SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (this
"Agreement") is entered into as of September 10, 2004, by and among Sprint
Spectrum L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas
corporation, Sprint Communications Company L.P., a Delaware limited partnership
and WirelessCo, L.P., a Delaware limited partnership, (the "Sprint Parties,"),
AirGate PCS, Inc., a Delaware corporation ("AirGate"), AGW Leasing Company,
Inc., a Delaware corporation ("AGW"), AirGate Network Services, LLC, a Delaware
limited liability company ("ANS"), and AirGate Service Company, Inc., a Delaware
corporation ("ASC"; AirGate, AGW, ANS and ASC are collectively referred to as
the "AirGate Parties" and the AirGate Parties together with the Sprint Parties
are collectively referred to as the "Parties").
AirGate has entered into a Management Agreement, a Services
Agreement and two Trademark and Service Xxxx License Agreements with the Sprint
Parties, dated and effective as of July 22, 1998 (each agreement, together with
all addenda and amendments, being the "Management Agreement," the "Services
Agreement" and two "Trademark and Service Xxxx License Agreements" and
collectively, the "Sprint Agreements").
The Parties (in the singular, "Party") desire to resolve and
release claims specified in this Agreement, whether known or unknown, that any
Party might have against any of the other Parties that arose on or before the
Effective Date (defined below) of this Agreement, including certain claims that
arise out of any actual or claimed actions or inactions of any Party on or
before the Effective Date of this Agreement, except as provided in this
Agreement. The Parties have agreed to take the actions set forth in this
Agreement to avoid the expense and delay inherent in further negotiations and
possible litigation concerning their business relationship.
In consideration of the mutual promises set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Parties agree as follows:
1. Addendum. The Parties will execute and deliver an addendum to the Sprint
Agreements in the form attached to this Agreement (the "Addendum")
contemporaneously with the Parties' execution and delivery of this Agreement.
2. Effective Date. The parties are executing this Agreement as of the date noted
above, but the terms of this Agreement become effective on (the "Effective
Date"):
(a) August 1, 2004, if before 5:00 p.m. Eastern Time on September 14,
2004:
(i) the Parties execute and deliver the Addendum and this
Agreement; and
(ii) AirGate pays Sprint Spectrum L.P. the amount required
under this Agreement; or
(b) the first calendar day of the first calendar month after the events
described in clauses 2(a)(i) and 2(a)(ii) occur, if both of those events do not
occur before the deadlines set forth in those clauses.
3. Settlement Payment. AirGate, on behalf of itself and the other AirGate
Parties, will pay Sprint Spectrum L.P., on its own behalf and on behalf
of the other Sprint Parties, $6,800,000. The payment will be made via
wire transfer to the account designated by Sprint Spectrum L.P.
4. General Releases.
(a) Sprint Release of the AirGate Parties. Except as provided in Section 5,
each of the Sprint Parties releases and forever discharges the AirGate Parties
and their respective officers, directors, shareholders, partners, members,
subsidiaries, employees, agents and representatives (the "AirGate Released
Parties") from all liabilities, claims, attorneys' fees, damages, injuries,
causes of action, and losses of any kind that any of the Sprint Parties ever
had, now has, may assert or may in the future claim to have against any of the
AirGate Released Parties by reason of any act, failure to act, cause or matter
occurring or existing on or before the date of this Agreement, concerning or
related to the Sprint Agreements ("Sprint's Claims"). For avoidance of doubt but
not for purposes of limitation, this provision releases and forever discharges
each of the AirGate Released Parties of and from any and all liabilities,
claims, attorneys' fees, damages, injuries, causes of action, and losses of any
kind that any of the Sprint Parties ever had, now has, may assert or may in the
future claim to have against any of the AirGate Released Parties with respect to
any of the matters set forth on Exhibit A to this Agreement, and waives any and
all rights that any of the Sprint Parties may have with respect to those matters
("Sprint's Specific Claims").
(b) AirGate Release of the Sprint Parties. Except as provided in Section 5,
each of the AirGate Parties releases and forever discharges the Sprint Parties
and their respective officers, directors, shareholders, partners, members,
subsidiaries, employees, agents and representatives (the "Sprint Released
Parties") from all liabilities, claims, attorneys' fees, damages, injuries,
causes of action, and losses of any kind that any of the AirGate Parties ever
had, now has, may assert or may in the future claim to have against any of the
Sprint Released Parties by reason of any act, failure to act, cause or matter
occurring or existing on or before the date of this Agreement concerning or
related to the Sprint Agreements ("AirGate's Claims" and together with Sprint's
Claims, the "Claims"). For avoidance of doubt but not for purposes of
limitation, this provision releases and forever discharges each of the Sprint
Released Parties of and from any and all liabilities, claims, attorneys' fees,
damages, injuries, causes of action, and losses of any kind that any of the
AirGate Parties ever had, now has, may assert or may in the future claim to have
against any of the Sprint Released Parties with respect to any of the matters
set forth on Exhibit A to this Agreement, and waives any and all rights that any
of the AirGate Parties may have with respect to those matters ("AirGate's
Specific Claims" and together with Sprint's Specific Claims, the "Specific
Claims").
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(c) Complete Release. Except as provided in Sections 5, 9 and 13(a), this
Agreement constitutes the complete compromise, settlement, accord and
satisfaction of all of the Claims with no reservation of any rights or claims,
whether stated or implied.
5. Exceptions to Released Claims.
(a) Right to Collect Business Activity Amounts. The Parties are releasing
their right to collect any amounts for fees, credits and business activity
arising under any of the Sprint Agreements before the Effective Date (the
"Business Activity Amounts") only with respect to the Specific Claims. For the
avoidance of doubt, the provisions in the Management Agreement, as amended by
the Addendum, regarding the limitations on invoicing and payment obligations
apply to Business Activity Amounts that accrued before the Effective Date. The
Parties may xxxx, collect and settle the Business Activity Amounts that accrue
before the Effective Date and that are not Specific Claims in accordance with
the terms of the Sprint Agreements (without giving effect to the Addendum) and
in accordance with past practice, notwithstanding the releases set forth in
Section 4. Neither Party is releasing its right to claims (including its right
to dispute amounts) related to any Settlements activity for which invoices have
not yet been generated relating to Picture Mail (third party charges from
LightSurf that have not been billed), mail-in handset rebates (third party
charges from Parago and/or Young America, including the associated
administrative fee), and RadioShack, Third Party and Small Business dealer
instant rebates identified in the commission files by G/L account 490950.
(b) Future Claims. Nothing in this Agreement constitutes a release by any
Party of claims arising after the date of this Agreement, including without
limitation future claims arising under the Management Agreement after giving
effect to the Addendum that becomes effective as of the Effective Date.
(c) Indemnification. This Agreement does not modify, waive or release the
parties' rights and responsibilities under section 13 of the Management
Agreement with respect to indemnification for claims brought by third parties
based upon facts that occurred before the date of this Agreement.
(d) Most Favored Nation. This Agreement does not modify, waive or release
any of AirGate's rights under the new section 1.10 of the Management Agreement,
even if the changes to an Other Manager's Management Agreement are in settlement
of that Other Manager's claims that are similar to claims that AirGate is
releasing under this Agreement.
6. Representations and Warranties. Each of the Parties represents and
warrants to the other Parties that:
(a) it has not commenced any action or proceeding against any other Party
concerning any of the Claims or Specific Claims, before any agency or other
governmental authority, at law, in equity, in arbitration, or otherwise;
(b) no promise, inducement or agreement not expressed in this Agreement or
the Addendum has been made;
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(c) it has the full right, power and authority to enter into this
Agreement, and to perform according to the terms of this Agreement;
(d) the Party is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(e) neither the execution, delivery and performance of this Agreement, nor
the consummation by the Party of the transactions contemplated by this
Agreement, will conflict with, violate or result in a breach of:
(i) any law, regulation, order, writ, injunction, decree, determination or
award of any governmental authority or any arbitrator, applicable to
the Party, or
(ii) any of the terms, conditions or provisions of the certificate of
limited partnership or certificate or articles of incorporation or
bylaws (or other governing documents) of the Party, or
(iii) any material agreement of the Party, or
(iv) any material instrument to which the Party is or may be bound or to
which any of its material properties or assets is subject;
(f) it has obtained all necessary consents and approvals required to enter
into this Agreement;
(g) with the exception of the litigation described in the Form 10K/A filed
by AirGate on January 15, 2004, there are no actions, suits, proceedings or
investigations 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 and the Addendum;
(h) it has negotiated the terms of this Agreement, and this Agreement is
the result of arms-length negotiations between the Parties and their respective
attorneys; and
(i) it has not assigned or otherwise transferred any interest in any of the
Claims or Specific Claims.
7. Covenant Not To Xxx or Assist Third Parties. Except for claims for
indemnification and contribution described in Sections 5(d) and 9, no Party will
(a) commence or in any manner seek relief against another Party through any suit
or proceeding arising, based upon, or relating to any of the Claims or Specific
Claims, or (b) voluntarily become a party to any suit or proceeding arising from
or in connection with an attempt by or on behalf of any third party to enforce
or collect an amount based on a Claim or Specific Claim. Nor will any Party
assist the efforts of any third party attempting to enforce or collect an amount
based on a Claim or Specific Claim, unless required to do so by a court of
competent jurisdiction.
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8. Contract. The Parties understand that the terms in this Agreement are
binding contractual commitments and not mere recitals, and that the Parties are
not relying upon any statement or representation made by any Party released, any
such Party's agents or attorneys, or any other person, concerning the nature,
extent or duration of any injuries or damages, or concerning any other thing or
matter, but are relying solely and exclusively upon their own knowledge, belief
and judgment.
9. Indemnification. The Sprint Parties and the AirGate Parties will
indemnify, hold harmless and defend each other against all claims, demands,
judgments, causes of action, losses, costs, damages, penalties, fines, taxes,
expenses or liabilities, including reasonable attorneys' fees and costs of
defense, brought against or incurred by them, arising from or in connection with
an attempt by or on behalf of any third party to enforce or collect an amount
based on a Claim or Specific Claim, where the third party's right to enforce or
collect the amount is based on a Claim or Specific Claim and is based upon
rights derived or obtained directly or indirectly from or through a Sprint Party
or an AirGate Party. Some examples of third party actions where indemnity is
appropriate under this Section 9 include: where the third party brings its claim
based on subrogation rights or derivative actions, or based on an assignment by
a Party of that Party's rights to a Claim or Specific Claim.
10. Expenses. The Parties will pay their own expenses and attorneys' fees
incurred in connection with the negotiation and execution of this Agreement and
the Addendum.
11. Additional Facts. The Parties are aware that they may after the date of
this Agreement discover claims or facts in addition to or different from those
they now know or believe to be true with respect to Claims and Specific Claims.
Nevertheless, except as set forth in Section 5 of this Agreement, it is the
intention of the Parties to fully, finally and forever settle and release all
such claims, including claims for damages and losses that are presently unknown
or unanticipated. In furtherance of this intention, the releases given in this
Agreement are and will remain in effect as full and complete mutual releases of
Claims and Specific Claims, except as set forth in Section 5 of this Agreement,
notwithstanding the discovery or existence of any additional or different facts
relative to them. Each Party assumes the risk of any mistake in executing this
Agreement and furnishing the releases set forth in this Agreement. Without
limiting the generality of the previous sentences in this Section 11, each Party
waives and relinquishes any right or benefit that such Party has or may have
under any provision of statutory or non-statutory law that may provide that a
release does not extend to claims that a person does not know or suspect to
exist at the time of execution of the release that, if known, would or may have
materially affected the decision to give the release.
12. Waivers. No waiver by a Party of any breach of or default under this
Agreement will be deemed to be a waiver of any other breach or default of any
kind or nature of this Agreement. No acceptance of payment or performance by a
Party after any such breach or default will be deemed to be a waiver of any
breach or default of this Agreement, whether or not such Party knows of such
breach or default at the time it accepts such payment or performance. No failure
or delay on the part of a Party to exercise any right it may have will prevent
the exercise of that right by that Party at any time the other Party continues
to be in default, and no such failure or delay will operate as a waiver of any
default.
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13. Enforcement of Agreement; Injunctive Relief.
(a) The releases given in this Agreement do not include a release of any
liabilities, claims, damages, injuries or losses that may arise under this
Agreement.
(b) Each Party acknowledges and agrees that in the event of any breach of
this Agreement, the non-breaching Party or Parties may be irreparably harmed and
may not be made whole by monetary damages. Accordingly, the Parties, in addition
to any other remedy to which they may be entitled, will be entitled to seek
injunctive or other equitable relief in any court of competent jurisdiction to
the extent permitted by applicable law.
(c) Each Party waives, to the fullest extent permitted by law, the right to
trial by jury in any legal proceeding arising out of or relating to the
enforcement of this Agreement.
(d) The prevailing Party will be entitled to recover from the opposing
Party its expenses (including reasonable attorneys' fees and costs) incurred in
connection with any claim, action or lawsuit brought to enforce this Agreement.
14. Assignment. No Party may assign any of its rights under this Agreement
or delegate its duties under it to any person or entity not a Party unless it
obtains the prior written consent of the other Parties to this Agreement, which
consent may be withheld at such other Party's absolute discretion.
15. Limitation on Rights of Others. Nothing in this Agreement, whether
express or implied, will be construed to give any person other than the Parties
any legal or equitable right, remedy or claim under or in respect of this
Agreement.
16. Confidentiality. The terms and provisions of this Agreement are
confidential and proprietary to the Sprint Parties and to the AirGate Parties
and are subject to the terms of Section 12.2 of the applicable Management
Agreement between the Parties.
17. High Travel Subscribers. Sprint Spectrum L.P. will continue to discuss
with the AirGate Parties possible solutions to the problem presented by
subscribers who use a significant percentage of their minutes of use on Away
Networks (as that term is defined in the Schedule of Definitions).
18. Other Provisions.
(a) Governing Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement will be governed by
and construed under Kansas law, without giving effect to any choice of law or
conflict of law rules or provisions (whether of Kansas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than Kansas.
(b) Jurisdiction.
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(i) Each Party irrevocably and unconditionally submits to the nonexclusive
jurisdiction of (A) any Kansas state court located in the County of Xxxxxxx or
(B) the United States District Court for the District of Kansas, and any
appellate court from any such court, in any suit, action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any
judgment relating to this Agreement. With respect to such suit, action or
proceeding, each Party irrevocably waives, to the fullest extent permitted by
law, the right to object that such court does not have jurisdiction over such
party.
(ii) Each Party irrevocably and unconditionally waives, to the fullest
extent it may legally do so, any objection that it may now or later have to the
venue of any suit, action or proceeding arising out of or relating to this
Agreement in a Kansas state court located in the County of Xxxxxxx or the United
States District Court for the District of Kansas. Each Party irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such suit, action or proceeding in any such court.
(c) Entire Agreement; Binding Effect. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter it covers and
supersedes all prior agreements, negotiations, representations and discussions
between the Parties with respect to the subject matter it covers. This Agreement
is binding on and inures to the benefit of the Parties and their respective
successors and assigns.
(d) Construction. The Parties participated in the negotiation and drafting
of this Agreement. If any ambiguity or question of intent or interpretation
arises, the Parties intend that (i) this Agreement be construed as if they had
drafted it together, and (ii) no presumption or burden of proof arises favoring
or disfavoring any Party by virtue of its role in drafting any provision of this
Agreement. All pronouns and any variations of pronouns used in this Agreement
refer to the masculine, feminine or neuter, singular or plural as the identity
of the person or persons require.
(e) Severability. Every provision of this Agreement is intended to be
severable. If any term or provision of this Agreement is illegal, invalid or
unenforceable for any reason whatsoever, that term or provision will be enforced
to the maximum extent permissible so as to effect the intent of the Parties, and
such illegality, invalidity or unenforceability will not affect the validity,
legality or enforceability of the remainder of this Agreement.
(f) Amendment. Any amendment to this Agreement must be in a written
document signed by the Parties and must state the intent of the Parties to amend
this Agreement.
(g) No Admission of Liability. It is expressly understood and agreed that
this Agreement is a compromise of disputed claims and that execution of, making
of payments under, and performing of obligations under this Agreement are not to
be construed as an admission of liability on the part of any Party.
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(h) Counterparts. This Agreement may be signed in counterpart or duplicate
copy and by facsimile signature, and any signed counterpart, duplicate or
facsimile copy is the equivalent to a signed original for all purposes.
[The remainder of this page is left blank intentionally.]
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EACH PARTY HAS COMPLETELY READ THE TERMS OF THIS AGREEMENT, FULLY UNDERSTANDS
THEM AND VOLUNTARILY ACCEPTS THEM FOR THE PURPOSE OF MAKING FULL AND FINAL
COMPROMISE, ADJUSTMENT AND SETTLEMENT OF ALL CLAIMS, DISPUTED OR OTHERWISE, IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT
The Parties have executed this Agreement on the date first
above written.
SPRINT SPECTRUM L.P.
By: /s/ Xxxxx Xxxxxxx
Name Xxxxx Xxxxxxx
Title:
SPRINTCOM, INC.
By: /s/ Xxxxx Xxxxxxx
Name Xxxxx Xxxxxxx
Title:
SPRINT COMMUNICATIONS
COMPANY L.P.
By: /s/ Xxxxxx X. Xxxxxx
Name Xxxxxx X. Xxxxxx
Title: SVP, Corp Communications
AIRGATE PCS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name Xxxxxx X. Xxxxxxxxx
Title: President & CEO
AGW LEASING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name Xxxxxx X. Xxxxxxxxx
Title: President & CEO
AIRGATE NETWORK SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
Name Xxxxxx X. Xxxxxxxxx
Title: President & CEO
AIRGATE SERVICE COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name Xxxxxx X. Xxxxxxxxx
Title: President & CEO
EXHIBIT A
Sprint Specific Claims and AirGate Specific Claims
1. Previously Filed Litigation. On May 2, 2003, AirGate filed a
complaint in the Superior Court of Gwinnett County, Georgia entitled AIRGATE
PCS, INC. v. SPRINT CORPORATION, SPRINT SPECTRUM, L.P. AND SPRINTCOM, INC.,
which litigation was dismissed without prejudice in May, 2003 pursuant to that
certain letter agreement dated May 13, 2003 from Xxxxx X. Xxxxx of King &
Spalding LLP to J. Xxxxx Xxxxxxxx, Xx., of XxXxxxx Long & Xxxxxxxx LLP.
2. Access Fees. All claims under the Management Agreement existing as
of July 31, 2004 relating to the Parties' rights and obligations respecting
originating and terminating access fees, whether billed or unbilled.
3. Claims released by the AirGate Parties, but that will only be
released by the Sprint Parties upon payment of the amount by AirGate to the
Sprint Parties under this Agreement:
o All claims in connection with the following unpaid disputed invoiced
fees:
AFS-012931
AFS-013056
AFS-013202
AFS-013281
AFS-013349
AFS-013448
AFS-013498
AFS-013549
AFS-013568 PAID & UNPAID
AFS-013633
AFS-013719 PAID & UNPAID
AFS-013739
AFS-013756
AFS-013866
AFS-013884
AFS-014024
AFS-014150
AFS-014425 PAID & UNPAID
AFS-014578
AFS-014662 PAID & UNPAID
AFS-014730
AFS-014749 PAID & UNPAID
AFS-014891
AFS-014903 PAID & UNPAID
AFS-014942
AFS-015069 PAID & UNPAID
AFS-015087
AFS-015352
AFS-015370
AFS-015566 - PAID & UNPAID
AFS-015584
AFS-015653
AFS-015688
AFS-015707
AFS-015874
AFS-015893
AFS-015987
AFS-016006
AFS-016089
AFS-016108
AFS-016256
AFS-016275
AFS-016364
AFS-016383
MIS-110292
AFS-013568DIS
AFS-012270
AFS-013384
AFS-014440
AFS-015062
AFS-015519
AFS-016306
AFS-016611 (AirGate intends to pay a portion of the invoice on
9/15/04. The parties release their claims respecting any
amounts paid or disputed by that date. AirGate intends to
dispute approximately $752,000 in invoices AFS-016611 and
AFS-016630.)
AFS-016630 (AirGate intends to pay a portion of the invoice on
9/15/04. The parties release their claims respecting any
amounts paid or disputed by that date. AirGate intends to
dispute approximately $752,000 in invoices AFS-016611 and
AFS-016630.)
o All claims in connection with the following paid disputed invoiced
fees:
AFS-012330
AFS-012540
AFS-012673
AFS-012776
AFS-012922
AFS-013039
AFS-013183
AFS-013330
AFS-013441
AFS-013533
AFS-013568 PAID & UNPAID
AFS-013719 PAID & UNPAID
AFS-014425 PAID & UNPAID
AFS-014584
AFS-014662 PAID & UNPAID
AFS-014684
AFS-014749 PAID & UNPAID
AFS-014850
AFS-014903 PAID & UNPAID
AFS-015566 PAID & UNPAID
Total Amount for claims identified under section 2
of this Exhibit $ 6,800,000.00
