AMENDED AND RESTATED MANAGEMENT AGREEMENT between DOBSON CELLULAR SYSTEMS, INC. and AMERICAN CELLULAR CORPORATION Effective as of March 15, 2007
EXHIBIT 10.3
AMENDED AND RESTATED MANAGEMENT AGREEMENT
between
XXXXXX CELLULAR SYSTEMS, INC.
and
AMERICAN CELLULAR CORPORATION
Effective as of March 15, 2007
Table of Contents
| Page | ||||||
| Section 1. | Definitions
|
1 | ||||
| Section 2. | Engagement
|
4 | ||||
| Section 3. | Management Standards
|
4 | ||||
| Section 4. | Services to be Provided
|
4 | ||||
| Section 5. | Compensation
|
9 | ||||
| Section 6. | Term and Termination
|
9 | ||||
| Section 7. | Confidentiality
|
11 | ||||
| Section 8. | Force Majeure
|
11 | ||||
| Section 9. | Books and Records
|
12 | ||||
| Section 10. | Regulatory Compliance
|
12 | ||||
| Section 11. | Dispute Resolution
|
13 | ||||
| Section 12. | Inspection Rights; Delivery of Information
|
14 | ||||
| Section 13. | Miscellaneous
|
15 | ||||
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AMENDED AND RESTATED MANAGEMENT AGREEMENT
This Amended and Restated Management Agreement (this “Agreement”) is entered into as
of March 15, 2007 by and between Xxxxxx Cellular Systems, Inc., an Oklahoma corporation (the
“Manager”), and American Cellular Corporation, a Delaware corporation (the
“Company”).
WHEREAS, the Manager and the Company have entered into a Management Agreement dated as of
August 19, 2003 (the “Original Agreement”) and desire to execute this Agreement to amend
and restate the Original Agreement in its entirety;
WHEREAS, the operation of the Business (as defined in Section 1 hereof), including,
without limitation, the determination of policy, the preparation and filing of any and all
applications and other filings with the FCC (as defined in Section 1 hereof), 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 the Manager shall
assist the Company in connection therewith and any action undertaken by the 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, Xxxxxx Communications Corporation, an Oklahoma corporation (“DCC”), through
its indirect, wholly owned subsidiaries, the Manager and the Company, owns certain Cellular Systems
and PCS Systems (each as defined in Section 1 hereof); and
WHEREAS, the Manager is willing to provide management services for the Company and its
Subsidiaries (as defined in Section 1 hereof) on the terms and subject to the conditions
contained in this Agreement.
NOW, THEREFORE, for and in consideration of the premises, 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, and the Original Agreement is
hereby amended and restated in its entirety, as follows:
Section 1. Definitions. Capitalized terms used in this Agreement without other
definition shall, unless expressly stated otherwise, have the meanings specified in this
Section 1.
“AAA Rules” is defined in Section 11(b).
“ACH” means The Automated Clearing House Network.
“Affiliate” means, with respect to any Person, any other Person that, either directly
or indirectly through one or more intermediaries, controls, is controlled by or is under common
control with such Person.
“Agreement” is defined in the Preamble.
“Arbitration Notice” is defined in Section 11(b).
“Board of Directors” means the directors serving on the board of directors on the
Effective Date for the Manager, the Company and DCC.
“Business” means the business of (a) owning, constructing and operating Cellular
Systems, PCS Systems or other networks or systems of the Company to provide Telecommunications
Services within the Territory, (b) providing to end-users and resellers Telecommunications
Services, (c) marketing and offering the services and features described in clauses (b) and (c)
within the Territory, including advertising such services and features using broadcast and other
media, and (d) offering related services and features to those described in clauses (b) and (c)
within the Territory.
“Cellular System” means a wireless communications system constructed and operated in a
Metropolitan Statistical Area or Rural Statistical Area as defined by the FCC (or any territorial
designations or subdivision thereof authorized by the FCC) using frequencies in the 800 MHz band
allocated for the Cellular Radiotelephone Service under Part 22 of the FCC Rules, pursuant to a
License therefor issued by the FCC.
“Change of Control” is defined in Section 6(b).
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Communications Act” means, means the Communications Act of 1934, as amended, and the
rules, regulations and published orders of the FCC thereunder.
“Company” is defined in the Preamble.
“Confidential Information” means all documents and information (including without
limitation, commercial information and information with respect to customers and proprietary
technologies or processes and the design and development of new products or services) concerning
the Company or its Business.
“Cost Allocations” is defined in Section 5(b).
“Dispute” is defined in Section 11.
“Effective Date” is defined in Section 6(a).
“Equipment Lease and Switch Sharing Agreements” means the three Equipment Lease
Agreements and the two Switch Sharing Agreements between Xxxxxx Operating Co., LLC and the Company,
and the one Equipment Lease Agreement between Xxxxxx Cellular Systems, Inc. and the Company, all
dated as of January 1, 2003, which provide for the leasing or sharing of certain telecommunications
equipment between the parties thereto, including any amendments or modifications thereto; provided,
however, that such amendments or modifications may not adversely affect the Company when compared
with the provisions in place immediately prior to the time of such amendment.
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“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“FAA” means the Federal Aviation Administration or any successor agency or entity
performing substantially the same functions.
“FCC” means the Federal Communications Commission or any successor agency or entity
performing substantially the same functions.
“FCC Rules” means the rules and regulations established by the FCC codified in Section
47 of the Code of Federal Regulations, as the same may be modified or amended from time to time
hereafter.
“GAAP” means generally accepted accounting principles as used by the Financial
Accounting Standards Board and/or the American Institute of Certified Public Accountants.
“Governmental Authority” means a national, state, provincial, county, city, local or
other governmental or regulatory body or authority, whether domestic or foreign.
“License” means, with respect to a PCS System or Cellular System, all permits,
licenses, waivers, and authorizations (including, without limitation, licenses issued by the FCC)
that are necessary to conduct the operations of such system in the manner in which such operations
are currently contemplated, or may in the future be contemplated by the licensee to be conducted.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest, right of first refusal or right of others therein, or encumbrance of any nature
whatsoever in respect of such asset.
“Manager” is defined in the Preamble.
“New Provider” is defined in Section 13(c).
“Out-of-Pocket Expenses” is defined in Section 5(a).
“Operating Budget” is defined in Section 4(d).
“PCS System” means a wireless communications system constructed and operated in a
Basic Trading Area or Major Trading Area as defined by Xxxx-XxXxxxx and modified by the FCC (or any
territorial designations or subdivision thereof authorized by the FCC) using frequencies in the
1900 MHz band allocated for the broadband Personal Communications Service under Part 24 of the FCC
Rules, pursuant to a License therefor issued by the FCC.
“Person” means any individual, corporation, partnership, firm, joint venture, limited
liability company, limited liability partnership, association, joint stock company, trust, estate,
incorporated or unincorporated organization, Governmental Authority or other entity.
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“Subsidiary” means, with respect to any Person, a corporation or other entity of which
50% or more of the voting power of the Voting Stock or other equity interests is owned, directly or
indirectly, by such Person.
“Telecommunications Services” means the offering of telecommunications or information
services to the public regardless of the facilities used. The term “telecommunications” means the
transmission, between or among points specified by the user of information of the user’s choosing.
“Territory” means the geographic territory where the Company is licensed and/or
authorized to operate Cellular Systems or PCS Systems or otherwise to offer Telecommunications
Services from time to time.
“Treasury Regulations” means regulations issued by the United States Department of the
Treasury pursuant to the Code, as the same may be modified or amended from time to time hereafter.
“Voting Stock” means shares of stock of a Person having the right to vote generally in
the election of the directors (or persons performing equivalent functions) of such Person.
Section 2. Engagement. The Company hereby engages the Manager to oversee, manage and
supervise the development and operation of the Business, and the Manager hereby accepts such
engagement, subject to and upon the terms and conditions hereof.
Section 3. Management Standards.
(a) In performing its obligations hereunder, the Manager shall act in a manner that it
reasonably believes to be in the best interests of the Company consistent with the standards set
forth herein.
(b) The Manager shall devote comparable attention and services to the Company as those devoted
by the Manager in its management of other wireless communications systems or markets directly or
indirectly owned or managed by the Manager, and will otherwise deal with the Company subject to the
terms of this Agreement in a manner that is substantially consistent with the manner in which the
Manager has operated the Company’s markets prior to the date of this Agreement and in a manner that
does not unreasonably discriminate against the Company in favor of such other markets.
(c) The Manager shall use commercially reasonable efforts to cause the Company’s Business to
be maintained and operated in the same manner and with quality standards consistent with the manner
and standard of the Manager’s own cellular systems.
Section 4. 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 4(c) below, the Manager shall be
responsible for the supervision, design, construction and operation of the Company and the
Business.
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Among other things, the Manager shall have the right to select the persons who shall perform
all design, construction, management or operational services and may elect to use its own employees
or engage independent contractors. To this end, the 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, supervisory services with respect to (x) all administrative, accounting, billing,
credit, collection, insurance, purchasing, clerical and such other general services as may be
necessary to the administration of the Business, (y) operational, engineering, maintenance,
construction, repair and such other technical services as may be necessary to the construction and
operation of the Business and (z) marketing, sales, advertising and such other promotional services
as may be necessary to the marketing of the Business. The services for which the Manager shall be
responsible, the Company’s oversight, review and ultimate control and approval and to the
limitations of Section 4(c) below, shall include, but shall not be limited to, the
following:
(i) the marketing of Telecommunications 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 reasonably requested by the Company;
(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 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, a business plan and personnel requirements, and key performance standards, goals and
indicators for the Company, for the period covered by the budget, in each case presented on
a month-by-month basis to the extent practicable, and generally describing all contracts and
commitments which the 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;
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(vii) management information services for the Company;
(viii) monitoring and controlling the Business;
(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 the
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 permitted
expenditures (including permitted 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 the Manager hereunder, which shall include, but not be limited
to, payments under Section 5, payments to independent contractors, payments to vendors and
suppliers of the Business, and interest payments to creditors that have financed the construction
or operation of the Business. To the extent provided herein, the Manager shall make such payments
on the Company’s behalf from one or more of the Manager’s accounts, xxxx the Company for such
payments and the Company shall promptly reimburse the Manager (in any event, within one month after
receiving the xxxx). All disbursements made by the Company as permitted under this Agreement shall
be made by wire transfer, ACH or checks drawn from one or more of the Company’s accounts and all
funds on deposit in the Company’s accounts shall at all times be the property of the Company.
(c) Restrictions on the Manager’s Authority. Anything to the contrary in this
Agreement notwithstanding, the Manager shall not take, or cause or permit to be taken, any action
that requires the approval of, or do, or cause or permit to be done, any of the following for or on
behalf of the Company without the consent of the Company or an officer of the Company (unless
included with reasonable specificity in an Operating Budget duly adopted by the Company):
(i) settle any claim or litigation by or against the Company if the settlement involves
a payment of $500,000 or more, or any non-ministerial regulatory proceedings involving the
Company;
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(ii) (A) 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 (B) 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 Company;
(v) assert on behalf of the Company a position with respect to any material matter, or
disagree on behalf of the Company with a position taken with respect to any material matter
by any Person, before the FCC or any other Governmental Authority, a self-regulatory body,
any industry organization or in any other public forum;
(vi) knowingly take or fail to take any action that violates (A) any law, rule or
regulation relating to the Business, (B) any material 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;
(vii) sell, assign, transfer or otherwise dispose of, or hypothecate or xxxxx x Xxxx on
any License or other material 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 (it being understood that
License renewals in the ordinary course of business shall not require the Company’s
approval);
(ix) borrow money on behalf of the Company or enter into other forms of financing for
the Business, other than any capital lease;
(x) commingle any funds of the Company with funds of any other entity or Person,
provided that the Manager may allow collections of accounts receivable of the
Company and the Manager to be temporarily commingled in a centralized cash management system
so long as the Manager maintains clear and separate records as to the amounts owing to each
of the Company and the Manager, respectively, such that the separate assets of the Company
and the Manager can be readily and inexpensively identified and that any such commingled
collections are promptly (and in any event within one month) remitted to the proper party;
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(xi) hire or fire the independent certified public accountants of the Company;
(xii) pay to any employee or consultant or advisor to the Company cash compensation in
excess of $150,000 in any fiscal year;
(xiii) establish any reserves that are not set forth on an Operating Budget approved by
the Company;
(xiv) make any material changes or modifications to any significant components of the
Company’s Cellular Systems or PCS Systems as they exist on the Effective Date;
(xv) enter into any contract, agreement (including any capital lease) or other
commitment or issue any purchase order, which contract or other agreement or purchase order
(A) is not in the ordinary course of business, (B) obligates the Company to make payments of
$500,000 or more within any 12-month period or (C) could reasonably be expected to create a
material variance relative to (x) in the case of a capital expenditure, the total budget for
capital expenditures contained in any Operating Budget approved by the Company and (y) in
the case of an operating expense, the total operating expense budget contained in any
Operating Budget approved by the Company, 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; 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 4(c); or
(xvi) enter into, or commit to enter into, any agreement, arrangement or understanding
that could reasonably be expected to have an adverse effect on the Company’s ability to
comply with any material provision of this Agreement.
(d) Budgets. The Manager shall prepare or cause to be prepared and present in a
timely manner an annual operating budget (with quarterly forecasts) for the Company’s review,
evaluation and approval (each, as duly approved by the Company, an “Operating Budget”).
Each Operating Budget shall set forth in reasonable detail the anticipated capital expenditures and
other projected costs and expenses of operating the Company’s Business during the period covered by
such Operating Budget, as well as projected revenues for that period and the projected reportable
income for such quarter and the Manager shall endeavor to assure the accuracy of its estimates.
(e) Transactions with Affiliates. Notwithstanding anything in this Agreement to the
contrary, without the prior approval of the Company, the Manager shall not (and shall not permit
the Company or its Subsidiaries to) enter into any agreement, arrangement or understanding with the
Manager or any of its Affiliates except for the Equipment Lease and Switch Sharing Agreements and
except in the ordinary course of the Business of the Company and on commercially reasonable terms
that are no less favorable to the Company or its Subsidiaries than the Company or its Subsidiaries
would obtain in a comparable arm’s-length transaction with an unaffiliated Person. In its request
for approval of the Company, the Manager shall specify that the applicable transaction is subject
to this Section 4(e).
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Section 5. Compensation.
(a) Reimbursement. The Company shall reimburse the Manager for all out-of-pocket
expenses (“Out-of-Pocket Expenses”) reasonably incurred by the Manager for goods and
services provided by third parties to, for or on behalf of the Company or incurred by the Manager
in the performance of its duties and responsibilities hereunder. The Manager shall provide the
Company with an accounting setting forth in reasonable detail (and, if requested by Company, with
supporting documentation) the Out-of-Pocket Expenses claimed within thirty (30) days after they are
incurred. The Company shall pay to the Manager each such amount within thirty (30) days of receipt
of such statement and invoices or other supporting documentation (it being understood that
estimated Out-of-Pocket Expenses will not be reimbursed until the Manager provides the Company with
the invoices or other supporting documentation therefor).
(b) Cost Allocations. To the maximum extent practicable, the Manager and its
Affiliates will specifically identify costs associated directly or solely with the Business, which
shall be reimbursed by the Company as Out-of-Pocket Expenses in accordance with Section
5(a). To the extent that such specific identification is impracticable, the Manager shall
charge the Company for those common costs that benefit the Company (including an appropriate
portion of the Manager’s general overhead costs) (“Cost Allocations”). Cost Allocations
(including, without limitation, the cost of services directly allocable to the Company that are
performed by employees of the Manager or its Affiliates) shall be calculated and charged to the
Company, except for common costs associated with call center activities or operation, on the basis
of licensed POPs or subscribers for the market(s) sharing in or benefiting from such common costs
(other than those associated with the call centers). For purposes of this Agreement,
“POPs” shall mean the number of residents of a licensed area based upon the most current
determination of such by the Company and the Manager. Common costs associated with call center
activities or operations shall be allocated on the basis of subscribers in the market(s) sharing in
or benefiting from such costs. With regard to those common costs, which are subject to any
specific lease or shared equipment agreements, the cost allocations therein shall control in the
event of a difference between those agreements and this Agreement. The Manager shall cause to be
furnished to the Company, at Company’s expense, an accounting of any such Cost Allocations, and the
Company shall pay to the Manager such amount within thirty (30) days of receipt of such accounting.
(c) Disputes, etc. If the Company disputes the amount of any Out-of-Pocket Expenses
or Cost Allocations claimed by the Manager, the Company shall notify the Manager in writing before
payment is due, and if the matter cannot be resolved informally between the parties, either the
Company or the Manager may request resolution of the Dispute pursuant to Section 11.
Section 6. Term and Termination.
(a) Term. This Agreement shall commence on March 15, 2007 (the “Effective
Date”) and shall terminate as provided herein.
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(b) Termination.
(i) By Either Party. Either party may terminate this Agreement in the event
that a Governmental Authority enters 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 the other party files a petition
seeking any such order; or if any such petition shall be filed against the other party and
shall not be dismissed within one hundred and twenty (120) 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 one hundred and twenty (120) days thereafter.
(ii) By the Company. The Company may terminate this Agreement:
(A) on ten (10) days’ notice in the event of a material breach of this
Agreement by the Manager, which has not been cured within sixty (60) days following
notice thereof from the Company;
(B) on ten (10) days’ notice if a Change of Control of either the Company, the
Manager or DCC occurs. For the purpose of this Agreement, a Change of Control shall
mean:
(1) any “person” or “group,” within the meaning of
Section 13(d) or 14(d)(2) of the Exchange Act, becomes the ultimate
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act,
of more than 35% of the total voting power of the Voting Stock of the
Company, the Manager or DCC (as the case may be), on a fully diluted basis
and such ownership represents a greater percentage of the total voting power
of the Voting Stock of the Company, the Manager or DCC (as the case may be),
other than is held by the controlling stockholder and its Affiliates of the
Company, the Manager or DCC (as the case may be), on the Effective Date; and
(2) individuals who on the Effective Date constitute the Board of
Directors, together with any new directors whose election by the Board of
Directors or whose nomination for election by the stockholders of the
Company, the Manager or DCC (as the case may be), was approved by a vote of
at least a majority of the members of the Board of Directors on the
Effective Date or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the members of
the Board of Directors then in office; (3) the sale, lease, transfer,
conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all the combined assets of the Company, taken as a whole, to
any Person other than the Company, the Manager or DCC (as the case may be),
or any Affiliate thereof; or (4) the adoption of a plan of
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liquidation or dissolution of the Company, the Manager or DCC (as the
case may be).
(iii) By the Manager. The Manager may terminate this Agreement on ten (10)
days’ notice in the event of a material breach of this Agreement by the Company (other than
a payment default) which has not been cured within sixty (60) days following notice thereof
from Manager.
(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.
Section 7. Confidentiality.
(a) Confidentiality. The Manager shall, and shall cause each of its Affiliates, and
each of its and their respective partners, members, managers, shareholders, directors, officers,
employees and agents (collectively, “Agents”) to keep secret and retain in strictest
confidence and not use for any purpose, except on behalf of the Company in accordance with this
Agreement, any and all Confidential Information relating to the Company or its Affiliates (other
than the Manager and its Subsidiaries) and shall not disclose such information, and shall cause its
Agents not to disclose such information, to the same extent such information of the Manager
protects its own confidential information.
(b) Company Property. Promptly following the termination of this Agreement, the
Manager 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.
(c) Injunctive Relief with Respect to Covenants. The Manager acknowledges and agrees
that the covenants and obligations contained in this Section 7 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, the Manager agrees 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 the Manager and its Affiliates from committing any violation
of the covenants and obligations contained in this Section 7. 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 8. 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, threats or acts of terrorism, 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.
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Section 9. Books and Records. The Manager shall maintain and oversee the maintenance
and preparation of proper and complete records and books of account for tax and financial purposes
with respect to its management of the operation of the Business, including all such transactions
and other matters as are usually entered into records and books of account maintained by Persons
engaged in business of like character or as required by law. The Manager shall maintain and
oversee the maintenance and preparation of complete records and books of the Company for tax
purposes. Books and records maintained for financial purposes shall be maintained in accordance
with GAAP, and books and records maintained for tax purposes shall be maintained in accordance with
the Code and applicable Treasury Regulations. The 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 of
the Company maintained by the Manager pursuant to this Section 9.
Section 10. Regulatory Compliance. Subject to the other provisions of this Agreement,
the Manager shall cause the Company and its Subsidiaries, and their respective Cellular Systems
and/or PCS Systems, to remain in compliance in all material respects with applicable laws, rules
and regulations, including rules and regulations promulgated by the FAA and the FCC. Without
limiting the generality of the foregoing, the parties agree to comply with all applicable FCC rules
and regulations governing the Business, including the Company’s Cellular Systems and the PCS
Systems and the Licenses, and specifically agree as follows:
(a) The Company (or its Subsidiaries which are the holders of the Licenses) shall at
all times maintain absolute control over, and retain the ability to exercise the unfettered
use of, the Licenses and the licensed facilities provided thereunder, including the products
and services to be offered and the rates to be charged and the further right to terminate
service should public interest obligations under the applicable Licenses so require.
(b) The Manager shall not represent itself as the holder of a License to provide the
Telecommunications Services in the Territory by reason of its rights and obligations to
operate the Company’s Business as provided herein.
(c) Each customer (if any) billed by the Manager shall be clearly advised that service
is provided over facilities licensed to the Company (or the Subsidiary which is the holder
of a License).
(d) Neither the Manager nor the Company (nor a Subsidiary which is a holder of a
License) shall represent itself as the legal representative of the other before the FCC.
The Manager and the Company (and each Subsidiary which is the holder of a License) will
cooperate with the other with respect to FCC matters concerning the Business.
(e) The Company (and each Subsidiary which is the holder of a License) shall (i) in
cooperation with the Manager, take all actions necessary to keep its Licenses in force and
shall prepare and submit to the FCC, or any other relevant authority, all reports,
applications, renewals, filings or other documents necessary to keep its Licenses in force
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and in good standing; (ii) with all due assistance which may be necessary from the
Manager, respond promptly to all FCC correspondence or inquiries and will immediately notify
the Manager of the receipt thereof; and (iii) promptly report any changes of its address to
the FCC and to the Manager.
(f) The Company (and each Subsidiary which is the holder of a License) and the Manager
are familiar with the rules of the FCC regarding the responsibility of the holder of a
License under the Communications Act and applicable FCC rules, regulations and policies.
Nothing in this Agreement is intended to diminish or restrict the obligations of the Company
(or a Subsidiary which is the holder of a License) as an FCC licensee and both parties
desire that this Agreement be in compliance with the rules and regulations of the FCC. If
the FCC determines that any provision of this Agreement violates any FCC rule, policy or
regulation, all parties will make good faith efforts to immediately correct the problem and
bring this Agreement into compliance, consistent with the intent of this Agreement.
Section 11. Dispute Resolution. If a dispute arises out of or relating to this
Agreement or the transactions contemplated hereby, or the construction, interpretation,
performance, breach, termination, enforceability or validity hereof, whether such claim is based on
rights, privileges or interests recognized by or based upon contract, tort, fraud,
misrepresentation, statute, common law or any other legal or equitable theory (“Dispute”)
and whether such Dispute existed prior to or arises on or after the Effective Date, the dispute
resolution processes set forth herein shall apply.
(a) The parties shall first attempt to settle each Dispute through good faith
negotiations. The aggrieved party shall initiate such negotiations by giving the other
party written notice of the existence and nature of the Dispute. The other party shall in a
writing to the aggrieved party acknowledge such notice of Dispute within ten (10) business
days. Such acknowledgment may also set forth any Dispute that the acknowledging party
desires to have resolved in accordance with this Section.
(b) Thereafter, if any Dispute is not resolved by the parties through negotiation
within thirty (30) calendar days of the date of the notice of acknowledgment, either party
may terminate informal negotiations with respect to that Dispute and have the right, by
delivery of written notice thereof to the other party (the “Arbitration Notice”), to
submit the matter to be finally settled by arbitration in accordance with the Commercial
Arbitration Rules then in effect of the American Arbitration Association, as modified herein
(the “AAA Rules”). The place of arbitration shall be Oklahoma City, Oklahoma. All
matters so submitted to arbitration shall be settled by three arbitrators. The Company and
the Manager shall each designate one arbitrator within 20 days of the delivery of the
Arbitration Notice. If either the Company or the Manager fails to so timely designate an
arbitrator, the matter shall be resolved by the one arbitrator timely designated. If two
arbitrators are selected, the Company and the Manager shall cause the designated arbitrators
to mutually agree upon and to designate a third arbitrator, provided,
however, that if the Company and the Manager fail to reach such agreement within 45
days of delivery of the Arbitration Notice, the third arbitrator shall be appointed in
accordance with the AAA Rules. The Company and the Manager shall be responsible for the
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payment of the fees and expenses of their respectively designated arbitrators and shall
bear equally the fees and expenses of the third arbitrator. The Company and the Manager
shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60
days after the appointment of the last appointed arbitrator.
The arbitral tribunal is not empowered to award damages in excess of compensatory
damages and each party hereby irrevocably waives any right to recover punitive, exemplary or
similar damages with respect to any Dispute. The final decision of the majority of the
arbitrators shall be furnished to the Company and the Manager in writing and shall
constitute a conclusive determination of the matter in question, binding upon the Company
and the Manager and shall not be contested by either of them. Such decision may be used in
a court of law only for the purpose of seeking enforcement of the arbitrators’ award. Any
arbitration proceeding, decision or award rendered hereunder and the validity, effect and
interpretation of this arbitration agreement shall be governed by the Federal Arbitration
Act, 9 U.S.C. Sections 1-16, and judgment upon any award may be entered in any court of
competent jurisdiction.
(c) Pending the resolution of any Dispute not involving the entire Agreement, the
parties agree to continue the operation of the provisions of this Agreement to the extent
reasonably possible.
Section 12. Inspection Rights; Delivery of Information.
(a) Company’s Right to Inspect. The Manager will permit representatives of the
Company, at the Company’s cost, during normal business hours and upon not less than five business
days’ advance written request, to (i) visit and inspect during normal business hours the Manager’s
properties and facilities which are utilized in connection with the 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 the Manager’s officers and employees such properties and facilities and the
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 five (5) business
days after the Manager has received notice or has otherwise become aware thereof, the Manager shall
give the Company notice of (i) the commencement of any material proceeding or investigation against
the Company or the 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 the Manager, the Business or
the Company, or on the 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 the Manager under this
Agreement or under any other material agreement to which the Company or the Manager is a party or
by which its properties may be bound, and (y) would be likely to have a material adverse effect on
the Manager, the Business or the Company, or on the Manager’s ability to perform its obligations
hereunder, giving in each case the details thereof and
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specifying the action being taken or proposed to be taken with respect thereto. Promptly upon
receipt thereof, the 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, the 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 the Manager, as may be reasonably requested by the
Company.
Section 13. Miscellaneous.
(a) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute one
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 thereto. The captions used herein are for convenience of reference only and
shall not affect the interpretation or construction hereof. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular, plural as the
context may require. Unless otherwise specified, (i) the terms “hereof,” “herein,”
and similar terms refer to this Agreement as a whole, (ii) references herein to Articles or
Sections refer to articles or sections of this Agreement and (iii) the word “including”
connotes the words “including without limitation” unless the context requires otherwise.
(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 the Manager shall not assign or otherwise transfer its
rights and obligations under this Agreement (other than to another wholly owned Subsidiary of DCC
that has substantially the same ability to perform its obligations hereunder as the original
Manager) without the prior written consent of the Company (any permitted assignee of the Manager
under this sentence, the “New Provider”). The parties agree that, upon any termination of
this Agreement by the Company pursuant to Section 6(b)(i) or Section 6(b)(ii), the
rights and (to the extent provided herein) obligations of the Manager shall be deemed to have been
assigned to the New Provider; provided, that no such termination shall relieve the Manager
of any liability which at the time of termination had already accrued to-the Manager or which
thereafter may accrue in respect of any act or omission of the Manager or its Affiliates prior to
such termination.
(d) Amendment. This Agreement may not be amended except by a writing signed by each
of the parties.
(e) 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 Oklahoma.
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(f) 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, so
long as the economic and legal substance of this Agreement is not, and the actions contemplated
hereby are not, affected in any manner adverse to either party.
(g) 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.
(h) 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
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 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.
(i) Notices. All notices or other communications hereunder shall be in writing and
shall be deemed to have been duly given or made (i) upon delivery if delivered personally (by
courier service or otherwise) or (ii) upon confirmation of dispatch if sent by facsimile
transmission (which confirmation shall be sufficient if shown on the journal produced by the
facsimile machine used for such transmission), and all legal process with regard hereto shall be
validly served when served in accordance with applicable law, in each case to the applicable
addresses set forth below (or such other address as the recipient may specify in accordance with
this Section):
If to the Manager:
Xxxxxx Cellular Systems, Inc.
00000 Xxxxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Attention: Sr. Corporate Counsel
Fax: (000) 000-0000
00000 Xxxxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Attention: Sr. Corporate Counsel
Fax: (000) 000-0000
If to the Company:
American Cellular Corporation
00000 Xxxxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Attention: President
Fax: (000) 000-0000
00000 Xxxxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Attention: President
Fax: (000) 000-0000
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized
officers effective as of the date first written above.
| AMERICAN CELLULAR CORPORATION | ||||||
| By: | ||||||
| Title: Vice President | ||||||
| XXXXXX CELLULAR SYSTEMS, INC. | ||||||
| By: | ||||||
| Title: Vice President | ||||||
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