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MANAGEMENT AGREEMENT
between
TRITEL MANAGEMENT, LLC
and
TRITEL, INC.
Dated as of January 7, 1999
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MANAGEMENT AGREEMENT
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This Management Agreement (the "Agreement") is entered into as of
January 7, 1999 (the "Effective Date") by and between TRITEL MANAGEMENT, LLC, a
Mississippi limited liability company ("Manager"), and TRITEL, INC., a Delaware
corporation (the "Company"). Capitalized terms used but not defined in this
Agreement shall have the meanings given to such terms in the Stockholders
Agreement of the Company, dated as of the date hereof (the "Stockholders
Agreement").
W I T N E S S E T H:
WHEREAS, the operation of the Business, including, without limitation,
the determination of policy, the preparation and filing of any and all
applications and other filings with the FCC, the hiring, supervision and
dismissal of personnel, day-to-day system operations, and the payment of
financial obligations and operating expenses, shall be controlled by the
Company, and Manager shall assist the Company in connection therewith and any
action undertaken by Manager shall be under the Company's continuing oversight,
review, control and approval, and the Company shall retain unfettered control
of, access to, and use of the Business, including its facilities and equipment
and shall be entitled to receive all profits from the operation of the Business;
WHEREAS, Xxxxxxx X. Xxxxxxx, XX, X.X. Xxxxxx, Xx., Xxxxx X. Xxxxxxxx,
Xx. (collectively, the "Senior Executives") are the owners of all of the
ownership interests in Manager and are each employed by the Company pursuant to
their respective employment agreements with the Company of even date herewith
(collectively, the "Employment Agreements");
WHEREAS, the Senior Executives are the owners of all of the issued and
outstanding shares of Voting Preference Stock and of 100% of the issued and
outstanding shares of Class C Common Stock;
WHEREAS, the Senior Executives are willing to cause Manager to provide
management services for the Company and its Subsidiaries on the terms and
subject to the conditions contained in this Agreement; and
WHEREAS, the parties desire to execute this Agreement to specify the
terms upon which Manager will perform services to the Company hereunder.
NOW, THEREFORE, for and in consideration of the premises, the covenants
and agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the execution and delivery
hereof, the parties agree as follows:
Section 1. Engagement. The Company hereby engages Manager to oversee,
manage and supervise the Company and the development and operation of the
Business, and Manager hereby accepts such engagement, subject to and upon the
terms and conditions hereof.
Section 2. Management Standards. Manager shall discharge its duties
hereunder in compliance with the Stockholders' Agreement, the Network Membership
License Agreement, the Resale Agreement and the Roaming Agreement (collectively
the "Operating Agreements") and all applicable Law. In performing its
obligations hereunder, Manager shall act in a manner that it reasonably believes
to be in or not opposed to the best interests of the Company consistent with the
standards set forth herein. Nothing in this Agreement shall be construed as
constituting Manager an agent of the Company beyond the extent expressly
provided in, and as limited by, this Agreement.
Section 3. Services to be Provided.
(a) Scope of Services. Subject to the Company's oversight, review
and ultimate control and approval and the limitations of Section 3(d) below,
Manager shall be responsible for the design, construction and operation of the
Company and the Business in accordance with the Operating Agreements, which
shall be carried out by the Company's employees under the supervision and
control of the Senior Executives. To this end Manager shall provide generally,
on the terms and subject to the conditions set forth herein and in a manner
consistent with the standards set forth herein and in the Operating Agreements,
supervisory services with respect to (I) all administrative, accounting,
billing, credit, collection, insurance, purchasing, clerical and such other
general services as may be necessary to the administration of the Business, (II)
operational, engineering, maintenance, construction, repair and such other
technical services as may be necessary to the construction and operation of the
Business, and (III) marketing, sales, advertising and such other promotional
services as may be necessary to the marketing of the Business. The services for
which Manager shall be responsible, subject in each case to the Operating
Agreements, the Company's oversight, review and ultimate control and approval
and to the limitations of Section 3(d) below, shall include but shall not be
limited to the following:
(i) the marketing of Company Communications Services to be
offered and provided by the Company;
(ii) the management, tax compliance, accounting and financial reporting for the
Company including, but not limited to, the preparation and presentation of
reports and reviews of the business, financial results and condition, regulatory
status, competitive position and strategic prospects of the Company as requested
by the Board of Directors;
(iii) the regulatory processing for the Company, including
without limitation the preparation and filing of all appropriate regulatory
filings, certificates, tariffs and reports that are required by, and
participation in any hearings or other proceedings before, local, state and
federal governmental regulatory bodies;
(iv) the engineering, design, planning, construction and
installation, maintenance and repair (both emergency and routine) and operation
of, and equipment purchases for, the Company;
(v) assisting the Company in the development and preparation of
budgets, including, without limitation, preparing and presenting, not later than
90 days before the
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beginning of each fiscal year, a proposed draft of an annual operating budget
for the Company's review, evaluation and approval setting forth in reasonable
detail the anticipated capital expenditures and other projected costs and
expenses of constructing and operating the Business during the period covered by
the budget, as well as projected revenues for that period, and generally
describing all contracts and commitments which Manager expects to enter into on
behalf of the Company during the period covered thereby;
(vi) services relating to sales of the products and services
offered by the Company, including without limitation processing orders for
service, customer support, billing for services provided by the Company and
collection of receivables for the Company;
(vii) management information services for the Company;
(viii) monitoring and controlling the Business and its PCS and
Cellular Systems;
(ix) negotiating contracts, issuing purchase orders and otherwise
entering into agreements on behalf of the Company for the purchase, lease,
license or use of such properties, services and rights as may be necessary or
desirable in the judgment of Manager for the operation of the Company;
(x) supervising, recruiting and training all necessary personnel
to be employed by the Company, and determining salaries, wages and benefits for
the Company's employees;
(xi) administering the Company's employee benefit programs and
the Company's programs for compliance with applicable laws governing the
administration and operation of such plans and programs;
(xii) administering the Company's risk management programs,
including negotiating the terms of property and casualty insurance and preparing
a comprehensive disaster recovery program; and
(xiii) in furtherance of the foregoing, making or committing to
make expenditures (including capital expenditures) on behalf of the Company.
(b) Accounts. Subject to the foregoing, the Company shall be
responsible for payment of all costs and expenses necessary to fund the ongoing
business and operations of the Business and for the provision of all services of
Manager hereunder, which shall include, but not be limited to, expenses arising
under Article 3, payments to independent contractors, payments to vendors and
suppliers of the Business, and interest payments to creditors who have financed
the construction or operation of the Business. To the extent provided herein,
Manager shall make such payments on the Company's behalf from one or more
accounts maintained in the name of the Company at one or more banks acceptable
to the Board of Directors, into which all Company revenues shall be deposited
(the "Accounts"). All funds of the Company shall be promptly deposited in such
bank accounts. All disbursements made by the Company as permitted under this
Agreement shall be made by checks drawn on the Accounts, and all funds on
deposit in the Accounts shall at all times be the property of the Company.
Manager will have the right and
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authority to make deposits to and disbursements and withdrawals from the
Accounts as required in connection with the performance of its services
hereunder, provided that all signatories on the Accounts shall be subject to the
approval of the Board of Directors.
(c) Restrictions on Manager's Authority. Any provision to the
contrary in this Agreement notwithstanding, unless such action is within (or on
terms more favorable to the Company than) parameters set forth in a budget or
business plan approved by the Board of Directors, Manager shall not do, or cause
or permit to be done, any of the following for or on behalf of the Company
without the prior written consent of the Board of Directors (excluding the
Senior Executives that are directors of the Company):
(i) settle any claim or litigation by or against the Company if
the settlement involves a payment of $100,000 or more, or any regulatory
proceedings involving the Company, unless such action is consistent with the
Company's regulatory strategy as set forth in a budget approved by the Board of
Directors;
(ii) lend money or guarantee debts of others (other than
wholly-owned Subsidiaries of the Company) on behalf of the Company, or assign,
transfer, or pledge any debts due the Company, or release or discharge any debt
due or compromise any claim of the Company, other than trade credit and advances
to employees in the ordinary course of business;
(iii) invest in or otherwise acquire any debt or equity
securities of any other Person, enter into any binding agreement for the
acquisition of any interest in any business entity or other Person (whether by
purchase of assets, purchase of stock or other securities, merger, loan or
otherwise), or enter into any joint venture or partnership with any other
Person;
(iv) take any tax reporting position or make any related election
on behalf of the Company which is inconsistent with the directions given by the
Board of Directors;
(v) formally assert a strategic position with respect to a
material matter before the Federal Communications Commission or any Governmental
Authority on behalf of the Company with respect to any such matter;
(vi) knowingly take or fail to take any action that violates (A)
any Law relating to the Business, (B) any agreement, arrangement or
understanding to which the Company is a party, including an Operating Agreement,
(C) any License or other governmental authorization granted to the Company in
connection with its ownership and operation of the Business, or (D) any judicial
or administrative order or decree to which the Company is subject, in each case
unless such violation would not be reasonably expected (so far as can be
foreseen at the time) to have a material adverse effect on the Company or the
Business;
(vii) sell, assign, transfer, or otherwise dispose of, or
hypothecate or xxxxx x Xxxx on any assets belonging to the Company (other than
the disposal of assets or equipment in the ordinary course of business);
(viii) take any action amending or agreeing to amend any License
granted to the Company in connection with its ownership and operation of the
Business;
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(ix) borrow money on behalf of the Company or enter into other
forms of financing for the Business, including any capital lease;
(x) commingle any funds of the Company with funds of any other
entity or Person;
(xi) hire or fire the independent certified public accountants of
the Company;
(xii) pay to any employee or agent of, or consultant or advisor
to, the Company, compensation in any form in excess of $100,000 in any fiscal
year;
(xiii) establish any reserves; or
(xiv) enter into any contract, agreement or other commitment or
issue any purchase order, which contract or other agreement or purchase order
(i) is not in the ordinary course of business, (ii) obligates the Company to
make payments of $100,000 or more or (iii) will create a material variance
(greater than 15%) relative to (x) in the case of a capital expenditure, the
total budget for capital expenditures contained in any budget approved by the
Board of Directors and (y) in the case of an operating expense, the total
operating expense budget contained in any budget approved by the Board of
Directors, in each case for the year-to-date period in which the expenditure is
made or incurred and taking into account all previous expenditures and
commitments in such year-to-date period, provided, that the approval of the
Board of Directors shall not be required for any contract, purchase order or
agreement the material terms of which are within (or on terms more favorable to
the Company than) the parameters set forth in any budget approved by the Board
of Directors; or terminate or amend in any material respect any contract,
agreement or other commitment or purchase order, in each case if the execution
and delivery or issuance thereof requires approval pursuant to this Section
3(d).
Section 4. Compensation.
(a) Reimbursement. The Company shall reimburse Manager for all
out-of-pocket expenses ("Out-of-Pocket Expenses") reasonably incurred by Manager
for goods and services provided by third parties to, for or on behalf of the
Company. Manager shall provide the Company with a statement setting forth in
reasonable detail (and with copies of invoices or other supporting
documentation) the Out-of-Pocket Expenses claimed and the Company shall pay to
Manager each such amount within thirty (30) days of receipt of the statement.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
portion of the salaries of the Senior Executives or the general overhead
expenses of Manager shall be subject to reimbursement as Out-of-Pocket Expenses
and (ii) in no event will Manager be responsible for the payment from its own
funds of any expenses, obligations or liabilities of the Company.
(b) Management Fees. In consideration of Manager's performance of
its responsibilities with respect to the Business, the Company shall pay
Manager, commencing on the date hereof, a management fee per annum equal to
$10,000 (the "Management Fee").
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(c) Disputes, etc. If the Company disputes the amount of expenses or
fees claimed by Manager, the Company shall notify Manager in writing before
payment is due, and if the matter cannot be resolved informally between the
parties, either the Company or Manager may request resolution of the dispute
pursuant to Section 9. The Company shall pay when due the portion of any such
amounts that is not in dispute.
Section 5. Term and Termination.
(a) Term. This Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance herewith, shall terminate on the fifth
(5th) anniversary of the Effective Date (the "Term").
(b) Termination.
(i) By Either Party. Either party may terminate this Agreement in
the event that a Governmental Authority shall enter an order appointing a
custodian, receiver, trustee, intervenor or other officer with similar powers
with respect to the other party or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition in
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding up or liquidation of such party; or if a party files a petition seeking
any such order; or if any such petition shall be filed against such party and
shall not be dismissed within sixty (60) days thereafter; or an order shall have
been issued granting such party a suspension of payments under applicable law
and any such order is not dismissed within sixty (60) days thereafter.
(ii) By Company. The Company may terminate this Agreement:
(A) immediately in the event of a material breach of this
Agreement by Manager (as determined by a majority vote of the Board
of Directors (excluding the Senior Executives that are directors of
the Company)), which has not been cured within thirty (30) days
following notice thereof from the Company, including, without
limitation, the failure of the Company to meet any of the objectives
set forth on Schedule I hereto;
(B) immediately in the event that the Company shall fail to
comply with the terms of any representation, warranty, covenant or
agreement contained in the Credit Documents or in any other
agreement or instrument pursuant to which the Company has incurred
indebtedness for borrowed money in the principal amount of
$25,000,000 or more, which failure to comply results in (unless such
failure to comply has been waived or cured in the applicable cure
period) an event of default thereunder;
(C) immediately in the event that the indebtedness incurred
pursuant to the Credit Documents or any other indebtedness for
borrowed money of the Company in the principal amount of $25,000,000
or more shall have been accelerated by the holder thereof; or
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(D) immediately in the event that the Employment Agreements
of any two of the three Senior Executives are terminated for any
reason pursuant to their respective terms.
(iii) By Manager. Manager may terminate this Agreement:
(A) in the event of a material breach of this Agreement by
the Company (other than a payment default) which has not been cured
within thirty (30) days following notice thereof from the Company;
or
(B) voluntarily upon thirty (30) days prior written notice
to the Company.
(c) Remedies. The remedies set forth herein are not intended to be
exclusive, and all remedies shall be cumulative and may be exercised
concurrently with any other remedy available to Manager or the Company at law or
in equity.
(d) Continuing Obligations. After receipt of written notice of
termination, but prior to the effective date of such termination, Manager shall
continue to perform under this Agreement unless specifically instructed to
discontinue such performance. In the event of termination, Manager and the
Company shall remain liable for their respective obligations accrued under this
Agreement prior to the effective date of termination.
(e) Transition Arrangements.
(i) In the event of termination of the Manager for any reason,
Manager shall at the Company's expense cooperate with the Company in order to
facilitate the transition to a new management service provider (the "New
Provider"). Upon such termination, the Board of Directors (excluding the Senior
Executives that are directors of the Company) shall nominate a New Provider that
would not cause a significant detrimental effect on the eligibility of the
Company to realize the benefits, if any, that the Company derives from its
status as a "very small business," as defined in 47 CFR Section 24.720(b)(2),
which New Provider shall be acceptable to Manager. Manager shall at the
Company's expense take whatever steps are commercially reasonable to assist the
New Provider in assuming the management of the Company and the operation of the
Business including, without limitation, transferring to the New Provider all
historical financial, tax, accounting and other data in the possession of
Manager, and giving such consents, assigning such permits and executing such
instruments as may be necessary to vest in the New Provider those rights that
were necessary for Manager to perform its services hereunder.
(ii) Within five (5) business days after the nomination by the
Board of Directors of a New Provider, the Senior Executives agree to nominate a
successor Person or group of Persons (collectively, a "Successor Control Group")
that would not cause a significant detrimental effect on the eligibility of the
Company to hold a Block F PCS license and to realize the benefits, if any, that
the Company derives from its status as a "very small business," as defined in 47
CFR Section 24.720(b)(2), to whom the Voting Preference Common Stock and Class C
Common Stock shall be transferred by the Senior Executives, which Successor
Control Group shall be reasonably acceptable to the Board of Directors
(excluding the Senior Executives
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that are directors of the Company); it being understood that the New Provider
shall be deemed to be a Successor Control Group reasonably acceptable to the
Board of Directors. Immediately after a Successor Control Group reasonably
acceptable to the Board of Directors is nominated, the Company, the Senior
Executives and the Manager shall take, or cause to be taken, all actions
necessary or required, including, without limitation, filing of all applications
with the FCC, to obtain all requisite consents and authorizations to permit the
transfer of the Voting Preference Common Stock and Class C Common Stock to the
Successor Control Group. On the first business day after all such consents and
authorizations shall have been obtained, the Senior Executives agree to resign
as directors and officers of the Company and to sell to the Successor Control
Group all of the shares of Voting Preference Common Stock for the per share
price paid by them for such shares and exchange with the Company the shares of
Class C Common Stock beneficially owned by them for an equal number of shares of
Class A Voting Common Stock of the Company. If at any time, whether by reason of
the inability of the Company to obtain all requisite consents and authorizations
to permit the transfer of the Voting Preference Common Stock to the Successor
Control Group or otherwise, the Board of Directors withdraws its consent to the
nomination of a Successor Control Group, the procedure outlined in Sections
5(e)(i) and (ii) shall be repeated commencing with the nomination by the Senior
Executives of a Successor Control Group within five (5) business days after the
nomination by the Board of Directors of a successor New Provider.
(f) Return of Information. Upon termination of this Agreement, all
books and records in the possession of Manager relating to the maintenance and
operation of and accounting for the Company, together with all supplies and
other items of property owned by the Company and in Manager's possession, shall
be delivered to the Company.
Section 6. Noncompetition and Confidentiality.
(a) Noncompetition. During the Term and for one year thereafter if
after the expiration of the Term on the fifth (5th) anniversary of the Effective
Date the Company offers to extend this Agreement for at least one (1) year on
terms and conditions no less favorable than those contained herein and the
Manager rejects such offer, neither of Manager nor any of its respective
Affiliates shall, without the consent of the Company, assist or become
associated with any person or entity, whether as a principal, partner, employee,
consultant or shareholder (other than as a holder of not in excess of 5% of the
outstanding voting shares of any publicly traded company) that is actively
engaged in the business of providing mobile wireless telecommunications services
in the Territory.
(b) Confidentiality. Without the prior written consent of the
Company, except to the extent required by an order of a court having competent
jurisdiction or under subpoena from a governmental body or agency, none of
Manager, the Senior Executives, nor any of their respective Affiliates shall
disclose any trade secrets, customer lists, drawings, designs, information
regarding product development, marketing plans, sales plans, manufacturing
plans, financial records, packaging design or other financial, commercial,
business or technical information relating to the Company or any of its
subsidiaries or affiliates (collectively, "Confidential Information"), to any
third person, unless such Confidential Information has been previously disclosed
to the public by the Company or is in the public domain (other than by reason of
Manager's, the Senior Executives' or any of their respective Affiliates' breach
of this
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Section 6(b)), except that Manager, the Senior Executives and their respective
Affiliates may disclose Confidential Information to the extent advisable in
their sole discretion in connection with (i) the performance of Manager's duties
hereunder, or (ii) the issuance of Company securities, or (iii) obtaining
financing for the Company, or (iv) the enforcement of Manager's rights under
this Agreement, or (v) any disclosures that may be required by law, including
securities laws.
(c) Company Property. Promptly following the termination of this
Agreement, Manager and the Senior Executives shall return to the Company all
property of the Company, and all copies thereof in its possession or under its
control, and all tangible embodiments of Confidential Information in its
possession in whatever media such Confidential Information is maintained.
(d) Non-Solicitation of Employees. During the Term and for one year
thereafter, none of Manager, the Senior Executives nor any of their respective
Affiliates will directly or indirectly induce any employee of the Company or any
of its subsidiaries or affiliates to terminate employment with such entity, and
will not directly or indirectly, either individually or as owner, agent,
employee, consultant or otherwise, employ or offer employment to any person who
is or was employed by the Company or a subsidiary thereof, unless such person
shall have ceased to be employed by such entity for a period of at least six
months.
(e) Injunctive Relief with Respect to Covenants. Manager and each
Senior Executive acknowledge and agree that the covenants and obligations with
respect to noncompetition, inventions, confidentiality and Company property
contained in this Section 6 relate to special, unique and extraordinary matters
and that a violation of any of the terms of such covenants and obligations will
cause the Company irreparable injury for which adequate remedies are not
available at law. Therefore, Manager and the Senior Executives agree that the
Company shall be entitled to an injunction, restraining order, or such other
equitable relief as a court of competent jurisdiction may deem necessary or
appropriate to restrain Manager and the Senior Executives from committing any
violation of the covenants and obligations contained in this Section 6. These
injunctive remedies are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
Section 7. Limitations of Liability.
(a) Force Majeure. Neither of the parties will be liable for
nonperformance or defective or late performance of any of its obligations
hereunder to the extent and for such periods of time as such nonperformance,
defective performance or late performance is due to reasons outside such party's
control, including acts of God, war (declared or undeclared), acts (including
failure to act) of any governmental authority, riots, revolutions, fire, floods,
explosions, sabotage, nuclear incidents, lightning, weather, earthquakes,
storms, sinkholes, epidemics, strikes, or delays of suppliers or subcontractors
for the same causes. Neither party shall be required to settle any labor dispute
in any manner which is deemed by that party to be less than totally
advantageous, in that party's sole discretion.
(b) Exculpation of Manager. Notwithstanding any other provision of
this Agreement, Manager shall not be liable for any failure or delay in its
performance hereunder,
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(except with respect to its performance of its obligations under Section 5(e))
or for any performance which is substandard, except where such failure, delay or
substandard performance is the result of willful misconduct or gross negligence
on the part of Manager.
(c) No Consequential or Special Damages. Manager shall not be
responsible to the Company or any other Person for any indirect, incidental,
consequential or special damages to the Company, the Business or any subscriber
or customer of any Business or any other person, including any damage to or loss
of revenues, business or goodwill, suffered by any person or entity for any
failure of any system or failure of performance hereunder. Manager's liability
to the Company in respect of any such failure shall be limited to the amounts
paid by the Company to Manager pursuant to this Agreement for the period of any
such failure.
Section 8. Books and Records. Manager shall keep or cause to be kept
accounts and complete books and records with respect to its management of the
operation of the Business, showing all costs, expenditures, allocations,
receipts, revenues, assets, and liabilities; any and all other records
necessary, convenient or incidental to recording the financial aspects of the
operation of the Business and sufficient to record the profits and losses
generated by the operation of the Business. Within fifteen (15) days after the
end of each month Manager shall prepare or cause to be prepared and transmit to
the Company unaudited statements, which shall include a general ledger and a
trial balance. Manager shall also provide at the Company's request and expense
any and all such additional statements or reports as may be reasonably necessary
to the Company's oversight and control of the Business. The Company shall have
control over and access, at all reasonable times during normal business hours,
to the books and records maintained by Manager pursuant to this Section 9.
Section 9. Dispute Resolution.
(a) Dispute Resolution. The parties desire to resolve disputes
arising out of this Agreement without litigation. Accordingly, except for action
seeking a temporary restraining order injunction related to the purposes of this
Agreement, or suit to compel compliance with this dispute resolution process,
the parties agree to use the dispute resolution procedures set forth in Section
9 as their sole remedy with respect to any controversy or claim arising out of
or relating to this Agreement or its breach.
At the written request of any party, the parties to the dispute will
appoint knowledgeable, responsible representatives to meet and negotiate in good
faith to resolve any dispute arising under this Agreement. The parties intend
that these negotiations be conducted by non-lawyer, business representatives,
including at least one senior executive of each party to the dispute. The
location, format, frequency, duration and conclusion of these discussions shall
be left to the discretion of the representatives. Discussion and correspondence
among the representatives for purposes of these negotiations shall be treated as
confidential information developed for purposes of settlement, exempt from
discovery and production, which shall not be admissible in the arbitration
described below. Documents identified in or provided with such communications,
which are not prepared for purposes of the negotiations, are not so exempted and
may, if otherwise admissible, be admitted in evidence in the arbitration or
lawsuit.
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(b) Mediation. If the negotiations set forth in Section 9(a) do not
resolve the dispute within thirty (30) days of the initial written request, the
parties agree to work in good faith to settle the dispute by mediation under the
commercial mediation rules of the American Arbitration Association. The parties
will attempt to agree on a mediator. If they are unable to do so, the mediation
will be referred to the New York, New York office of the American Arbitration
Association for mediation which will appoint a qualified mediator to serve. The
mediation shall take place in New York, New York or such other location as
mutually agreed upon by the parties. Unless the parties agree otherwise, the
first mediation session shall take place no later than ten (10) days after the
initial written request to negotiate. The mediation shall continue until the
dispute is resolved or until such time as the mediator makes a good faith
determination that the likelihood of resolution is sufficiently remote that
continuation of the mediation is not warranted.
(c) Arbitration. If the mediation conducted pursuant to Section 9(b)
does not resolve the dispute within thirty (30) days of the commencement of
mediation, or if prior to the expiration of such thirty (30) day period the
mediator determines that continuation of the mediation process is not warranted,
the dispute shall be submitted to binding arbitration by a panel of three
arbitrators pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Any party may demand such arbitration in accordance
with the procedures set out in those rules. Each party shall have the right to
take the deposition of up to five individuals (or a larger number of individuals
with the consent of two of the three arbitrators), and any expert witness
designated by the other party. Each party shall also have the right to request
production of relevant documents, the scope and enforcement of which shall be
governed by the arbitrator. Additional discovery may be only by order of the
arbitrator, and only upon a showing of substantial need. The arbitrator shall be
authorized to issue subpoenas for the purpose of requiring attendance of
witnesses at depositions. The arbitration hearing shall be commenced within ten
(10) days of the determination that mediation is not going to be successful. The
arbitration shall be held in New York, New York or such other location as
mutually agreed upon by the parties. The arbitrator shall control the scheduling
so as to process the matter expeditiously. The parties may submit written
briefs. The arbitrator shall rule on the dispute by issuing a written opinion
within thirty (30) days after the close of hearings. The times specified in this
section may be extended upon mutual agreement of the parties or by the
arbitrator upon a showing of good cause. The award rendered by arbitration shall
be final, binding and nonappealable judgment and the aware may be entered in any
court of competent jurisdiction in the United States. Special, consequential or
punitive damages shall not be awarded by the arbitrator.
(d) Confidentiality. The parties agree that all communications and
negotiations between the parties during the dispute resolution process, any
settlements agreed upon during the dispute resolution process and any
information regarding the other party obtained during the dispute resolution
process (that are not already public knowledge) are confidential and may be
disclosed only to employees and agents of the parties who shall have a "need to
know" the information and who shall have been made aware of the confidentiality
obligations set forth in this Section, unless the party is required by law to
disclose such information.
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(e) Fees and Expenses. The parties shall equally split the fees of
the mediator and the arbitrator. Any party found by the arbitrator to have
breached this Agreement shall pay all other out-of-pocket costs and expenses,
including reasonable attorneys' fees and expenses, of the other party incurred
in connection with the dispute resolution process. If the arbitrator does not
find that any party has breached this Agreement, then each party shall bear its
own costs and expenses, including attorneys' fees and expenses.
Section 10. Inspection Rights; Delivery of Information.
(a) Company's Right to Inspect. Manager will permit representatives
of the Company, at the Company's cost, during normal business hours and upon not
less than five business days' advanced written request, to (i) visit and inspect
during normal business hours Manager's properties and facilities which are
utilized in connection with Manager's provision of services to the Company
pursuant to this Agreement, including without limitation access to, and the
right to make copies of, books and records of the Company located at such
properties and facilities, and (ii) discuss with Manager's officers and
employees such properties and facilities and Manager's provision of services to
the Company pursuant to this Agreement. All such information shall be held in
confidence by the Company, except for disclosures made to the Company's
advisors, lenders and investors, or as required to be disclosed by process of
law or other applicable law.
(b) Notice of Certain Events. Promptly, and in any event within
three (3) business days after Manager has received notice or has otherwise
become aware thereof, Manager shall give the Company notice of (i) the
commencement of any material proceeding or investigation against the Company or
Manager by or before any governmental body or in any court or before any
arbitrator which would be likely to have a material adverse effect on Manager,
the Business or the Company, or on Manager's ability to perform its obligations
hereunder, and (ii) the occurrence or non-occurrence of any event (x) which
constitutes, or which with the passage of time or giving of notice or both would
constitute, a default by the Company or Manager under this Agreement or under
any other material agreement to which the Company or Manager is a party or by
which its properties may be bound, and (y) would be likely to have a material
adverse effect on Manager, the Business or the Company, or on Manager's ability
to perform its obligations hereunder, giving in each case the details thereof
and specifying the action being taken or proposed to be taken with respect
thereto. Promptly upon receipt thereof, Manager shall deliver to the Company
copies of any material notice or report regarding any License from the grantor
of such license or from any Governmental authority regarding the Business or the
Company.
(c) Other Information. From time to time and promptly upon each
request, Manager shall provide the Company with such data, certificates,
reports, statements, financial projections, documents or further information
regarding the business, equity owners, assets, liabilities, financial position
or results of operations of Manager, as may be reasonably requested by the
Company.
Section 11. Representations and Warranties. Each party makes the
following representations and warranties to the other party, as a material
inducement to the other party to enter into this Agreement.
12
(a) Organization and Standing of Parties. Each party is duly
organized, validly existing and in good standing under the laws of the State of
its formation referenced in the first paragraph of this Agreement. Each party
has full limited liability company or corporate power and authority to own its
assets and carry on its business as now conducted by it.
(b) Execution, Delivery, Performance and Binding Effect. The
execution, delivery and performance by each party of this Agreement have been
duly authorized by all necessary limited liability company or corporate action,
as appropriate, including by such party's members or managers or stockholders or
directors, as appropriate. Each party has full power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance by such party of this Agreement will not (with the passage of time
or giving of notice or both) conflict with, violate any provision of, result in
the breach of, or constitute a default under (i) such party's articles of
organization, certificate of incorporation, regulations, or other constituent,
organizational or governing documents, as applicable, (ii) any License held by
such party, (iii) any Law, (iv) any order, writ, injunction, decree, judgment or
regulation of any Governmental Agency or (v) any contract, agreement,
arrangement or understanding, (A) to which such party is a party, (B) to which
or by which such party is subject or bound, or (C) to which or by which such
party's assets are subject or bound. The execution, delivery and performance of
this Agreement will not (with the passage of time or giving of notice or both)
(i) create or impose any Lien upon the assets of such party, (ii) result in the
termination, suspension, modification or impairment of any contract, agreement,
arrangement or understanding (A) to which such party is a party, (B) to which,
or by which, such party is subject or bound, or (C) to which or by which such
party's assets are subject or bound, or (iii) result in the termination,
suspension, modification or impairment of any governmental license, permit,
authorization or certificate held by such party or relating to its assets or
businesses. This Agreement constitutes the legal, valid and binding obligation
of such party enforceable against it in accordance with its terms.
(c) Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
Governmental Authority or other Person is required on the part of each party in
connection with the execution, delivery and performance of this Agreement.
(d) Litigation; Claims. With respect to each party, there is no
claim, action, audit, arbitration, dispute, investigation, suit, litigation or
legal proceeding pending, or to the best of such party's knowledge threatened,
against such party (i) relating to or otherwise affecting such party's ability
to execute and deliver this Agreement or to perform such party's obligations
hereunder, or (ii) which would materially adversely affect the Company or the
Company's contemplated business.
(e) Court Orders, Decrees, Judgments, etc. There is outstanding no
order, writ, injunction, decree or judgment of any court, governmental agency or
arbitration tribunal against a party (i) relating to or otherwise affecting such
party's ability to execute and deliver this Agreement or to perform such party's
obligations hereunder or (ii) which would materially adversely affect the
Company or the Company's contemplated business.
13
Section 12. Miscellaneous.
(a) Counterparts. This Agreement may be executed by one or more of
the parties hereto in any number of counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
(b) Construction. Each of the parties hereto acknowledge that it has
reviewed this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any amendments hereto.
(c) Benefit; Assignment. This Agreement shall be binding upon and
inure to the benefit of all parties hereto and their respective successors and
permitted assigns; provided, however, that Manager shall not assign or otherwise
transfer its rights and obligations under this Agreement without the Company's
prior written consent. Any sale, assignment, sublease or other transfer in
violation of this Section 12(c) shall be null and void. Each of the Stockholders
shall be deemed a third party beneficiary of the Company's rights under this
Agreement and shall be permitted to exercise any rights pursuant to this
provision with the consent of AT&T and two-thirds in interest of the Cash Equity
Investors.
(d) Complete Agreement. This document, the exhibits attached hereto
and each of the documents referred to herein, embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements, or representations by or among the parties written
or oral, which may have related to the subject matter hereof in any way.
(e) Amendment. This Agreement may not be amended except by a writing
signed by each of the parties.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws, and not the laws of conflict, of the State
of New York.
(g) Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall for any reason or to any
extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but, rather, shall be enforced to the extent permitted by law.
Furthermore, in lieu of such an illegal, invalid or unenforceable provision,
there shall be added automatically as part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid or enforceable.
(h) Further Assurances. The parties agree that they will take all
such further actions and execute and deliver all such further instruments and
documents as may be required in order to effectuate the agreements set forth in
this Agreement.
(i) Waiver. No failure or delay on the part of the parties or any of
them in exercising any right, power or privilege hereunder, nor any course of
dealing among the parties or any of them shall operate as a waiver of any such
right, power or privilege nor shall any single or partial exercise of any such
right, power or privilege preclude the simultaneous or later
14
exercise of any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and are not exclusive of any rights or
remedies which the parties or any of them would otherwise have.
(j) Notices. All notices and communications hereunder shall be in
writing and shall be deemed to have been duly given to a party when delivered in
person (including delivery by an express delivery service or by facsimile
transmission during the recipient's regular business hours) to an officer of the
Company or to Manager, respectively, or three (3) business days after such
notice is enclosed in a properly sealed envelope, certified or registered, and
deposited (postage and certification or registration prepaid) in a post office
or collection facility regularly maintained by the United States Postal Service
and addressed as follows:
If to Manager:
Tritel, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Tritel, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company:
Tritel, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Tritel Management, LLC
0000 Xxxxx Xxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
15
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AT&T Wireless Services, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Corporate Secretary
Telephone:
Facsimile: (000) 000-0000
and
Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
To each Cash Equity Investor, to its address set forth on
Schedule I to the Stockholders Agreement.
and
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
16
Attention: Xxxx X. Xxxxxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses as either party may designate in a
written notice served upon the other party in the manner provided
herein.
* * *
17
IN WITNESS WHEREOF, the parties have set their hands effective as of the
date first written above.
COMPANY:
TRITEL, INC.
By:
----------------------------------------
Name:
Title:
MANAGER:
TRITEL MANAGEMENT, LLC
By:
----------------------------------------
Name:
Title:
In order to induce the Company to execute and deliver the foregoing Management
Agreement, by their execution in the spaces provided below each of the
undersigned hereby agrees to be bound by the provisions of Sections 5(e) and 6
of this Agreement and to use good faith efforts to cause the Manager to perform
all of its obligations pursuant to this Agreement.
SENIOR EXECUTIVES
By:
----------------------------------------
Xxxxxxx X. Xxxxxxx, XX
By:
----------------------------------------
X.X. Xxxxxx, Xx.
By:
----------------------------------------
Xxxxx X. Xxxxxxxx, Xx.
18
SCHEDULE I
----------
Objectives
----------
[TO BE ESTABLISHED BY THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS]
I-1
Table of Contents
Page
Section 1. Engagement.....................................................1
Section 2. Management Standards...........................................2
Section 3. Services to be Provided.2
(a) Scope of Services..............................................2
(b) Accounts.......................................................3
(c) Restrictions on Manager's Authority............................4
Section 4. Compensation.5
(a) Reimbursement..................................................5
(b) Management Fees................................................5
(c) Disputes, etc..................................................6
Section 5. Term and Termination.6
(a) Term...........................................................6
(b) Termination.6
(c) Remedies.......................................................7
(d) Continuing Obligations.........................................7
(e) Transition Arrangements.7
(f) Return of Information..........................................8
Section 6. Noncompetition and Confidentiality.8
(a) Noncompetition.................................................8
(b) Confidentiality................................................8
(c) Company Property...............................................9
(d) Non-Solicitation of Employees..................................9
(e) Injunctive Relief with Respect to Covenants....................9
Section 7. Limitations of Liability.9
(a) Force Majeure..................................................9
(b) Exculpation of Manager.........................................9
(c) No Consequential or Special Damages...........................10
Section 8. Books and Records.............................................10
Section 9. Dispute Resolution............................................10
(a) Dispute Resolution............................................10
(b) Mediation.....................................................11
(c) Arbitration...................................................11
(d) Confidentiality...............................................11
(e) Fees and Expenses.............................................12
I-i
Section 10. Inspection Rights; Delivery of Information....................12
(a) Company's Right to Inspect....................................12
(b) Notice of Certain Events......................................12
(c) Other Information.............................................12
Section 11. Representations and Warranties................................12
(a) Organization and Standing of Parties..........................13
(b) Execution, Delivery, Performance and Binding Effect...........13
(c) Consents......................................................13
(d) Litigation; Claims............................................13
(e) Court Orders, Decrees, Judgments, etc.........................13
Section 12. Miscellaneous.................................................14
(a) Counterparts..................................................14
(b) Construction..................................................14
(c) Benefit; Assignment...........................................14
(d) Complete Agreement............................................14
(e) Amendment.....................................................14
(f) Governing Law.................................................14
(g) Severability..................................................14
(h) Further Assurances............................................14
(i) Waiver........................................................14
(j) Notices.......................................................15
Schedule I - Objectives
I-ii