THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]"
SPRINT PCS
MANAGEMENT AGREEMENT
SPRINTSPECTRUM L.P.,
WIRELESSCO, L.P.,
COX COMMUNICATIONS PCS, L.P.,
COX PCS LICENSE, LLC,
SPRINTCOM, INC.
ALAMOSA PCS, LLC
December 23, 1999
TABLE OF CONTENTS
PAGE
1. MANAGER....................................................................2
1.1 HIRING OF MANAGER ..............................................2
1.2 PROGRAM REQUIREMENTS............................................3
1.3 VENDOR PURCHASE AGREEMENTS .....................................3
1.4 INTERCONNECTION ................................................3
1.5 SEAMLESSNESS ...................................................3
1.6 FORECASTING ....................................................4
1.7 FINANCING ......................................................4
1.8 ETHICAL CONDUCT AND RELATED COVENANTS ..........................4
2. BUILD-OUT OF NETWORK .............. .......................................4
2.1 BUILD-OUT PLAN .................................................4
2.2 COMPLIANCE WITH REGULATORY RULES ...............................4
2.3 EXCLUSIVITY OF SERVICE AREA ....................................5
2.4 RESTRICTION ....................................................5
2.5 COVERAGE ENHANCEMENT ...........................................6
2.6 PURCHASE OF ASSETS BY MANAGER ..................................7
2.7 MICROWAVE RELOCATION ...........................................7
2.8 DETERMINATION OF POPS ..........................................7
3. PRODUCTS AND SERVICES; IXC SERVICES .......................................8
3.1 SPRINT PCS PRODUCTS AND SERVICES ...............................8
3.2 OTHER PRODUCTS AND SERVICES ....................................8
3.3 CROSS-SELLING WITH SPRINT ......................................8
3.4 IXC SERVICES ...................................................9
3.5 RESALE OF PRODUCTS AND SERVICES ................................9
3.5.1 Mandatory Resale of Products and Services ................9
3.5.2 Voluntary Resale of Products and Services ................9
3.6 NON-COMPETITION ...............................................10
3.7 RIGHT OF LAST OFFER ...........................................11
4. MARKETING AND SALES ACTIVITIES ..................... .....................11
4.1 SPRINT PCS NATIONAL OR REGIONAL DISTRIBUTION PROGRAM
REQUIREMENTS ................................................11
4.1.1 Territorial Limitations on Manager's Distribution
Activities ...... .............................................11
4.1.2 Settlement of Equipment Sales ...........................11
4.1.3 Use of Third-Party Distributors .........................12
4.2 SPRINT PCS NATIONAL ACCOUNTS PROGRAM REQUIREMENTS .............12
4.3 SPRINT PCS ROAMING AND INTER SERVICE AREA PROGRAM .............12
REQUIREMENTS ................................................12
4.4 PRICING .......................................................13
4.5 HOME SERVICE AREA .............................................13
5. USE OF BRANDS ............................................................14
5.1 USE OF BRANDS .................................................14
5.2 CONFORMANCE TO MARKETING COMMUNICATIONS GUIDELINES.............14
5.3 JOINT MARKETING WITH THIRD PARTIES ............................14
5.4 PRIOR APPROVAL OF USE OF BRANDS ...............................15
5.5 DURATION OF USE OF BRAND ......................................16
6. ADVERTISING AND PROMOTION.................................................16
6.1 NATIONAL ADVERTISING AND PROMOTION.............................16
6.2 IN-TERRITORY ADVERTISING AND PROMOTION.........................16
6.3 REVIEW OF ADVERTISING AND PROMOTION CAMPAIGNS..................16
6.4 PUBLIC RELATIONS...............................................17
7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS ................................17
7.1 CONFORMANCE TO SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS ......17
7.2 ESTABLISHMENT OF SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS ...17
7.3 HANDOFF TO ADJACENT NETWORKS ..................................17
8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS .........................18
8.1 COMPLIANCE WITH SPRINT PCS CUSTOMER SERVICE PROGRAM
REQUIREMENTS .............................................18
9. SPRINT PCS PROGRAM REQUIREMENTS . . ......................................18
9.1 PROGRAM REQUIREMENTS GENERALLY ................................18
9.2 AMENDMENTS TO PROGRAM REQUIREMENTS ............................18
9.3 MANAGER'S RIGHT TO REQUEST REVIEW OF CHANGES ..................19
9.4 SPRINT PCS' RIGHT TO IMPLEMENT CHANGES ........................20
9.5 RIGHTS OF INSPECTION ..........................................20
9.6 MANAGER'S RESPONSIBILITY TO INTERFACE WITH SPRINT PCS .........20
10. FEES ....................................................................21
10.1 FEES AND PAYMENTS ............ ................................21
10.1.1 Fee Based on Collected Revenues ........................21
10.1.2 Payment of Universal Service Funds .....................21
10.1.3 Inter Service Area Fees ....... ........................21
10.1.4 Interconnect Fees ........... ..........................21
10.1.5 Outbound Roaming Fees ...... ...........................21
10.1.6 Reimbursements ............. ...........................21
10.2 MONTHLY TRUE UP ................ ..............................22
10.3 TAXES .........................................................22
10.4 COLLECTED REVENUES DEFINITION .................................22
10.5 LATE PAYMENTS .................................................24
10.6 SETOFF RIGHT IF FAILURE TO PAY AMOUNTS DUE. ...................24
11. TERM; TERMINATION; EFFECT OF TERMINATION.................................24
11.1 INITIAL TERM ..................................................24
11.2 RENEWAL TERMS .................................................24
11.2.1 Non-renewal Rights of Manager .........................24
11.2.2 Non-renewal Rights of Sprint PCS ......................26
11.2.3 Extended Term Awaiting FCC Approval ...................27
11.3 EVENTS OF TERMINATION .........................................27
11.3.1 Termination of License .................................27
11.3.2 Breach of Agreement. Payment of Money Terms ............28
11.3.3 Breach of Agreement: Other Terms .......................28
11.3.4 Regulatory Considerations ..............................28
11.3.5 Termination of Trademark License Agreements ............28
11.3.6 Financing Considerations ...............................29
11.3.7 Bankruptcy of a Party ..................................29
11.4 EFFECT OF AN EVENT OF TERMINATION .............................30
11.5 MANAGER'S EVENT OF TERMINATION RIGHTS AND REMEDIES ............31
11.5.1 Manager's Put Right ....................................31
11.5.2 Manager's Purchase Right ...............................32
11.5.3 Manager's Action for Damages or Other Relief ...........33
11.6 SPRINT PCS' EVENT OF TERMINATION RIGHTS AND REMEDIES...........33
11.6.1 Sprint PCS' Purchase Right .............................33
11.6.2 Sprint PCS' Put Right ..................................33
11.6.3 Sprint PCS' Right to Cause A Cure ......................34
11.6.4 Sprint PCS' Action for Damages or Other Relief .........36
11.7 DETERMINATION OF ENTIRE BUSINESS VALUE ........................36
11.7.1 Appointment of Appraisers ..............................36
11.7.2 Manager's Operating Assets .............................36
11.7.3 Entire Business Value ..................................37
11.7.4 Calculation of Entire Business Value ...................37
11.8 CLOSING TERMS AND CONDITIONS ..................................38
11.9 CONTEMPORANEOUS AND IDENTICAL APPLICATION .....................38
12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE ..................38
12.1 BOOKS AND RECORDS .............................................38
12.1.1 General ................................................38
12.1.2 Audit ..................................................38
12.1.3 Contesting an Audit ....................................39
12.2 CONFIDENTIAL INFORMATION ......................................40
12.3 INSURANCE .....................................................41
12.3.1 General ................................................41
12.3.2 Waiver of Subrogation ..................................41
12.3.3 Certificates of Insurance ..............................41
13. INDEMNIFICATION ............ ............................................42
13.1 INDEMNIFICATION BY SPRINT PCS .................................42
13.2 INDEMNIFICATION BY MANAGER ....................................42
13.3 PROCEDURE .....................................................42
13.3.1 Notice .................................................42
13.3.2 Defense by Indemnitor ..................................43
13.3.3 Defense by Indemnitee ..................................43
13.3.4 Costs ..................................................43
14. DISPUTE RESOLUTION ......................................................43
14.1 NEGOTIATION ...................................................43
14.2 UNABLE TO RESOLVE .............................................44
14.3 ATTORNEYS AND INTENT ..........................................45
14.4 TOLLING OF CURE PERIODS .......................................45
15. REPRESENTATIONS AND WARRANTIES ..........................................45
15.1 DUE INCORPORATION OR FORMATION; AUTHORIZATION OF AGREEMENTS ...45
15.2 VALID AND BINDING OBLIGATION ..................................45
15.3 NO CONFLICT; NO DEFAULT .......................................46
15.4 LITIGATION ....................................................46
16. REGULATORY COMPLIANCE ...................................................46
16.1 REGULATORY COMPLIANCE .........................................46
16.2 FCC COMPLIANCE ................................................47
16.3 MARKING AND LIGHTING ..........................................48
16.4 REGULATORY NOTICES ............................................48
16.5 REGULATORY POLICY-SETTING PROCEEDINGS .........................49
17. GENERAL PROVISIONS ......................................................49
17.1 NOTICES .......................................................49
17.2 CONSTRUCTION ..................................................49
17.3 HEADINGS ......................................................49
17.4 FURTHER ACTION ................................................49
17.5 COUNTERPART EXECUTION .........................................49
17.6 SPECIFIC PERFORMANCE ..........................................49
17.7 ENTIRE AGREEMENT; AMENDMENTS ..................................49
17.8 LIMITATION ON RIGHTS OF OTHERS ................................50
17.9 WAIVERS .......................................................50
17.9.1 Waivers-General ........................................50
17.9.2 Waivers-Manager ........................................50
17.9.3 Force Majeure ..........................................50
17.10 WAIVER OF JURY TRIAL ..........................................51
17.11 BINDING EFFECT ................................................51
17.12 GOVERNING LAW .................................................51
17.13 SEVERABILITY ..................................................51
17.14 LIMITATION OF LIABILITY .......................................51
17.15 NO ASSIGNMENT; EXCEPTIONS .....................................51
17.15.1 General ...............................................51
17.15.2 Assignment Right of Manager to Financial Lender........52
17.15.3 Change of Control Rights ..............................53
17.15.4 Right of First Refusal ................................54
17.15.5 Transfer of Sprint PCS Network ........................55
17.16 PROVISION OF SERVICES BY SPRINT SPECTRUM ......................55
17.17 NUMBER PORTABILITY ............................................55
17.18 DISCLAIMER OF AGENCY ..........................................55
17.19 INDEPENDENT CONTRACTORS .......................................55
17.20 EXPENSE .......................................................56
17.21 GENERAL TERMS ................................................56
17.22 CONFLICTS WITH OTHER AGREEMENTS ...............................56
17.23 SURVIVAL UPON TERMINATION .....................................56
17.24 ANNOUNCED TRANSACTION .........................................56
17.25 ADDITIONAL TERMS AND PROVISIONS ...............................57
17.26 MASTER SIGNATURE PAGE .........................................57
17.27 AGENT AUTHORIZATION ...........................................57
SPRINT PCS MANAGEMENT AGREEMENT
This SPRINT
PCS MANAGEMENT AGREEMENT is made as of December 23, 1999, between Sprint Spectrum L.P., a
Delaware limited partnership, WirelessCo, L.P., a Delaware limited partnership, Cox Communications PCS, L.P., a Delaware limited partnership, Cox CPS License, LLC, a
Delaware limited liability company, SprintCom, Inc., a Kansas corporation, and Alamosa PCS, LLC, a Delaware limited liability company (but not any Related Party) ("Manager"). The definitions for this agreement are set forth on the "Schedule of Definitions
".
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 ide
ntified 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 o
r 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 servic
es 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
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 Networ
ks 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 Servic
e 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 enh
ance 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 resp
ect 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 a
nd data services, using wireless technology.
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 system
s 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 equipmen
t
, 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 agreeme
nts 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 agreeme
nt 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 con
tracts, 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 impor
tant 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 for
ecast.
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 w
orking 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 offe
r
ing 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 re
spective 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 Bui
ld-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. Du
ring the build-out of the Service Area Network, Sprint PCS authorizes Manager to make all filings w ...