EXHIBIT 10.4
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT PCS MANAGEMENT AGREEMENT is made as of November 5, 1999,
between Sprint Spectrum L.P., a Delaware limited partnership, WirelessCo, L.P.,
a Delaware limited partnership, APC PCS, LLC, a Delaware limited liability
company, PhillieCo, L.P., a Delaware limited partnership, and Shenandoah
Personal Communications Company, a Virginia corporation (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.
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
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.
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
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
obligations 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;
(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
2.4.
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
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 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 2.6.
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 Manager'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;
(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 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;
(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
(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
(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
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
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 being 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.
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 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 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 t lower of the Operational Level of Sprint PCS or the
operational level contemplated by the Sprint PCS Technical Program Requirements;
or
(ii) Sprint PCS 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
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 8.1.
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;
(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
Sprint 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 changes 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 change 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.
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 fully 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.
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
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:
(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
(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 non-renewal
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
non-renewal 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;
(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:
(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
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 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;
(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.
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.
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
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 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 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 7.1(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;
(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 T1 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.
(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
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
(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.
(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
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 Indemnitor 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
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,
Indemnitee 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. Indemnitee 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
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.
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
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 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, rule-making 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 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.
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 parties' 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 parties 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
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 non-compliance 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.
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 writing 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;
(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:
(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 anyone
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
(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
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 agree 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
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. Sprint 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 I, 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.; (c) APC PCS, LLC and American PCS Communications, LLC;
and (d) PhillieCo, L.P. and PhillieCo Partners I, L.P.
Schedule of Definitions
This Schedule of Definitions is the "Schedule of Definitions" referred to
in and incorporated by reference under the Management Agreement, Services
Agreement, and Trademark License Agreements (as such agreements are defined
below). Whenever the phrase "this agreement" is used below, such phrase refers
to the particular agreement under whose terms this Schedule of Definitions is
being applied in that instance. If citations to sections or exhibits of
different agreements are included in a definition, the citation to the
particular agreement under whose terms this Schedule of Definitions is being
applied controls to the exclusion of the citations to different agreements.
The following words and phrases used in this agreement have the following
meanings:
"Addendum" means any addendum attached to this agreement that contains the
amendments to this agreement; such Addendum is expressly incorporated as a part
of this agreement.
"Affiliation Agreement" means any and all of the agreements, known as
Sprint PCS Affiliation Agreements, whereby an affiliate and Sprint PCS and/or
one or more of Sprint PCS' Related Parties agree to the terms and conditions
under which such affiliate will manage the Service Area Network identified in
such agreement, using such Affiliate's own PCS license issued by the FCC and any
documents incorporated by reference in such agreement.
"Agent" has the meaning set forth in Section 3.1 of the Sprint Spectrum
Trademark and Service Mark License Agreement or Section 3.1 of the Sprint
Trademark and Service Mark License Agreement.
"Arbiter" has the meaning set forth in Section 12.1.3 of the Management
Agreement or Section 5.1.3 of the Services Agreement.
"Available Services" means those categories of services listed on Exhibit
2.1.1 to the Services Agreement (as the same may be amended from time to time by
Sprint Spectrum and made available to Manager under the terms of the Services
Agreement).
"Available Services and Fees Schedule" means that schedule set forth on
Exhibit 2.1.1 to the Services Agreement, which sets forth the Available Services
offered from time to time and the fees charged for such Available Services.
"Bankruptcy" means, for the purposes of the Trademark License Agreements,
either a Voluntary Bankruptcy or an Involuntary Bankruptcy.
"Brands" means the Sprint PCS Brands and the Sprint Brands.
"BTA" means a Basic Trading Area for which a Basic Trading Area (BTA)
license is issued by the FCC.
"Build-out Plan" means the plan agreed upon by Manager and Sprint PCS,
along with any modifications and updates to the plan, respecting the
construction and design of the Service Area Network, a copy of which is attached
as Exhibit 2.1 to the Management Agreement.
"Business Day" means a day of the year that banks are not required or
authorized to close in the State of New York.
"Cancelled Service" has the meaning set forth in Section 3.2 of the
Services Agreement.
"CDMA" means code division multiple access.
"Change of Control" has the meaning set forth in Section 17.15.3 of the
Management Agreement.
"Collected Revenues" has the meaning set forth in Section 10.4 of the
Management Agreement.
"Confidential Information" means all Program Requirements, guidelines,
standards, and programs, the technical, marketing, financial, strategic and
other information provided by each party under the Management Agreement,
Services Agreement, and Trademark License Agreements, and any other information
disclosed by one party to the other party pursuant to the Management Agreement,
Services Agreement, and Trademark License Agreements that is not specifically
excluded by Section 12.2 of the Management Agreement. In addition to the
preceding sentence, "Confidential Information" has the meaning set forth in
Section 3.1 of the Sprint Spectrum Trademark and Service Mark License Agreement
or Section 3.1 of the Sprint Trademark and Service Mark License Agreement.
"Controlled Related Party" means the Parent of any Person and each
Subsidiary of such Parent. As used in Section 1.2 and Article 3 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 1.2 and Article
3 of the Sprint Trademark and Service Mark License Agreement, the term
"Controlled Related Party" will also include any Related Party of a Person that
such Person or its Parent can directly or indirectly unilaterally cause to take
or refrain from taking any of the actions required, prohibited or otherwise
restricted by such Section, whether through ownership of voting securities,
contractually or otherwise.
"Default Rate" means the rate per annum (computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as applicable),
compounded monthly, equal to the Prime Rate (adjusted as and when changes in the
Prime Rate occur) plus five percent (5%).
"Disaggregated License" means that portion of the License that Manager may
or is required to purchase under Section 11 of the Management Agreement from
Sprint PCS under certain circumstances, after Sprint PCS' receipt of FCC
approval of the necessary disaggregation and partition, which portion comprises
no less than the amount of spectrum sufficient to operate one duplex CDMA
carrier (including the required guard bands) within the PCS Spectrum, and no
more than 10 MHz of the Spectrum (at Manager's designation) covering the Service
Area, and which includes the frequencies then in use in the Service Area Network
and, if applicable, adjacent frequencies, so long as such frequencies in the
aggregate do not exceed 10 MHz.
"Dispute Notice" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"Dispute Notice Date" has the meaning set forth in Section 12.1.3 of the
Management Agreement or Section 5.1.3 of the Services Agreement.
"Encumbrances" has the meaning set forth in Section 5.1(a) of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 5.1(a) of the
Sprint Trademark and Service Mark License Agreement.
"Entire Business Value" has the meaning set forth in Section 11.7.3 of the
Management Agreement.
"Event of Termination" means any of the events described in Section 11.3
of the Management Agreement. For the purposes of the Sprint Spectrum Trademark
and Service Mark License Agreement only, "Event of Termination" has the meaning
set forth in Section 13.2 of that agreement. For the purposes of the Sprint
Trademark and Service Mark License Agreement only, "Event of Termination" has
the meaning set forth in Section 13.2 of that agreement.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"Financial Lender" means any and all of those commercial and financial
institutions that provide material credit to Manager for the purpose of
assisting Manager with the fulfillment of its obligations and duties under this
agreement.
"fixed wireless local loop" has the meaning set forth in Section 2.4 of
the Management Agreement.
"home service area" means the geographic area within which a customer can
make a local call on the customer's PCS phone (i.e., the customer does not incur
an extra charge).
"Inbound Roaming" means calls placed by a non-Sprint PCS Network customer
on the Sprint PCS Network.
"Indemnitee" and "Indemnitor" have the meanings set forth in Section
13.3.1 of the Management Agreement or Section 6.3.1 of the Services Agreement.
"Initial Term" has the meaning set forth in Section 11.1 of the Management
Agreement.
"Involuntary Bankruptcy" has the meaning set forth in Section 11.3.7 of
the Management Agreement.
"Law" means all laws (statutory or otherwise), ordinances, rules,
regulations, bylaws, Orders and codes of all governmental and regulatory
authorities, whether United States Federal, state or local, which are applicable
to the Sprint PCS Products and Services.
"License" means the PCS license(s) issued by the FCC described on the
Service Area Exhibit to the Management Agreement.
"Licensed Marks" means the trademarks and service marks referred to in the
Recitals section of the Trademark License Agreement under whose terms this
definition is being applied, and such other marks as may be adopted and
established under said agreement from time to time.
"Licensee" has the meaning set forth in the introductory paragraph to the
particular agreement under whose terms this definition is being applied.
"Licensor" has the meaning set forth in the introductory paragraph to the
particular agreement under whose terms this definition is being applied.
"local calling area" means the geographic area within which a customer can
make a local call on the customer's PCS handset without incurring a long
distance charge.
"Loss" means any and all damage, loss, liability, claim, out-of-pocket
cost and expense, including reasonable expenses of investigation and reasonable
attorneys' fees and expenses, but excluding consequential or special damages.
"Management Agreement" means that certain Sprint PCS Management Agreement
executed by Manager and Sprint PCS and any documents incorporated by reference
in said agreement.
"Manager" means the party to this agreement as indicated in the
introductory paragraph of this agreement.
"Manager Management Report" has the meaning set forth in Section 12.1.2 of
the Management Agreement.
"Manager's Products and Services" means all types and categories of
wireless communications services and associated products that are offered by
Manager in the Service Area under Section 3.2 of the Management Agreement.
"Marketing Communications Guidelines" means the guidelines issued by
Sprint or Sprint PCS in accordance with Section 5.2 of the Management Agreement
with respect to the marketing, promotion, advertising, distribution, lease and
sale of Sprint PCS Products and Services, as they may be amended from time to
time by Sprint or Sprint PCS in accordance with the terms of the Trademark
License Agreements.
"Master Signature Page" means the document that the parties to the
Management Agreement, Services Agreement and/or one or more of the Trademark
License Agreements sign to evidence their agreement to execute, become a party
to and be bound by each of the agreements, or parts thereof, listed above the
particular party's signature on such Master Signature Page.
"MFN price" or "Most Favored Nation price" means, with respect to resale,
the best local market price offered to any third party for the purchase of air
time on Manager's network including but not limited to any third party who may
use the air time for its own wireless
communications services or resell the air time, and, with respect to roaming,
the lowest roaming charge of Manager to other wireless carriers when their
customers roam on the Service Area Network.
"MIN" means the 24-bit mobile identification number corresponding to the
7-digit telephone number assigned to the handset, used for both billing and
receiving calls.
"MTA" means a Major Trading Area for which a MTA license is issued by the
FCC.
"New Coverage" means the build-out in the Service Area that is in addition
to the build-out required under the then-existing Build-out Plan, which
build-out Sprint PCS or Manager decides should be built-out.
"Notice Address Schedule" means the schedule attached to the Master
Signature Page that provides the mailing and courier delivery addresses, and the
facsimile number, for giving notices to each of the parties signing the Master
Signature Page. The Notice Address Schedule may include supplemental addresses
that serve as additional or alternate notice addresses for use by the parties in
specifically prescribed situations.
"NPA-NXX" means as follows: "NPA" means numbering plan area, which is the
area code for a telephone number. "NXX" refers to the first three digits of a
telephone number, which identify the specific telephone company central office
that serves that number.
"Offer" means an offer received by Manager to sell substantially all of
the assets comprising or used in connection with the operation and management of
the Service Area Network or any portion of the Service Area Network.
"Offer Notice" means a written notice given by Manager to Sprint PCS that
sets forth in detail the terms and conditions of an Offer and the name and
address of the person or entity making the Offer.
"Offered Interest" means the assets that Manager proposes to sell pursuant
to an Offer.
"Operating Assets" means the assets Manager or its Related Parties owns
and uses in connection with the operation of the Service Area Network, at the
time of termination, to provide the Sprint PCS Products and Services. Operating
Assets does not include items such as furniture, fixtures and buildings that
Manager or its Related Parties use in connection with other businesses. Examples
of Operating Assets include without limitation: switches, towers, cell sites,
systems, records and retail stores.
"Operational Level of Sprint PCS" means the average operational level of
all the service area networks operated by Sprint PCS and its Related Parties
without the use of a manager or affiliate, as measured by Sprint PCS, unless the
operational level, as measured by Sprint PCS, of all of the service area
networks operated by Sprint PCS and its Related Parties without the use of a
manager or affiliate that are contiguous to the Service Area are below the
national average, in which case "Operational Level of Sprint PCS" means the
average operational level of those contiguous service area networks.
"Order" means any order, writ, injunction, decree, judgment, award or
determination of any court or governmental or regulatory authority.
"Other Managers" means any person or entity with which Sprint PCS has
entered into an agreement similar to this agreement or an Affiliation Agreement,
including without limitation an affiliate under an Affiliation Agreement or a
manager under another Management Agreement, under which the person or entity
designs, constructs and manages a service area network and offers and promotes
Sprint PCS Products or Services.
"Outbound Roaming" means calls placed by a Sprint PCS Network customer on
a non-Sprint PCS network.
"Parent" means, with respect to any Person, the ultimate parent entity (as
determined in accordance with the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and the rules and regulations promulgated thereunder) of such Person;
except that if such ultimate parent entity is an individual, the Parent will be
the highest entity in the ownership chain from the ultimate parent entity to and
including such Person that is not an individual.
"parties" means, with respect to the Management Agreement, Sprint PCS and
Manager. For the purpose of the services Agreement only, "parties" means Sprint
Spectrum and Manager. Sprint is not a party to the Management Agreement, except
to the limited extent described on the signature page executed on behalf of
Sprint. For the purpose of the Trademark License Agreements only, "parties"
means Licensor and Licensee.
"PCS" means a radio communication system authorized under the rules for
broadband personal communications services designated as Subpart E of Part 24 of
the FCC's rules, including the network, marketing, distribution, sales, customer
interface and operations functions relating thereto. "PCS Spectrum" means the
range of frequencies that Sprint PCS is authorized to use under the License.
"Permitted Assignee" means any assignee of the rights and obligations of
Licensee pursuant to an assignment consented to in writing by Licensor, in its
sole discretion, in accordance with Section 14.1 of the Sprint Spectrum
Trademark and Service Mark License Agreement or Section 14.1 of the Sprint
Trademark and Service Mark License Agreement, or any subsequent permitted
assignee of any such permitted assignee.
"Person" means any individual, partnership, limited partnership, limited
liability company, corporation, trust, other business association or business
entity, estate, or other entity.
"pops" means the population covered by a license or group of licenses.
Unless otherwise noted, as used in the Management Agreement, pops means the most
recent Rand-McNally Population Survey estimate of the population of a geographic
area.
"Premium and Promotional Items" means all items, including clothing,
memorabilia and novelties, used to display the Licensed Marks for the purpose of
promoting the awareness, sale or image of the Sprint PCS Products and Services;
provided, however, that Premium and
Promotional Items does not include marketing and advertising materials prepared
by Licensee that are subject to the Marketing Communications Guidelines (e.g.
printed materials such as bill stuffers, brochures and similar materials).
"Prime Rate" means the rate announced from time to time by The Chase
Manhattan Bank, or its successor(s), as its prime rate.
"Program Requirements" means the standards, guidelines, plans, policies
and programs established by Sprint PCS from time to time regarding the operation
and management of the Service Area Network and the Sprint PCS business operated
using the Service Area Network, including the Program Requirements set forth in
Sections 4.1, 4.2, 4.3, 7.2 and 8.1 of the Management Agreement. Sprint PCS may
also implement Program Requirements respecting a voluntary resale program, as
defined in Section 3.5.2 of the Management Agreement.
"Purchase Notice" has the meaning set forth in Section 1.2 of Exhibit 11.8
to the Management Agreement.
"Quality Standards" has the meaning set forth in Section 2.1(a) of the
Sprint Spectrum Trademark and Service Mark License Agreement or Section 2.1(a)
of the Sprint Trademark and Service Mark License Agreement.
"Rand-McNally Population Survey" means the most recent population survey
published by Rand-McNally or, if Rand-McNally no longer publishes the surveys,
then the most recent population survey published by any successor organization
to Rand-McNally or, if no such organization exists, an organization selected by
Sprint PCS that provides surveys similar to the Rand-McNally surveys.
"Receiving Party" has the meaning set forth in Section 3.1 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 3.1 of the
Sprint Trademark and Service Mark License Agreement.
"Related Equipment" means customer-controlled equipment for use in
connection with the Sprint PCS Products and Services including telephones,
wireless handsets and related accessories, PCMCIA cards, "smart" cards, PDA's,
PBX's, set-top boxes and data terminals.
"Related Party" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the Person. For purposes of the
Management Agreement, Sprint Spectrum, SprintCom, American PCS Communications,
LLC, PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. will be deemed
to be Related Parties. For purposes of this definition, the term "controls"
(including its correlative meanings "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Restricted Party" has the meaning set forth in Section 3.1 of the Sprint
Spectrum Trademark and Service Mark License Agreement or Section 3.1 of the
Sprint Trademark and Service Mark License Agreement.
"Selected Services" means those Available Services selected by Manager to
be provided by Sprint Spectrum under Section 2.1 of the Services Agreement. An
Available Service will not be treated as a Selected Service until Sprint
Spectrum begins providing that service.
"Service Area" means the geographic area described on the Service Area
Exhibit to the Management Agreement.
"Service Area Network" means the network and business activities managed
by Manager under the Management Agreement in the Service Area under the License.
"Services Agreement" means that certain Sprint PCS Services Agreement
executed by Manager and Sprint Spectrum and any documents incorporated by
reference in said agreement, whereby Manager may delegate the performance of
certain services to Sprint PCS for fees that represent an adjustment of the fees
paid by Sprint PCS to Manager under Section 10 of the Management Agreement.
"Siting Regulations" means:
(1) FCC regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 47 CFR
ss.ss.17.1 through 17.58, and as may be amended;
(2) FAA regulations governing tower siting, lighting, marking,
monitoring, and reporting of lighting malfunctions as set forth in 14 CFR
ss.ss.77.1 through 77.75, and as may be amended;
(3) FCC land use regulations as set forth in 47 CFR ss.ss.1.1301
through 1.1319, and as may be amended; and
(4) FCC radio frequency exposure regulations as set forth in 47
CFR ss.ss.1.1301 through 1.1319, and as may be amended.
"spectrum" has the same meaning as PCS Spectrum.
"Sprint" means Sprint Communications Company, L.P., a Delaware limited
partnership.
"Sprint Brands" means the "Licensed Marks" as that term is defined under
the Sprint Trademark and Service Mark License Agreement.
"Sprint PCS" means any or all of the following Related Parties who are
License holders and signatories to the Management Agreement: Sprint Spectrum
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation,
PhillieCo Partners I, L.P., a Delaware limited partnership, Cox Communications
PCS, L.P., a Delaware limited partnership, and American PCS Communications, LLC,
a Delaware limited liability company. Each entity listed above is a Related
Party to each of the other listed entities.
"Sprint PCS Affiliation Agreement" has the same meaning as Affiliation
Agreement.
"Sprint PCS Brands" means the "Licensed Marks" as that term is defined
under the Sprint Spectrum Trademark and Service Mark License Agreement.
"Sprint PCS Communications Policies" means the policies established in
accordance with Section 6.4 of the Management Agreement with respect to public
relations development, maintenance and management, as they may be amended from
time to time by Sprint PCS in accordance with the terms of the Management
Agreement.
"Sprint PCS Customer Service Program Requirements" means the program and
requirements established in accordance with Section 8.1 of the Management
Agreement with respect to customer service development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS Customer Service Standards" means those customer service
standards developed by Sprint PCS with respect to customer service and
maintenance as described in Section 8.1 of the Management Agreement, as it may
be amended from time to time by Sprint PCS in accordance with the terms of the
Management Agreement.
"Sprint PCS Insurance Requirements" means the insurance requirements
developed by Sprint PCS as described in Section 12.3 of the Management
Agreement, as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS Management Agreement" has the same meaning as Management
Agreement.
"Sprint PCS National Accounts Program Requirements" means the program and
requirements established in accordance with Section 4.2 of the Management
Agreement with respect to national accounts development, maintenance and
management, as it may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint PCS National or Regional Distribution Program Requirements" means
any distribution program and requirements established in accordance with Section
4.1 of the Management Agreement, as it may be amended from time to time by
Sprint PCS in accordance with the terms of the Management Agreement, and entered
into by Sprint PCS or its Related Parties and a third-party distributor (for
example, a national chain of retail electronics stores) from time to time, under
which the third party will distribute, lease, or sell Sprint PCS Products and
Services on a national or regional basis. The term "distributor" means a
reseller of Sprint PCS Products and Services, or an agent of Sprint PCS
authorized to sell Sprint PCS Products and Services on behalf of Sprint PCS, or
a person engaged in any other means of wholesale or retail distribution of
Sprint PCS Products and Services.
"Sprint PCS Network" means the national wireless network and business
activities to be developed by Sprint PCS, Manager and Other Managers in the
United States and certain of its territories and possessions, which network
includes the Service Area Network.
"Sprint PCS Products and Services" means all types and categories of
wireless communications services and associated products that are designated by
Sprint PCS (whether now existing or developed and implemented in the future) as
products and services to be offered by
Sprint PCS, Manager and all Other Managers as the products and services of the
Sprint PCS Network for fixed and mobile voice, short message and other data
services under the FCC's rules for broadband personal communications services,
including all local area service plans. Sprint PCS Products and Services do not
include wireline products or services, including local exchange service,
wireline long distance service, and wireline based Internet access.
"Sprint PCS Roaming and Inter Service Area Program Requirements" means:
(i) the roaming program and requirements established in accordance
with Section 4.3 of the Management Agreement, as amended from time to time by
Sprint PCS in accordance with the terms of the Management Agreement, to provide
for customers from a carrier not associated with the Sprint PCS Network to
operate the customer's handset on the Sprint PCS Network and for customers from
the Sprint PCS Network (whether customers of Sprint PCS, Manager or an Other
Manager) to operate the customer's handset on a network of a carrier not
associated with the Sprint PCS Network, and
(ii) the program established in accordance with Section 4.3 of the
Management Agreement, as amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement, to provide for customers from one
Service Area on the Sprint PCS Network, whether managed by Sprint PCS, Manager,
or an Other Manager, to operate the customer's handsets and otherwise receive
seamless service, regardless of whether the customer makes its call to or from
the Sprint PCS Network and regardless of whether the customer is a customer of
Sprint PCS, Manager or an Other Manager.
"Sprint PCS Technical Program Requirements" means the operating and
technical performance standards established by Sprint PCS, in accordance with
Section 7.2 of the Management Agreement, as amended from time to time by Sprint
PCS in accordance with the terms of the Management Agreement, for the Sprint PCS
Network as they may be amended from time to time by Sprint PCS in accordance
with the terms of the Management Agreement.
"Sprint Spectrum" means Sprint Spectrum L.P., a Delaware limited
partnership.
"Sprint Spectrum Brands" means the "Licensed Marks" as that term is
defined under the Sprint Spectrum Trademark and Service Mark License Agreement.
"Sprint Spectrum Trademark and Service Mark License Agreement" means that
certain Sprint Spectrum Trademark and Service Mark License Agreement executed by
Manager and Sprint Spectrum and any documents incorporated by reference in said
agreement.
"Sprint Trademark and Service Mark License Agreement" means that certain
Sprint Trademark and Service Mark License Agreement executed by Manager and
Sprint and any documents incorporated by reference in said agreement.
"SprintCom" means SprintCom, Inc., a Kansas corporation.
"Subsidiary" of any Person as of any relevant date means a corporation,
company or other entity (i) more than 50% of whose outstanding shares or equity
securities are, as of such date, owned or controlled, directly or indirectly
through one or more Subsidiaries, by such Person, and
the shares or securities so owned entitle such Person and/or Subsidiaries to
elect at least a majority of the members of the board of directors or other
managing authority of such corporation, company or other entity notwithstanding
the vote of the holders of the remaining shares or equity securities so entitled
to vote or (ii) which does not have outstanding shares or securities, as may be
the case in a partnership, joint venture or unincorporated association, but more
than 50% of whose ownership interest is, as of such date, owned or controlled,
directly or indirectly through one or more Subsidiaries, by such Person, and in
which the ownership interest so owned entitles such Person and/or Subsidiaries
to make the decisions for such corporation, company or other entity.
"Successor Notice" has the meaning set forth in Section 17.15.2(e) of the
Management Agreement.
"Term" means during the term of the Management Agreement, including the
Initial Term and any renewal terms.
"Trademark and Service Mark Usage Guidelines" means the rules governing
the depiction and presentation of the Licensed Marks then generally in use by
Licensor, to be furnished by Licensor to Licensee, as the same may be amended
and updated from time to time by Licensor.
"Trademark License Agreements" means the Sprint Trademark and Service Mark
License Agreement and the Sprint Spectrum Trademark and Service Mark License
Agreement.
"Type II Report" has the meaning set forth in Section 12.1.2 of the
Management Agreement.
"Voluntary Bankruptcy" has the meaning set forth in Section 11.3.7 of the
Management Agreement.
"wireless mobility communications network" means a radio communications
system operating in the 1900 MHz spectrum range under the rules designated as
Subpart E of Part 24 of the FCC's rules.