EXHIBIT 10.1
================================================================================
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
between
DOBSON CELLULAR SYSTEMS, INC.
and
ACC ACQUISITION LLC
Dated as of February 25, 2000
===============================================================================
I
TABLE OF CONTENTS
Page
----
Section 1. Engagement.........................................................................2
Section 2. Management Standards...............................................................2
Section 3. Services to be Provided............................................................2
Section 4. Compensation.......................................................................7
Section 5. Term and Termination...............................................................8
Section 6. Noncompetition and Confidentiality................................................11
Section 7. Force Majeure.....................................................................12
Section 8. Books and Records.................................................................12
Section 9. Regulatory Compliance.............................................................13
Section 10. Dispute Resolution................................................................14
Section 11. Inspection Rights; Delivery of Information........................................14
Section 12. Miscellaneous.....................................................................15
Exhibit 2(c) Quality Standards
Exhibit 3(c) Financial Performance Standards
Exhibit 4(b)(i) Cost Allocation Methodology
Exhibit 4(b)(ii) Per Unit Cost Comparison
Exhibit 5(e) Integration with DCC Systems
i
AMENDED AND RESTATED MANAGEMENT AGREEMENT
This Amended and Restated Management Agreement (the "Agreement") is
entered into as of February 25, 2000 by and between Dobson Cellular Systems,
Inc., an Oklahoma corporation ("Manager"), and ACC Acquisition LLC, a Delaware
limited liability company (the "Company"). Capitalized terms used but not
defined in this Agreement shall have the meanings given to such terms in the
Amended and Restated Limited Liability Company Agreement of the Company, dated
as of date hereof (the "LLC Agreement").
WHEREAS, the operation of the Business, including, without limitation,
the determination of policy, the preparation and filing of any and all
applications and other filings with the FCC, the hiring, supervision and
dismissal of personnel, day-to-day system operations, and the payment of
financial obligations and operating expenses, shall be controlled by the
Company, and Manager shall assist the Company in connection therewith and any
action undertaken by Manager shall be under the Company's continuing oversight,
review, control and approval, and the Company shall retain unfettered control
of, access to, and use of the Business, including its facilities and equipment
and shall be entitled to receive all profits from the operation of the Business;
WHEREAS, Manager is an indirect wholly owned subsidiary of Dobson
Communications Corporation ("DCC"), which owns 50% of the Economic Interests and
50% of the Voting Interests of the Company;
WHEREAS, the Company owns all of the equity interests in ACC
Acquisition Co., which as of the Effective Date (as defined below) will own
certain Cellular Systems and PCS Systems;
WHEREAS, Manager is willing to provide management services for the
Company and its Subsidiaries (including ACC Acquisition Co.) on the terms and
subject to the conditions contained in this Agreement; and
WHEREAS, the parties entered into a Management Agreement dated as of
January 31, 2000 (the "Original Agreement"), and desire to execute this
Agreement to amend and restate the terms upon which Manager will perform
services to the Company hereunder.
NOW, THEREFORE, for and in consideration of the premises, the covenants
and agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the execution and delivery
hereof, the parties agree, and the Original Agreement is hereby amended and
restated in its entirety, as follows:
ENGAGEMENT. THE COMPANY HEREBY ENGAGES MANAGER TO OVERSEE, MANAGE AND
SUPERVISE THE DEVELOPMENT AND OPERATION OF THE BUSINESS, AND MANAGER HEREBY
ACCEPTS
SUCH ENGAGEMENT, SUBJECT TO AND UPON THE TERMS AND CONDITIONS HEREOF.
MANAGEMENT STANDARDS.
MANAGER SHALL DISCHARGE ITS DUTIES HEREUNDER IN COMPLIANCE WITH THE LLC
AGREEMENT AND THE OPERATING AGREEMENT (COLLECTIVELY, THE "OPERATING AGREEMENTS")
AND ALL APPLICABLE LAW. IN PERFORMING ITS OBLIGATIONS HEREUNDER, MANAGER SHALL
ACT IN A MANNER THAT IT REASONABLY BELIEVES TO BE IN THE BEST INTERESTS OF THE
COMPANY CONSISTENT WITH THE STANDARDS SET FORTH HEREIN. NOTHING IN THIS
AGREEMENT SHALL BE CONSTRUED AS CONSTITUTING MANAGER AN AGENT OF THE COMPANY
BEYOND THE EXTENT EXPRESSLY PROVIDED IN, AND AS LIMITED BY, THIS AGREEMENT.
MANAGER SHALL DEVOTE COMPARABLE ATTENTION AND SERVICES TO THE COMPANY AS THOSE
DEVOTED BY MANAGER (OR ANY AFFILIATE OF DCC THAT MANAGES DCC'S WIRELESS
COMMUNICATIONS SYSTEMS) IN ITS MANAGEMENT OF OTHER WIRELESS COMMUNICATIONS
SYSTEMS OR MARKETS DIRECTLY OR INDIRECTLY OWNED OR MANAGED BY MANAGER, AND WILL
OTHERWISE DEAL WITH THE COMPANY SUBJECT TO THE TERMS OF THIS AGREEMENT IN A
MANNER THAT DOES NOT DISCRIMINATE AGAINST THE COMPANY IN FAVOR OF SUCH OTHER
MARKETS.
MANAGER SHALL USE REASONABLE BEST EFFORTS TO CAUSE THE COMPANY'S CELLULAR
SYSTEMS TO COMPLY IN EACH OF THE COMPANY'S MARKETS WITH THE QUALITY STANDARDS
SET FORTH ON EXHIBIT 2(c).
SERVICES TO BE PROVIDED.
SCOPE OF SERVICES. SUBJECT TO THE COMPANY'S OVERSIGHT, REVIEW AND ULTIMATE
CONTROL AND APPROVAL AND THE LIMITATIONS OF SECTION 3(c) BELOW, MANAGER SHALL BE
RESPONSIBLE FOR THE SUPERVISION, DESIGN, CONSTRUCTION AND OPERATION OF THE
COMPANY AND THE BUSINESS IN ACCORDANCE WITH THE OPERATING AGREEMENTS. AMONG
OTHER THINGS, MANAGER SHALL HAVE THE RIGHT TO SELECT THE PERSONS WHO SHALL
PERFORM ALL DESIGN, CONSTRUCTION, MANAGEMENT OR OPERATIONAL SERVICES AND MAY
ELECT TO USE ITS OWN EMPLOYEES OR ENGAGE INDEPENDENT CONTRACTORS. TO THIS END
MANAGER SHALL PROVIDE GENERALLY, ON THE TERMS AND SUBJECT TO THE CONDITIONS SET
FORTH HEREIN AND IN A MANNER CONSISTENT WITH THE STANDARDS SET FORTH HEREIN AND
IN THE OPERATING AGREEMENTS, SUPERVISORY SERVICES WITH RESPECT TO (x) ALL
ADMINISTRATIVE, ACCOUNTING, BILLING, CREDIT, COLLECTION, INSURANCE, PURCHASING,
CLERICAL AND SUCH OTHER GENERAL SERVICES AS MAY BE NECESSARY TO THE
ADMINISTRATION OF THE BUSINESS, (y) OPERATIONAL, ENGINEERING, MAINTENANCE,
CONSTRUCTION, REPAIR AND SUCH OTHER TECHNICAL SERVICES AS MAY BE NECESSARY TO
THE CONSTRUCTION AND OPERATION OF THE BUSINESS, AND (z) MARKETING, SALES,
ADVERTISING AND SUCH OTHER PROMOTIONAL SERVICES AS MAY BE NECESSARY TO THE
MARKETING OF THE BUSINESS. THE SERVICES FOR WHICH MANAGER SHALL BE RESPONSIBLE,
SUBJECT IN EACH CASE TO THE OPERATING AGREEMENTS, THE COMPANY'S OVERSIGHT,
REVIEW AND ULTIMATE CONTROL AND APPROVAL AND TO THE LIMITATIONS OF SECTION 3(c)
BELOW, SHALL INCLUDE BUT SHALL NOT BE LIMITED TO THE FOLLOWING:
2
THE MARKETING OF MOBILE WIRELESS SERVICES (AND, TO THE EXTENT DETERMINED BY THE
MANAGEMENT COMMITTEE, OTHER COMPANY COMMUNICATIONS SERVICES) TO BE OFFERED AND
PROVIDED BY THE COMPANY;
THE MANAGEMENT, TAX COMPLIANCE, ACCOUNTING AND FINANCIAL REPORTING FOR THE
COMPANY INCLUDING, BUT NOT LIMITED TO, THE PREPARATION AND PRESENTATION OF
REPORTS AND REVIEWS OF THE BUSINESS, FINANCIAL RESULTS AND CONDITION, REGULATORY
STATUS, COMPETITIVE POSITION AND STRATEGIC PROSPECTS OF THE COMPANY AS REQUESTED
BY THE MANAGEMENT COMMITTEE;
THE REGULATORY PROCESSING FOR THE COMPANY, INCLUDING WITHOUT LIMITATION THE
PREPARATION AND FILING OF ALL APPROPRIATE REGULATORY FILINGS, CERTIFICATES,
TARIFFS AND REPORTS THAT ARE REQUIRED BY, AND PARTICIPATION IN ANY HEARINGS OR
OTHER PROCEEDINGS BEFORE, LOCAL, STATE AND FEDERAL GOVERNMENTAL REGULATORY
BODIES;
THE ENGINEERING, DESIGN, PLANNING, CONSTRUCTION AND INSTALLATION, MAINTENANCE
AND REPAIR (BOTH EMERGENCY AND ROUTINE) AND OPERATION OF, AND EQUIPMENT
PURCHASES FOR, THE COMPANY;
ASSISTING THE COMPANY IN THE DEVELOPMENT AND PREPARATION OF BUDGETS, INCLUDING,
WITHOUT LIMITATION, PREPARING AND PRESENTING, NOT LATER THAN 60 DAYS BEFORE THE
BEGINNING OF EACH FISCAL YEAR (IT BEING UNDERSTOOD THAT THE ANNUAL BUDGETS FOR
THE FIRST THREE YEARS SHALL BE BASED ON, IN TERMS OF FORMAT AND LEVEL OF DETAIL,
THE INITIAL THREE-YEAR BUDGET OF THE COMPANY, PROVIDED, THAT ANY SUCH ANNUAL
BUDGET SHALL SUPERSEDE THE INITIAL THREE-YEAR BUDGET WITH RESPECT TO THE YEAR
COVERED BY SUCH ANNUAL BUDGET), A PROPOSED DRAFT OF AN ANNUAL OPERATING BUDGET
FOR THE COMPANY'S REVIEW, EVALUATION AND APPROVAL SETTING FORTH IN REASONABLE
DETAIL THE ANTICIPATED CAPITAL EXPENDITURES AND OTHER PROJECTED COSTS AND
EXPENSES OF CONSTRUCTING AND OPERATING THE BUSINESS DURING THE PERIOD COVERED BY
THE BUDGET, AS WELL AS PROJECTED REVENUES FOR THAT PERIOD, A BUSINESS PLAN AND
PERSONNEL REQUIREMENTS, AND KEY PERFORMANCE STANDARDS, GOALS AND INDICATORS FOR
THE COMPANY, FOR THE PERIOD COVERED BY THE BUDGET, IN EACH CASE PRESENTED ON A
MONTH-BY-MONTH BASIS TO THE EXTENT PRACTICABLE, AND GENERALLY DESCRIBING ALL
CONTRACTS AND COMMITMENTS WHICH MANAGER EXPECTS TO ENTER INTO ON BEHALF OF THE
COMPANY DURING THE PERIOD COVERED THEREBY;
SERVICES RELATING TO SALES OF THE PRODUCTS AND SERVICES OFFERED BY THE COMPANY,
INCLUDING WITHOUT LIMITATION PROCESSING ORDERS FOR SERVICE, CUSTOMER SUPPORT,
BILLING FOR SERVICES PROVIDED BY THE COMPANY AND COLLECTION OF RECEIVABLES FOR
THE COMPANY;
MANAGEMENT INFORMATION SERVICES FOR THE COMPANY;
MONITORING AND CONTROLLING THE BUSINESS AND ITS CELLULAR SYSTEMS;
NEGOTIATING CONTRACTS, ISSUING PURCHASE ORDERS AND OTHERWISE ENTERING INTO
AGREEMENTS ON BEHALF OF THE COMPANY FOR THE PURCHASE, LEASE, LICENSE OR USE OF
SUCH PROPERTIES, SERVICES AND RIGHTS AS MAY BE NECESSARY OR DESIRABLE IN THE
JUDGMENT OF MANAGER FOR THE OPERATION OF THE COMPANY;
SUPERVISING, RECRUITING AND TRAINING ALL NECESSARY PERSONNEL TO BE EMPLOYED BY
THE COMPANY, AND DETERMINING SALARIES, WAGES AND BENEFITS FOR THE COMPANY'S
EMPLOYEES;
3
ADMINISTERING THE COMPANY'S EMPLOYEE BENEFIT PROGRAMS AND THE COMPANY'S PROGRAMS
FOR COMPLIANCE WITH APPLICABLE LAWS GOVERNING THE ADMINISTRATION AND OPERATION
OF SUCH PLANS AND PROGRAMS;
ADMINISTERING THE COMPANY'S RISK MANAGEMENT PROGRAMS, INCLUDING NEGOTIATING THE
TERMS OF PROPERTY AND CASUALTY INSURANCE AND PREPARING A COMPREHENSIVE DISASTER
RECOVERY PROGRAM; AND
IN FURTHERANCE OF THE FOREGOING, MAKING OR COMMITTING TO MAKE PERMITTED
EXPENDITURES (INCLUDING PERMITTED CAPITAL EXPENDITURES) ON BEHALF OF THE
COMPANY.
ACCOUNTS. SUBJECT TO THE FOREGOING, THE COMPANY SHALL BE RESPONSIBLE FOR PAYMENT
OF ALL COSTS AND EXPENSES NECESSARY TO FUND THE ONGOING BUSINESS AND OPERATIONS
OF THE BUSINESS AND FOR THE PROVISION OF ALL SERVICES OF MANAGER HEREUNDER,
WHICH SHALL INCLUDE, BUT NOT BE LIMITED TO, PAYMENTS UNDER SECTION 4, PAYMENTS
TO INDEPENDENT CONTRACTORS, PAYMENTS TO VENDORS AND SUPPLIERS OF THE BUSINESS,
AND INTEREST PAYMENTS TO CREDITORS WHO HAVE FINANCED THE CONSTRUCTION OR
OPERATION OF THE BUSINESS. TO THE EXTENT PROVIDED HEREIN, MANAGER SHALL MAKE
SUCH PAYMENTS ON THE COMPANY'S BEHALF FROM ONE OR MORE ACCOUNTS MAINTAINED IN
THE NAME OF THE COMPANY AT ONE OR MORE BANKS ACCEPTABLE TO THE MANAGEMENT
COMMITTEE, INTO WHICH ALL COMPANY REVENUES SHALL BE DEPOSITED (THE "ACCOUNTS").
ALL FUNDS OF THE COMPANY SHALL BE PROMPTLY DEPOSITED IN SUCH BANK ACCOUNTS. ALL
DISBURSEMENTS MADE BY THE COMPANY AS PERMITTED UNDER THIS AGREEMENT SHALL BE
MADE BY CHECKS DRAWN ON THE ACCOUNTS, AND ALL FUNDS ON DEPOSIT IN THE ACCOUNTS
SHALL AT ALL TIMES BE THE PROPERTY OF THE COMPANY. MANAGER WILL HAVE THE RIGHT
AND AUTHORITY TO MAKE DEPOSITS TO AND DISBURSEMENTS AND WITHDRAWALS FROM THE
ACCOUNTS AS REQUIRED IN CONNECTION WITH THE PERFORMANCE OF ITS SERVICES
HEREUNDER, PROVIDED THAT ALL SIGNATORIES ON THE ACCOUNTS SHALL BE SUBJECT TO THE
APPROVAL OF THE MANAGEMENT COMMITTEE. THE EXECUTIVE OFFICERS OF THE MANAGER
SHALL BE DEEMED TO BE SIGNATORIES WHO HAVE BEEN APPROVED BY THE MANAGEMENT
COMMITTEE.
RESTRICTIONS ON MANAGER'S AUTHORITY. ANYTHING TO THE CONTRARY IN THIS AGREEMENT
NOTWITHSTANDING, MANAGER SHALL NOT TAKE, OR CAUSE OR PERMIT TO BE TAKEN, ANY
ACTION THAT REQUIRES THE APPROVAL OF THE MANAGEMENT COMMITTEE UNDER SECTION 7.3
OF THE LLC AGREEMENT (INCLUDING, IF APPLICABLE, BY REFERENCE TO EXHIBIT A TO THE
LLC AGREEMENT), OR DO, OR CAUSE OR PERMIT TO BE DONE, ANY OF THE FOLLOWING FOR
OR ON BEHALF OF THE COMPANY WITHOUT THE PRIOR WRITTEN CONSENT OF THE MANAGEMENT
COMMITTEE (UNLESS INCLUDED WITH REASONABLE SPECIFICITY IN A BUDGET DULY ADOPTED
BY THE COMPANY):
SETTLE ANY CLAIM OR LITIGATION BY OR AGAINST THE COMPANY IF THE SETTLEMENT
INVOLVES A PAYMENT OF $100,000 OR MORE, OR ANY NON-MINISTERIAL REGULATORY
PROCEEDINGS INVOLVING THE COMPANY;
(A) LEND MONEY OR GUARANTEE DEBTS OF OTHERS (OTHER THAN WHOLLY-OWNED
SUBSIDIARIES OF THE COMPANY) ON BEHALF OF THE COMPANY, OR ASSIGN, TRANSFER, OR
PLEDGE ANY DEBTS DUE THE COMPANY, OR (B) RELEASE OR DISCHARGE ANY DEBT DUE OR
COMPROMISE ANY CLAIM OF THE COMPANY, OTHER THAN TRADE CREDIT AND ADVANCES TO
EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS;
4
INVEST IN OR OTHERWISE ACQUIRE ANY DEBT OR EQUITY SECURITIES OF ANY OTHER
PERSON, ENTER INTO ANY BINDING AGREEMENT FOR THE ACQUISITION OF ANY INTEREST IN
ANY BUSINESS ENTITY OR OTHER PERSON (WHETHER BY PURCHASE OF ASSETS, PURCHASE OF
STOCK OR OTHER SECURITIES, MERGER, LOAN OR OTHERWISE), OR ENTER INTO ANY JOINT
VENTURE OR PARTNERSHIP WITH ANY OTHER PERSON;
TAKE ANY TAX REPORTING POSITION OR MAKE ANY RELATED ELECTION ON BEHALF OF THE
COMPANY WHICH IS INCONSISTENT WITH THE DIRECTIONS GIVEN BY THE MANAGEMENT
COMMITTEE;
ASSERT ON BEHALF OF THE COMPANY A POSITION WITH RESPECT TO ANY MATERIAL MATTER,
OR DISAGREE ON BEHALF OF THE COMPANY WITH A POSITION TAKEN WITH RESPECT TO ANY
MATERIAL MATTER BY A MEMBER OR ANY OTHER PERSON, BEFORE THE FEDERAL
COMMUNICATIONS COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY, A SELF-REGULATORY
BODY, ANY INDUSTRY ORGANIZATION OR IN ANY OTHER PUBLIC FORUM;
KNOWINGLY TAKE OR FAIL TO TAKE ANY ACTION THAT VIOLATES (A) ANY LAW, RULE OR
REGULATION RELATING TO THE BUSINESS, (B) ANY MATERIAL AGREEMENT, ARRANGEMENT OR
UNDERSTANDING TO WHICH THE COMPANY IS A PARTY, INCLUDING AN OPERATING AGREEMENT,
(C) ANY LICENSE OR OTHER GOVERNMENTAL AUTHORIZATION GRANTED TO THE COMPANY IN
CONNECTION WITH ITS OWNERSHIP AND OPERATION OF THE BUSINESS, OR (D) ANY JUDICIAL
OR ADMINISTRATIVE ORDER OR DECREE TO WHICH THE COMPANY IS SUBJECT;
SELL, ASSIGN, TRANSFER, OR OTHERWISE DISPOSE OF, OR HYPOTHECATE OR GRANT A LIEN
ON ANY LICENSE OR OTHER MATERIAL ASSETS BELONGING TO THE COMPANY (OTHER THAN THE
DISPOSAL OF ASSETS OR EQUIPMENT IN THE ORDINARY COURSE OF BUSINESS);
TAKE ANY ACTION AMENDING OR AGREEING TO AMEND ANY LICENSE GRANTED TO THE COMPANY
IN CONNECTION WITH ITS OWNERSHIP AND OPERATION OF THE BUSINESS (IT BEING
UNDERSTOOD THAT LICENSE RENEWALS IN THE ORDINARY COURSE OF BUSINESS SHALL NOT
REQUIRE MANAGEMENT COMMITTEE APPROVAL);
BORROW MONEY ON BEHALF OF THE COMPANY OR ENTER INTO OTHER FORMS OF FINANCING FOR
THE BUSINESS, OTHER THAN ANY CAPITAL LEASE;
COMMINGLE ANY FUNDS OF THE COMPANY WITH FUNDS OF ANY OTHER ENTITY OR PERSON;
HIRE OR FIRE THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE COMPANY;
PAY TO ANY EMPLOYEE OR AGENT OF, OR CONSULTANT OR ADVISOR TO, THE COMPANY, CASH
COMPENSATION IN EXCESS OF $150,000 IN ANY FISCAL YEAR;
ESTABLISH ANY RESERVES THAT ARE NOT SET FORTH ON THE QUARTERLY FINANCIAL REPORTS
PROVIDED TO THE MANAGEMENT COMMITTEE;
MAKE ANY MATERIAL CHANGES OR MODIFICATIONS TO ANY SIGNIFICANT COMPONENTS OF THE
COMPANY'S CELLULAR SYSTEMS AS THEY EXIST ON THE EFFECTIVE DATE;
ENTER INTO ANY CONTRACT, AGREEMENT (INCLUDING ANY CAPITAL LEASE) OR OTHER
COMMITMENT OR ISSUE ANY PURCHASE ORDER, WHICH CONTRACT OR OTHER AGREEMENT OR
PURCHASE ORDER (A) IS NOT IN THE ORDINARY COURSE OF BUSINESS, (B) OBLIGATES THE
COMPANY TO MAKE PAYMENTS OF $100,000 OR MORE WITHIN ANY 12-MONTH PERIOD OR (C)
COULD REASONABLY BE EXPECTED TO CREATE A MATERIAL VARIANCE RELATIVE TO (x) IN
THE CASE OF A CAPITAL EXPENDITURE, THE TOTAL BUDGET FOR CAPITAL EXPENDITURES
CONTAINED IN ANY BUDGET APPROVED BY THE MANAGEMENT
5
COMMITTEE AND (y) IN THE CASE OF AN OPERATING EXPENSE, THE TOTAL OPERATING
EXPENSE BUDGET CONTAINED IN ANY BUDGET APPROVED BY THE MANAGEMENT COMMITTEE, IN
EACH CASE FOR THE YEAR-TO-DATE PERIOD IN WHICH THE EXPENDITURE IS MADE OR
INCURRED AND TAKING INTO ACCOUNT ALL PREVIOUS EXPENDITURES AND COMMITMENTS IN
SUCH YEAR-TO-DATE PERIOD; OR TERMINATE OR AMEND IN ANY MATERIAL RESPECT ANY
CONTRACT, AGREEMENT OR OTHER COMMITMENT OR PURCHASE ORDER, IN EACH CASE IF THE
EXECUTION AND DELIVERY OR ISSUANCE THEREOF REQUIRES APPROVAL PURSUANT TO THIS
SECTION 3(c); OR
ENTER INTO, OR COMMIT TO ENTER INTO, ANY AGREEMENT, ARRANGEMENT OR UNDERSTANDING
THAT COULD REASONABLY BE EXPECTED TO HAVE AN ADVERSE EFFECT ON THE COMPANY'S
ABILITY TO COMPLY IN ANY MATERIAL RESPECT WITH THE QUALITY STANDARDS SET FORTH
IN EXHIBIT 2(c) OR THE FINANCIAL PERFORMANCE STANDARDS SET FORTH IN
EXHIBIT 3(c).
PROVIDED, that if this Agreement is terminated by the Company pursuant to
5(b)(ii)(B), and AT&T designates the New Provider (as defined in Section
5(e)(i)), such New Provider may do, or cause or permit to be done, for or on
behalf of the Company, without the prior written consent of the Management
Committee, any of the actions set forth in clauses (i) through (xvi) above;
PROVIDED, FURTHER, that anything herein to the contrary notwithstanding, the New
Provider shall not take any action set forth on Exhibit B to the LLC Agreement
without obtaining approval of the Management Committee in the manner specified
in the LLC Agreement. Prior to the effectiveness of any assignment to a New
Provider, such Person shall agree in writing to become bound by this Agreement.
6
BUDGETS. MANAGER SHALL PREPARE OR CAUSE TO BE PREPARED AND PRESENT NOT LATER
THAN 30 DAYS BEFORE THE BEGINNING OF EACH FISCAL YEAR FOLLOWING THE FISCAL YEAR
2000 AN ANNUAL OPERATING BUDGET (WITH QUARTERLY FORECASTS) FOR THE COMPANY'S
REVIEW, EVALUATION AND APPROVAL (EACH, AS DULY APPROVED BY THE COMPANY, AN
"OPERATING BUDGET"). EACH OPERATING BUDGET SHALL SET FORTH IN REASONABLE DETAIL
THE ANTICIPATED CAPITAL EXPENDITURES AND OTHER PROJECTED COSTS AND EXPENSES OF
OPERATING THE COMPANY'S CELLULAR SYSTEMS DURING THE PERIOD COVERED BY THE
BUDGET, AS WELL AS PROJECTED REVENUES FOR THAT PERIOD AND THE PROJECTED
REPORTABLE INCOME FOR SUCH QUARTER AND MANAGER SHALL ENDEAVOR TO ASSURE THE
ACCURACY OF ITS ESTIMATES. PRIOR APPROVAL BY THE COMPANY SHALL BE REQUIRED FOR
ANY EXPENDITURE WHICH WOULD RESULT IN OPERATING EXPENDITURES EXCEEDING ANY
SUMMARY LINE ITEM IN AN OPERATING BUDGET BY MORE THAN 10 PERCENT OR THE TOTAL
AMOUNT OF EXPENSES CONTEMPLATED BY AN OPERATING BUDGET BY MORE THAN 10 PERCENT.
TRANSACTIONS WITH AFFILIATES. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, WITHOUT THE PRIOR APPROVAL OF THE MANAGEMENT COMMITTEE, MANAGER SHALL
NOT (AND SHALL CAUSE THE COMPANY AND ITS SUBSIDIARIES NOT TO) ENTER INTO ANY
AGREEMENT, ARRANGEMENT OR UNDERSTANDING WITH MANAGER OR ANY OF ITS AFFILIATES OR
ANY MEMBER OF THE DOBSON GROUP EXCEPT IN THE ORDINARY COURSE OF THE BUSINESS OF
THE COMPANY AND ON COMMERCIALLY REASONABLE TERMS THAT ARE NO LESS FAVORABLE TO
THE COMPANY OR ITS SUBSIDIARIES THAN THE COMPANY OR ITS SUBSIDIARIES WOULD
OBTAIN IN A COMPARABLE ARM'S-LENGTH TRANSACTION WITH AN UNAFFILIATED PERSON. IN
ITS REQUEST FOR APPROVAL OF THE MANAGEMENT COMMITTEE, MANAGER SHALL SPECIFY THAT
THE APPLICABLE TRANSACTION IS SUBJECT TO THIS SECTION 3(e).
COMPENSATION.
REIMBURSEMENT. THE COMPANY SHALL REIMBURSE MANAGER FOR ALL OUT-OF-POCKET
EXPENSES ("OUT-OF-POCKET EXPENSES") REASONABLY INCURRED BY MANAGER FOR GOODS AND
SERVICES PROVIDED BY THIRD PARTIES TO, FOR OR ON BEHALF OF THE COMPANY OR
INCURRED BY MANAGER IN THE PERFORMANCE OF ITS DUTIES AND RESPONSIBILITIES
HEREUNDER. MANAGER SHALL PROVIDE THE COMPANY WITH A STATEMENT SETTING FORTH IN
REASONABLE DETAIL (AND WITH COPIES OF INVOICES OR OTHER SUPPORTING
DOCUMENTATION) THE OUT-OF-POCKET EXPENSES CLAIMED WITHIN THIRTY (30) DAYS AFTER
THEY ARE INCURRED, PROVIDED, THAT OUT-OF-POCKET EXPENSES INCURRED IN THE LAST
THIRTY (30) DAYS OF ANY FISCAL YEAR SHALL BE CLAIMED OR ESTIMATED IN GOOD FAITH
AT LEAST TWO WEEKS PRIOR TO THE END OF SUCH FISCAL YEAR. THE COMPANY SHALL PAY
TO MANAGER EACH SUCH AMOUNT WITHIN THIRTY (30) DAYS OF RECEIPT OF SUCH STATEMENT
AND INVOICES OR OTHER SUPPORTING DOCUMENTATION (IT BEING UNDERSTOOD THAT
ESTIMATED OUT-OF-POCKET EXPENSES WILL NOT BE REIMBURSED UNTIL MANAGER PROVIDES
THE COMPANY WITH THE INVOICES OR OTHER SUPPORTING DOCUMENTATION THEREFOR).
COST ALLOCATIONS. TO THE MAXIMUM EXTENT PRACTICABLE, MANAGER AND ITS AFFILIATES
WILL SPECIFICALLY IDENTIFY COSTS ASSOCIATED WITH THE BUSINESS, WHICH SHALL BE
REIMBURSED BY THE COMPANY AS OUT-OF-POCKET EXPENSES IN ACCORDANCE WITH SECTION
4(a). TO THE EXTENT THAT SUCH SPECIFIC IDENTIFICATION IS IMPRACTICABLE, MANAGER
SHALL CHARGE THE COMPANY "COST ALLOCATIONS" FOR THOSE COMMON COSTS
7
WHICH BENEFIT THE COMPANY (INCLUDING AN APPROPRIATE PORTION OF MANAGER'S GENERAL
OVERHEAD EXPENSES). COST ALLOCATIONS (INCLUDING WITHOUT LIMITATION THE COST OF
SERVICES DIRECTLY ALLOCABLE TO THE COMPANY THAT ARE PERFORMED BY EMPLOYEES OF
DCC OR ITS AFFILIATES) SHALL BE CALCULATED IN THE MANNER SET FORTH IN EXHIBIT
4(b)(i). MANAGER SHALL CAUSE TO BE FURNISHED TO THE COMPANY, AT COMPANY'S
EXPENSE, AN ACCOUNTING OF ANY SUCH COST ALLOCATIONS, AND THE COMPANY SHALL PAY
TO MANAGER SUCH AMOUNT WITHIN THIRTY (30) DAYS OF RECEIPT OF SUCH ACCOUNTING.
EXHIBIT 4(b)(ii) SETS FORTH BY CATEGORY IN REASONABLE DETAIL THE PER UNIT COSTS
INCURRED BY AMERICAN CELLULAR CORPORATION IN 1999, THE PER UNIT COSTS INCURRED
BY MANAGER AND ITS AFFILIATES IN 1999, AND MANAGER'S GOOD FAITH ESTIMATE OF THE
PROJECTED PER UNIT COSTS TO BE INCURRED BY THE COMPANY IN 2000, IN OPERATING
THEIR RESPECTIVE CELLULAR SYSTEMS.
DISPUTES, ETC. IF THE COMPANY DISPUTES THE AMOUNT OF OUT-OF-POCKET EXPENSES OR
COST ALLOCATIONS CLAIMED BY MANAGER, THE COMPANY SHALL NOTIFY MANAGER IN WRITING
BEFORE PAYMENT IS DUE, AND IF THE MATTER CANNOT BE RESOLVED INFORMALLY BETWEEN
THE PARTIES, EITHER THE COMPANY OR MANAGER MAY REQUEST RESOLUTION OF THE DISPUTE
PURSUANT TO SECTION 10.
TERM AND TERMINATION.
TERM. THIS AGREEMENT SHALL COMMENCE ON THE CLOSING DATE UNDER THE AGREEMENT AND
PLAN OF MERGER DATED AS OF OCTOBER 5, 1999 AMONG THE COMPANY, ACC ACQUISITION
CO. AND AMERICAN CELLULAR CORPORATION (THE "EFFECTIVE DATE") AND SHALL TERMINATE
AS PROVIDED HEREIN OR UNDER THE LLC AGREEMENT.
TERMINATION.
BY EITHER PARTY. EITHER PARTY MAY TERMINATE THIS AGREEMENT IN THE EVENT THAT A
GOVERNMENTAL AUTHORITY SHALL ENTER AN ORDER APPOINTING A CUSTODIAN, RECEIVER,
TRUSTEE, INTERVENOR OR OTHER OFFICER WITH SIMILAR POWERS WITH RESPECT TO THE
OTHER PARTY OR WITH RESPECT TO ANY SUBSTANTIAL PART OF ITS PROPERTY, OR
CONSTITUTING AN ORDER FOR RELIEF OR APPROVING A PETITION IN BANKRUPTCY OR
INSOLVENCY LAW OF ANY JURISDICTION, OR ORDERING THE DISSOLUTION, WINDING UP OR
LIQUIDATION OF SUCH PARTY; OR IF A PARTY FILES A PETITION SEEKING ANY SUCH
ORDER; OR IF ANY SUCH PETITION SHALL BE FILED AGAINST SUCH PARTY AND SHALL NOT
BE DISMISSED WITHIN ONE HUNDRED AND TWENTY (120) DAYS THEREAFTER; OR AN ORDER
SHALL HAVE BEEN ISSUED GRANTING SUCH PARTY A SUSPENSION OF PAYMENTS UNDER
APPLICABLE LAW AND ANY SUCH ORDER IS NOT DISMISSED WITHIN ONE HUNDRED AND TWENTY
(120) DAYS THEREAFTER.
BY COMPANY. THE COMPANY (ACTING THROUGH THE MANAGEMENT COMMITTEE, EXCLUDING THE
REPRESENTATIVES APPOINTED BY DCC) MAY TERMINATE THIS AGREEMENT:
on five (5) days' notice in the event of a material breach of this Agreement by
Manager (as determined by the Management Committee, excluding the
Representatives appointed by DCC), which has not been cured within sixty (60)
days following notice thereof from the Company;
8
on five (5) days' notice if (I) the DCC Affiliate Group ceases to be a Qualified
Member Group or (II) a Change of Control of DCC occurs and (x)(1) a Prohibited
Transferee (alone or as part of a "group" as such term is used in Sections 13(d)
and 14(d) of the Exchange Act and the regulations thereunder) or (2) prior to
the second anniversary of the Effective Date, any other Person (alone or as part
of a "group" as such term is used in Sections 13(d) and 14(d) of the Exchange
Act and the regulations thereunder) or (3) on or after the second anniversary of
the Effective Date, a Person that is not a Prohibited Transferee (alone or as
part of a "group" as such term is used in Sections 13(d) and 14(d) of the
Exchange Act and the regulations thereunder), acquires control of Dobson and
(y)(1) either the Company is a limited liability company and the AWS Affiliate
Group is a Qualified Member Group or (2) the Company has converted to a
corporation and the AWS Affiliate Group retains at least 50% of its initial
economic interests or (III) Manager ceases to be a wholly owned subsidiary of
DCC; PROVIDED, IN THE CASE OF CLAUSE (II)(x)(3) ONLY, THAT AWS SUB SHALL, WITHIN
60 DAYS AFTER THE CHANGE OF CONTROL OF DCC, HAVE ELECTED IN ITS REASONABLE
DISCRETION TO CAUSE THE COMPANY TO (AND THE COMPANY THEREUPON SHALL) TERMINATE
THIS AGREEMENT;
on five (5) days' notice if the Company (acting through the Management
Committee, excluding the Representatives appointed by DCC) has notified Manager
of the Company's failure to comply with the Quality Standards in any material
respect, and such failure has not been cured within sixty (60) days thereafter
or, if such breach is not capable of being cured on commercially reasonable
terms within such sixty (60) day period, within one-hundred eighty (180) days of
such notice, provided that Manager is using reasonable best efforts to cure such
breach as soon as reasonably practicable; and
on five (5) days' notice if the Company fails to comply with the financial
performance standards set forth on Exhibit 3(c).
BY MANAGER. MANAGER MAY TERMINATE THIS AGREEMENT ON FIVE (5) DAYS' NOTICE IN THE
EVENT OF A MATERIAL BREACH OF THIS AGREEMENT BY THE COMPANY (OTHER THAN A
PAYMENT DEFAULT) WHICH HAS NOT BEEN CURED WITHIN SIXTY (60) DAYS FOLLOWING
NOTICE THEREOF FROM MANAGER.
REMEDIES. THE REMEDIES SET FORTH HEREIN ARE NOT INTENDED TO BE EXCLUSIVE, AND
ALL REMEDIES SHALL BE CUMULATIVE AND MAY BE EXERCISED CONCURRENTLY WITH ANY
OTHER REMEDY AVAILABLE TO MANAGER OR THE COMPANY AT LAW OR IN EQUITY.
CONTINUING OBLIGATIONS. NOTWITHSTANDING THE PROVISIONS OF SECTIONS 6(a) AND (b),
NO TERMINATION OF THIS AGREEMENT SHALL TAKE EFFECT UNTIL THE EXPIRATION OF THE
TRANSITION PERIOD (AS DEFINED BELOW). AFTER RECEIPT OF WRITTEN NOTICE OF
TERMINATION, BUT PRIOR TO THE EXPIRATION OF THE TRANSITION PERIOD, MANAGER SHALL
CONTINUE TO PERFORM UNDER THIS AGREEMENT UNLESS SPECIFICALLY INSTRUCTED (BY THE
MANAGEMENT COMMITTEE, EXCLUDING THE REPRESENTATIVES APPOINTED BY DCC) TO
DISCONTINUE SUCH PERFORMANCE IN WHOLE OR IN PART. IN THE EVENT OF TERMINATION,
MANAGER AND THE COMPANY SHALL REMAIN LIABLE FOR THEIR RESPECTIVE OBLIGATIONS
ACCRUED UNDER THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE TRANSITION PERIOD.
TRANSITION ARRANGEMENTS.
9
GENERAL. IN THE EVENT OF TERMINATION OF THIS AGREEMENT FOR ANY REASON, MANAGER
SHALL, DURING THE TRANSITION PERIOD, AT THE COMPANY'S EXPENSE, COOPERATE WITH
THE COMPANY IN ORDER TO FACILITATE THE TRANSITION TO A NEW MANAGEMENT SERVICE
PROVIDER (THE "NEW PROVIDER"), WHO SHALL BE DESIGNATED BY AWS IN ITS SOLE
DISCRETION (AND WHICH MAY BE, AT THE ELECTION OF AWS, AN AFFILIATE OF AWS).
MANAGER SHALL AT THE COMPANY'S EXPENSE TAKE ALL COMMERCIALLY REASONABLE STEPS TO
ASSIST THE NEW PROVIDER IN ASSUMING THE MANAGEMENT OF THE COMPANY AND THE
OPERATION OF THE COMPANY'S CELLULAR SYSTEMS INCLUDING, WITHOUT LIMITATION,
TRANSFERRING TO THE NEW PROVIDER ALL HISTORICAL FINANCIAL, TAX, ACCOUNTING,
BILLING AND OTHER DATA WITH RESPECT TO THE COMPANY IN THE POSSESSION OF MANAGER
OR ITS AFFILIATES, AND GIVING SUCH CONSENTS, ASSIGNING SUCH PERMITS AND
EXECUTING SUCH INSTRUMENTS AS MAY BE NECESSARY TO VEST IN THE NEW PROVIDER THOSE
RIGHTS THAT WERE USED BY MANAGER TO PERFORM ITS SERVICES HEREUNDER. EXHIBIT 5(e)
SETS FORTH THOSE ITEMS OF INFORMATION AND OTHER ASSETS AND PROPERTIES OF THE
COMPANY THAT MANAGER ANTICIPATES WILL BE INTEGRATED IN WHOLE OR IN PART WITH THE
OPERATIONS OF MANAGER OR ITS AFFILIATES IN THE COURSE OF MANAGER'S PERFORMANCE
OF ITS OBLIGATIONS HEREUNDER, AND THAT WILL ACCORDINGLY NEED TO BE TRANSFERRED
TO THE COMPANY OR THE NEW PROVIDER IN CONNECTION WITH ANY TERMINATION OF THIS
AGREEMENT.
USE OF MANAGER MARKS. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN THE
EVENT OF TERMINATION OF THIS AGREEMENT BY MANAGER OTHER THAN PURSUANT TO SECTION
5(b)(i) OR SECTION 5(b)(iii), MANAGER SHALL USE REASONABLE EFFORTS TO MAKE
AVAILABLE TO THE COMPANY ON COMMERCIALLY REASONABLE TERMS, BY LICENSE,
SUBLICENSE OR OTHERWISE, DURING THE TRANSITION PERIOD, THE RIGHT TO MARKET IN
THOSE AREAS BEING SERVED BY THE COMPANY AT THE COMMENCEMENT OF THE TRANSITION
PERIOD THOSE PRODUCTS AND SERVICES BEING MARKETED AT THE COMMENCEMENT OF THE
TRANSITION PERIOD UNDER THOSE MARKS OWNED BY OR LICENSED TO MANAGER OR ITS
AFFILIATES (THE "MANAGER MARKS") BEING USED FOR SUCH PURPOSE AT THE COMMENCEMENT
OF THE TRANSITION PERIOD (INCLUDING THE "CELLULAR ONE" NAME AND LOGO AND, IF
APPLICABLE, THE "DOBSON" NAME AND LOGO) AND, DURING THE TRANSITION PERIOD AND
FOR SIX (6) MONTHS THEREAFTER, NEITHER MANAGER NOR ANY OF ITS AFFILIATES SHALL
MARKET UNDER ANY OF THE MANAGER MARKS IN SUCH AREAS SUCH PRODUCTS AND SERVICES.
"TRANSITION PERIOD" MEANS THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF
TERMINATION OF THIS AGREEMENT AND EXPIRING ON THE LATER OF (X) THE FIRST
ANNIVERSARY OF SUCH DATE OF TERMINATION AND (Y) THE DATE ON WHICH THE COMPANY,
AS MANAGED BY THE NEW PROVIDER, IS ABLE, IN THE GOOD FAITH DETERMINATION OF AWS,
TO PROVIDE SUBSTANTIALLY THE SAME LEVEL OF SERVICE TO ITS REGISTERED AND ROAMING
CUSTOMERS AS IT DID WHEN THE COMPANY WAS MANAGED BY MANAGER.
NONCOMPETITION AND CONFIDENTIALITY.
NONCOMPETITION. DURING THE TRANSITION PERIOD, NEITHER MANAGER NOR ANY OF ITS
AFFILIATES SHALL ASSIST OR BECOME ASSOCIATED WITH ANY PERSON OR ENTITY, WHETHER
AS A PRINCIPAL, PARTNER, EMPLOYEE, CONSULTANT OR SHAREHOLDER (OTHER THAN AS A
HOLDER OF NOT IN EXCESS OF 5% OF THE OUTSTANDING VOTING SHARES OF ANY PUBLICLY
TRADED COMPANY) THAT IS ACTIVELY ENGAGED IN THE BUSINESS OF PROVIDING MOBILE
WIRELESS SERVICES IN THE TERRITORY.
10
CONFIDENTIALITY. MANAGER SHALL, AND SHALL CAUSE EACH OF ITS AFFILIATES, AND EACH
OF ITS AND THEIR RESPECTIVE PARTNERS, MEMBERS, MANAGERS, SHAREHOLDERS,
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS (COLLECTIVELY, "AGENTS") TO KEEP
SECRET AND RETAIN IN STRICTEST CONFIDENCE AND NOT USE FOR ANY PURPOSE ANY AND
ALL CONFIDENTIAL INFORMATION RELATING TO THE COMPANY OR ANY MEMBER OF THE
COMPANY AND SHALL NOT DISCLOSE SUCH INFORMATION, AND SHALL CAUSE ITS AGENTS NOT
TO DISCLOSE SUCH INFORMATION, TO THE SAME EXTENT PROVIDED IN SECTION 8.9 OF THE
LLC AGREEMENT.
COMPANY PROPERTY. PROMPTLY FOLLOWING THE TERMINATION OF THIS AGREEMENT, MANAGER
SHALL RETURN TO THE COMPANY ALL PROPERTY OF THE COMPANY, AND ALL COPIES THEREOF
IN ITS POSSESSION OR UNDER ITS CONTROL, AND ALL TANGIBLE EMBODIMENTS OF
CONFIDENTIAL INFORMATION IN ITS POSSESSION IN WHATEVER MEDIA SUCH CONFIDENTIAL
INFORMATION IS MAINTAINED.
NON-SOLICITATION OF EMPLOYEES. DURING THE TRANSITION PERIOD AND FOR SIX MONTHS
THEREAFTER, NEITHER MANAGER NOR ANY OF ITS AFFILIATES WILL DIRECTLY OR
INDIRECTLY INDUCE ANY EMPLOYEE OF THE COMPANY OR ANY OF ITS AFFILIATES, OR ANY
EMPLOYEE OF THE NEW PROVIDER OR ANY OF ITS AFFILIATES, TO TERMINATE EMPLOYMENT
WITH SUCH ENTITY, AND WILL NOT DIRECTLY OR INDIRECTLY, EITHER INDIVIDUALLY OR AS
OWNER, AGENT, EMPLOYEE, CONSULTANT OR OTHERWISE, EMPLOY OR OFFER EMPLOYMENT TO
ANY PERSON WHO IS OR WAS EMPLOYED BY THE COMPANY OR ANY OF ITS AFFILIATES, OR BY
THE NEW PROVIDER OR ANY OF ITS AFFILIATES, UNLESS SUCH PERSON SHALL HAVE CEASED
TO BE EMPLOYED BY SUCH ENTITY FOR A PERIOD OF AT LEAST SIX MONTHS.
INJUNCTIVE RELIEF WITH RESPECT TO COVENANTS. MANAGER ACKNOWLEDGES AND AGREES
THAT THE COVENANTS AND OBLIGATIONS CONTAINED IN THIS SECTION 6 RELATE TO
SPECIAL, UNIQUE AND EXTRAORDINARY MATTERS AND THAT A VIOLATION OF ANY OF THE
TERMS OF SUCH COVENANTS AND OBLIGATIONS WILL CAUSE THE COMPANY IRREPARABLE
INJURY FOR WHICH ADEQUATE REMEDIES ARE NOT AVAILABLE AT LAW. THEREFORE, MANAGER
AGREES THAT THE COMPANY SHALL BE ENTITLED TO AN INJUNCTION, RESTRAINING ORDER,
OR SUCH OTHER EQUITABLE RELIEF AS A COURT OF COMPETENT JURISDICTION MAY DEEM
NECESSARY OR APPROPRIATE TO RESTRAIN MANAGER AND ITS AFFILIATES FROM COMMITTING
ANY VIOLATION OF THE COVENANTS AND OBLIGATIONS CONTAINED IN THIS SECTION 6.
THESE INJUNCTIVE REMEDIES ARE CUMULATIVE AND ARE IN ADDITION TO ANY OTHER RIGHTS
AND REMEDIES THE COMPANY MAY HAVE AT LAW OR IN EQUITY.
FORCE MAJEURE. NEITHER OF THE PARTIES WILL BE LIABLE FOR NONPERFORMANCE OR
DEFECTIVE OR LATE PERFORMANCE OF ANY OF ITS OBLIGATIONS HEREUNDER TO THE
EXTENT AND FOR SUCH PERIODS OF TIME AS SUCH NONPERFORMANCE, DEFECTIVE
PERFORMANCE OR LATE PERFORMANCE IS DUE TO REASONS OUTSIDE SUCH PARTY'S
CONTROL, INCLUDING ACTS OF GOD, WAR (DECLARED OR UNDECLARED), ACTS (INCLUDING
FAILURE TO ACT) OF ANY GOVERNMENTAL AUTHORITY, RIOTS, REVOLUTIONS,
FIRE, FLOODS, EXPLOSIONS, SABOTAGE, NUCLEAR INCIDENTS, LIGHTNING,
WEATHER, EARTHQUAKES, STORMS, SINKHOLES, EPIDEMICS, STRIKES,
11
OR DELAYS OF SUPPLIERS OR SUBCONTRACTORS FOR THE SAME CAUSES.
BOOKS AND RECORDS. MANAGER SHALL MAINTAIN AND OVERSEE THE MAINTENANCE AND
PREPARATION OF PROPER AND COMPLETE RECORDS AND BOOKS OF ACCOUNT FOR TAX AND
FINANCIAL PURPOSES WITH RESPECT TO ITS MANAGEMENT OF THE OPERATION OF THE
BUSINESS, INCLUDING ALL SUCH TRANSACTIONS AND OTHER MATTERS AS ARE USUALLY
ENTERED INTO RECORDS AND BOOKS OF ACCOUNT MAINTAINED BY PERSONS ENGAGED IN
BUSINESS OF LIKE CHARACTER OR AS REQUIRED BY LAW. MANAGER SHALL MAINTAIN AND
OVERSEE THE MAINTENANCE AND PREPARATION OF COMPLETE RECORDS AND BOOKS OF THE
COMPANY FOR TAX PURPOSES. BOOKS AND RECORDS MAINTAINED FOR FINANCIAL PURPOSES
SHALL BE MAINTAINED IN ACCORDANCE WITH GAAP, AND BOOKS AND RECORDS MAINTAINED
FOR TAX PURPOSES SHALL BE MAINTAINED IN ACCORDANCE WITH THE CODE AND APPLICABLE
TREASURY REGULATIONS. WITHIN FIVE (5) DAYS AFTER THE END OF EACH MONTH MANAGER
SHALL PREPARE OR CAUSE TO BE PREPARED AND TRANSMIT TO THE COMPANY UNAUDITED
STATEMENTS, WHICH SHALL INCLUDE A GENERAL LEDGER AND A TRIAL BALANCE. MANAGER
SHALL ALSO PROVIDE AT THE COMPANY'S REQUEST AND EXPENSE ANY AND ALL SUCH
ADDITIONAL STATEMENTS OR REPORTS AS MAY BE REASONABLY NECESSARY TO THE COMPANY'S
OVERSIGHT AND CONTROL OF THE BUSINESS. THE COMPANY SHALL HAVE CONTROL OVER AND
ACCESS, AT ALL REASONABLE TIMES DURING NORMAL BUSINESS HOURS, TO THE BOOKS AND
RECORDS OF THE COMPANY MAINTAINED BY MANAGER PURSUANT TO THIS SECTION 8.
REGULATORY COMPLIANCE. SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT,
MANAGER SHALL CAUSE THE COMPANY AND ITS SUBSIDIARIES, AND THEIR RESPECTIVE
CELLULAR SYSTEMS, TO REMAIN IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH
APPLICABLE LAWS, RULES AND REGULATIONS, INCLUDING RULES AND REGULATIONS
PROMULGATED BY THE FAA AND THE FCC. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE PARTIES AGREE TO COMPLY WITH ALL APPLICABLE FCC RULES AND
REGULATIONS GOVERNING THE CELLULAR SYSTEMS AND THE LICENSES, AND SPECIFICALLY
AGREE AS FOLLOWS:
THE COMPANY (OR ITS SUBSIDIARIES WHICH ARE THE HOLDERS OF THE LICENSES) SHALL AT
ALL TIMES MAINTAIN ABSOLUTE CONTROL OVER, AND RETAIN THE ABILITY TO EXERCISE THE
UNFETTERED USE OF, THE LICENSES AND THE LICENSED FACILITIES PROVIDED THEREUNDER,
INCLUDING THE PRODUCTS AND SERVICES TO BE OFFERED AND THE RATES TO BE CHARGED
AND THE FURTHER RIGHT TO TERMINATE SERVICE SHOULD PUBLIC INTEREST OBLIGATIONS
UNDER THE APPLICABLE LICENSES SO REQUIRE.
12
MANAGER SHALL NOT REPRESENT ITSELF AS THE HOLDER OF A LICENSE TO PROVIDE THE
COMPANY COMMUNICATIONS SERVICES ON ANY OF THE CELLULAR SYSTEMS OF THE COMPANY.
EACH CUSTOMER (IF ANY) BILLED BY MANAGER SHALL BE CLEARLY ADVISED THAT SERVICE
IS PROVIDED OVER FACILITIES LICENSED TO THE COMPANY (OR THE SUBSIDIARY WHICH IS
THE HOLDER OF A LICENSE).
NEITHER MANAGER NOR THE COMPANY (OR A SUBSIDIARY WHICH IS A HOLDER OF A LICENSE)
SHALL REPRESENT ITSELF AS THE LEGAL REPRESENTATIVE OF THE OTHER BEFORE THE FCC.
MANAGER AND THE COMPANY (AND EACH SUBSIDIARY WHICH IS THE HOLDER OF A LICENSE)
WILL COOPERATE WITH THE OTHER WITH RESPECT TO FCC MATTERS CONCERNING THE
CELLULAR SYSTEMS.
THE COMPANY (AND EACH SUBSIDIARY WHICH IS THE HOLDER OF A LICENSE) SHALL (i) IN
COOPERATION WITH MANAGER, TAKE ALL ACTIONS NECESSARY TO KEEP ITS LICENSES IN
FORCE AND SHALL PREPARE AND SUBMIT TO THE FCC, OR ANY OTHER RELEVANT AUTHORITY,
ALL REPORTS, APPLICATIONS, RENEWALS, FILINGS OR OTHER DOCUMENTS NECESSARY TO
KEEP ITS LICENSES IN FORCE AND IN GOOD STANDING; (ii) WITH ALL DUE ASSISTANCE
WHICH MAY BE NECESSARY FROM MANAGER, RESPOND PROMPTLY TO ALL FCC CORRESPONDENCE
OR INQUIRIES AND WILL IMMEDIATELY NOTIFY MANAGER OF THE RECEIPT THEREOF; AND
(iii) PROMPTLY REPORT ANY CHANGES OF ITS ADDRESS TO THE FCC AND TO MANAGER.
THE COMPANY (AND EACH SUBSIDIARY WHICH IS THE HOLDER OF A LICENSE) AND MANAGER
ARE FAMILIAR WITH THE RULES OF THE FCC REGARDING THE RESPONSIBILITY OF THE
HOLDER OF A LICENSE UNDER THE COMMUNICATIONS ACT AND APPLICABLE FCC RULES,
REGULATIONS AND POLICIES. NOTHING IN THIS AGREEMENT IS INTENDED TO DIMINISH OR
RESTRICT THE OBLIGATIONS OF THE COMPANY (OR A SUBSIDIARY WHICH IS THE HOLDER OF
A LICENSE) AS AN FCC LICENSEE AND BOTH PARTIES DESIRE THAT THIS AGREEMENT BE IN
COMPLIANCE WITH THE RULES AND REGULATIONS OF THE FCC. IF THE FCC DETERMINES THAT
ANY PROVISION OF THIS AGREEMENT VIOLATES ANY FCC RULE, POLICY OR REGULATION, ALL
PARTIES WILL MAKE GOOD FAITH EFFORTS TO IMMEDIATELY CORRECT THE PROBLEM AND
BRING THIS AGREEMENT INTO COMPLIANCE, CONSISTENT WITH THE INTENT OF THIS
AGREEMENT.
DISPUTE RESOLUTION. IF A DISPUTE ARISES OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE CONSTRUCTION, INTERPRETATION,
PERFORMANCE, BREACH, TERMINATION, ENFORCEABILITY OR VALIDITY HEREOF, WHETHER
SUCH CLAIM IS BASED ON RIGHTS, PRIVILEGES OR INTERESTS RECOGNIZED BY OR BASED
UPON CONTRACT, TORT, FRAUD, MISREPRESENTATION, STATUTE, COMMON LAW OR ANY OTHER
LEGAL OR EQUITABLE THEORY, AND WHETHER SUCH CLAIM EXISTED PRIOR TO OR ARISES ON
OR AFTER THE EFFECTIVE DATE, THE DISPUTE RESOLUTION PROCESSES SET FORTH IN
SECTION 8.11 OF THE LLC AGREEMENT SHALL GOVERN THE RESOLUTION OF SUCH DISPUTE.
INSPECTION RIGHTS; DELIVERY OF INFORMATION.
13
COMPANY'S RIGHT TO INSPECT. MANAGER WILL PERMIT REPRESENTATIVES OF THE COMPANY
OR ANY QUALIFIED MEMBER GROUP, AT THE COMPANY'S OR SUCH GROUP'S COST, DURING
NORMAL BUSINESS HOURS AND UPON NOT LESS THAN FIVE BUSINESS DAYS' ADVANCED
WRITTEN REQUEST, TO (i) VISIT AND INSPECT DURING NORMAL BUSINESS HOURS MANAGER'S
PROPERTIES AND FACILITIES WHICH ARE UTILIZED IN CONNECTION WITH MANAGER'S
PROVISION OF SERVICES TO THE COMPANY PURSUANT TO THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION ACCESS TO, AND THE RIGHT TO MAKE COPIES OF, BOOKS AND RECORDS
OF THE COMPANY LOCATED AT SUCH PROPERTIES AND FACILITIES, AND (ii) DISCUSS WITH
MANAGER'S OFFICERS AND EMPLOYEES SUCH PROPERTIES AND FACILITIES AND MANAGER'S
PROVISION OF SERVICES TO THE COMPANY PURSUANT TO THIS AGREEMENT. ALL SUCH
INFORMATION SHALL BE HELD IN CONFIDENCE BY THE COMPANY OR SUCH GROUP, EXCEPT FOR
DISCLOSURES MADE TO THE COMPANY'S OR GROUP'S ADVISORS, LENDERS AND INVESTORS, OR
AS REQUIRED TO BE DISCLOSED BY PROCESS OF LAW OR OTHER APPLICABLE LAW.
NOTICE OF CERTAIN EVENTS. PROMPTLY, AND IN ANY EVENT WITHIN FIVE (5) BUSINESS
DAYS AFTER MANAGER HAS RECEIVED NOTICE OR HAS OTHERWISE BECOME AWARE THEREOF,
MANAGER SHALL GIVE THE COMPANY NOTICE OF (i) THE COMMENCEMENT OF ANY MATERIAL
PROCEEDING OR INVESTIGATION AGAINST THE COMPANY OR MANAGER BY OR BEFORE ANY
GOVERNMENTAL BODY OR IN ANY COURT OR BEFORE ANY ARBITRATOR WHICH WOULD BE LIKELY
TO HAVE A MATERIAL ADVERSE EFFECT ON MANAGER, THE BUSINESS OR THE COMPANY, OR ON
MANAGER'S ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER, AND (ii) THE OCCURRENCE
OR NON-OCCURRENCE OF ANY EVENT (x) WHICH CONSTITUTES, OR WHICH WITH THE PASSAGE
OF TIME OR GIVING OF NOTICE OR BOTH WOULD CONSTITUTE, A DEFAULT BY THE COMPANY
OR MANAGER UNDER THIS AGREEMENT OR UNDER ANY OTHER MATERIAL AGREEMENT TO WHICH
THE COMPANY OR MANAGER IS A PARTY OR BY WHICH ITS PROPERTIES MAY BE BOUND, AND
(y) WOULD BE LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON MANAGER, THE BUSINESS
OR THE COMPANY, OR ON MANAGER'S ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER,
GIVING IN EACH CASE THE DETAILS THEREOF AND SPECIFYING THE ACTION BEING TAKEN OR
PROPOSED TO BE TAKEN WITH RESPECT THERETO. PROMPTLY UPON RECEIPT THEREOF,
MANAGER SHALL DELIVER TO THE COMPANY COPIES OF ANY MATERIAL NOTICE OR REPORT
REGARDING ANY LICENSE FROM THE GRANTOR OF SUCH LICENSE OR FROM ANY GOVERNMENTAL
AUTHORITY REGARDING THE BUSINESS OR THE COMPANY.
OTHER INFORMATION. FROM TIME TO TIME AND PROMPTLY UPON EACH REQUEST, MANAGER
SHALL PROVIDE THE COMPANY WITH SUCH DATA, CERTIFICATES, REPORTS, STATEMENTS,
FINANCIAL PROJECTIONS, DOCUMENTS OR FURTHER INFORMATION REGARDING THE BUSINESS,
EQUITY OWNERS, ASSETS, LIABILITIES, FINANCIAL POSITION OR RESULTS OF OPERATIONS
OF MANAGER, AS MAY BE REASONABLY REQUESTED BY THE COMPANY.
MISCELLANEOUS.
COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE INSTRUMENT.
CONSTRUCTION. EACH OF THE PARTIES HERETO ACKNOWLEDGE THAT IT HAS REVIEWED THIS
AGREEMENT AND THAT THE NORMAL RULE OF CONSTRUCTION TO THE EFFECT THAT ANY
14
AMBIGUITIES ARE TO BE RESOLVED AGAINST THE DRAFTING PARTY SHALL NOT BE EMPLOYED
IN THE INTERPRETATION OF THIS AGREEMENT OR ANY AMENDMENTS THERETO. THE CAPTIONS
USED HEREIN ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE
INTERPRETATION OR CONSTRUCTION HEREOF. ALL PRONOUNS AND ANY VARIATIONS THEREOF
SHALL BE DEEMED TO REFER TO THE MASCULINE, FEMININE, NEUTER, SINGULAR, PLURAL AS
THE CONTEXT MAY REQUIRE. UNLESS OTHERWISE SPECIFIED, (i) THE TERMS "HEREOF,"
"HEREIN," AND SIMILAR TERMS REFER TO THIS AGREEMENT AS A WHOLE, (ii) REFERENCES
HEREIN TO ARTICLES OR SECTIONS REFER TO ARTICLES OR SECTIONS OF THIS AGREEMENT
AND (iii) THE WORD "INCLUDING" CONNOTES THE WORDS "INCLUDING WITHOUT LIMITATION
UNLESS THE CONTEXT REQUIRES OTHERWISE.
BENEFIT; ASSIGNMENT. THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF ALL PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED
ASSIGNS; PROVIDED, HOWEVER, THAT MANAGER SHALL NOT ASSIGN OR OTHERWISE TRANSFER
ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN TO ANOTHER WHOLLY
OWNED SUBSIDIARY OF DCC THAT HAS SUBSTANTIALLY THE SAME ABILITY TO PERFORM ITS
OBLIGATIONS HEREUNDER AS THE ORIGINAL MANAGER) WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY (ACTING THROUGH THE MANAGEMENT COMMITTEE EXCLUDING THE
REPRESENTATIVES APPOINTED BY DCC). THE PARTIES AGREE THAT, UPON ANY TERMINATION
OF THIS AGREEMENT BY THE COMPANY PURSUANT TO SECTION 5(b)(i) OR SECTION
5(b)(ii), THE RIGHTS AND (TO THE EXTENT PROVIDED HEREIN) OBLIGATIONS OF MANAGER
SHALL BE DEEMED TO HAVE BEEN ASSIGNED TO THE NEW PROVIDER; PROVIDED, THAT NO
SUCH TERMINATION SHALL RELIEVE MANAGER OF ANY LIABILITY WHICH AT THE TIME OF
TERMINATION HAD ALREADY ACCRUED TO MANAGER OR WHICH THEREAFTER MAY ACCRUE IN
RESPECT OF ANY ACT OR OMISSION OF MANAGER OR ITS AFFILIATES PRIOR TO SUCH
TERMINATION.
COMPLETE AGREEMENT. THIS DOCUMENT, THE EXHIBITS ATTACHED HERETO AND EACH OF THE
DOCUMENTS REFERRED TO HEREIN, EMBODY THE COMPLETE AGREEMENT AND UNDERSTANDING
AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE AND
PREEMPT ANY PRIOR UNDERSTANDINGS (WRITTEN OR ORAL) RELATING TO SUCH SUBJECT
MATTER, INCLUDING THE LETTER AGREEMENT AND TERM SHEET ATTACHED THERETO DATED
OCTOBER 5, 1999 AMONG AT&T WIRELESS SERVICES, INC., DCC AND DOBSON CC LIMITED
PARTNERSHIP.
AMENDMENT. THIS AGREEMENT MAY NOT BE AMENDED EXCEPT BY A WRITING SIGNED BY EACH
OF THE PARTIES.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS, AND NOT THE LAWS OF CONFLICT, OF THE STATE OF NEW YORK.
SEVERABILITY. IF ANY PROVISION OF THIS AGREEMENT OR THE APPLICATION THEREOF TO
ANY PERSON OR CIRCUMSTANCE SHALL FOR ANY REASON OR TO ANY EXTENT BE INVALID OR
UNENFORCEABLE, THE REMAINDER OF THIS AGREEMENT AND THE APPLICATION OF SUCH
PROVISION TO OTHER PERSONS OR CIRCUMSTANCES SHALL NOT BE AFFECTED THEREBY, BUT,
RATHER, SHALL BE ENFORCED TO THE EXTENT PERMITTED BY LAW, SO LONG AS THE
ECONOMIC AND LEGAL SUBSTANCE OF THIS AGREEMENT AND THE ACTIONS CONTEMPLATED
HEREBY IS NOT AFFECTED IN ANY MANNER ADVERSE TO EITHER PARTY.
15
FURTHER ASSURANCES. THE PARTIES AGREE THAT THEY WILL TAKE ALL SUCH FURTHER
ACTIONS AND EXECUTE AND DELIVER ALL SUCH FURTHER INSTRUMENTS AND DOCUMENTS AS
MAY BE REQUIRED IN ORDER TO EFFECTUATE THE AGREEMENTS SET FORTH IN THIS
AGREEMENT.
WAIVER. NO FAILURE OR DELAY ON THE PART OF THE PARTIES OR ANY OF THEM IN
EXERCISING ANY RIGHT, POWER OR PRIVILEGE HEREUNDER, NOR ANY COURSE OF DEALING
AMONG THE PARTIES OR ANY OF THEM SHALL OPERATE AS A WAIVER OF ANY SUCH RIGHT,
POWER OR PRIVILEGE NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT,
POWER OR PRIVILEGE PRECLUDE THE SIMULTANEOUS OR LATER EXERCISE OF ANY OTHER
RIGHT, POWER OR PRIVILEGE. THE RIGHTS AND REMEDIES HEREIN EXPRESSLY PROVIDED ARE
CUMULATIVE AND ARE NOT EXCLUSIVE OF ANY RIGHTS OR REMEDIES WHICH THE PARTIES OR
ANY OF THEM WOULD OTHERWISE HAVE.
NOTICES. ALL NOTICES OR OTHER COMMUNICATIONS HEREUNDER SHALL BE IN WRITING AND
SHALL BE DEEMED TO HAVE BEEN DULY GIVEN OR MADE (i) UPON DELIVERY IF DELIVERED
PERSONALLY (BY COURIER SERVICE OR OTHERWISE) OR (ii) UPON CONFIRMATION OF
DISPATCH IF SENT BY FACSIMILE TRANSMISSION (WHICH CONFIRMATION SHALL BE
SUFFICIENT IF SHOWN ON THE JOURNAL PRODUCED BY THE FACSIMILE MACHINE USED FOR
SUCH TRANSMISSION), AND ALL LEGAL PROCESS WITH REGARD HERETO SHALL BE VALIDLY
SERVED WHEN SERVED IN ACCORDANCE WITH APPLICABLE LAW, IN EACH CASE TO THE
APPLICABLE ADDRESSES SET FORTH BELOW (OR SUCH OTHER ADDRESS AS THE RECIPIENT MAY
SPECIFY IN ACCORDANCE WITH THIS SECTION):
If to Manager:
Dobson Cellular Systems, Inc.
c/o Dobson Communications Corporation
13439 North Broadway Extension
Oklahoma City, OK 73114
Attention: General Counsel
Fax: (405) 529-8765
If to the Company:
ACC Acquisition LLC
c/o Dobson Communications Corporation
13439 North Broadway Extension
Oklahoma City, OK 73114
Attention: General Counsel
Fax: (405) 529-8765
with copies to:
Dobson Communications Corporation
13439 North Broadway Extension
Oklahoma City, OK 73114
Attention: General Counsel
Facsimile: (405) 529-8765
16
and
AT&T Wireless Services, Inc.
7277 164th Avenue, NE
Redmond, WA 98052
Attention: Mary Hawkins-Key
Facsimile: (425) 580-8075
* * *
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF, the parties have set their hands effective as of
the date first written above.
COMPANY:
ACC ACQUISITION LLC
By: AT&T Wireless Services JV Co.
By: /s/ Don Adams
------------------------------
Name: Don Adams
Title: Vice President
By: Dobson JV Company
By: /s/ Bruce R. Knooihuizen
------------------------------
Name: Bruce R. Knooihuizen
Title: V.P. and Chief Financial
Officer
MANAGER:
DOBSON CELLULAR SYSTEMS, INC.
By: /s/ Bruce R. Knooihuizen
------------------------------
Name: Bruce R. Knooihuizen
Title: V.P. and Chief Financial
Officer