FIRST AMENDMENT TO OMNIBUS AGREEMENT
This First Amendment dated as of February 9, 2000 (the "First Amendment")
to the Omnibus Agreement (the "Agreement") made and entered into as of September
7, 1999, each by and among Unwired Telecom Corp., formerly known as US Unwired,
Inc., a Louisiana corporation ("Unwired"), EATELCORP, Inc., a Louisiana
corporation ("EATEL"), Fort Bend Telephone Company, a Texas corporation ("Fort
Bend"), XIT Leasing, Inc., a Texas Corporation ("XIT"), Wireless Management
Corporation, a Louisiana corporation ("Wireless"), Meretel Communications
Limited Partnership, a Louisiana limited partnership in commendam ("Meretel")
and Meretel Wireless, Inc., a Louisiana corporation ("MI"). Unwired, EATEL and
Fort Bend are sometimes collectively referred to as the "Partners", the Partners
and XIT are collectively referred to as the "Meretel Partners" and the parties
hereto are collectively referred to as the "Parties".
RECITALS
--------
WHEREAS, the Parties have agreed to certain amendments to the Agreement and
desire to enter into this First Amendment to memorialize such amendments
(capitalized terms used herein to have the meanings ascribed to them in the
Agreement unless otherwise expressly defined herein), and to further agree to
expeditiously undertake their reasonable best efforts to consummate the
transactions contemplated by the Agreement as amended by this First Amendment
(the "Amended Agreement").
NOW, THEREFORE, in consideration of the benefits to be derived hereby, the
Parties do hereby agree as follows:
Section 1. Recitals. The Recitals set forth hereinabove are incorporated
herein.
Section 2. Mutual Representations and Warranties. Each Party reaffirms as
of the date hereof the representations and warranties made by it to each of the
other Parties in the Agreement.
Section 3. Amendments to Section 3 of the Agreement (Contributions,
Distributions and Other Transfers). Sections 3(a), (c), (d)(i) and (e) of the
Agreement are amended and restated in their entirety to read as follows:
"(a) (i) transfer the Biloxi/Gulfport BTA, free of any liens,
encumbrances or restrictions, from the applicable Unwired/Sprint Agreement
to the Meretel/Sprint Agreement and (ii) transfer the Beaumont and Lufkin
BTAs, free of any liens, encumbrances or restrictions (other than those
securing the Assumed Liabilities (as such term is defined in Section 4 of
the BL PCS Customer Agreement), from the Meretel/Sprint Agreement to the
applicable agreement between Newco (as defined in the next sentence) and
Sprint. "Newco" means Texas Unwired, a general partnership organized prior
to this First Amendment, managed by Unwired or its affiliate and owned 80%
by Unwired or its affiliate, 15% by Fort Bend or its affiliate and 5% by
XIT or its affiliate, pursuant to the terms of an agreement, including the
related contribution and assumption agreement (the "Newco Agreement")
substantially in the form attached as Exhibit A to the
Agreement. Upon the Closing, the related contribution and assumption
agreement comprising a part of the Newco Agreement, as well as the
distribution agreement from Unwired to U.S. Unwired, Inc., and the
contribution agreement from U.S. Unwired, Inc., to Louisiana Unwired,
L.L.C. (each in the form previously provided to the Parties, the "Unwired
Affiliates Distribution and Contribution Agreements"), will be executed.
(c) Meretel and the Meretel Partners have negotiated the transfer (a
portion of which will be a capital contribution) to Meretel, as of August
1, 1998, by Unwired of its PCS customers and related assets located in the
Baton Rouge, Lafayette and Beaumont BTAs pursuant to the terms of the
agreement (the "Unwired PCS Customer Agreement") attached as Exhibit B to
the Agreement. Prior to the execution of this First Amendment, the Unwired
PCS Customer Agreement has been executed. At the Closing, Section 3 of the
Unwired PCS Customer Agreement shall be deemed to be amended as follows:
(i) The following sentence is added to the end of the first paragraph
of Section 3: "In addition, the Contributor will receive $913,373
of the Consideration to be delivered pursuant to clause "(A)" of
this Section 3 as additional paid-in capital of the Partnership
rather than cash; and interest as provided in clause (i) of this
Section 3 shall cease to accrue on December 31, 1999, on the
amount of the Consideration delivered as additional paid-in
capital of the Partnership and shall continue to accrue on the
balance of the Consideration to be paid in cash. "
(ii) Section 3(f) is amended and restated to read in its entirety as
follows:
"(f) Effective Time for Issuance of Units. The additional
Units in the Partnership to be obtained by the Contributor
pursuant to this Section 3, if any, shall be deemed to be issued
to and obtained by the Contributor effective as of January 1,
2000 (the time for the actual issuance and delivery of the Units,
if any, shall be subject to the other requirements of this
Section 3), notwithstanding that the Contributed Assets are to be
transferred to and obtained by the Partnership as of the
Effective Date. It is the intent of the parties that the issuance
of such additional Units to the Contributor shall not affect the
proportionate interests held in the Partnership by any of its
partners prior to January 1, 2000."
(d) (i) Meretel and the Meretel Partners have negotiated the
distribution by Meretel to Unwired, Fort Bend and XIT of Meretel's PCS
customers and related assets located in the Beaumont and Lufkin BTAs, and
the assumption by Unwired, Fort Bend and XIT of the Assumed Liabilities,
pursuant to the terms of the agreement (the "BL PCS Customer
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Agreement") attached as Exhibit C to this First Amendment (which replaces
Exhibit C to the Agreement), and Unwired, Fort Bend and XIT have negotiated
the contribution by Unwired, Fort Bend and XIT, directly or indirectly, of
their respective resulting interests in such assets to Newco, and the
assumption by Newco of the Assumed Liabilities, pursuant to the Newco
Agreement and the Unwired Affiliates Distribution and Contribution
Agreements. Upon the Closing, the BL PCS Customer Agreement will be
executed. The "Assumed Liabilities" shall include the portion of Meretel's
outstanding indebtedness owed to its bank lenders (of which CoBank ACB is
the agent) secured by Meretel's assets located in the Beaumont and Lufkin
BTAs having a principal balance of $13,673,483 as of January 1, 2000, plus
accrued interest thereon from January 1, 2000.
(e) Meretel and the Meretel Partners have negotiated the contribution
to Meretel by EATEL, as a capital contribution by EATEL to Meretel, of
EATEL's PCS customers and related assets located in the Baton Rouge and
Lafayette BTAs pursuant to the terms of the agreement (the "EATEL PCS
Customer Agreement") attached as Exhibit D to the Agreement, provided (i)
the Effective Date thereof shall be December 8, 1999, (ii) the reference in
Sections 2(e) and (f) to the "Closing Date" shall be changed to the
"Effective Date"; and (iii) Section 3 thereof shall be amended and restated
in its entirety to read as follows:
"Section 3. Consideration. Subject to the adjustments, if any,
provided below in Section 3(a), the Partnership shall deliver the
following amounts to the Contributor in exchange for the Contributed
Assets: (i) $7,616,000 worth of additional Units (as such term is
defined in the Articles of Partnership and determined as of the
Closing Date pursuant to the Omnibus Agreement and Section 8 of the
Articles of Partnership) and additional paid-in capital of the
Partnership, of which $3,113,389 shall be allocated to additional
paid-in capital (the "Consideration"), plus (ii) interest on
$10,729,389 at the rate of 8.03% compounded annually from and
including the Effective Date until January 1, 2000 (the "Interest").
The Interest shall be paid to the Contributor by the delivery of cash
payable by wire transfer or delivery of other immediately available
funds. The Interest shall be delivered to the Contributor within five
days of the Closing Date; provided, payment of the Interest shall not
be required until consented to by CoBank, ACB.
(a) Adjustment to Consideration. The Consideration is equal
to the sum of the following two items: (i) the product of $448.00
times the number of Customers less the sum of (w) the product of
10% times $448.00 times the number of Customers who had
outstanding invoices aged more than 30 but less than 61 days as
of the Effective Date, plus (x) the product of 30% times $448.00
times the number of Customers who had outstanding invoices aged
more than 60 but less than 91 days as of the Effective Date, plus
(y) the product of 90% times $448.00 times the number of
Customers who had outstanding invoices aged more than 90 but less
than 121 days as of the Effective Date, plus (z) the product of
100% times $448.00 times the number of Customers who had
outstanding invoices aged more than 120 days as of the Effective
Date; and (ii) the Book Value
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(as defined below) of the Inventory. The Consideration shall be
based solely on Customers and Inventory acquired by the
Contributor in the ordinary course of business prior to the
Effective Date. The Consideration shall be adjusted on the basis
of the results of an audit of the Contributed Assets and Assumed
Liabilities (as defined below) to be conducted by representatives
of Fort Bend on behalf of the Partnership to substantiate the
information provided by the Contributor to the Partnership
relating to the Contributed Assets and Assumed Liabilities (the
"Audit"). For purposes of this Agreement, "Book Value" shall mean
the book value of Contributor's assets as of the Effective Date
determined in accordance with generally accepted accounting
principles consistently applied.
(b) Audit Procedures. The Audit shall be conducted
commencing no later than 10 days following the Closing Date, and
shall be concluded no later than 40 days following the Closing
Date, or at such other date as the Contributor and Fort Bend
otherwise mutually agree. No later than 50 days following the
Closing Date, or at such other date as the Contributor and Fort
Bend otherwise mutually agree, Fort Bend shall deliver to the
Contributor a statement (the "Audit Statement") showing (i) the
amount of any changes to the Consideration arising out of the
Audit, and (ii) a narrative explanation of each of the proposed
changes. In the event that Partnership fails to deliver an Audit
Statement within such 50-day period, Partnership shall be
conclusively presumed to have accepted the Consideration as the
Final Consideration. The Contributor shall have the right to
review the Audit Statement (and supporting work papers) and
provide written notice to Fort Bend of the Contributor's
objections with respect to any error, omission, or other
discrepancy in the Audit Statement (the "Discrepancy Notice")
until 10 days following Contributor's receipt of the Audit
Statement. In the event that Contributor fails to deliver a
Discrepancy Notice within such 10-day period, Contributor shall
be conclusively presumed to have accepted the adjustments set
forth in the Audit Statement. Fort Bend and the Contributor shall
work together in good faith to resolve any dispute referenced in
a Discrepancy Notice and agree on the final amount of any
adjustment to the Consideration. However, Fort Bend's
determination of the amount of any adjustment to the
Consideration shall be binding and conclusive on the Contributor,
the Partnership and all other parties to this Agreement if the
dispute is regarding less than $250,000. Section 11 of this
Agreement shall govern all disputes regarding $250,000 or more.
Fort Bend shall make a final determination in this regard no
later than the 20th day following delivery of the Audit Statement
(the "Determination Date").
(c) Payment of Adjusted Amount. In the event that the
actions contemplated by Section 3(a) and Section 3(b) are
completed before delivery of the Consideration is made (as
contemplated under Section 3), the Partnership's delivery
obligation to the Contributor under Section 3 shall relate only
to the amount of the final Consideration, as adjusted pursuant to
Section 3(a) and Section 3(b) (the "Final Consideration"). In the
event that the actions contemplated by
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Section 3(a) and Section 3(b) are not completed until after
delivery of the Consideration has been made, Partnership and
Contributor shall comply with the following requirements, as
applicable: (i) if the Final Consideration exceeds the
Consideration, the Contributor shall receive additional paid-in
capital in the Partnership equal in value to the amount of such
excess effective as of the Effective Date; (ii) if the Final
Consideration is less than the Consideration, the Contributor
shall relinquish to the Partnership, and the Partnership shall
rescind and cancel, effective as of the Effective Date such
amount of additional paid-in capital in the Partnership equal in
value to the amount of the difference.
(d) Effective Time For Issuance of Units. The additional
Units and paid-in capital in the Partnership to be obtained by
the Contributor pursuant to this Section 3 shall be deemed to be
issued to and obtained by the Contributor effective as of January
1, 2000 (the time for the actual issuance and delivery of the
Units shall be subject to the other requirements of this Section
3), notwithstanding that the Contributed Assets are to be
transferred to and obtained by the Partnership as of the
Effective Date. It is the intent of the parties that the issuance
of such additional Units and additional paid-in capital to the
Contributor shall not affect the proportionate interests held in
the Partnership by any of its partners prior to January 1, 2000."
Upon the Closing, the EATEL PCS Customer Agreement, amended as aforesaid, will
be executed, and the resale agreement between Meretel and EATEL's affiliate will
be terminated as of December 8, 1999.
Section 4. Amendments to Section 4 of the Agreement (Changes in Meretel and
Wireless). Section 4(a) of the Agreement is amended and restated to read in its
entirety as follows:
"(a) At the Closing, Wireless, the Meretel Partners and MI shall
execute or cause to be executed, or authorize or cause to be authorized, as
the case may be, Articles of Amendment to the Articles of Incorporation of
Wireless, Amended and Restated Bylaws of Wireless and Fourth Amendment to
the Articles of Partnership of Meretel, in the forms of Exhibits E, F and G
to the Agreement, provided Exhibit G shall be amended by amending and
restating Sections 6, 7 and 8 thereof in their entirety as follows:
6. Section 6.1 of the Amended Articles is hereby amended and
restated to read in its entirety as follows:
"As of January 1, 2000, and from that date through the date
of the Fourth Amendment, each Limited Partner has contributed, or
has agreed to contribute, to the capital of the Partnership the
amount set forth opposite its name below (excluding the
additional paid-in capital specified in Section 8 of the Amended
Articles):
5
Limited Partner Capital Contribution
--------------- --------------------
EATEL $18,209,506
Unwired $ 4,661,184 of which $380,605 shall be paid in cash
simultaneously with the execution of the
Fourth Amendment (by deducting such
amount from the cash portion of the
Consideration payable to Unwired
pursuant to the Unwired PCS Customer
Agreement (as defined in the Omnibus
Agreement))
Fort Bend $ 9,729,520 of which $632,544 shall be paid in cash
simultaneously with the execution of the
Fourth Amendment
XIT $ 1,797,083 of which $121,163 shall be paid in cash
simultaneously with the execution of the
----------- Fourth Amendment
Total $34,397,293
===========
7. Section 6.3 of the Amended Articles is hereby amended and
restated to read in its entirety as follows:
"On and after the date of the Fourth Amendment, no Partner
shall be obligated to make any additional Deferred Capital
Contributions other than the following Deferred Capital
Contribution in the following aggregate amount to be made no
later than the date set forth opposite such amount (or such other
date specified by the General Partner), each Partner hereby
agreeing to contribute the portion thereof equal to its
percentage ownership interest as specified in Section 8 below
(such contribution to be made in cash or by application of a
Partner's additional paid-in capital as each Partner may elect):
Aggregate Deferred Capital Contribution Date
--------------------------------------- ----
$ 6,676,703 August 1, 2000
Unwired shall not be permitted to make additional Deferred
Capital Contributions which will increase the percentage
ownership interest of it and its Affiliates in the Partnership to
more than 20% without the express prior written agreement of all
the Partners."
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8. Section 8 of the Amended Articles is hereby amended and
restated to read in its entirety as follows:
"As of January 1, 2000, and from that date through the date
of the Fourth Amendment, the Partners agree that the total number
of Units owned by each Partner, the percentage ownership interest
of each Partner in the Partnership and the amount of additional
paid-in capital contributed by each Partner is set forth opposite
its name below, subject to adjustment, retroactive to January 1,
2000, in accordance with Section 6(c) of that certain agreement
dated as of September 7, 1999, as amended, among the General
Partner and the Limited Partners (the "Omnibus Agreement"):
Amount of
Percentage Additional
Partner Units Owned Ownership Interest Paid-In Capital
------- ----------- ------------------ ---------------
General Partner 702 2.00%
EATEL 18,210 51.88% $ 3,113,389
Unwired 4,661 13.28% $ 913,373
Fort Bend 9,730 27.72%
XIT 1,797 5.12%
----------- ------------------ ---------------
Total 35,100 100.00% $ 4,026,762
=========== ================== ===============
The total number of Units outstanding on any date shall equal the
dollar amount of total capital contributions (initial and
deferred) made by the Partners on or prior to such date divided
by $1,000.00; provided, however, the amount of additional paid-in
capital contributed by a Partner, unless and until utilized as a
Deferred Capital Contribution, shall be excluded from the
determination of the total number of Units outstanding on any
date. Deferred Capital Contributions paid on or prior to such
date shall be included for purposes of computing the number of
Units; unpaid Deferred Capital Contributions shall not be
included for such purposes. The total number of Units
attributable to a Partner on any date shall equal the total
capital contributions (initial and deferred but excluding
additional paid-in capital unless and until utilized as a
Deferred Capital Contribution) made by such Partner on or prior
to such date divided by $1,000.00. A Partner shall be entitled to
withdraw its additional paid-in capital at any time after August
1, 2000, and interest shall accrue (at a rate equal to that then
paid by the Partnership to its primary lender) on any unpaid
amount thereof from the date of the withdrawal request until
paid. Upon sale or dissolution of the Partnership, additional
paid-in capital previously
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contributed by a Partner and not utilized as a Deferred Capital
Contribution or withdrawn shall be included in determining the
Partner's percentage interest in the sale proceeds or
distributions of capital to be made by the Partnership, as the
case may be."
Sections 4(c)(iii) and (v) of the Agreement are amended to change the
reference to "Exhibit I" therein to "Exhibit I to this First Amendment."
Section 5. Amendment to Section 6 of the Agreement (Adjustments in Meretel
Percentage Interests). Section 6 of the Agreement is amended and restated to
read in its entirety as follows:
"(a) At the Closing but effective as of January 1, 2000, each Meretel
Partner's percentage interest in Meretel will be adjusted to its Fixed
Percentage Interest as specified in the table below, and the Articles of
Partnership of Meretel will be amended pursuant to Exhibit G to the
Agreement, as amended pursuant to Section 4 of the First Amendment, to
reflect its Fixed Percentage Interest. To the extent that the adjustments
specified in clauses (b) and (c) below result in the percentage interest of
a Partner (the "Final Percentage Interest") exceeding or being less than
the Fixed Percentage Interest of such Partner, the dollar amount of such
excess shall be allocated to additional paid-in capital of such Partner and
the dollar amount of such deficit shall be made from such Partner's
additional paid-in capital, if any, and the balance shall be made in cash.
If a Partner fails to make the contribution with respect to such deficit,
the Fixed Percentage Interest of such Partner shall be adjusted
accordingly, but nothing shall preclude the Partnership from taking
collection action against such defaulting Partner. The percentage interest
of Wireless in Meretel will remain the same, i.e., 2%, but the ownership
interest of the affiliates of the Partners in Wireless will be adjusted at
the Closing but effective as of January 1, 2000, as provided in Section
8(e). The Fixed Percentage Interest of each Meretel Partner shall be as
follows:
Meretel Partner Fixed Percentage Interest
--------------- -------------------------
Unwired 13.28%
Fort Bend 27.72%
EATEL 51.88%
XIT 5.12%
Wireless 2.00%
(b) A Meretel Partner's Final Percentage Interest is the percentage
determined by (i)(A) subtracting from its Original Meretel Equity Value its
Newco Equity Value, (B) adding in the case of EATEL, the EATEL Contribution
Amount, and in the case of Unwired, $1,500,000 of the Unwired Price (the
"Unwired Contribution Amount") and (C) adding or subtracting, as the case
may be, its Switch Adjustment, (ii) dividing the result by the sum of
clause (i) for each Meretel Partner, and (iii) subtracting from the result
of clause (ii) 0.8% from EATEL and Fort Bend and 0.4% from Unwired.
8
A Meretel Partner's Original Meretel Equity Value is a dollar amount
equal to its percentage interest in Meretel, directly and, in the case of
each of the Partners, through the stock ownership in Wireless of its
affiliate, multiplied by the Total Meretel Equity Value. For purposes of
this Agreement, each Meretel Partner's percentage interest as of the date
of the Agreement (which includes its indirect percentage interest by virtue
of its affiliate's ownership of shares of Wireless) is as follows:
Meretel Partner Percentage Interest
--------------- -------------------
Unwired 31.25%
Fort Bend 31.25%
EATEL 31.25%
XIT 6.25%
The Total Meretel Equity Value is $83,191,000 minus Closing Meretel Debt.
Closing Meretel Debt is the actual amount of Meretel's debt at January 1,
2000, minus that portion of the Final Purchase Price under the Asset Purchase
Agreement, as adjusted to reflect the exclusion by Pinnacle of any towers
therefrom (the "Tower Price") not applied to Meretel's debt by the Closing.
A Meretel Partner's Newco Equity Value is a dollar amount equal to its
percentage interest in Newco multiplied by the Total Newco Equity Value.
Unwired's percentage interest in Newco is 80%, Fort Bend's percentage interest
is 15%, XIT's percentage interest is 5% and EATEL's percentage interest is 0%.
The Total Newco Equity Value is $24,125,390 minus 29% of the Closing
Meretel Debt.
The Switch Adjustment for each Meretel Partner is:
Meretel Partner Switch Adjustment
--------------- -----------------
Fort Bend ($ 36,808)
Unwired $ 103,624
EATEL ($ 62,715)
XIT ($ 4,101)
The Unwired Price is the Consideration specified in the Unwired PCS
Customer Agreement, as amended.
The EATEL Contribution Amount is the Consideration specified in the EATEL
PCS Customer Agreement.
(c) The Parties agree that the exact Tower Price, EATEL Contribution
Amount and Closing Meretel Debt may not have been finally determined by the
Closing, in which case the
9
Parties will make a good faith estimate of the applicable amounts and will
use those estimates to make the adjustments provided above. The Parties
further agree that once all final amounts are determined, they will reapply
the foregoing methodology to determine the capital required for each
Meretel Partner's Final Percentage Interest to be effective as of January
1, 2000.
(d) The guaranties of Unwired, Fort Bend, EATEL and XIT in favor of
CoBank with respect to Meretel's loan obligations to CoBank shall be
amended to reflect their respective Fixed Percentage Interests, to be
effective as of January 1, 2000."
Section 6. Amendments to Section 8 of the Agreement (Additional Covenants).
Sections 8(c) and (d) of the Agreement are amended and restated in their
entirety as follows:
"(c) At the Closing, but effective as of January 1, 2000, EATEL will
contribute the EATEL Contribution to the capital of Meretel.
(d) At the Closing, but effective as of January 1, 2000, Unwired will
contribute the Unwired Contribution."
Section 7. Amendment to Section 9 of the Agreement (Closing;
Effectiveness). Section 9 of the Agreement is amended and restated to read in
its entirety as follows:
"A Closing (the "Closing") of the transactions contemplated hereby shall be
held at 10:00 a.m., Central Standard time, on February 11, 2000, to be held at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin, 1200 Smith St.,
14th Floor, Houston, Texas, or at such later date, other time and place as the
Parties shall mutually agree. At the Closing,
(a) The transfers contemplated by Section 3 (a) shall be executed and
become effective as of January 1, 2000.
(b) The transfer or sublease contemplated by Section 3(b) shall be
executed and become effective as of January 1, 2000.
(c) The BL PCS Customer Agreement shall be executed.
(d) The EATEL PCS Customer Agreement shall be executed.
(e) The changes in Meretel and Wireless contemplated by Section 4,
other than the management transition of Wireless already undertaken as
provided herein, shall be authorized and executed and shall become
effective as of January 1, 2000.
(f) The adjustments contemplated by Section 6 shall be made and become
effective as of January 1, 2000.
(g) The mutual release contemplated by Section 7 shall be executed and
become effective.
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(h) The contributions, stock transfer and stock issuances contemplated
by Section 8 shall be made and shall be effective as of January 1, 2000.
(i) Each Party shall execute and deliver to each requesting Party such
other instruments, consistent with the terms of this Agreement, as the
requesting Party shall reasonably request in order to effect or evidence
the transactions contemplated hereby or the satisfaction of the conditions
herein to consummation of such transactions.
(j) The contribution and assumption agreement related to and
comprising a part of the Newco Agreement and the Unwired Affiliates
Distribution and Contribution Agreements shall be executed.
(k) Intentionally omitted.
(l) The opinion letter of Ernst & Young, LLP, relating to the tax
consequences of the transactions contemplated hereby, in form and substance
satisfactory to the Parties, shall be delivered to Meretel.
(m) The two management agreements between Meretel and Unwired and
Meretel and EATEL executed several years ago, as subsequently reviewed and
amended, shall be deemed canceled and terminated in their entirety.
(n) The balance sheet of Meretel immediately prior to the Closing
shall, effective as of January 1, 2000, be apportioned between Meretel and
Newco in accordance with the allocation methodology set forth on Exhibit K
attached to this First Amendment.
The Parties agree that the transfers, changes and other matters
contemplated by the Amended Agreement are interrelated and, other than the
management transition of Wireless already underway, the switch conversion
contemplated by Section 3(d)(ii) and the Unwired PCS Customer Agreement, the
effectiveness thereof should occur at the same time. Accordingly, the Parties
agree to use their reasonable best efforts so that all the remaining
transactions contemplated hereby are consummated no later than February 11,
2000, or such later date as the Parties shall mutually agree, to be effective as
provided herein, subject to the adjustments contemplated by Section 6(c).
Section 8. Counterpart Execution. The Parties agree that this First
Amendment may be executed in multiple counterparts, each of which shall be
considered a single instrument.
Section 9. Headings; Construction. The descriptive headings contained in
this First Amendment are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this First Amendment. The provisions
of this First Amendment were negotiated by the Parties hereto and this First
Amendment shall be deemed to have been drafted by all the Parties hereto.
11
Section 10. Entire Agreement. The Amended Agreement constitutes the entire
agreement of the Parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
the parties with respect to the subject matter hereof.
Section 11. Approval by the Meretel Partners, Wireless and MI. By their
respective execution of this First Amendment, each of the Meretel Partners,
Wireless and MI do hereby consent to and authorize the amendments to the
Articles of Partnership of Meretel contemplated by the Amended Agreement and the
transfers, contributions, distributions and other transactions contemplated by
the Amended Agreement to which Meretel is a party, and no further action or
authorization shall be necessary or required by any of them in order to
consummate the same.
Section 12. Intended Tax Consequences. The parties intend that the
transfers, contributions, distributions and other transactions contemplated by
the Amended Agreement shall be treated as tax free transactions to the extent
permitted and available under the Internal Revenue Code.
Section 13. Continued Effectiveness. As amended hereby, the Agreement shall
continue in full force and effect between the Parties.
WHEREFORE, the Parties have executed this First Amendment as of the date
first set forth hereinabove by their respective undersigned duly authorized
officers.
UNWIRED TELECOM CORP., formerly known as
US Unwired, Inc.
By: /s/ Thomas Henning
-------------------------------------
Name: Thomas Henning
-----------------------------------
Title: Secretary
----------------------------------
FORT BEND TELEPHONE COMPANY
By: /s/ George Head
-------------------------------------
Name: George Head
-----------------------------------
Title: President & CEO
----------------------------------
EATELCORP, INC.
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: Executive President
----------------------------------
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XIT LEASING, INC.
By: /s/ Gilbert R. Rasco
-------------------------------------
Name: Gilbert R. Rasco
-----------------------------------
Title: Secretary
----------------------------------
WIRELESS MANAGEMENT CORPORATION
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: President
----------------------------------
MERETEL COMMUNICATIONS LIMITED
PARTNERSHIP
By: Wireless Management Corporation, its
General Partner
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: President
----------------------------------
MERETEL WIRELESS, INC.
By: /s/ John D. Scanlon
-------------------------------------
Name: John D. Scanlon
-----------------------------------
Title: Executive President
----------------------------------
Exhibits:
Exhibit C - BL PCS Customer Agreement
Exhibit I - Transitional Services Fees Payable to Unwired
Exhibit K - Balance Sheet Apportionment Methodology
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EXHIBIT C
---------
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") made and entered into
effective as of January 1, 2000 (the "Effective Date"), by and between UNWIRED
TELECOM CORP., f/k/a US UNWIRED, INC., a Louisiana corporation ("Unwired"), FORT
BEND TELEPHONE COMPANY, a Texas corporation ("Fort Bend"), XIT LEASING, INC., a
Texas corporation ("XIT"), and MERETEL COMMUNICATIONS LIMITED PARTNERSHIP, a
Louisiana partnership in commendam (the "Partnership"), acting through its
undersigned general partner, Wireless Management Corporation, a Louisiana
corporation (the "General Partner").
RECITALS
--------
WHEREAS, the Partnership was formed pursuant to the Articles of Partnership
in Commendam made and entered into as of July 26, 1995, as amended (the
"Articles of Partnership"), by and among the General Partner, Unwired, Fort
Bend, XIT, EATELCORP, Inc., a Louisiana corporation ("Eatel"), and Meretel
Wireless, Inc., a Louisiana corporation ("MWT");
WHEREAS, Unwired is a limited partner of the Partnership (and an affiliate
of Unwired is a shareholder of the General Partner); Fort Bend is a limited
partner of the Partnership (and an affiliate of Fort Bend is a shareholder of
the General Partner); XIT is a limited partner of the Partnership; Eatel is a
limited partner of the Partnership (and an affiliate of Eatel is a shareholder
of the General Partner); and MWI is no longer a partner in the Partnership;
WHEREAS, the Partnership entered into that certain management agreement
dated June 8, 1998 (the "Sprint PCS Management Agreement"), with Sprint
Spectrum, L.P., and SprintCom, Inc. (collectively, "Sprint") to manage and
construct a wireless personal communications service ("PCS") system in the
following five basic trading areas in which the Partnership had previously
obtained from the Federal Communications Commission (the "FCC") licenses to
construct and operate a PCS system pursuant to the FCC Block C auction (each, a
"BTA"): (1) BTA #034 Beaumont and BTA #265 Lufkin (collectively, the
"Beaumont/Lufkin BTAs"): and (2) BTA #032 Baton Rouge, BTA #236 Lafayette and
BTA #180 Hammond; and, pursuant to the Sprint PCS Management Agreement, the
Partnership took advantage of the FCC's offer for amnesty in the five BTAs by
returning the FCC licenses it previously obtained from the FCC to the FCC;
WHEREAS, prior to the Sprint PCS Management Agreement, Unwired was a
wholesaler of PCS services obtained from the Partnership and, pursuant to its
marketing and sales activities, developed and owned a base of PCS retail
customers (the "Unwired Customers"); and, pursuant to the Sprint PCS Management
Agreement and that certain Contribution Agreement dated effective as of August
1, 1998 (the "Unwired PCS Customer Agreement"), Unwired contributed the Unwired
Customers to the Partnership;
WHEREAS, the Partnership has entered into that certain Asset Purchase
Agreement dated April 7, 1999 by and between the Partnership and Pinnacle
Towers, Inc. ("Pinnacle"), as amended (the "Pinnacle APA"), that certain Master
Tower Lease dated July 8, 1999 by and between the
Partnership and Pinnacle, as amended (the "Pinnacle Lease"), and certain other
agreements executed and delivered by the Partnership and certain other parties
relating thereto, pursuant to which the Partnership has agreed, upon
satisfaction of certain terms and conditions, to sell and lease back its radio
signal transmission towers, associated equipment, land, ground leases and leases
of tower space to tower tenants (collectively, the "Pinnacle Agreements").
WHEREAS, Unwired, Fort Bend, Eatel, XIT, MWI, the General Partner, and the
Partnership have entered into an agreement dated effective as of September 7,
1999, as amended by the First Amendment thereto dated as of February ___, 2000
(the "Omnibus Agreement") which provides for the consummation of certain
transactions with respect to the Partnership (the "Restructuring Transactions"),
one of the conditions to the closing of which is the execution and delivery of
this Agreement (which, in the Omnibus Agreement, is referred to as the "BL PCS
Customer Agreement");
WHEREAS, in order to carry out the foregoing, the Partnership desires to
distribute, transfer and convey to Unwired, Fort Bend, and XIT (collectively,
the "Distributees") all of its right, title and interest in and to all of the
Distributed Assets (as defined hereinbelow), and assign to them the Assumed
Liabilities (as defined hereinbelow), in accordance with the terms and
provisions of this Agreement; and
WHEREAS, the Distributees desire to obtain from the Partnership all of the
Partnership's right, title and interest in and to all of the Distributed
Assets, and assume the Assumed Liabilities, in accordance with the terms and
provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, and
benefits to be obtained hereby and other good and valuable consideration, the
receipt and sufficiency of which the Partnership and Distributees hereby
acknowledge, the Partnership and Distributees hereby agree as follows:
AGREEMENTS
----------
SECTION 1. RECITALS. The Recitals are hereby incorporated herein.
SECTION 2. DISTRIBUTION OF ASSETS. Subject to the other terms and
conditions of this Agreement, the Partnership hereby distributes, transfers and
conveys to the Distributees, and the Distributees each hereby agree to acquire
and take from the Partnership, all of the Partnership's right, title and
interest in and to the Distributed Assets as of the Effective Date. For
purposes hereof, the "Distributed Assets" shall mean all of the following assets
and properties associated with the PCS business activities that the Partnership
conducts in and with respect to the Beaumont/Lufkin BTAs as of the Effective
Date:
(a) all customers of the Partnership, including the Unwired
Customers, who have telephone numbers with the area code (NPA) "409" (the
"Customers");
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(b) all contracts, oral or written, between the Partnership and the
Customers relating to the provision of PCS services by the Partnership to
the Customers (the "PCS Contracts"); provided, however, that the interests
hereby obtained in the PCS Contracts shall relate solely to the delivery of
PCS services in the Beaumont/Lufkin BTAs, and thus shall constitute an
undivided interest in any PCS Contracts that provide for the delivery of
PCS services in BTAs other than the Beaumont/Lufkin BTAs;
(c) all trade secrets, know-how, trade dress, data, proprietary
information, and other intellectual property, including the right to
recover for infringement thereon, associated with the Customers, PCS
Contracts, and delivery of PCS services to the Customers under the PCS
Contracts (the "Intellectual Property"); provided, however, that the
Intellectual Property shall not include (i) any rights or interests in or
to the Partnership's name or logo, or any intellectual property of the
Partnership associated with activities of the Partnership unrelated to the
Customers, PCS Contracts, or delivery of PCS Services to the Customers, or
(ii) any items that are non-transferable (such as third party commercial
software licenses);
(d) all payments and proceeds on or relating to accounts receivable
associated with the provision of services to Customers under the PCS
Contracts on and after the Effective Date (the "Accounts");
(e) all handsets which are the subject of the PCS Contracts and
that are owned by the Partnership on the Effective Date (the "Handsets");
(f) all radio signal transmission towers located within the
Beaumont/Lufkin BTAs which have not been acquired by Pinnacle pursuant to
the Pinnacle Agreements as of the Effective Date (the "Residual
Beaumont/Lufkin Towers"), and all other tangible personal property of the
Partnership relating to PCS activities that on the Effective Date is
located either (i) on the Residual Beaumont/Lufkin Towers, (ii) on the
radio signal transmission towers located within the Beaumont/Lufkin BTAs
which have been acquired (and thus are owned) by Pinnacle pursuant to the
Pinnacle Agreements as of the Effective Date, or (iii) at the following
addresses (the "Tangible Personal Property"):
(1) 4414 Dowlen Road
Suite 105
Beaumont, TX 77706
(2) #62 Cental Mall
3100 Highway 365
Port Arthur, TX 77642;
(g) all leases, subleases and other rights between the Partnership
and lessors and sublessors relating to (i) the two locations set forth
above in Section 2(f), (ii) the Residual Beaumont/Lufkin Towers, and (iii)
the Pinnacle Agreements, including without limitation the Pinnacle Lease,
but only to the extent attributable to the Beaumont/Lufkin BTAs
(collectively, the "Leases");
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(h) inventory relating to PCS activities located at the two
locations set forth above in Section 2(f) as of the Effective Date and as
set forth in Schedule 1 attached hereto and incorporated herein (the
"Inventory");
(i) all goodwill associated with the Customers, PCS Contracts, and
delivery of PCS services to the Customers under the PCS Contracts (the
"Goodwill");
(j) all information, data and records of the Partnership relating
to the Customers, PCS Contracts, Accounts, Handsets, Tangible Personal
Property, Leases, Inventory, Intellectual Property, and Goodwill (the
"Books and Records");
(k) all customer proprietary network information and subscriber
list information, as such terms are defined in Section 222(f) of the
Communications Act of 1934, as amended (47 USC (S) 222(f)), regarding the
Customers ("CPNI/SLI"); and
(l) all other benefits, rights and interests of the Partnership in
and to the Customers, PCS Contracts, Intellectual Property, Accounts,
Handsets, Tangible Personal Property, Leases, Inventory, Goodwill and Books
and Records; provided, however, that the interests hereby obtained shall
relate solely to the Beaumont/Lufkin BTAs, and thus shall constitute an
undivided interest in any items that relate to both the Beaumont/Lufkin
BTAs and BTAs other than the Beaumont/Lufkin BTAs, including without
limitation the Pinnacle APA, Pinnacle Lease and other Pinnacle Agreements.
SECTION 4. ASSUMED LIABILITIES. Subject to the terms and conditions of
this Agreement, the Distributees hereby severally assume, and shall discharge
and satisfy, all of the Assumed Liabilities as of the Effective Date. For
purposes of this Agreement, the term "Assumed Liabilities" shall mean all
obligations and liabilities of the Partnership accruing on and after the
Effective Date solely with respect to (i) the PCS Contracts, (ii) the Leases,
(iii) without duplication, the Pinnacle Agreements, but only to the extent
attributable to obligations and liabilities associated with radio signal
transmission towers constructed or acquired in the Beaumont/Lufkin BTAs, (iv)
the Intellectual Property, (v) a $13,673,483 portion of the total aggregate
outstanding principal amount and accrued interest thereon owed by the
Partnership as of the Effective Date to CoBank, ACB, individually and as agent
for other lenders, and The CIT Group/Equipment Financing, Inc., (vi) $1,876,423
(plus accrued interest) portion of the indebtedness owed to Unwired, and (vii)
the agreements and other items referenced on Schedule 2, attached to and made a
part of this Agreement, to the extent and in the manner indicated on Schedule 2.
SECTION 5. EXCLUDED LIABILITIES. Except for the Assumed Liabilities, the
Distributees do not hereby assume or agree to assume any other debts,
liabilities and obligations, whether accrued or fixed, absolute or contingent,
matured or unmatured or determined or determinable, of the Partnership or any of
its affiliates, including, without limitation, those arising under any law,
action, claim, suit or governmental order and those arising under any contract,
agreement, arrangement, commitment or undertaking of the Partnership or any of
its affiliates (collectively, the "Excluded Liabilities").
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SECTION 6. RELATIVE INTERESTS AND OBLIGATIONS. The Distributees shall,
pursuant to Section 2 of this Agreement, obtain the following undivided
ownership interests in the Distributed Assets: (a) 80% Unwired; (b) 15% Fort
Bend; (c) 5% XIT. The individual obligations and duties that the Distributees
each have with respect to the discharge and satisfaction of the Assumed
Liabilities shall be proportionate to, and no more than, the foregoing
proportionate interests that they each obtain in the Distributed Assets.
SECTION 7. EFFECT OF DISTRIBUTION WITH RESPECT TO PARTNERSHIP. As a
result of the distribution of the Distributed Assets to the Distributees
pursuant to this Agreement, each of their respective ownership interests in the
Partnership shall be reduced and adjusted as of the Effective Date in the manner
contemplated by the Omnibus Agreement. However, the economic burden of any
payment required to be made by the Partnership to Pinnacle after the Closing
(under this Agreement) pursuant to the indemnification or other obligations set
forth in the Pinnacle Agreements shall be allocated in an equitable manner among
and between the Distributees and the other partners of the Partnership based on
their proportionate ownership interests in the Partnership during the time
period during which the liability for the payment accrues.
SECTION 8. CLOSING AND CONVEYANCE INSTRUMENTS. The closing of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin, 1200 Smith
Street, 14/th/ Floor, Houston, Texas, or at such other place as the parties
mutually agree, simultaneously with the execution of this Agreement. All
actions taken at the Closing shall be deemed to have been taken simultaneously
at the time the last of any such actions is taken or completed. The Closing,
and each of the transactions contemplated by this Agreement, shall be effective
as of the close of business on the Effective Date. At the Closing, the
Partnership and Distributees shall deliver to each other a completed General
Conveyance, Transfer and Assignment, in the form attached hereto as Exhibit A,
covering all of the Distributed Assets. At the Closing and at all times after
the Closing, the Partnership shall execute and deliver, or cause to be executed
and delivered, all such other documents or instruments of conveyance,
assignment, or transfer, in each case dated effective as of the Effective Date,
as is necessary or appropriate in order to effectuate the distribution of the
Distributed Assets as contemplated in Section 2 and vest title in or confirm
title to the Distributed Assets to the Distributees (collectively, the
"Conveyance Instruments").
SECTION 9. CERTAIN ALTERNATIVE ARRANGEMENTS. In the event that the
Distributees and Partnership are precluded from fully consummating the
transactions contemplated by this Agreement, including without limitation with
respect to the Residual Beaumont/Lufkin Towers or Pinnacle Agreements, by any
one or more third parties, including without limitation Pinnacle or the lessors
on the ground leases associated with the Residual Beaumont/Lufkin Towers, the
Distributees and Partnership shall enter into such mutually agreeable
alternative contractual arrangements as are necessary or appropriate in order to
approximate as closely as possible the results otherwise contemplated by this
Agreement, including without limitation the execution and delivery of sublease
or comparable agreements (as contemplated by Section 3(b) of the Omnibus
Agreement with respect to the Pinnacle Agreements).
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SECTION 10. NO REPRESENTATIONS OR WARRANTIES. The Distributed Assets are
hereby transferred to and received by the Distributees without any
representations or warranties, whether express or implied, of any nature
whatsoever, on an "as is" "where is" basis, but with full subrogation to all
rights and claims of the Partnership against prior owners.
SECTION 11. GOOD FAITH EFFORTS. All parties to this Agreement shall make
good faith efforts to take and complete all steps necessary or appropriate in
order to consummate the transactions contemplated by this Agreement.
SECTION 12. NON-COMPETITION MATTERS. At and as of the Effective Date,
Section 9(a), Section 9(b), and Section 9(c) of the Unwired PCS Customer
Agreement shall not be applicable to the Distributed Assets; provided, however,
that this Section 12 of this Agreement shall not otherwise affect any of
Unwired's obligations under any of the documents or agreements governing the
organization or operation of the Partnership or entered into pursuant to the
Omnibus Agreement, including the Unwired PCS Customer Agreement.
SECTION 13. DISPUTE RESOLUTION PROCEDURES
(a) Agreement to Use Procedure. The parties have entered into
this Agreement in good faith and in the belief that it is mutually advantageous
to them. It is with that same spirit of cooperation that they pledge to attempt
to resolve any dispute amicably without the necessity of litigation.
Accordingly, if a dispute arises between them relating to this Agreement (a
"Dispute"), they will first utilize the procedures specified in this Section 13
(the "Procedure") prior to the commencement of any legal action.
(b) Initiation of Procedure. The party seeking to initiate the
Procedure (the "Initiating Party") shall give written notice to the other party
setting forth a general description of the nature of the Dispute, the Initiating
Party's claim for relief, and the identity of one or more individuals with
authority to settle the Dispute on behalf of the Initiating Party. The party
receiving such notice (the "Responding Party") shall have five business days
within which to designate by written notice to the Initiating Party one or more
individuals with authority to settle the Dispute on behalf of the Responding
Party. The individuals so designated by the Initiating Party and the Responding
Party shall be known as the "Authorized Individuals."
(c) Direct Negotiations. The Authorized Individuals shall be
entitled to make such investigation of the Dispute as they deem appropriate, but
agree to promptly, and in no event later than 30 days from the date of the
Initiating Party's written notice, meet to discuss in good faith a resolution of
the Dispute. The Authorized Individuals shall meet at such times and places and
with such frequency as they may agree. If the Dispute has not been resolved
within 30 days from the date of their initial meeting, the parties shall cease
direct negotiations and shall submit the Dispute to mediation in accordance with
the following provisions of this Section 13.
(d) Selection of Mediator. After direct negotiations have ceased,
the Authorized Individuals shall work together in good faith to select one
qualified attorney-mediator not affiliated with any of the parties. If the
Authorized Individuals are not able to agree on a mediator within five
6
business days from the date they cease direct negotiations, the Initiating Party
and the Responding Party each shall select a mediator (collectively, the
"Preliminary Mediators"). The Preliminary Mediators shall in turn select another
mediator to alone preside over the mediation of the Dispute.
(e) Time and Place for Mediation. In consultation with the
mediator selected, the parties shall promptly designate a mutually convenient
time and place for the mediation, and unless circumstances require otherwise,
such time to be not later than 45 days after selection of the mediator.
(f) Exchange of Information. In the event any party to this
Agreement has substantial need for information in the possession of another
party to this Agreement in order to prepare for the mediation, all parties shall
attempt in good faith to agree on procedures for the expeditious exchange of
such information. If no agreement is reached in this regard, the mediator shall
decide on the appropriate procedures.
(g) Summary of Views. At least seven days prior to the first
scheduled session of the mediation, each party shall deliver to the mediator and
to the other party a concise written summary of the facts concerning the matter
in Dispute, and such other matters required by the mediator. The mediator may
also request, as the mediator determines is appropriate, that a confidential
issue paper be submitted by each party to the mediator.
(h) Parties to be Represented. In the mediation, each party shall
be represented by an Authorized Individual and may be represented by counsel. In
addition, each party may, with permission of the mediator, bring such addition
persons as needed to respond to questions, contribute information and
participate in the negotiations.
(i) Conduct of Mediation. The mediator shall determine the format
for the meetings, designed to assure that both the mediator and the Authorized
Individuals have an opportunity to hear an oral presentation of each party's
views on the matter in dispute, and that the authorized parties attempt to
negotiate a resolution of the matter in dispute, with or without the assistance
of counsel or others, but with the assistance of the mediator. To this end, the
mediator is authorized to conduct both joint meetings and separate private
caucuses with the parties. The mediation session shall be private, and all
information and statements shall remain confidential. The mediator will keep
confidential all information learned in private caucus with any party unless
specifically authorized by such party to make disclosure of the information to
the other party. The parties shall keep confidential, and shall not use for any
other purpose, all information and statements obtained or made in the course of
the mediation process. The parties hereby agree to sign a document agreeing that
the mediator shall be governed by the provisions of Chapter 154 of the Texas
Remedies and Practice Code and such other rules as the mediator shall prescribe.
The parties commit to participate in the proceedings in good faith with the
intention of resolving the Dispute if at all possible.
(j) Termination of Procedure. The parties agree to participate in
the mediation procedure to its conclusion. The mediation shall be terminated (i)
by the execution of a settlement agreement by the parties, (ii) by a declaration
of the mediator that the mediation is terminated, or
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(iii) by a written declaration of a party to the effect that the mediation
process is terminated at the conclusion of one full day's mediation session.
Even if the mediation is terminated without a resolution of the Dispute, the
parties agree not to terminate negotiations and not to commence any legal action
or seek other remedies prior to the expiration of five days following the
mediation. Notwithstanding the foregoing, any party may commence litigation
within such five day period if litigation could be barred by an applicable
statute of limitations or in order to request an injunction to prevent
irreparable harm.
(k) Fees of Mediator, Disqualification. The fees and expenses of
the mediator shall be shared equally by the parties. The mediator shall be
disqualified as a witness, consultant, expert or counsel for any party with
respect to the Dispute and any related matters.
(l) Confidentiality. Mediation is a compromise negotiation for
purposes of the Federal and State Rules of Evidence and constitutes privileged
communication under Texas and Louisiana law. The entire mediation process is
confidential, and no stenographic, visual or audio record shall be made. All
conduct, statements, promises, offers, views and opinions, whether oral or
written, made in the course of the mediation by any party, their agents,
employees, representatives or other invitees and by the mediator are
confidential and shall, in addition and where appropriate, be deemed to be
privileged. Such conduct, statements, promises, offers, views and opinions
shall not be discoverable or admissible for any purposes, including impeachment,
in any litigation or other proceeding involving the parties, and shall not be
disclosed to anyone not an agent, employee, expert, witness, or representative
of any of the parties; provided, however, that evidence otherwise discoverable
or admissible is not excluded from discovery or admission as a result of its use
in the mediation.
SECTION 14. MISCELLANEOUS PROVISIONS.
(a) Further Documentation. At any time, and from time to time
hereafter, upon the reasonable request of any party, and without payment of
further consideration to the other party, each party covenants to do, execute,
acknowledge and deliver, and cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances, including the execution and delivery of the
Conveyance Instruments, as may be required in order to (i) complete the
transactions contemplated by this Agreement, (ii) assign, transfer, grant,
convey, assure and confirm to Unwired, Fort Bend, and XIT, or to collect and
reduce to possession, any or all of the Distributed Assets or the Assumed
Liabilities as provided for herein, and (iii) to evidence any of the foregoing.
(b) Notices. All notices, requests, demands, claims, and other
communications pertaining to this Agreement ("Notices") must be in writing, must
be sent to the addressee at the address set forth in this Section, or at such
other address as the addressee has designated by a Notice given in the manner
set forth in this Section, and must be sent by telegram, telex, facsimile,
electronic mail, courier, or prepaid, certified U.S. mail. Notices will be
deemed given when received, if sent by telegram, telex, electronic mail or
facsimile, and if received between the hours of 8:00 a.m. and 5:00 p.m., local
time of the destination address, on a business day (with confirmation of
completed transmission sufficing as prima facie evidence of receipt of a notice
sent
8
by telex, telecopy, electronic mail, or facsimile), and when delivered and
receipted for (or when attempted delivery is refused at the address where sent)
if sent by courier or by certified U.S. mail. Notices sent by telegram, telex,
electronic mail, or facsimile and received between 12:01 a.m. and 7:59 a.m.,
local time of the destination address, on a business day will be deemed given at
8:00 a.m. on that same day. Notices sent by telegram, telex, electronic mail, or
facsimile and received at a time other than between the hours of 12:01 a.m. and
5:00 p.m., local time of the destination address, on a business day will be
deemed given at 8:00 a.m. on the next following business day after the day of
receipt. The addresses for Notice are as follows:
If to the Partnership: Meretel Communications Limited Partnership
Wireless Management Corporation, General Partner
c/o EATELCORP, Inc.
913 South Burnside Ave.
Gonzales, Louisiana 70737
Telephone No.: (225) 621-4231
Facsimile No.: (225) 644-8566
Attention: John D. Scanlan
If to Unwired: Unwired Telecom Corp.
Suite 1900
One Lakeshore Drive
Lake Charles, Louisiana 70629
Telephone No.: (318) 436-9000
Facsimile No.: (318) 497-3479
Attention: Robert Piper
If to Fort Bend: Fort Bend Telephone Company
1260 Pin Oak Road
Katy, Texas 77493
Facsimile No.: (281) 396-5524
Telephone No.: (281) 396-5759
Attention: George V. Head
If to XIT: XIT Leasing, Inc.
P.O. Box 2008
314 W Texas
Brazoria, Texas 77422
Facsimile No.: (409) 798-3005
Telephone No.: (409) 798-2121
Attention: Gilbert R. Rasco
(c) Severability. Each part of this Agreement is intended to be
severable. If any term, covenant, condition or provision hereof is unlawful,
invalid, or unenforceable for any reason whatsoever, and such illegality,
invalidity, or unenforceability does not affect the remaining parts
9
of this Agreement, then all such remaining parts hereof shall be valid and
enforceable and have full force and effect as if the invalid or unenforceable
part had not been included.
(d) Rights Cumulative; Waivers. The rights of each of the parties
under this Agreement are cumulative and may be exercised as often as any party
considers appropriate. The rights of each of the parties hereunder shall not be
capable of being waived or varied otherwise than by an express waiver or
variation that is in writing and signed by the parties. Any failure to exercise
or any delay in exercising any of such rights shall not operate as a waiver or
variation of that or any other such right. Any defective or partial exercise of
any of such rights shall not preclude any other or further exercise of that or
any other such right. No act or course of conduct or negotiation on the part of
any party shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.
(e) Headings. The headings of the Sections and Subsections
contained in this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provision thereof.
(f) Construction. Unless the context otherwise requires, singular
nouns and pronouns, when used herein, shall be deemed to include the plural of
such noun or pronoun and pronouns of one gender shall be deemed to include the
equivalent pronoun of the other gender.
(g) Assignment. This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights and benefits hereof,
including the Attachments hereto, shall be binding upon, and shall inure to the
benefit of, the undersigned parties and their respective successors and assigns.
No party may assign either this Agreement or any of its rights, interests, or
obligations under this Agreement without the prior written consent of the
Partnership and all of the Distributees; provided, however, that a Distributee
may assign all, but not less than all, of its rights, interests, and obligations
under this Agreement to (i) an Affiliate (as defined below) of the Distributee,
or (ii) Newco (as defined in the Omnibus Agreement); provided, further, that in
the event of an assignment permitted by the foregoing clauses, the Distributee
in question shall remain responsible for the performance of all of its
obligations under this Agreement. For purposes of this Section 14(g) of this
Agreement, the term "Affiliate" shall mean, with respect to a Distributee, any
corporation, limited liability company, partnership, trust, or other entity
controlling, controlled by, or under common control with the Distributee. For
this purpose the terms "controls," "controlled by," or "under common control
with" shall mean the ownership and possession, directly or indirectly, of at
least 80% of the beneficial interests in the entity in question and the power to
direct or cause the direction of the management and policies of the entity in
question.
(h) Prior Understandings. This Agreement supersedes any and all
prior discussions and agreements between the parties with respect to the
distribution of the Distributed Assets and other matters contained herein, and
this Agreement contains the sole and entire understanding between the parties
hereto with respect to the transactions contemplated in this Agreement, except
as otherwise provided in the Omnibus Agreement.
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(i) Integrated Agreement; Amendments. This Agreement and all
attachments hereto constitute the final complete expression of the intent and
understanding of the parties hereto. This Agreement shall not be altered or
modified except by a subsequent writing, signed by the parties hereto.
(j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing any such counterpart.
(k) Survival. Each and every covenant and agreement hereinabove
made by the parties shall survive the consummation of the distribution of the
Distributed Assets.
(l) Joinder of Other Parties. Eatel is executing this Agreement
to acknowledge its fairness, and Eatel's assent to the terms and conditions
hereof.
(m) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED, AND THE
RIGHTS AND OBLIGATIONS OF THE CONTRIBUTOR AND THE PARTNERSHIP HEREUNDER
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA WITHOUT REGARD
TO THE CONFLICTS OF LAWS AND RULES THEREOF.
[SIGNATURES ON NEXT PAGE]
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IN TESTIMONY WHEREOF, the parties hereto have executed this Agreement in
multiple originals on February __, 2000 to be effective as of the Effective
Date.
MERETEL COMMUNICATIONS LIMITED
PARTNERSHIP
By Wireless Management Corporation, its
General Partner
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
UNWIRED TELECOM CORP. f/k/a US UNWIRED, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
FORT BEND TELEPHONE COMPANY
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
XIT LEASING, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
EATELCORP, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
Schedule 1 - List of Inventory
Schedule 2 - List of Other Agreements To Be Assumed
Exhibit A - Form of General Conveyance, Transfer and Assignment
13
SCHEDULE 1
----------
List of Inventory
14
SCHEDULE 2
----------
List of Other Agreements to Be Assumed
1. See Schedule 2-A attached hereto and incorporated herein by reference.
15
EXHIBIT A
Form of General Conveyance, Transfer and Assignment
16
EXHIBIT I
[Letterhead of US Unwired]
November 12, 1999
Mr. Robert Burgess
Chief Operating Officer
Meretel Communications, L.P.
406 B. Worthy
Gonzalcs, LA 70737
Dear Robert
Here is a quick summation of our discussion in Lafayette concerning
management Services.
After November 1 After November 1
---------------- ----------------
General Fees: $100,895 S126,709
Management, Accounting,
Finance, Marketing, Sales
Technical, Information
Technology, Human Resources
and Legal
Customer Care:
*Call Center $2.15/subscriber/month $4.05/subscriber/month
Activations $13.25/activation
Loyalty Welcomes $2.25/activation
Third Party National Retailers:
Set-up Fee (one-time charge) $20,000
Monthly Fee $12,500/month
*Prepay will add S1.00/subscriber to fee for use of the US Unwired platform.
The general fees are for the services that are already being provided but
have allowed for a reduction of two-thirds of the sales and marketing costs
(Meretel is performing those services itself in Lafayette: and Baton Rouge).
When the spin-off of Meretel is complete, all the sales and marketing charges
will be dropped. The new rate also allows for a small mark-up as US Unwired is
no longer committed to performing these services at cost. As has been the case.
. Existing services can be terminated only by groups;
. Information Technology, Human Resources, and Legal will remain as long as
any existing services are being provided;
. Existing "Management" service can not be terminated without simultaneously
terminating Marketing, Sales, Technical, Call Center; and
. No credit checks or collections are included in the proposed services.
Customer Care services will be charged at Sprint's rates less 10 Percent.
Prepay will add $1.00 per subscriber for use of US Unwired's software platform.
Sprint charges $13.83 per subscriber for a similar service.
After reviewing the National third Party Retailer program, we have
determined we need five additional CSRs to handle Meretel's volume. The training
for this Position takes a lot of time. However, since Meretel wants to be using
these distribution points by December 1, we will move one and maybe two
experienced CSRs from our existing staff to help get the program started. The
monthly fee of $12,500 is meant to cover the, salaries of these five new staff
members.
It is my understanding Tom Henning committed to providing billing services
under the current contract through January 2000. If services are required beyond
that time, the charges will more closely resemble; Sprint's charges.
One other service Meretel may want to consider is from a department we call
Back-End Prepay. This is a group whose sale responsibility is to reduce prepay
churn and increase its ARPU. In order to perform this service. we would need to
be aware of all your sales and marketing promotions prior to their
implementation.
Call me if you have any questions
Sincerely.
/s/ Robert Piper
Robert Piper
President
RP/cn
EXHIBIT K
Meretel
Balance Sheet Apportionment
Allocation Method
Balance Sheet Category -----------------------------------------------------------------
* Cash - Operating Valuation
* Cash - Store Depository Valuation
Cash - Petty Directly assigned
Cash & Cash Equivalents
A/R - Customer Receivables Directly Assigned
A/R - Customer Receivables - Eatel Meretel
A/R - Accrued Cust. Reveivables Directly Assigned
A/R - Roamer Net Settlement Allocated based on Clearing House reports for 15th of prior month
A/R - Allow. For Doubtful Accts. In same porportion as Cust. Rec. and Accrued Cust. Rec.
Due From ( To) Affilitates
Sale of Customer Base - USU Apportioned on customer base apportionment
Interest on customer base Apportioned on customer base apportionment
Other NBV of store fixtures - Directly Assigned
Total
Due From / (To) - LA Unwired, LLC Meretel
* Due From / (To) - LEC Unwired, LLC Valuation
* Due From / (To) - Wireless Mgmt. Valuation
* NSF Clearing Valuation
* Credit Bureau Clearing Valuation
* Refund Clearing Valuation
Employee Advances Valuation
Deposits Directly Assigned
Other Accounts Receivable Valuation
Other Receivables
Prepaid Rent Directly Assigned - Tower Leases
Prepaid Insurance Valuation
Prepaid Eng. Spares Inventory Directly Assigned
Prepaid Other Valuation
Prepaid Expenses
Inventory - PCS Directly Asssigned
Inventory - Prepaid Cards Directly Asssigned
Inventory - Accessories Directly Asssigned
Inventory
PPE - Gross Directly Assigned
Accumulated Depreciation Directly Assigned
Net PPE
Subscriber Base Directly assigned based on where original customer was from
Less Amorization Follows Subscriber Base
Net Subscriber Base
Loan Origination Fees Valuation
Acc. Amort. - Loan Orig. Fees Valuation
Investment in CoBank Valuation
Other Assets
Total Assets
* A/P - Trade Valuation
A/P - Roamers Allocated based on Clearing House reports for 15th of prior month
Payroll W/H Other Than Taxes Based on accrued payroll
* A/P - Accrued Invoices Valuation
* A/P - Accrued PO's Valuation
Accounts Payable
Property and State & Local Telcom tax Directly assigned
Federal Telcom Tax allocated based on retail subscribers
* Use Tax Valuation
* Acrued Interest Expense Valuation
Accrued Payroll Directly assigned based on employee location
Unearned Revenue Apportioned based on A/R
Deposits Payable Valuation
* Accrued Professional Services Valuation
Accrued Commissions Expense Directly assigned
Microwave Relocation Valuation
* Sprint Management Fee Valuation
* Accrued Other Valuation
Accrued Expenses
LTD - Bank Financing Valuation
Paid In Capital Valuation
Retained Earnings Balancing
Stockholder's Equity
Total Liabilities & Stockholders' Equity
* Items marked will be assumed to total by "New Meretel". The 29% owed by Texas
Unwired will be paid by Texas Unwired bo Meretel.
This is for logistic reasons, a vendor will be paid by "New Meretel" and
reimbursed 29% by Texas Unwired.