CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of This Agreement Which Have Been Redacted Are Marked
With Brackets ("[***]"). The Omitted Material Has Been Filed Separately With The
Securities and Exchange Commission.
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made as of ________, between Sprint
Spectrum L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas
corporation, WirelessCo, L.P., a Delaware limited partnership, and Bright
Personal Communications Services, LLC, an Ohio limited liability company (but
not any Related Party) ("Manager"). The definitions for this agreement are set
forth on the "Schedule of Definitions".
RECITALS
A. Sprint Spectrum L.P., a Delaware limited partnership, WirelessCo, L.P.,
a Delaware limited partnership, SprintCom, Inc., a Kansas corporation, American
PCS Communications, LLC, a Delaware limited liability company, APC PCS, LLC, a
Delaware limited liability company, PhillieCo Partners I, L.P., a Delaware
limited partnership, PhillieCo, L.P., a Delaware limited partnership, Cox
Communications PCS, L.P., a Delaware limited partnership, and Cox PCS License,
L.L.C., a Delaware limited liability company, hold and exercise, directly or
indirectly, control over licenses to operate wireless services networks.
B. The entity or entities named in Recital A that execute this agreement
hold, directly or indirectly, the Licenses for the areas identified on the
Service Area Exhibit and are referred to in this agreement as "Sprint PCS."
Because this agreement addresses the rights and obligations of each license
holder with respect to each of its Licenses, each reference in this agreement to
"Sprint PCS" refers to the entity that owns, directly or indirectly, the License
referred to in that particular instance or application of the provision of this
agreement. If Sprint Spectrum does not own the License, it will provide on
behalf of Sprint PCS most or all of the services required under this agreement
to be provided by Sprint PCS.
C. The Sprint PCS business was established to use the Sprint PCS Network, a
nationwide wireless services network, to offer seamless, integrated voice and
data services using wireless technology. The Sprint PCS Network offers the
services to customers under the Brands.
D. This agreement, therefore, includes provisions defining Manager's
obligations with respect to:
o The design, construction and management of the Service Area Network;
o Offering and promoting products and services designated by Sprint PCS
as the Sprint PCS Products and Services of the Sprint PCS Network;
o Adherence to Program Requirements established by Sprint PCS to ensure
seamless interoperability throughout the Sprint PCS Network and
uniform and consistent quality of product and service offerings;
o Adherence to Customer Service Program Requirements established by
Sprint PCS to ensure consistency in interactions with customers
(including billing, customer care. etc.); and
o Adherence to Program Requirements relating to the marketing, promotion
and distribution of Sprint PCS Products and Services.
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E. The Sprint PCS Network is expanding with the assistance of "managers"
(companies such as Manager that manage Service Area Networks that offer Sprint
PCS Products and Services under a license owned by Sprint PCS or one of the
entities named in Recital A) and "affiliates" (companies that manage Service
Area Networks that offer Sprint PCS Products and Services under a license owned
by the affiliate).
F. Manager wishes to enter into this agreement to help construct, operate,
manage and maintain for Sprint PCS a portion of the Sprint PCS Network in the
Service Area. Sprint PCS has determined that permitting, Manager to manage a
portion of the Sprint PCS Network in accordance with the terms of this agreement
will facilitate Sprint PCS' expansion of fully digital, wireless coverage under
the License and will enhance the wireless service for customers of Sprint PCS.
G. All managers of a portion of the business of Sprint PCS, including
Manager, must construct facilities and operate in accordance with Program
Requirements established by Sprint PCS with respect to certain aspects of the
development and offering of wireless products and services and the presentation
of the products and services to customers, to establish and operate the Sprint
PCS Network successfully by providing seamless, integrated voice and data
services, using wireless technology.
AGREEMENT
In consideration of the recitals and mutual covenants and agreements
contained in this agreement, the sufficiency of which are hereby acknowledged,
the parties, intending to be bound, agree as follows:
1. MANAGER
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1.1 HIRING OF MANAGER. Sprint PCS hires Manager:
(a) to construct and manage the Service Area Network in compliance
with the License and in accordance with the terms of this agreement;
(b) to distribute continuously during the Term the Sprint PCS Products
and Services and to establish distribution channels in the Service Area;
(c) to conduct continually during the Term advertising and promotion
activities in the Service Area (including mutual decisions to "go dark",
with respect to advertising and promotion activities, for reasonable
periods of time); and
(d) to manage that portion of the customer base of Sprint PCS that has
the NPA-NXXs assigned to the Service Area Network.
Sprint PCS has the right to unfettered access to the Service Area Network
to be constructed by Manager under this agreement. The fee to be paid to Manager
by Sprint PCS under Section 10 is for all obligations of Manager under this
agreement.
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1.2 PROGRAM REQUIREMENTS. Manager must adhere to the Program Requirements
established by Sprint PCS and as modified from time to time, to ensure uniform
and consistent operation of all wireless systems within the Sprint PCS Network
and to present the Sprint PCS Products and Services to customers in a uniform
and consistent manner under the Brands.
1.3 VENDOR PURCHASE AGREEMENTS. Manager may participate in discounted
volume-based pricing on wireless-related products and services and in the
warranties Sprint PCS receives from its vendors, as is commercially reasonable
and to the extent permitted by applicable procurement agreements (e.g.,
agreements related to network infrastructure equipment, subscriber equipment,
interconnection, and collocation). Sprint PCS will use commercially reasonable
efforts to obtain for managers the same price Sprint PCS receives from vendors;
this does not prohibit Sprint PCS from entering into procurement agreements that
do not provide managers with the Sprint PCS prices.
Manager must purchase subscriber and infrastructure equipment from a Sprint
PCS approved list of products, which will include a selection from a variety of
manufacturers. Where required, the products must include proprietary software
developed by the manufacturers for Sprint PCS or by Sprint PCS to allow seamless
interoperability in the Sprint PCS Network. Sprint PCS or the vendor may require
Manager to execute a separate license agreement for the software prior to
Manager's use of the software.
Manager may only make purchases under this Section 1.3 for items to be used
exclusively in the Service Area (e.g., Manager may not purchase base stations
under a Sprint PCS contract for use in a system not affiliated with Sprint PCS).
1.4 INTERCONNECTION. If Manager desires to interconnect a portion of the
Service Area Network with another carrier and Sprint PCS can interconnect with
that carrier at a lower rate, then to the extent permitted by applicable laws,
tariffs and contracts, Sprint PCS may arrange for the interconnection under its
agreements with the carrier and if it does so, Sprint PCS will bill the
interconnection fees to Manager.
1.5 SEAMLESSNESS. Manager will design and operate its systems, platforms,
products and services in the Service Area and the Service Area Network so as to
seamlessly interface them into the Sprint PCS Network.
1.6 FORECASTING. Manager and Sprint PCS will work cooperatively to generate
mutually acceptable forecasts of important business metrics including traffic
volumes, handset sales, subscribers and Collected Revenues for the Sprint PCS
Products and Services. The forecasts are for planning purposes only and do not
constitute Manager's obligation to meet the quantities forecast.
1.7 FINANCING. The construction and operation of the Service Area Network
requires a substantial financial commitment by Manager. The manner in which
Manager will finance the build-out of the Service Area Network and provide the
necessary working capital to operate the business is described in detail on
Exhibit 1.7. Manager will allow Sprint PCS an opportunity to review before
filing any registration statement or prospectus or any amendment or supplement
thereto before distributing any offering memorandum or amendment or supplement
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thereto, and agrees not to file or distribute any such document if Sprint PCS
reasonably objects in writing on a timely basis to any portion of the document
that refers to Sprint PCS, its Related Parties, their respective businesses.
this agreement or the Services Agreement.
1.8 ETHICAL CONDUCT AND RELATED COVENANTS. Each party must perform its
obli2ations under this agreement in a diligent, legal, ethical, and professional
manner.
2. BUILD-OUT OF NETWORK
-----------------------
2.1 BUILD-OUT PLAN. Manager will build-out the Service Area Network in the
Service Area in accordance with a Build-out Plan. Sprint PCS and Manager will
jointly develop each Build-out Plan, except the initial Build-out Plan and any
modifications, additions or expansions of the Build-out Plan will be subject to
prior written approval by Sprint PCS. Manager will report to Sprint PCS its
performance regarding the critical milestones included in the Build-out Plan on
a periodic basis as mutually agreed to by the parties, but no less frequently
than quarterly. The Build-out Plan and the Service Area Network as built must
comply with Sprint PCS Program Requirements and federal and local regulatory
requirements.
Sprint PCS approves the Build-out Plan in effect as of the date of this
agreement, which Build-out Plan is attached as Exhibit 2.1. Each new or amended
Build-out Plan will also become part of Exhibit 2.1.
2.2 COMPLIANCE WITH REGULATORY RULES. During, the build-out of the Service
Area Network, Sprint PCS authorizes Manager to make all filings with regulatory
authorities regarding the build-out, including filings with the Federal Aviation
Administration, environmental authorities, and historical districts. Manager may
further delegate its duty under this Section 2.2 to a qualified site acquisition
company. Manager must ensure that a copy of every filing is given to Sprint PCS.
Manager must ensure that Sprint PCS is notified in writing of any contact by a
regulatory agency including the FCC with Manager or Manager's site acquisition
company regarding any filing. Sprint PCS has the right to direct any proceeding,
inquiry, dispute, appeal or other activity with a regulatory or judicial
authority regarding any filing made on behalf of Sprint PCS. Manager will amend,
modify, withdraw, refile and otherwise change any filing as Sprint PCS requires.
Notwithstanding the preceding sentences in this Section 2.2, and in conjunction
with Section 16, Sprint PCS is solely responsible for making, any and all
filings with the FCC regarding the build-out. Manager will notify Sprint PCS of
any activity, event or condition related to the build-out that might require an
FCC filing.
2.3 EXCLUSIVITY OF SERVICE AREA. Manager will be the only person or entity
that is a manager or operator for Sprint PCS with respect to the Service Area
and neither Sprint PCS nor any of its Related Parties will own, operate, build
or manage another wireless mobility communications network in the Service Area
so long as this agreement remains in full force and effect and there is no Event
of Termination that has occurred giving Sprint PCS the right to terminate this
agreement, except that:
(a) Sprint PCS may cause Sprint PCS Products and Services to be sold
in the Service Area through the Sprint PCS National Accounts Program
Requirements and Sprint PCS National or Regional Distribution Program
Requirements;
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(b) A reseller of Sprint PCS Products and Services may sell its
products and services in the Service Area so long as such resale is not
contrary to the terms and conditions of this agreement; and
(c) Sprint PCS and its Related Parties may engage in the activities
described in Sections 2.4(a) and 2.4(b) with Manager in the geographic
areas within the Service Area in which Sprint PCS or any of its Related
Parties owns an incumbent local exchange carrier as of the date of this
agreement.
2.4 RESTRICTION. In geographic areas within the Service Area in which
Sprint PCS or any of its Related Parties owns an incumbent local exchange
carrier as of the date of this agreement, Manager must not offer any Sprint PCS
Products or Services specifically designed for the competitive local exchange
market ("fixed wireless local loop"), except that:
(a) Manager may designate the local exchange carrier that is a Related
Party of Sprint PCS to be the exclusive distributor of the fixed wireless
local loop product in the territory served by the local exchange carrier,
even if a portion of its territory is within the Service Area; or
(b) Manager may sell the fixed wireless local loop product under the
terms and conditions specified by Sprint PCS (e.g., including designation
by Sprint PCS of an exclusive distribution agent for the territory).
This restriction exists with respect to a particular geographic area only so
long as Sprint PCS or its Related Party owns such incumbent local exchange
carrier.
Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS
Products and Services primarily designed for mobile functionality. The
restricted markets as of the date of this agreement are set forth on Exhibit 2.
2.5 COVERAGE ENHANCEMENT. Sprint PCS and Manager agree that maintaining a
high standard of customer satisfaction regarding network capacity and footprint
is a required element of the manager and affiliate programs. Sprint PCS intends
to expand network coverage to build all cells that cover at least 5,000 pops and
all interstate and major highways in the areas not operated by Manager or Other
Managers. Accordingly, Manager agrees to build-out New Coverage when directed by
Sprint PCS as set forth in this Section 2.5. Sprint PCS agrees not to require
any New Coverage build-out during the first two years of this Agreement, nor any
New Coverage that exceeds the capacity and footprint parameters that Sprint PCS
has adopted for all of its comparable markets.
Sprint PCS will give to Manager a written notice of any New Coverage within
the Service Area that Sprint PCS decides should be built-out. Such notice will
include an analysis completed by Sprint PCS demonstrating that such required
build-out should be economically advantageous to Manager. Such analysis will be
generated in good faith and will be based on then-currently available
information, however Sprint PCS makes no warranties or representations regarding
the accuracy of, nor will Sprint PCS be bound by, or guarantee the accuracy of,
such analysis. Manager must confirm to Sprint PCS within 90 days after receipt
of the notice that Manager will build-out the New Coverage and deliver to Sprint
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PCS with such confirmation Manager's proposed amendment to the Build-out Plan
and a description of the manner and timing in which it will finance such
build-out.
If Manager confirms, within such 90-day period, its intention to build-out
the New Coverage, then Manager and Sprint PCS will diligently finalize an
amendment to the Build-out Plan and proceed as set forth in Sections 2.1 and
2.2. The amended Build-out Plan will contain critical milestones that provide
Manager a commercially reasonable period in which to construct and implement the
New Coverage. In determining what constitutes a "commercially reasonable period"
as used in this paragraph, the parties will consider several factors, including
local zoning processes and other legal requirements, weather conditions,
equipment delivery schedules, the need to arrange additional financing, and
other construction already in progress by Manager. Manager will construct and
operate the New Coverage in accordance with the terms of this Agreement, and the
New Coverage will be included in the Service Area Network for purposes of this
agreement.
If Manager fails to confirm, within such 90-day period, its intention to
build-out the New Coverage, declines to complete such build-out, or fails to
complete such build-out in accordance with the amended Build-out Plan, then an
Event of Termination will be deemed to have occurred under Section 11.3.3,
Manager will not have a right to cure such breach, and Sprint PCS may exercise
its rights and remedies under Section 11.2.2.1.
Notwithstanding the preceding paragraphs in this Section 2.5, the capacity
and footprint parameters contained in the amended Build-out Plan will not be
required to exceed the parameters adopted by Sprint PCS in building out all of
its comparable service areas, unless such build-out relates to an obligation
regarding the Service Area Network mandated by law. When necessary for reasons
related to new technical standards, new equipment or strategic reasons, Sprint
PCS can require Manager to build-out the New Coverage concurrently with Sprint
PCS' build-out, in which case Sprint PCS will reimburse Manager for its costs
and expenses if Sprint PCS discontinues its related build-out.
If Sprint PCS requires build-out of New Coverage that will:
(a) cause the Manager to spend an additional amount greater than 5 %
of Manager's shareholder's equity or capital account plus Manager's
long-term debt (i.e., notes that mature more than one year from the date
issued), as reflected on Manager's books; or
(b) cause the long-term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net
present value basis,
then Manager may give Sprint PCS a written notice requesting Sprint PCS to
reconsider the required New Coverage.
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the New
Coverage. If after the review and decision by the Vice President or designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
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still requires Manager to complete the New Coverage following the Chief
Officer's review, then if Manager and Sprint PCS fail to agree to an amended
Build-out Plan within 15 days after completion of the reconsideration process
described above in this paragraph or the end of the 90-day period described in
the second paragraph of this Section 2.5, whichever occurs first, then an Event
of Termination will be deemed to have occurred under Section 11-3.3, Manager
will not have a right to cure such breach, and Sprint PCS may exercise its
rights and remedies under Section 11.2.2.1.
2.6 PURCHASE OF ASSETS BY MANAGER. If Sprint PCS has assets located in the
Service Area that Manager could reasonably use in its construction of the
Service Area Network and if Sprint PCS is willing to sell such assets, then
Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to
Manager the assets in accordance with the terms and conditions of the asset
purchase agreement attached as Exhibit 2.7.
2.7 MICROWAVE RELOCATION. Sprint PCS will relocate interfering microwave
sources in the spectrum in the Service Area to the extent necessary to permit
the Service Area Network to carry the anticipated call volume as set out in the
Build-out Plan. If the spectrum cleared is not sufficient to carry the actual
call volume then Sprint PCS will clear additional spectrum of its choosing to
accommodate the call volume. Sprint PCS may choose to clear spectrum one carrier
at a time. The parties will share equally all costs associated with clearing
spectrum under this Section 2.7.
2.8 DETERMINATION OF POPS. If any provision in this agreement requires the
determination of pops in a given area, then the pops will be determined using
the census block group pop forecast then used by Sprint PCS, except that a
different forecast will be used for any FCC filing and in preparing the
Build-out Plan if required by the FCC. Sprint PCS presently uses the forecast of
Equifax/NDS, but it may choose in its sole discretion to use another service
that provides comparable data.
3. PRODUCTS AND SERVICES; IXC SERVICES
--------------------------------------
3.1 SPRINT PCS PRODUCTS AND SERVICES. Manager must offer for sale, promote
and support all Sprint PCS Products and Services within the Service Area, unless
the parties otherwise agree in advance in writing. Within the Service Area,
Manager may only sell, promote and support wireless products and services that
are Sprint PCS Products and Services or are other products and services
authorized under Section 3.2. The Sprint PCS Products and Services as of the
date of this agreement are attached as Exhibit 3.1. Sprint PCS may modify the
Sprint PCS Products and Services from time to time in its sole discretion by
delivering to Manager a new Exhibit 3.1. If Sprint PCS begins offering
nationally a Sprint PCS Product or Service that is a Manger's Product or
Service, such Manager's Product or Service will become a Sprint PCS Product or
Service under this agreement.
3.2 OTHER PRODUCTS AND SERVICES. Manager may offer wireless products and
services that are not Sprint PCS Products and Services, on the terms Manager
determines, if the offer of the additional products and services:
(a) does not violate the obligations of Manager under this agreement;
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(b) does not cause distribution channel conflict with or consumer
confusion regarding Sprint PCS' regional and national offerings of Sprint
PCS Products and Services;
(c) complies with the Trademark License Agreements; and
(d) does not materially impede the development of the Sprint PCS
Network.
Manager will not offer any products or services under this Section 3.2 that
are confusingly similar to Sprint PCS Products and Services. Manager must
request that Sprint PCS determine whether Sprint PCS considers a product or
service to be confusingly similar to any Sprint PCS Products and Services by
providing advance written notice to Sprint PCS that describes those products and
services that could be interpreted to be confusingly similar to Sprint PCS
Products and Services. If Sprint PCS fails to provide a response to Manager
within 30 days after receiving the notice, then the products and services are
deemed to create confusion with the Sprint PCS Products and Services and the
request therefore rejected. In rejecting any request Sprint PCS must provide the
reasons for the rejection. If the rejection is based on Sprint PCS' failure to
respond within 30 days and Manager requests an explanation for the deemed
rejection, then Sprint PCS must provide within 30 days the reasons for the
rejection.
3.3 CROSS-SELLING WITH SPRINT. Manager and Sprint and Sprint's Related
Parties may enter into arrangements to sell Sprint's services, including long
distance service (except those long distance services governed by Section 3.4),
Internet access, customer premise equipment, prepaid phone cards, and any other
services that Sprint or its Related Parties make available from time to time.
Sprint's services may be packaged with the Sprint PCS Products and Services.
If Manager chooses to resell the long distance services, Internet access or
competitive local telephone services including prepaid phone cards, of third
parties (other than Manager's Related Parties), Manager will give Sprint the
right of last offer to provide those services on the same terms and conditions
as the offer to which Manager is prepared to agree, subject to the terms of any
existing agreements Manager was subject to prior to execution of this agreement.
If Sprint sells Sprint PCS Products and Services in the Service Area,
Manager will provide such Sprint PCS Products and Services to such customers in
accordance with the terms and conditions of the Sprint PCS National or Regional
Distribution Program Requirements.
3.4 IXC SERVICES. Manager must purchase from Sprint long distance telephony
services for the Sprint PCS Products and Services at wholesale rates. Long
distance telephone calls are those calls between the local calling area for the
Service Area Network and areas outside the local calling area. The local calling
area will be defined by mutual agreement of Sprint PCS and Manager. If the
parties cannot agree on the extent of the local calling area they will resolve
the matter through the dispute resolution process in Section 14. Any arrangement
must have terms at least as favorable to Manager (in all material respects) as
those offered by Sprint to any wholesale customer of Sprint in comparable
circumstances (taking into consideration volume, traffic patterns, etc.). If
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Manager is bound by an agreement for these services and the agreement was not
made in anticipation of this agreement, then the requirements of this Section
3.4 do not apply during the term of the other agreement. If the other agreement
terminates for any reason then the requirements of this Section 3.4 do apply.
3.5 RESALE OF PRODUCTS AND SERVICES
3.5.1 MANDATORY RESALE OF PRODUCTS AND SERVICES. Sprint PCS is subject
to FCC rules that require it to allow its service plans to be resold by a
purchaser of the service plan. Sprint PCS will not grant the purchaser of a
service plan the right to use any of the support services offered by Sprint PCS,
including customer care, billing, collection, and advertising, nor the right to
use the Brands. The reseller only has the right to use the service purchased.
Consequently, Manager agrees not to interfere with any purchaser of the Sprint
PCS Products or Services who resells the service plans in accordance with this
agreement and applicable law. Manager will notify purchaser that the purchaser
does not have a right to use the Brands or Sprint PCS' support services. In
addition, Manager will notify Sprint PCS if it reasonably believes a reseller of
retail service plans is using the support services or Brands.
3.5.2 VOLUNTARY RESALE OF PRODUCTS AND SERVICES. Sprint PCS may choose
to offer a resale product under which resellers will resell Sprint PCS Products
and Services under brand names other than the Brands, except Sprint PCS may
permit the resellers to use the Brands for limited purposes related to the
resale of Sprint PCS Products and Services (e.g., to notify people that the
handsets of the resellers will operate on the Sprint PCS Network). The resellers
may also provide their own support services (e.g., customer care and billing) or
may purchase the support services from Sprint PCS.
If Sprint PCS chooses to offer a voluntary resale product, it will
adopt a program that will be a Program Requirement under this agreement and that
addresses the manner in which Manager and Other Managers interact with the
resellers. Manager must agree to comply with the terms of the program, including
its pricing provisions, if Manager wants handsets of subscribers of resellers
with NPA-NXXs of Manager to be activated. Usage of telecommunications services
while in the Service Area by subscribers of resellers with NPA-NXXs from outside
the Service Area will be subject to the pricing provisions of the Sprint PCS
Roaming and Inter Service Area Program for roaming and inter service area
pricing between Manager and Sprint PCS unless Manager agrees in writing to
different pricing.
Except as required under the regulations and rules concerning
mandatory resale, Manager may not sell Sprint PCS Products and Services for
resale unless Sprint PCS consents to such sales in advance in writing.
3.6 NON-COMPETITION. Neither Manager nor any of its Related Parties may
offer Sprint PCS Products and Services outside of the Service Area without the
prior written approval of Sprint PCS.
Within the Service Area, Manager and Manager's Related Parties may offer,
market or promote telecommunications products or services only under the
following brands:
(a) products or services with the Brands;
(b) other products and services approved under Section 3.2;
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(c) products or services with Manager's brand; or
(d) products or services with the brands of Manager's Related Parties,
except no brand of a significant competitor of Sprint PCS or its Related Parties
in the telecommunications business may be used by Manager or Manager's Related
Parties on these products and services.
If Manager or any of its Related Parties has licenses to provide broadband
personal communication services outside the Service Area, neither Manager nor
such Related Party may utilize the spectrum to offer Sprint PCS Products and
Services without prior written consent from Sprint PCS. Additionally, when
Manager's customers from inside the Service Area travel or roam to other
geographic areas, Manager will route the customers' calls, both incoming and
outgoing, according to the Sprint PCS Network Roaming and Inter Service Area
Program Requirements, without regard to any wireless networks operated by
Manager or its Related Parties. For example, Manager will program the preferred
roaming list for handsets sold in the Service Area to match the Sprint PCS
preferred roaming list.
3.7 RIGHT OF LAST OFFER. Manager will offer to Sprint the right to make to
Manager the last offer to provide backhaul and transport services for call
transport for the Service Area Network, if Manager decides to use third parties
for backhaul and transport services rather than self-provisioning the services
or purchasing the services from Related Parties of Manager. Sprint will have a
reasonable time to respond to Manager's request for last offer to provide
backhaul and transport pricing and services, which will be no greater than 5
Business Days after receipt of the request for the services and pricing from
Manager.
If Manager has an agreement in effect as of the date of this agreement for
these services and the agreement was not made in anticipation of this agreement,
then the requirements of this Section 3.7 do not apply during the term of the
other agreement. If the other agreement terminates for any reason then the
requirements of this Section 3.7 do apply.
4. MARKETING AND SALES ACTIVITIES
---------------------------------
4.1 SPRINT PCS NATIONAL OR REGIONAL DISTRIBUTION PROGRAM REQUIREMENTS.
During the term of this agreement, Manager must participate in any Sprint PCS
National or Regional Distribution Program (as in effect from time to time), and
will pay or receive compensation for its participation in accordance with the
terms and conditions of that program. The Sprint PCS National or Regional
Distribution Program Requirements in effect as of the date of this agreement are
attached as Exhibit 4.1.
4.1.1 TERRITORIAL LIMITATIONS ON MANAGER'S DISTRIBUTION ACTIVITIES.
Neither Manager nor any of its Related Parties will market, sell or distribute
Sprint PCS Products and Services outside of the Service Area, except:
(a) as otherwise agreed upon by the parties in advance in writing; or
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(b) Manager may place advertising in media that has distribution
outside of the Service Area, so long as that advertising is intended by
Manager to reach primarily potential customers within the Service Area.
4.1.2 SETTLEMENT OF EQUIPMENT SALES. Sprint PCS will establish a
settlement policy and process that will be included in the Sprint PCS National
or Regional Distribution Program Requirements to:
(a) reconcile sales of subscriber equipment made in the service areas
of Sprint PCS or Other Managers of Sprint PCS, that result in activations
in the Service Area; and
(b) reconcile sales of subscriber equipment made in the Service Area
that result in activations in service areas of Sprint PCS or Other
Managers.
In general, the policy will provide that the party in whose service
area the subscriber equipment is activated will be responsible for the payment
of any subsidy (i.e., the difference between the price paid to the manufacturer
and the suggested retail price for direct channels or the difference between the
price paid to the manufacturer and the wholesale price for third party
retailers) and for other costs associated with the sale, including logistics,
inventory carrying costs, direct channel commissions and other retailer
compensation.
4.1.3 USE OF THIRD-PARTY DISTRIBUTORS.
(a) Manager may request that Sprint PCS and a local distributor enter
into Sprint PCS' standard distribution agreement regarding the purchase
from Sprint PCS of handsets and accessories. Sprint PCS will use
commercially reasonable efforts to reach agreement with the local
distributor. Sprint PCS may refuse to enter into a distribution agreement
with a distributor for any reasonable reason, including that the
distributor fails to pass Sprint PCS' then current credit and background
checks or the distributor fails to agree to the standard terms of the
Sprint PCS distribution agreement. Any local distributor will be subject to
the terms of the Trademark License Agreements or their equivalent. Manager
will report to Sprint PCS the activities of any local distributor that
Manager believes to be in violation of the distribution agreement.
(b) Manager may establish direct local distribution programs in
accordance with the Sprint PCS National or Regional Distribution Program
Requirements, subject to the terms and conditions of the Trademark License
Agreements and the non-competition and other provisions contained in this
agreement. If Manager sells Sprint PCS handsets and accessories directly to
a local distributor:
(i) Sprint PCS has the right to approve or disapprove a
particular distributor,
(ii) Manager is responsible for such distributor's compliance
with the terms of the Trademark License Agreements and the other
provisions contained in this agreement, and
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(iii) Manager must retain the right to terminate the distribution
rights of the local distributor when so instructed by Sprint PCS (even
if Sprint PCS initially approved or did not exercise its right to
review the distributor).
4.2 SPRINT PCS NATIONAL ACCOUNTS PROGRAM REQUIREMENTS. During the term of
this agreement, Manager must participate in the Sprint PCS National Accounts
Program (as in effect from time to time), and will be entitled to compensation
for its participation and will be required to pay the expenses of the program in
accordance with the terms and conditions of that program. The Sprint PCS
National Accounts Program Requirements in effect as of the date of this
agreement are attached as Exhibit 4.2.
4.3 SPRINT PCS ROAMING AND INTER SERVICE AREA PROGRAM REQUIREMENTS. Manager
will participate in the Sprint PCS Roaming and Inter Service Area Program
established and implemented by Sprint PCS, including roaming price plans and
inter-carrier settlements. The Sprint PCS Roaming and Inter Service Area Program
Requirements in effect as of the date of this agreement are attached as Exhibit
4.3.
As part of the Sprint PCS Roaming and Inter Service Area Program
Requirements, Sprint PCS will establish a settlement policy and process to
equitably distribute between the members making up the Sprint PCS Network (i.e.,
Sprint PCS, Manager and all Other Managers) the revenues received by one member
for services used by its customers when they travel into other members' service
areas.
4.4 PRICING. Manager will offer and support all Sprint PCS pricing plans
designated for regional or national offerings of Sprint PCS Products and
Services (e.g., national inter service area rates, regional home rates, and
local price points). The Sprint PCS pricing plans as of the date of this
agreement are attached as Exhibit 4.4. Sprint PCS may modify the Sprint PCS
pricing plans from time to time in its sole discretion by delivering to Manager
a new Exhibit 4.4.
Additionally, with prior approval from Sprint PCS, which approval will not
be unreasonably withheld, Manager may establish price plans for Sprint PCS
Products and Services that are only offered in its local market, subject to:
(a) the non-competition and other provisions contained in this
agreement;
(b) consistency with regional and national pricing plans;
(c) regulatory requirements; and
(d) capability and cost of implementing rate plans in Sprint PCS
systems (if used).
Manager must provide advance written notice to Sprint PCS with details of
any pricing proposal for Sprint PCS Products or Services in the Service Area. If
Sprint PCS fails to respond to Manager within 10 Business Days after receiving
such notice, then the price proposed for those Sprint PCS Products or Services
is deemed approved.
At the time Sprint PCS approves a pricing proposal submitted by Manager,
Sprint PCS will provide Manager an estimate of the costs and expenses and
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applicable time frames required for Sprint PCS to implement the proposed pricing
plan. Manager agrees to promptly reimburse Sprint PCS for any cost or expense
incurred by Sprint PCS to implement such a pricing plan, which will not exceed
the amount estimated by Sprint PCS if Manager waited for Sprint PCS' response to
Manager's proposal.
4.5 HOME SERVICE AREA. Sprint PCS and Manager will agree to the initial
home service area for each base station in the Service Area Network prior to the
date the Service Area Network goes into commercial operation. If the parties
cannot agree to the home service area for each base station in the Service Area
Network, then the parties will use the dispute resolution process in Section 14
of this agreement to assign each base station to a home service area.
5. USE OF BRANDS
----------------
5.1 USE OF BRANDS.
(a) Manager must enter into the Trademark License Agreements on or
before the date of this agreement.
(b) Manager must use the Brands exclusively in the marketing,
promotion, advertisement, distribution, lease or sale of any Sprint PCS
Products and Services within the Service Area, except Manager may use other
brands to the extent permitted by the Trademark License Agreements and not
inconsistent with the terms of this agreement.
(c) Neither Manager nor any of its Related Parties may market,
promote. advertise, distribute, lease or sell any of the Sprint PCS
Products and Services or Manager's Products and Services on a non-branded,
"private label" basis or under any brand, trademark, trade name or trade
dress other than the Brands, except (i) for sales to resellers required
under this agreement, or (ii) as permitted under the Trademark License
Agreements.
(d) The provisions of this Section 5.1 do not prohibit Manager from
including Sprint PCS Products and Services under the Brands within the
Service Area as part of a package with its other products and services that
bear a different brand or trademark. The provisions of this Section 5.1 do
not apply to the extent that they are inconsistent with applicable law or
in conflict with the Trademark License Agreements.
5.2 CONFORMANCE TO MARKETING COMMUNICATIONS GUIDELINES. Manager must
conform to the Marketing Communications Guidelines in connection with the
marketing, promotion, advertisement, distribution, lease and sale of any of the
Sprint PCS Products and Services. The Marketing Communications Guidelines in
effect as of the date of this agreement are attached as Exhibit 5.2. Sprint and
Sprint Spectrum may amend the Marketing Communications Guidelines from time to
time in accordance with the terms of the Trademark License Agreements.
5.3 JOINT MARKETING WITH THIRD PARTIES.
(a) Manager may engage in various joint marketing activities (e.g.,
promotions with sports teams and entertainment providers or tournament
13
sponsorships) with third parties in the Service Area from time to time
during the term of this agreement with respect to the Sprint PCS Products
and Services, except that Manager may engage in the joint marketing
activities only if the joint marketing activities:
(i) are conducted in accordance with the terms and conditions of
the Trademark License Agreements and the Marketing Communications
Guidelines;
(ii) do not violate the terms of this agreement;
(iii) are not likely (as determined by Sprint PCS, in its sole
discretion) to cause confusion between the Brands and any other
trademark or service mark, used in connection with the activities;
(iv) are not likely (as determined by Sprint, in its sole
discretion) to cause confusion between the Sprint Brands and any other
trademark or service mark used in connection with the activities; and
(v) are not likely (as determined by Sprint PCS, in its sole
discretion) to give rise to the perception that the Sprint PCS
Products and Services are beirL2 advertised, marketed or promoted
under any trademark or service mark other than the Brands, except as
provided in the Trademark, License Agreements. Manager will not engage
in any activity that includes co-branding involving use of the Brands
(that is, the marketing, promotion, advertisement, distribution, lease
or sale of any of the Sprint PCS Products and Services under the
Brands and any other trademark or service mark), except as provided in
the Trademark License Agreements.
(b) Manager must provide advance written notice to Sprint PCS
describing any joint marketing activities that may:
(i) cause confusion between the Brands and any other trademark or
service mark used in connection with the proposed activities; or
(ii) give rise to the perception that the Sprint PCS Products and
Services are being advertised, marketed or promoted under any
trademark or service mark other than the Brands, except as provided in
the Trademark License Agreements.
(c) If Sprint PCS fails to provide a response to Manager within 20
days after receiving such notice, then the proposed activities are deemed,
as the case may be:
(i) not to create confusion between the Brands and any other
trademark or service mark; or
(ii) not to give rise to the perception that Manager's products
and services are being advertised, marketed or promoted under any
trademark or service mark other than the Brands, except as provided in
the Trademark License Agreements.
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5.4 PRIOR APPROVAL OF USE OF BRANDS. Manager must obtain advance written
approval from Sprint for use of the Sprint Brands to the extent required by the
Sprint Trademark and Service Mark License Agreement and from Sprint PCS for use
of the Sprint PCS Brands to the extent required by the Sprint Spectrum Trademark
and Service Mark License Agreement. Sprint PCS will use commercially reasonable
efforts to facilitate any review of Manager's use of the Brands, if Sprint PCS
is included in the review process.
5.5 DURATION OF USE OF BRAND. Manager is entitled to use the Brands only
during the term of the Trademark License Agreements and any transition period
during which Manager is authorized to use the Brands following the termination
of the Trademark License Agreements.
6. ADVERTISING AND PROMOTION
----------------------------
6.1 NATIONAL ADVERTISING AND PROMOTION. Sprint PCS is responsible for (a)
all national advertising and promotion of the Sprint PCS Products and Services,
including the costs and expenses related to national advertising and promotions,
and (b) all advertising, and promotion of the Sprint PCS Products and Services
in the markets where Sprint PCS operates without the use of an Other Manager.
6.2 IN-TERRITORY ADVERTISING AND PROMOTION. Manager must advertise and
promote the Sprint PCS Products and Services in the Service Area (and may do so
in the areas adjacent to the Service Area so long as Manager intends that such
advertising or promotion primarily reach potential customers within the Service
Area). Manager must advertise and promote the Sprint PCS Products and Services
in accordance with the terms and conditions of this agreement, the Trademark
License Agreements and the Marketing Communication Guidelines. Manager is
responsible for the costs and expenses incurred by Manager with respect to
Manager's advertising and promotion activities in the Service Area.
Manager will be responsible for a portion of the cost of any promotion or
advertising done by third party retailers in the Service Area (e.g., Best Buy)
in accordance with any cooperative advertising arrangements based on per unit
handset sales.
Sprint PCS has the right to use in any promotion or advertising done by
Sprint PCS any promotion or advertising materials developed by Manager from time
to time with respect to the Sprint PCS Products and Services. Sprint PCS will
reimburse Manager for the reproduction costs related to such use.
Sprint PCS will make available to Manager the promotion or advertising
materials developed by Sprint PCS from time to time with respect to Sprint PCS
Products and Services in current use by Sprint PCS (e.g., radio ads, television
ads, design of print ads, design of point of sale materials, retail store
concepts and designs, design of collateral). Manager will bear the cost of using
such materials (e.g., cost of local radio and television ad placements, cost of
printing collateral in quantity, and building out and finishing retail stores).
6.3 REVIEW OF ADVERTISING AND PROMOTION CAMPAIGNS. Sprint PCS and Manager
will jointly review the upcoming marketing and promotion campaigns of Manager
with respect to Sprint PCS Products and Services (including advertising and
promotion expense budgets) and will use good faith efforts to coordinate
15
Manager's campaign with Sprint PCS' campaign to maximize the market results of
both parties. Sprint PCS and Manager may engage in cooperative advertising or
promotional activities during the term of this agreement as the parties may
agree in writing.
6.4 PUBLIC RELATIONS. If Manager conducts local public relations efforts,
then Manager must conduct the local public relations efforts consistent with the
Sprint PCS Communications Policies. The Sprint PCS Communications Policies as of
the date of this agreement are attached as Exhibit 6.4. Sprint PCS may modify
the Sprint PCS Communications Policies from time to time by delivering to
Manager a new Exhibit 6.4.
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS
--------------------------------------------
7.1 CONFORMANCE TO SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS.
(a) Manager must meet or exceed the Sprint PCS Technical Program
Requirements established by Sprint PCS from time to time for the Sprint PCS
Network. Manager will be deemed to meet the Sprint PCS Technical Program
Requirements if:
(i) Manager operates the Service Area Network at a level equal to
or better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Sprint PCS Technical Program
Requirements; or
(ii) Sprint PCS is responsible under the Services Agreement to
ensure the Service Area Network complies with the Sprint PCS Technical
Program Requirements.
(b) Manager must demonstrate to Sprint PCS that Manager has complied
with the Sprint PCS Technical Program Requirements prior to connecting the
Service Area Network to the rest of the Sprint PCS Network. Once the
Service Area Network is connected to the Sprint PCS Network, Manager must
continue to comply with the Sprint PCS Technical Program Requirements.
Sprint PCS agrees that the Sprint PCS Technical Program Requirements
adopted for Manager will be the same Sprint PCS Technical Program
Requirements applied by Sprint PCS to the Sprint PCS Network.
7.2 ESTABLISHMENT OF SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS. Sprint PCS
has delivered to Manager a copy of the current Sprint PCS Technical Program
Requirements, attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS
Technical Program Requirements to ensure a minimum, base-line level of quality
for the Sprint PCS Network. The Sprint PCS Technical Program Requirements
include standards relating to voice quality, interoperability, consistency
(seamlessness) of coverage, RF design parameters, system design, capacity, and
call blocking ratio. Sprint PCS has selected code division multiple access as
the initial air interface technology for the Sprint PCS Network (subject to
change in accordance with Section 9. 1).
7.3 HANDOFF TO ADJACENT NETWORKS. If technically feasible and commercially
reasonable, Manager will operate the Service Area Network in a manner that
permits a seamless handoff of a call initiated on the Service Area Network to
any adjacent PCS network that is part of the Sprint PCS Network, as specified in
the Sprint PCS Technical Program Requirements. Sprint PCS agrees that the terms
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and conditions for seamless handoffs adopted for the Service Area Network will
be the same as the terms Sprint PCS applies to the other parts of the Sprint PCS
Network for similar configurations of equipment.
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS
---------------------------------------------------
8.1 COMPLIANCE WITH SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS.
Manager must comply with the Sprint PCS Customer Service Program Requirements in
providing the Sprint PCS Products and Services to any customer of Manager,
Sprint PCS or any Sprint PCS Related Party. Manager will be deemed to meet the
standards if:
(a) Manager operates the Service Area Network at a level equal to or
better than the lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Program Requirements; or
(b) Manager has delegated to Sprint PCS under the Services Agreement
responsibility to ensure the Service Area Network complies with the Sprint
PCS Customer Service Standards.
Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer
Service Standards, which are attached as Exhibit B.1.
9. SPRINT PCS PROGRAM REQUIREMENTS
----------------------------------
9.1 PROGRAM REQUIREMENTS GENERALLY. This agreement contains numerous
references to Sprint PCS National and Regional Distribution Program
Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS
Roaming and Inter Service Area Program Requirements, Sprint PCS Technical
Program Requirements and Sprint PCS Customer Service Program Requirements. This
agreement also provides under Section 3.5.2 for the offering by Sprint PCS of a
voluntary resale product through a program, which program, if adopted, will be a
Program Requirement under this agreement. Sprint PCS may unilaterally amend from
time to time in the manner described in Section 9.2 all Program Requirements
mentioned in this agreement. The most current version of the Program
Requirements mentioned in the first sentence of this Section 9.1 have been
provided to Manager. Manager has reviewed the Program Requirements and adopts
them for application in the Service Area.
9.2 AMENDMENTS TO PROGRAM REQUIREMENTS. Sprint PCS may amend any of the
Program Requirements, subject to the following conditions:
(a) The applicable Program Requirements, as amended, will apply
equally to Manager, Sprint PCS and each Other Manager, except if Manager
and Sprint PCS agree otherwise or if Sprint PCS grants a waiver to Manager.
Sprint PCS may grant waivers to Other Managers without affecting Manager's
obligation to comply with the Program Requirements;
(b) Each amendment will be reasonably required to fulfill the purposes
set forth in Section 1.2 with respect to uniform and consistent operations
of the Sprint PCS Network and the presentation of Sprint PCS Products and
Services to customers in a uniform and consistent manner;
17
(c) Each amendment will otherwise be on terms and conditions that are
commercially reasonable with respect to the construction, operation and
management of the Sprint PCS Network. With respect to any amendment to the
Program Requirements, Sprint PCS will provide for reasonable transition
periods and, where appropriate, may provide for grandfathering provisions
for existing activities by Manager that were permitted under the applicable
Program Requirements before the amendment;
(d) Sprint PCS must give Manager reasonable, written notice of the
amendment, but in any event the notice will be given at least 30 days prior
to the effective date of the amendment; and
(e) Manager must implement any changes in the Program Requirements
within a commercially reasonable period of time unless otherwise consented
to by print PCS. Sprint PCS will determine what constitutes a commercially
reasonable period of time taking into consideration relevant business
factors, including the strategic significance of the changes to the Sprint
PCS Network, the relationship of the changes to the yearly marketing cycle,
and the financial demands on and capacity generally of Other Managers.
Notwithstanding the preceding two sentences, Manager will not be required
to implement any change in the Service Area Network or the business of
Manager required by an amendment to a Program Requirement until Sprint PCS
has implemented the required changes in substantially all of that portion
of the Sprint PCS Network that Sprint PCS operates without the use of a
manager or affiliate, unless the amendment to the Program Requirement
relates to an obligation regarding the Service Area Network mandated by
law. When necessary for reasons related to new technical standards, new
equipment or strategic reasons, Sprint PCS can require Manager to implement
the changes in the Service Area Network or Manager's business concurrently
with Sprint PCS, in which case Sprint PCS will reimburse Manager for its
costs and expenses if Sprint PCS discontinues the Program Requirement
chances prior to implementation.
Sprint PCS may grant Manager appropriate waivers and variances from the
requirements of any Program Requirements. Sprint PCS has the right to adopt any
Program Requirements that implement any obligation regarding the Service Area
Network mandated by law.
Any costs and expenses incurred by Manager in connection with conforming to
any change to the Program Requirements during the term of this agreement are the
responsibility of Manager.
9.3 MANAGER'S RIGHT TO REQUEST REVIEW OF CHANGES. If Sprint PCS announces a
chancre to a Program Requirement that will:
(a) cause the Manager to spend an additional amount greater than 5 %
of Manager's shareholder's equity or capital account plus Manager's
long-term debt (i.e., notes that mature more than one year from the date
issued), as reflected on Manager's books; or
(b) cause the long term operating expenses of Manager on a per unit
basis using a 10-year time frame to increase by more than 10% on a net
present value basis, then Manager may give Sprint PCS a written notice
requesting Sprint PCS to reconsider the change.
18
The Sprint PCS Vice President or the designee of the Sprint PCS Chief
Officer in charge of the group that manages the Sprint PCS relationship with
Manager will review Manager's request and render a decision regarding the
change. If after the review and decision by the Vice President or designee,
Manager is still dissatisfied, then Manager may ask that the Chief Officer to
whom the Vice President or designee reports review the matter. If Sprint PCS
still requires Manager to implement the change to the Program Requirement
following the Chief Officer's review, then upon Manager's failure to implement
the change an Event of Termination will be deemed to have occurred under Section
11.3.3, Manager will not have a right to cure such breach, and Sprint PCS may
exercise its rights and remedies under Section 11.6.
9.4 SPRINT PCS' RIGHT TO IMPLEMENT CHANGES. If Manager requests Sprint PCS
to reconsider a change to a Program Requirement as permitted under Section 9.3
and Sprint PCS decides it will not require Manager to make the change, Sprint
PCS may, but is not required to, implement the change at Sprint PCS' expense, in
which event Manager will be required to operate the Service Area Network, as
changed, but Sprint PCS will be entitled to any revenue derived from the change.
9.5 RIGHTS OF INSPECTION. Sprint PCS and its authorized agents and
representatives may enter upon the premises of any office or facility operated
by or for Manager at any time, with reasonable advance notice to Manager if
possible, to inspect, monitor and test in a reasonable manner the Service Area
Network, including the facilities, equipment, books and records of Manager, to
ensure that Manager has complied or is in compliance with all covenants and
obligations of Manager under this agreement, including Manager's obligation to
conform to the Program Requirements. The inspection, monitoring and testing may
not disrupt the operations of the office or facility, nor impede Manager's
access to the Service Area Network.
9.6 MANAGER'S RESPONSIBILITY TO INTERFACE WITH SPRINT PCS. Manager will use
platforms fully capable of interfacing with the Sprint PCS platforms in
operating the Service Area Network and in providing Sprint PCS Products and
Services. Manager will pay the expense of making its platforms full capable of
interfacing with Sprint PCS, including paying for the following:
(i) connectivity;
(ii) any changes that Manager requests Sprint PCS to make to
Sprint PCS systems to interconnect with Manager's systems that Sprint
PCS, in its sole discretion, agrees to make;
(iii) equipment to run Manager's software;
(iv) license fees for Manager's software; and
(v) Manager's upgrades or changes to its platforms.
19
10. FEES
--------
10.1 FEES AND PAYMENTS.
10.1.1 FEE BASED ON COLLECTED REVENUES. Sprint PCS will pay to Manager
a weekly fee equal to 92% of Collected Revenues for the week for all obligations
of Manager under this Agreement. The fee will be due on Thursday of the week
following the week, for which the fee is calculated.
10.1.2 PAYMENT OF UNIVERSAL SERVICE FUNDS. Sprint PCS and Manager will
share any federal and state subsidy funds (e.g., payments by a state of
universal service fund subsidies to Sprint PCS or Manager), if any, received by
Sprint PCS or Manager for customers who reside in the portion of the Service
Area served by the Service Area Network. Manager is entitled to 92 % of any
amount received by either party and Sprint PCS is entitled to 8 % of such
amounts.
10.1.3 INTER SERVICE AREA FEES. Sprint PCS will pay to Manager monthly
a fee as set out in the Sprint PCS Roaming and Inter Service Area Program, for
each minute of use that a customer of Sprint PCS or one of the Other Managers
whose NPA-NXX is not assigned to the Service Area Network uses the Service Area
Network. Manager will pay to Sprint PCS a fee, as set out in the Sprint PCS
Roaming and Inter Service Area Program, for each minute of use that a customer
whose NPA-NXX is assigned to the Service Area Network uses a portion of the
Sprint PCS Network other than the Service Area Network. Manager acknowledges
that the manner in which the NPA-NXX is utilized could change, which will
require a modification in the manner in which the inter service area fees, if
any, will be calculated.
10.1.4 INTERCONNECT FEES. Manager will pay to Sprint PCS (or to other
carriers as appropriate) monthly the interconnect fees, if any, as provided
under Section 1.4.
10.1.5 OUTBOUND ROAMING FEES. If not otherwise provided under any
Program Requirement:
(a) Sprint PCS will pay to Manager monthly the amount of Outbound
Roaming fees that Sprint PCS collects for the month from end users whose
NPA-NXX is assigned to the Service Area; and
(b) Manager will pay to Sprint PCS (or to a clearinghouse or other
carrier as appropriate) the direct cost of providing the capability for the
Outbound Roaming, including any amounts payable to the carrier that handled
the roaming call and the clearinghouse operator.
10.1.6 REIMBURSEMENTS. Manager will pay to or reimburse Sprint PCS for
any amounts that Sprint PCS is required to pay to a third party (e.g., a
telecommunications carrier) to the extent Sprint PCS already paid such amount to
Manager under this Section 10.
10.2 MONTHLY TRUE UP. Manager will report to Sprint PCS monthly the amount
of Collected Revenues received directly by the Manager (e.g., customer mails
payment to the business address of Manager rather than to the lockbox or a
customer pays a direct sales force representative in cash). Sprint PCS will on a
monthly basis true up the fees and payments due under Section 10. 1 against the
20
actual payments made by Sprint PCS to Manager. Sprint PCS will provide to
Manager a true up report each month showing the true up and the net amount due
from one party to the other, if any. If the weekly payments made to Manager
exceed the actual fees and payments due to Manager, then Manager will remit the
amount of the overpayment to Sprint PCS within 5 Business Days after receiving
the true up report from Sprint PCS. If the weekly payments made to Manager are
less than the actual fees and payments due to Manager, then Sprint PCS will
remit the shortfall to Manager within 5 Business Days after sending the true up
report to Manager.
If a party disputes any amount on the true up report, the disputing party
must give the other party written notice of the disputed amount and the reason
for the dispute within 90 days after it receives the true up report. The dispute
will be resolved through the dispute resolution process in Section 14. The
parties must continue to pay to the other party any undisputed amounts owed
under this agreement during the dispute resolution process. The dispute of an
item does not stay or diminish a party's other rights and remedies under this
agreement.
10.3 TAXES. Manager will pay or reimburse Sprint PCS for any sales, use,
gross receipts or similar tax, administrative fee, telecommunications fee or
surcharge for taxes or fees levied by a governmental authority on the fees and
charges payable by Sprint PCS to Manager.
Manager will report all taxable property to the appropriate taxing
authority for ad valorem tax purposes. Manager will pay as and when due all
taxes, assessments, liens, encumbrances, levies, and other charges against the
real estate and personal property owned by Manager or used by Manager in
fulfilling its obligations under this agreement.
Manager is responsible for paying all sales, use, or similar taxes on the
purchase and use of its equipment, advertising, and other goods or services in
connection with this agreement.
10.4 COLLECTED REVENUES DEFINITION. "Collected Revenues" means actual
payments received by or on behalf of Sprint PCS or Manager for Sprint PCS
Products and Services from others, including the customers, whose NPA-NXX is the
same as that for the portion of the Service Area served by the Service Area
Network. In determining Collected Revenues the following principles will apply.
(a) The following items will be treated as follows:
(i) Collected Revenues do not include revenues from federal and
state subsidy funds; they are handled separately as noted in Section
10. 1.2;
(ii) Collected Revenues do include any amounts received for the
payment of Inbound Roaming charges and interconnect fees when calls
are carried on the Service Area Network; and
(iii) Collected Revenues do not include any amounts received with
respect to any changes made by Sprint PCS under Section 9.4.
(b) The following items are not Collected Revenues; Sprint PCS is
obligated to remit the amounts received with respect to such items, if any,
to Manager, as follows:
21
(i) inter service area payments will be paid as provided under
Section 10.1.3;
(ii) Outbound Roaming and related charges will be paid as
provided under Section 10.1.5;
(iii) proceeds from the sale or lease of subscriber equipment and
accessories will be paid to Manager, subject to the equipment
settlement process in Section 4.1.2;
(iv) proceeds from sales not in the ordinary course of business
(e.g., sales of switches, cell sites, computers, vehicles or other
fixed assets);
(v) any amounts collected with respect to sales and use taxes,
gross receipts taxes, transfer taxes, and similar taxes,
administrative fees, telecommunications fees, and surcharges for taxes
and fees that are collected by a carrier for the benefit of a
governmental authority, subject to Manager's obligation under Section
10.3; and
(vi) Manager will be entitled to 100% of all revenues received by
Sprint PCS with respect to sales of Manager's Products and Services.
(c) The following items are not Collected Revenues; neither party is
obligated to remit any amounts respecting such items:
(i) reasonable adjustments of a customer's account (e.g., if
Sprint PCS or Manager reduces a customer's bill, then the amount of
the adjustment is not Collected Revenues); and
(ii) amount of bad debt and fraud associated with customers whose
NPA-NXX is assigned to the Service Area (e.g., if Sprint PCS or
Manager writes off a customer's bill as a bad debt, there are no
Collected Revenues on which a fee is due to Manager).
10.5 LATE PAYMENTS. Any amount due under this Section 10 that is not paid
by one party to the other party in accordance with the terms of this agreement
will bear interest at the Default Rate beginning (and including) the 3rd day
after the due date until (and including) the date paid.
10.6 SETOFF RIGHT IF FAILURE TO PAY AMOUNTS DUE. If Manager fails to pay
any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this
agreement, the Services Agreement, or any other agreement with Sprint PCS or a
Related Party of Sprint PCS, then Sprint PCS may setoff against its payments to
Manager under this Section 10, the following amounts:
(a) any amount that Manager owes to Sprint PCS or a Related Party of
Sprint PCS, including amounts due under the Services Agreement; and
22
(b) any amount that Sprint PCS reasonably estimates will be due to
Sprint PCS for the current month under the Services Agreement (e.g., if
under the Services Agreement customer care calls are billed monthly, Sprint
PCS can deduct from the weekly payment to Manager an amount Sprint PCS
reasonably estimates will be due Sprint PCS on account of such customer
care calls under the Services Agreement).
On a monthly basis Sprint PCS will true up the estimated amounts deducted
against the actual amounts due Sprint PCS and Sprint PCS' Related Parties. If
the estimated amounts deducted by Sprint PCS exceed the actual amounts due to
Sprint PCS and Sprint PCS' Related Parties, then Sprint PCS will remit the
excess to Manager with the next weekly payment. If the estimated amounts
deducted are less than the actual amounts due to Sprint PCS and its Related
Parties, then Sprint PCS may continue to setoff the payments to Manager against
the amounts due to Sprint PCS and Sprint PCS' Related Parties. This right of
setoff is in addition to any other right that Sprint PCS may have under this
agreement.
11. TERM; TERMINATION; EFFECT OF TERMINATION
--------------------------------------------
11.1 INITIAL TERM. This agreement commences on the date of execution and,
unless terminated earlier in accordance with the provisions of this Section 11,
continues for a period of 20 years (the "Initial Term").
11.2 RENEWAL TERMS. Following expiration of the Initial Term, this
agreement will automatically renew for 3 successive 10-year renewal periods (for
a maximum of 50 years including the Initial Term), unless at least 2 years prior
to the commencement of any renewal period either party notifies the other party
in writing that it does not wish to renew this agreement.
11.2.1 NON-RENEWAL RIGHTS OF MANAGER. If this agreement will terminate
because Sprint PCS gives Manager timely written notice of non-renewal of this
agreement, then Manager may exercise its rights under Section 11.2.1.1 or, if
applicable, its rights under Section 11.2.1.2.
11.2.1.1 MANAGER'S PUT RIGHT. Manager may within 30 days after the date
Sprint PCS gives notice of non-renewal put to Sprint PCS all of the Operating
Assets. Sprint PCS will pay to Manager for the Operating Assets an amount equal
to 80% of the Entire Business Value. The closing of the purchase of the
Operating Assets will occur within 20 days after the later of (a) the receipt by
Sprint PCS of the written notice of determination of the Entire Business Value
provided by the appraisers under Section 11.7 or (b) the receipt of all
materials required to be delivered to Sprint PCS under Section 11.8. Upon
closing the purchase of the Operating Assets this agreement will be deemed
terminated. The exercise of the put, the determination of the Operating Assets,
the representations and warranties made by Manager with respect to the Operating
Assets and the business, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11. 8.
11.2.1.2 MANAGER'S PURCHASE RIGHT.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in the Service
Area under the License on the date this agreement is executed, then Manager
may within 30 days after the date Sprint PCS gives notice of nonrenewal
declare its intent to purchase the Disaggregated License. Subject to
receipt of FCC approval of the necessary disaggregation and partition,
Manager may purchase from Sprint PCS the Disaggregated License for an
amount equal to the greater of (1) the original cost of the License to
Sprint PCS (pro rated on a pops and spectrum basis) plus the microwave
relocation costs paid by Sprint PCS or (2) 10% of the Entire Business
Value.
(b) Upon closing the purchase of the spectrum this agreement will be
deemed terminated. The closing of the purchase of the Disaggregated License
will occur within the later of:
(1) 20 days after the receipt by Manager of the written
notice of determination of the Entire Business Value by the
appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect to the
Disaggregated License, and the process for closing the purchase will be
subject to the terms and conditions set forth in Section 11.8.
(d) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's network;
and
(2) Sprint PCS to resell Manager's Products and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.2 NON-RENEWAL RIGHTS OF SPRINT PCS. If this agreement will
terminate because of any of the following five (5) events, then Sprint PCS may
exercise its rights under Section 11.2.2.1 or, if applicable, its rights under
Section 11.2.2.2:
(a) Manager gives Sprint PCS timely written notice of nonrenewal of
this agreement;
(b) both parties give timely written notices of non-renewal;
(c) this agreement expires with neither party giving
a written notice of non-renewal;
23
(d) either party elects to terminate this agreement under Section
11.3.4(a); or
(e) Manager elects to terminate this agreement under Section
11.3.4(b).
11.2.2.1 SPRINT PCS' PURCHASE RIGHT. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount
equal to 80% of the Entire Business Value. The closing of the purchase of the
Operating Assets will occur within 20 days after the later of (a) the receipt by
Sprint PCS of the written notice of determination of the Entire Business Value
provided by the appraisers under Section 11.7 or (b) the receipt of all
materials required to be delivered to Sprint PCS under Section 11.8. Upon
closing the purchase of the Operating Assets this agreement will be deemed
terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.2.2.2 SPRINT PCS' PUT RIGHT.
(a) Sprint PCS may, subject to receipt of FCC approval, put to Manager
the Disaggregated License for a purchase price equal to the greater of (1)
the original cost of the License to Sprint PCS (pro rated on a pops and
spectrum basis) plus the microwave relocation costs paid by Sprint PCS or
(2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the written
notice of determination of the Entire Business Value by the
appraisers under Section 11.7; or
(2) 10 days after the approval of the sale of the
Disaggregated License by the FCC.
(c) The exercise of the put, the determination of the geographic
extent of the Disaggregated License coverage, the representations and
warranties made by Sprint PCS with respect to the Disaggregated License,
and the process for closing the purchase will be subject to the terms and
conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice of Sprint
PCS' exercise of its put, advise Sprint PCS of the amount of spectrum (not
to exceed 10 MHz) it wishes to purchase. After the purchase Manager will
allow:
24
(1) subscribers of Sprint PCS to roam on Manager's network;
and
(2) Sprint PCS to resell Manager's Products and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.2.3 EXTENDED TERM AWAITING FCC APPROVAL. If Manager is buying the
Disaggregated License as permitted or required under Sections 11.2.1.2 or
11.2.2.2, then the Term of this agreement will extend beyond the original
expiration date until the closing of the purchase of the Disaggregated License.
The parties agree to exercise their respective commercially reasonable efforts
to obtain FCC approval of the transfer of the Disaggregated License.
11.3 EVENTS OF TERMINATION. An "Event of Termination" is deemed to occur
when a party gives written notice to the other party of the Event of Termination
as permitted below:
11.3.1 TERMINATION OF LICENSE.
(a) At the election of either party this agreement may be terminated
at the time the FCC revokes or fails to renew the License. Unless Manager
has the right to terminate this agreement under Section 11. 3. 1 (b),
neither party has any claim against the other party if the FCC revokes or
fails to renew the License, even if circumstances would otherwise permit
one party to terminate this agreement based on a different Event of
Termination, except that the parties will have the right to pursue claims
against each other as permitted under Section 11.4(b).
(b) If the FCC revokes or fails to renew the License because of a
breach of this agreement by Sprint PCS, then Manager has the right to
terminate this agreement under Section 11. 3.3 and not this Section 11. 3.
1.
11.3.2 BREACH OF AGREEMENT: PAYMENT OF MONEY TERMS. At the election of
the non-breaching party this agreement may be terminated upon the failure by the
breaching party to pay any amount due under this agreement or any other
agreement between the parties or their respective Related Parties, if the breach
is not cured within 30 days after the breaching party's receipt of written
notice of the nonpayment from the non-breaching party.
11.3.3 BREACH OF AGREEMENT: OTHER TERMS. At the election of the
non-breaching party this agreement may be terminated upon the material breach by
the breaching party of any material term contained in this agreement that does
not regard the payment of money, if the breach is not cured within 30 days after
the breaching party's receipt of written notice of the breach from the
non-breaching party, except the cure period will continue for a reasonable
period beyond the 30-day period, but will under no circumstances exceed 180 days
26
after the breaching party's receipt of written notice of the breach, if it is
unreasonable to cure the breach within the 30-day period, and the breaching
party takes action prior to the end of the 30-day period that is reasonably
likely to cure the breach and continues to diligently take action necessary to
cure the breach. 11.3.4 REGULATORY CONSIDERATIONS.
(a) At the election of either party this agreement may be terminated
if this agreement violates any applicable law in any material respect where
such violation (i) is classified as a felony or (ii) subjects either party
to substantial monetary fines or other substantial damages, except that
before causing any termination the parties must use best efforts to modify
this agreement, as necessary to cause this agreement (as modified) to
comply with applicable law and to preserve to the extent possible the
economic arrangements set forth in this agreement.
(b) At the election of Manager this agreement may be terminated if the
regulatory action described under 11.3.4(a) is the result of a deemed
change of control of the License and the parties are unable to agree upon a
satisfactory resolution of the matter with the regulatory authority without
a complete termination of this agreement.
11.3.5 TERMINATION OF TRADEMARK LICENSE AGREEMENTS. If either
Trademark License Agreement terminates under its terms, then:
(a) Manager may terminate this agreement if the Trademark License
Agreement terminated because of a breach of the Trademark License Agreement
by Sprint PCS or Sprint; and
(b) Sprint PCS may terminate this agreement if the Trademark License
Agreement terminated because of a breach of the Trademark License Agreement
by Manager.
11.3.6 FINANCING CONSIDERATIONS. At the election of Sprint PCS this
agreement may be terminated upon the failure of Manager to obtain the financing
described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit.
11.3.7 BANKRUPTCY OF A PARTY. At the election of the non-bankrupt
party, this agreement may be terminated upon the occurrence of a Voluntary
Bankruptcy or an Involuntary, Bankruptcy of the other party.
"VOLUNTARY BANKRUPTCY" means:
(a) the inability Of a party generally to pay its debts as the debts
become due, or an admission in writing by a party of its inability to pay
its debts generally or a general assignment by a party for the benefit of
creditors;
(b) the filing of any petition or answer by a party seeking to
adjudicate itself a bankrupt or insolvent, or seeking any liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition for itself or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking, consenting
to, or acquiescing in the entry of an order for relief or the appointment
27
of a receiver, trustee, custodian or other similar official for itself or
for substantially all of its property; or
(c) any action taken by a party to authorize any of the actions set
forth above.
"INVOLUNTARY BANKRUPTCY" means, without the consent or acquiescence of a
party:
(a) the entering of an order for relief or approving a petition for
relief or reorganization;
(b) any petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or other similar relief under any
present or future bankruptcy, insolvency or similar statute, law or
regulation;
(c) the filing of any petition against a party, which petition is not
dismissed within 90 days; or
(d) without the consent or acquiescence of a party, the entering of an
order appointing a trustee, custodian, receiver or liquidator of party or
of all or any substantial part of the property of the party, which order is
not dismissed within 90 days.
11.4 EFFECT OF AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination, the party with the
right to terminate this agreement or to elect the remedy upon the Event of
Termination. as the case may be, may:
(i) in the case of an Event of Termination under Sections
11.3.1(a) or 11.3.7, give the other party written notice that the
agreement is terminated effective as of the date of the notice, in
which case neither party will have any other remedy or claim for
damages (except any claim the non-bankrupt party has against the
bankrupt party and any claims permitted under Section 11.4(b)); or
(ii) in the case of an Event of Termination other than under
Section 11.3. 1 (a), give the other party written notice that the
party is exercising one of its rights, if any, under Section 11.5 or
Section 11.6.
(b) If the party terminates this agreement under Section 11.4(a)(i)
then all rights and obligations of each party under this agreement will
immediately cease, except that:
(i) any rights arising out of a breach of any terms of this
agreement will survive any termination of this agreement;
(ii) the provisions described in Section 17.23 will survive any
termination of this agreement;
28
(iii) the payment obligations under Section 10 will survive any
termination of this agreement if, and to the extent, any costs or fees
have accrued or are otherwise due and owing as of the date of
termination of this agreement from Manager to Sprint PCS or any Sprint
PCS Related Party or from Sprint PCS to Manager or any Manager Related
Party;
(iv) either party may terminate this agreement in accordance with
the terms of this agreement without any liability for any loss or
damage arising, out of or related to such termination, including any
loss or damage arising out of the exercise by Sprint PCS of its rights
under Section 11.6.3;
(v) Manager will use all commercially reasonable efforts to cease
immediately all of their respective efforts to market, sell, promote
or distribute the Sprint PCS Products and Services;
(vi) Sprint PCS has the option to buy from Manager any new unsold
subscriber equipment and accessories, at the prices charged to
Manager;
(vii) the parties will immediately Stop making any statements or
taking any action that might cause third parties to infer that any
business relationship continues to exist between the parties, and
where necessary or advisable, the parties will inform third parties
that the parties no longer have a business relationship; and
(viii) if subscriber equipment and accessories are in transit
when this agreement is terminated, Sprint PCS may, but does not have
the obligation to, cause the freight carrier to not deliver the
subscriber equipment and accessories to Manager but rather to deliver
the subscriber equipment and accessories to Sprint PCS.
(c) If the party exercises its rights under Section 11.4(a)(ii), this
agreement will continue in full force and effect until otherwise
terminated.
(d) If this agreement terminates for any reason other than Manager's
purchase of the Disaggregated License, Manager will not, for 3 years after
the date of termination compile, create, or use for the purpose of selling
merchandise or services similar to any Sprint PCS Products and Services, or
sell, transfer or otherwise convey to a third party, a list of customers
who purchased, leased or used any Sprint PCS Products and Services. Manager
may use such a list for its own internal analysis of its business practices
and operations. If this agreement terminates because of Manager's purchase
of the Disaggregated License, then Sprint PCS will transfer to Manager the
Sprint PCS customers with a MIN assigned to the Service Area covered by the
Disaggregated License, but Sprint PCS retains the customers of a national
account and any resellers who have entered into a resale agreement with
Sprint PCS. Manager agrees not to solicit, directly or indirectly, any
customers of Sprint PCS not transferred to Manager under this Section
11.4(d) for 2 years after the termination of this agreement, except that
Manager's advertising through mass media will not be considered a
solicitation of Sprint PCS customers.
29
11.5 MANAGER'S EVENT OF TERMINATION RIGHTS AND REMEDIES. In addition to any
other right or remedy that Manager may have under this agreement, the parties
agree that Manager will have the rights and remedies set forth in this Section
11.5 and that such rights and remedies will survive the termination of this
agreement. If Manager has a right to terminate this agreement as the result of
the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3, 11.3.5
or 11.3.7 (if Manager is the non-bankrupt party), then Manager has the right to
elect one of the following three (3) remedies, except Manager cannot elect its
remedies under Sections 11.5.1 or 11.5.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11. 3.3.
11.5.1 MANAGER'S PUT RIGHT. Manager may put to Sprint PCS within 30
days after the Event of Termination all of the Operating Assets. Sprint PCS will
pay to Manager an amount equal to 80% of the Entire Business Value. The closing
of the purchase of the Operating Assets will occur within 20 days after the
later of:
(a) the receipt by Sprint PCS of the written notice of determination
of the Entire Business Value by the appraisers under Section 11.7: or
(b) the receipt of all materials required to be delivered to Sprint
PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the put, the determination of the Operating
Assets, the representations and warranties made by the Manager with respect to
the Operating Assets and the business, and the process for closing the purchase
will be subject to the terms and conditions set forth in Section 11.8.
11.5.2 MANAGER'S PURCHASE RIGHT.
(a) If Sprint PCS owns 20 MHz or more of PCS spectrum in the Service
Area under the License on the date this agreement is executed, then Manager
may, subject to receipt of FCC approval, purchase from Sprint PCS the
Disaggregated License for the greater of (1) the original cost of the
License to Sprint PCS (pro rated on a pops and spectrum basis) plus the
microwave relocation costs paid by Sprint PCS or (2) 9% (10% minus a 10%
penalty) of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Manager of the written notice of
determination of the Entire Business Value by the appraisers under
Section 11.7; or
(2) 10 days after the approval of the sale of the Disaggregated
License by the FCC.
30
The exercise of the purchase right, the determination of the
geographic extent of the Disaggregated License coverage, the
representations and warranties made by Sprint PCS with respect
to the Disaggregated License, and the process for closing the
purchase will be subject to the terms and conditions set forth
in Section 11. 8.
(c) After the closing of the purchase Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's network; and
(2) Sprint PCS to resell Manager's Product and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.5.3 MANAGER'S ACTION FOR DAMAGES OR OTHER RELIEF. Manager, in
accordance with the dispute resolution process in Section 14, may seek damages
or other appropriate relief.
11.6 SPRINT PCS' EVENT OF TERMINATION RIGHTS AND REMEDIES. In addition to
any other right or remedy that Sprint PCS may have under this agreement, the
parties agree that Sprint PCS will have the rights and remedies set forth in
this Section 11.6 and that such rights and remedies will survive the termination
of this agreement. If Sprint PCS has a right to terminate this agreement as the
result of the occurrence of an Event of Termination under Sections 11.3.2,
11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if Sprint PCS is the non-bankrupt party), then
Sprint PCS has the right to elect one of the following four (4) remedies, except
that (i) if Sprint PCS elects the remedies under Sections 11.6.1, 11.6.2 or
11.6.4, Sprint PCS may pursue its rights under Section 11.6.3 concurrently with
its pursuit of one of the other three remedies, (ii) Sprint PCS cannot elect its
remedies under Sections 11.6.1 or 11.6.2 during the first 2 years of the Initial
Term with respect to an Event of Termination under Section 11.3.3 (unless the
Event of Termination is caused by a breach related to the Build-out Plan or the
build-out of the Service Area Network), and (iii) Sprint PCS cannot elect its
remedy under Section 11.6.2 during the first 2 years of the Initial Term with
respect to an Event of Termination under Section 11.3.6.
11.6.1 SPRINT PCS' PURCHASE RIGHT. Sprint PCS may purchase from
Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount
equal to 72 % (80 % minus a 10% penalty) of the Entire Business Value. The
closing of the purchase of the Operating Assets will occur within 20 days after
the later of:
(a) the receipt by Sprint PCS of the written notice of determination
of the Entire Business Value by the appraisers pursuant to Section 11.7; or
(b) the receipt of all materials required to be delivered to Sprint
PCS under Section 11.8.
Upon closing the purchase of the Operating Assets this agreement will be
deemed terminated. The exercise of the purchase right, the determination of the
Operating Assets, the representations and warranties made by Manager with
31
respect to the Operating Assets and the business, and the process for closing
the purchase will be subject to the terms and conditions set forth in Section
11.8.
11.6.2 SPRINT PCS' PUT RIGHT.
(a) Sprint PCS may, subject to receipt of FCC approval, put to Manager
the Disaggregated License for a purchase price equal to the greater of (1)
the original cost of the License to Sprint PCS (pro rated on a pops and
spectrum basis) plus the microwave relocation costs paid by Sprint PCS or
(2) 10% of the Entire Business Value.
(b) Upon closing the purchase of the Disaggregated License this
agreement will be deemed terminated. The closing of the purchase of the
Disaggregated License will occur within the later of:
(1) 20 days after the receipt by Sprint PCS of the written notice
of determination of the Entire Business Value by the appraisers under
Section 11.7; or
(2) 10 days after the approval of the sale of the Disaggregated
License by the FCC.
(c) The exercise of the put, the determination of the geographic
extent of the Disaggregated License coverage, the representations and
warranties made by Sprint PCS with respect to the Disaggregated License,
and the process for closing the purchase will be subject to the terms and
conditions set forth in Section 11.8.
(d) Manager may, within 10 days after it receives notice of Sprint
PCS' exercise of its put, advise Sprint PCS of the amount of spectrum (not
to exceed 10 MHz) it wishes to purchase. After the closing of the purchase
Manager will allow:
(1) subscribers of Sprint PCS to roam on Manager's network; and
(2) Sprint PCS to resell Manager's Products and Services.
Manager will charge Sprint PCS a MFN price in either case.
11.6.3 SPRINT PCS' RIGHT TO CAUSE A CURE.
(a) Sprint PCS' Right. Sprint PCS may, but is not obligated to, take
such action as it deems necessary to cure Manager's breach of this
agreement, including assuming operational responsibility for the Service
Area Network to complete construction, continue operation, complete any
necessary repairs, implement changes necessary to comply with the Program
Requirements and terms of this agreement, or take such other steps as are
appropriate under the circumstances, or Sprint PCS may designate a third
32
party or parties to do the same, to assure uninterrupted availability and
deliverability of Sprint PCS Products and Services in the Service Area, or
to complete the build-out of the Service Area Network in accordance with
the terms of this agreement. In the event that Sprint PCS elects to
exercise its right under this Section 11.6.3, Sprint PCS will give Manager
written notice of such election. Upon giving such notice:
(1) Manager will collect and make available at a convenient,
central location at its principal place of business, all documents,
books, manuals, reports and records related to the Build-out Plan and
required to operate and maintain the Service Area Network; and
(2) Sprint PCS, its employees, contractors and designated third
parties will have the unrestricted right to enter the facilities and
offices of Manager for the purpose of curing the breach and, if Sprint
PCS deems necessary, operate the Service Area Network.
Manager agrees to cooperate with and assist Sprint PCS to the extent
requested by Sprint PCS to enable Sprint PCS to exercise its rights under
this Section 11.6.3.
(b) Liability. Sprint PCS' exercise of its rights under this Section
11.6.3 will not be deemed an assumption by Sprint PCS of any liability
attributable to Manager or any other party, except that, without limiting
the provisions of Section 13, during the period that Sprint PCS is curing a
breach under this agreement or operating any portion of the Service Area
Network pursuant to this Section 11.6.3, Sprint PCS will indemnify and
defend Manager and its directors, partners, officers, employees and agents
from and against, and reimburse and pay for, all claims, demands, damages,
losses, judgments, awards, liabilities, costs and expenses (including
reasonable attorneys' fees, court costs and other expenses of litigation),
whether or not arising out of third party claims, in connection with any
suit, claim, action or other legal proceeding relating to the bodily
injury, sickness or death of persons or the damage to or destruction of
property, real or personal, resulting from or arising out of Sprint PCS'
negligence or willful misconduct in curing the breach or in the operation
of the Service Area Network. Sprint PCS' obligation under this Section
11.6.3(b) will not apply to the extent of any claims, demands, damages,
losses, judgments, awards, liabilities, costs and expenses resulting from
the negligence or willful misconduct of Manager or arising from any
contractual obligation of Manager.
(c) Costs and Payments. During the period that Sprint PCS is curing a
breach or operating the Service Area Network under this Section 11.6.3,
Sprint PCS and Manager will continue to make any and all payments due to
the other party and to third parties under this agreement, the Services
Agreement and any other agreements to which such party is bound, except
that Sprint PCS may deduct from its payments to Manager all reasonable
costs and expenses incurred by Sprint PCS in connection with the exercise
of its right under this Section 11.6.3. Sprint PCS' operation of the
33
Service Area Network pursuant to this Section 11.6.3 is not a substitution
for Manager's performance of its obligations under this agreement and does
not relieve Manager of its other obligations under this agreement.
(d) Length of Right. Sprint PCS may continue to operate the Service
Area Network in accordance with Section 11.6.3 until (i) Sprint PCS cures
all breaches by Manager under this agreement; (ii) Manager cures all
breaches and demonstrates to Sprint PCS' satisfaction that it is
financially and operationally willing, ready and able to perform in
accordance with this agreement and resumes such performance; (iii) Sprint
PCS consummates the purchase of the Operating Assets under Section 11.6.1
or the sale of the Disaggregated License under Section 11.6.2; or (iv)
Sprint PCS terminates this agreement.
(e) Not Under Services Agreement. The exercise by Sprint PCS of its
right under this Section 11.6.3 does not represent services rendered under
the Services Agreement, and therefore it does not allow Manager to be
deemed in compliance with the Program Requirements under Sections
7.l(a)(ii), .8.1(b).
11.6.4 SPRINT PCS' ACTION FOR DAMAGES OR OTHER RELIEF. Sprint PCS, in
accordance with the dispute resolution process in Section 14, may seek damages
or other appropriate relief.
11.7 DETERMINATION OF ENTIRE BUSINESS VALUE.
11.7.1 APPOINTMENT OF APPRAISERS. Sprint PCS and Manager must each
designate an independent appraiser within 30 days after giving the Purchase
Notice under Exhibit 11.8. Sprint PCS and Manager will direct the two appraisers
to jointly select a third appraiser within 15 days after the day the last of
them is appointed. Each appraiser must be an expert in the valuation of wireless
telecommunications businesses. Sprint PCS and Manager must direct the three
appraisers to each determine, within 45 days after the appointment of the last
appraiser, the Entire Business Value. Sprint PCS and Manager will each bear the
costs of the appraiser appointed by it, and they will share equally the costs of
the third appraiser.
11.7.2 MANAGER'S OPERATING ASSETS. The following assets are included
in the Operating Assets (as defined in the Schedule of Definitions):
(a) network assets, including all personal property, real property
interests in cell sites and switch sites, leasehold interests, collocation
agreements, easements, and rights-of-way;
(b) all of the real, personal, tangible and intangible property and
contract rights that Manager owns and uses in conducting the business of
providing the Sprint PCS Products and Services, including the goodwill
resulting from Manager's customer base;
(c) sale and distribution assets primarily dedicated (i.e., at least
80% of their revenue is derived from the sale of Sprint PCS Products and
Services) To the sale by Manager of Sprint PCS Products and Services. For
example, a retail store that derives at least 80% of its revenue from the
sale of Sprint PCS Products and Services is an Operating Asset. A store
that derives 65 % of its revenue from Sprint PCS Products and Services is
not an Operating Asset;
34
(d) customers, if any, that use both the other products and services
approved under Section 3.2 and the Sprint PCS Products and Services;
(e) handset inventory;
(f) books and records of the wireless business, including all
engineering drawings and designs and financial records; and
(g) all contracts used by Manager in operating the wireless business
including Tl service agreements, service contracts, interconnection
agreements, distribution agreements, software license agreements, equipment
maintenance agreements, sales agency agreements and contracts with all
equipment suppliers.
11.7.3 ENTIRE BUSINESS VALUE. Utilizing the valuation principles set
forth below and in Section 11.7.4, "ENTIRE BUSINESS VALUE" means the fair market
value of Manager's wireless business in the Service Area, valued on a going
concern basis.
(a) The fair market value is based on the price a willing buyer would
pay a willing seller for the entire on-going business. -
(b) The appraisers will use the then-current customary means of
valuing a wireless telecommunications business.
(c) The business is conducted under the Brands and existing agreements
between the parties and their respective Related Parties.
(d) Manager owns the Disaggregated License (in the case where Manager
will be buying the Disaggregated License under Sections 11.2.1.2, 11.2.2.2,
11.5.2 or 11.6.2) or Manager owns the spectrum and the frequencies actually
used by Manager under this agreement (in the case where Sprint PCS will be
buying the Operating Assets under Sections 11.2.1.1, 11.2.2.1, 11.5.1 or
11.6.1).
(e) The valuation will not include any value for the business
represented by Manager's Products and Services or any business not directly
related to Sprint PCS Products and Services.
11.7.4 CALCULATION OF ENTIRE BUSINESS VALUE. The Entire Business Value
to be used to determine the purchase price of the Operating Assets or the
Disaggregated License under this agreement is as follows:
(a) If the highest fair market value determined by the appraisers is
within 10% of the lowest fair market value, then the Entire Business Value
used to determine the purchase price under this agreement will be the
arithmetic mean of the three appraised fair market values.
35
(b) If two of the fair market values determined by the appraisers are
within 10% of one another, and the third value is not within 10% of the
other fair market values, then the Entire Business Value used to determine
the purchase price under this agreement will be the arithmetic mean of the
two more closely aligned fair market values.
(c) If none of the fair market values is within 10% of the other two
fair market values, then the Entire Business Value used to determine the
purchase price under this agreement will be the middle value of the three
fair market values.
11.8 CLOSING TERMS AND CONDITIONS. The closing terms and conditions for the
transactions contemplated in this Section 11 are attached as Exhibit 11.8.
11.9 CONTEMPORANEOUS AND IDENTICAL APPLICATION. The parties agree that any
action regarding renewal or non-renewal and any Event of Termination will occur
contemporaneously and identically with respect to all Licenses. For example, if
Manager exercises its purchase right under Section 11.5.2, it must exercise such
right with respect to all of the Licenses under this agreement. The Term of this
agreement will be the same for all Licenses; Manager will not be permitted to
operate a portion of the Service Area Network with fewer than all of the
Licenses.
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE
12.1 BOOKS AND RECORDS.
12.1.1 GENERAL. Each party must keep and maintain books and records to
support and document any fees, costs, expenses or other charges due in
connection with the provisions set forth in this agreement. The records must be
retained for a period of at least 3 years after the fees, costs, expenses or
other charges to which the records relate have accrued and have been paid, or
such other period as may be required by law.
12.1.2 AUDIT. On reasonable advance notice, each party must provide
access to appropriate records to the independent auditors selected by the other
party for purposes of auditing the amount of fees, costs, expenses or other
charges payable in connection with the Service Area with respect to the period
audited. The auditing party will conduct the audit no more frequently than
annually. If the audit shows that Sprint PCS was underpaid then, unless the
amount is contested, Manager will pay to Sprint PCS the amount of the
underpayment within 10 Business Days after Sprint PCS gives Manager written
notice of the determination of the underpayment. If the audit determines that
Sprint PCS was overpaid then, unless the amount is contested, Sprint PCS will
pay to Manager the amount of the overpayment within 10 Business Days after
Sprint PCS determines Sprint PCS was overpaid. The auditing party will pay all
costs and expenses related to the audit unless the amount owed to the audited
party is reduced by more than 10% or the amount owed by the audited party is
increased by more than 10%, in which case the costs and expenses related to the
audit will be paid by the audited party.
Notwithstanding the above provisions of this Section 12.1.2, rather than
allow Manager's independent auditors access to Sprint PCS' records, Sprint PCS
may provide a report issued in conformity with Statement of Auditing Standard
36
No. 70 "Reports on the Processing of Transactions by Service Organizations"
("TYPE II REPORT" OR "MANAGER MANAGEMENT REPORT"). Such report will be prepared
by independent auditors and will provide an opinion on the controls placed in
operation and tests of operating effectiveness of those controls in effect at
Sprint PCS over the Manager Management Processes. "Manager Management Processes"
include those services generally provided within the Management Agreement,
primarily billing, and collection of Collected Revenues.
12.1.3 CONTESTING AN AUDIT. If the party that did not select the
independent auditor does not agree with the findings of the audit, then such
party can contest the findings by providing notice of such disagreement to the
other party (the "Dispute Notice"). The date of delivery of such notice is the
"DISPUTE NOTICE DATE." If the parties are unable to resolve the disagreement
within 10 Business Days after the Dispute Notice Date, they will resolve the
disagreement in accordance with the following procedures.
The two parties and the auditor that conducted the audit will all agree on
an independent certified public accountant with a regional or national
accounting practice in the wireless telecommunications industry (the "ARBITER")
within 15 Business Days after the Dispute Notice Date. If, within 15 Business
Days after the Dispute Notice Date, the three parties fail to agree on the
Arbiter, then at the request of either party to this agreement, the Arbiter will
be selected pursuant to the rules then in effect of the American Arbitration
Association. Each party will submit to the Arbiter within 5 Business Days after
its selection and engagement all information reasonably requested by the Arbiter
to enable the Arbiter to independently resolve the issue that is the subject of
the Dispute Notice. The Arbiter will make its own determination of the amount of
fees, costs, expenses or other charges payable under this agreement with respect
to the period audited. The Arbiter will issue a written report of its
determination in reasonable detail and will deliver a copy of the report to the
parties within 10 Business Days after the Arbiter receives all of the
information reasonably requested. The determination made by the Arbiter will be
final and binding and may be enforced by any court having, jurisdiction. The
parties will cooperate fully in assisting the Arbiter and will take such actions
as are necessary to expedite the completion of and to cause the Arbiter to
expedite its assignment.
If the amount owed by a contesting party is reduced by more than 10% or the
amount owed to a contesting party is increased by more than 10% then the
non-contesting party will pay the costs and expenses of the Arbiter, otherwise
the contesting party will pay the costs and expenses of the Arbiter.
12.2 CONFIDENTIAL INFORMATION.
(a) Except as specifically authorized by this agreement, each of the
parties must, for the Term and 3 years after the date of termination of
this agreement, keep confidential, not disclose to others and use only for
the purposes authorized in this agreement, all Confidential Information
disclosed by the other party to the party in connection with this
agreement. except that the foregoing, obligation will not apply to the
extent that any Confidential Information:
(i) is or becomes, after disclosure to a party, publicly known by
any means other than through unauthorized acts or omissions of the
party or its agents; or
37
(ii) is disclosed in good faith to a party by a third party
entitled to make the disclosure.
(b) Notwithstanding the foregoing, a party may use, disclose or
authorize the disclosure of Confidential Information that it receives that:
(i) has been published or is in the public domain, or that
subsequently comes into the public domain, through no fault of the
receiving party;
(ii) prior to the effective date of this agreement was properly
within the legitimate possession of the receiving party, or subsequent
to the effective date of this agreement, is lawfully received from a
third party having rights to publicly disseminate the Confidential
Information without any restriction and without notice to the
recipient of any restriction against its further disclosure;
(iii) is independently developed by the receiving party through
persons or entities who have not had, either directly or indirectly,
access to or knowledge of the Confidential Information;
(iv) is disclosed to a third party consistent with the terms of
the written approval of the party originally disclosing the
information;
(v) is required by the receiving party to be produced under order
of a court of competent jurisdiction or other similar requirements of
a governmental agency, and the Confidential Information will otherwise
continue to be Confidential Information required to be held
confidential for purposes of this agreement;
(vi) is required by the receiving party to be disclosed by
applicable law or a stock exchange or association on which the
receiving party's securities (or those of its Related Parties) are or
may become listed; or
(vii) is disclosed by the receiving party to a financial
institution or accredited investor (as that term is defined in Rule
501(a) under the Securities Act of 1933) that is considering providing
financing to the receiving party and which financial institution or
accredited investor has agreed to keep the Confidential Information
confidential in accordance with an agreement at least as restrictive
as this Section 12.2.
(c) Notwithstanding the foregoing, Manager and Sprint PCS authorize
each other to disclose to the public in regulatory filings the other's
identity and the Service Area to be developed and managed by Manager, and
Manager authorizes Sprint PCS to mention Manager and the Service Area in
public relations announcements.
(d) The party making a disclosure under Sections 12.2(b)(v),
12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as
is reasonably necessary to enable the disclosing party to take action to,
and use the party's reasonable best efforts to, limit the disclosure and
maintain confidentiality to the extent practicable.
38
(e) Manager will not except when serving in the capacity of Manager
under this agreement, use any Confidential Information of any kind that it
receives under or in connection with this agreement. For example, if
Manager operates a wireless company in a different license area, Manager
may not use any of the Confidential Information received under or in
connection with this agreement in operating the other wireless business.
12.3 INSURANCE.
12.3.1. GENERAL. During the term of this agreement, Manager must
obtain and maintain, and will cause any subcontractors to obtain and maintain,
with financially reputable insurers licensed to do business in all jurisdictions
where any work is performed under this agreement and who are reasonably
acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance
Requirements The Sprint PCS Insurance Requirements as of the date of this
agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS
Insurance Requirements as is commercially reasonable from time to time by
delivering to Manager a new Exhibit 12.3.
12.3.2 WAIVER OF SUBROGATION. Manager must look first to any insurance
in its favor before making any claim against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives for
recovery resulting from injury to any person (including Manager's or its
subcontractor's employees) or damage to any property arising from any cause,
regardless of negligence. Manager does hereby release and waive to the fullest
extent permitted by law, and will cause its respective insurers to waive, all
rights of recovery by subrogation against Sprint PCS or Sprint, and their
respective directors, officers, employees, agents or representatives.
12.3.3 CERTIFICATES OF INSURANCE. Manager and all of its
subcontractors, if any, must, as a material condition of this agreement and
prior to the commencement of any work under and any renewal of this agreement,
deliver to Sprint PCS a certificate of insurance,. satisfactory in form and
content to Sprint PCS, evidencing that the above insurance, including waiver of
subrogation, is in force and will not be canceled or materially altered without
first giving Sprint PCS at least 30 days prior written notice and that all
coverages are primary to any insurance carried by Sprint PCS, its directors,
officers, employees, agents or representatives.
Nothing contained in this Section 12.3.3 will limit Manager's liability to
Sprint PCS, its directors, officers, employees, agents or representatives to the
limits of insurance certified or carried.
13. INDEMNIFICATION
-------------------
13.1 INDEMNIFICATION BY SPRINT PCS. Sprint PCS agrees to indemnify, defend
and hold harmless Manager, its directors, managers, officers, employees, agents
and representatives from and against any and all claims, demands, causes of
action, losses, actions. damages, liability and expense, including costs and
reasonable attorneys' fees, against Manager, its directors, managers, officers,
employees, agents and representatives arising from or relating to the violation
by Sprint PCS of any law, regulation or ordinance applicable to Sprint PCS or by
Sprint PCS' breach of any representation, warranty or covenant contained in this
39
agreement or any other agreement between Sprint PCS or Sprint PCS' Related
Parties and Manager or Manager's Related Parties except where and to the extent
the claim, demand, cause of action, loss, action, damage, liability and/or
expense results solely from the negligence or willful misconduct of Manager.
13.2 INDEMNIFICATION BY MANAGER. Manager agrees to indemnify, defend and
hold harmless Sprint PCS and Sprint, and their respective directors, managers,
officers, employees, agents and representatives from and against any and all
claims, demands, causes of action, losses, actions, damages, liability and
expense, including costs and reasonable attorneys' fees, against Sprint PCS or
Sprint, and their respective directors, managers, officers, employees, agents
and representatives arising from or relating to Manager's violation of any law,
regulation or ordinance applicable to Manager, Manager's breach of any
representation, warranty or covenant contained in this agreement or any other
agreement between Manager or Manager's Related Parties and Sprint PCS and Sprint
PCS' Related Parties, Manager's ownership of the Operating Assets or the
operation of the Service Area Network, or the actions or failure to act of any
of Manager's contractors, subcontractors, agents, directors, managers, officers,
employees and representatives of any of them in the performance of any work
under this agreement, except where and to the extent the claim, demand, cause of
action, loss, action, damage, liability and expense results solely from the
negligence or willful misconduct of Sprint PCS or Sprint, as the case may be.
13.3 PROCEDURE.
13.3.1 NOTICE. Any party being indemnified ("INDEMNITEE") will give
the party making, the indemnification ("INDEMNITOR") written notice as soon as
practicable but no later than 5 Business Days after the party becomes aware of
the facts, conditions or events that give rise to the claim for indemnification
if:
(a) any claim or demand is made or liability is asserted against
Indemnitee; or
(b) any suit, action, or administrative or legal proceeding, is
instituted or commenced in which Indemnitee is involved or is named as a
defendant either individually or with others.
Failure to give notice as described in this Section 13.3.1 does not modify
the indemnification obligations of this provision, except if Indemnitee is
harmed by failure to provide timely notice to Indemnitor, then Indenmitor does
not have to indemnify Indemnitee for the harm caused by the failure to give the
timely notice.
13.3.2 DEFENSE BY INDEMNITOR. If within 30 days after giving notice
Indemnitee receives written notice from Indemnitor stating that Indemnitor
disputes or intends to defend against the claim, demand, liability, suit, action
or proceeding, then Indemnitor will have the right to select counsel of its
choice and to dispute or defend against the claim, demand, liability, suit,
action or proceeding, at its expense.
Indemnitee will fully cooperate with Indemnitor in the dispute or defense
so long as Indemnitor is conducting the dispute or defense diligently and in
40
good faith. Indemnitor is not permitted to settle the dispute or claim without
the prior written approval of Indemnitee, which approval will not be
unreasonably withheld. Even though Indemnitor selects counsel of its choice,
Indenmitee has the right to retain additional representation by counsel of its
choice to participate in the defense at Indemnitee's sole cost and expense.
13.3.3 DEFENSE BY INDEMNITEE. If no notice of intent to dispute or
defend is received by Indemnitee within the 30-day period, or if a diligent and
good faith defense is not being or ceases to be conducted, Indemnitee has the
right to dispute and defend against the claim, demand or other liability at the
sole cost and expense of Indemnitor and to settle the claim, demand or other
liability, and in either event to be indemnified as provided in this Section
13.3.3. Indenmitee is not permitted to settle the dispute or claim without the
prior written approval of Indemnitor, which approval will not be unreasonably
withheld.
13.3.4 COSTS. Indemnitor's indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Indemnitee from the first notice that any claim or demand
has been made or may be made, and is not limited in any way by any limitation on
the amount or type of damages, compensation, or benefits payable under
applicable workers' compensation acts, disability benefit acts, or other
employee benefit acts.
14. DISPUTE RESOLUTION
----------------------
14.1 NEGOTIATION. The parties will attempt in good faith to resolve any
dispute arising out of or relating to this agreement promptly by negotiation
between or among representatives who have authority to settle the controversy.
Either party may escalate any dispute not resolved in the normal course of
business to the appropriate (as determined by the party) officers of the parties
by providing written notice to the other party.
Within 10 Business Days after delivery of the notice, the appropriate
officers of each party will meet at a mutually acceptable time and place, and
thereafter as often as they deem reasonably necessary, to exchange relevant
information and to attempt to resolve the dispute.
Either party may elect, by giving written notice to the other party, to
escalate any dispute arising out of or relating to the determination of fees
that is not resolved in the normal course of business or by the audit process
set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or
accounting officers to be designated by each party. The designated officers will
meet in the manner described in the preceding paragraph. If the matter has not
been resolved by the designated officers within 30 days after the notifying
party's notice, either party may elect to escalate the dispute to the
appropriate (as determined by the party) officers in accordance with the prior
paragraphs of this Section 14.1.
14.2 UNABLE TO RESOLVE. If a dispute has not been resolved within 60 days
after the notifying party's notice, either party may continue to operate under
this agreement and sue the other party for damages or seek other appropriate
remedies as provided in this agreement. If, and only if, this agreement does not
41
provide a remedy (as in the case of Sections 3.4 and 4.5. where the parties are
supposed to reach an agreement), then either party may give the other party
written notice that it wishes to resolve the dispute or claim arising out of the
parties' inability to agree under such Sections of this agreement by using the
arbitration procedure set forth in this Section 14.2. Such arbitration will
occur in Kansas City Missouri, unless the parties otherwise mutually agree, with
the precise location being as agreed upon by the parties or, absent such
agreement, at a location in Kansas City, Missouri selected by Sprint PCS. Such
arbitration will be conducted pursuant to the procedures prescribed by the
Missouri Uniform Arbitration Act, as amended from time to time, or, if none,
pursuant to the rules then in effect of the American Arbitration Association (or
at any other place and by any other form of arbitration mutually acceptable to
the parties). Any award rendered in such arbitration will be confidential and
will be final and conclusive upon the parties, and a judgment on the award may
be entered in any court of the forum, state or federal, having jurisdiction. The
expenses of the arbitration will be borne equally by the parties to the
arbitration, except that each party must pay for and bear the cost of its own
experts, evidence, and attorneys' fees.
The parties must each, within 30 days after either party gives notice to
the other party of the notifying party's desire to resolve a dispute or claim
under the arbitration procedure in this Section 14.2, designate an independent
arbitrator, who is knowledgeable with regard to the wireless telecommunications
industry, to participate in the arbitration hearing. The two arbitrators thus
selected will select a third independent arbitrator, who is knowledgeable with
regard to the wireless telecommunications industry, who will act as chairperson
of the board of arbitration. If, within 15 days after the day the last of the
two named arbitrators is appointed. the two named arbitrators fail to agree upon
the third, then at the request of either party, the third arbitrator shall be
selected pursuant to the rules then in effect of the American Arbitration
Association. The three independent arbitrators will comprise the board of
arbitration, which will preside over the arbitration hearing and will render all
decisions by majority vote. If either party refuses or neglects to appoint an
independent arbitrator within such 30-day period, the independent arbitrator who
has been appointed as of the 31st day after the notifying party's notice will be
the sole independent arbitrator and will solely preside over the arbitration
hearing. The arbitration hearing will commence no sooner than 30 days after the
date the last arbitrator is appointed and no later than 60 days after such date.
The arbitration hearing will be conducted during normal working hours on
Business Days without interruption or adjournment of more than 2 Business Days
at any one time or 6 Business Days in the aggregate.
The arbitrators will deliver their decision to the parties in writing
within 10 days after the conclusion of the arbitration hearing. The arbitration
award will be accompanied by findings of fact and a statement of reasons for the
decision. There will be no appeal from the written decision, except as permitted
by applicable law. The arbitration proceedings, the arbitrators' decision, the
arbitration award, and any other aspect, matter, or issue of or relating to the
arbitration are confidential, and disclosure of such confidential information is
an actionable breach of this agreement. Notwithstanding any other provision of
this agreement, arbitration will not be required of any issue for which
injunctive relief is properly sought by either party.
14.3 ATTORNEYS AND INTENT. If an officer intends to be accompanied at a
meeting by an attorney, the other party's officer will be given at least 3
Business Days prior notice of the intention and may also be accompanied by an
attorney. All negotiations under Section 14.1 are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Civil Procedure and state rules of evidence and civil procedure.
42
14.4 TOLLING OF CURE PERIODS. Any cure period under Section 11.3 that is
less than 90 days will be tolled during the pendency of the dispute resolution
process. Any cure period under Section 11.3 that is 90 days or longer will not
be tolled during the pendency of the dispute resolution process.
15. REPRESENTATIONS AND WARRANTIES
----------------------------------
Each party for itself makes the following representations and warranties to
the other party:
15.1 DUE INCORPORATION OR FORMATION; AUTHORIZATION OF AGREEMENTS. The party
is either a corporation, limited liability company, or limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Manager is qualified to do business and in
good standing in every jurisdiction in which the Service Area is located. The
party has the full power and authority to execute and deliver this agreement and
to perform its obligations under this agreement.
15.2 VALID AND BINDING OBLIGATION. This agreement constitutes the valid and
binding obligation of the party, enforceable in accordance with its terms,
except as may be limited by principles of equity or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
15.3 NO CONFLICT; NO DEFAULT. Neither the execution, delivery and
performance of this agreement nor the consummation by the party of the
transactions contemplated in this agreement will conflict with, violate or
result in a breach of (a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to such party, (b) any term, condition or provision of the articles
of incorporation, certificate of limited partnership, certificate of
organization, bylaws, partnership agreement or limited liability company
agreement (or other governing documents) of such party or of any material
agreement or instrument to which such party is or may be bound or to which any
of its material properties or assets is subject.
15.4 LITIGATION. No action, suit, proceeding or investigation is pending
or, to the knowledge of the party, threatened against or affecting the party or
any of its properties, assets or businesses in any court or before or by any
governmental agency that could, if adversely determined, reasonably be expected
to have a material adverse effect on the party's ability to perform its
obligations under this agreement. The party has not received any currently
effective notice of any default that could reasonably be expected to result in a
breach of the preceding sentence.
16. REGULATORY COMPLIANCE
-------------------------
16.1 REGULATORY COMPLIANCE. Manager will construct, operate, and manage the
Service Area Network in compliance with applicable federal, state, and local
laws and regulations, including Siting Regulations. Nothing in this Section 16.1
43
will limit Manager's obligations under Section 2.2 and the remainder of this
Section 16. Manager acknowledges that failure to comply with applicable federal,
state, and local laws and regulations in its construction, operation, and
management of the Service Area Network may subject the parties and the License
to legal and administrative agency actions, including forfeiture penalties and
actions that affect the License, such as license suspension and revocation, and
accordingly. Manager agrees that it will cooperate with Sprint PCS to maintain
the License in full force and effect.
Manager will write and implement practices and procedures governing
construction and management of the Service Area Network in compliance with
Siting Regulations. Manager will make its Siting Regulations practices and
procedures available upon request to Sprint PCS in the manner specified by
Sprint PCS for its inspection and review, and Manager will modify those Siting
Regulations practices and procedures as may be requested by Sprint PCS. Every
six months, and at the request of Sprint PCS, Manager will provide a written
certification from one of Manager's chief officers that Manager's Service Area
Network- complies with Siting Regulations. Manager's first certification of
compliance with Siting Regulations will be provided to Sprint PCS six months
after the date of this agreement.
Manager will conduct an audit and physical inspection of its Service Area
Network at the request of Sprint PCS to confirm compliance with Siting
Regulations, and Manager will report the results of the audit and physical
inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear
the cost of Siting Regulations compliance audits and physical inspections
requested by Sprint PCS.
Manager will retain for 3 years records demonstrating compliance with
Siting Regulations, including compliance audit and inspection records. Manager
will make those records available upon request to Sprint PCS for production,
inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will
bear the cost of production, inspection, and copying.
16.2 FCC COMPLIANCE. The parties agree to comply with all applicable FCC
rules governing the License or the Service Area Network and specifically agree
as follows:
(a) The party billing a customer will advise the customer that service
is provided over spectrum licensed to Sprint PCS. Neither Manager nor
Sprint PCS will represent itself as the legal representative of the other
before the FCC or any other third party, but will cooperate with each other
with respect to FCC matters concerning the License or the Service Area
Network.
(b) Sprint PCS will use commercially reasonable efforts to maintain
the License in accordance with the terms of the License and all applicable
laws, policies and regulations and to comply in all material respects with
all other legal requirements applicable to the operation of the Sprint PCS
Network and its business. Sprint PCS has sole responsibility, except as
specifically provided otherwise in Section 2.2, for keeping the License in
full force and effect and for preparing submissions to the FCC or any other
relevant federal, state or local authority of all reports, applications,
interconnection agreements, renewals, or other filings or documents.
Manager must cooperate and coordinate with Sprint PCS' actions to comply
44
with regulatory requirements, which cooperation and coordination must
include, without limitation, the provision to Sprint PCS of all information
that Sprint PCS deems necessary to comply with the regulatory requirements.
Manager must refrain from taking any action that could impede Sprint PCS
from fulfilling its obligations under the preceding sentence, and must not
take any action that could cause Sprint PCS to forfeit or cancel the
License.
(c) Sprint PCS and Manager are familiar with Sprint PCS'
responsibility under the Communications Act of 1934, as amended, and
applicable FCC rules. Nothing in this agreement is intended to diminish or
restrict Sprint PCS' obligations as an FCC Licensee and both parties desire
that this agreement and each party's obligations under this agreement be in
compliance with the FCC rules.
(d) Nothing in this agreement will preclude Sprint PCS from
permitting, or facilitating resale of Sprint PCS Products and Services to
the extent required or elected under applicable FCC regulations. Manager
will take the actions necessary to facilitate Sprint PCS' compliance with
FCC regulations. To the extent permitted by applicable regulations, Sprint
PCS will not authorize a reseller that desires to sell services and
products in only the Service Area to resell Sprint PCS wholesale products
and services, unless Manager agrees in advance to such sales.
(e) If a change in FCC policy or rules makes it necessary to obtain
FCC consent for the implementation, continuation or further effectuation of
any term or provision of this agreement, Sprint PCS will use all
commercially reasonable efforts diligently to prepare, file and prosecute
before the FCC all petitions, waivers, applications, amendments, rulemaking
comments and other related documents necessary to secure and/or retain FCC
approval of all aspects of this agreement. Manager will use commercially
reasonable efforts to provide to Sprint PCS any information that Sprint PCS
may request from Manager with respect to any matter involving Sprint PCS,
the FCC, the License, the Sprint PCS Products and Services or any other
products and services approved under Section 3.2. Each party will bear its
own costs of preparation of the documents and prosecution of the actions.
(f) If the FCC determines that this agreement is inconsistent with the
terms and conditions of the License or is otherwise contrary to FCC
policies, rules and regulations, or if regulatory or legislative action
subsequent to the date of this agreement alters the permissibility of this
agreement under the FCC's rules or other applicable law, rules or
regulations, then the parties must use best efforts to modify this
agreement as necessary to cause this agreement (as modified) to comply with
the FCC policies, rules, regulations and applicable law and to preserve to
the extent possible the economic arrangements set forth in this agreement.
(g) Manager warrants and represents to Sprint PCS that Manager is and
at all times during the Term of this agreement will be in compliance with
FCC rules and regulations regarding limits on classes and amounts of
spectrum that may be owned by Manager. Manager agrees that in the event
45
that Manager is or at any time becomes in violation of such rules and
regulations, Manager will promptly take all action necessary and
appropriate (other than terminating this agreement) to cure such violation
and comply with such rules and regulations, including without limitation
disposing of its direct or indirect interests in cellular licenses.
16.3 MARKING AND LIGHTING. Manager will conform to applicable FAA standards
when Siting Regulations require marking and lighting of Manager's Service Area
Network, cell sites. Manager will cooperate with Sprint PCS in reporting
lighting malfunctions as required by Siting Regulations.
16.4 REGULATORY NOTICES. Manager will, within 2 Business Days after its
receipt, give Sprint PCS written notice of all oral and written communications
it receives from regulatory authorities (including but not limited to the FCC,
the FAA, state public service commissions, environmental authorities, and
historic preservation authorities) and complaints respecting Manager's
construction, operation, and management of the Service Area Network that could
result in actions affecting the License as well as written notice of the details
respecting such communications and complaints, including a copy of any written
material received in connection with such communications and complaints. Manager
will cooperate with Sprint PCS in responding to such communications and
complaints received by Manager. Sprint PCS has the right to respond to all such
communications and complaints, with counsel and consultants of its own choice.
If Sprint PCS chooses to respond to such communications and complaints, Manager
will not respond to them without the consent of Sprint PCS, and Manager will pay
the costs of Sprint PCS' responding to such communications and complaints,
including reasonable attorneys' and consultants' fees, investigation costs, and
all other reasonable costs and expenses incurred by Sprint PCS.
16.5 REGULATORY POLICY-SETTING PROCEEDINGS. Manager will not intervene in
or otherwise participate in a rulemaking, investigation, inquiry, contested
case, or similar regulatory policy setting proceedings before a regulatory
authority concerning the License or construction, operation, and management of
the Service Area Network and the Sprint PCS business operated using the Service
Area Network.
17. GENERAL PROVISIONS
----------------------
17.1 NOTICES. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this agreement must be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested), sent by hand or overnight courier, or sent by facsimile (with
acknowledgment received and a copy sent by overnight courier), charges prepaid
and addressed as described on the Notice Address Schedule attached to the Master
Signature Page, or to any other address or number as the person or entity may
from time to time specify by written notice to the other parties.
All notices and other communications given to a party in accordance with
the provisions of this agreement will be deemed to have been given when
received.
17.2 CONSTRUCTION. This agreement will be construed simply according to its
fair meaning and not strictly for or against either party.
46
17.3 HEADINGS. The table of contents, section and other headings contained
in this agreement are for reference purposes only and are not intended to
describe, interpret, define, limit or expand the scope, extent or intent of this
agreement.
17.4 FURTHER ACTION. Each party agrees to perform all further acts and
execute, acknowledge, and deliver any documents that may be reasonably
necessary, appropriate, or desirable to carry out the intent and purposes of
this agreement.
17.5 COUNTERPART EXECUTION. This agreement will be executed by affixing the
par-ties' signatures to the Master Signature Page, which Master Signature Page,
and thus this agreement, may be executed in any number of counterparts with the
same effect as if both par-ties had signed the same document. All counterparts
will be construed together and will constitute one agreement.
17.6 SPECIFIC PERFORMANCE. Each party agrees with the other party that the
party would be irreparably damaged if any of the provisions of this agreement
were not performed in accordance with their specific terms and that monetary
damages alone would not provide an adequate remedy. Accordingly, in addition to
any other remedy to which the non-breaching party may be entitled, at law or in
equity, the non-breaching party will be entitled to injunctive relief to prevent
breaches of this agreement and specifically to enforce the terms and provisions
of this agreement.
17.7 ENTIRE AGREEMENT; AMENDMENTS. The provisions of this agreement, the
Services Agreement and the Trademark License Agreements (including the exhibits
to those agreements) set forth the entire agreement and understanding between
the parties as to the subject matter of this agreement and supersede all prior
agreements, oral or written, and other communications between the parties
relating to the subject matter of this agreement. Except for Sprint PCS' right
to amend the Program Requirements in accordance with Section 9.2 and its right
to unilaterally modify and amend certain other provisions as expressly provided
in this agreement, this agreement may be modified or amended only by a written
amendment signed by persons or entities authorized to bind each party and, with
respect to the sections set forth for Sprint on the Master Signature Page, the
persons or entities authorized to bind Sprint.
17.8 LIMITATION ON RIGHTS OF OTHERS. Except as set forth on the Master
Signature Page for Sprint, nothing in this agreement, whether express or
implied, will be construed to give any person or entity other than the parties
any legal or equitable right, remedy or claim under or in respect of this
agreement.
17.9 WAIVERS.
17.9.1 WAIVERS-GENERAL. The observance of any term of this agreement
may be waived (whether generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce the term, but
any waiver is effective only if in a writing signed by the party against which
the waiver is to be asserted. Except as otherwise provided in this agreement, no
47
failure or delay of either party in exercising, any power or right under this
agreement will operate as a waiver of the power or right, nor will any single or
partial exercise of any right or power preclude any other or further exercise of
the right or power or the exercise of any other right or power.
17.9.2 WAIVERS-MANAGER. Manager is not in breach of any covenant in
this agreement and no Event of Termination will have occurred as a result of the
occurrence of any event, if Manager had delegated to Sprint Spectrum under the
Services Agreement (or any successor to that agreement) responsibility for
taking any action necessary to ensure compliance with the covenant or to prevent
the occurrence of the event.
17.9.3 FORCE MAJEURE. Neither Manager nor Sprint PCS, as the case may
be. is in breach of any covenant in this agreement and no Event of Termination
will occur as a result of the failure of such party to comply with such
covenant, if such party's noncompliance with the covenant results primarily
from: (i) any FCC order or any other injunction issued by any governmental
authority impeding the party's ability to comply with the covenant;
(ii) the failure of any governmental authority to grant any
consent, approval, waiver, or authorization or any delay on the part
of any governmental authority in granting any consent, approval,
waiver or authorization;
(iii) the failure of any vendor to deliver in a timely manner any
equipment or services; or
(iv) any act of God, act of war or insurrection, riot, fire,
accident, explosion, labor unrest, strike, civil unrest, work
stoppage, condemnation or any similar cause or event not reasonably
within the control of such party.
17.10 WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.11 BINDING EFFECT. Except as otherwise provided in this agreement, this
agreement is binding upon and inures to the benefit of the parties and their
respective and permitted successors, transferees, and assigns, including any
permitted successor, transferee or assignee of the Service Area Network or of
the License. The parties intend that this agreement bind only the party signing
this agreement and that the agreement is not binding on the Related Parties of a
party unless the agreement expressly provides that Related Parties are bound.
17.12 GOVERNING LAW. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
17.13 SEVERABILITY. The parties intend every provision of this agreement to
be severable. If any provision of this agreement is held to be illegal, invalid,
or unenforceable for any reason, the parties intend that a court enforce the
provision to the maximum extent permissible so as to effect the intent of the
parties (including the enforcement of the remaining provisions). If necessary to
effect the intent of the parties, the parties will negotiate in good faith to
amend this agreement to replace the unenforceable provision with an enforceable
provision that reflects the original intent of the parties.
48
17.14 LIMITATION OF LIABILITY. NO PARTY WILL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES,
OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT
OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR
LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION
AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY
ANOTHER PARTY TO THIS AGREEMENT.
17.15 NO ASSIGNMENT; EXCEPTIONS.
17.15.1 GENERAL. Neither party will, directly or indirectly, assign this
agreement or any of the party's rights or obligations under this agreement
without the prior written consent of the other party, except as otherwise
specifically provided in this Section 17.15. Sprint PCS may deny its consent to
any assignment or transfer in its sole discretion except as otherwise provided
in this Section 17.15.
Any attempted assignment of this agreement in violation of this Section
17.15 will be void and of no effect.
A party may assign this agreement to a Related Party of the party, except
that Manager cannot assign this agreement to a Related Party that is a
significant competitor of Sprint, Sprint PCS or their respective Related Parties
in the telecommunications business. Except as provided in Section 17.15.5, an
assignment does not release the assignor from its obligations under this
agreement unless the other party to this agreement consents in writiri_2 in
advance to the assignment and expressly grants a release to the assignor.
Except as provided in Section 17.15.5, Sprint PCS must not assign this
agreement to any entity that does not also own the License covering the Service
Area directly or indirectly through a Related Party. Manager must not assign
this agreement to any entity (including a Related Party), unless such entity
assumes all rights and obligations under the Services Agreement, the Trademark
License Agreements and any related agreements.
17.15.2 ASSIGNMENT RIGHT OF MANAGER TO FINANCIAL LENDER. If Manager is
no longer able to satisfy its financial obligations and other duties, then
Manager has the right to assign its obligations and rights under this agreement
to its Financial Lender, if:
(a) Manager or Financial Lender provides Sprint PCS at least 10 days
advance written notice of such assignment;
(b) Financial Lender cures or commits to cure any outstanding material
breach of this agreement by Manager prior to the end of any applicable cure
period. If Financial Lender fails to make a timely cure then Sprint PCS may
exercise its rights under Section 11;
49
(c) Financial Lender agrees to serve as an interim trustee for the
obligations and duties of Manager under this agreement for a period not to
exceed 180 days. During this interim period, Financial Lender must identify
a proposed successor to assume the obligations and rights of Manager under
this agreement;
(d) Financial Lender assumes all of Manager's rights and obligations
under the Services Agreement, the Trademark License Agreements and any
related agreements; and
(e) Financial Lender provides to Sprint PCS advance written notice of
the proposed successor to Manager that Financial Lender has identified
("SUCCESSOR NOTICE"). Sprint PCS may give to Financial Lender written
notice of Sprint PCS' decision whether to consent to such proposed
successor within 30 days after Sprint PCS' receipt of the Successor Notice.
Sprint PCS may not unreasonably withhold such consent, except that Sprint
PCS is not required to consent to a proposed successor that:
(i) has, in the past, materially breached prior agreements with
Sprint PCS or its Related Parties;
(ii) is a significant competitor of Sprint PCS or its Related
Parties in the telecommunications business;
(iii) does not meet Sprint PCS' reasonable credit criteria;
(iv) fails to execute an assignment of all relevant documents
related to this agreement including the Services Agreement and the
Trademark License Agreements; or
(v) refuses to assume the obligations of Manager under this
Agreement, the Services Agreement, the Trademark License Agreements
and any related agreements.
If Sprint PCS fails to provide a response to Financial Lender within 30
days after receiving the Successor Notice, then the proposed successor is deemed
rejected. Any Financial Lender disclosed on the Build-out Plan on Exhibit 2.1 is
deemed acceptable to Sprint PCS.
17.15.3 CHANGE OF CONTROL RIGHTS. If there is a Change of Control of
Manager, then:
(a) Manager must provide to Sprint PCS advance written notice
detailing relevant and appropriate information about the new ownership
interests effecting the Change of Control of Manager.
(b) Sprint PCS must provide to Manager written notice of its decision
whether to consent to or reject the proposed Change of Control within 30
days after its receipt of such notice. Sprint PCS may not unreasonably
withhold such consent, except that Sprint PCS is not required to consent to
a Change of Control in which:
50
(i) the final controlling entity or any of its Related Parties
has in the past materially breached prior agreements with Sprint PCS
or its Related Parties;
(ii) the final controlling entity or any of its Related Parties
is a significant competitor of Sprint PCS or its Related Parties in
the telecommunications business;
(iii) the final controlling entity does not meet Sprint PCS'
reasonable credit criteria;
(iv) the final controlling entity fails to execute an assignment
of all relevant documents related to this agreement including the
Services Agreement and the Trademark License Agreements; or
(v) the final controlling entity or its Related Parties refuse to
assume the obligations of Manager under this agreement.
(c) In the event that Sprint PCS provides notice that it does not
consent to the Change of Control, Manager is entitled to either:
(i) contest such determination pursuant to the dispute resolution
procedure in Section 14; or
(ii) abandon the proposed Change of Control.
(d) Nothing in this agreement requires Sprint PCS' consent to:
(i) a public offering of Manager that does not result in a Change
of Control (i.e., a shift from one party being in control to no party
being in control is not a Change of Control); or
(ii) a recapitalization or restructuring of the ownership
interests of Manager that Manager determines is necessary to:
(A) facilitate the acquisition of commercial financing and
lending arrangements that will support Manager's operations and
efforts to fulfill its obligations under this agreement; and
(B) that does not constitute a Change of Control.
(e) "CHANGE OF CONTROL" means a situation where in any one transaction
or series of related transactions occurring during any 365-day period, the
ultimate parent entity of the Manager changes. The ultimate parent entity
is to be determined using the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 rules. A Change of Control does not occur if:
(i) a party changes the form of its organization without
materially changing their ultimate ownership (e.g., converting from a
limited partnership to a limited liability company); or
51
(ii) one of the owners of the party on the date of this agreement
or on the date of the closing of Manager's initial equity offering for
purposes of financing its obligations under this agreement ultimately
gains control over the party, unless such party is a significant
competitor of Sprint PCS or Sprint PCS' Related Parties in the
telecommunications business.
17.15.4 RIGHT OF FIRST REFUSAL. Notwithstanding any other provision in
this agreement, Manager grants Sprint PCS the right of first refusal described
below. If Manager determines it wishes to sell an Offered Interest, upon
receiving any Offer to purchase an Offered Interest, Manager agrees to promptly
deliver to Sprint PCS an Offer Notice. The Offer Notice is deemed to constitute
an offer to sell to Sprint PCS, on the terms set forth in the Offer, all but not
less than all of the Offered Interest. Sprint PCS will have a period of 60 days
from the date of the Offer Notice to notify Manager that it agrees to purchase
the Offered Interest on such terms. If Sprint PCS timely agrees in writing to
purchase the Offered Interest, the parties will proceed to consummate such
purchase not later than the 180th day after the date of the Offer Notice. If
Sprint PCS does not agree within the 60-day period to purchase the Offered
Interest, Manager will have the right, for a period of 120 days after such 60th
day, subject to the restrictions set forth in this Section 17, to sell to the
person or entity identified in the Offer Notice all of the Offered Interest on
terms and conditions no less favorable to Manager than those set forth in the
Offer. If Manager fails to sell the Offered Interest to such person or entity on
such terms and conditions within such 120-day period, Manager will again be
subject to the provisions of this Section 17.15.4 with respect to the Offered
Interest.
17.15.5 TRANSFER OF SPRINT PCS NETWORK. Sprint PCS may sell, transfer
or assign the Sprint PCS Network or any of the Licenses, including its rights
and obligations under this agreement, the Services Agreement and any related
agreements, to a third party without Manager's consent so long as the third
party assumes the rights and obligations under this agreement and the Services
Agreement. Manager agrees that Sprint PCS and Sprint PCS' Related Parties will
be released from any and all obligations under and with respect to any and all
such agreements upon such sale, transfer or assignment in accordance with this
Section 17.15.5, without the need for Manager to execute any document to effect
such release.
17.16 PROVISION OF SERVICES BY SPRINT SPECTRUM. As described in the
Recitals, the party or parties to this agreement that own the Licenses are
referred to in this agreement as "SPRINT PCS." Sprint Spectrum will provide most
or all of the services required to be provided by Sprint PCS under this
agreement on behalf of Sprint PCS, other than the services to be rendered by
Manager. For example, Sprint Spectrum is the party to the contracts relating to
the national distribution network, the roaming and long distance services, and
the procurement arrangements. Accordingly, Sprint PCS and Manager will deal with
Sprint Spectrum to provide many of the attributes of the Sprint PCS Network.
17.17 NUMBER PORTABILITY. Manager understands that the manner in which
customers are assigned to the Service Area Network could change as telephone
numbers become portable without any relation to the service area in which they
are initially activated. To the extent the relationship between NPA-NXX and the
52
Service Area changes, Sprint PCS will develop an alternative system to attempt
to assign customers who primarily live and work in the Service Area to the
Service Area. The terms of this agreement will be deemed to be amended to
reflect the new system that Sprint PCS develops.
17.18 DISCLAIMER OF AGENCY. Neither party by this agreement makes the other
party a legal representative or agent of the party, nor does either party have
the right to obligate the other party in any manner, except if the other party
expressly permits the obligation by the party or except for provisions in this
agreement expressly authorizing one party to obligate the other.
17.19 INDEPENDENT CONTRACTORS. The parties do not intend to create any
partnership, joint venture or other profit-sharing arrangement, landlord-tenant
or lessor-lessee relationship, employer-employee relationship, or any other
relationship other than that expressly provided in this agreement. Neither party
to this agreement has any fiduciary duty to the other party.
17.20 EXPENSE. Each party bears the expense of complying with this
agreement except as otherwise expressly provided in this agreement. The parties
must not allocate any employee cost or other cost to the other party, except as
otherwise provided in the Program Requirements or to the extent the parties
expressly arising in advance to the allocation.
17.21 GENERAL TERMS.
(a) This agreement is to be interpreted in accordance with the
following rules of construction:
(i) The definitions in this agreement apply equally to both the
singular and plural forms of the terms defined unless the context
otherwise requires.
(ii) The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation
(iii) All references in this agreement to Sections and Exhibits
are references to Sections of, and Exhibits to, this agreement, unless
otherwise specified; and
(iv) All references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time
to time (and, in the case of a statute or regulation, to any
corresponding provisions of successor statutes or regulations), unless
the context otherwise requires.
(b) Any reference in this agreement to a "day" or number of "days"
(without the explicit qualification of "BUSINESS") is a reference to a
calendar day or number of calendar days. If any action or notice is to be
taken or given on or by a particular calendar day, and the calendar day is
not a Business Day, then the action or notice may be taken or given on the
next Business Day.
17.22 CONFLICTS WITH OTHER AGREEMENTS. The provisions of this Management
Agreement govern over those of the Services Agreement if the provisions
contained in this agreement conflict with analogous provisions in the Services
53
Agreement. The provisions of each Trademark License Agreement governs over those
of this agreement if the provisions contained in this agreement conflict with
analogous provisions in a Trademark License Agreement.
17.23 SURVIVAL UPON TERMINATION. The provisions of Sections 10, 11.4, 11.5,
11.6. 12.2, 13, 14, 16 and 17 of this agreement will survive any termination of
this agreement.
17.24 ANNOUNCED TRANSACTION. print Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership have
executed a Restructuring and Merger Agreement and related agreements that
provide for restructuring the ownership of Sprint Spectrum L.P., SprintCom,
Inc., PhillieCo Partners 1, L.P., and Cox Communications PCS, L.P. Upon
consummation of the transactions contemplated by those agreements, Sprint would
control each of the four entities. While Sprint and Sprint PCS anticipate the
proposed transactions will be consummated, there can be no assurances.
17.25 ADDITIONAL TERMS AND PROVISIONS. Certain additional and supplemental
terms and provisions of this agreement, if any, are set forth in the Addendum to
Sprint PCS Management Agreement attached hereto and incorporated herein by this
reference. Manager represents and warrants that the Addendum also describes all
existing contracts and arrangements (written or verbal) that relate to or affect
the rights of Sprint PCS or Sprint under this agreement (e.g., agreements
relating to long distance telephone services (Section 3.4) or backhaul and
transport services (Section 3.7)).
17.26 MASTER SIGNATURE PAGE. Each party agrees that it will execute the
Master Signature Page that evidences such party's agreement to execute, become a
party to and be bound by this agreement, which document is incorporated herein
by this reference.
17.27 AGENT AUTHORIZATION. Because of the close operational relationship
between the parties listed together below, each entity authorizes the other
entity to act on its behalf in every capacity under this agreement: (a)
WirelessCo, L.P. and Sprint Spectrum L.P.; (b) Cox PCS License, L.L.C. and Cox
Communications PCS, L.P.; (e) APC PCS, LLC and American PCS Communications, LLC;
and (d) PhillieCo, L.P. and PhillieCo Partners I, L.P.
54
SPRINT PCS
MANAGEMENT AGREEMENT
BETWEEN
WIRELESSCO, L.P.,
SPRINTCOM, INC.
SPRINT SPECTRUM L.P.
AND
BRIGHT PERSONAL COMMUNICATIONS
SERVICES, LLC
DATED AS OF OCTOBER 13, 1999
CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of This Agreement Which Have been Redacted are Marked
With Brackets ("[***]"). The Omitted Material has been Filed Separately with The
Securities and Exchange Commission.
ADDENDUM I
TO
SPRINT PCS MANAGEMENT AGREEMENT
Manager: Bright Personal Communications Services, LLC
Service Area: Battle Creek, MI BTA #33
(Service Area is limited. Reference Exhibit 2.1 for coverage
description.)
Benton Harbor, MI BTA #39
(Service Area is limited. Reference Exhibit 2.1 for
coverage description.)
Dayton-Springfield, OH (Mercer County) BTA #106
Elkhart, IN BTA #126
Fort Wayne, IN BTA #155
Kalamazoo, MI BTA #223
(Service Area is limited. Reference Exhibit 2.1 for
coverage description.)
Kokomo-Logansport, IN BTA #233
Findlay-Tiffin, OH BTA #143
Lima, OH BTA #255
Marion, IN BTA #280
Michigan City-La Porte, IN BTA #294
(Service Area is limited. Reference Exhibit 2.1 for
coverage description.)
South Bend-Mishawaka, IN BTA #424
Toledo, OH BTA #444
(Service Area is limited. Reference Exhibit 2.1 for
coverage description.)
This Addendum contains certain additional and supplemental terms and
provision of that certain Sprint PCS Management Agreement (the "Management
Agreement") entered into contemporaneously with and by the same parties as this
Addendum. The terms and provisions of the Addendum control, supersede and amend
any conflicting terms and provisions contained in the Management Agreement.
Except for express modification made in this Addendum, the Management Agreement
continues in full force and effect.
Capitalized terms used and not otherwise defined in this Addendum have
the meaning ascribed to them in the Schedule of Definitions. Section and Exhibit
references are to Sections and Exhibits of the Management Agreement unless
otherwise noted.
The Management Agreement is modified as follows:
1. Program Requirements. Section 1.2 of the Agreement is modified by
the addition of the introductory phrase "Subject to Section 9.2 of this
Agreement," to the first sentence of the Section.
1
[***]- CONFIDENTIAL TREATMENT REQUESTED
2. Financing. (a) The word "and" is inserted between the words
"thereto" and "before" in the last sentence of Section 1.7.
(b) The following paragraph is added at the end of Section 1.7:
Sprint PCS agrees to propose modifications to the Management
Agreement, and perhaps to the Schedule of Definitions, the Services
Agreement, the Sprint Trademark and Service Mark License Agreement,
and the Sprint Spectrum Trademark and Service Mark License Agreement,
that will enhance Manager's ability to obtain financing for the
Service Area Network. Sprint PCS will not be required to offer the
Manager subsequent modifications offered or agreed to with Other
Managers subsequent to the initial set of modifications.
3. Distribution of Fixed Wireless Local Loop. The following sentence
is added at the end of Section 2.4:
In any geographic area within the Service Area in which a member of
Manager operates as an incumbent local exchange carrier as of the date
of this agreement, Manager may designate such member as the exclusive
distributor of the fixed wireless local loop product in the territory
served by such local exchange carrier.
4. Asset Transfer. Manager may purchase from Sprint PCS under the
terms of the Asset Purchase Agreement, substantially in the form attached to
this Addendum as Exhibit 2.6, the assets listed on Exhibit A to such agreement.
The parties recognize and acknowledge that the exhibits to the Asset Purchase
Agreement will be completed by Sprint PCS prior to the closing under such
agreement, and that a due diligence investigation will be undertaken and
completed by Manager prior to its determination of whether to make the asset
transfer contemplated under Section 2.6 of the agreement. The purchase price for
the assets under the Asset Purchase Agreement is estimated by the parties to be
[***] for sites for which there is an executed lease as of the closing of the
asset transfer, with the exception of Henry County site, and [***] for sites for
which there is not an executed lease as of the closing of the asset transfer.
5. Long Distance Pricing. (a) The first sentence of Section 3.4 is
deleted in its entirety and replaced by the following language:
Manager must purchase long-distance telephony services from Sprint
through Sprint PCS both (i) to provide long-distance telephony service
to users of the Sprint PCS Network and (ii) to connect the Service Area
Network with national platforms used by Sprint PCS to provide services
to Manager under the agreement and/or the Services Agreement. Sprint
will bill Sprint PCS for such services rendered to Sprint PCS, Manager
and all Other Managers, and in turn, Sprint PCS will bill Manager for
the services used by Manager. Manager will be charged the same price
for such long-distance service as Sprint PCS is charged by Sprint
(excluding interservice area long-distance travel rates) plus an
additional administrative fee to cover Sprint PCS' processing costs.
2
(b) The following sentence is added as a second paragraph in Section
3.4: "Manager may not resell the long-distance telephony services acquired from
Sprint under this Section 3.4."
6. Voluntary Resale of Products and Services. Section 3.5.2 is
modified by amending the second sentence of the second paragraph in its entirety
to read as follows: "If Manager wants handsets of subscribers of resellers with
NPA-NXXs of Manager to be activated, Manager must agree to comply with the terms
of the program, including its pricing provisions."
7. Right of Last Offer. Section 3.7 is modified by adding the
following language: "(other than backhaul services relating to national platform
and IT application connections, which Manager must purchase from Sprint)" both
between (i) "Service Area Network" and "if Manager decides to use" in the first
sentence of the first paragraph and (ii) "for these services" and "and the
agreement was not made" in the first sentence of the second paragraph.
8. Existing Service Offerings. Sprint PCS agrees that the current
local exchange, Internet access, long-distance, paging, cable television,
satellite delivered television and Signaling Transfer Points for Signaling
Switching 7 service offerings of Manager or its Related Parties, as currently
branded, do not violate any provision of the Management Agreement. This approval
does not, however, represent approval of any changes to such offerings that do
not comply with the Management Agreement.
9. Deployment of Cellular by Manager's Related Parties. Neither
Manager, nor any of its Related Parties who do not offer cellular service as of
the date of this agreement, may market or sell any cellular products or
services. Manager's Related Parties who have the ability to control, either
through the ownership of voting securities or otherwise, the management or
operations of an entity that offers cellular service as of the date of this
agreement may permit such entity to continue to provide such service, subject to
the following terms and conditions:
(a) the geographic scope of the cellular service will not expand
outside of the following RSAs:
RSA #2 Ohio, Minority Owner: Sycamore Telephone Company
RSA #5 Ohio Minority Owners: Sycamore Telephone Company and
Benton Ridge Telephone Company
RSQ #6 Ohio, Minority Owner: Doylestown Telephone Company
(b) unless earlier approved in writing by Sprint PCS, Manager's
Related Parties will not "substantially convert" (as defined below) any cellular
businesses to digital wireless technology prior to the date that is three years
after the date of this agreement;
(c) the management of Manager and its Related Parties will be
separate and distinct, except that the chief executive officer (or such
officer's functional equivalent in title or responsibility) may be a part of the
executive management for Manager and its Related Parties;
(d) the sales and marketing personnel for Manager's Related Party
that provides cellular service cannot be a part of the sales and marketing
4
personnel of the Manager and vice versa; additionally, the Manager's sales and
marketing personnel cannot disclose Sprint PCS proprietary information to
parties other than the Manager without prior consent from Sprint PCS;
(e) Manager and its Related Party that provides cellular service
will at all times have separate agreements with their distributors.
As used in this paragraph, "substantially convert" means to offer, sell or
distribute any wireless service that uses a digital or dual mode handset that
utilizes digital technology deployed on cellular licenses and frequencies within
the Service Area. The prohibition contained in this paragraph does not prohibit
the use of digital technology for the delivery or provisioning of analog
cellular services that use analog handsets, nor does it prohibit Manager from
offering dual mode handsets to cellular customers that send and receive (i)
analog cellular products and services utilizing cellular licenses and
frequencies and (ii) digital Sprint PCS Products and Services and Manager's
Products and Services.
10. Implementation of Pricing Plans. Section 4.4 of the Agreement is
modified by the inclusion of the following language between the first and second
sentences of the last paragraph of that Section (the first sentence ending with
the phrase "and applicable time frames required for Sprint PCS to implement the
proposed pricing plan" and the second sentence beginning with the phrase
"Manager agrees to promptly reimburse Sprint PCS"):
Manager shall have five (5) Business Days after the receipt of the
Sprint PCS estimate to notify Sprint PCS of its desire to have such
proposed pricing plan implemented. If Manager fails to notify Sprint
PCS within five (5) Business Days of such desire to implement,
11. Required Advertising Expenditures. The following sentence is added
at the end of Section 6.2: "Any advertising required of Manager will be
commercially reasonable."
12. Non-termination of Agreement. The following language is added at
the end of Section 11.5.3 and Section 11.6.4: "but such action does not
terminate this agreement."
13. Term of Confidentiality. In both Section 12.2(a) of the agreement
and Section 5.2(a) of the Services Agreement, 3 years is changed to 5 years.
14. Sitting Compliance Audits. Section 16.1 of the agreement is
modified by the deletion of the phrase "Every six months" found in sentence 3 of
paragraph 2, and its replacement with the phrase "Every 12 months".
15. Regulatory Notices. Section 16.4 of the Agreement regarding
regulatory notices is modified by the deletion of the phrase "within 2 Business
Days" found in the first sentence of this Section and its replacement with the
phrase "within 5 Business Days".
16. Force Majeure. Section 17.9.3, Force Majeure, is modified by
addition of the following sentence:
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For the purposes of this Section, an event results primarily from
the actions of a governmental authority, vendor or other act
beyond the control of a party if, and only if, the event was not
precipitated by a finally adjudged breach of contract, tortuous,
or other wrongful act of the party claiming such excuse.
17. Binding Effect. Section 17.11 of the Agreement is modified by the
addition of the following sentence:
The parties further intend that, unless expressly provided in
this agreement, its exhibits, attachments or addenda, the
covenants not to compete and other restrictions on the sale of
goods or services contained within those documents are not
binding on the officers, directors, employees, agents,
shareholders or members of Manager or its Related Parties.
18. Member Transfers. Notwithstanding anything to the contrary herein,
any member of Manager may assign its rights and obligations under Manager's
Operating Agreement to another member of Manager, in whole or in part, without
Sprint PCS' consent if such transfer does not result in a "Change in Control" of
Manager, as defined in Section 17.15.3(e) of the agreement.
19. Announced Transactions. Section 17.24 is deleted in its entirety.
20. Additional Terms and Provisions. The phrase "the Addendum also
describes" is deleted from the second sentence of Section 17.25, and the
following language is inserted at the end of that second sentence: "have been
disclosed verbally or in writing to Sprint PCS, and photocopies of any such
written agreements will be delivered to Sprint PCS upon its request".
21. Federal Contractor Compliance. A new Section 17.28, the text of
which is attached as Exhibit A, is added and incorporated by this reference.
22. Year 2000 Compliance. The following Section 17.29 is added:
17.29 Year 2000 Compliance. Sprint PCS and Manager each
separately represents and warrants that any system or equipment
acquired, operated or designated by it for use in the Service Area
Network or for use to support the Service Area Network, including
(without limitation) billing, ordering and customer service systems,
will be capable of correctly processing and receiving date data, as
well as properly exchanging date data with all products (for example,
hardware, software and firmware) with which the Service Area Network
is designed to be used, and will not malfunction or fail to function
due to an inability to process correctly date data in conformance with
Sprint PCS requirements for "Year 2000 Compliance." If the Service
Area Network or any system used to support the Service Area Network
fails to operate as warranted due to defects or failures in any system
or equipment selected by Manager (including systems or equipment of
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third party vendors and subcontractors selected by Manager rather than
by Sprint PCS) Manager will, at its own expense, make the repairs,
replacements or upgrades necessary to correct the failure and provide
a Year 2000 Compliant Service Area Network. If the Service Area
Network or any system used to support the Service Area Network fails
to operate as warranted due to defects or failures in any systems or
equipment selected by Sprint PCS (including systems or equipment of
third party vendors and subcontractors that Sprint PCS selects and
requires Manager to use), Sprint PCS will, at its own expense, make
the repairs, replacements or upgrades necessary to correct the failure
and provide a Year 2000 Compliant Service Area Network.
"Year 2000 Compliance" means the functions, calculations, and
other computing processes of the Service Area Network (collectively
"Processes") that perform and otherwise process, date-arithmetic,
display, print or pass date/time data in a consistent manner,
regardless of the date in time on which the Processes are actually
performed or the dates used in such data or the nature of the
date/time data input is affected by leap years. To the extent any part
of the Services Area Network is intended to be used in combination
with other software, hardware or firmware, it will properly exchange
date/time data with such software, hardware or firmware. The Service
Area Network will accept and respond to two-digit year-date input,
correcting or supplementing as necessary, and store, print, display or
pass date/time data in a manner that is unambiguous as to century. No
date/time data will cause any part of the Service Area Network to
perform an abnormally ending routine or function within the Processes
or generate incorrect final values or invalid results.
23. Services Agreement with Horizon Personal Communications, Inc. If
that certain Services Agreement, dated September __, 1999, between Manager and
Horizon Personal Communications, Inc. (the "Horizon Services Agreement") is
terminated for any reason, then Manager will obtain all Available Services from
Sprint PCS under the Services Agreement.
24. Service Period. Section 2.1.3 of the Services Agreement is
modified by addition of the following phrase to the first sentence of such
Section: "Except as otherwise provided in Section 3.2 of this agreement".
25. Payment of Fees Under Services Agreement. The second sentence of
Section 3.1 of the Services Agreement is deleted in its entirety and replaced by
the following two sentences:
Except with respect to fees paid for billing-related services, the
monthly charge for any fees based on the number of subscribers of the
Service Area Network will be determined based on the number of
subscribers as of the 15th day of the month for which the charge is
being calculated. With respect to fees paid for billing-related
services, the monthly charge for any fees based on the number of
subscribers will be based on the number of gross activations in the
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month for which the charge is being calculated plus the number of
subscribers of the Service Area Network on the last day of the prior
calendar month.
26. Ownership of Spectrum. (a) Sprint PCS represents and warrants that
on the date of the agreement it owns licenses to provide wireless services for
at least 20 MHz of spectrum in the following BTAs within the Service Area:
Battle Creek, MI; Kalamazoo, MI; Kokomo-Logansport, IN; Findlay-Tiffin, OH;
Lima, OH; Marion, IN; and Toledo, OH.
(b) Sprint PCS represents and warrants that on the date of the
agreement it owns licenses to provide wireless services for 10 MHz of spectrum
in the following BTAs within the Service Area: Fort Wayne, IN and South
Bend-Mishawaka, IN.
27. Amendment to Trademark License Agreement. The following sentence
is added at the end of Section 14.1 of each of the Trademark Licenses
Agreements:
Notwithstanding anything to the contrary contained herein, Licensor
shall not withhold its consent to an assignment of this agreement to a
party to whom Sprint PCS has approved the assignment of the Management
Agreement.
28. Branding Guidelines. Manager will comply with the Sprint PCS
Network Partner guidelines attached hereto as Exhibit B.
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Exhibit A
Section 17.28. Federal Contractor Compliance. (1) The Manager will not
discriminate against any employee or applicant for employment because of race,
color, religion, sex, or national origin. The Manager will take affirmative
action to ensure that applicants are employed, and that employees are treated
during employment without regard to their race, color, religion, sex, or
national origin. Such action shall include, but not be limited to the following:
Employment, upgrading, demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of compensation;
and selection for training, including apprenticeship. The Manager agrees to post
in conspicuous places, available to employees and applicants for employment,
notices to be provided setting forth the provisions of this nondiscrimination
clause.
(2) The Manager will, in all solicitations or advertisements for
employees placed by or on behalf of the Manager, state that all qualified
applicants will receive considerations for employment without regard to race,
color, religion, sex, or national origin.
(3) The Manager will send to each labor union or representative of
workers with which he has a collective bargaining agreement or other contract or
understanding, a notice to be provided advising the said labor union or workers'
representatives of the Manager's commitments under this section, and shall post
copies of the notice in conspicuous places available to employees and applicants
for employment.
(4) The Manager will comply with all provisions of Executive Order
11246 of September 24, 1965, and of the rules, regulations, and relevant orders
of the Secretary of Labor.
(5) The Manager will furnish all information and reports required by
Executive Order 11246 of September 24, 1965, and by rules, regulations, and
orders of the Secretary of Labor, or pursuant thereto, and will permit access to
his books, records, and accounts by the administering agency and the Secretary
of Labor for purposes of investigation to ascertain compliance with such rules,
regulations, and orders.
(6) In the event of the Manager's noncompliance with the
nondiscrimination clauses of this contract or with any of the said rules,
regulations, or orders, this contract may be canceled, terminated, or suspended
in whole or in part and the Manager may be declared ineligible for further
Government contracts or federally assisted construction contracts in accordance
with procedures authorized in Executive Order 11246 of September 24, 1965, and
such other sanctions may be imposed and remedies invoked as provided in
Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of
the Secretary of Labor, or as otherwise provided by law.
(7) The Manager will include the portion of the sentence immediately
preceding paragraph (1) and the provisions of paragraphs (1) through (7) in
every subcontract or purchase order unless exempted by rules, regulations, or
orders of the Secretary of Labor issued pursuant to section 204 of Executive
Order 11246 of September 24, 1965, so that such provisions will be binding upon
each subcontractor or vendor. The Manager will take such action with respect to
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any subcontract or purchase order as the administering agency may direct as a
means of enforcing such provisions, including sanctions for noncompliance.
Provided, however, that in the event a Manager becomes involved in, or is
threatened with, litigation with a subcontractor or vendor as a result of such
direction by the administering agency the Manager may request the United States
to enter into such litigation to protect the interests of the United States.
(8) In consideration of contracts with Sprint PCS, the Manager agrees
to execute the Certificate of Compliance attached hereto as Attachment I and
further agrees that this certification shall be part of each contract between
Sprint PCS and Manager. The Manager will include Attachment I in every
subcontract or purchase order, so that such provisions will be binding upon each
subcontractor.
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Attachment I
CERTIFICATE OF COMPLIANCE WITH
FEDERAL REGULATIONS
In consideration of contracts with SPRINT SPECTRUM L.P., the undersigned
"contractor", "vendor" or "consultant" agrees to the following and further
agrees that this Certification shall be a part of each purchase order, supply
agreement, or contract between SPRINT SPECTRUM L.P. and the undersigned.
1. Equal Opportunity
Executive Order 11246 is herein incorporated by reference.
2. Affirmative Action Compliance
If undersigned contract has 50 or more employees and if this contract is
for $50,000 or more, Contractor shall develop a written Affirmative Action
Compliance Program for each of its establishments, as required by rules and
regulations of the Secretary of Labor (41 CFR 60-1 and 60-2).
3. Affirmative Action for Special Disabled and Vietnam Era Veterans
If this contract exceeds $10,000, the undersigned Contractor certifies that
the Contractor does not discriminate against any employee or applicant
because the person is a special disabled or Vietnam Veteran and complies
with the rules, regulations and relevant orders of the Secretary of Labor
issued pursuant to the Vietnam Veterans Readjustment Assistance Act of
1972, as amended.
Contractor hereby represents that it has developed and has on file, at each
establishment, affirmative action programs for Special Disabled and Vietnam
Era Veterans required by the rules and regulations of the Secretary of
Labor (41 CFR 60-250).
4. Affirmative Action for Handicapped Workers
If this contract exceeds $2,500, the undersigned Contractor certifies that
the Contractor does not discriminate against any employee or applicant
because of physical or mental handicap and complies with the rules,
regulations and relevant orders of the Secretary of Labor issued under the
Rehabilitation Act of 1973, as amended.
Contractor hereby represents that it has developed and has on file, at each
establishment, affirmative action programs for Handicapped Workers required
by the rules and regulations of the Secretary of Labor (41 CFR 60-741).
5. Employer Information Report (EEO-1 Standard Form 100)
If undersigned Contractor has 50 or more employees and if this contract is
for $10,000 or more, Contractor shall complete and file government Standard
Form 100, Equal Employment Opportunity Employer Information Report EEO-1,
in accordance with instructions contained therein.
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6. Compliance Review
The undersigned Contractor certifies that it has not been subject to a
Government equal opportunity compliance review. If the Contractor has been
reviewed, that review occurred on ___________________ (date).
7. Utilization of Small Businesses, Small Disadvantaged Businesses, and
Women-Owned Small Business
It is the policy of SPRINT SPECTRUM L.P., consistent with Federal
Acquisition Regulations (FAR 52.219-8 and FAR 52.219-13), that small
business concerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals, and women-owned businesses
shall have the maximum practicable opportunity to participate in performing
subcontracts under Government contracts for which SPRINT SPECTRUM L.P. is
the Government's Prime Contractor. SPRINT SPECTRUM L.P. awards contracts to
small businesses to the fullest extent consistent with efficient prime
contract performance. The Contractor agrees to use its best efforts to
carry out this policy in the award of its subcontract to the fullest extent
consistent with the efficient performance of this contract.
Contractor hereby represents that it___ is ___ is not a small business, ___
is ___ is not a small business owned and controlled by socially and
economically disadvantaged individuals, and ___ is ___ is not a small
business controlled and operated as a women-owned small business as defined
by the regulations implementing the Small Business Act.
If the answer to any of the above is in the affirmative, Contractor will
complete SPRINT SPECTRUM L.P. Small/Minority/Women Owned Business Self
Certification Form. This form is available from Mr. Ron Gier, Sprint PCS,
4900 Main Street, Kansas City, Missouri 64112.
8. Certification of Nonsegregated Facilities
If this contract is expected to exceed $10,000, the undersigned Contractor
certifies as follows:
The Contractor certifies that the Contractor does not or will not maintain
or provide for its employees any segregated facilities at any of its
establishments, and that it does not and will not permit its employees to
perform services at any location, under its control, where segregated
facilities are maintained. The Contractor agrees that a breach of this
Certification is a violation of the Equal Opportunity provision of this
contract. As used in this Certification, the term "segregated facilities"
means any waiting rooms, work areas, rest rooms and wash rooms, restaurants
and other eating areas, time clocks, locker rooms and other storage or
dressing areas, parking lots, drinking fountains, recreation or
entertainment areas, transportation, and housing facilities provided for
employees that are segregated by explicit directive or are in fact
segregated on the basis of race, color, religion, or national origin,
because of habit, local custom, or otherwise. Contractor further agrees
that (except where it has obtained identical certifications from proposed
subcontracts for specific time periods) it will obtain identical
certifications from proposed subcontractors prior to the award of
subcontracts exceeding $10,000 that are not exempt from the provisions of
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the Equal Opportunity Clause; and that it will retain such certification in
its files.
9. Clean Air and Water
The undersigned Contractor certifies that any facility to be used in the
performance of this contract is not listed on the Environmental Protection
Agency List of Violating Facilities.
The undersigned Contractor agrees to immediately notify SPRINT SPECTRUM
L.P., immediately upon the receipt of any communication from the
Administrator or a designee of the Environmental Protection Agency
indicating that any facility that the Contractor proposes to use for the
performance of the contract is under consideration to be listed on the EPA
List of Violating Facilities. SPRINT SPECTRUM L.P. includes this
certification and agreement pursuant to FAR 52-223-1(c) which requires
including such paragraph (c) in every nonexempt subcontract.
Contractor:
________________________________________
Company Name
________________________________________
Address
________________________________________
City State Zip
By: _________________________________
Name: _________________________
Title: ________________________
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