purchase the Offered Interest
for a purchase price (the "Offer Price") denominated and payable
in United States dollars at closing, which offer shall be in
writing signed by the Purchaser and shall be irrevocable for a
period ending no sooner than the Business Day following the end
of the Offer Period, as hereinafter defined. (b) Offer Notice.
Prior to accepting the Purchase Offer, the Seller shall give to
the Partnership and each other Partner other than any Exclusive
Limited Partner written notice (the "Offer Notice") which shall
include a copy of the Purchase Offer and an offer (the "Firm
Offer") to sell the Offered Interest to the other Partners (the
"Offerees") for the Offer Price, payable according to the same
terms as (or on more favorable terms than) those contained in the
Purchase Offer, provided that the Firm Offer shall be made
without regard to the requirement of any xxxxxxx money or similar
deposit required of the Purchaser prior to closing. If the
Person making the Purchase Offer is not an entity that is subject
to the periodic reporting requirements of Section 13 or Section
15(d) of the Securities Exchange Act of 1934, the Seller shall
also provide any information concerning the ownership of the
Person making the Purchase Offer that may be reasonably requested
by any other Partner, to the extent such information is available
to the Seller.
(c) Offer Period. The Firm Offer shall be irrevocable
for a period (the "Offer Period") ending at 11:59 P.M., local
time at the Partnership's principal place of business, on the
sixtieth (60th) day following the day of the Offer Notice.
(d) Acceptance of Firm Offer. At any time during the
Offer Period, any Offeree may accept the Firm Offer as to all or
any portion of the Offered Interest, by giving written notice of
such acceptance to the Seller and each other Offeree, which
notice shall indicate the maximum Percentage Interest that such
Offeree is willing to purchase (the "purchase commitment"). If
the aggregate purchase commitments made by Offerees accepting the
Firm Offer ("Accepting Offerees") are equal to at least one
hundred percent (100%) of the Offered Interest, then, except as
otherwise provided in Section 12.4(d)(i), each Accepting Offeree
shall be obligated to purchase, and the Seller shall be obligated
to sell to such Accepting Offeree that portion of the Offered
Interest that corresponds to the ratio of the Percentage Interest
of such Accepting Offeree to the aggregate Percentage Interests
of the Accepting Offerees, provided that if any Accepting
Offeree's purchase commitment was for an amount less than its
proportionate share of the Offered Interest as so determined,
then the portion of the Offered Interest not so committed to be
purchased shall continue to be allocated proportionally in the
manner provided above in this sentence among the other Accepting
Offerees until each has been allocated, by such process of
apportionment, a percentage of the Offered Interest equal to the
maximum percentage such Accepting Offeree committed to purchase
or until the entire Offered Interest has been allocated among the
Accepting Offerees. If Offerees do not accept the Firm Offer as
to all of the Offered Interest during the Offer Period, the Firm
Offer shall be deemed to be rejected in its entirety.
(i) Except as otherwise provided in Section
12.4(d)(ii), if a Seller is a Cable Partner and no Cable
Partner's Percentage Interest, when added to the Percentage
Interests of all Controlled Affiliates of such Partner, is equal
to or greater than Sprint's Percentage Interest, when added to
the Percentage Interests of all Controlled Affiliates of Sprint,
then the Offered Interest shall be allocated first among those of
the Accepting Offerees that are Cable Partners as though Sprint
were not an Accepting Offeree and if and to the extent that the
aggregate purchase commitments made by such Cable Partners are
less than one hundred percent (100%) of the Offered Interest, the
balance of the Offered Interest up to Sprint's purchase
commitment shall be allocated to Sprint.
(ii) The Offered Interest shall be allocated
among the Cable Partners in the manner set forth in Section
12.4(d)(i) until any Cable Partner would have a Percentage
Interest, when added to the Percentage Interests of all
Controlled Affiliates of such Partner, that is equal to Sprint's
Percentage Interest, when added to the Percentage Interests of
all Controlled Affiliates of Sprint, calculated in each case
after giving effect to the adjustments to Percentage Interests to
be made in connection with the purchase of the Offered Interest
by the Cable Partners in accordance with Section 12.4(d)(i)
assuming that such purchase was made up to the amount that would
yield such result (as to each Partner, its "Adjusted Percentage
Interest"). Any portion of the Offered Interest not yet
allocated shall continue to be allocated proportionately among
all Accepting Offerees (including Sprint, if applicable) in the
manner set forth in this Section 12.4(d) without regard to
Section 12.4(d)(i), but substituting the Adjusted Percentage
Interests of the Offerees for the Percentage Interests that would
otherwise be used to determine such allocation, until each has
been allocated an amount equal to its purchase commitment or
until the entire Offered Interest has been allocated among the
Accepting Offerees.
(e) Closing of Purchase Pursuant to Firm Offer. If all
of the Offered Interest has been subscribed for in accordance
with the terms of Section 12.4(d), the Seller shall give notice
to such effect (the "Sale Notice") to all Offerees within five
days after the end of the Offer Period. Unless the Accepting
Offerees and the Seller otherwise agree, the closing of any
purchase pursuant to this Section 12.4 shall be held at the
principal office of the Seller at 10:00 a.m. (local time at the
place of closing) on the first Business Day on or after the
thirtieth (30th) day following the date on which the Sale Notice
is given (subject to Section 11.5). At the closing, each
Accepting Offeree shall pay to the Seller, by cash or other
immediately available funds, that portion of the purchase price
for the Offered Interest, MinorCo Interest and Partner Loans of
the Seller for which such Accepting Offeree is liable, and the
Seller shall deliver to each Accepting Offeree good title, free
and clear of any liens, claims, encumbrances, security interests
or options (other than those created by this Agreement and those
securing financing obtained by the Partnership), to the portion
of the Offered Interest, MinorCo Interest and Partner Loans thus
purchased. Each Accepting Offeree shall be liable to the Seller
only for its allocable portion of the purchase price for the
Offered Interest, MinorCo Interest and Partner Loans.
At the closing, the Partners shall execute such documents
and instruments of conveyance as may be necessary or appropriate
to effectuate the transactions contemplated hereby, including the
Transfer of the Offered Interest, MinorCo Interest and Partner
Loans of the Seller to the Accepting Offerees and the assumption
by each Accepting Offeree of the Seller's obligations with
respect to the portion of the Seller's Interest and MinorCo
Interest Transferred to such Accepting Offerees. Each Partner
and the Partnership shall bear its own costs of such Transfer and
closing, including attorneys' fees and filing fees.
(f) Sale Pursuant to Purchase Offer If Firm Offer
Rejected. If the Firm Offer is not accepted in the manner
hereinabove provided, or the Accepting Offerees fail to close the
purchase on the closing date, then in either such event, but
subject to the last sentence of this Section 12.4(f) and subject
to Section 12.3, the Seller shall be free for the period
described below (the "Free to Sell Period") to sell the Offered
Interest to the Purchaser upon terms and conditions that are the
same as, or more favorable to the Seller than, those contained in
the Purchase Offer (including at the same or greater price). The
Free to Sell Period shall be the applicable of (i) if the Firm
Offer is not accepted, sixty (60) days after the last day of the
Offer Period (subject to Section 11.5) or (ii) if the Firm Offer
is accepted but the purchase is not closed, sixty (60) days
(subject to Section 11.5) after the scheduled closing date,
provided that if the last sentence of this Section 12.4(f)
becomes applicable, then such sixty (60) day period shall be
measured from the fifth (5th) Business Day after the previously
scheduled closing date or, if applicable, from the subsequently
scheduled closing date contemplated by such sentence (assuming
the required purchase elections are made). If the Offered
Interest is not so sold within the Free to Sell Period, the
Seller's right to Transfer its Interest shall again be subject to
the foregoing restrictions. Notwithstanding the foregoing, if
more than one Offeree elected to purchase the Offered Interest
and at least one Accepting Offeree tendered its proportionate
share of the purchase price therefor at the closing but any other
Accepting Offeree failed to make such tender, then any tendering
Accepting Offeree may elect, by notice given to the Seller within
five (5) Business Days thereafter, to purchase the portion of the
Offered Interest for which payment was not tendered (provided
that, after giving effect to such election, the entire Offered
Interest is being purchased) and shall be provided an additional
fifteen (15) days from the previously scheduled closing date in
which to tender payment therefor.
(g) Restrictions on Notice. No notice initiating the
procedures contemplated by this Section 12.4 may be given by any
Partner while any notice, purchase or Transfer is pending under
Section 11 or this Section 12.4 or after a Liquidating Event has
occurred. No notice initiating the procedures contemplated by
this Section 12.4 may be given by an Adverse Partner nor any
Delinquent Partner prior to the applicable Cure Date unless such
Partner has cured the underlying Payment Default, and no Seller
shall be required to offer any portion of its Interest to an
Adverse Partner during the period that the Partnership is
pursuing any remedy specified in Section 11.1 with respect to
such Adverse Partner. No Partner may accept a Purchase Offer
during any period that, as provided above, such Partner may not
give the notice initiating the procedures contemplated by this
Section 12.4 or thereafter until it has given such notice and
otherwise complied with the provisions of this Section 12.4.
12.5 Tagalong Rights.
(a) Direct Transfers. In the event that (i) a Partner
proposes to Transfer its Interest (as part of a single
transaction or any series of related transactions) to any Person
other than a Controlled Affiliate of such Partner after March 1,
2000, and such Transfer would cause the proposed transferee (a
"Tagalong Purchaser") and its Controlled Affiliates to own more
than fifty-five percent (55%) of the Percentage Interests (a
"Tagalong Transaction") and (ii) the Firm Offer is not accepted
in the manner provided in Section 12.4, the Tagalong Transaction
shall not be permitted hereunder unless the Tagalong Purchaser
offers to purchase the entire Interest of any other Partner that
desires to sell its Interest to the Tagalong Purchaser at the
same price per each one percent (1%) Percentage Interest and on
the same terms and conditions as the Tagalong Purchaser has
offered to the Partner proposing to make such Transfer (the
"Transferring Partner"). If such Transfer occurs as part of a
series of related transactions, the price and terms shall be the
price and terms most favorable to the Transferring Partner for
which any portion of the Interest of the Transferring Partner is
Transferred as part of such series of transactions. Prior to
effecting any Tagalong Transaction, the Transferring Partner
shall deliver to each other Partner a binding, irrevocable offer
(the "Tagalong Offer") by the Tagalong Purchaser to purchase the
entire Interest of the other Partners at the same price per each
one percent (1%) Percentage Interest and on the same terms and
conditions as the Tagalong Purchaser has offered to the
Transferring Partner (the "Tagalong Notice"). The "Tagalong
Offer" shall be irrevocable for a period (the "Tagalong Period")
ending at 11:59 p.m., local time at the Partnership's principal
place of business, (x) with respect to a Tagalong Purchaser that
is an existing Partner or a Controlled Affiliate of an existing
Partner, on the one hundred eightieth (180th) day following the
date of the Tagalong Notice and (y) with respect to any other
Tagalong Purchaser, on the first anniversary of the date of the
Tagalong Notice. At any time during the Tagalong Period, any
Partner may accept the Tagalong Offer as to the entire amount of
its Interest by giving written notice of such acceptance to the
Tagalong Purchaser.
(b) Indirect Transfers. Within five (5) days of the
Parent of any Partner (such Partner, a "Controlling Partner")
acquiring, indirectly, Interests in the Partnership (other than
through such Controlling Partner's acquisition of additional
Interests), causing such Parent to own, directly and indirectly
through its Controlled Affiliates, more than fifty-five percent
(55%) of the Percentage Interests, such Controlling Partner shall
give to each other Partner written notice of such acquisition (a
"Control Notice"), which shall include an offer (the "Control
Offer") by the Controlling Partner to purchase the entire
Interest of each other Partner at a price equal to the Net Equity
thereof (as determined pursuant to Section 11.3) and shall
designate a First Appraiser (as required by Section 11.4). The
Representatives of the other General Partners shall by Required
Majority Vote pursuant to Section 8.6 appoint the Second
Appraiser within ten (10) Business Days following the date the
Control Notice was given. The Control Offer shall be irrevocable
for a period (the "Control Offer Period") ending at 11:59 p.m.,
local time at the Partnership's principal place of business, on
the one hundred eightieth (180th) day following the date of the
Net Equity Notice. At any time during the Control Offer Period,
any Partner may accept the Control Offer as to the entire amount
of its Interest by giving written notice of such acceptance to
the Controlling Partner. The costs of determining the Net Equity
shall be borne one-half by the Controlling Partner and one-half
by the Partners that accept the Control Offer (pro rata based on
their respective Percentage Interests) or, if no Partner accepts
the Control Offer, then such costs shall be borne entirely by the
Partnership.
(c) Limitations on Acceptance of Offers. No Adverse
Partner may accept a Tagalong Offer or a Control Offer during any
period that an election may be made to pursue the remedies
specified in Section 11.1(a) against such Partner and, if an
election pursuant to clause (i) of the first sentence thereof to
purchase the Adverse Partner's Interest is made, pending the
closing of the purchase thereof, unless, in any such case, such
Adverse Partner agrees that the purchase price for its Interest
under this Section 12.5 will not be greater than the price at
which its Interest could then be purchased under Section 11.
(d) Closing Matters. Unless the Tagalong Purchaser or
the Controlling Partner, as the case may be, on the one hand, and
the Partners accepting the Tagalong Offer or the Control Offer,
as the case may be, on the other hand, otherwise agree, the
closing of the purchase and sale of Interests pursuant to this
Section 12.5 shall occur at the principal office of the
Partnership at 10:00 a.m. (local time at the place of the
closing) on the first Business Day occurring on or after the
sixtieth (60th) day following the expiration of the Tagalong
Period or the Control Offer Period, as applicable, subject to
Section 11.5. At the closing, the Tagalong Purchaser or
Controlling Partner shall pay to the Partners who have accepted
the applicable offer, by cash or other immediately available
funds, the purchase price for the Interests, MinorCo Interests
and Partner Loans being Transferred, and the Partners selling
their Interests, MinorCo Interests and Partner Loans shall
deliver to the Tagalong Purchaser or Controlling Partner, as
applicable, good title, free and clear of any liens, claims,
encumbrances, security interest or options (other than those
created by this Agreement and those securing financing obtained
by the Partnership), to the Interest, MinorCo Interest and
Partner Loans thus purchased.
At the closing, the Partners shall execute such documents
and instruments of conveyance as may be necessary or appropriate
to effectuate the transactions contemplated hereby, including the
Transfer of the Interests, MinorCo Interests and Partner Loans to
the Tagalong Purchaser or Controlling Partner, as applicable, and
the assumption by the Tagalong Purchaser or Controlling Partner,
as applicable, of the obligations with respect to the Interests
and MinorCo Interests so Transferred. Each Partner and the
Partnership shall bear its own costs of such Transfer and
closing, including attorneys' fees and filing fees.
12.6 Offer and Registration Rights.
(a) Registration Notice. At any time on or after
August 1, 2003 and on or before September 30, 2003 and during the
corresponding two-month periods of each calendar year thereafter,
any Partner or group of Partners (individually, a "Notice
Partner" and collectively the "Notice Partners"), by notice (a
"Registration Notice") given to the Partnership Board and each
other Partner, may request that the Partnership convert to
corporate form pursuant to Section 5.9 and that the corporate
successor to the Partnership ("MajorCorp") register under the
1933 Act for resale by the Notice Partner(s) all or a portion of
the shares of common stock ("MajorCorp Stock") that would be
issued in exchange for such Notice Partner's Interest and MinorCo
Interest upon such conversion to corporate form. Each
Registration Notice shall (i) identify the Notice Partner(s)
giving the Registration Notice, (ii) specify the percentage (or
respective percentages) of the MajorCorp Stock to be issued in
exchange for the Interest(s) (and MinorCo Interest(s)) of the
Notice Partner(s) upon such conversion of the Partnership that
such Notice Partner(s) desire to have registered for resale (as
to each Notice Partner, subject to increase as provided in
Section 12.6(c), its "Registration Interest"), (iii) identify the
Public Appraiser selected by the Notice Partner(s) to make the
determination of Public Market Value and the Minimum Offering
Amount (the "First Public Appraiser") and (iv) set forth the
First Public Appraiser's estimate of the Minimum Offering Amount.
If, during the period specified above of any calendar year, one
or more Registration Notices are timely given as provided above,
then each Partner that did not timely give a Registration Notice
will have until October 15th of the same calendar year to give a
Registration Notice, which Registration Notice shall contain only
the information required to be set forth in a Registration Notice
by clauses (i) and (ii) of the second sentence of this Section
12.6(a), and a Partner giving such a Registration Notice shall be
deemed to concur in the selection of the First Public Appraiser
made in the initial Registration Notice given during the
applicable calendar year. All Registration Notices shall be
deemed void if the aggregate Registration Interests specified in
such Registration Notices are less than the Minimum Offering
Amount. If a Registration Notice has been timely given in any
calendar year and is not deemed void pursuant to the previous
sentence, then by October 31st of such year, the Partnership
Board shall inform the Partners of its selection of a Public
Appraiser (the "Second Public Appraiser"); provided that if the
Partnership Board has not timely designated the Second Public
Appraiser, then the Second Public Appraiser shall be the Public
Appraiser proposed to the Partnership Board by the General
Partner (other than any Notice Partner) that (together with its
Controlled Affiliates) holds the largest Voting Percentage
Interest. For purposes of this Section 12.6 and Section 12.7, a
"Public Appraiser" must be an investment banking firm of national
reputation, must not be an Interested Person with respect to any
Partner, and must be one of the ten leading investment banking
firms based on aggregate proceeds of public offerings of common
stock in the United States for which it acted as a managing
underwriter during the preceding two full calendar years.
"Minimum Offering Amount" means the percentage (which shall not
be less than one percent (1%)) of the total equity of MajorCorp
that the First Public Appraiser and Second Public Appraiser
jointly determine would be necessary to effect a viable initial
public offering and to result in a sufficient public float for
MajorCorp Stock to be actively traded and to satisfy the
applicable listing requirements for the Nasdaq National Market or
The New York Stock Exchange and any applicable market
capitalization requirements for use of the shortest form of
registration statement (excluding Form S-4 and Form S-8) then
available for the registration of a primary offering by an issuer
of common stock under the 1933 Act (which form currently is Form
S-3) assuming the satisfaction of all other requirements,
including any duration of public reporting requirements.
(b) Determination of Public Market Value. The "Public
Market Value" of the Registration Interests of the Notice
Partners shall equal the aggregate cash proceeds, net of
underwriters' fees, discounts and commissions and other selling
expenses customarily borne by selling stockholders, that would be
received by the Notice Partners from the sale in an underwritten
public offering registered under the 1933 Act of the MajorCorp
Stock issued in exchange for such Registration Interests if such
offering were carried out in an orderly manner over a period not
exceeding eighteen (18) months (excluding any changes in value of
MajorCorp over such time, but otherwise considering all factors
that the Public Appraisers may deem relevant). In determining
the Public Market Value of the Registration Interests, the Public
Appraisers shall assume the conversion of the Partnership to a
corporation in accordance with Section 5.9 and the consolidation
of the assets of MinorCo with the Partnership in connection
therewith. The Public Market Value of the Registration Interests
will be determined in accordance with the procedures set forth in
the second paragraph of Section 11.4, substituting the term
"Public Market Value" for the term "Gross Appraised Value", the
term "First Public Appraiser" for the term "First Appraiser" and
the term "Second Public Appraiser" for the term "Second
Appraiser." The Public Appraisers shall agree on the Minimum
Offering Amount. The fees and expenses of the Public Appraisers
in making such determination will be paid by the Partnership.
Within five (5) days after the final determination of Public
Market Value, the Public Appraisers shall provide written notice
(the "PMV Notice") of such Public Market Value and the Minimum
Offering Amount to each Notice Partner and each other Partner.
The Public Market Value of each Notice Partner's Registration
Interest shall be its allocable share of the Public Market Value
of the Registration Interests.
(c) Offer. By notice given to the Partnership and each
other Partner (other than any Exclusive Limited Partner) within
thirty (30) days after the date of the PMV Notice, any Notice
Partner (any such Notice Partner to then be referred to as a
"Registering Partner") may make an offer (the "Registration Firm
Offer") to sell to the other Partners (including any Notice
Partner who has not given a Registration Firm Offer within the
thirty (30) day period for the delivery of such Registration Firm
Offer but excluding any other Registering Partner and any
Exclusive Limited Partner) (the "Registration Offerees") its
Registration Interest for the Public Market Value of such
Registration Interest. If the Partnership receives (i)
Registration Firm Offers from all of the Notice Partners prior to
the expiration of such thirty (30) day period or (ii)
Registration Firm Offers from at least one Notice Partner on or
before the thirtieth (30th) day after the date of the PMV Notice,
the Partnership shall promptly give notice (the "Firm Offer
Commencement Notice") to each Partner stating that such
Registration Firm Offers have been delivered as of the date of
such Firm Offer Commencement Notice. If the aggregate amount of
Registration Interest(s) for which Registration Firm Offers are
given is less than the Minimum Offering Amount, then each
Registering Partner shall have the right to increase the
Registration Interest so offered by it by the amount by which the
aggregate Registration Interest(s) for which Registration Firm
Offer(s) have previously been given is less than the Minimum
Offering Amount (which right as among the Registering Partners
shall be apportioned pro rata based upon the relative
Registration Interests of the Registering Partners unless
otherwise agreed), by giving notice to the Partnership Board and
each other Partner amending its Registration Firm Offer to effect
such increase by the tenth (10th) day following the date of the
Firm Offer Commencement Notice; provided, that in such event the
Firm Offer Commencement Notice shall be deemed to have been given
as of the end of such ten (10) day period. If, as of the end of
such ten (10) day period, the aggregate Registration Interest(s)
so offered pursuant to the Registration Firm Offer(s), as so
amended, are less than the Minimum Offering Amount, then all of
such Registration Firm Offers shall be deemed to have been
rejected and withdrawn.
(d) Registration Offer Period. Subject to the last
sentence of Section 12.6(c), each Registration Firm Offer shall
be irrevocable for a period (the "Registration Offer Period")
ending at 11:59 p.m., local time at the Partnership's principal
place of business, on the thirtieth (30th) day following the date
of the Firm Offer Commencement Notice; provided that if, as of
the end of such period, at least one but fewer than all of the
Registration Offerees have accepted the Registration Firm Offer
pursuant to Section 12.6(e), the Registration Offer Period shall
be extended for an additional fifteen (15) days and any remaining
Registration Offeree(s) shall have the right to accept the
Registration Firm Offer during such fifteen (15) day period.
(e) Acceptance of Registration Firm Offer. At any time
during the Registration Offer Period (as extended by Section
12.6(d), if applicable), any Registration Offeree may accept the
Registration Firm Offer as to all or any portion of the
Registration Interest(s) covered thereby, by giving notice of
such acceptance to each Partner (other than any Exclusive Limited
Partner) which notice shall indicate the maximum percentage of
the Registration Interest of each Registering Partner that such
Registration Offeree is willing to purchase (the "purchase
commitment"); provided that if more than one Registration
Interest is being offered, such Registration Offeree must accept
the Registration Firm Offer as to the same percentage of the
Registration Interest of each such Registering Partner. If the
aggregate purchase commitments made by Registration Offerees
accepting the Registration Firm Offer(s) ("Registration Accepting
Offerees") exceed one hundred percent (100%) of each Registration
Interest, then, each Registration Accepting Offeree shall
purchase, and each Registering Partner shall sell to such
Registration Accepting Offeree, that portion of such Registering
Partner's Registration Interest that corresponds to the ratio of
the Percentage Interest of such Registration Accepting Offeree to
the aggregate Percentage Interests of all Registration Accepting
Offerees; provided that if any Registration Accepting Offeree's
purchase commitment was for an amount less than its proportionate
share of the applicable Registration Interest as so determined,
then the portion of the Registration Interest not so committed to
be purchased by such Registration Accepting Offeree shall
continue to be allocated proportionally in the manner provided
above in this sentence among the other Registration Accepting
Offerees until each has been allocated, by such process of
apportionment, a percentage of the Registration Interest equal to
the maximum percentage such Registration Accepting Offeree
committed to purchase or until the entire amount of each
Registration Interest has been allocated among the Registration
Accepting Offerees. Notwithstanding any purported acceptance of
a Registration Firm Offer, all Registration Firm Offers shall be
deemed to be rejected by all such Registration Accepting Offerees
in their entirety if the portion not accepted is in the aggregate
greater than zero but less than the Minimum Offering Amount;
provided that all Registration Firm Offers will not be deemed
rejected in their entirety if, within ten (10) days after the
expiration of the Registration Offer Period, the Registration
Accepting Offerees increase or decrease their purchase
commitments, by giving notice to the Partnership Board and each
other Partner amending their respective purchase commitments to
the extent required to effect any such increase or decrease, as
applicable, such that the amount accepted for purchase by the
Registration Accepting Offerees constitutes all of the
Registration Interest(s) or the amount not accepted equals or
exceeds the Minimum Offering Amount.
(f) Closing of Purchase Pursuant to Registration Firm
Offer. If the Registration Firm Offer(s) have been accepted in
whole or in part in accordance with the terms of Section 12.6(e),
the Registering Partner(s) shall give notice to such effect (the
"Registration Sale Notice") to all Registration Offerees within
five (5) days after the end of the Registration Offer Period.
Unless the Registration Accepting Offerees and the Registering
Partner(s) otherwise agree, the closing of any purchase pursuant
to this Section 12.6 shall be held at the principal office of the
Partnership at 10:00 a.m. (local time at the place of closing) on
the first Business Day on or after the thirtieth (30th) day
following the date on which such Registration Sale Notice is
given (subject to Section 11.5). At the closing, each
Registration Accepting Offeree shall (i) pay to each Registering
Partner an amount in cash or other immediately available funds
equal to at least one-third of that portion of the purchase price
for the applicable portion of the Registration Interest and
Partner Loans of the Registering Partner for which such
Registration Accepting Offeree is liable and (ii) issue to each
Registering Partner a promissory note (the "Registration Note")
of the Registration Accepting Offeree or its Controlled Affiliate
in a principal amount equal to the remaining portion of the
purchase price for the applicable portion of the Registration
Interest and Partner Loans of the Registering Partner for which
such Registration Accepting Offeree is liable, and the
Registering Partner shall deliver to each Registration Accepting
Offeree good title, free and clear of any liens, claims,
encumbrances, security interests or options (other than those
created by this Agreement and those securing financing obtained
by the Partnership), to the applicable portion of the
Registration Interest and Partner Loans thus purchased. The
principal amount of the Registration Note shall be payable in two
equal annual installments beginning on the first anniversary of
the closing date under this Section 12.6(f), and shall bear
interest, payable quarterly, in arrears at the rate specified
below from the closing date until the principal amount thereof
and all accrued interest thereon is paid in full. The
Registration Note will contain customary terms, conditions and
remedies, including an increased rate of interest payable after a
default in the payment of principal and/or interest. The
interest rate on the Registration Note shall be determined in
connection with the closing and shall be the average of the
interest rates determined independently by the First Public
Appraiser and the Second Public Appraiser as the rate that would
be necessary to cause publicly traded securities with terms,
conditions and remedies comparable to the Registration Note to
trade at face value on a fully distributed basis. Each
Registration Accepting Offeree shall be liable to each
Registering Partner only for its allocable portion of the
purchase price for the Registration Interest and corresponding
portion of such Registering Partner's Partner Loans.
At the closing, the Partners shall execute such documents
and instruments of conveyance as may be necessary or appropriate
to effectuate the transactions contemplated hereby, including the
Transfer of an allocable portion of the Registration Interest and
Partner Loans of each Registering Partner to each of the
Registration Accepting Offerees and the assumption by each
Registration Accepting Offeree of each Registering Partner's
obligations with respect to such portion of the Registering
Partner's Registration Interest Transferred to such Registration
Accepting Offeree. Each Partner and the Partnership shall bear
its own costs of such Transfer and closing, including attorneys'
fees and filing fees.
In the event that any Registration Accepting Offeree shall
fail to perform its obligation to purchase hereunder on the
scheduled closing date and any other Registration Accepting
Offeree(s) were prepared to perform their respective obligations
at the closing on such date (each a "Tendering Offeree"), then
the Tendering Offerees shall be entitled to elect by notice given
to the Partnership Board, the Registering Partner(s) and each
other Tendering Offeree within ten (10) days after the originally
scheduled closing date (the "extension period") to increase or
decrease their purchase commitments such that the amount accepted
for purchase by the Tendering Offerees constitutes all of the
Registration Interest(s) or the amount not accepted equals or
exceeds the applicable Minimum Offering Amount, and the closing
of the purchase of the Registration Interest(s) shall be delayed
until the date determined in accordance with the following
sentence; provided, however, that the Registering Partner(s) will
not be obligated to sell any portion of their Registration
Interest(s) or Partner Loans if the amount of the Registration
Interest(s) not accepted for purchase after giving effect to such
elections is greater than zero but less than the applicable
Minimum Offering Amount. If, after giving effect to all
elections timely made in accordance with the preceding sentence,
the Registering Partner(s) would be required to sell all or any
portion of their Registration Interest(s), then the closing of
the purchase of such Registration Interest(s) and Partner Loans
shall be held (i) on the first Business Day following the
expiration of the extension period if no Tendering Offeree has
timely elected to increase its purchase commitment or (ii) on the
fifth (5th) Business Day following the expiration of the
extension period if any Tendering Offeree has timely elected to
increase its purchase commitment. If, pursuant to this
paragraph, (x) any Tendering Offeree decreases its purchase
commitment or (y) the Registering Partner(s) are not obligated to
sell any portion of their Registration Interest(s) to any
Tendering Offeree, the eighteen (18) month period described in
the last two sentences of Section 12.6(g) shall be extended to
account for the number of days elapsed between the last day of
the applicable Registration Offer Period and the end of the
extension period.
(g) Registration. If the Registration Firm Offer(s) in
the aggregate are for Registration Interest(s) that in the
aggregate are equal to or greater than the Minimum Offering
Amount and are not accepted with respect to all of the
Registration Interest(s) in the manner provided in Section
12.6(e), (i) the Partners will cause the Partnership to be
converted to corporate form in accordance with Section 5.9 no
later than the effective date of the registration contemplated
hereunder and will cause the Partnership and MajorCorp to
register the shares of MajorCorp Stock to be received by such
Registering Partner in exchange for its Registration Interest
(other than any portion of such Registration Interest purchased
by the Registration Accepting Offerees pursuant to Sections
12.6(e) and (f)) for sale under the 1933 Act (and any applicable
state securities laws) in accordance with the offering
contemplated hereunder and (ii) subject to such registration, the
Registering Partner will sell such shares to the public in a
broadly disseminated firm commitment underwritten offering
subject to customary cutbacks on a pro rata basis. MajorCorp
shall select the managing underwriter for such offering subject
to the approval of the Registering Partner(s) which approval
shall not be unreasonably withheld. To effectuate such offers,
MajorCorp and the Registering Partner(s) will enter into an
underwriting agreement with such managing underwriter on terms
and conditions customary for underwriting agreements in a firm
commitment underwritten secondary offering. If the first
sentence of this Section 12.6(g) applies to any Registration Firm
Offer and for any reason the Partnership has not converted to
corporate form in accordance with Section 5.9 within eighteen
(18) months from the expiration of the Registration Offer Period,
such Registering Partner's right to Transfer its Registration
Interest shall again be subject to the restrictions set forth in
this Section 12.6. If any shares of MajorCorp Stock registered
and offered pursuant to this Section 12.6(g) are not sold within
eighteen (18) months from the expiration of the Registration
Offer Period, any Transfer of such shares will be subject to the
provisions of the stockholders' agreement contemplated under
Section 5.9(a).
(h) Restrictions on Notice. Subject to the provisions
of Section 12.6(a), no notice initiating the procedures
contemplated by this Section 12.6 may be given by any Partner
while the Partnership is undertaking to effect the registration
of MajorCorp Stock pursuant to the exercise by any Partner of its
rights under this Section 12.6 in a prior year or after a
Liquidating Event has occurred. No notice initiating the
procedures contemplated by this Section 12.6 may be given by an
Adverse Partner, and no Registering Partner shall be required to
offer any portion of its Interest to an Adverse Partner during
the period that the Partnership is pursuing any remedy specified
in Section 11.1 with respect to such Adverse Partner.
(i) Right of First Refusal/Tagalong Rights. The
provisions of Sections 12.4 and 12.5 shall not apply to the
purchase and sale of a Registration Interest pursuant to this
Section 12.6.
12.7 Right of First Offer.
If the Partnership is converted to corporate form pursuant
to Section 12.6(g), the stockholders' agreement contemplated
under Section 5.9(a) shall incorporate the provisions of this
Section 12.7, mutatis mutandis. Any Partner (a "Selling
Partner") that proposes to sell its shares of MajorCorp Stock (i)
in accordance with Rule 144 under the 1933 Act or Rule 145 under
the 1933 Act (in accordance with the applicable provisions of
Rule 144) (or any successor to either of such Rules), in a
transaction that satisfies the manner of sale requirements of
Rule 144 or Rule 145 (whether or not applicable to such sale) (a
"Rule 144 Sale"), or (ii) in a broadly disseminated Public
Offering pursuant to a registration statement filed under the
1933 Act (a "Registered Offering"), must first comply with the
requirements of this Section 12.7.
(a) Open Market Sales. Prior to any sale or
disposition by a Selling Partner of any of its shares of
MajorCorp Stock in a Rule 144 Sale, such Selling Partner shall
give notice (a "Rule 144 Notice") to the Board of Directors of
MajorCorp and each other Partner (excluding any Partner that was
an Exclusive Limited Partner at the time the Partnership
converted to corporate form, the "Non-Selling Partners") of the
number of shares of MajorCorp Stock proposed to be sold and the
intended manner of disposition. The Rule 144 Notice shall
constitute an irrevocable offer (a "Rule 144 Offer") by such
Selling Partner to the Non-Selling Partners to sell the number of
shares of MajorCorp Stock so proposed to be sold at a price equal
to the Market Value of such shares determined as provided in
Section 12.7(g).
(b) Registered Offerings. If, pursuant to the
registration rights agreement contemplated under Section 5.9(b)
or otherwise, a Selling Partner intends to sell any of its shares
of MajorCorp Stock in a Registered Offering, such Selling Partner
shall first give notice to each Non-Selling Partner (the
"Secondary Registration Notice"). The Secondary Registration
Notice shall (i) specify the number of shares of MajorCorp Stock
proposed to be so registered, (ii) identify the Public Appraiser
selected by such Selling Partner to make the determination of the
Minimum Secondary Offering Amount, which Public Appraiser shall
be reasonably acceptable to MajorCorp, (iii) set forth the Public
Appraiser's determination of the Minimum Secondary Offering
Amount (or state that such Selling Partner has elected to waive
the Minimum Secondary Offering Amount limitations set forth in
the following sentence and in Sections 12.7(d) and 12.7(e)), and
(iv) set forth the intended method of distribution. The shares
of MajorCorp Stock so specified in the Secondary Registration
Notice shall not be less than the Minimum Secondary Offering
Amount (if any) specified in such Secondary Registration Notice.
The Secondary Registration Notice shall constitute an irrevocable
offer (a "Registration Offer") by such Selling Partner to each
Non-Selling Partner to sell such number of shares of MajorCorp
Stock so proposed to be registered at a price equal to the Market
Value of such shares determined in accordance with Section
12.7(g). "Minimum Secondary Offering Amount" means the number of
shares of MajorCorp Stock that the Public Appraiser selected by
the Selling Partner determines would be necessary to effect a
viable secondary public offering of the MajorCorp Stock
considering all relevant factors, including the intended method
of distribution set forth in the Secondary Registration Notice.
Two or more Selling Partner(s) may jointly give a Secondary
Registration Notice.
(c) First Offer Period. A Rule 144 Offer or a
Registration Offer, as applicable, shall be irrevocable for a
period (the "First Offer Period") commencing on the date of
delivery by the Selling Partner of the applicable notice to the
Non-Selling Partners and ending at 11:59 p.m., local time at
MajorCorp's principal place of business, (i) with respect to a
Rule 144 Offer, on the fifth (5th) full Trading Day following the
date of the Rule 144 Notice, and (ii) with respect to a
Registration Offer, on the twentieth (20th) full Trading Day
following the date of the Secondary Registration Notice.
(d) Acceptance of Offers. At any time during the
applicable First Offer Period, any Non-Selling Partner may accept
a Rule 144 Offer or Registration Offer, as applicable, as to all
or any portion of the shares of MajorCorp Stock covered by such
Rule 144 Offer or Registration Offer, as applicable, by giving
notice of such acceptance to the applicable Selling Partner and
each other Non-Selling Partner, which notice shall indicate the
maximum number of shares of MajorCorp Stock that such Non-Selling
Partner is willing to purchase (the "purchase commitment") and,
with respect to a Registration Offer in which the aggregate
Market Value of the shares of MajorCorp Stock proposed to be
registered exceeds $150,000,000, if applicable, identify the
Public Appraiser selected by such Non-Selling Partner to
determine the interest rate of the Accepting Partner Note. If
the aggregate purchase commitments made by Non-Selling Partners
accepting a Rule 144 Offer or Registration Offer, as applicable
("Accepting Partners"), exceed the number of shares of MajorCorp
Stock covered by such Rule 144 Offer or Registration Offer, as
applicable, then each Accepting Partner shall purchase, and the
Selling Partner shall sell to such Accepting Partner, that
portion of the number of shares of MajorCorp Stock covered by
such Rule 144 Offer or Registration Offer, as applicable, that
corresponds to the ratio of the Percentage Interest of such
Accepting Partner to the aggregate Percentage Interests of all
Accepting Partners; provided that if any Accepting Partner's
purchase commitment was for an amount less than its proportionate
share of the number of shares of MajorCorp Stock as so
determined, then the number of shares of MajorCorp Stock not so
committed to be purchased shall continue to be allocated
proportionally in the manner provided above in this sentence
among the other Accepting Partners until each has been allocated,
by such process of apportionment, a number of shares of MajorCorp
Stock equal to the maximum number of shares such Accepting
Partner committed to purchase or until all of the shares of
MajorCorp Stock covered by such Rule 144 Offer or Registration
Offer, as applicable, have been allocated among the Accepting
Partners. Notwithstanding any purported acceptance of a
Registration Offer, the Registration Offer shall be deemed to be
rejected by all such Accepting Partners in their entirety if the
portion not accepted is in the aggregate greater than zero but
less than the Minimum Secondary Offering Amount; provided that
such Registration Offer will be deemed accepted if, within ten
(10) days after the expiration of the First Offer Period, the
Accepting Partners increase or decrease their purchase
commitments, by giving notice to the Board of Directors of
MajorCorp and each other Partner amending their respective
purchase commitments to the extent required to effect any such
increase or decrease, as applicable, such that the amount
accepted for purchase by the Accepting Partners constitutes all
of the shares of MajorCorp Stock covered by such Registration
Offer or the amount not accepted equals or exceeds the Minimum
Secondary Offering Amount.
(e) Closing of Purchase Pursuant to First Offer. If
the Rule 144 Offer or Registration Offer, as applicable has been
accepted in whole or in part in accordance with the terms of
Section 12.7(d), the Selling Partner shall give notice to such
effect (the "First Offer Sale Notice") to all Non-Selling
Partners within five (5) days after the end of the applicable
First Offer Period. Unless the Accepting Partners and the
Selling Partner otherwise agree, the closing of any purchase
pursuant to this Section 12.7 shall be held at the principal
office of MajorCorp at 10:00 a.m. (local time at the place of
closing) on the first Business Day on or after (x) with respect
to a Rule 144 Offer, the fifth (5th) Business Day following the
date on which the First Offer Sale Notice is given, and (y) with
respect to a Registration Offer, the thirtieth (30th) day
following the date on which the First Offer Sale Notice is given.
At the closing, each Accepting Partner shall (i) with respect to
a Rule 144 Offer, pay to the Selling Partner an amount in cash or
other immediately available funds equal to that portion of the
purchase price for the shares of MajorCorp Stock of the Selling
Partner for which such Accepting Partner is liable, and (ii) with
respect to a Registration Offer, (A) if the aggregate Market
Value of the shares of MajorCorp Stock covered by the applicable
Registration Offer exceeds $150,000,000, (1) pay to the Selling
Partner an amount in cash or other immediately available funds
equal to at least one-third of that portion of the purchase price
for the shares of MajorCorp Stock of the Selling Partner for
which such Accepting Partner is liable and (2) issue to the
Selling Partner a promissory note (an "Accepting Partner Note")
of such Non-Selling Partner or its Controlled Affiliate in a
principal amount equal to the remaining portion of the purchase
price for the shares of MajorCorp Stock of the Selling Partner
for which such Accepting Partner is liable, or (B) if the
aggregate Market Value of the shares of MajorCorp Stock covered
by the applicable Registration Offer is equal to or less than
$150,000,000, pay to the Selling Partner an amount in cash or
other immediately available funds equal to that portion of the
purchase price for the shares of MajorCorp Stock of the Selling
Partner for which such Accepting Partner is liable, and the
Selling Partner shall deliver to each Accepting Partner good
title, free and clear of any liens, claims, encumbrances,
security interests or options (other than those created by any
stockholders' agreement contemplated under Section 5.9(a)) to the
shares of MajorCorp Stock thus purchased. The principal amount
of each Accepting Partner Note shall be payable in two equal
annual installments beginning on the first anniversary of the
closing date under this Section 12.7(e), and shall bear interest,
payable quarterly, in arrears at the rate specified below from
the closing date until the principal amount thereof and all
accrued interest thereon is paid in full. The Accepting Partner
Note will contain customary terms, conditions and remedies,
including an increased rate of interest payable after a default
in the payment of principal and/or interest. The interest rate
on the Accepting Partner Note shall be determined in connection
with the closing and shall be the average of the interest rates
determined independently by the Public Appraiser selected by the
Selling Partner and the Public Appraiser selected by the
applicable Accepting Partner as the rate that would be necessary
to cause publicly traded securities with terms, conditions and
remedies comparable to the Accepting Partner Note to trade at
face value on a fully distributed basis. Each Accepting Partner
shall be liable to the Selling Partner only for its allocable
portion of the purchase price for the shares of MajorCorp Stock
purchased hereunder. The provisions of the stockholders'
agreement contemplated under Section 5.9(a) will incorporate
provisions comparable to this Section 12.7 and additional
appropriate provisions that will address the Partners' relative
rights and obligations in the event the circumstances described
in Section 11.5 prevent the Accepting Partners from purchasing
any shares of MajorCorp Stock offered by a Selling Partner
hereunder within the time periods specified in this Section
12.7(e).
At the closing, the Partners and MajorCorp shall execute
such documents and instruments of conveyance as may be necessary
or appropriate to effectuate the transactions contemplated
hereby, including the Transfer of the shares of MajorCorp Stock
of the Selling Partner to the Accepting Partners. Each Partner
and MajorCorp shall bear its own costs of such Transfer and
closing, including attorneys' fees and filing fees.
In the event that any Accepting Partner shall fail to
perform its obligation to purchase hereunder on the scheduled
closing date and any other Accepting Partner(s) were prepared to
perform their respective obligations at the closing on such date
(each a "Tendering Partner"), then the Tendering Partners shall
be entitled to elect by notice given to the Board of Directors of
MajorCorp, the Selling Partner(s) and each other Tendering
Partner within ten (10) days after the originally scheduled
closing date (the "extension period") to increase or decrease
their purchase commitments such that the amount accepted for
purchase by the Tendering Partners constitutes all of the shares
of MajorCorp Stock offered or the amount not accepted equals or
exceeds the applicable Minimum Secondary Offering Amount, and the
closing of the purchase of the shares of MajorCorp Stock shall be
delayed until the date determined in accordance with the
following sentence; provided, however, that the Selling
Partner(s) will not be obligated to sell any portion of their
shares of MajorCorp Stock if the amount of the shares of
MajorCorp Stock not accepted for purchase after giving effect to
such elections is greater than zero but less than the applicable
Minimum Secondary Offering Amount. If, after giving effect to
all elections timely made in accordance with the preceding
sentence, the Selling Partner(s) would be required to sell all or
any portion of their shares of MajorCorp Stock, then the closing
of the purchase of such shares of MajorCorp Stock shall be held
(i) on the first Business Day following the expiration of the
extension period if no Tendering Partner has timely elected to
increase its purchase commitment or (ii) on the fifth (5th)
Business Day following the expiration of the extension period if
any Tendering Partner has timely elected to increase its purchase
commitment.
(f) Sale if First Offer Rejected. Any shares of
MajorCorp Stock not purchased in the manner provided in this
Section 12.7 (including any shares that are not purchased because
of the failure of the Accepting Partners to close any purchase in
accordance with Section 12.7(e)), but subject to the last
sentence of this Section 12.7(f), may be sold during the period
described below (the "Permitted Period") in the manner described
in the Rule 144 Notice or pursuant to the intended method of
distribution set forth in the Secondary Registration Notice, as
applicable. Except as otherwise provided in the following
sentence, the Permitted Period shall be the applicable of (i)
with respect to shares of MajorCorp Stock covered by a Rule 144
Notice, twenty (20) full Trading Days after the last day of the
applicable First Offer Period, or (ii) with respect to shares of
MajorCorp Stock covered by a Secondary Registration Notice, one
hundred eighty (180) days after the last day of the applicable
First Offer Period (in each case commencing on the first day
following the applicable First Offer Period), provided that such
180-day period may be extended for an additional period of up to
ninety (90) days if at the end of such 180-day period the Selling
Partner has caused a registration statement to be filed by
MajorCorp with the Securities and Exchange Commission relating to
such Registered Offering and is actively pursuing the
consummation of such Registered Offering in good faith.
Notwithstanding the foregoing, if, pursuant to the third
paragraph of Section 12.7(e), (x) any Tendering Partner decreases
its purchase commitment or (y) the Selling Partner is not
obligated to sell any portion of its shares of MajorCorp Stock to
any Tendering Partner, the Permitted Period shall be extended to
account for the number of days elapsed between the last day of
the applicable First Offer Period and the end of the extension
period under Section 12.7(e). Any such shares of MajorCorp Stock
not sold within the applicable Permitted Period shall again be
subject to the restrictions set forth in this Section 12.7.
(g) Market Value. The "Market Value" of any shares of
MajorCorp Stock purchased pursuant to this Section 12.7 shall be
(i) with respect to shares of MajorCorp Stock offered pursuant to
a Rule 144 Offer, an amount equal to the product of (A) the
number of shares of MajorCorp Stock offered times (B) the average
of the last reported sales prices, regular way, for the five (5)
full Trading Days preceding the date of the Rule 144 Notice as
reported on the principal national securities exchange on which
MajorCorp Stock is listed or admitted for trading or, if
MajorCorp Stock is not listed or admitted for trading on any
national securities exchange, on the Nasdaq National Market or
(ii) with respect to shares of MajorCorp Stock offered pursuant
to a Registration Offer, the product of (A) the number of shares
of MajorCorp Stock offered times (B) the average of the last
reported sales prices, regular way, for the twenty (20) full
Trading Days preceding the date of the Secondary Registration
Notice as reported on the principal national securities exchange
on which MajorCorp Stock is listed or admitted for trading or, if
MajorCorp Stock is not listed or admitted for trading on any
national securities exchange, on the Nasdaq National Market.
12.8 Prohibited Dispositions.
Any purported Disposition of all or any part of an Interest
that is not a Permitted Transfer shall be null and void and of no
force or effect whatever; provided that, if the Partnership is
required to recognize a Disposition that is not a Permitted
Transfer (or if the Partnership Board, in its sole discretion,
elects to recognize a Disposition that is not a Permitted
Transfer), the Interest Disposed of shall be strictly limited to
the transferor's rights to allocations and distributions as
provided by this Agreement with respect to the Transferred
Interest, which allocations and distributions may be applied
(without limiting any other legal or equitable rights of the
Partnership) to satisfy any debts, obligations, or liabilities
for damages that the transferor or transferee of such Interest
may have to the Partnership.
12.9 Representations Regarding Transfers.
Each Partner hereby represents and warrants to the
Partnership and the other Partners that such Partner's
acquisition of Interests hereunder is made as principal for such
Partner's own account and not for resale or distribution of such
Interests.
12.10 Distributions and Allocations in Respect of
Transferred Interests.
If any Interest is Transferred during any Fiscal Year in
compliance with the provisions of this Section 12, Profits,
Losses, each item thereof, and all other items attributable to
the Transferred Interest for such Fiscal Year shall be divided
and allocated between the transferor and the transferee by taking
into account their varying Percentage Interests during the Fiscal
Year in accordance with Code Section 706(d), using any
conventions permitted by law and selected by the Partnership
Board. All distributions on or before the date of such Transfer
shall be made to the transferor, and all distributions thereafter
shall be made to the transferee. Solely for purposes of making
such allocations and distributions, the Partnership shall
recognize such Transfer not later than the end of the calendar
month during which it is given notice of such Transfer, provided
that, if the Partnership is given notice of a Transfer at least
ten (10) Business Days prior to the Transfer, the Partnership
shall recognize such Transfer as of the date of such Transfer,
and provided further that if the Partnership does not receive a
notice stating the date such Interest was Transferred and such
other information as the Partnership Board may reasonably require
within thirty (30) days after the end of the Fiscal Year during
which the Transfer occurs, then all such items shall be
allocated, and all distributions shall be made, to the Person
who, according to the books and records of the Partnership, was
the owner of the Interest on the last day of such Fiscal Year.
Neither the Partnership nor the Partnership Board shall incur any
liability for making allocations and distributions in accordance
with the provisions of this Section 12.10, whether or not the
Partnership Board or the Partnership has knowledge of any
Transfer of ownership of any Interest.
SECTION 13. CONVERSION OF INTERESTS
13.1 Termination of Status as General Partner. (a) A
General Partner shall cease to be a General Partner
upon the first to occur of (i) the Transfer of such
Partner's entire Interest as a Partner in a Permitted
Transfer (in which event the transferee of such
Interest shall be admitted as a successor General
Partner and a Limited Partner upon compliance with
Section 12.3), (ii) the Unanimous Vote of the
Partnership Board to approve a request by such General
Partner to withdraw, (iii) any Adverse Act with respect
to such Partner, (iv) such Partner's failure to satisfy
the Minimum Ownership Requirement or (v) in the case of
Comcast only, the occurrence of any of the events
described in Section 6.4(f) that cause Comcast to
become an Exclusive Limited Partner. In the event a
Person ceases to be a General Partner pursuant to
clauses (ii), (iii), (iv) or (v), the Interest of such
Person as a General Partner shall automatically and
without any further action by the Partners be converted
into an Interest solely as a Limited Partner, and such
Partner shall thereafter be an Exclusive Limited
Partner.
(b) The Partners intend that the Partnership not
dissolve as a result of the cessation of any Person's status as a
General Partner; provided, however, that if it is determined by a
court of competent jurisdiction that the Partnership has
dissolved, the provisions of Section 14.1 shall govern.
13.2 Restoration of Status as General Partner.
An Exclusive Limited Partner whose rights to representation
on the Partnership Board have been restored as provided in
Section 5.1(c) shall be restored to the status of a General
Partner and its Interest shall thereafter be deemed held in part
as a General Partner and in part as a Limited Partner as provided
in Section 2.1. If Comcast becomes an Exclusive Limited Partner
pursuant to Section 6.4(f), it shall not be entitled to be
restored to the status of General Partner except as expressly
provided in such Section.
SECTION 14. DISSOLUTION AND WINDING UP
14.1 Liquidating Events.
(a) In General. Subject to Section 14.1(b), the
Partnership shall dissolve and commence winding up and
liquidating upon the first to occur of any of the following
("Liquidating Events"):
(i) The sale of all or substantially all of the
Property;
(ii) A Unanimous Vote of the Partnership Board
to dissolve, wind up, and liquidate the Partnership in accordance
with Section 5.1;
(iii) The failure of the General Partners to
resolve a Deadlock Event as provided in Section 5.8(a)(iii)
unless the Partnership Board determines by Required Majority Vote
not to dissolve; and
(iv) The withdrawal of a General Partner, the
assignment by a General Partner of its entire Interest or any
other event that causes a General Partner to cease to be a
general partner under the Act, provided that any such event shall
not constitute a Liquidating Event if the Partnership is
continued pursuant to this Section 14.1. The Partners hereby
agree that, notwithstanding any provision of the Act or the
Delaware Uniform Partnership Act, the Partnership shall not
dissolve prior to the occurrence of a Liquidating Event. Upon
the occurrence of any event set forth in Section 14.1(a)(iv), the
Partnership shall not be dissolved or required to be wound up if
(x) at the time of such event there is at least one remaining
General Partner, or (y) if there is not at least one remaining
General Partner, within ninety (90) days after such event all
remaining Partners agree in writing to continue the business of
the Partnership and to the appointment, effective as of the date
of such event, of one or more additional General Partners.
(b) Special Rules. The events described in Sections
14.1(a)(ii), 14.1(a)(iii) or 14.1(a)(iv) shall not constitute
Liquidating Events until such time as the Partnership is
otherwise required to dissolve, and commence winding up and
liquidating, in accordance with Section 14.7.
14.2 Winding Up.
(a) Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up
its affairs in an orderly manner, liquidating its assets, and
satisfying the claims of its creditors and Partners and neither
the Partnership Board nor any Partner shall take any action that
is inconsistent with, or not appropriate for, the winding up of
the Partnership's business and affairs. To the extent not
inconsistent with the foregoing, this Agreement shall continue in
full force and effect until such time as the Partnership's
Property has been distributed pursuant to this Section 14.2 and
the Certificate has been cancelled in accordance with the Act.
The Partnership Board shall be responsible for overseeing the
winding up and dissolution of the Partnership, shall take full
account of the Partnership's liabilities and Property, shall
cause the Partnership's Property to be liquidated as promptly as
is consistent with obtaining the fair value thereof, and shall
cause the proceeds therefrom, to the extent sufficient therefor,
to be applied and distributed in the following order:
(i) First, to the payment of all of the
Partnership's debts and liabilities (other than Partner Loans) to
creditors other than the Partners and to the payment of the
expenses of liquidation;
(ii) Second, to the payment of all Partner Loans
and all of the Partnership's debts and liabilities to the
Partners in the following order and priority:
(A) first, to the payment of all debts and
liabilities owed to any Partner other than in respect of Partner
Loans;
(B) second, to the payment of all accrued and
unpaid interest on Partner Loans, such interest to be paid to
each Partner and its Affiliates (considered as a group) pro rata
in proportion to the interest owed to each such group; and
(C) third, to the payment of the unpaid
principal amount of all Partner Loans, such principal to be paid
to each Partner and its Affiliates (considered as a group) pro
rata in proportion to the outstanding principal owed to each such
group; and
(iii) The balance, if any, to the Partners in
accordance with their Capital Accounts, after giving effect to
all contributions, distributions, and allocations for all
periods.
(b) In the discretion of the Partnership Board, a
portion of the distributions that would otherwise be made to the
Partners pursuant to this Section 14.2 may be: (i) distributed to
a trust established for the benefit of the Partners for the
purposes of liquidating Partnership assets, collecting amounts
owed to the Partnership, and paying any contingent or unforeseen
liabilities or obligations of the Partnership or of the General
Partners arising out of or in connection with the Partnership.
The assets of any such trust shall be distributed to the Partners
from time to time, in the reasonable discretion of the
Partnership Board in the same proportions as the amount
distributed to such trust by the Partnership would otherwise have
been distributed to the Partners pursuant to Section 14.2; or
(ii) withheld to provide a reasonable reserve
for Partnership liabilities (contingent or otherwise) and to
reflect the unrealized portion of any installment obligations
owed to the Partnership, provided that such withheld amounts
shall be distributed to the Partners as soon as practicable.
Each Partner and each of its Affiliates (as to Partner Loans
only) agrees that by accepting the provisions of this Section
14.2 setting forth the priority of the distribution of the assets
of the Partnership to be made upon its liquidation, such Partner
or Affiliate expressly waives any right which it, as a creditor
of the Partnership, might otherwise have under the Act to receive
distributions of assets pari passu with the other creditors of
the Partnership in connection with a distribution of assets of
the Partnership in satisfaction of any liability of the
Partnership, and hereby subordinates to said creditors any such
right.
14.3 Compliance With Certain Requirements of Regulations;
Deficit Capital Accounts.
In the event the Partnership is "liquidated" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), (a)
distributions shall be made pursuant to this Section 14 to the
Partners who have positive Capital Accounts in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(2), and (b) if any
Partner's Capital Account has any deficit balance (after giving
effect to all contributions, distributions, and allocations for
all taxable years, including the year during which such
liquidation occurs), such Partner shall contribute to the capital
of the Partnership the amount necessary to restore such deficit
balance to zero in compliance with Regulations Section 1.704-
1(b)(2)(ii)(b)(3); provided, however, that the obligation of an
Exclusive Limited Partner to contribute capital pursuant to this
sentence shall be limited to the amount of the deficit balance,
if any, that existed in such Exclusive Limited Partner's Capital
Account at the time it became an Exclusive Limited Partner
(taking into account for this purpose any revaluation of
Partnership assets pursuant to subparagraph (ii)(D) of the
definition of Gross Asset Value made as a result of such
Partner's becoming an Exclusive Limited Partner).
14.4 Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Section 14, in
the event the Partnership is liquidated within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations but no
Liquidating Event has occurred, the Property shall not be
liquidated, the Partnership's liabilities shall not be paid or
discharged, and the Partnership's affairs shall not be wound up.
Instead, solely for federal income tax purposes, the Partnership
shall be deemed to have distributed the Property in kind to the
Partners, who shall be deemed to have assumed and taken subject
to all Partnership liabilities, all in accordance with their
respective Capital Accounts and, if any Partner's Capital Account
has a deficit balance that such Partner would be required to
restore pursuant to Section 14.3 (after giving effect to all
contributions, distributions, and allocations for all Fiscal
Years, including the Fiscal Year during which such liquidation
occurs), such Partner shall contribute to the capital of the
Partnership the amount necessary to restore such deficit balance
to zero in compliance with Regulations Section 1.704-
1(b)(2)(ii)(b)(3). Immediately thereafter, the Partners shall be
deemed to have recontributed the Property to the Partnership,
which shall be deemed to have assumed and taken subject to all
such liabilities.
14.5 Rights of Partners.
Except as otherwise provided in this Agreement, (a) each
Partner shall look solely to the assets of the Partnership for
the return of its Capital Contributions and shall have no right
or power to demand or receive property other than cash from the
Partnership, and (b) no Partner shall have priority over any
other Partner as to the return of its Capital Contributions,
distributions, or allocations. If, after the Partnership ceases
to exist as a legal entity, a Partner is required to make a
payment to any Person on account of any activity carried on by
the Partnership, such paying Partner shall be entitled to
reimbursement from each other Partner consistent with the manner
in which the economic detriment of such payment would have been
borne had the amount been paid by the Partnership immediately
prior to its cessation.
14.6 Notice of Dissolution.
In the event a Liquidating Event occurs or an event
described in Section 14.1(a)(iv) occurs that would, but for
provisions of Section 14.1, result in a dissolution of the
Partnership, the Partnership Board shall, within thirty (30) days
thereafter, provide written notice thereof to each of the
Partners.
14.7 Buy/Sell Arrangements.
(a) As soon as practicable after the occurrence of an
event described in Section 14.1(a)(ii), 14.1(a)(iii) or, subject
to the proviso contained therein, Section 14.1(a)(iv), the Net
Equity of the Interests shall be determined in accordance with
Section 11.3 and notice of such determination shall be delivered
to each Partner. For purposes of such determination of Net
Equity pursuant to this Section 14.7(a), the General Partner that
(together with its Controlled Affiliates) holds the largest
Voting Percentage Interest shall designate the First Appraiser as
required by Section 11.4 within thirty (30) days after an
occurrence of the applicable Liquidating Event, and the General
Partner that (together with its Controlled Affiliates) holds the
smallest Voting Percentage Interest shall appoint the Second
Appraiser within ten (10) Business Days of receiving notice of
the appointment of the First Appraiser.
(b) Prior to 5:00 p.m. (local time at the principal
office of the Partnership) on the first Business Day on or after
the thirtieth (30th) day following its receipt of notice of the
determination of Net Equity pursuant to Section 14.7(a), each
General Partner (individually or together with one or more other
General Partners) must submit sealed statements (the "Offer
Statement") to the Chief Executive Officer notifying the Chief
Executive Officer in writing either (i) that such General Partner
or group of General Partners offers to sell all of its
Interest(s), or (ii) that such General Partner or group of
General Partners offers to buy all of the other Partners'
Interests. Except as provided in Section 14.7(g), each Exclusive
Limited Partner shall be automatically deemed to have offered to
sell its Interest hereunder and shall for all purposes under this
Section 14.7 be treated as a General Partner that has offered to
sell its Interest. The Chief Executive Officer shall provide a
copy of each Offer Statement to each of the Partners within five
(5) days following the last day for submission of the Offer
Statements.
(c) If the Offer Statements indicate that one General
Partner or group of General Partners wishes to buy and all of the
other Partners wish to sell, the Net Equity of the Interests
shall thereupon be the price at which the Interests will be sold.
(d) If the Offer Statements indicate that all Partners
wish to sell their Interests, the Partnership shall dissolve, and
commence winding up and liquidating in accordance with Section
14.2.
(e) If the Offer Statements indicate that more than one
General Partner or group of General Partners wishes to purchase
the other Partners' Interests, then the General Partners or
groups of General Partners wishing to purchase (each General
Partner or group of Partners, a "Bidding Partner") shall begin
the bidding process described below and the highest bidder
(determined as the amount bid per each one percent (1%)
Percentage Interest in the Partnership) shall buy all the other
Partners' Interests. Each of the Bidding Partners may make an
initial offer (an "Initial Offer") to purchase the Interests of
the other Partners, which offer may not be less than the Net
Equity of the Interests to be purchased and shall be made within
fifteen (15) days of the last day for submission of the Offer
Statements. If no Bidding Partner makes an Initial Offer by 5:00
p.m. (local time at the principal office of the Partnership) on
the last day of such fifteen (15) day period, the Partnership
shall dissolve, and commence winding up and liquidating in
accordance with Section 14.2. If only one Bidding Partner timely
makes an Initial Offer, such offer shall thereupon be the price
at which all other Partners' Interests shall be sold to such
Bidding Partner. If more than one Bidding Partner timely makes
an Initial Offer, each such Bidding Partner must respond within
fifteen (15) days of the last day of the 15-day period for
submitting such Initial Offers either by accepting the highest of
such Initial Offers or delivering a counteroffer to purchase the
Interests of the other Partners. A counteroffer must be at least
one percent (1%) higher than the prior offer of which the Bidding
Partner has received notice. The bidding process shall continue
until all Bidding Partners have either responded by accepting the
highest immediate prior offer or failed to make a timely
response, in which case the highest immediate prior offer shall
be deemed accepted. An acceptance of an offer shall, if the
bidding process thereafter continues, be deemed to be an
acceptance of the highest succeeding counteroffer. For purposes
of this Section 14.7, all offers, acceptances and counteroffers
must be in writing, in a form which is firm and binding and
delivered to the Chief Executive Officer at the principal office
of the Partnership (who shall promptly notify each other Partner
of the identity of the bidder and the amount of such bid); all
offers must be responded to within fifteen (15) days of the last
day of the immediately preceding 15-day period for submitting
offers. If no response to an offer or counteroffer is received
by 5:00 p.m. (local time at the principal office of the
Partnership) on the last day of such fifteen (15) day period, the
highest immediate prior offer shall be deemed to be accepted.
(f) The closing of the purchase and sale of each
selling Partner's Interest, MinorCo Interest and Partner Loans
shall occur at the principal office of the Partnership at 10:00
a.m. (local time at the place of the closing) on the first
Business Day occurring on or after the thirtieth (30th) day
following the date of the final determination of the purchase
price pursuant to Section 14.7(e) (subject to Section 11.5). At
the closing, the purchasing Partner(s) shall pay to each selling
Partner, by cash or other immediately available funds, the
purchase price for such selling Partners' Interest, MinorCo
Interest and Partner Loans, and the selling Partner shall deliver
to the purchasing Partner(s) good title, free and clear of any
liens, claims, encumbrances, security interests or options (other
than those created by this Agreement and those securing financing
obtained by the Partnership), to the selling Partner's Interest,
MinorCo Interest and Partner Loans thus purchased.
At the closing, the Partners shall execute such documents
and instruments of conveyance as may be necessary or appropriate
to effectuate the transactions contemplated hereby, including the
Transfer of the Interests, MinorCo Interests and Partner Loans of
the selling Partner(s) to the purchasing Partner(s) and the
assumption by each purchasing Partner of the selling Partner's
obligations with respect to the selling Partner's Interest
Transferred to the purchasing Partner(s). Each Partner shall
bear its own costs of such Transfer and closing, including
attorneys' fees and filing fees. The costs of determining Net
Equity shall be borne by the Partners (pro rata based on their
respective Percentage Interests as of the occurrence of the
Liquidating Event).
(g) Solely for the purposes of this Section 14.7,
Comcast will have the same rights and obligations as a General
Partner hereunder even if it has become an Exclusive Limited
Partner under Section 6.4(f) so long as Comcast would not
otherwise then be an Exclusive Limited Partner under Section
13.1(a).
SECTION 15. MISCELLANEOUS
15.1 Notices.
Any notice, payment, demand, or communication required or
permitted to be given by any provision of this Agreement shall be
in writing and mailed (certified or registered mail, postage
prepaid, return receipt requested) or sent by hand or overnight
courier, or by facsimile (with acknowledgment received), charges
prepaid and addressed as follows, or to such other address or
number as such Person may from time to time specify by notice to
the Partners:
(a) If to the Partnership, to the address or number set
forth on Schedule 2.2;
(b) If to a Partner or its designated
Representative(s), to the address or number set forth in Schedule
2.2; and
(c) If to the Partnership Board, to the Partnership and
to each General Partner and its designated Representative(s).
Any Person may from time to time specify a different address by
notice to the Partnership and the Partners. All notices and
other communications given to a Person in accordance with the
provisions of this Agreement shall be deemed to have been given
and received (i) four (4) Business Days after the same are sent
by certified or registered mail, postage prepaid, return receipt
requested, (ii) when delivered by hand or transmitted by
facsimile (with acknowledgment received and, in the case of a
facsimile only, a copy of such notice is sent no later than the
next Business Day by a reliable overnight courier service, with
acknowledgment of receipt) or (iii) one (1) Business Day after
the same are sent by a reliable overnight courier service, with
acknowledgment of receipt.
15.2 Binding Effect.
Except as otherwise provided in this Agreement, this
Agreement shall be binding upon and inure to the benefit of the
Partners and their respective successors, transferees, and
assigns.
15.3 Construction.
This Agreement shall be construed simply according to its
fair meaning and not strictly for or against any Partner.
15.4 Time.
Time is of the essence with respect to this Agreement.
15.5 Table of Contents; Headings.
The table of contents and section and other headings
contained in this Agreement are for reference purposes only and
are not intended to describe, interpret, define or limit the
scope, extent or intent of this Agreement.
15.6 Severability.
Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal, invalid
or unenforceable for any reason whatsoever, that term or
provision will be enforced to the maximum extent permissible so
as to effect the intent of the Partners, and such illegality,
invalidity or unenforceability shall not affect the validity or
legality of the remainder of this Agreement. If necessary to
effect the intent of the Partners, the Partners will negotiate in
good faith to amend this Agreement to replace the unenforceable
language with enforceable language which as closely as possible
reflects such intent.
15.7 Incorporation by Reference.
Every exhibit and other appendix (other than schedules)
attached to this Agreement and referred to herein is not
incorporated in this Agreement by reference unless this Agreement
expressly otherwise provides.
15.8 Further Action.
Each Partner, upon the reasonable request of the Partnership
Board, agrees to perform all further acts and execute,
acknowledge, and deliver any documents which may be reasonably
necessary, appropriate, or desirable to carry out the intent and
purposes of this Agreement.
15.9 Governing Law.
The internal laws of the State of Delaware (without regard
to principles of conflict of law) shall govern the validity of
this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the Partners.
15.10 Waiver of Action for Partition; No Xxxx For
Partnership Accounting.
Each Partner irrevocably waives any right that it may have
to maintain any action for partition with respect to any of the
Property; provided that the foregoing shall not be construed to
apply to any action by a Partner for the enforcement of its
rights under this Agreement. Each Partner waives its right to
seek a court decree of dissolution (other than a dissolution in
accordance with Section 14) or to seek appointment of a court
receiver for the Partnership as now or hereafter permitted under
applicable law. To the fullest extent permitted by law, each
Partner covenants that it will not (except with the consent of
the Partnership Board) file a xxxx for Partnership accounting.
15.11 Counterpart Execution.
This Agreement may be executed in any number of counterparts
with the same effect as if all the Partners had signed the same
document. All counterparts shall be construed together and shall
constitute one agreement.
15.12 Sole and Absolute Discretion.
Except as otherwise provided in this Agreement, all actions
which the Partnership Board may take and all determinations which
the Partnership Board may make pursuant to this Agreement may be
taken and made at the sole and absolute discretion of the
Partnership Board.
15.13 Specific Performance.
Each Partner agrees with the other Partners that the other
Partners would be irreparably damaged if any of the provisions of
this Agreement are not performed in accordance with their
specific terms and that monetary damages would not provide an
adequate remedy in such event. Accordingly, in addition to any
other remedy to which the nonbreaching Partners may be entitled,
at law or in equity, the nonbreaching Partners shall be entitled
to injunctive relief to prevent breaches of this Agreement and
specifically to enforce the terms and provisions hereof.
15.14 Entire Agreement.
The provisions of this Agreement set forth the entire
agreement and understanding between the Partners as to the
subject matter hereof and supersede all prior agreements, oral or
written, and other communications between the Partners relating
to the subject matter hereof.
15.15 Limitation on Rights of Others.
Nothing in this Agreement, whether express or implied, shall
be construed to give any Person other than the Partners any legal
or equitable right, remedy or claim under or in respect of this
Agreement.
15.16 Waivers; Remedies.
The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either
retroactively or prospectively) by the party or parties entitled
to enforce such term, but any such waiver shall be effective only
if in a writing signed by the party or parties against which such
waiver is to be asserted. Except as otherwise provided herein,
no failure or delay of any Partner in exercising any power or
right under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such
right or power, preclude any other or further exercise thereof or
the exercise of any other right or power.
15.17 Jurisdiction; Consent to Service of Process. (a) Each
Partner hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive
jurisdiction of any New York State court sitting in the
County of New York or any Federal court of the United
States of America sitting in the Southern District of
New York, and any appellate court from any such court,
in any suit, action or proceeding arising out of or
relating to the Partnership or this Agreement, or for
recognition or enforcement of any judgment, and each
Partner hereby irrevocably and unconditionally agrees
that all claims in respect of any such suit, action or
proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such
Federal court.
(b) Each Partner hereby irrevocably and unconditionally
waives, to the fullest extent it may legally do so, any objection
which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to the
Partnership or this Agreement in any New York State court sitting
in the County of New York or any Federal court sitting in the
Southern District of New York. Each Partner hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or
proceeding in any such court and further waives the right to
object, with respect to such suit, action or proceeding, that
such court does not have jurisdiction over such Partner.
(c) Each Partner irrevocably consents to service of
process in the manner provided for the giving of notices pursuant
to this Agreement, provided that such service shall be deemed to
have been given only when actually received by such Partner.
Nothing in this Agreement shall affect the right of a party to
serve process in any other manner permitted by law.
15.18 Waiver of Jury Trial.
Each Partner waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or
relating to the Partnership or this Agreement.
15.19 No Right of Set-Off.
No Partner shall be entitled to offset against any of its
financial obligations to the Partnership under this Agreement,
any obligation owed to it or any of its Affiliates by any other
Partner or any of such other Partner's Affiliates.
IN WITNESS WHEREOF, the parties have entered into this
Amended and Restated Agreement of Limited Partnership of MajorCo,
L.P. as of the date first above set forth.
SPRINT SPECTRUM, L.P.
By: US Telecom, Inc.,
Its General Partner
By: /s/ Xxx X. Xxxxxx
Title: Vice President
TCI NETWORK SERVICES
By: TCI Network, Inc.,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
Title:
COMCAST TELEPHONY SERVICES
By: Comcast Telephony Services, Inc.,
Its General Partner
By: /s/ Xxxxxx X. Block
Title: Vice President
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF MAJORCO, X.X.
XXX TELEPHONY PARTNERSHIP
By: Xxx Communications Wireless, Inc.,
Its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxx
Title: Vice President