ADDENDUM XII
TO
SPRINT PCS MANAGEMENT AGREEMENT AND
SPRINT PCS SERVICES AGREEMENT
AMENDING THESE AGREEMENTS FURTHER AND RESTATING CERTAIN
PARAGRAPHS IN ADDENDA I THROUGH XI
DATED JUNE 14, 2004
MANAGER: ALAMOSA MISSOURI, LLC (formerly known as Roberts Wireless
Communications, LLC)
SERVICE AREA BTAS:
Missouri Cape Girardeau # 66
Columbia # 90
Jefferson City # 217
Joplin # 220
Kirksville # 230
Poplar Bluff # 355
Rolla # 383
St. Joseph # 393
Sedalia # 414
Springfield # 428
West Plains # 470
Kansas Pittsburg # 349
Kansas City # 226
(Atchison County, KS only)
Illinois Carbondale # 67
Quincy # 367
This Addendum XII (this "ADDENDUM") contains amendments to the
Sprint PCS Management Agreement, the Sprint PCS Services Agreement, the Sprint
Trademark and Service Mark License Agreement and the Sprint Spectrum Trademark
and Service Mark License Agreement, each of which was entered into on June 8,
1998 by the same parties to this Addendum.
The Management Agreement, Services Agreement and Trademark
License Agreements were amended by:
(1) Addendum I dated June 8, 1998,
(2) Addendum II dated October 6, 1998,
(3) Addendum III dated January 21, 1999,
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(4) Addendum IV dated September 8, 1999,
(5) Addendum V dated February 22, 2000,
(6) Addendum VI dated May 5, 2000,
(7) Addendum VII dated July 27, 2000,
(8) Addendum VIII dated February 14, 2001,
(9) Addendum IX dated November 29, 2002,
(10) Addendum X dated September 12, 2003, and
(11) Addendum XI dated March 26, 2004.
The purposes of this Addendum are to (1) amend the Management
Agreement, the Services Agreement, the Trademark License Agreements and the
Schedule of Definitions and restate those paragraphs in the addenda executed
previously that amend the Management Agreement, the Services Agreement, the
Trademark License Agreements and the Schedule of Definitions (see section A
below), and (2) provide cross-references to those paragraphs in addenda executed
previously that are not restated in this Addendum (see section B below).
The terms and provisions of this Addendum control over any
conflicting terms and provisions contained in the Management Agreement, the
Services Agreement, the Trademark License Agreements and the Schedule of
Definitions. The Management Agreement, the Services Agreement, the Trademark
Licenses Agreements, the Schedule of Definitions and all prior addenda continue
in full force and effect, except for express modifications made in this
Addendum. This Addendum does not change the effective date of any prior
amendment made to the Management Agreement, the Services Agreement, the
Trademark License Agreements or the Schedule of Definitions through previously
executed addenda.
Capitalized terms used and not otherwise defined in this
Addendum have the meaning ascribed to them in the Schedule of Definitions or in
prior addenda. Section and Exhibit references are to sections and Exhibits of
the Management Agreement unless otherwise noted.
The parties entered into Addendum XI dated March 26, 2004, but
the parties acknowledge that Addendum XI is superseded in its entirety by this
Addendum. The parties are executing this Addendum as of the date noted above,
but this Addendum becomes effective on (the "EFFECTIVE DATE") either (1) March
1, 2004, if the Parties execute all of the following addenda by June 14, 2004:
o Alamosa Missouri, LLC Addendum XII,
o Alamosa Wisconsin Limited Partnership Addendum XI,
o Southwest PCS, L.P. Addendum VII,
o Texas Telecommunications, LP Addendum XII, and
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o Washington Oregon Wireless LLC Addendum VIII.
(2) the first calendar day of the first calendar month after the above addenda
are executed if the Parties execute the above addenda after June 14, 2004.
On the Effective Date the Management Agreement, the Services
Agreement, the Trademark License Agreements and the Schedule of Definitions are
amended and restated as follows:
A. NEW AMENDMENTS AND RESTATEMENT OF PREVIOUS AMENDMENTS TO SPRINT PCS
AGREEMENTS.
MANAGEMENT AGREEMENT
1. UPDATED SPRINT PARTIES [ADDM XI,SS.1]. Recital A is amended to read as
follows:
A. Sprint Spectrum L.P., a Delaware limited partnership, WirelessCo,
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas
corporation, American PCS Communications, LLC, a Delaware limited liability
company, APC PCS, LLC, a Delaware limited liability company, PhillieCo
Partners I, L.P., a Delaware limited partnership, PhillieCo, L.P., a
Delaware limited partnership, Sprint Telephony PCS, L.P., a Delaware
limited partnership, and Sprint PCS License, L.L.C., a Delaware limited
liability company, hold and exercise, directly or indirectly, control over
licenses to operate wireless services networks.
2. EXPANDED SERVICE AREA [ADDM VI,SS.1]. The Manager's Service Area
includes the Kansas City BTA (Atchison County, KS only) BTA No. 226.
3. VENDOR PURCHASE AGREEMENT - SOFTWARE FEES [ADDM XI,SS.2; REVISED BY THIS
ADDENDUM]. Section 1.3 is amended to read as follows:
Insert: "1.3.1 DISCOUNTED VOLUME-BASED PRICING." before the first
paragraph.
Insert: "1.3.2 SUBSCRIBER AND INFRASTRUCTURE EQUIPMENT." before the
second paragraph.
Insert: "1.3.3 EXCLUSIVE USE." before the third paragraph.
Add a new section 1.3.4 as follows:
1.3.4 SOFTWARE FEES.
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(a) Manager acknowledges that Sprint PCS administers the testing and
implementation of the Software (i.e., pushing of the Software) into the
Service Area Network.
(b) Sprint PCS, when obtaining software for its own use that is
identical to the Software, will use commercially reasonable efforts to
obtain a license from vendors providing for the right of Manager to use the
Software in connection with telecommunications equipment manufactured by
the vendor (collectively the software obtained by Sprint PCS for its own
use and the Software that operates on telecommunications equipment
manufactured by the vendor are for purposes of this section 1.3.4, the
"VENDOR SOFTWARE"; when the term "Vendor Software" is used with respect to
Manager, it means only the Software, and not the software used only by
Sprint PCS).
(c) Manager will arrange independently with the vendor to obtain a
license if Sprint PCS cannot reasonably obtain a license for Manager. Any
license that Manager obtains from a vendor must require the Vendor Software
to be tested in Sprint PCS test beds by Sprint PCS and require Sprint PCS,
not the vendor or Manager, to push the Vendor Software to the Service Area
Network unless Sprint PCS otherwise consents in advance in writing. Sprint
PCS agrees to test the Vendor Software in Sprint PCS test beds within a
reasonable period after Manager reasonably requests the tests in writing.
(d) Sprint PCS will:
(i) notify Manager in writing at least 60 days before the
date of an automatic renewal of, or Sprint PCS' unilateral act to
renew or extend, an agreement that provides Sprint PCS the right
to use the Vendor Software, or
(ii) use reasonable efforts to notify Manager in writing
before the date Sprint PCS intends to start negotiations with a
vendor regarding extension, renewal, pricing or other material
terms relating to Sprint PCS' and Manager's right to use the
Vendor Software (whether for new Software or renewal of an
existing license), and at least 60 days before the date Sprint
PCS executes an agreement, extension or renewal.
The notice by Sprint PCS will include the material terms and
conditions of any such agreement or negotiations to the extent known at the
time of the notice, including the network elements to be covered by the
right to use the Vendor Software. Manager must notify Sprint PCS in writing
within 30 days after receiving the notice described in the first sentence
of this section 1.3.4(d) if Manager wants Sprint PCS to attempt to obtain
or continue the right for Manager
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to use the Vendor Software. Sprint PCS will renew or negotiate the
agreement as if Manager will not be a user of the Vendor Software if
Manager does not provide notice to Sprint PCS within the 30-day period.
However, Sprint PCS may obtain pricing from the vendor for the Vendor
Software that includes Manager as a user if obtaining the pricing does not
obligate Manager to be a user.
Sprint PCS will advise Manager upon Manager's reasonable request of
the status of the Software negotiations if Manager requested Sprint PCS to
obtain or continue the right for Manager to use the Vendor Software under
Sprint PCS' agreement with the vendor. Sprint PCS will use commercially
reasonable efforts to give Manager notice of the final pricing for the
right to use the Vendor Software no less than 20 days before the expected
execution or renewal of the agreement; provided that, in any event, Sprint
PCS will give Manager notice of the final pricing no less than 3 Business
Days before the expected execution or renewal of the agreement. If
necessary, Manager agrees to use commercially reasonable efforts to enter
into a nondisclosure agreement with the vendor to facilitate providing such
final pricing to Manager.
Manager may give Sprint PCS notice by the time set forth in Sprint
PCS' notice to Manager (which time will not be less than 10 Business Days)
that Manager does not intend to use the Vendor Software through the
agreement between Sprint PCS and the vendor. If Manager does not give this
final notice to Sprint PCS, Manager is deemed to agree to be a user of the
Vendor Software through the agreement between Sprint PCS and the vendor and
will pay the Allocable Software Fee (as defined below). Within 15 Business
Days after execution of an agreement between Sprint PCS and the vendor,
Sprint PCS will provide to Manager a forecast of Manager's Allocable
Software Fee, the estimated payment due dates relating to the Allocable
Software Fee, and the proportion of Manager's Allocable Software Fee
forecast to be due on each payment due date.
Sprint PCS does not have to obtain a license for Vendor Software for
Manager, even if Manager requests Sprint PCS to obtain such license, if at
any time before execution of the agreements granting the license Sprint PCS
reasonably believes that Manager is more likely than not to unreasonably
refuse to pay the Allocable Software Fee or Sprint PCS reasonably believes
that the Manager is in such financial condition that Manager is more likely
than not to be unable to pay the Allocable Software Fee.
If Manager accepts the Vendor Software, Sprint will give Manager,
Manager's proportional share of (i) any cash benefits relating specifically
to the Vendor Software that Sprint PCS obtains from the vendor, and (ii) to
the extent reasonably able to be made available to Manager, other benefits,
including training, relating specifically to the Vendor Software.
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(e) Sprint PCS will pay all Software Fees relating to the Vendor
Software to the vendor if Sprint PCS obtains a license from the vendor that
provides Manager the right to use the Vendor Software and Manager agrees to
pay any applicable Allocable Software Fee in accordance with this section
1.3.4(e). Manager will be deemed to agree to pay any applicable Allocable
Software Fee if both:
(i) Manager has not taken the action described in paragraph
(d) above to decline obtaining the right to use the Vendor
Software through the agreement between Sprint PCS and the vendor,
and
(ii) Sprint PCS obtains a license providing for the right of
Manager to use the Vendor Software.
Manager will pay Sprint PCS the Allocable Software Fee within 30 days
after receipt of an invoice. Sprint PCS will invoice Manager only after
Sprint PCS pays the underlying Software Fee to the vendor. The Allocable
Software Fee will not include any amount for Software that is the same as
or functionally equivalent to any Software (y) that is a component of any
service for which a fee is charged under the Services Agreement or (z) for
which Sprint PCS otherwise charges Manager under this agreement.
Sprint PCS will calculate the "ALLOCABLE SOFTWARE FEE" as follows:
For each vendor, multiply:
(i) the Total Software Cost of the Software Fees
attributable to the Vendor Software for which Sprint PCS has
obtained for itself, Manager and Other Managers a license or
other right to use, by
(ii) the quotient of:
(A) the number of Customers and Reseller Customers with
an NPA-NXX assigned to the Service Area that are assigned to
a system using the Vendor Software, as reported in the most
recent monthly report that Sprint PCS issues before the date
that Sprint PCS prepares an Allocable Software Fee invoice,
divided by:
(B) the number of Customers and Reseller Customers that
are assigned to all systems using the Vendor Software, as
reported in the most recent monthly report that Sprint PCS
issues before
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the date that Sprint PCS prepares an Allocable Software Fee
invoice.
(f) Sprint PCS will include with the invoice for the Allocable
Software Fee a list of the component charges, if available from the Vendor.
The Software Fees that Sprint PCS pays to the vendor will reflect rates no
greater than commercial rates negotiated at arms' length. For purposes of
clarification, the parties acknowledge the vendor may insist on a
comprehensive fee without listing each component, but rather asserting that
the fee covers all software necessary to operate the equipment. But Sprint
PCS will provide to Manager a description of all the features and
functionality in reasonable detail for all Software for which Manager is to
pay an Allocable Software Fee.
(g) Manager will not be charged the Allocable Software Fee for the
Vendor Software after Manager:
(i) notifies Sprint PCS in writing within the periods
allowed in section 1.3.4(d) that Manager declines to have Sprint
PCS obtain a right for Manager to use the Vendor Software or that
it does not intend to use the Vendor Software,
(ii) obtains its own license providing for Manager's right
to use the Vendor Software, and
(iii) complies with the requirements of section 1.3.4(h).
(h) Manager will obtain its own license providing for Manager's right
to use the Vendor Software from the vendor if Manager elects not to have
Sprint PCS attempt to obtain a right for Manager to use the Vendor Software
under section 1.3.4(d). Manager will notify Sprint PCS in writing and
deliver to Sprint PCS within 10 Business Days after Manager's execution of
Manager's separate license, a signed document from the vendor confirming
that:
(i) the vendor has provided Manager a separate license for
the necessary software and the term of that license, which term
with appropriate renewal rights, must be at least as long as the
license Sprint PCS has from the vendor,
(ii) the fees paid by Manager to the vendor reflect
commercial rates negotiated at arms' length,
(iii) the Vendor Software covered by Manager's license
provides the usage and functionality necessary for
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Manager to operate the Service Area Network in compliance with
the Sprint PCS Technical Program Requirements, and
(iv) the Vendor Software may be tested in Sprint PCS test
beds by Sprint PCS and will be pushed to the Service Area Network
by Sprint PCS, not the vendor or Manager, unless Sprint PCS
otherwise consents in advance in writing. Sprint PCS agrees to
test the Vendor Software in Sprint PCS test beds within a
reasonable period after Manager reasonably requests in writing.
4. INTERCONNECTION [ADDM XI,SS.4]. Section 1.4 is amended and restated in
its entirety to read as follows:
If Manager desires to interconnect a portion of the Service Area
Network with another carrier and Sprint PCS can interconnect with that
carrier at a lower rate, then to the extent that applicable laws, tariffs
and agreements permit, Sprint PCS will use commercially reasonable efforts
to arrange for the interconnection under its agreements with the carrier
within a commercially reasonable period. Sprint PCS will bill the
interconnection fees to Manager at actual cost.
5. FORECASTING [ADDM XI,SS.5]. Section 1.6 is amended and restated in its
entirety to read as follows:
1.6 FORECASTING. Manager and Sprint PCS will work cooperatively to
generate mutually acceptable forecasts of important business metrics that
they agree upon. The forecasts are for planning purposes only and do not
constitute either party's obligation to meet the quantities forecast.
6. REVISED FINANCING PLAN [ADDM XI, SS.6; REVISED BY THIS ADDENDUM].
Exhibit 1.7 attached to Addendum XI supersedes and replaces Exhibit 1.7 attached
to Addendum IX to the Management Agreement.
7. INFORMATION [ADDM XI,SS.7]. A new section 1.9 is added to the Management
Agreement.
1.9 ACCESS TO INFORMATION.
1.9.1 NETWORK OPERATIONS.Manager and Sprint PCS will have access
to, and may monitor, record or otherwise receive, information
processed through equipment, including switches, packet data switching
nodes and cell site equipment, that relates to the provision of Sprint
PCS Products and Services or to the provision of telecommunications
services
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to Reseller Customers in the Service Area Network, if the access,
monitoring, recording or receipt of the information is accomplished in
a manner that:
(i) Does not unreasonably impede Manager or Sprint PCS from
accessing, monitoring, recording or receiving the information,
(ii) Does not unreasonably encumber Manager's or Sprint PCS'
operations (including, without limitation, Sprint PCS' real-time
monitoring of the Sprint PCS Network status, including the
Service Area Network),
(iii) Does not unreasonably threaten the security of the
Sprint PCS Network,
(iv) Does not violate any law regarding the information,
(v) Complies with technical requirements applicable to the
Service Area Network,
(vi) Does not adversely affect any warranty benefiting
Manager or Sprint PCS (e.g., software warranties), and
(vii) With respect to the information processed through
Manager's equipment, including its switches, does not result in a
material breach of any agreement regarding the information (e.g.,
national security agreements).
Sprint PCS and Manager will immediately notify the other party
and reasonably cooperate to establish new procedures for allowing both
Manager and Sprint PCS to access, monitor, record and receive the
information in a manner that meets the criteria in clauses (i) through
(vii) above if either Manager or Sprint PCS reasonably determines that
the other party is accessing, monitoring, recording or receiving the
information described in this section 1.9.1 in a manner that does not
meet the criteria in clauses (i) through (vii) above.
Manager owns the information regarding the performance of its
equipment. Each of Manager and Sprint PCS may use the information
obtained under this section 1.9.1 for any reasonable internal business
purpose, during the term of and after termination of this agreement,
the Services Agreement and the Trademark License
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Agreements, so long as the use would be in accordance with those
agreements if those agreements were still in effect.
1.9.2 CUSTOMER INFORMATION. Manager is entitled to receive
information Sprint PCS accesses, monitors, records or receives
concerning the Service Area Network or the Customers with NPA-NXXs
assigned to Manager's Service Area, subject to the terms of this
section 1.9.2 and section 1.9.3 and Manager's compliance with CPNI
requirements and any other legal requirements applicable to the
information.
Sprint PCS will provide the information in the format that
Manager requests at no additional charge to Manager if Sprint PCS
accesses, monitors, records, receives or reports for its own use the
information specific to Manager that Manager requests in the same
format as Manager requests. Sprint PCS will use commercially
reasonable efforts to provide the information within 5 Business Days.
Sprint PCS will provide the information in the format that
Manager requests if Sprint PCS accesses, monitors, records, receives
or reports for its own use the information that Manager requests, but
not in the same format that Manager requests, if Manager agrees to pay
or reimburse Sprint PCS for the costs Sprint PCS reasonably incurs.
Sprint PCS will use commercially reasonable efforts to provide the
requested information within 15 Business Days.
If Sprint PCS accesses, monitors, records or receives the
information requested by Manager, but not in the same format that
Manager requests, then Sprint PCS will provide the requested
information as raw data, if:
(i) Sprint PCS chooses not to provide the information as
described in the preceding paragraph, and
(ii) Manager agrees to pay or reimburse Sprint PCS for the
costs Sprint PCS reasonably incurs.
Sprint PCS will use commercially reasonable efforts to provide the raw
data within 15 Business Days.
Sprint PCS owns the information regarding the Customers. Each of
Manager and Sprint PCS may use the information obtained under this
section 1.9.2 during the term of and after termination of this
agreement, the Services Agreement and the Trademark License Agreements
so long as the use would be in accordance with those agreements if
those agreements were still in effect.
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1.9.3 LIMITATIONS AND OBLIGATIONS. Sprint PCS does not have to
provide any information that Manager reasonably requests under this
agreement or the Services Agreement that:
(i) Manager can obtain itself in accordance with section
1.9.1 (if Sprint PCS has provided Manager with any necessary
specifications requested by Manager as to how to obtain the
information), unless Sprint PCS already has the information in
its possession and has not previously delivered it to Manager,
(ii) Sprint PCS no longer maintains,
(iii) Manager has already received from Sprint PCS or its
Related Parties,
(iv) Sprint PCS does not access, monitor, record, receive or
report, or
(v) Sprint PCS must make system modifications to provide the
raw data, including without limitation modifying or adding data
fields or modifying code.
Sprint PCS will provide Manager a copy of the then-current Sprint
PCS document retention policy from time to time upon reasonable
request.
1.9.4 CONTRACTS. Sprint PCS will disclose to Manager the relevant
terms and conditions of any agreement between Sprint PCS and any third
party:
(i) with which Manager must comply, directly or indirectly,
under the Management Agreement, the Services Agreement or any
Program Requirement,
(ii) from which Manager is entitled to any benefit, or
(iii) that relate to any pass-through amounts that Sprint
PCS charges Manager under this agreement or Settled-Separately
Manager Expenses under the Services Agreement.
In each case Sprint PCS' disclosure will be in sufficient detail to
enable Manager to determine the obligations or benefits with which
Manager must comply or benefit or the charges or expenses to be paid
by Manager. Sprint PCS may provide to Manager copies of the agreements
or the relevant terms and conditions of such agreements in electronic
format
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upon notice to Manager, including by posting the copies or relevant
terms and conditions to a secure website to which Manager has access.
Once each calendar year and from time to time when a change is
effected to any relevant term or condition, Manager may request copies
of the agreements that are not posted to the secure website or whose
relevant terms and conditions are not posted to the secure website.
Sprint PCS will provide a copy of the agreement to Manager to the
extent permissible by the terms of the agreement. Sprint PCS will
allow Manager or its representatives to review a copy of the agreement
to the extent permissible by the agreement if the agreement prohibits
Sprint PCS from providing Manager a copy. Sprint PCS will satisfy the
requirements of this section 1.9.4 if it chooses to provide a copy of
the agreement in electronic form on a server that Sprint PCS
designates. Sprint PCS will use commercially reasonable efforts to
obtain the right from the third party, if required, to provide a
complete copy to Manager of any agreement between Sprint PCS and any
third party of the type described in this section 1.9.4.
8. MOST FAVORED NATION [ADDM XI,SS.8; REVISED BY THIS ADDENDUM]. A new
section 1.10 is added to the Management Agreement:
1.10 SUBSEQUENT AMENDMENTS TO OTHER MANAGERS' MANAGEMENT AGREEMENTS
AND SERVICES AGREEMENTS. Manager has the right to amend the terms in its
Management Agreement and Services Agreement as described in this section
1.10 if during the period beginning on the date of this Addendum and ending
December 31, 2006, any of the terms of a 3M-pops Manager's Management
Agreement or Services Agreement are amended in any manner for any reason to
be more favorable to the 3M-pops Manager than the terms of Manager's
Management Agreement or Services Agreement are to Manager, subject to the
following:
(a) All of the Alamosa Managers must elect to accept all, but not
less than all, of the terms of the 3M-pops Manager's Management
Agreement and Services Agreement agreed to since the Effective Date
(including accepting existing terms that relate to the changes or
terms that were previously changed and not previously accepted by
Manager but that remain a part of the latest version of the 3M-pops
Manager's agreement) (collectively, but excluding the changes
described in paragraphs (b) and (c) below, the "OVERALL CHANGES"),
(b) Manager will not be required to accept any changes involving
payment of specific disputed amounts arising under the
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Management Agreement or Services Agreement of the 3M-pops Manager, and
(c) No amendments in Manager's Management Agreement and Services
Agreement will be made to reflect changes made in a 3M-pops Manager's
Management Agreement and Services Agreement if such changes are:
(i) made solely because the 3M-pops Manager owns spectrum on
which all or a portion of its network operates, unless the
3M-pops Manager acquired this spectrum from Sprint PCS or its
Related Parties after the Effective Date, or
(ii) compelled by a law, rule or regulation that applies to
the 3M-pops Manager, but not to Manager, or
(iii) made solely to modify the build-out plan.
Sprint PCS will prepare and deliver to Manager either an addendum
containing the Overall Changes that have been made to the 3M-pops
Manager's agreements in all of its addenda or copies of the 3M-pops
Manager's amended and restated Management Agreement, Services
Agreement and Trademark License Agreements (in each case redacted to
protect the identity of the 3M-pops Manager) within 10 Business Days
after the later of the effective date expressly stated in the addendum
or other instrument containing these changes and the date of the
addendum or other instrument. Manager then has 30 days to notify
Sprint PCS that Manager wants the Overall Changes.
If Manager does not notify Sprint PCS in this 30-day time period
in writing that it wants the Overall Changes, no changes will be made
in the agreements between Manager and Sprint PCS and Manager will be
deemed to have waived its rights under this section 1.10 with respect
to the Overall Changes.
If Manager notifies Sprint PCS within the 30-day period in
writing that it wants the Overall Changes, Sprint PCS will prepare,
execute and deliver to Manager an addendum reflecting the Overall
Changes. The new addendum will have the same effective date as the
addendum or the restated Management Agreement, Services Agreement and
Trademark License Agreements between Sprint PCS and the 3M-pops
Manager that gave rise to the new addendum. For purposes of
clarification, if the addendum or other instrument between Sprint PCS
and the 3M-pops Manager provides or defines a specific date that is
the effective date of that addendum or other instrument then the
effective date of the new addendum will be the same as that specific
date. Manager will have 15 days to review the new
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addendum and notify Sprint PCS if Manager determines any inaccuracies
are reflected in the new addendum. Sprint will correct those
inaccuracies and provide a corrected new addendum to Manager within 10
Business Days after Manager's notification.
No changes will be made in the agreements between Manager and
Sprint PCS if all the Alamosa Managers do not execute and return their
respective signed addenda within 30 days after receipt of the signed
addenda (or the corrected signed addenda, if applicable, pursuant to
the previous paragraph), in which case Manager will be deemed to have
waived its rights under this section 1.10 with respect to the Overall
Changes contained in the addendum presented.
If Manager and Sprint PCS disagree as to whether the terms of the
signed addendum accurately reflect the Overall Changes, then the
parties will submit to binding arbitration in accordance with section
14.2, excluding the escalation process set forth in section 14.1. If
the arbiter rules in favor of Manager, then Sprint PCS will make
changes to the signed addendum that are necessary to reflect the
arbiter's ruling and submit the revised signed addendum to Manager
within 10 days after receipt of the arbiter's ruling. If the arbiter
rules in favor of Sprint PCS, then Manager will execute the signed
addendum as proffered to Manager within 10 days after Manager's
receipt of the arbiter's ruling.
The parties acknowledge that Sprint PCS can disclose to Manager
who the 3M-pops Manager is that gave rise to the proposed addendum
only if the 3M-pops Manager agrees to the disclosure.
9. REVISED BUILDOUT PLAN [ADDM VII,SS.1]. Section 2.1 is supplemented with
the following language:
(a) REVISED EXHIBITS. Exhibit 2.1 attached to Addendum VII supersedes
and replaces Exhibit 2.1 attached to Addendum V. Exhibit 2.1 includes:
(i) Buildout Plan Map which distinguishes between the Minimum
Launch Footprint (as defined below) and Full Buildout
Coverage;
(ii) Buildout Plan Table which distinguishes between the Minimum
Launch Footprint (as defined below) and the Full Buildout
Coverage and sets forth the Contractual Launch Date and Full
Buildout Date for each A Market and B Market; and
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(iii) Buildout Plan Description.
(b) PENALTY, HARD LAUNCH
Each penalty described in this subsection will begin accruing at 12:01
am (Kansas City time) on the date six calendar days after the Contractual
Launch Date set forth in Exhibit 2.1 for that respective market (each a
"PENALTY DATE").
The A Markets Penalty Amount equals the amount set forth on the
following Penalty Table opposite the appropriate range of number of days
from and including the Contractual Launch Date to and including the date of
the latest A Market to achieve Hard Launch.
The B Markets Penalty Amount equals the amounts set forth on the
following Penalty Table opposite the appropriate range of number of days
from and including the Full Buildout Date to and including the date of each
B Market to achieve Hard Launch. The B Markets Penalty Amount is the sum of
each individual B Market that launches past the respective Contractual
Launch Date; each individual B Market has a separate penalty amount.
HARD LAUNCH PENALTY TABLE
- ------------------------------------ ------------------------------------ -----------------------------------
Penalty Period A Markets Penalty Amount B Markets Penalty Amounts
- ------------------------------------ ------------------------------------ -----------------------------------
6-60 days past the Contractual 3% of Available EBV 1% of Available EBV multiplied by
Launch Date the Proration Factor for each B
market
- ------------------------------------ ------------------------------------ -----------------------------------
61-90 days past the Contractual 5% of Available EBV 1.5% of Available EBV multiplied
Launch Date by the Proration Factor for each
B market
- ------------------------------------ ------------------------------------ -----------------------------------
91-120 days past the Contractual 6% of Available EBV 2% of Available EBV multiplied by
Launch Date the Proration Factor for each B
market
- ------------------------------------ ------------------------------------ -----------------------------------
121-150 days past the Contractual 9% of Available EBV 3% of Available EBV multiplied by
Launch Date the Proration Factor for each B
market
- ------------------------------------ ------------------------------------ -----------------------------------
151-180 days past the Contractual 12% of Available EBV 4% of Available EBV multiplied by
Launch Date the Proration Factor for each B
market
- ------------------------------------ ------------------------------------ -----------------------------------
(c) PENALTY, FULL BUILDOUT.
Each penalty described in this subsection will begin accruing at 12:01
am (Kansas City time) on the date six calendar days after the Full Buildout
Date set forth in Exhibit 2.1 for that respective market (each also a
"PENALTY DATE").
The A Markets Penalty Amount equals the amount set forth on the
following Penalty Table opposite the appropriate range of number of days
from
15
and including the Full Buildout Date to and including the date of the
latest A Market to achieve Full Buildout Coverage.
The B Markets Penalty Amount equals the amounts set forth on the
following Penalty Table opposite the appropriate range of number of days
from and including the Full Buildout Date to and including the date of each
B Market to achieve Full Buildout Coverage. The B Markets Penalty Amount is
the sum of each individual B Market in which Full Buildout Coverage occurs
past the respective Full Buildout Date; each individual B Market has a
separate penalty amount.
FULL BUILDOUT PENALTY TABLE
- ------------------------------------ ------------------------------------ -----------------------------------
Penalty Period A Markets Penalty Amount B Markets Penalty Amounts
- ------------------------------------ ------------------------------------ -----------------------------------
6-60 days past the Contractual 1.5% of Available EBV .5% of Available EBV multiplied
Launch Date by the Proration Factor for each
B market
- ------------------------------------ ------------------------------------ -----------------------------------
61-90 days past the Contractual 2.5% of Available EBV .75% of Available EBV multiplied
Launch Date by the Proration Factor for each
B market
- ------------------------------------ ------------------------------------ -----------------------------------
91-120 days past the Contractual 3% of Available EBV 1% of Available EBV multiplied by
Launch Date the Proration Factor for each B
market
- ------------------------------------ ------------------------------------ -----------------------------------
121-150 days past the Contractual 4.5% of Available EBV 1.5% of Available EBV multiplied
Launch Date by the Proration Factor for each
B market
- ------------------------------------ ------------------------------------ -----------------------------------
151-180 days past the Contractual 6% of Available EBV 2% of Available EBV multiplied by
Launch Date the Proration Factor for each B
market
- ------------------------------------ ------------------------------------ -----------------------------------
(d) PAYMENT OF PENALTY AMOUNTS.
(i) Manager will pay the aggregate penalty amounts on or before
the date five business days after the date the last A
Market or B Market achieves Full Buildout Coverage (the
"ASSESSMENT DATE").
(ii) If the Assessment Date occurs prior to both March 31, 2001
and the closing of a Change of Control Transaction, the
Assessment Date will be extended to the earlier of (a) the
date that a Change of Control Transaction closes or (b)
five business days after the Entire Business Value of
Manager, as determined in accordance with the Management
Agreement, is determined (which earlier date is the
"PAYMENT DATE").
16
(iii) Manager will also owe Additional Interest on the individual
penalty amounts, which Additional Interest is payable in
the same manner as the penalty amounts (e.g., timing and
form of payment).
(iv) Manager will pay the aggregate penalty amounts in cash or
in Manager Shares, at Sprint PCS's election. Payments of
cash will be made via wire transfer instruction provided to
Manager by Sprint PCS.
(v) If the Assessment Date has not occurred as of the date of
the closing of a Change of Control Transaction, Manager
will place Manager Shares in escrow for the benefit of
Sprint PCS in an amount sufficient to cover the penalty
amounts.
(e) WAIVER OF CURE RIGHTS.
(i) If Manager does not achieve Hard Launch or Full Buildout
Coverage, as applicable, in a market by midnight on the
90-Day Threshold, Manager will be in breach of a material
term of the Management Agreement. Accordingly, Sprint PCS
may declare an Event of Termination under the Management
Agreement, and Manager waives any right to a cure period
set forth in section 11.3.3.
(ii) If Sprint PCS does not declare in writing an Event of
Termination within ten business days after the 90-Day
Threshold, Sprint PCS waives its right to declare an Event
of Termination based on Manager's failure to meet a
Contractual Launch Date or Full Buildout Date, as
applicable, until the 180-Day Threshold. If Manager does
not achieve Hard Launch or Full Buildout Coverage, as
applicable, in a market by the 180-Day Threshold, Manager
will be in breach of a material term of the Management
Agreement. Accordingly, Sprint PCS may declare an Event of
Termination under the Management Agreement, and Manager
waives any right to a cure period set forth in section
11.3.3.
(f) DEFINITIONS.
17
"90-DAY THRESHOLD" means the date 90 calendar days after the
Contractual Launch Date or the Full Buildout Date, as applicable, for a
respective A Market or B Market.
"180-DAY THRESHOLD" means the date 180 calendar days after the
Contractual Launch Date or the Full Buildout Date, as applicable, for a
respective A Market or B Market.
"A MARKETS" means Springfield (BTA #428), Joplin (BTA #220) and Cape
Girardeau (BTA #66).
"ADDITIONAL INTEREST" means the sum of the products of (a) each
individual penalty amount, multiplied by (b) 14% per annum, multiplied by
(c) the number of calendar days from the respective Penalty Date to the
Payment Date, inclusive, divided by 365.
"AVAILABLE EBV" means either:
(i) if no Change of Control Transaction has closed by March 31,
2001, 80% of Entire Business Value of Manager, as
determined in accordance with the Management Agreement,
except that the Manager will pay all of the costs of
determining Entire Business Value, which includes, but is
not limited to, the cost of all parties' appraisers
(Available EBV will be determined as of a date, no later
than April 12, 2001 and completed by May 30, 2001); or
(ii) if a Change of Control Transaction closes on or before
March 31, 2001, 80% of the product of (a) 13,500,000
multiplied by (b) the closing share price of publicly
issued equity of Alamosa Holdings, Inc. on the date of the
closing of the Change of Control Transaction.
"B MARKETS" means Rolla (BTA #383), Poplar Bluff (BTA #355),
Carbondale (BTA #67), Quincy/Hannibal (BTA #367), and Kirksville (BTA
#230).
"CHANGE OF CONTROL TRANSACTION" means a transaction that results in a
Change of Control, as defined in the Management Agreement, of Manager.
"CHIEF FINANCIAL OFFICER OF SPRINT PCS", "SPRINT PCS CHIEF FINANCIAL
OFFICER" and other references to the Chief Financial Officer of Sprint PCS
mean the Senior Vice President - Finance of Sprint Corporation designated
to serve as
18
the chief financial officer of Sprint PCS or if none, the individual
serving in that capacity.
"CONTRACTUAL LAUNCH DATE" means the date set forth on the Buildout
Plan Table portion of Exhibit 2.1.
"FULL BUILDOUT COVERAGE" means network coverage of the geographic area
described in Exhibit 2.1 in which commercial Sprint PCS service is offered,
consistent with Sprint PCS standards and Program Requirements.
"FULL BUILDOUT DATE" means the date set forth on the Buildout Plan
Table portion of Exhibit 2.1.
"HARD LAUNCH" means, for each market, that (i) Manager has met all
Sprint PCS standards and Program Requirements for operational and network
readiness (which includes but is not limited to completion of the OPAC
checklist, OPAC process, test plans, coverage definition, assessment of
site readiness, network optimization, operational and systems readiness
assessment by the Sprint PCS Operational Readiness Team); (ii) Manager has
handset inventory, training completed and point-of-sale materials for
Sprint PCS, Sprint PCS National Third Party and local third party retail
outlets in the Minimum Launch Footprint to meet reasonably expected
subscriber demand; (iii) Manager markets and sells Sprint PCS Products and
Services through mass advertising (i.e., print, radio and television
media); (iv) the Minimum Launch Footprint is complete; and (v) Manager has
met all Sprint PCS soft launch criteria which means (a) systems are up and
functioning, stores are operational (and open), and activations can occur,
(b) soft launch typically occurs one week after network ready date, and one
week before Hard Launch, (c) activations of friendly accounts may occur,
but any store traffic is strictly unsolicited; (d) launch-related hiring
and training should be completed prior to soft launch.
"MANAGER SHARES" are defined as the number of shares calculated by
multiplying (i) the percentage of Manager's told equity equivalent to the
penalty amount (i.e., the percentage calculated by dividing the dollar
amount of the penalty by the dollar amount of Manager's total equity) by
(ii) either (a) the membership interests of Manager, of no Change of
Control Transaction has closed by March 31, 2001, or (b) the number of
shares granted to Manager's members as consideration for their interests in
Manager as a result of such change of control, if a Change of Control
Transaction closes on or before March 31, 2001.
"MINIMUM LAUNCH FOOTPRINT" means the geographic area described in
Exhibit 2.1 in which commercial Sprint PCS service is offered, consistent
with Sprint PCS standards and Program Requirements.
19
"PRORATION FACTOR" means a number between 0 and 1 that is calculated
by dividing the covered pops of an individual B Market by the total covered
pops of all B Markets, and then multiplying this amount by the Priority
Factor, Proration Factors are set forth in Exhibit 2.1.
"PRIORITY FACTOR" is a number between 0 and 2. Priority Factors are
set forth in Exhibit 2.1.
10. EXCLUSIVITY OF SERVICE AREA [ADDM VIII,SS.5]. In section 2.3 and the
Schedule of Definitions, the phrase "wireless mobility communications network"
is replaced by the phrase "Wireless Mobility Communications Network".
11. COVERAGE ENHANCEMENT [ADDM XI,SS.11]. Section 2.5 is replaced by the
following language:
2.5 MANAGER'S RIGHT OF FIRST REFUSAL FOR NEW COVERAGE BUILD-OUT.
Sprint PCS grants to Manager the right of first refusal to build-out New
Coverage. Sprint PCS will give to Manager a written notice of a New
Coverage within the Service Area that Sprint PCS decides should be
built-out. Manager must communicate to Sprint PCS within 90 days after
receipt of the notice whether it will build-out the New Coverage.
If Manager decides to build-out the New Coverage then Manager and
Sprint PCS will diligently negotiate and execute an amendment to the
Build-out Plan and proceed as set forth in sections 2.1 and 2.2. The
amended Build-out Plan will contain critical milestones that provide
Manager a commercially reasonable period in which to implement coverage in
the New Coverage. In determining what constitutes a "commercially
reasonable period" as used in this paragraph, the parties will consider
several factors, including local zoning processes and other legal
requirements, weather conditions, equipment delivery schedules, the need to
arrange additional financing, and other construction already in progress by
Manager. Manager will construct and operate the network in the New Coverage
in accordance with the terms of this agreement.
If Manager (i) does not communicate to Sprint PCS within such 90-day
period that it will build out the New Coverage, (ii) fails to agree with
Sprint PCS upon the amended Build-Out Plan, or (iii) fails to build-out the
New Coverage in accordance with the amended Build-Out Plan, then Sprint PCS
shall be entitled to (A) build-out the New Coverage itself or allow a
Sprint PCS Related Party to do so, or (B) offer third parties (including
Other Managers) the right to build-out the New Coverage on terms and
conditions that are no more favorable than those that were offered to and
rejected by Manager. If (x) neither Sprint PCS, a Sprint PCS Related Party,
nor any third party (with respect to such third party, on terms and
conditions that are no more favorable than those that were offered to and
rejected by Manager) commits to build-out such New Coverage within 150 days
of the original communication to Manager with respect thereto, or (y) more
favorable
20
terms and conditions than those that were offered to and rejected by
Manager are offered to any third party to build-out the New Coverage, then
any build-out of such New Coverage shall again be subject to Manager's
right of first refusal (and, if applicable, on such more favorable terms
and conditions).
Sprint PCS has the right, in a New Coverage that it constructs or that
is constructed by a third party, to manage the network, allow a Sprint PCS
Related Party to manage the network, or hire a manager to operate the
network in the New Coverage. Any New Coverage that Sprint PCS or a third
party builds out is deemed removed from the Service Area and the Service
Area Exhibit is deemed amended to reflect the change in the Service Area.
If Manager does not exercise its right of first refusal with respect to a
New Coverage, Manager's right of first refusal does not terminate with
respect to the remainder of the Service Area.
12. LONG DISTANCE PRICING [ADDM XI,SS.12]. Section 3.4 of the Management
Agreement is amended and restated in its entirety to read as follows:
3.4 IXC SERVICES.
3.4.1. CUSTOMER LONG DISTANCE. Sprint PCS and Manager will from time
to time mutually define local calling areas in the Service Areas of Manager
that Sprint PCS and Manager will use to determine when a customer will be
billed for a "long distance call" under the applicable rate plan of the
Customer. The parties acknowledge that these local calling areas (i) may
change in geographic scope in response to competitive pressures or
perceived market opportunities, and (ii) may not be able to be changed
because of regulatory, industry, or system limitations. The parties will
not use local calling areas to determine "long distance telephony services"
under section 3.4.2. If the parties cannot agree on the extent of the local
calling area they will resolve the matter through the dispute resolution
process in section 14.
3.4.2. LONG DISTANCE SERVICES
(a) Required purchase. Manager must obtain (i) long-distance telephony
services through Sprint PCS or its Related Parties to provide long-distance
service to users of the Sprint PCS Network and (ii) telephony services
through Sprint PCS or its Related Parties to connect the Service Area
Network with the national platforms that Sprint PCS uses to provide
services to Manager under this agreement or the Services Agreement. The
term "long distance telephony service" means any inter-LATA call for
purposes of this section 3.4.2 as it relates to long-distance telephony
services provided to users of the Sprint PCS Network.
21
(b) Pricing and procedure. Sprint PCS will purchase for Sprint PCS,
Manager and Other Managers long-distance telephony services used in the
Sprint PCS Network from Sprint Communications Company L.P. or its Related
Parties ("SCCLP"). Sprint PCS will purchase these long-distance telephony
services at a price and terms at least as favorable to Sprint PCS, Manager
and the Other Managers (considering Sprint PCS, Manager and the Other
Managers as a single purchaser) as the best prices and terms SCCLP offers
to any wholesale customer of SCCLP in similar situations when taking into
account all relevant factors (e.g., volume, peak/off-peak usage, length of
commitment). Sprint PCS will pay the invoice from SCCLP, except for items
that SCCLP directly bills under section 3.4.2(c). Sprint PCS will bill to
Manager as an activity settled separately under the Services Agreement the
portion of the fees billed to Sprint PCS that relate to Manager's
operations and the activity of all Customers and Reseller Customers in the
Service Area, except for items SCCLP directly bills under section 3.4.2(c).
If Sprint Corporation no longer has its "PCS" tracking stock, Sprint
PCS will include the volume of long-distance telephony services of Manager
and Other Managers with the volume of Sprint PCS when negotiating the
Sprint PCS rate with the long distance division of Sprint Corporation
(currently SCCLP). The long distance division will continue to provide
long-distance telephony services to Sprint PCS for a price and upon terms
based on the same relevant factors described in the preceding paragraph and
in the same manner that it has under the present tracking stock policy.
(c) Call routing. Manager, acting as a single purchaser, may purchase
private line capacity (or other forms of capacity) from SCCLP for
inter-LATA calls to the extent that this capacity can be obtained on terms
more favorable to Manager (acting as a single purchaser). SCCLP will sell
that capacity to Manager at the best price that SCCLP offers to third
parties in similar situations when taking into account all relevant
factors. SCCLP will directly bill Manager for any purchase of capacity
under this section 3.4.2(c). The terms of section 1.3 do not apply to
purchases of capacity in this section 3.4.2(c).
(d) Pre-existing agreement. If before the date Addendum X to this
agreement is signed, Manager is bound by an agreement for long distance
services or an agreement for private line service and the agreement was not
made in anticipation of this agreement or Addendum X, then the requirements
of this section 3.4.2 do not apply during the term of the other agreement.
If the other agreement terminates for any reason, then the requirements of
this section 3.4.2 do apply from and after the termination.
22
(e) Resale. Manager may not resell the long-distance telephony
services acquired under this section 3.4.2. For purposes of clarification,
resale under this section 3.4.2(e) includes Manager selling minutes to
carriers for ultimate resale to end users under a brand other than "Sprint"
or selling minutes to end users under a brand other than "Sprint". Manager
may engage in the following activities (i.e., these activities are not
treated as resale of long-distance telephony services):
(1) the transport of long-distance calls for Customers under
section 3.4.2(a),
(2) the transport of long-distance calls for resellers under
section 3.5, and
(3) the transport of long-distance calls for roaming under
section 4.3.
13. VOLUNTARY RESALE OF PRODUCTS AND SERVICES [NEW]. Schedule 1 attached to
this Addendum replaces and supersedes the heading, preamble, general terms and
all attachments to the Program Requirement 3.5.2 dated August 13, 2002, which is
labeled "Exhibit 3.5.2 Program Requirement for Voluntary Resale of Products and
Services By Voluntary Resellers Under the Private Label Solutions Program".
Program Requirement 3.5.2 - VMU which is labeled "Exhibit 3.5.2 - VMU Program
Requirements for Voluntary Resale of Products and Services by Virgin Mobile USA,
LLC (version 7/07/02)" continues in effect, as amended from time to time, except
its label is amended to read "Program Requirement 3.5.2 - VMU Program
Requirements for Resale of Products and Services By Virgin Mobile USA, LLC
(version 7/07/02)".
Section 3.5.2 to the Management Agreement is amended and restated in its
entirety to read as follows:
3.5.2 RESALE OF PRODUCTS AND SERVICES. Sprint PCS may choose to offer
a resale product under which resellers will resell Sprint PCS Products and
Services under brand names other than the Brands, except Sprint PCS may
permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The
resellers may also provide their own support services (e.g., customer care
and billing) or may purchase the support services from Sprint PCS. Other
terms of the resale program are governed by Program Requirement 3.5.2.
Manager will continue to participate in any resale arrangements that,
before April 1, 2004, Manager had opted into under the Program Requirement
3.5.2, effective as of January 1, 2004, and before the amendment to the
Program Requirement 3.5.2 by this Addendum, except that those resale
arrangements will be governed by Program Requirement 3.5.2 as amended by
this Addendum.
23
Compensation for Manager's participation in these resale arrangements will
be paid to Manager in accordance with section 10.4.1.1(a)(i) of this
agreement, unless compensation was otherwise negotiated between Manager and
Sprint PCS (e.g., Virgin Mobile USA).
Manager will participate in all resale arrangements entered into,
renewed or extended during the Required Resale Participation Period
(regardless of whether Manager was participating in the resale arrangement
on or before April 1, 2004) in all cases with compensation being paid to
Manager as set forth in section 10.4.1.1(a)(ii) or (iii), whichever is
applicable. Additionally, Manager will continue to support resale
arrangements entered into, renewed or extended during the Required Resale
Participation Period to the end of their respective terms. Sprint PCS
agrees that the compensation, payment and other terms and conditions under
each resale arrangement entered into, renewed or extended during the
Required Resale Participation Period will be the same as the compensation,
payment and other terms and conditions applicable to Sprint PCS and each
Other Manager with respect to such reseller.
The resale arrangement between Sprint PCS and Virgin Mobile USA will
be treated as a new resale arrangement and subject to the compensation set
forth in section 10.4.1.1(a)(ii) or (iii), whichever is applicable, if
continued after the expiration of the initial term of the arrangement.
Except as required under the regulations and rules concerning
mandatory resale, Manager may not sell Sprint PCS Products and Services for
resale unless Sprint PCS consents to such sales in advance in writing.
14. INTRA-LATA CALLS AND BACKHAUL SERVICES [ADDM XI,SS.14]. Section 3.7 is
amended and restated in its entirety to read as follows:
3.7 INTRA-LATA CALLS AND BACKHAUL SERVICES. Manager, acting as a
single purchaser, may purchase capacity (including private line capacity)
from SCCLP for intra-LATA calls and backhaul services. SCCLP will sell that
capacity to Manager at the best price that SCCLP offers to third parties in
similar situations when taking into account all relevant factors.
Manager will offer to Sprint PCS or one of its Related Parties the
right to make to Manager the last offer to provide capacity for intra-LATA
calls and backhaul services for the Service Area Network if:
(i) Manager decides to use third parties for intra-LATA calls and
backhaul services rather than self-provisioning the capacity or
purchasing the capacity from Related Parties of Manager, and
24
(ii) Sprint PCS or one of its Related Parties has provided
evidence to Manager that SCCLP or one of its Related Parties has
facilities to provide the capacity requested.
Manager will deliver to Sprint PCS the terms under which the third
party will provide the capacity. Sprint PCS or one of its Related Parties
will have a reasonable time to respond to Manager's request for last offer
to provide pricing for capacity for intra-LATA calls and backhaul, which
will be no greater than 5 Business Days after receipt of the request for
the pricing and the third party's terms from Manager. Manager will acquire
capacity for intra-LATA calls and backhaul services from Sprint PCS or one
of its Related Parties if Sprint PCS or one of its Related Parties offers
Manager pricing and other terms for intra-LATA calls and backhaul services
for the Service Area Network that matches the terms, including pricing, or
is better than the terms and lower than the pricing offered by the third
party. For purposes of this section 3.7, the term "backhaul" means the
provision of services from a cell site of Manager to the corresponding
switch associated with the cell site.
If Manager has an agreement for these services in effect as of the
date Addendum X is signed and the agreement was not made in anticipation of
this agreement or Addendum X, then the requirements of this section 3.7 do
not apply during the term of the other agreement. If the other agreement
terminates for any reason, then the requirements of this section 3.7 do
apply from and after the termination.
15. SPRINT PCS ROAMING AND INTER SERVICE AREA PROGRAM REQUIREMENTS [ADDM
XI,SS.14]. The second paragraph of section 4.3 is amended to read as follows:
Section 10.4.1 sets forth the settlement process that distributes
between the members making up the Sprint PCS Network (i.e., Sprint PCS,
Manager and all Other Managers) a fee for use of the Sprint PCS Network and
the Service Area Network (the "INTER SERVICE AREA FEE").
16. CHANGES TO PROGRAM REQUIREMENTS [ADDM XI, SS.15].
(a) The first sentence of section 9.2(e) is amended to read as follows:
Manager must implement any changes in the Program Requirements within
a commercially reasonable period of time unless otherwise consented to by
Sprint PCS, subject to the terms of section 9.3.
(b) Section 9.3 is amended to read as follows:
25
9.3 MANAGER'S RIGHTS REGARDING CHANGES TO PROGRAM REQUIREMENTS.
9.3.1 PARAMETERS FOR REQUIRED PROGRAM REQUIREMENT IMPLEMENTATION.
Manager has the right to decline to implement any new Program Requirement
or any change to any existing Program Requirement (a "PROGRAM REQUIREMENT
CHANGE") if Manager determines that any such Program Requirement Change,
other than a change involving Sprint PCS National or Regional Distribution
Program Requirements, will have an adverse impact on Manager that meets or
exceeds the parameters set forth below in subparagraphs (a) through (d).
For purposes of this section 9.3 a Program Requirement Change will include
any change in any "guidelines," "policies," "standards" or "specifications"
proposed by Sprint PCS under this agreement, the Services Agreement or
either of the Trademark License Agreements, and the exercise by Sprint PCS
of any unilateral right under those agreements, except changes to the
Trademark Usage Guidelines, the Marketing Communications Guidelines, or the
definition of Sprint PCS Products and Services (other than the pricing of
those products and services, i.e. pricing is a Program Requirement Change).
If Manager determines to decline to implement any Program Requirement
Change, other than a change involving a national distribution program, then
Manager must, within 10 days after Sprint PCS provides Manager with notice
of the Program Requirement Change, give Sprint PCS (i) a written assessment
of the impact of the Program Requirement Change on Manager using the
parameters set forth in subparagraphs (a) through (d) below, and (ii)
written notice that Manager declines to implement the Program Requirement
Change. Manager may, without being deemed in default of this agreement,
decline to implement any Program Requirement Change that will:
(a) individually cause the combined peak negative cash flow of the
Alamosa Managers to be an amount greater than 3% of Alamosa Holdings,
Inc.'s Enterprise Value; or
(b) when combined with the original assessments made in accordance
with section 9.3.1(a) of all other Program Requirement Changes that Sprint
PCS announced and the Alamosa Managers agreed to implement, both within the
preceding 12 calendar months, cause the combined cumulative peak negative
cash flow of the Alamosa Managers to be an amount greater than 5% of
Alamosa Holdings, Inc.'s Enterprise Value; or
(c) individually cause a decrease in the forecasted 5-year discounted
cash flow of the Alamosa Managers (at the Alamosa Managers'
26
appropriate discount rate) of more than 3% on a combined net present value
basis; or
(d) when combined with the original assessments made in accordance
with section 9.3.1(c) of all other Program Requirement Changes that Sprint
PCS announced and Manager agreed to implement, both within the preceding 12
calendar months, cause a decrease in the forecasted 5-year discounted cash
flow of the Alamosa Managers (at the Alamosa Managers' appropriate discount
rate) of more than 5% on a combined net present value basis.
Manager may discuss with Sprint PCS in the manner described in section
9.7(c) any change that does not meet or exceed the parameters set forth in
this section 9.3.1, except any change involving Sprint PCS National or
Regional Distribution Program Requirements.
9.3.2. DISAGREEMENT WITH ASSUMPTIONS OR METHODOLOGY. Sprint PCS must
notify Manager of any disagreement with Manager's assumptions or
methodology within 10 days after its receipt of Manager's assessment under
section 9.3.1. Manager will not be required to implement the Program
Requirement Change if Sprint PCS fails to notify Manager of any
disagreement within such 10-day period unless Sprint PCS elects to require
such compliance under section 9.3.3 below. Either party may escalate the
review of the assumptions and methodology underlying the assessment to the
parties' respective Chief Financial Officers if Sprint PCS disagrees with
Manager's assessment and the parties are unable to agree on the assumptions
and methodology within 20 days after Sprint PCS notifies Manager of the
disagreement.
The parties will mutually select an independent investment banker in
the wireless telecommunications industry ("INVESTMENT BANKER") to determine
whether the implementation of the Program Requirement Change will exceed
one of the parameters if Sprint PCS and Manager are unable to agree on the
assumptions and methodology to perform the calculations within 30 days
after Sprint PCS notifies Manager of the disagreement. The American
Arbitration Association will select the Investment Banker if the parties do
not select the Investment Banker within 50 days after Sprint PCS notifies
Manager of the disagreement. Sprint PCS and Manager will cooperate fully
and provide all information reasonably requested by the Investment Banker;
except that any Investment Banker selected by the American Arbitration
Association, and its investment bank, must have no current engagement with
either Manager or Sprint PCS and must not have been engaged by either such
party within the 12 calendar months preceding the engagement under this
section. A business relationship between Manager or Sprint PCS and a
27
commercial bank or other organization affiliated with an investment bank
will not disqualify the investment bank. Sprint PCS and Manager will
cooperate fully and provide all information reasonably requested by the
Investment Banker. The Investment Banker will have 20 days from the date of
engagement to make its decision.
Manager will pay any Investment Banker's fees and implement the
Program Requirement Change if the parties agree or the Investment Banker
determines that implementing the Program Requirement Change will not exceed
any of the parameters described in section 9.3.1.
9.3.3 ONE OR MORE PARAMETERS EXCEEDED. Sprint PCS will pay the
Investment Banker's fees if the parties agree or the Investment Banker
determines that implementing the Program Requirement Change will exceed at
least one of the parameters described in section 9.3.1. Sprint PCS may
require Manager to implement the Program Requirement Change whether the
parties agree or disagree or the Investment Banker determines that
implementing the Program Requirement Change will exceed at least one of the
parameters described in section 9.3.1, if Sprint PCS agrees to compensate
Manager the amount necessary to prevent Manager from exceeding the
parameters set forth in section 9.3.1.
9.3.4 CHANGES WITH RESPECT TO PRICING PLANS AND ROAMING PROGRAM
REQUIREMENTS. Manager will implement a Program Requirement Change in the
manner requested by Sprint PCS that
(i) relates to a pricing plan under section 4.4 or roaming
program and
(ii) Sprint PCS reasonably determines must be implemented on an
immediate or expedited basis to respond to competitive market forces,
notwithstanding Manager's determination that implementation of the Program
Requirement Change will have an adverse impact on Manager that meets or
exceeds the parameters set forth in section 9.3.1. Manager's implementation
of the Program Requirement Change will not adversely affect Manager's right
to object to the implementation of the Program Requirement Change. Manager
will continue to comply with the Program Requirement Change if the parties
agree or the Investment Banker determines that implementing the Program
Requirement Change will not exceed any of the parameters described in
section 9.3.1. If Sprint PCS does not successfully challenge Manager's
assessment of the adverse impact of the Program Requirement Change on
Manager in accordance with section 9.3.2, Sprint PCS can require Manager
either to (i) continue
28
to comply with the Program Requirement Change and compensate Manager in the
amount necessary to reimburse Manager for any reasonable costs, expenses or
losses that Manager incurred as a result of its implementation of the
Program Requirement Change net of any benefit received by Manager, to the
extent the costs, expenses and losses net of the benefits exceed the
parameters set forth in section 9.3.1 or (ii) terminate its continued
compliance with the Program Requirement Change and compensate Manager in
the amount necessary to reimburse Manager for any reasonable costs,
expenses or losses that Manager incurred as a result of its implementation
of the Program Requirement Change net of any benefit received by Manager.
Manager cannot terminate its continued compliance if Sprint PCS elects to
require Manager's continued compliance with the Program Requirement Change
under section 9.3.3 above.
(c) A new section 9.7 is added to the Management Agreement:
9.7 MANDATORY REQUIREMENTS; UNILATERAL CHANGES.
(a) Any "guidelines," "policies," "standards" or "specifications"
previously issued by Sprint PCS are mandatory requirements with which
Manager, the Other Managers and Sprint PCS must comply (subject to Sprint
PCS' right to grant waivers as provided in Article 9 of this agreement),
unless otherwise identified by Sprint PCS within 120 days after the date of
Addendum X.
(b) Any changes to or new "guidelines," "policies," "standards" or
"specifications" proposed by Sprint PCS under this agreement, the Services
Agreement or either of the Trademark License Agreements are mandatory
requirements with which Manager, the Other Managers and Sprint PCS must
comply (subject to Sprint PCS' right to grant waivers as provided in
Article 9 of this agreement). Sprint PCS will when issuing them reference
the applicable section of this agreement, the Services Agreement, the
Trademark License Agreements and if applicable, the Program Requirement to
which they relate.
(c) Sprint PCS and Manager will in good faith attempt to mutually
agree on how to mitigate the adverse economic impact on Manager of the
exercise of any unilateral right of Sprint PCS under this agreement, the
Services Agreement and either Trademark License Agreement to the extent
Manager believes such change will have a significant adverse economic
impact on Manager's operations, except with respect to changes involving
Sprint PCS National or Regional Distribution Program Requirements. For
purposes of clarification, the parties intend the preceding sentence to
obligate them to a robust discussion and open
29
dialogue but understand the discussion and dialogue may not lead to any
particular solution of the issues raised by Manager or Sprint PCS. By way
of illustration, under the second preceding sentence if Manager believed
that the exercise of the unilateral right to change the Trademark Usage
Guidelines or the designation of Sprint PCS Products and Services had an
adverse economic impact on Manager, then Manager and Sprint PCS will in
good faith attempt to mutually agree on how to mitigate the adverse impact
on Manager.
(d) A new section 9.8 is added to the Management Agreement.
9.8 BREACH FOR FAILURE TO IMPLEMENT PROGRAM REQUIREMENT.
Manager will be in material breach of a material term and Sprint PCS
may exercise its rights under section 11 if Manager declines to implement a
Program Requirement when required to do so under this agreement.
17. FEES [ADDM XI,SS.16; REVISED BY THIS ADDENDUM]. (a) Article 10 of the
Management Agreement is amended and restated in its entirety to read as follows:
10. FEES
10.1 GENERAL. Sprint PCS and Manager will pay to each other the fees
and apply the credits in the manner described in this section 10. The
amounts that Sprint PCS is paid or retains are for all obligations of
Manager under this agreement. Many of the definitions for the fees in
section 10.2 are found in section 10.3.
10.2 FEES.
10.2.1 FEE BASED ON BILLED REVENUE. Sprint PCS will pay to
Manager the Fee Based on Billed Revenue as determined in this section
10.2.1.
"BILLED REVENUE" is all customer account activity (e.g., all
activity billed, attributed or otherwise reflected in the customer account
but not including Customer Credits) during the calendar month for which the
fees and payments are being calculated (the "BILLED MONTH") for Sprint PCS
Products and Services related to all Customer accounts within a customer
service area ("CSA") assigned to the Service Area, except (i) Outbound
Roaming Fees, (ii) amounts handled separately in this section 10 (including
the amounts in sections 10.2.3 through 10.2.6, 10.4 and 10.8), (iii)
amounts collected from Customers and paid to governmental or regulatory
authorities (e.g., Customer Taxes and USF Charges), and (iv)
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other amounts identified in this agreement as not included in Billed
Revenue (these Customer accounts being "MANAGER ACCOUNTS").
Billed Revenue does not include new activity billed to the
Customer solely to recover costs incurred by Sprint PCS, Manager or both
related solely to such new activity. Manager and Sprint PCS will share the
revenues from this billing in proportion to the costs they incur.
For purposes of clarification, the parties have in place
procedures to assign Customers to CSAs and expect those procedures to
remain in place after the Effective Date.
If Sprint PCS or Manager develops products or services that
bundle Sprint PCS Products and Services with other products or services
(e.g., local service or broadband wireline service), then Sprint PCS and
Manager will use commercially reasonable efforts to agree on the proper
allocation of revenue, bad debt expenses, credits and promotions for the
bundled products and services.
Sprint PCS will reasonably determine the amount of credits
applied to Manager Accounts during the Billed Month ("CUSTOMER CREDITS").
"NET BILLED REVENUE" for a Billed Month is the amount of the
Billed Revenue less the Customer Credits.
The "FEE BASED ON BILLED REVENUE" for a Billed Month is equal to
92% of (a) Net Billed Revenue, less (b) the Allocated Write-offs for Net
Billed Revenue.
10.2.2 OUTBOUND ROAMING FEE. Sprint PCS will pay to Manager a fee
equal to the amount of Outbound Roaming Fees that Sprint PCS or its Related
Parties bills to Manager Accounts, less the Allocated Write-offs for
Outbound Roaming Fees. For purposes of clarification, Sprint PCS will
settle separately with Manager the direct cost of providing the capability
for the Outbound Roaming, including any amounts payable to the carrier that
handled the roaming call and the clearinghouse operator for Outbound
Roaming.
10.2.3 PHASE II E911 SURCHARGES. Sprint PCS will pay to Manager a
fee equal to a portion of the E911 Phase II Surcharges (attributable to
incremental costs for Phase II E911, including but not limited to related
handset costs, routing costs, implementation costs, trunks and testing
costs, and anticipated write-offs for bad debt) billed during the Billed
Month to Customers with an NPA-NXX assigned to the Service Area, less the
Allocated Write-offs for that portion of E911 Phase
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II Surcharges in the Billed Month. The portion of the billed amount
attributed to Manager will be based on Manager's proportional cost (as
compared to Sprint PCS' proportional cost) to comply with Phase II of the
E911 requirements. Sprint PCS will determine from time to time the rate
billed to Customers related to Phase II E911 and the portion payable to
Manager.
10.2.4 WIRELESS LOCAL NUMBER PORTABILITY SURCHARGES. Sprint PCS
will pay to Manager a fee equal to a portion of the Wireless Local Number
Portability Surcharges ("WLNP SURCHARGES") billed during the Billed Month
to Customers with an NPA-NXX assigned to the Service Area, less the
Allocated Write-offs for that portion of the WLNP Surcharges in the Billed
Month. The portion of the billed amount attributed to Manager will be based
on Manager's proportional cost (as compared to Sprint PCS' proportional
cost) to comply with Wireless Local Number Portability requirements. Sprint
PCS will determine from time to time the rate billed to Customers related
to WLNP Surcharges and the portion payable to Manager.
10.2.5 CUSTOMER EQUIPMENT CREDITS. Sprint PCS will apply as a
credit to any other fees under this section 10.2 owing by Sprint PCS to
Manager an amount equal to the amount of the Customer Equipment Credits
less the Allocated Write-offs for Customer Equipment Credits.
10.2.6 WRITE-OFFS FOR CUSTOMER EQUIPMENT CHARGES. Sprint PCS will
apply as a credit to any other fees under this section 10.2 owing by Sprint
PCS to Manager an amount equal to the amount of the Allocated Write-offs
for Customer Equipment Charges.
10.3 DEFINITIONS USED IN FEE CALCULATIONS
10.3.1 WRITE-OFFS. Sprint PCS will determine the amounts written
off net of deposits applied (the "WRITE-OFFS") in the Sprint PCS billing
system during the Billed Month relating to Manager Accounts.
10.3.2 BILLED COMPONENTS. Each of the following amounts is
referred to as a "BILLED COMPONENT" and collectively they are referred to
as the "BILLED COMPONENTS".
10.3.2.1 Net Billed Revenue. The amount determined as
described in section 10.2.1.
10.3.2.2 Customer Equipment Credits. The reductions of
amounts billed to Manager Accounts related to the sale of
32
handsets and handset accessories from Sprint PCS inventory are referred to
as "CUSTOMER EQUIPMENT CREDITS". This is a negative amount that reduces the
Amount Billed (Net of Customer Credits).
10.3.2.3 100% Affiliate Retained Amounts. The amounts
referred to as "100% Affiliate Retained Amounts" on Exhibit 10.3, to which
Manager is entitled to 100% of the amounts that Customers are billed for
such items.
10.3.2.4 100% Sprint PCS Retained Amounts. The amounts
referred to as "100% Sprint PCS Retained Amounts" on Exhibit 10.3, to which
Sprint PCS is entitled to 100% of the amounts that Customers are billed for
such items.
10.3.2.5 Customer Equipment Charges. The amounts that Sprint
PCS bills to Manager Accounts for subscriber equipment and accessories sold
or leased are referred to as "CUSTOMER EQUIPMENT CHARGES".
10.3.2.6 E911 Phase II Surcharges. The amounts that Sprint
PCS bills to Manager Accounts to recover all costs related to Phase II E911
functionality are referred to as "E911 PHASE II SURCHARGES".
10.3.2.7 USF Charges. The amounts that Sprint PCS bills to
Manager Accounts relating to Universal Service Funds are referred to as
"USF CHARGES".
10.3.2.8 WLNP Surcharges. The amounts that Sprint PCS bills
to Manager Accounts to recover costs related to WLNP activities.
10.3.3 AMOUNT BILLED (NET OF CUSTOMER CREDITS). The "AMOUNT
BILLED (NET OF CUSTOMER CREDITS)" for a Billed Month is equal to the sum of
the Billed Components.
10.3.4 THE ALLOCATED WRITE-OFFS. The "ALLOCATED WRITE-OFFS" for
all or a portion of a Billed Component in a Billed Month is the Write-offs
for the Billed Month times the amount of the Billed Component (or portion
thereof) divided by the Amount Billed (Net of Customer Credits).
10.4 OTHER FEES AND PAYMENTS. Sprint PCS and Manager will pay to each
other the fees and payments described below:
10.4.1 INTER SERVICE AREA FEES AND RESELLER CUSTOMER FEES.
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10.4.1.1 Inter Service Area Fee and Reseller Customer Fee
Paid. Manager will pay to Sprint PCS an Inter Service Area Fee as set forth
in this section 10.4.1 for each billed minute or kilobyte of use that a
Customer with an NPA-NXX assigned to the Service Area uses a portion of the
Sprint PCS Network other than the Service Area Network. Sprint PCS will pay
to Manager an Inter Service Area Fee for each billed minute or kilobyte of
use that a Customer whose NPA-NXX is not assigned to the Service Area
Network uses the Service Area Network.
(a) Sprint PCS will pay to Manager the fees set forth in this
Section 10.4.1 for each billed minute or kilobyte of use that a
Reseller Customer uses the Service Area Network unless otherwise
negotiated (such fees are referred to in this agreement as "RESELLER
CUSTOMER FEES"):
(i) with respect to arrangements between Sprint PCS and
resellers in existence as of April 1, 2004, that Manager has
opted into other than Virgin Mobile USA, the amount of fees set
forth in subsections 10.4.1.2 and 10.4.1.3, and with respect to
Virgin Mobile USA, the amount of fees set forth in Program
Requirement 3.5.2 - VMU; except, that the resale arrangement
between Sprint PCS and Virgin Mobile USA will each be treated as
a new resale arrangement and subject to the compensation set
forth in section 10.4.1.1(a)(ii) or (iii), whichever is
applicable, if continued after the expiration of the initial term
of the arrangement;
(ii) with respect to arrangements between Sprint PCS and
resellers that are entered into after April 1, 2004 and before
January 1, 2007, or that are renewed or extended during that
period, the amount of fees collected by Sprint PCS from the
resellers as payment for the Reseller Customer's use of the
Service Area Network; and
(iii) with respect to arrangements between Sprint PCS and
resellers that are entered into, renewed or extended during the
three-year period beginning on January 1, 2007, or a subsequent
three-year period beginning on the third anniversary of the
beginning of the previous three-year period, the amount of fees
determined as described in section 10.4.1.1(c).
(b) With respect to resale arrangements described in section
10.4.1.1(a)(ii), Sprint PCS will give Manager Manager's proportional
share of (i) any cash payments, in addition to the
34
reseller rate, relating specifically to the resale arrangements (other
than those cash payments for reimbursement of expenses incurred to
implement the resale arrangement), and (ii) to the extent reasonably
able to be made available to Manager, non-cash payments relating
specifically to the resale arrangements. For purposes of
clarification, payments made to Sprint PCS by the other party to a
resale arrangement to reimburse Sprint PCS for actual costs incurred
to implement some aspect of the resale arrangement are not cash or
non-cash payments subject to this section. Each resale arrangement
will provide that the other party to the resale arrangement will
reimburse Manager for Manager's actual costs incurred to implement the
resale arrangement if (A) Sprint PCS obtains from the other party to
the resale arrangement a commitment for that party to reimburse Sprint
PCS for Sprint PCS' actual costs of implementing the resale
arrangement and (B) Sprint PCS reasonably expects Manager to incur
actual costs in implementing the resale arrangement for the reseller.
If the reseller is a Related Party of Sprint PCS, then Sprint
PCS, Manager and all Other Managers must agree on the Reseller
Customer Fee to be paid by Sprint PCS to Manager and all Other
Managers and any proportional sharing of any other cash and non-cash
payments. If Manager does not so agree in writing with any such
reseller arrangement with a Related Party of Sprint PCS, then Manager
will have no obligation to opt into or support such reseller
arrangement.
(c) For each three-year period described in section
10.4.1.1(a)(iii):
(i) Sprint PCS will give Manager proposed terms, fees and
conditions applicable to Manager's participation in resale
arrangements by October 31 of the calendar year before the
calendar year in which the then current reseller period ends
(e.g., the initial reseller period ends on December 31, 2006 so
the amount has to be presented by October 31, 2005). Manager's
representative and the Sprint PCS representative will begin
discussions regarding the proposed terms, fees and conditions
applicable to Manager's participation in resale arrangements
within 20 days after Manager receives the proposed terms, fees
and conditions applicable to Manager's participation in resale
arrangements from Sprint PCS.
(ii) If the parties do not agree on the new terms, fees and
conditions applicable to Manager's participation in
35
resale arrangements within 30 days after the discussions begin,
then Manager may escalate the discussion to the Sprint PCS Chief
Financial Officer or Sprint Spectrum may escalate the discussion
to Manager's Chief Executive Officer or Chief Financial Officer.
(iii) If the parties cannot agree on the new terms, fees and
conditions applicable to Manager's participation in resale
arrangements through the escalation process within 20 days after
the escalation process begins, then without Manager's prior
written consent, Manager will not be required to participate in
any resale arrangement that is entered into by Sprint PCS, or
renewed or extended, after the Required Resale Participation
Period. Manager will, however, continue to allow resellers with
executed contracts under resale arrangements existing prior to or
entered into, renewed or extended during the Required Resale
Participation Period, with which Manager opted into or was
required to participate under this Agreement, to activate
subscribers with an NPA-NXX assigned to Manager's Service Area
and support such resellers throughout the then remaining term of
their resale arrangement with Sprint PCS, including any
applicable renewal terms and phase out periods. Manager will
continue to receive Reseller Customer Fees with respect to such
resale arrangements at the same rates in effect at the end of the
Required Resale Participation Period.
Sprint PCS may not amend, modify or change in any manner the
Inter Service Area Fees between Sprint PCS and Manager or Reseller
Customer Fees and other matters set forth in this section 10.4.1
without Manager's prior written consent, except as expressly provided
in this section. For purposes of clarification, the parties do not
intend the above sentence to limit Sprint PCS' ability to negotiate
fees with resellers.
Sprint PCS will not be obligated to pay Manager those Inter
Service Area Fees not received by Sprint PCS from an Other Manager who
is a debtor in a bankruptcy proceeding with respect to Inter Service
Area Fees that Sprint PCS owes Manager because of CSAs assigned to
such Other Manager's Service Area traveling in the Service Area. For
clarification purposes, Sprint PCS does not have to advance the Inter
Service Area Fees for the Other Manager who is involved in the
bankruptcy proceeding to Manager, to the extent that the Other Manager
fails to pay the Inter Service Area Fees. Manager bears the risk of
loss of the Other Manager who is involved in the bankruptcy proceeding
not paying the Inter Service Area Fees to Sprint PCS.
36
If relief is ordered under title 11 of the United States Code for
an Other Manager or an Other Manager files a voluntary petition for
relief under title 11 of the United States Code and such Other Manager
fails to pay to Sprint PCS amounts that such Other Manager owes to
Sprint PCS with respect to the Inter Service Area Fees for travel into
Manager's Service Area, Sprint PCS will immediately assign to Manager
all of its claims and rights as a creditor of such Other Manager for
those amounts owed with respect to Inter Service Area Fees for travel
in Manager's Service Area. Sprint PCS agrees to take all actions
necessary to effect this assignment of rights to Manager, and further
agrees that Manager will not be responsible for any expenses related
to such assignment. If Sprint PCS receives any amounts from an Other
Manager involved in a bankruptcy proceeding with respect to Inter
Service Area Fees for travel into the Service Area, Sprint PCS will
immediately remit those amounts to Manager. If relief is ordered under
title 11 of the United States Code for Sprint PCS or Sprint PCS files
a voluntary petition for relief under title 11 of the United States
Code, then Sprint PCS will be deemed a trustee for Manager's benefit
with respect to any Inter Service Area Fees that Sprint PCS collects
from Other Managers for travel into Manager's Service Area, and Sprint
PCS has no rights to Manager's portion of such Inter Service Area
Fees.
Manager acknowledges that if the manner in which the CSAs are
assigned changes because of changes in the manner in which the NPA-NXX
is utilized, the manner in which the Inter Service Area Fees and
Reseller Customer Fees, if any, will be calculated might be changed
accordingly.
10.4.1.2 Voice and 2G Data Rate. The amount of the Inter
Service Area Voice and 2G Data Fee and Reseller Customer Voice and 2G
Data Fee for arrangements between Sprint PCS and resellers in
existence as of April 1, 2004, will be as follows:
(a) The Inter Service Area Voice and 2G Data Fee for each
billed minute of use that a Customer uses an Away Network and the
Reseller Customer Fee for each billed minute of use that a
Reseller Customer uses the Service Area Network, will be $0.058
from the Effective Date to December 31, 2006.
(b) For each calendar year during the Term of this agreement
beginning January 1, 2007, the Inter Service Area Voice and 2G
Data Fee for each billed minute of use that a Customer uses an
Away Network and the Reseller Customer Fee for each billed minute
of use that a Reseller Customer uses the Service Area Network,
will be an amount equal to 90% of Sprint PCS' Retail Yield for
Voice and 2G Data Usage for the previous calendar year;
37
provided that such amount for any period will not be less than
Manager's network costs (including a reasonable return using
Manager's weighted average cost of capital applied against
Manager's net investment in the Service Area Network) to provide
the services that are subject to the Inter Service Area Voice and
2G Data Fee. If the parties have a dispute relating to the
determination of the foregoing fees for any period, then the
parties will submit the dispute to binding arbitration as set
forth in section 10.4.1.3(b).
10.4.1.3 3G Data Rate. The amount of the Inter Service Area
3G Data Fee and Reseller Customer 3G Data Fee for arrangements between
Sprint PCS and resellers in existence as of April 1, 2004, will be as
follows:
(a) From the Effective Date to December 31, 2006 ("INITIAL
3G DATA FEE PERIOD"), the Inter Service Area 3G Data Fee for each
kilobyte of use that a Customer uses an Away Network and the
Reseller Customer 3G Data Fee for each kilobyte of use that a
Reseller Customer uses the Service Area Network, will be $0.0020;
except with respect to Sprint 3G Data Service as defined and set
out in the Program Requirement 3.5.2.
(b) The parties will reset the Inter Service Area 3G Data
Fee and the Reseller Customer 3G Data Fee after the Initial 3G
Data Fee Period ends. The Inter Service Area 3G Data Fee and the
Reseller Customer 3G Data Fee will be based on an appropriate
discount from the Sprint PCS Retail Yield for 3G Data Usage for
the previous calendar year to be negotiated before December 31,
2006. Each subsequent fee period will last three years with, for
example, the second pricing period beginning on January 1, 2007
and ending on December 31, 2009.
The process for resetting the fees is as follows:
(i) Sprint PCS will give Manager a proposal for the
appropriate discount from the Sprint PCS Retail Yield for 3G
Data Usage by March 31 of the final year of the then current
pricing period. Manager's representative and the Sprint PCS
representative will begin discussions regarding the proposed
schedule of fees within 20 days after Manager receives the
proposed schedule of fees from Sprint PCS.
(ii) Manager may escalate the discussion to the Chief
Financial Officer of Sprint PCS or Sprint PCS may escalate
the discussion to Manager's Chief Executive
38
Officer or Chief Financial Officer if the parties do not
agree on a new schedule of fees within 30 days after the
discussions begin.
(iii) If the parties cannot agree on a new schedule of
fees within 20 days after a party escalates the discussion,
then Manager may either agree to the fees set forth in the
Inter Service Area 3G Data Fee and Reseller Customer 3G Data
Fee proposal or submit the determination of the Inter
Service Area 3G Data Fee and Reseller Customer 3G Data Fee
to binding arbitration based on a market-rate determination
of an appropriate Inter Service Area 3G Data Fee and
Reseller Customer 3G Data Fee in accordance with section
14.2, excluding the escalation process set forth in section
14.1.
(iv) If Manager submits the matter to arbitration the
fees that Sprint PCS proposed will apply starting after
December 31 of the first year of the appropriate period as
described in section 10.4.1.4 and will continue in effect
unless modified by the final decision of the arbitrator. If
the arbitrator imposes a fee different than the ones in
effect the new fees will be applied as if in effect after
December 31 of the first year of the appropriate period as
described in section 10.4.1.4 and if on application of the
new fees one party owes the other party any amount after
taking into account payments the parties have already made
then the owing party will pay the other party within 30 days
of the date of the final arbitration order.
10.4.1.4 Rate Changes - Effective Date. All rate changes
related to Inter Service Area Fees and Reseller Customer Fees will be
applied to all activity in a bill cycle regardless of when the activity
occurred, if the bill cycle ends after the effective date of the rate
change.
10.4.1.5 Long Distance. The long distance rates associated
with the Inter Service Area and Reseller Customer usage will be equal to
the actual wholesale transport and terminating costs associated with the
originating and terminating locations. The rates are then applied to
cumulative usage at a BID level for settlement purposes.
10.4.2 INTERCONNECT FEES. Manager will pay to Sprint PCS (or to
other carriers as appropriate) monthly the interconnect fees, if any, as
provided under section 1.4.
39
10.4.3 TERMINATING AND ORIGINATING ACCESS FEE. Sprint PCS will
pay Manager 92% of any terminating or originating access fees Sprint PCS
collects from an IXC that are not subject to refund or dispute (but it will
not be Billed Revenue). For purposes of clarification, Sprint Corporation's
Related Parties are obligated to pay terminating access to Sprint PCS only
if MCI and AT&T pay terminating or originating access to Sprint PCS. At the
Effective Date of Addendum X, neither MCI nor AT&T pays terminating access
to Sprint PCS. The ability of wireless carriers to collect access fees is
currently subject to legal challenge. The parties acknowledge that Sprint
PCS has limited ability to require IXCs to pay access fees.
10.4.4 REIMBURSEMENTS FOR MISTAKEN PAYMENTS. If one party
mistakenly pays an amount that the other party is obligated to pay then the
other party will reimburse the paying party, if the paying party identifies
the mistake and notifies the receiving party within 9 calendar months after
the date on which the paying party makes the mistaken payment.
10.5 TAXES AND PAYMENTS TO THE GOVERNMENT. Manager will pay or
reimburse Sprint PCS for any sales, use, gross receipts or similar tax,
administrative fee, telecommunications fee or surcharge for taxes or fees
that a governmental authority levies on the fees and charges payable by
Sprint PCS to Manager.
Manager will report all taxable property to the appropriate taxing
authority for ad valorem tax purposes. Manager will pay as and when due all
taxes, assessments, liens, encumbrances, levies and other charges against
the real estate and personal property that Manager owns or uses in
fulfilling its obligations under this agreement.
Manager is responsible for paying all sales, use or similar taxes on
the purchase and use of its equipment, advertising and other goods or
services in connection with this agreement.
Sprint PCS will be solely responsible for remitting to government
agencies or their designees any and all fees or other amounts owed as a
result of the services provided to the Customers under the Management
Agreement. As a consequence of this responsibility, Sprint PCS is entitled
to 100% of any amounts that Manager, Sprint PCS or their Related Parties
receives from Customers (including Customers whose NPA-NXX is assigned to
the Service Area) relating to these fees or other amounts.
10.6 UNIVERSAL SERVICE FUNDS.
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10.6.1 PAID BY GOVERNMENT. Manager is entitled to 100% of
any federal and state subsidy funds (the "SUBSIDY FUNDS"), including
Universal Service Funds, that Manager or Sprint PCS receives from
government disbursements based on customers with mailing addresses located
in the Service Area and with NPA-NXXs assigned to the Service Area, or such
other method then in effect under the rules of the FCC, Universal Service
Administrative Company or other federal or state administrator. For
purposes of clarity, Universal Service Funds provide support payments to
Eligible Telecommunications Carriers ("ETC") serving in high cost areas or
providing services to low income individuals. Sprint PCS will file on
behalf of itself or Manager appropriate ETC documentation in those
jurisdictions in which Sprint PCS determines to make the filing.
If Manager asks Sprint PCS to make a filing in a jurisdiction and
Sprint PCS reasonably determines not to make the filing because making the
filing is detrimental to Sprint's best interests, then Sprint does not have
to make the filing. If Manager disagrees with the reasonableness of Sprint
PCS' determination not to make the filing, then the parties will submit to
binding arbitration in accordance with section 14.2, excluding the
escalation process set forth in section 14.1.
If the process set forth in the previous paragraph results in Sprint
PCS making a filing, Manager will pay all of Sprint PCS' reasonable
out-of-pocket costs associated with the filing and any compliance
obligations that arise from the filing or that are imposed by the
jurisdiction in which the filing is made (e.g. filing fees, legal fees,
expert witness retention, universal lifeline service, enhancing customer
care quality, and including, without limitation, network upgrades). Sprint
PCS will remit to Manager 50% of any Subsidy Funds that Sprint PCS receives
from filings Sprint PCS is required to make under the preceding paragraph
that are not payable to Manager under the first paragraph of this section
10.6.1, until the aggregate amount of the payments to Manager under this
sentence equals 50% of the amount Manager has paid Sprint PCS under the
preceding sentence.
All Subsidy Funds received must be used to support the provision,
maintenance and upgrading of facilities and services for which the funds
are intended. Sprint PCS will attempt to recover from the appropriate
governmental authority Subsidy Funds and will remit the appropriate
recoveries to Manager.
10.6.2 PAID BY CUSTOMERS. Sprint PCS will be solely
responsible for remitting to government agencies or their designees,
including but not limited to the Universal Service Administrative Company,
all universal service fees. As a consequence of this
41
responsibility, Sprint PCS is entitled to 100% of any amounts that Manager,
Sprint PCS or their Related Parties receives from Customers (including
Customers whose NPA-NXX is assigned to the Service Area) relating to the
Universal Service Funds.
10.7 EQUIPMENT REPLACEMENT PROGRAM. Sprint PCS is entitled to 100% of
the amounts that Customers pay for participating in any equipment
replacement program billed on their Sprint PCS bills. Manager will not be
responsible for or in any way billed for any costs or expenses that Sprint
PCS or any Sprint PCS Related Party incurs in connection with any such
equipment replacement program.
10.8 CUSTOMER EQUIPMENT. Sprint PCS is entitled to 100% of the amounts
that Customers pay for subscriber equipment and accessories sold or leased
by Sprint PCS, and Manager is entitled to 100% of the amounts that
Customers pay for subscriber equipment and accessories that Manager sold or
leased, subject to the equipment settlement process in section 4.1.2.
10.9 PHASE I E911. Sprint PCS is entitled to collect 100% of the E911
Phase I Surcharges (e.g., for equipment other than handsets, such as
platforms and networks). Sprint PCS will attempt to recover from the
appropriate governmental authority Phase I E911 reimbursements and will
remit the appropriate amounts to Manager.
10.10 MANAGER DEPOSITS INTO RETAIL BANK ACCOUNTS. Each Business Day,
Manager will deposit into bank accounts and authorize Sprint PCS or a
Related Party that Sprint PCS designates to sweep from such accounts the
amounts collected from Customers on behalf of Sprint PCS and its Related
Parties for Sprint PCS Products and Services. Manager will allow the funds
deposited in the bank accounts to be transferred daily to other accounts
that Sprint PCS designates. Manager will also provide the daily reports of
the amounts collected that Sprint PCS requires. Manager will not make any
changes to the authorizations and designations Sprint PCS designates for
the bank accounts without Sprint PCS' prior written consent.
10.11 MONTHLY STATEMENTS.
10.11.1 SECTION 10.2 STATEMENT. Each month Sprint PCS will
determine the amount payable to or due from Manager for a Billed Month
under section 10.2. Sprint PCS will deliver a monthly statement to Manager
that reports the amount due to Manager, the manner in which the amount was
calculated, the amount due to Sprint PCS and its Related Parties under this
agreement and the Services Agreement, and the net amount payable to or due
from Manager.
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10.11.2 OTHER STATEMENTS. Sprint PCS will deliver a
monthly statement to Manager that reports amounts due to Manager or
from Manager, other than amounts described in section 10.12.1, the
manner in which the amounts were calculated, the amount due to Manager
or to Sprint PCS and its Related Parties under this agreement and the
Services Agreement, and the net amount payable to Manager.
10.11.3 THIRD PARTY CHARGES. Sprint PCS will include
any third party charges on Manager's statements within three calendar
months after the end of the calendar month during which Sprint PCS
receives the third party charge. Sprint PCS' failure to include these
charges on Manager's statements within the three calendar month-period
will mean that Sprint PCS cannot collect those third party charges from
Manager.
10.12 PAYMENTS.
10.12.1 WEEKLY PAYMENTS. Sprint PCS will pay the
amount payable to Manager for a Billed Month under section 10.2 in
equal weekly payments on consecutive Thursdays beginning the second
Thursday of the calendar month following the Billed Month and ending on
the first Thursday of the second calendar month after the Billed Month.
If Sprint PCS is unable to determine the amount due to Manager in time
to make the weekly payment on the second Thursday of a calendar month,
then Sprint PCS will pay Manager for that week the same weekly amount
it paid Manager for the previous week. Sprint PCS will true-up any
difference between the actual amount due for the first weekly payment
of the Billed Month and amounts paid for any estimated weekly payments
after Sprint PCS determines what the weekly payment is for that month.
Sprint PCS will use reasonable efforts to true-up within 10 Business
Days after the date on which Sprint PCS made the estimated weekly
payment.
10.12.2 MONTHLY PAYMENTS. The amounts payable to
Manager and Sprint PCS and its Related Parties under this agreement and
the Services Agreement, other than the payments described in section
10.12.1, will be determined, billed and paid monthly in accordance with
section 10.12.3.
10.12.3 TRANSITION OF PAYMENT METHODS. (a) Sprint PCS
and Manager wish to conduct an orderly transition from making weekly
payments to Manager based on Collected Revenues to weekly payments
based on Billed Revenue. The method of calculating the weekly payments
will change on the first day of the calendar month after the Effective
Date of Addendum X (the "TRANSITION DATE"). The weekly amounts paid to
Manager during the calendar month before the Transition Date and on the
first Thursday after the Transition Date will be based on the Collected
43
Revenues method. The weekly amounts paid to Manager beginning on the
second Thursday of the second calendar month after the Transition Date
will be based on the Billed Revenue method described in this section
10. To effect an orderly transition, Sprint PCS will pay Manager for
the period beginning on the second Thursday after the Transition Date
and ending on the first Thursday of the calendar month after the
Transition Date an amount calculated as described below in section
10.12.3(b).
(b) Sprint PCS will apply the estimated collection
percentages that Sprint PCS uses before the Transition Date to the
gross accounts receivable aging categories for Customers with an
NPA-NXX assigned to the Service Area as of the close of business on the
day before the Transition Date to calculate the amount Sprint PCS
anticipates collecting on those accounts receivable. Sprint PCS will
pay Manager the amount estimated to be collected in equal weekly
payments on consecutive Thursdays beginning the second Thursday after
the Transition Date and ending the first Thursday of the calendar month
after the Transition Date. Sprint PCS will also pay to Manager no later
than the second Thursday after the Transition Date any Collected
Revenues received after the Saturday before the Transition Date and
before the Transition Date.
(c) Sprint PCS will recalculate the estimated
collection percentages and apply the recalculated estimated collection
percentages to the gross accounts receivable aging categories described
in the first sentence of section 10.12.3(b) when all applicable data is
available. Sprint PCS will increase or decrease a weekly payment by the
amount of the difference between the amount paid to Manager based on
the initial estimated collection percentages and the amount that would
have been paid to Manager using the newer estimated collection
percentages.
10.13 DISPUTE OR CORRECTION OF STATEMENT AMOUNT. A party can
only dispute or correct an amount on a statement in good faith. If a
party disputes or corrects an amount on a statement, the disputing or
correcting party must give the other party written notice of the
specific item disputed or corrected, the disputed or corrected amount
with respect to that item and the reason for the dispute or correction
within three calendar months after the end of the calendar month during
which the disputed or erroneous statement was delivered.
Any dispute regarding a statement will be submitted for
resolution under the dispute resolution process in section 14. The
parties must continue to pay to the other party all amounts, except
disputed amounts (subject to the next paragraph), owed under this
agreement and the Services Agreement during the dispute resolution
process. If the aggregate disputed amount, combined with any aggregate
disputed amount
44
under section 10.14, exceeds $1,000,000, and upon the written request
of the other party, the party disputing the amount (the "DISPUTING
PARTY") will deposit the portion of the disputed amount in excess of
$1,000,000 into an escrow account that will be governed by an escrow
agreement in a form to be mutually agreed upon by the parties. The
Disputing Party will deposit the amount into the escrow account within
10 Business Days after its receipt of the written request from the
other party in accordance with the foregoing. If the Disputing Party
complies with the requirements of this paragraph, then the other party
or its Related Parties may not declare the Disputing Party in breach
of this agreement or the Services Agreement because of nonpayment of
the disputed amount, pending completion of the dispute resolution
process.
The escrow agent will be an unrelated third party that is in
the business of serving as an escrow agent for or on behalf of
financial institutions. The parties will share evenly the escrow
agent's fees. The escrow agent will invest and reinvest the escrowed
funds in interest-bearing money market accounts or as the parties
otherwise agree. The escrow agent will disburse the escrowed funds in
the following manner based on the determination made in the dispute
resolution process:
(a) If the Disputing Party does not owe any
of the disputed amounts, then the escrow agent will return all
of the escrowed funds to the Disputing Party with the interest
earned on the escrowed funds.
(b) If the Disputing Party owes all of the
disputed amounts, then the escrow agent will disburse all of
the escrowed funds with the interest earned on the escrowed
funds to the non-disputing party. If the interest earned is
less than the amount owed based on the Default Rate, then the
Disputing Party will pay the non-disputing party the
difference between those amounts.
(c) If the Disputing Party owes a portion of
the disputed amounts, then the escrow agent will disburse to
the non-disputing party the amount owed with interest at the
Default Rate from the escrowed funds and disburse the balance
of the escrowed funds to the Disputing Party. The Disputing
Party will pay the non-disputing party the amount owed for
interest at the Default Rate if the amount of the escrowed
funds is insufficient.
Manager and Sprint PCS will take all reasonable actions
necessary to allow the Disputing Party to continue to reflect the
amounts deposited into the escrow account by the Disputing Party as
assets in the Disputing Party's financial statements.
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The parties will use the dispute resolution process under
section 14.2 of this agreement, excluding the escalation process set
forth in section 14.1, if they cannot agree on the form of escrow
agreement.
The parties agree that, despite this section 10.13, Manager
will pay all disputed amounts due to Sprint PCS or any Related Party
for fees for CCPU Services and CPGA Services payable under the Services
Agreement for periods ending on or before December 31, 2006, subject to
any other rights and remedies that Manager has under this agreement and
the Services Agreement.
The dispute of an item in a statement does not stay or
diminish a party's other rights and remedies under this agreement,
except that a party must complete the dispute resolution process in
section 14 before taking any legal or equitable action against the
other party.
10.14 DISPUTE OR CORRECTION OF A THIRD PARTY INVOICE AMOUNT.
Sprint PCS will include the applicable portion of any amount based on a
third party invoice in a statement to Manager within three calendar
months after Sprint PCS' receipt of the third party invoice. Sprint
PCS' failure to include the amount in a statement to Manager within the
three calendar month-period will mean that the third party charges will
not be collectible from Manager.
A party can dispute or correct an amount based on a third
party invoice only in good faith. Modified invoices received by Sprint
PCS from a third party vendor and then sent by Sprint PCS to Manager
will be treated as a new statement for purposes of this section, so
long as the modified statement was revised in good faith and not simply
to provide Sprint PCS additional time to resubmit a previous invoice.
If a party disputes or corrects an amount on a third party
invoice or the amount Sprint PCS attributed to Manager, the disputing
party must give the other party written notice of the specific item
disputed or corrected, the disputed or corrected amount with respect to
that item and the reason for the dispute or correction within three
calendar months after the end of the calendar month during which the
disputed or erroneous statement was delivered. Sprint PCS and Manager
will cooperate with each other to obtain the information needed to
determine if the amounts billed by the third party and allocated to
Manager were correct.
Any dispute regarding the amount of the third party invoice
Sprint PCS attributed to Manager will be submitted for resolution under
the dispute resolution process in section 14. Manager must continue to
pay to Sprint PCS all amounts, except disputed amounts, owed under this
agreement and the Services Agreement during the information gathering
46
and dispute resolution process. If the aggregate disputed amount,
combined with any aggregate disputed amount under section 10.13,
exceeds $1,000,000, and upon the written request of Sprint PCS, Manager
will deposit the portion of the disputed amount in excess of $1,000,000
into an escrow account that will be governed by an escrow agreement
containing terms similar to the general terms described in section
10.13 and in a form to be mutually agreed upon by the parties. Manager
will deposit the amount into the escrow account within 10 Business Days
after its receipt of the written request from Sprint PCS in accordance
with the foregoing. If Manager complies with the requirements of this
paragraph, then none of Sprint PCS or its Related Parties may declare
Manager in breach of this agreement or the Services Agreement because
of nonpayment of the disputed amount, pending completion of the dispute
resolution process.
The dispute of an item in a statement does not stay or
diminish a party's other rights and remedies under this agreement,
except that the parties must complete the dispute resolution process in
section 14 before taking any legal or equitable action against each
other.
10.15 LATE PAYMENTS. Any amount due under this agreement or
the Services Agreement without a specified due date will be due 20 days
after Manager receives an invoice. Any amount due under this agreement
and the Services Agreement (including without limitation any amounts
disputed under those agreements that are ultimately determined to be
due) that is not paid by one party to the other party in accordance
with the terms of the applicable agreement will bear interest at the
Default Rate beginning (and including) the 6th day after the invoice or
settlement due date until (and including) the date paid.
10.16 SETOFF RIGHT IF FAILURE TO PAY AMOUNTS DUE. If Manager
fails to pay any undisputed amount due Sprint PCS or a Related Party of
Sprint PCS under this agreement, any undisputed amount due Sprint PCS
or a Related Party of Sprint PCS under the Services Agreement or any
other agreement with Sprint PCS or a Related Party of Sprint PCS, or
any disputed amount due to Sprint PCS or a Related Party for fees for
CCPU Services or CPGA Services payable under the Services Agreement,
then 5 days after the payment due date Sprint PCS may setoff against
its payments to Manager under this section 10 any such undisputed
amount that Manager owes to Sprint PCS or a Related Party of Sprint
PCS. This right of setoff is in addition to any other right that Sprint
PCS or a Related Party of Sprint PCS might have under this agreement,
the Services Agreement or any other agreements with Sprint PCS or a
Related Party of Sprint PCS.
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18. TERMINATION RIGHTS [ADDM XI,SS.17]. Section 11.3.7 is deleted, and all
references in the agreement to section 11.3.7 are also deleted.
19. BUSINESS VALUATION [ADDM VIII,SS.4]. A new subsection 11.7.4(f) is
added:
(f) In the event the Entire Business Value of the
Manager is being determined, the entire value of any Operating
Asset may be allocated among the Manager and one or more of
the Other Affiliates, where appropriate, but the sum of the
values attributed to such Operating Asset in determining the
Entire Business Value of the Manager and the Other Affiliates
shall not exceed the value of such Operating Asset if it were
used to calculate only the Manager's Entire Business Value
(i.e. "double counting" is prohibited).
20. AUDIT [ADDM XI,SS.19]. Section 12.1.2 is amended and restated in its
entirety to read as follows:
12.1.2 AUDITS. On reasonable advance notice by one party, the
other party must provide its independent or internal auditors access to
its appropriate financial and operating records, including, without
limitation, vendor and distribution agreements, for purposes of
auditing the amount of fees (including the appropriateness of items
excluded from the Fee Based on Billed Revenue), costs, expenses
(including operating metrics referred to in this agreement and the
Services Agreement relating to or used in the determination of Inter
Service Area Fees, Reseller Customer Fees, CCPU Services or CPGA
Services) or other charges payable in connection with the Service Area
for the period audited. The party that requested the audit may decide
if the audit is conducted by the other party's independent or internal
auditors. Manager and Sprint PCS may each request no more than one
audit per year.
(a) If the audit shows that Sprint PCS was underpaid
then, unless the amount is contested, Manager will pay to
Sprint PCS the amount of the underpayment within 10 Business
Days after Sprint PCS gives Manager written notice of the
underpayment determination.
(b) If the audit determines that Sprint PCS was
overpaid then, unless the amount is contested, Sprint PCS will
pay to Manager the amount of the overpayment within 10
Business Days after Manager gives Sprint PCS written notice of
the overpayment determination.
The auditing party will pay all costs and expenses related to
the audit unless the amount owed to the audited party is reduced by
more than
48
10% or the amount owed by the audited party is increased by more than
10%, in which case the audited party will pay the costs and expenses
related to the audit.
Sprint PCS will provide a report issued in conformity with
Statement of Auditing Standard No. 70 "Reports on the Processing of
Transactions by Service Organizations" ("TYPE II REPORT" or "MANAGER
MANAGEMENT REPORT") to Manager annually. If Manager, on the advice of
its independent auditors or its legal counsel, determines that a
statute, regulation, rule, judicial decision or interpretation, or
audit or accounting rule, policy or literature published by the
accounting or auditing profession or other authoritative rule making
body (such as the Securities and Exchange Commission, the Public
Company Accounting Oversight Board or the Financial Accounting
Standards Board) requires additional assurances beyond SAS 70, then
Sprint PCS will cooperate with Manager to provide the additional
assurances. Sprint PCS' independent auditors will prepare any Type II
Report or Manager Management Report provided under this section 12.1.2
and will provide an opinion on the controls placed in operation and
tests of operating effectiveness of those controls in effect at Sprint
PCS over Manager Management Processes. "Manager Management Processes"
include those services generally provided within this agreement,
primarily billing and collection of revenues.
21. NOTICES [ADDM IV,SS.5 AND ADDM XI,SS.20]. (a) Section 17.1 is amended
and restated in its entirety to read as follows:
17.1 NOTICES. (a) Any notice, payment, invoice, demand or
communication required or permitted to be given by any provision of
this agreement must be in writing and mailed (certified or registered
mail, postage prepaid, return receipt requested), sent by hand or
overnight courier, charges prepaid or sent by facsimile or email (in
either instance with acknowledgement or read receipt received), and
addressed as described below, or to any other address or number as the
person or entity may from time to time specify by written notice to the
other parties. Sprint PCS may give notice of changes to a Program
Requirement by sending an email that directs Manager to the changed
Program Requirement on the affiliate intranet website.
The subject line of any email notice that purports to amend
any Program Requirement must read "Program Requirement Change" and the
first paragraph must indicate (i) which Program Requirement is being
modified, (ii) what is being modified in the Program Requirement, and
(iii) when the Program Requirement will take effect. The email must
also include either a detailed summary of the Program Requirement
Change or a redline comparison between the old Program Requirement and
the new Program Requirement.
49
Any notice, demand or communication intended to be notice of a
breach of an agreement or notice of an Event of Termination must:
(A) clearly indicate that intent,
(B) state the section(s) of the agreements allegedly
breached, and
(C) be mailed or sent by overnight courier in the
manner described in the first paragraph in this section 17.1.
Manager will promptly give Sprint PCS a copy of any notice
Manager receives from the Administrative Agent or any Lender, and a
copy of any notice Manager gives to the Administrative Agent or any
Lender. Sprint PCS will promptly give Manager a copy of any notice that
Sprint PCS receives from the Administrative Agent or any Lender and a
copy of any notice that Sprint PCS gives to the Administrative Agent or
any Lender.
All notices and other communications given to a party in
accordance with the provisions of this agreement will be deemed to have
been given when received.
(b) The parties' notice addresses are as follows:
For all entities comprising Sprint PCS:
Sprint PCS
KSOPHJ0212-2A101
6130 Sprint Parkway
Overland Park, KS 66251
Telephone: 913-762-7929
Telecopier: 913-523-0539
Email: dbotto01@sprintspectrum.com
Attention: Vice President - Finance
with a copy to:
Sprint Law Department
KSOPHT0101-Z2020
6391 Sprint Parkway
Overland Park, KS 66251
Telephone: 913-315-9315
Telecopier: 913-523-9823
Email: john.w.chapman@mail.sprint.com
Attention: John Chapman
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For Manager:
Alamosa Missouri, LLC
5225 S. Loop 289
Suite 120
Lubbock, TX 79424
Telephone: 806-722-1100
Telecopier: 806-722-1127
Email: dsharbutt@alamosapcs.com
Attention: David Sharbutt, President
with a copy to:
Crenshaw, Dupree & Milam, L.L.P.
Wells Fargo Center
1500 Broadway, 8th Floor
Lubbock, Texas 79401
Telephone: 806-762-5281
Telecopier: 806-762-3510
Email: JMcCutchin@cdmlaw.com
Attention: Jack McCutchin, Jr.
and with copies to the following individuals' email addresses
if a notice of a Program Requirement Change is sent by email:
Kendall W. Cowan, Chief Financial Officer
Email: kcowan@alamosapcs.com
Stephen A. Richardson, Chief Operating Officer
Email: srichardson@alamosapcs.com
Loyd I. Rinehart, Senior Vice President of Corporate
Finance
Email: lrinehart@alamosapcs.com
22. FORCE MAJEURE [ADDM XI,SS.21]. The second paragraph of section 17.9.3
is amended and restated in its entirety to read as follows:
Neither Manager nor Sprint PCS, as the case may be, is in
breach of any covenant in this agreement, and no Event of Termination
will occur as a result of the failure of such party to comply with any
covenant, if the party's non-compliance with the covenant results
primarily from:
51
(i) any FCC order or any other injunction
that any governmental authority issues that impedes
the party's ability to comply with the covenant,
(ii) the failure of any governmental
authority to grant any consent, approval, waiver or
authorization or any delay on the part of any
governmental authority in granting any consent,
approval, waiver or authorization,
(iii) the failure of any vendor to deliver
in a timely manner any equipment or service, or
(iv) any act of God, act of war or
insurrection, riot, fire, accident, explosion, labor
unrest, strike, civil unrest, work stoppage,
condemnation or any similar cause or event not
reasonably within the control of the party.
23. GOVERNING LAW, JURISDICTION AND CONSENT TO SERVICE OF PROCESS [ADDM
XI,SS.22]. Section 17.12 of the Management Agreement is replaced with the
following language:
17.12 GOVERNING LAW, JURISDICTION AND CONSENT TO SERVICE
OF PROCESS.
17.12.1 GOVERNING LAW. The internal laws of the State
of Kansas (without regard to principles of conflicts of law) govern the
validity of this agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties.
17.12.2 JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) Each party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive
jurisdiction of any Kansas State court sitting in the County
of Johnson or any Federal court of the United States of
America sitting in the District of Kansas, and any appellate
court from any such court, in any suit action or proceeding
arising out of or relating to this agreement, or for
recognition or enforcement of any judgment, and each party
hereby irrevocably and unconditionally agrees that all claims
in respect of any such suit, action or proceeding may be heard
and determined in such Kansas State Court or, to the extent
permitted by law, in such Federal court.
(b) Each party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally do so, any
objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or
relating to this agreement in Kansas State court sitting in
52
the County of Johnson or any Federal court sitting in the
District of Kansas. Each party hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or
proceeding in any such court and further waives the right to
object, with respect to such suit, action or proceeding, that
such court does not have jurisdiction over such party.
(c) Each party irrevocably consents to service of
process in the manner provided for the giving of notices
pursuant to this agreement, provided that such service shall
be deemed to have been given only when actually received by
such party. Nothing in this agreement shall affect the right
of a party to serve process in another manner permitted by
law.
24. TRANSFER OF SPRINT PCS NETWORK [ADDM VIII,SS.9]. The first sentence of
section 17.15.5 is replaced with the following sentence:
In conjunction with the sale of the Sprint PCS Network, Sprint
PCS may sell, transfer or assign the Sprint PCS Network and any of the
Licenses, including its rights and obligations under this agreement,
the Services Agreement and any related agreements, to a third party
without Manager's consent so long as the third party assumes the rights
and obligations under this agreement and the Services Agreement.
25. CROSS-DEFAULT [ADDM VIII,SS.2 AND ADDM IX,SS.2]. A new section 17.26 is
added to the Management Agreement:
17.26 CROSS-DEFAULT. A breach or Event of Termination under
any of the Sprint Agreements (as that term is defined in the Consent
and Agreement) by Texas Telecommunications, L.P., a Texas limited
partnership, Alamosa Wisconsin Limited Partnership, a Wisconsin limited
partnership, Southwest PCS, L.P., an Oklahoma limited partnership, or
Washington Oregon Wireless LLC, a Delaware limited liability company,
or their respective successors or assigns (collectively the "OTHER
AFFILIATES") also constitutes a breach or Event of Termination, as the
case may be, by Manager of the same provision of the applicable Sprint
Agreement to which Manager is a party, and the Sprint Parties (as that
term is defined in the Consent and Agreement) shall have the same
rights under the Sprint Agreements and the Consent and Agreement to
which Manager is a party as if the same breach or Event of Termination
had occurred under such Sprint Agreement. Manager has no right to cure
any breach or Event of Termination with respect to an Other Affiliate.
Such breach or Event of Termination by an Other Affiliate shall not
qualify as a force majeure under the Sprint Agreements or the Consent
and Agreement.
26. PERFORMANCE/PAYMENT OF OTHER AFFILIATES' OBLIGATIONS [ADDM VIII,SS.3].
A new section 17.27 is added to the Management Agreement:
53
17.27 PERFORMANCE/PAYMENT OF OTHER AFFILIATES' OBLIGATIONS. To
induce the Sprint Parties to enter into the Consent and Agreement with
Citicorp, Manager absolutely and unconditionally guarantees the prompt
and punctual performance and payment of the Obligations (as that term
is defined in the Consent and Agreement) of the Other Affiliates and
their respective successors or assigns when due and payable pursuant to
the terms of the Other Affiliates' Sprint Agreements as they may be
amended and modified. Manager agrees that the Sprint Parties shall not
be required first to collect from any other guarantor of any such
obligation or to proceed against or exhaust any collateral or security
for any obligation before requiring Manager to perform or pay the
obligation guaranteed under this section. Any Sprint Party may bring
suit against Manager without joining the Other Affiliates or any other
guarantor. Manager agrees that notice given by a Sprint Party to any
Other Affiliate under such Other Affiliate's Sprint Agreements or the
Consent and Agreement constitutes notice to the Manager.
27. FEDERAL CONTRACTOR COMPLIANCE [ADDM XI, SS.26; REVISED BY THIS
ADDENDUM]. A new section 17.28, the text of which is attached as Exhibit A to
Addendum X, is added and incorporated by this reference. When and to the extent
required by applicable law, Manager will comply with the requirement of this
section 17.28.
28. FINANCIAL INFORMATION [ADDM XI,SS.27; REVISED BY THIS ADDENDUM]. A new
section 17.29 is added to the Management Agreement:
17.29 COPIES OF FINANCIAL INFORMATION. Manager agrees
to give Sprint PCS a copy of all financial information it
gives the Administrative Agent or any Lender (as such parties
are defined in the Consent and Agreement).
SERVICES AGREEMENT
29. NON-EXCLUSIVE SERVICE [ADDM XI,SS.28]. Section 1.3 of the Services
Agreement is amended and restated in its entirety to read as follows:
1.3 NON-EXCLUSIVE SERVICES. Nothing contained in this
agreement confers upon Manager an exclusive right to any of the
Services. Sprint Spectrum may contract with others to provide expertise
and services identical or similar to those to be made available or
provided to Manager under this agreement.
30. CHANGES TO ARTICLE 2 [ADDM XI,SS.29; REVISED BY THIS ADDENDUM]. Article
2 of the Services Agreement is amended and restated in its entirety to read as
follows:
2. SERVICES
54
2.1 SERVICES.
2.1.1 SERVICES. Subject to the terms of this
agreement, through December 31, 2006, Manager will obtain the services
set forth on Schedule 2.1.1 attached to this agreement ("SERVICES")
from Sprint Spectrum in accordance with this section 2.1, and Sprint
Spectrum will provide all or none of the Services. For purposes of
clarification, as of the Effective Date of Addendum X through December
31, 2006, Sprint Spectrum is providing all of the Services to Manager
and Sprint Spectrum will not provide individual Services.
The fees charged for the Services and the process for
setting the fees charged for the Services are set forth in section 3.2.
Sprint Spectrum may designate additional Services upon at least 60
days' prior written notice to Manager by providing an amended Schedule
2.1.1 to Manager in accordance with the provisions of section 9.1.
Without Manager's prior written consent, neither
Sprint Spectrum nor any of its Related Parties will require Manager to
pay for:
(A) any of those additional CCPU Services or CPGA
Services to the extent that they are the same as or functionally
equivalent to any service or benefit that Manager currently receives
from Sprint Spectrum or its Related Parties or Sprint PCS or its
Related Parties but for which Manager does not pay a separate fee
immediately after the Effective Date, or
(B) any other additional CCPU Services or CPGA
Services through December 31, 2006. After that date the fee for those
other additional Services will be included in the fees for CCPU
Services and CPGA Services.
2.1.2 DISCONTINUANCE OF SERVICES. If Sprint Spectrum
determines to no longer offer a Service, then Sprint Spectrum must
(i) notify Manager in writing a reasonable
time before discontinuing the Service, except Sprint
will notify Manager at least 9 months before Sprint
plans to discontinue a significant Service (e.g.,
billing, collection and customer care).
(ii) discontinue the Service to all Other
Managers.
55
If Manager determines within 90 days after receipt of notice of
discontinuance that it wants to continue to receive the Service, Sprint
Spectrum will use commercially reasonable efforts to:
(a) help Manager provide the Service itself
or find another vendor to provide the Service, and
(b) facilitate Manager's transition to the
new Service provider.
The fees charged by Sprint Spectrum for the CCPU
Services and CPGA Services will be reduced by any fees payable by
Manager to a vendor or new Service provider in respect of discontinued
CCPU Services and CPGA Services, if (x) Sprint Spectrum procures such
CCPU Services or CPGA Services from a vendor or a new Service provider
and bills those items as Settled-Separately Manager Expenses (as
defined in subsection 3.2.5 of this agreement), or (y) Manager procures
such CCPU Services or CPGA Services from a vendor or a new provider of
Services, or (z) Manager self-provisions the Service. No adjustment to
the fees will be made if Sprint Spectrum discontinues a CCPU Service or
CPGA Service and Sprint Spectrum does not provide the CCPU Service or
CPGA Service to end users.
2.1.3 PERFORMANCE OF SERVICES. Sprint Spectrum may
select the method, location and means of providing the Services. If
Sprint Spectrum wishes to use Manager's facilities to provide the
Services, Sprint Spectrum must obtain Manager's prior written consent.
2.2 THIRD PARTY VENDORS. Some of the Services might be
provided by third party vendors under arrangements between Sprint
Spectrum and the third party vendors. In some instances, Manager may
receive Services from a third party vendor under the same terms and
conditions that Sprint Spectrum receives those services. In other
instances, Manager may receive Services under the terms and conditions
set forth in an agreement between Manager and the third party vendor.
31. CHANGES TO ARTICLE 3 [ADDM XI,SS.30; REVISED BY THIS ADDENDUM]. (a)
Article 3 of the Services Agreement is amended and restated in its entirety to
read as follows:
3. FEES FOR SERVICES
3.1 SERVICES. Manager will pay Sprint Spectrum a fee for the
Services provided by or on behalf of Sprint Spectrum now or in the
future, subject to Section 2.1.1. Manager may not obtain these Services
from other sources, except as provided in this agreement.
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If an accounting classification change has the effect
of moving a Service from a CCPU Service or CPGA Service to a
Settled-Separately Manager Expense, the fees for the CCPU Services or
CPGA Services, as applicable, charged by Sprint Spectrum will be
reduced by the fees payable by Manager for the new Settled-Separately
Manager Expense.
3.2 FEES FOR SERVICES.
3.2.1 INITIAL PRICING PERIOD. The fees Manager will
pay Sprint Spectrum for the CCPU Services and CPGA Services provided to
Manager by or on behalf of Sprint Spectrum each month from the
Effective Date of Addendum XII until December 31, 2006 ("INITIAL
PRICING PERIOD"), will be:
(a) for the CCPU Services: $7.00 per subscriber
multiplied by the Number of Customers in Manager's Service Area, and
(b) for the CPGA Services: $23.00 per Gross Customer
Addition in Manager's Service Area multiplied by the Gross Customer
Additions in Manager's Service Area.
The fees will be paid as set forth in section 10 of
the Management Agreement.
3.2.2 PRICING PROCESS. The parties will reset the
CCPU and CPGA amounts to be applied in each pricing period after the
Initial Pricing Period ends. Each subsequent pricing period will last
three years (if Manager continues to use Sprint Spectrum or a Related
Party to provide these Services) with, for example, the second pricing
period beginning on January 1, 2007 and ending on December 31, 2009.
The process for resetting the amounts is as follows:
(a) Sprint Spectrum will give Manager proposed CCPU
and CPGA amounts by October 31 of the calendar year before the calendar
year in which the then current pricing period ends (e.g. if the pricing
period ends on December 31, 2006 then the amounts have to be presented
by October 31, 2005). The proposed amounts will be based on the amount
necessary to recover Sprint PCS' reasonable costs for providing the
CCPU Services and CPGA Services to Manager and the Other Managers.
Manager's representative and the Sprint PCS representative will begin
discussions regarding the proposed CCPU and CPGA amounts within 20 days
after Manager receives the proposed CCPU and CPGA amounts from Sprint
Spectrum.
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(b) The fee Manager will pay Sprint Spectrum for the
CCPU Services provided to Manager by or on behalf of Sprint Spectrum
each month beginning on January 1, 2007 until December 31, 2008 under
the pricing process described in this section 3.2.2 will not exceed
$8.50 per subscriber multiplied by the Number of Customers in Manager's
Service Area.
(c) If the parties do not agree on new CCPU and CPGA
amounts within 30 days after the discussions begin, then Manager may
escalate the discussion to the Sprint PCS Chief Financial Officer or
Sprint Spectrum may escalate the discussion to Manager's Chief
Executive Officer or Chief Financial Officer.
(d) If the parties cannot agree on the new CCPU and
CPGA amounts through the escalation process within 20 days after the
escalation process begins, then Manager may either
(i) submit the determination of the CCPU and
CPGA amounts to binding arbitration under section
14.2 of this agreement, excluding the escalation
process set forth in section 14.1 and continue
obtaining all of the CCPU Services and CPGA Services
from Sprint Spectrum at the CCPU and CPGA amounts the
arbitrator determines, or
(ii) procure from a vendor other than Sprint
Spectrum or self-provision all of the Services.
By December 1, 2006, the parties will agree on a service level
agreement for customer care services and collection services ("CUSTOMER-RELATED
SERVICES") that will apply to Customer-Related Services delivered by Sprint
Spectrum starting on January 1, 2007. If the parties cannot agree on a service
level agreement by December 1, 2006, either party may submit a proposed service
level agreement to binding arbitration under section 14.2 of the Management
Agreement, excluding the escalation process set forth in section 14.1. If the
arbitration concludes after January 1, 2007 the service level agreement, as
agreed upon through the arbitration process, will be effective as of January 1,
2007. The agreement will set forth 5 metrics for Customer-Related Services and
will provide that Sprint Spectrum will use commercially reasonable efforts to
meet the industry averages for those metrics as in effect on December 1, 2006.
The 5 metrics are:
(a) Service Grade Rate defined as percentage of calls answered in 60
seconds or less after the customer enters the call queue.
(b) Average Hold Time defined as average time a customer waits to talk to
a customer service representative once the customer enters the call
queue.
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(c) Abandoned Call Rate defined as the percentage of calls that disconnect
prior to talking to a customer service representative after the
customer enters the call queue.
(d) Net Write-Offs Rate defined as monthly write-offs of accounts
receivable, net of customer deposits, divided by monthly subscriber
revenue.
(e) Past-Due Accounts Receivable Aging Rates defined as percentage of
accounts receivable greater than 60 days from due date.
The service level agreement will provide that Sprint Spectrum
will give Manager a quarterly report on the above metrics. Beginning in 2008,
Manager will have the right to opt out of Sprint Spectrum providing the Customer
Related Services if the average of the metrics reflected in the four quarterly
reports for the prior calendar year indicate that Sprint Spectrum is not in
compliance with any 2 of the 5 metrics. To exercise the opt-out right, Manager
must give its opt-out notice to Sprint Spectrum during the first quarter of any
calendar year that Manager has an opt-out right. Upon receipt of an opt-out
notice, Manager and Sprint Spectrum will use commercially reasonable efforts to
transition the Customer-Related Services to Manager or a third party vendor
within 9 months after the opt-out notice date. Upon the parties' completion of
the transition, the parties will agree to an adjustment to the CCPU Service Fee
being charged by Sprint Spectrum to Manager. If the parties cannot agree to an
adjustment, Manager has the right to submit the determination to binding
arbitration under section 14.2 of the Management Agreement, excluding the
escalation process set forth in section 14.1, and continue obtaining all the
CPGA Services and remaining CCPU services from Sprint Spectrum. Manager will
reimburse Sprint Spectrum for transition and continuing operation costs in
accordance with Section 3.2.4.
Manager's opt-out right described above is its sole remedy if
Sprint Spectrum is not in compliance with the metrics; Sprint Spectrum's
non-compliance with the metrics does not constitute a breach of this agreement
or any other agreement between the parties.
Manager has the right to propose to Sprint Spectrum that
Manager self-provision or procure from a vendor some, but not all, of the
Services. Sprint Spectrum will discuss the proposal with Manager, but Manager
can only self-provision or procure from a vendor some of the Services if Sprint
Spectrum agrees.
Manager will begin paying Sprint Spectrum under the CCPU and
CPGA amounts that Sprint Spectrum presents for discussion at the beginning of
the new pricing period until the date on which the parties agree or until the
arbitrator determines the new CCPU and CPGA amounts, whichever occurs first.
Within 30 days after the amounts are determined (either by agreement or by
arbitration), Sprint PCS will recalculate the fees from the beginning of the new
pricing period and give notice to Manager of what the fees are and the amount of
any adjusting payments required. If Sprint PCS owes Manager a
59
refund of fees already paid, Sprint PCS may pay the amount to Manager or Sprint
PCS, in its sole discretion, may credit the amount of the refund against any
amounts Manager then owes to Sprint PCS. If Sprint PCS chooses to pay the
refund, it will make the payment at the time it sends the notice to Manager; If
Sprint PCS chooses to credit the refund, it will in the notice indicate the
amounts owing to which the credit will be applied. If Manager owes Sprint PCS
additional fees Manager will pay those fees to Sprint PCS within 10 days after
receipt of the notice.
3.2.3 SPRINT SPECTRUM FIRST RIGHT OF REFUSAL. Manager
must give Sprint Spectrum written notice of Manager's decision to
procure the Services from a third party vendor the Services at least
120 days before the end of the Initial Pricing Period or any subsequent
three-year pricing period and provide the third party vendor terms to
Sprint Spectrum. Sprint Spectrum will have 30 days from the date it
receives the third party vendor's terms to decide if it will provide
those Services to Manager under those terms.
Manager must agree to receive the Services from
Sprint Spectrum if Sprint Spectrum gives notice to Manager that it will
provide the Services to Manager on the third party vendor terms. If
Sprint Spectrum does not exercise its first right of refusal, Manager
must sign the agreement with the third party vendor on the same terms
and conditions as presented to Sprint Spectrum within 10 Business Days
after Sprint Spectrum notifies Manager of its decision not to exercise
the first right of refusal or the expiration of the 30-day period,
whichever occurs first. The procedure set forth in this section 3.2.3
will begin again if Manager does not sign the agreement with the third
party vendor as required in the preceding sentence.
3.2.4 TRANSITION AND CONTINUING OPERATING COSTS.
Sprint Spectrum will cooperate with Manager and work diligently and in
good faith to implement the transition to another service provider
(including Manager, if applicable), in a reasonably efficient and
expeditious manner.
Manager will pay for all reasonable out-of-pocket
costs that Sprint Spectrum and its Related Parties actually incur to
(i) transfer any Service(s) provided to Manager to a third party vendor
or to enable Manager to self-provide any Service(s), and (ii) operate
and maintain systems, processes, licenses and equipment to support
those Services. Sprint Spectrum will bill Manager monthly for these
costs.
3.2.5 SETTLED-SEPARATELY MANAGER EXPENSES. Manager
will pay to or reimburse Sprint Spectrum for any amounts that Sprint
Spectrum or its Related Parties pays for Settled-Separately Manager
Expenses. "SETTLED-SEPARATELY MANAGER EXPENSES" means those items the
parties choose to settle separately between themselves (e.g. accessory
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margins, reciprocal retail store cost recovery) that are listed in
sections C and D of Schedule 2.1.1.
Sprint Spectrum will give Manager at least 60 days'
prior written notice by providing an amended Schedule 2.1.1 to Manager
in accordance with the provisions of section 9.1 of any additional
Services added to sections C and D of Schedule 2.1.1, but no additional
service may be added to the extent it is the same as, or functionally
equivalent to, either:
(a) any service that Sprint Spectrum or any
of its Related Parties currently provides to Manager as a CCPU
Service or a CPGA Service (unless the fees payable by Manager
to Sprint Spectrum hereunder are correspondingly reduced) or
(b) any service or benefit that Manager
currently receives from Sprint Spectrum or its Related Parties
but for which Manager does not pay a separate fee before the
Effective Date.
For each Settled-Separately Manager Expense, Sprint Spectrum
will provide sufficient detail to enable Manager to determine how the
expense was calculated, including the unit of measurement (e.g., per
subscriber per month or per call) and the record of the occurrences
generating the expense (e.g., the number of calls attributable to the
expense). If an expense is not reasonably subject to occurrence level
detail, Sprint Spectrum will provide reasonable detail on the process
used to calculate the fee and the process must be reasonable. A detail
or process is reasonable if it is substantially in the form as is
customarily used in the wireless industry. The Settled-Separately
Manager Expenses will be paid as set forth in section 10 of the
Management Agreement. Sprint Spectrum and its Related Parties may
arrange for Manager to pay any of the Settled-Separately Manager
Expenses directly to the vendor after giving Manager reasonable notice.
Unless Manager specifically agrees otherwise, any
Settled-Separately Manager Expense that Sprint Spectrum or any of its
Related Parties is entitled to charge or pass through to Manager under
this agreement or the Management Agreement will reflect solely
out-of-pocket costs and expenses that Sprint Spectrum or its Related
Parties actually incur, will be usage-based or directly related to
revenue-generating products and services, and will not include any
allocation of Sprint PCS' or its Related Parties' internal costs or
expenses (including, but not limited to, allocations of general and
administrative expenses or allocations of employee compensation or
related expenses). For clarity, Sprint Spectrum's or its Related
Parties' out-of-pocket costs for handset and
61
accessory inventory consist of actual inventory invoice costs less any
volume incentive rebates and price protection credits that Sprint
Spectrum or its Related Parties receive from a vendor.
3.3 LATE PAYMENTS. Any payment due under this section 3 that
Manager fails to pay to Sprint Spectrum in accordance with this
agreement will bear interest at the Default Rate beginning (and
including) the 6th day after the due date stated on the invoice until
(and including) the date on which the payment is made.
3.4 TAXES. Manager will pay or reimburse Sprint Spectrum for
any sales, use, gross receipts or similar tax, administrative fee,
telecommunications fee or surcharge for taxes or fees that a
governmental authority levies on the fees and charges that Manager pays
to Sprint Spectrum or a Related Party.
32. AUDIT [ADDM XI,SS.31]. Section 5.1.2 of the Services Agreement is
amended and restated in its entirety to read as follows:
5.1.2 AUDITS. On reasonable advance notice by one party, the
other party must provide its independent or internal auditors access to
its appropriate financial and operating records, including, without
limitation, vendor and distribution agreements, for purposes of
auditing the amount of fees (including the appropriateness of items
included in Settled-Separately Manager Expenses), costs, expenses
(including operating metrics referred to in this agreement and the
Services Agreement relating to or used in the determination of Inter
Service Area Fees, Reseller Customer Fees, CCPU Services or CPGA
Services) or other charges payable in connection with the Service Area
for the period audited. The party that requested the audit may decide
if the audit is conducted by the other party's independent or internal
auditors. Manager and Sprint Spectrum may each request no more than one
audit per year.
(a) If the audit shows that Sprint Spectrum was
underpaid then, unless the amount is contested, Manager will
pay to Sprint Spectrum the amount of the underpayment within
10 Business Days after Sprint Spectrum gives Manager written
notice of the underpayment determination.
(b) If the audit determines that Sprint Spectrum was
overpaid then, unless the amount is contested, Sprint Spectrum
will pay to Manager the amount of the overpayment within 10
Business Days after Manager gives Sprint Spectrum written
notice of the overpayment determination.
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The auditing party will pay all costs and expenses related to
the audit unless the amount owed to the audited party is reduced by
more than 10% or the amount owed by the audited party is increased by
more than 10%, in which case the audited party will pay the costs and
expenses related to the audit.
If either party disputes the auditor's conclusion then the
dispute will be submitted to binding arbitration in accordance with
section 14.2 of the Management Agreement, excluding the escalation
process set forth in section 14.1 of the Management Agreement.
Sprint PCS will provide a Type II Report to Manager annually.
If Manager, on the advice of its independent auditors or its legal
counsel, determines that a statute, regulation, rule, judicial decision
or interpretation, or audit or accounting rule, policy or literature
published by the accounting or auditing profession or other
authoritative rule making body (such as the Securities and Exchange
Commission, the Public Company Accounting Oversight Board or the
Financial Accounting Standards Board) requires additional assurances
beyond SAS 70, then Sprint Spectrum will cooperate with Manager to
provide the additional assurances. Sprint Spectrum's independent
auditors will prepare any Type II Report or Manager Management Report
provided under this section 5.1.2 and will provide an opinion on the
controls placed in operation and tests of operating effectiveness of
those controls in effect at Sprint PCS over Manager Management
Processes.
33. NOTICES [ADDM XI,SS.32]. Section 9.1 of the Services Agreement is
amended and restated in its entirety to read as follows:
9.1 NOTICES. Any notice, payment, invoice, demand or
communication required or permitted to be given by any provision of
this agreement must be in writing and mailed (certified or registered
mail, postage prepaid, return receipt requested), sent by hand or
overnight courier, charges prepaid or sent by facsimile or email (in
either instance with acknowledgement or read receipt received), and
addressed as described in section 17.1(b) of the Management Agreement,
or to any other address or number as the person or entity may from time
to time specify by written notice to the other parties.
The subject line of any email notice that purports to add any
additional service to Schedule 2.1.1 must read "Additional Service to
Schedule 2.1.1". The new Schedule 2.1.1 must also be attached to the
email, and notice will also be provided to those individuals listed for
notices for Manager regarding Program Requirement Changes set forth in
section 17.1(b) of the Management Agreement.
63
Any notice, demand or communication intended to be notice of a
breach of an agreement or notice of an Event of Termination must
clearly indicate that intent, state the section(s) of the agreements
allegedly breached, and in addition to any other form of notice it must
be mailed or sent by overnight courier in the manner described in the
first paragraph of this section 9.1.
Manager will promptly give Sprint Spectrum a copy of any
notice Manager receives from the Administrative Agent or any Lender,
and a copy of any notice Manager gives to the Administrative Agent or
any Lender. Sprint Spectrum will promptly give Manager a copy of any
notice that Sprint Spectrum receives from the Administrative Agent or
any Lender and a copy of any notice that Sprint Spectrum gives to the
Administrative Agent or any Lender.
All notices and other communications given to a party in
accordance with the provisions of this agreement will be deemed to have
been given when received.
34. ENTIRE AGREEMENT; AMENDMENTS [ADDM XI,SS.33]. Section 9.6 of the
Services Agreement is amended and restated in its entirety to read as follows:
9.6 ENTIRE AGREEMENT; AMENDMENTS. The provisions of this
agreement and the Management Agreement including the exhibits to those
agreements set forth the entire agreement and understanding between the
parties as to the subject matter of this agreement and supersede all
prior agreements, oral or written, and other communications between the
parties relating to the subject matter of this agreement. Except for
Sprint Spectrum's right to add additional Services to Schedule 2.1.1
subject to the provisions of section 2.1.1 and section 3.2.5, this
agreement may be modified or amended only by a written amendment signed
by the persons or entities authorized to bind each party.
35. FORCE MAJEURE [ADDM XI,SS.34]. The second paragraph of section 9.8 of
the Services Agreement is amended and restated in its entirety to read as
follows: Neither Manager nor Sprint Spectrum, as the case may be, is in breach
of any covenant in this agreement and no Event of Termination will occur as a
result of the failure of such party to comply with any covenant, if the party's
non-compliance with the covenant results primarily from:
(i) any FCC order or any other injunction that any
governmental authority issues that impedes the party's
ability to comply with the covenant,
(ii) the failure of any governmental authority to grant
any consent, approval, waiver or authorization or any
64
delay on the part of any governmental authority in granting
any consent, approval, waiver or authorization,
(iii) the failure of any vendor to deliver in a timely
manner any equipment or service, or
(iv) any act of God, act of war or insurrection, riot,
fire, accident, explosion, labor unrest, strike, civil
unrest, work stoppage, condemnation or any similar cause or
event not reasonably within the control of the party.
36. GOVERNING LAW, JURISDICTION AND CONSENT TO SERVICE OF PROCESS [ADDM
XI,SS.35]. Section 9.11 of the Services Agreement is replaced with the following
language:
9.11 GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS.
9.11.1 GOVERNING LAW. The internal laws of the State
of Kansas (without regard to principles of conflicts of law)
govern the validity of this agreement, the construction of its
terms, and the interpretation of the rights and duties of the
parties.
9.11.2 JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) Each party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive
jurisdiction of any Kansas State court sitting in the County
of Johnson or any Federal court of the United States of
America sitting in the District of Kansas, and any appellate
court from any such court, in any suit action or proceeding
arising out of or relating to this agreement, or for
recognition or enforcement of any judgment, and each party
hereby irrevocably and unconditionally agrees that all claims
in respect of any such suit, action or proceeding may be heard
and determined in such Kansas State Court or, to the extent
permitted by law, in such Federal court.
(b) Each party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally do so, any
objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or
relating to this agreement in Kansas State court sitting in
the County of Johnson or any Federal court sitting in the
District of Kansas. Each party hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or
proceeding in any such court and further waives the right to
object, with respect to such suit, action or proceeding, that
such court does not have jurisdiction over such party.
65
(c) Each party irrevocably consents to service of
process in the manner provided for the giving of notices
pursuant to this agreement, provided that such service shall
be deemed to have been given only when actually received by
such party. Nothing in this agreement shall affect the right
of a party to serve process in another manner permitted by
law.
TRADEMARK LICENSE AGREEMENTS
37. NOTICES [ADDM XI,SS.36]. Section 15.1 of each of the Trademark License
Agreements is amended and restated in its entirety to read as follows:
Section 15.1. Notices. Any notice, payment, invoice, demand or
communication required or permitted to be given by any provision of
this agreement must be in writing and mailed (certified or registered
mail, postage prepaid, return receipt requested), sent by hand or
overnight courier, or sent by facsimile (with acknowledgment received),
charges prepaid and addressed as described in section 17.1(b) of the
Management Agreement, or to any other address or number as the person
or entity may from time to time specify by written notice to the other
parties.
Any notice, demand or communication intended to be notice of a
breach of an agreement or notice of an Event of Termination must
clearly indicate that intent, state the section(s) of the agreements
allegedly breached, and be mailed or sent by overnight courier in the
manner described in the preceding paragraph.
Licensee will promptly give Licensor a copy of any notice
Licensee receives from any Administrative Agent or any Lender, and a
copy of any notice Licensee gives to any Administrative Agent or any
Lender. Licensor will promptly give Licensee a copy of any notice that
Licensor receives from the Administrative Agent or any Lender and a
copy of any notice that Licensor gives to the Administrative Agent or
any Lender.
All notices and other communications given to a party in
accordance with the provisions of this agreement will be deemed to have
been given when received.
38. GOVERNING LAW [ADDM XI,SS.37]. Section 15.8 of each of the Trademark
License Agreements is replaced by the following language:
15.8 Governing Law. The internal laws of the State of Kansas (without
regard to principles of conflicts of law) govern the validity of this
agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
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39. JURISDICTION [ADDM XI,SS.38]. Section 15.13 of each of the Trademark
License Agreements is replaced by the following language:
15.13 Jurisdiction; Consent to Service of Process.
(a) Each party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction
of any Kansas State court sitting in the County of Johnson or any
Federal court of the United States of America sitting in the District
of Kansas, and any appellate court from any such court, in any suit
action or proceeding arising out of or relating to this agreement, or
for recognition or enforcement of any judgment, and each party hereby
irrevocably and unconditionally agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in such
Kansas State Court or, to the extent permitted by law, in such Federal
court.
(b) Each party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this agreement in Kansas
State court sitting in the County of Johnson or any Federal court
sitting in the District of Kansas. Each party hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or
proceeding in any such court and further waives the right to object,
with respect to such suit, action or proceeding, that such court does
not have jurisdiction over such party.
(c) Each party irrevocably consents to service of
process in the manner provided for the giving of notices pursuant to
this agreement, provided that such service shall be deemed to have been
given only when actually received by such party. Nothing in this
agreement shall affect the right of a party to serve process in another
manner permitted by law.
SCHEDULE OF DEFINITIONS
40. DELETED DEFINITION [ADDM XI,SS.39]. The definition of "Available
Services" is deleted.
41. ADDITIONAL, AMENDED OR SUPPLEMENTED DEFINITIONS [ADDM XI,SS.40; REVISED
BY THIS ADDENDUM]. The following are new or amended definitions, unless
otherwise indicated:
"ADDITIONAL INTEREST" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"ALAMOSA MANAGERS" means Manager and the Other Managers controlled by
Alamosa Holdings, Inc.
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"ALLOCABLE SOFTWARE FEE" has the meaning set forth in section 1.3.4(e)
of the Management Agreement.
"ALLOCATED WRITE-OFFS" has the meaning set forth in section 10.3.4 of
the Management Agreement.
"A MARKETS" [ADDM VII, SS.1] has the meaning set forth in section 2.1
of the Management Agreement.
"AMOUNT BILLED (NET OF CUSTOMER CREDITS)" has the meaning set forth in
section 10.3.3 of the Management Agreement.
"ASSESSMENT DATE" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"AVAILABLE EBV" [ADDM VII, SS.1] has the meaning set forth in section
2.1 of the Management Agreement.
"AWAY NETWORK" means:
(i) any portion of the Sprint PCS Network other than
Manager's Service Area Network, in the case of Customers with an
NPA-NXX assigned to the Service Area (or any other such
designation in accordance with section 17.17 of the Management
Agreement), and
(ii) Manager's Service Area Network, in the case of
Customers with an NPA-NXX assigned to an area outside the Service
Area (or any other such designation in accordance with section
17.17 of the Management Agreement).
"BILLED COMPONENT(S)" has the meaning set forth in section 10.3.2 of
the Management Agreement.
"BILLED MONTH" has the meaning set forth in section 10.2.1 of the
Management Agreement.
"BILLED REVENUE" has the meaning set forth in section 10.2.1 of the
Management Agreement.
"B MARKET" [ADDM VII, SS.1] has the meaning set forth in section 2.1
of the Management Agreement.
"CCPU SERVICES" means those Services listed in section A of Schedule
2.1.1 to the Services Agreement.
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"CHANGE OF CONTROL TRANSACTION" [ADDM VII, SS.1] has the meaning set
forth in section 2.1 of the Management Agreement.
"CHIEF FINANCIAL OFFICER OF SPRINT PCS", "SPRINT PCS CHIEF FINANCIAL
OFFICER" and other references to the Chief Financial Officer of Sprint PCS
mean the Senior Vice President - Finance of Sprint Corporation designated
to serve as the chief financial officer of Sprint PCS or if none, the
individual serving in that capacity.
"CONTRACTUAL LAUNCH DATE" [ADDM VII, SS.1] has the meaning set forth
in section 2.1 of the Management Agreement.
"CPGA SERVICES" means those Services listed in section B of Schedule
2.1.1 to the Services Agreement.
"CSA" has the meaning set forth in section 10.2.1 of the Management
Agreement.
"CUSTOMER" means any customer, except Reseller Customers or customers
of third parties for which Manager provides solely switching services, who
purchases Sprint PCS Products and Services, regardless of where their
NPA-NXX is assigned.
"CUSTOMER CREDITS" has the meaning set forth in section 10.2.1 of the
Management Agreement.
"CUSTOMER EQUIPMENT CHARGES" has the meaning set forth in section
10.3.2.5 of the Management Agreement.
"CUSTOMER EQUIPMENT CREDITS" has the meaning set forth in section
10.3.2.2 of the Management Agreement.
"CUSTOMER-RELATED SERVICES" has the meaning set forth in section 3.2.2
of the Services Agreement.
"CUSTOMER TAXES" means the amounts that Sprint PCS bills to Manager
Accounts for taxes, including, without limitation, federal, state, and
local sales, use, gross and excise tax.
"EFFECTIVE DATE" has the meaning set forth in the preamble of this
Addendum.
"ENTERPRISE VALUE" means either:
(i) if the entity has issued publicly-traded equity, the combined
book value of the entity's outstanding debt and preferred stock less
cash plus the fair market value of each class of its publicly-traded
equity other
69
than any publicly-traded preferred stock. For the purposes of this
definition, the fair market value of a class of the entity's
publicly-traded equity (other than publicly-traded preferred stock) is
equal to the product of:
(A) the number of issued and outstanding shares of the class
of publicly-traded equity as of the date of determination, times
(B) the applicable average closing price (or average closing
bid, if traded on the over-the-counter market) per share of the
class of publicly-traded equity over the 21 consecutive trading
days immediately preceding the date of determination; or
(ii) if the entity does not have issued publicly-traded equity,
the combined book value of the entity's outstanding debt and equity
less cash.
"E911 PHASE I SURCHARGES" means all costs related to Phase I E911
functionality.
"E911 PHASE II SURCHARGES" has the meaning set forth in section
10.3.2.6 of the Management Agreement.
"ETC" has the meaning set forth in section 10.6.1 of the Management
Agreement.
"FEE BASED ON BILLED REVENUE" has the meaning set forth in section
10.2.1 of the Management Agreement.
"FULL BUILDOUT COVERAGE" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"FULL BUILDOUT DATE" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"GROSS CUSTOMER ADDITIONS IN MANAGER'S SERVICE AREA" means the average
number of Customers activated (without taking into consideration the number
of Customers lost) during the previous month with an NPA-NXX assigned to
the Service Area as reported in Sprint PCS' most recent monthly KPI report.
"HARD LAUNCH" [ADDM VII, SS.1] has the meaning set forth in section
2.1 of the Management Agreement.
"INITIAL 3G DATA FEE PERIOD" has the meaning set forth in section
10.4.1.3(a) of the Management Agreement.
70
"INITIAL PRICING PERIOD" has the meaning set forth in section 3.2.1 of
the Services Agreement.
"INTER SERVICE AREA FEE" has the meaning set forth in section 4.3 of
the Management Agreement.
"INVESTMENT BANKER" has the meaning set forth in section 9.3.2 of the
Management Agreement.
"MANAGER ACCOUNTS" has the meaning set forth in section 10.2.1 of the
Management Agreement.
"MANAGER MANAGEMENT PROCESS" has the meaning set forth in section
12.1.2 of the Management Agreement.
"MANAGER MANAGEMENT REPORT" has the meaning set forth in section
12.1.2 of the Management Agreement.
"MANAGER SHARES" [ADDM VII, SS.1] has the meaning set forth in section
2.1 of the Management Agreement.
"MINIMUM LAUNCH FOOTPRINT" [ADDM VII, SS.1] has the meaning set forth
in section 2.1 of the Management Agreement.
"NET BILLED REVENUE" has the meaning set forth in section 10.2.1 of
the Management Agreement.
"NEW COVERAGE" means the build-out in the Service Area that is in
addition to the build-out required under the then-existing Build-out Plan,
which build-out Sprint PCS or Manager decides should be built-out.
"90-DAY THRESHOLD" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"NPA-NXX" means NPA-NXX or an equivalent identifier, such as a network
access identifier (NAI).
"NUMBER OF CUSTOMERS IN MANAGER'S SERVICE AREA" means the average
number of Customers with NPA-NXXs assigned to the Service Area reported in
Sprint PCS' most recent monthly KPI report.
"180-DAY THRESHOLD" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"OTHER AFFILIATES" [ADDM VIII, SS.2 AND ADDM IX, SS.2] has the meaning
set forth in section 17.26 of the Management Agreement.
71
"OUTBOUND ROAMING FEES" means the amounts that Sprint PCS or its
Related Parties bills to Manager Accounts for calls placed on a non-Sprint
PCS Network.
"OVERALL CHANGES" has the meaning set forth in section 1.10(a) of the
Management Agreement.
"PAYMENT DATE" [ADDM VII, SS.1] has the meaning set forth in section
2.1 of the Management Agreement.
"PENALTY DATE" [ADDM VII, SS.1] has the meaning set forth in section
2.1 of the Management Agreement.
"PRIORITY FACTOR" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"PROGRAM REQUIREMENT CHANGE" has the meaning set forth in section
9.3.1 of the Management Agreement.
"PRORATION FACTOR" [ADDM VII, SS.1] has the meaning set forth in
section 2.1 of the Management Agreement.
"REQUIRED RESALE PARTICIPATION PERIOD" means the period from April 1,
2004, until the later of (1) December 31, 2006 and (2) the expiration of
any three-year period beginning after December 31, 2006, for which Sprint
PCS and Manager have reached agreement in accordance with section
10.4.1.1(c) with respect to the terms, fees and conditions applicable to
Manager's participation in resale arrangements entered into by Sprint PCS.
"RESELLER CUSTOMER" means customers of companies or organizations with
a Private Label PCS Services or similar resale agreement with Sprint PCS or
Manager.
"RESELLER CUSTOMER FEES" has the meaning set forth in section 10.4.1.1
of the Management Agreement.
"SCCLP" has the meaning set forth in section 3.4.2(b) of the
Management Agreement.
"SELECTED SERVICES" means Services.
"SERVICE AREA NETWORK" means the network that is directly required for
the provision of telecommunications services to Customers and is managed by
Manager under the Management Agreement in the Service Area under the
License.
72
"SERVICES" has the meaning set forth in section 2.1.1 of the Services
Agreement.
"SETTLED-SEPARATELY MANAGER EXPENSES" has the meaning set forth in
section 3.2.5 of the Services Agreement.
"SOFTWARE" means only that software and software features currently
existing or developed in the future that are used in connection with
telecommunications equipment owned or leased by Manager in Manager's
provisioning of wireless services in the Service Area and includes, without
limitation, software maintenance, updates, improvements, upgrades and
modifications. "Software" expressly excludes:
(i) software "rights to use" licenses to the extent paid to
the licensor directly by Manager, and
(ii) software operating Sprint PCS' national platforms,
billing system platforms, customer service platforms and like
applications.
"SOFTWARE FEES" means costs associated (including applicable license
fees) with procuring software, software maintenance, software upgrades and
other software costs needed to provide uniform and consistent operation of
the wireless systems within the Sprint PCS Network.
"SPRINT PCS" means any or all of the following Related Parties who are
License holders or signatories to the Management Agreement: Sprint Spectrum
L.P., a Delaware limited partnership, WirelessCo, L.P., a Delaware limited
partnership, SprintCom, Inc., a Kansas corporation, PhillieCo Partners I,
L.P., a Delaware limited partnership, PhillieCo, L.P., a Delaware limited
partnership, Sprint Telephony PCS, L.P., a Delaware limited partnership,
Sprint PCS License, L.L.C., a Delaware limited liability company, American
PCS Communications, LLC, a Delaware limited liability company, and APC PCS,
LLC, a Delaware limited liability company. Any reference in the Management
Agreement or Services Agreement to Cox Communications PCS, L.P., a Delaware
limited partnership, or Cox PCS License, L.L.C., a Delaware limited
liability company, is changed to Sprint Telephony PCS, L.P., a Delaware
limited partnership, or Sprint PCS License, L.L.C., a Delaware limited
liability company, respectively, to reflect name changes filed with the
Delaware Secretary of State in 2002.
"SPRINT PCS ARPU" means the average revenue per user publicly
announced by Sprint PCS or its Related Parties for the most recent calendar
year. Sprint PCS ARPU is generally calculated by dividing wireless service
revenues by average wireless subscribers.
73
"SPRINT PCS RETAIL YIELD FOR VOICE AND 2G DATA USAGE" means the
quotient calculated by dividing (a) Sprint PCS ARPU less the 3G data
component in the Sprint PCS ARPU by (b) the reported minutes of use per
subscriber for the calendar year for which the Sprint PCS ARPU was
calculated.
"SPRINT PCS RETAIL YIELD FOR 3G DATA USAGE" means the quotient
calculated by dividing (a) the 3G data component in the Sprint PCS ARPU by
(b) the kilobytes of use for 3G data usage per subscriber for the calendar
year for which the Sprint PCS ARPU was calculated.
"SUBSIDY FUNDS" has the meaning set forth in section 10.6.1 of the
Management Agreement.
"3M-POPS MANAGER" means any Other Manager whose ultimate parent entity
(as defined by the Hart-Scott-Rodino Antitrust Improvements Act of 1976)
controls entities with 3 million or more covered pops.
"TOTAL SOFTWARE COST" means the amount paid by Sprint PCS to the
vendor directly associated with the Software used by Sprint PCS, Manager
and Other Managers (if and to the extent Manager and the Other Managers
have agreed to pay any Allocable Software Fee) for the Sprint PCS Network
for which Manager is not obligated to pay the Software vendor directly, net
of any discounts or rebates and excluding any mark-up by Sprint PCS for
administrative or other fees.
"TRANSITION DATE" has the meaning set forth in section 10.12.3 of the
Management Agreement.
"TYPE II REPORT" has the meaning set forth in section 12.1.2 of the
Management Agreement.
"ULTIMATE PARENT" has the meaning set forth in the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
"USF CHARGES" has the meaning set forth in section 10.3.2.7 of the
Management Agreement.
"VENDOR SOFTWARE" has the meaning set forth in section 1.3.4(b) of the
Management Agreement.
"WIRELESS MOBILITY COMMUNICATIONS NETWORK" [ADDM VIII, SS.8] means a
radio communications system operating in the 1900 MHz range under the rules
designated as subpart E of Part 24 of the FCC's rules.
"WLNP SURCHARGES" has the meaning set forth in section 10.2.4 of the
Management Agreement.
74
"WRITE-OFFS" has the meaning set forth in section 10.3.1 of the
Management Agreement.
B. CROSS-REFERENCES TO OTHER PARAGRAPHS IN PREVIOUS ADDENDA.
Listed below are those paragraphs in the previous addenda that
are interpretations or applications of the Management Agreement, the Services
Agreement, the Trademark License Agreements or the Schedule of Definitions that
are not listed above. These serve as cross-references to facilitate finding
provisions in the previous addenda. The number shown at the beginning of each
item is the paragraph reference in the designated Addendum.
Addendum I
1. Potential Expansion of Service Area
Addendum II
1. Modification of Build-Out Plan
2. Simultaneous Execution of Asset Sale Agreement
3. Designation of Selected Services
4. Completion of New BTA Builds
5. Sprint LTD Coverage
Addendum III
1. Modification of Build-Out Plan
2. Simultaneous Execution of Asset Sale Agreement
3. Backhaul and Interconnection
4. Designation of Selected Services
5. Columbia, MO and Jefferson City, MO Build-Out
6. Completion of Asset Transfer
7. Right of Sprint PCS to Repurchase Transferred Assets
8. Sprint LTD Coverage
Addendum IV
1. Modification of Build-Out Plan
2. Backhaul and Interconnection
3. Consent and Agreement ("C&A")-Related: Use of Loan
Proceeds
4. C&A-Related: C&A Not Assignable
6. Sale of Operating Assets or License
7. C&A-Related: No Default under Credit Documents or
Sprint Agreements
75
8. Counterparts
Addendum V
1. Modification of Build-Out Plan
2. Backhaul and Interconnection
3. Designation of Selected Services
Addendum VI
2. Reaffirmation of Sprint Agreements
3. Counterparts
Addendum VII
2. Reaffirmation of Sprint Agreements
3. Counterparts
Addendum VIII
1. C&A-Related: Use of Loan Proceeds
6. Expiration of Limited Remedies Period
7. Revised Financing Plan
10. Reaffirmation of Sprint Agreements
11. Counterparts
Addendum IX
1. C&A-Related: Use of Loan Proceeds
3. Financing Plan
4. Reaffirmation of Sprint Agreements
5. Counterparts
Addendum X (initial simplified pricing addendum)
----------
None (all are superseded by Addendum XI).
Addendum XI
None (all are superseded by this Addendum).
76
C. OTHER PROVISIONS.
1. MANAGER AND SPRINT PCS' REPRESENTATIONS. Manager and Sprint PCS each
represents and warrants that its respective execution, delivery and performance
of its obligations described in this Addendum have been duly authorized by
proper action of its governing body and do not and will not violate any material
agreements to which it is a party. Each of Manager and Sprint PCS also
represents and warrants that there are no legal or other claims, actions,
counterclaims, proceedings or suits, at law or in arbitration or equity, pending
or, to its knowledge, threatened against it, its Related Parties, officers or
directors that question or may affect the validity of this Addendum, the
execution and performance of the transactions contemplated by this Addendum or
that party's right or obligation to consummate the transactions contemplated by
this Addendum.
2. REAFFIRMATION OF SPRINT AGREEMENTS. Each of the undersigned reaffirms in
their entirety the Management Agreement, the Services Agreement and the
Trademark License Agreements, together with their respective rights and
obligations under those agreements.
3. COUNTERPARTS. This Addendum may be executed in one or more counterparts,
including facsimile counterparts, and each counterpart will have the same force
and effect as an original instrument as if the parties to the aggregate
counterparts had signed the same instrument.
[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]
77
The parties have caused this Addendum XII to be executed as of
the date first above written.
SPRINT SPECTRUM L.P.
By: /s/ Steve Nielsen
---------------------------------------------
Name: Steve Nielsen
Title: SVP Finance
WIRELESSCO, L.P.
By: /s/ Steve Nielsen
---------------------------------------------
Name: Steve Nielsen
Title: SVP Finance
SPRINT COMMUNICATIONS COMPANY L.P.
By: /s/ Tom Murphy
---------------------------------------------
Name: Tom Murphy
Title: Senior Vice President - Corporate
Communication & Brand Management
ALAMOSA MISSOURI, LLC
a Missouri limited liability company
By: ALAMOSA HOLDINGS, LLC
a Delaware limited liability company,
as the sole equity holder
By: /s/ David E. Sharbutt
----------------------------------------
David E. Sharbutt
President
78
SCHEDULE 1
Program Requirement 3.5.2 dated August 13, 2002, and labeled "Exhibit 3.5.2
Program Requirement for Voluntary Resale of Products and Services By Voluntary
Resellers Under the Private Label Solutions Program" is amended by replacing the
title, preamble and general terms with the following, and by deleting all
attachments:
PROGRAM REQUIREMENT FOR RESALE OF PRODUCTS AND SERVICES
BY
RESELLERS UNDER THE PRIVATE LABEL SOLUTIONS PROGRAM
(5/1/04)
Sprint PCS' Resale Program ("RESALE PROGRAM") is described in
Section 3.5.2 of the Sprint PCS Management or Affiliations Agreement and
consists of this Program Requirement 3.5.2 (the "PROGRAM REQUIREMENT 3.5.2") and
separate attachments to the Program Requirement 3.5.2 ("ATTACHMENT(S)"). Each
Attachment is a separate Resale Program and includes a specific list of
companies with which Sprint PCS contracts to sell Sprint PCS Products and
Services under brand names other than the Brands.
"Capitalized terms used and not otherwise defined in this
Program Requirement 3.5.2 have the meaning ascribed to them in the Schedule of
Definitions in the Management or Affiliations Agreement. Section and Exhibit
references are to Sections and Exhibits of the Management or Affiliations
Agreement unless otherwise noted.
"As used in this Program Requirement "NPA-NXX" of Manager or
Affiliate means a NPA-NXX in the Service Area of that Manager or Affiliate or an
equivalent identifier, such as a network access identifier (NAI).
GENERAL TERMS
Unless otherwise specified, the Program Requirements outlined below apply to the
resellers set forth in the Attachments.
1. PRODUCTS AND SERVICES OFFERED. Sprint PCS may from time to time
limit the Sprint PCS Products and Services that are provided to resellers.
Manager will provide to resellers those Sprint PCS Products and Services that
Sprint PCS provides to the resellers, and Manager will support products and
services offered resellers in the same fashion that Manager supports similar
Sprint PCS Products and Services.
2. INFORMATION AND MINS. Manager will allow Sprint PCS access to
information necessary to bill resellers, including Call Detail Records and basic
provisioning information. For purposes of clarification, all such information
will constitute "Confidential Information" for purposes of the Management
Agreement. Neither Sprint PCS nor Manager will have access to resellers'
end-users' personal information. Sprint PCS will administer NPA-NXXs available
for resellers in a manner substantially the same as the MIN allocation process
in place for Sprint PCS owned markets. Sprint PCS will provide resellers with an
unbranded coverage map and zip code information for the Manager's service
area(s) substantially the same as the coverage map and zip code information
provided for Sprint PCS owned service areas.
3. CONTACTS AND DISPUTES. Manager will direct any questions or disputes
regarding a reseller or resale arrangement to the designated representative(s)
within the Management Agreement and will not contact the resellers directly. Any
disputes between Manager and Sprint PCS regarding a resale arrangement will be
resolved under the terms of the Management Agreement.
4. PRICING: SIX-SECOND INCREMENT BILLING. For all QuickNet Connect
(QNC) data and other traffic on the Manager's Service Area Network for which
Sprint PCS bills a reseller in six-second increments or some other incremental
measurement other than one-minute ("OTHER INCREMENT"), Sprint PCS will settle
with Manager in six-second increments or such Other Increment, as applicable.
Billed charges (per call or event) that result in fractional cents may be
rounded up to the next whole cent.
5. SPRINT 3G DATA SERVICE. In addition to reselling certain Sprint PCS
Products and Services under brand names other than the Brands, some resellers
are also permitted to sell Sprint's 1XRTT advanced multimedia data services and
premium services associated with the PCS Vision service ("SPRINT 3G DATA
SERVICE") using the Sprint and PCS Vision service marks. If Manager specifically
consented to a reseller's use of the Brands in selling Sprint 3G Data Service in
the Manager's Service Area, the Manager will be compensated for Sprint 3G Data
Service as follows:
The revenue for Sprint 3G Data Service sold by resellers using the
Brands to reseller subscribers having an NPA-NXX of Manager will be
treated as Billed Revenue under the Management Agreement. Billed
Revenue will be based on reseller specific Sprint 3G Data Service
pricing set forth in Attachment 1.1 to Program Requirement 3.5.2. From
time to time, Sprint may amend the rates charged to Voluntary Resellers
for Sprint 3G Data Service.
6. SHORT MESSAGE SERVICE (SMS). For SMS messages on the Manager's
network used by subscribers of Voluntary Resellers with an NPA-NXX of Manager,
Manager will be compensated at the rate set forth in Attachment 1.2 to Program
Requirement 3.5.2, which may be amended from time to time in accordance with the
Management Agreement. For SMS messages used by subscribers of Voluntary
Resellers
with an NPA-NXX of Manager, there will be no compensation either paid or owed
when such subscribers are traveling outside of the Manager's Service Area.
SMS messages means circuit-switched short alphanumeric messages on a
Voluntary Reseller subscriber's handset.
7. FUTURE SERVICES. If Sprint PCS elects to enter into resale
arrangement with any then existing resellers or new resellers for any services
other than those services described in the current Attachments to this Program
Requirement 3.5.2 ("FUTURE SERVICES"), Manager is not required to activate
subscribers for the Future Services with an NPA-NXX of Manager until the next
available opt out date. If Manager does not elect to opt out of a Future
Services at the first opt out date following the date that Manager is notified
in writing of the resale arrangement for Future Services, Manager must allow the
then existing resellers of the Future Services and all future resellers of the
Future Services to activate subscribers with an NPA-NXX of Manager and Manager
must support those resellers of Future Services throughout the term of their
resale arrangements with Sprint PCS, including any renewal or phase out periods.
Sprint PCS will compensate Manager for the resale of Future Services at rates to
be established in future Attachments to Program Requirement 3.5.2, as amended
from time to time in accordance with the Management Agreement, which rates will
be communicated in writing to Manager in advance.
ATTACHMENT NO. 1.0 TO PROGRAM REQUIREMENT 3.5.2
RESALE PROGRAM
This Attachment No. 1.0 to Program Requirement 3.5.2 contains the list of
resellers included in the Resale Program as of April 1, 2004.
RESELLERS
Effective
Renewal Renewal
Date Date Period *
---- ---- --------
Vartec Telecom, Inc. (Excel) 9/15/2000 12/15/2003 3 Years
ZefCom, L.L.C. (Telespire) 11/17/2000 11/17/2003 3/31/2006
Working Assets Funding Service, Inc.(Working Assets) 12/1/2001 12/31/2003 3 Years
Wherify Wireless, Inc. (Wherify Wireless) 1/7/2002 1/7/2005
QUALCOMM Incorporated (Qualcomm / GlobalTracs) 1/8/2002 1/8/2005
Star Number, Inc. (Liberty Wireless) 8/2/2002 8/2/2005
Telco Group, Inc. (STI Mobile) 2/25/2003 2/25/2006
TRANZACT (Sears Connect) 3/21/2003 3/21/2006
Hal Inc. (U-Mobile PCS) 6/12/2003 6/12/2006
Wireless Retail Inc. (Airlink Mobile) 6/17/2003 6/17/2006
Phonetec, L.P. (PhoneTec) 6/26/2003 6/26/2006
Qwest Wireless, LLC (Qwest) 8/3/2003 3/3/2009
TracFone Wireless, Inc. (TracFone) 1/22/2004 1/22/2007
* If applicable. Not including phase out periods.
Attachment No. 1.0 to Program Requirement 3.5.2 will be updated as new resellers
enter into a resale arrangement with Sprint PCS.
ATTACHMENT NO. 1.1 TO PROGRAM REQUIREMENT 3.5.2
SPRINT 3G DATA SERVICE PRICING
A) QWEST WIRELESS
Listed below are the Qwest monthly recurring charges ("MRC") and Adjustment
Rates for Sprint 3G Data Service. Qwest will be billed the following MRC and
Adjustment Rate for each subscriber that uses any Qwest service enabled by
Sprint 3G Data Service.
HANDSET DATA SERVICE
Data Transport/Web Browsing/Third Party Instant Messaging
o MRC $8.10 (unlimited)
o Adjustment Rate $0.002 per Kb
ADJUSTMENT RATE:
On a monthly basis, Sprint will calculate (as described below) the Sprint
average kilobytes per retail handset subscriber ("SAKPS") and the Qwest average
kilobytes per handset subscriber ("QAKPS"). If the QAKPS exceeds the SAKPS,
Sprint will charge Qwest an amount equal to the difference between the SAKPS and
the QAKPS multiplied by the total number of End users, multiplied by the
Adjustment Rate detailed above.
Sprint will calculate SAKPS by using the total number of kilobytes generated by
Sprint retail handset end users divided by the average number of Sprint retail
handset end users for the previous fiscal quarter. For example, the SAKPS for
May will be divided by the average number of Sprint retail handset end users for
the 1st fiscal quarter (January-March).
Average number of Sprint retail handset end users for the quarter is equal to
the beginning number of Sprint retail handset end users plus the ending number
of Sprint retail handset end users, divided by two.
QAKPS is equal to the total number of kilobytes generated by Qwest handset End
Users divided by the average number of Qwest handset End Users for the previous
fiscal quarter.
AVERAGE NUMBER OF QWEST HANDSET END USERS FOR THE QUARTER IS EQUAL TO THE
BEGINNING NUMBER OF QWEST HANDSET END USERS PLUS THE ENDING NUMBER OF QWEST
HANDSET END USERS, DIVIDED BY TWO.
In making the calculations described in this section, PDAs, "smart phones" and
other similar devices along with air cards will not be considered "handsets" as
that term is used therein.
THE PRICING IN THIS ATTACHMENT NO. 1.1 TO PROGRAM 3.5.2 IS SUBJECT TO CHANGE AS
SPRINT RETAIL PRICES OR INCLUDED SERVICES CHANGE.
ATTACHMENT NO. 1.2 TO PROGRAM REQUIREMENT 3.5.2
SHORT MESSAGE SERVICE PRICING
Unless otherwise specified in this Attachment 1.2 to Program Requirement 3.5.2,
Manager will be compensated at the rates listed below by Voluntary Reseller.
Short Message Service Rate: $0.0246 per SMS message
Qwest SMS Rate: $0.0110 per SMS message
EXHIBIT 10.3
100% AFFILIATE RETAINED AMOUNTS
Roaming Revenue
International Roaming Credits
Affiliate Equip Sale On Acct
100% SPRINT PCS RETAINED AMOUNTS
Accrued Sales Taxes
Accrued Federal Excise Taxes
Collected Insurance
EXHIBIT 1
ILLUSTRATIVE CALCULATION FOR CASH SETTLEMENT
CASH SIMPLIFICATION
ILLUSTRATIVE ONLY
MONTH1Y
--------------------------
WRITE-OFFS $ 1,235
BILLED REVENUE $10,350
CUSTOMER CREDITS (970)
---------------
NET BILLED REVENUE $ 9,380 82.5%
CUSTOMER EQUIPMENT CREDITS (66) -0.6%
100% AFFILIATE RETAINED AMOUNTS 235 2.1%
100% SPRINT PCS RETAINED AMOUNTS 1,479 13.0%
CUSTOMER EQUIPMENT CHARGES 175 1.5%
E911 SURCHARGES 65 0.6%
WIRELESS LOCAL NUMBER PORTABILITY CHARGES 26 0.2%
USF CHARGES 74 0.7%
--------------- ----------
AMOUNT BILLED (NET OF CUSTOMER CREDITS) $11,368 100.0%
FEE CALCULATION
NET BILLED REVENUE $ 9,380
ALLOCATED WRITE-OFF (1,019)
---------------
$ 8,361
92%
---------------
FEE BASED ON BILLED REVENUE $ 7,692
100% AFFILIATE RETAINED AMOUNTS $ 235
ALLOCATED WRITE-OFF (26)
PHASE II E911 SURCHARGES 53
ALLOCATED WRITE-OFF (6)
WIRELESS LOCAL NUMBER PORTABILITY CHARGES 2
ALLOCATED WRITE-OFF (0)
CUSTOMER EQUIPMENT CREDITS (66)
ALLOCATED WRITE-OFF 7
WRITE-OFF FOR CUSTOMER EQUIPMENT CHARGES (19)
---------------
$ 180
TOTAL $ 7,872
--------------------------
SCHEDULE 2.1.1
-SECTION A-
PRESENTLY OFFERED CCPU SERVICES - Activity Applied as % to Sprint PCS reported
CCPU
3G Fees
A/P Backhaul/Facility Disputes
Affiliate Utilities
ATM Soft Hand Off Bank Fees
BI Performance Services - Initiation
BI Performance Services - Maintenance
Bid Cost
Billing
Check Free
Clarify Maintenance Fee
CO Usage
Collection Agency Fees
Conferences
Costs associated with rollout of new products and services
Credit Card Processing/Fees
Customer Care
Customer Solutions - Mature Life
Directory Assistance
DS3
E - Commerce PT
Enhanced Voicemail
Entrance Facility Expenses (Includes Terminating/Trunking Charge)
Ford Revenue
Ford Telematics
Gift Card Payable
Gift Card Receivable
Hal Riney Ad Kit
High Speed Remote Access Server
ICS Clearing House Costs (Includes Illuminet, Roaming Clearing House, and TSI)
IMT Charges
Interconnection
Inter-Machine Trunk
IT (Includes E-Commerce)
LD Verification
LIDB/CNAM
Local Loop, COC, ACF, IXC, etc. (National Platform Expense - Local Loop Cost,
Central Office Connection (COC), access Coordination Fee (ACF),
Co-Location Charges, and Inter Exchange Carrier (IXC) Charges)
Lockbox 261
MCI Disconnect Adjusted
National Platform - COA
National Platform Disputes
National Platform (2G) (Includes Voice Activated Dialing)
NATIONAL PLATFORM COMPONENT
FCAPS (FAULT, CONFIGURATION, ACCOUNTING, PERFORMANCE, SECURITY)
Capital Projects
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
IN (INTELLIGENT NETWORK)
Capital Expense
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
OSSN
Capital Expense
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
3G
Capital Projects
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
OPERATOR SERVICE
Vendor Fee
WIRELESS WEB
Capital Projects
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
MESSAGING
Capital Projects
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
VAD
Capital Projects
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
VOICE MAIL
Capital
Expense Projects
Circuit Expense
CLOH
Labor
Forecasts
SOFTWARE MAINTENANCE
Openwave
Hewlett Packard
Comverse
Marconi
Lucent
Commworks
Four Corners
Other Vendors (39)
Northwest Frequent Flyer
Premium Vision Services
PreNet
Pricing
Pro Text Messaging Plan
Ringers & More (Includes SBF and PT fees)
Roadside Rescue
Sprint Synch Services
Telecheck Charge
Telematics
Text Messaging Plan
TSC Usage
Type 1 Affiliate Long Distance
Voice Command Web
Wireless Web
-SECTION B-
PRESENTLY OFFERED CPGA SERVICES - Activity Applied as % to Sprint PCS reported
CPGA
500 Minute Promotion Credit
Activations - Customer Solutions
Activations - E-Commerce (Includes On Line (Web) Activations)
Activations - Telesales
Credit Check Fee
Customer Solutions - Early Life
Demo Phones
EarthLink
Hal Riney Service
Handset Logistics
Handset Obsolesence Fee and Carrying Costs
Local/Indirect Commission
Marketing Collateral Destruction
NAM/CAM
One Sprint Telesales
PGA Expenses
PLS Commission
SmartWorks Printing
-SECTION C-
PRESENTLY OFFERED CCPU SERVICES - Activity Settled Separately
Affiliate Project Authorizations
Long Distance
E911 Phase I Revenue
Microwave Clearing
Roaming
Software Fees
Sprint Local Telephone Usage
Taxes Paid on Behalf of Type III Affiliates
Tower Lease
Travel Revenue and Expense
Upgrade Commission - 2 Step Channel
Vendor Usage-Based Charges on New Products
Wholesale Revenue and Expense
-SECTION D-
PRESENTLY OFFERED CPGA SERVICES -Activity Settled Separately
3G Device Logistics Fee
3rd Party Spiffs
Accessory Margin
Commissions - National 3rd Party
Commissions - Other 3rd Party
Coop Advertising - Local 3rd Party
Coop Advertising - National 3rd Party
Handset returns
Handset subsidies
Handsets
Marketing Collateral (excluding destruction)
Meeting Competition Fund
RadioShack Promos (Includes RadioShack Golden Quarter, Jumpstart, Relaunch,
Sprint to Vegas, and Break the Bank)
Rebate Administrative Expense
Rebates
Reciprocal Retail Store Cost Recovery
Sprint LDD Commission
Third Party Promotions
Upgrade Commission - RadioShack
EXHIBIT A
SECTION 17.28. FEDERAL CONTRACTOR COMPLIANCE. (1) The Manager will not
discriminate against any employee or applicant for employment because of race,
color, religion, sex, or national origin. The Manager will take affirmative
action to ensure that applicants are employed, and that employees are treated
during employment without regard to their race, color, religion, sex, or
national origin. Such action shall include, but not be limited to the following:
Employment, upgrading, demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of compensation;
and selection for training, including apprenticeship. The Manager agrees to post
in conspicuous places, available to employees and applicants for employment,
notices to be provided setting forth the provisions of this nondiscrimination
clause.
(2) The Manager will, in all solicitations or advertisements for
employees placed by or on behalf of the Manager, state that all qualified
applicants will receive considerations for employment without regard to race,
color, religion, sex, or national origin.
(3) The Manager will send to each labor union or representative of
workers with which he has a collective bargaining agreement or other contract or
understanding, a notice to be provided advising the said labor union or workers'
representatives of the Manager's commitments under this section, and shall post
copies of the notice in conspicuous places available to employees and applicants
for employment.
(4) The Manager will comply with all provisions of Executive Order
11246 of September 24, 1965, and of the rules, regulations, and relevant orders
of the Secretary of Labor.
(5) The Manager will furnish all information and reports required by
Executive Order 11246 of September 24, 1965, and by rules, regulations, and
orders of the Secretary of Labor, or pursuant thereto, and will permit access to
his books, records, and accounts by the administering agency and the Secretary
of Labor for purposes of investigation to ascertain compliance with such rules,
regulations, and orders.
(6) In the event of the Manager's noncompliance with the
nondiscrimination clauses of this contract or with any of the said rules,
regulations, or orders, this contract may be canceled, terminated, or suspended
in whole or in part and the Manager may be declared ineligible for further
Government contracts or federally assisted construction contracts in accordance
with procedures authorized in Executive Order 11246 of September 24, 1965, and
such other sanctions may be imposed and remedies invoked as provided in
Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of
the Secretary of Labor, or as otherwise provided by law.
(7) The Manager will include the portion of the sentence immediately
preceding paragraph (1) and the provisions of paragraphs (1) through (7) in
every subcontract or purchase order unless exempted by rules, regulations, or
orders of the Secretary of Labor issued pursuant to section 204 of Executive
Order 11246 of September 24, 1965, so that such provisions will be binding upon
each subcontractor or vendor. The Manager will take such action with respect to
any subcontract or purchase order as the administering agency may direct as a
means of enforcing such provisions, including sanctions for noncompliance.
Provided, however, that in the event a Manager becomes involved in, or is
threatened with, litigation with a subcontractor or vendor as a
result of such direction by the administering agency the Manager may request the
United States to enter into such litigation to protect the interests of the
United States.
(8) In consideration of contracts with Sprint PCS, the Manager agrees
to execute the Certificate of Compliance attached hereto as Attachment I and
further agrees that this certification shall be part of each contract between
Sprint PCS and Manager. The Manager will include Attachment I in every
subcontract or purchase order, so that such provisions will be binding upon each
subcontractor.
Attachment I
CERTIFICATE OF COMPLIANCE WITH
FEDERAL REGULATIONS
In consideration of contracts with SPRINT SPECTRUM L.P., the undersigned
"contractor", "vendor" or "consultant" agrees to the following and further
agrees that this Certification shall be a part of each purchase order, supply
agreement, or contract between SPRINT SPECTRUM L.P. and the undersigned.
1. Equal Opportunity
Executive Order 11246 is herein incorporated by reference.
2. Affirmative Action Compliance
If undersigned Contractor has 50 or more employees and if this contract
is for $50,000 or more, Contractor shall develop a written Affirmative
Action Compliance Program for each of its establishments, as required
by rules and regulations of the Secretary of Labor (41 CFR 60-1 and
60-2).
3. Affirmative Action for Special Disabled and Vietnam Era Veterans
If this contract exceeds $10,000, the undersigned Contractor certifies
that the Contractor does not discriminate against any employee or
applicant because the person is a Special Disabled or Vietnam Veteran
and complies with the rules, regulations and relevant orders of the
Secretary of Labor issued pursuant to the Vietnam Veterans Readjustment
Assistance Act of 1972, as amended.
Contractor hereby represents that it has developed and has on file, at
each establishment, affirmative action programs for Special Disabled
and Vietnam Era Veterans required by the rules and regulations of the
Secretary of Labor (41 CFR 60-250).
4. Affirmative Action for Handicapped Workers
If this contract exceeds $2,500, the undersigned Contractor certifies
that the Contractor does not discriminate against any employee or
applicant because of physical or mental handicap and complies with the
rules, regulations and relevant orders of the Secretary of Labor issued
under the Rehabilitation Act of 1973, as amended.
Contractor hereby represents that it has developed and has on file, at
each establishment, affirmative action programs for Handicapped Workers
required by the rules and regulations of the Secretary of Labor (41 CFR
60-741).
5. Employer Information Report (EEO-1 Standard Form 100)
If undersigned Contractor has 50 or more employees and if this contract
is for $10,000 or more, Contractor shall complete and file government
Standard Form 100, Equal Employment Opportunity Employer Information
Report EEO-1, in accordance with instructions contained therein.
6. Compliance Review
The undersigned Contractor certifies that it has not been subject to a
Government equal opportunity compliance review. If the Contractor has
been reviewed, that review occurred on __________________ (date).
7. Utilization of Small Businesses, Small Disadvantaged Businesses, and
Women-Owned Small Business
It is the policy of SPRINT SPECTRUM L.P., consistent with Federal
Acquisition Regulations (FAR 52.219-8 and FAR 52.219-13), that small
business concerns, small business concerns owned and controlled by
socially and economically disadvantaged individuals, and women-owned
businesses shall have the maximum practicable opportunity to
participate in performing subcontracts under Government contracts for
which SPRINT SPECTRUM L.P. is the Government's Prime Contractor. SPRINT
SPECTRUM L.P. awards contracts to small businesses to the fullest
extent consistent with efficient prime contract performance. The
Contractor agrees to use its best efforts to carry out this policy in
the award of its subcontract to the fullest extent consistent with the
efficient performance of this contract.
Contractor hereby represents that it ___ is ___ is not a small
business, ___ is ___ is not a small business owned and controlled by
socially and economically disadvantaged individuals, and ___ is ___ is
not a small business controlled and operated as a women-owned small
business as defined by the regulations implementing the Small Business
Act.
If the answer to any of the above is in the affirmative, Contractor
will complete SPRINT SPECTRUM L.P. Small/Minority/Women Owned Business
Self Certification Form. This form is available from Sprint
Corporation's Human Resources Department..
8. Certification of Nonsegregated Facilities
If this contract is expected to exceed $10,000, the undersigned
Contractor certifies as follows:
The Contractor certifies that the Contractor does not or will not
maintain or provide for its employees any segregated facilities at any
of its establishments, and that it does not and will not permit its
employees to perform services at any location, under its control, where
segregated facilities are maintained. The Contractor agrees that a
breach of this Certification is a violation of the Equal Opportunity
provision of this contract. As used in this Certification, the term
"segregated facilities" means any waiting rooms, work areas, rest rooms
and wash rooms, restaurants and other eating areas, time clocks, locker
rooms and other storage or dressing areas, parking lots, drinking
fountains, recreation or entertainment areas, transportation, and
housing facilities provided for employees that are segregated by
explicit directive or are in fact segregated on the basis of race,
color, religion, or national origin, because of habit, local custom, or
otherwise. Contractor further agrees that (except where it has obtained
identical certifications from proposed subcontracts for specific time
periods) it will obtain identical certifications from proposed
subcontractors prior to the award of subcontracts exceeding $10,000
that are not exempt from the provisions of the Equal Opportunity
Clause; and that it will retain such certification in its files.
9. Clean Air and Water
The undersigned Contractor certifies that any facility to be used in
the performance of this contract ___ is ___ is not listed on the
Environmental Protection Agency List of Violating Facilities.
The undersigned Contractor agrees to immediately notify SPRINT SPECTRUM
L.P., immediately upon the receipt of any communication from the
Administrator or a designee of the Environmental Protection Agency
indicating that any facility that the Contractor proposes to use for
the performance of the contract is under consideration to be listed on
the EPA List of Violating Facilities. SPRINT SPECTRUM L.P. includes
this certification and agreement pursuant to FAR 52-223-1(c) which
requires including such paragraph (c) in every nonexempt subcontract.
CONTRACTOR:
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