-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IwF4sWLDCkElXpLLWkXS5mTaQL6DD6x2N865uC/q9oRuJUCm5dujQjsY00BLYLg+ ON6aNuaRfcVHJdhyT6CBRA== 0000928385-99-002487.txt : 19990810 0000928385-99-002487.hdr.sgml : 19990810 ACCESSION NUMBER: 0000928385-99-002487 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19990809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRGATE WIRELESS INC CENTRAL INDEX KEY: 0001086844 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 582422929 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-79189-02 FILM NUMBER: 99680515 BUSINESS ADDRESS: STREET 1: 230 PEACHTREE ST STREET 2: SUITE 1700 CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 3105406222 MAIL ADDRESS: STREET 1: 230 PEACHTREE ST STREET 2: SUITE 1700 CITY: ATLANTA STATE: GA ZIP: 30303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AGW LEASING CO INC CENTRAL INDEX KEY: 0001086843 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 582441171 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-79189-01 FILM NUMBER: 99680516 BUSINESS ADDRESS: STREET 1: 230 PEACHTREE ST STREET 2: SUITE 1700 CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 3105406222 MAIL ADDRESS: STREET 1: 230 PEACHTREE ST STREET 2: SUITE 1700 CITY: ATLANTA STATE: GA ZIP: 30303 S-1/A 1 AMENDMENT NO. 4 TO FORM S-1 As filed with the Securities and Exchange Commission on August 6, 1999 Registration No. 333-79189-02 Registration No. 333-79189-01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- Amendment No. 4 TO Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- AirGate PCS, Inc. Delaware 4812 58-2422929 AGW Leasing Company, Inc. Delaware 4812 58-2441171 (Exact name of registrants as (State or other jurisdiction) (Primary Standard Industry (I.R.S. Employer specified in their charters) of incorporation or organization) Classification Code Number) Identification No.)
--------------- Harris Tower Thomas M. Dougherty Suite 1700 AirGate PCS, Inc. 233 Peachtree Street, N.E. Harris Tower Atlanta, Georgia 30303 Suite 1700 (404) 525-7272 233 Peachtree Street, N.E. (Address, including zip code, and Atlanta, Georgia 30303 telephone number, including area (404) 525-7272 code, of registrants' principal (Name, address, including zip code, and executive offices) telephone number, including area code, of agent for service) --------------- Copies to: Mary M. Sjoquist, Esq. Gary P. Cullen, Esq. Joseph G. Passaic, Jr., Esq. Skadden, Arps, Slate, Meagher & Flom Patton Boggs LLP (Illinois) 2550 M Street, NW 333 West Wacker Drive Washington, DC 20037 Chicago, Illinois 60606 (202) 457-6000 (312) 407-0700 --------------- Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. --------------- If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box: [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If the Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Part II Information Not Required in the Prospectus Item 13. Other Expenses of Issuance and Distribution AirGate PCS, Inc. and AGW Leasing Company, Inc. (the "Registrants") estimate that expenses (other than underwriting discounts and commissions) in connection with the offering described in this Registration Statement will be as set forth in the following table. All amounts shown are estimates except for the Securities and Exchange Commission registration fee, the NASD filing fee and the Nasdaq National Market listing fee. Securities and Exchange Commission registration fee................ $ 75,801 National Association of Securities Dealers, Inc. filing fee........ 27,767 Nasdaq National Market listing fees................................ 76,625 Printing and engraving expenses.................................... 350,000 Accountants' fees and expenses..................................... 250,000 Legal fees and expenses............................................ 350,000 Fees and expenses for qualifications under state securities laws (including legal fees)............................................ 10,000 Transfer agent fees................................................ 5,000 Miscellaneous...................................................... 854,807 ---------- Total............................................................ $2,000,000 ==========
Item 14. Indemnification of Directors and Officers In accordance with General Corporation Law of the State of Delaware (being Chapter 1 of Title 8 of the Delaware Code), each Registrant's Certificate of Incorporation provides as follows: Each Registrant's Certificate of Incorporation provides that the Registrant shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Registrant to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorney's fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if such person acted under similar standards, provided that the Registrant receives a written undertaking by or on behalf of the director or officer to repay such amount if it is ultimately determined that that such person is not entitled to be indemnified by the Registrant. Each Registrant's Certificate of Incorporation further provides that to the extent that a director or officer of the Registrant has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him or her in connection therewith, that indemnification provided for by the Certificate of Incorporation shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and that the Registrant is empowered to purchase and maintain insurance on behalf of a director or officer of the Registrant against any liability asserted against him or here in any such capacity, or arising out of such person's status as such, whether or not the Registrant would have the power to indemnify him against such liabilities under the Certificate of Incorporation. II-1 In addition to indemnification provided to our officers and directors in the Certificate of Incorporation and under the laws of Delaware, AirGate PCS, Inc. has entered into indemnification agreements with certain officers and directors to provide further assurances and protection from liability that they may incur in their respective positions and duties in connection with the public offering or as a fiduciary of AirGate PCS, Inc. and its shareholders. We have agreed to indemnify and hold harmless, to the extent permitted under Delaware law, each person and affiliated person (generally, any director, officer, employee, controlling person, agent, or fiduciary of the indemnified person), provided that the indemnified person was acting or serving at our request in his capacity as either an officer, director, employee, controlling person, fiduciary or other agent or affiliate of AirGate PCS, Inc. Under the indemnification agreements, each person is indemnified against any and all losses, claims, damages, expenses and liabilities, joint or several, (including attorney's fees, expenses and amount in settlement) that occur in connection with any threatened, pending or completed action, suit, proceeding, alternative dispute resolution mechanism or hearing, inquiry or investigation that such indemnified person believes in good faith may lead to the institution of such action, under the Securities Act of 1933, Securities Exchange Act of 1934 or other federal or state statutory law or regulation, at common law or otherwise, which relate directly or indirectly to the registration, purchase, sale or ownership of any securities of AirGate PCS, Inc. or to any fiduciary obligation owed with respect to AirGate PCS, Inc. and its stockholders. As a condition to receiving indemnification, indemnified persons are required to give us notice in writing of any claim for which indemnification may be sought under this agreement. The agreement provides that an indemnified person may receive indemnification against (1) expenses (including attorney's fees and other costs, expenses and obligations incurred), judgments, fines and penalties; (2) amounts paid in settlement (approved by AirGate PCS, Inc.); (3) federal, state, local taxes imposed as a result of receipt of any payments under the indemnification agreement; and (4) all interest, assessments and other charges paid or payable in connection with any expenses, costs of settlement or taxes. An indemnified person will be indemnified against expenses to the extent that he is successful on the merits or otherwise, including dismissal of an action without prejudice, in defense of any action, suit, proceeding, inquiry or investigation. Expenses that the indemnified person have or will incur in connection with a suit or other proceeding may be received in advance within 10 days of written demand to AirGate PCS, Inc. Prior to receiving indemnification or being advanced expenses, a committee, consisting of either members of the board of directors or any person appointed by the board of directors, must make a determination of whether the indemnified person is entitled to indemnification under Delaware law. If there is a change in control (as defined in the indemnification agreement) that occurs without majority approval of the board of directors, then the committee will consist of independent legal counsel selected by the indemnified person and approved by AirGate PCS, Inc. to render a written opinion as to whether and the extent of indemnification that the indemnified person is entitled, which will be binding on AirGate PCS, Inc. Under the indemnification agreement, an indemnified person may appeal a determination by the committee's determination not to grant indemnification or advance expenses by commencing a legal proceeding. Failure of the committee to make a indemnification determination or the termination of any claim by judgment, order, settlement, plea of nolo contendere, or conviction does not create a presumption that either (1) the indemnified person did not meet a particular standard of conduct or belief or (2) that the court has determined that indemnification is not available. Under the indemnification agreement, an indemnified person is entitled to contribution from us for losses, claims, damages, expenses or liabilities as well as other equitable considerations upon the II-2 determination of a court of competent jurisdiction that indemnification is not available. The amount contributed by AirGate PCS, Inc. will be in proportion, as appropriate, to reflect the relative benefits received by us and the indemnified person or, if such contribution is not permitted under Delaware law, then the relative benefit will be considered with the relative fault of both parties. In connection with the registration of AirGate PCS, Inc.'s securities, the relative benefits received by AirGate PCS, Inc. and indemnified person will be deemed to be in the same respective proportions of the net proceeds from the offering (less expenses) received by AirGate PCS, Inc. and the indemnified person. The relative fault of AirGate PCS, Inc. and the indemnified person is determined by reference to the whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by AirGate PCS, Inc. or the indemnified person and their relative intent, knowledge, access to information and opportunity to correct such statement or omission. Contribution paid takes into account the equitable considerations, if any, instead of a pro rata or per capital allocation. In connection with the offering of AirGate PCS, Inc. securities, an indemnified person will not be required to contribute any amount in excess of the lessor of (1) the proportion of the total of such losses, claims, damages, or liabilities indemnified against equal to the proportion of the total securities sold under the registration statement sold by the indemnified person or (2) the proceeds received by the indemnified person from the sale of securities under the registration statement. Contribution will not be available if such person is found guilty of fraudulent misrepresentation, as defined in the agreement. In the event that AirGate PCS, Inc. is also obligated under a claim and upon written notice to the indemnified person, we are entitled to assume defense of the claim and select counsel which is approved by the indemnified person. Upon receipt of the indemnified person's approval, AirGate PCS, Inc. will directly incur the legal expenses and as a result will have the right to conduct the defense as it sees fit in its sole discretion, including the right to settle any claim against any indemnified party, without consent of the indemnified person. The underwriting agreements to be filed as Exhibits 1.1 and 1.2 to the Registration Statement provides for indemnification by the underwriters of AirGate PCS, Inc. and its directors and certain officers, and by AirGate PCS, Inc. of the underwriters, for certain liabilities arising under the Securities Act or otherwise. Item 15. Recent Sales of Unregistered Securities In accordance with Item 701 of Regulation S-K, the following information is presented with respect to securities sold by the Registrants within the past three years which were not registered under the Securities Act. (i) September 1996 Note (a) On September 27, 1996, AirGate, L.L.C. (the "LLC") sold a $180,000 8% note, due and payable or convertible on August 8, 1998. This note was rolled into the 1998 Financing outlined below. (b) The note was sold to a related party who qualified as an accredited investor under Regulation D promulgated under the Securities Act. (c) The note was sold for $180,000. (d) The notes were offered and sold in reliance upon an exemption from registration under Section 4(2) of the Securities Act. II-3 (e) Not applicable (f) Not applicable (ii) The 1998 Financing (a) Between August and September 1998, AirGate PCS, Inc. sold $4,815,000 of 8% Convertible Promissory Notes. $3 million of the notes was due on September 18, 1999, while $1.815 million was due on August 20, 1999, unless converted. The notes are convertible into Series A preferred stock or common stock upon the satisfaction of certain conditions. AirGate PCS, Inc. also issued warrants to purchase the preferred stock to the purchasers of the notes, which warrants were to be exercised on the earlier of five years from the date of issuance or an initial public offering. These notes were rolled into the May 1999 Refinancing. (b) The notes and warrants were sold to two related party venture funds and their affiliates who qualified as accredited investors within the meaning of Regulation D under the Securities Act. (c) The notes and the warrants were sold for a total aggregate consideration of $4,815,000. (d) The notes were offered and sold in reliance upon an exemption from registration under Section 4(2) of the Securities Act. (e) Not applicable (f) Not applicable (iii) The 1999 Financings (a) In March, April and May 1999 AirGate PCS, Inc. sold an aggregate of $2.5 million of 8% subordinated notes. (b) The notes and warrants were sold to two related party venture funds, Weiss, Peck and Greer Venture Partners affiliated funds and JAFCO America Ventures, Inc. affiliated funds, who qualified as accredited investors within the meaning of Regulation D under the Securities Act. (c) The notes were sold for a total aggregate consideration of $2.5 million. (d) The notes were offered and sold in reliance upon an exemption from registration under Section 4(2) of the Securities Act. (e) Not applicable (f) Not applicable (iv) The May 1999 Refinancing (a) In May 1999, AirGate PCS, Inc. consolidated the promissory notes issued to the two related party venture funds in the 1998 financing and the March, April and May 1999 financings totaling $7.325 million into promissory notes that will be converted into shares of AirGate PCS, Inc.'s common stock concurrently with the completion of the offering contemplated hereby at a price 48% less than the price of a share of common stock sold in the offering. The warrants held by these funds II-4 were terminated. In addition, the Registrant issued warrants to Weiss, Peck and Greer Venture Partners affiliated funds to purchase shares of common stock for an aggregate price of up to $2.73 million at a price 25% less than the price of a share of common stock sold in this offering. (b) The promissory notes and the warrants were issued to two related party venture funds, Weiss, Peck and Greer Venture Partners affiliated funds and JAFCO America Ventures, Inc. affiliated funds, who qualified as accredited investors within the meaning of Regulation D under the Securities Act. (c) The aggregate consideration received in exchange for the promissory notes and the warrant was the refinancing of $7.561 million of promissory notes and the cancellation of warrants held by each venture fund. (d) The notes and the warrant were offered and sold in reliance upon an exemption from registration under Section 4(2) of the Securities Act. (e) Not applicable (f) Not applicable Item 16. Exhibits The exhibits and financial statement schedules filed as a part of the Registration Statement are as follows: (a) List of Exhibits 1.1* Form of Equity Underwriting Agreement 1.2* Form of Debt Underwriting Agreement 3.1 Amended and Restated Certificate of Incorporation of AirGate PCS, Inc. 3.2* Amended and Restated Bylaws of AirGate PCS, Inc. 4.1* Specimen of Common Stock Certificate of AirGate PCS, Inc. 4.2* Form of warrants 4.3** Form of Indenture for Senior Subordinated Discount Notes 5.1* Opinion of Patton Boggs LLP regarding legality of the common stock being offered 5.2* Opinion of Patton Boggs LLP regarding legality of the Senior Subordinated Discount Notes being offered 10.1+ Sprint PCS Management Agreement between SprintCom, Inc. and AirGate Wireless, L.L.C. 10.2* Sprint PCS Services Agreement between Sprint Spectrum L.P. and AirGate Wireless, L.L.C. 10.3* Sprint Spectrum Trademark and Service Mark License Agreement 10.4* Sprint Trademark and Service Mark License Agreement 10.5+ Master Site Agreement dated August 6, 1998 between AirGate and BellSouth Carolinas PCS, L.P., BellSouth Personal Communications, Inc. and BellSouth Mobility PCS. 10.6+ Compass Telecom, L.L.C. Construction Management Agreement 10.7* Commercial Real Estate Lease dated August 7, 1998 between AirGate and Perry Company of Columbia, Inc. to lease a warehouse facility. 10.8* Form of Indemnification Agreement
II-5 10.9* Employment Agreement dated April 9, 1999 between AirGate and Mr. Thomas M. Dougherty 10.10* Form of Executive Employment Agreement 10.11* Form of 1999 Stock Option Plan 10.12** Form of Credit Agreement with Lucent (including the form of pledge agreement and form of intercreditor agreement) 10.13** Form of Consent and Agreement 10.14 Assignment of Sprint PCS Management Agreement, Sprint Spectrum Services Agreement and Trademark and Service Mark Agreements from AirGate Wireless, L.L.C. to AirGate Wireless, Inc. date November 20, 1998. 21.1* Subsidiaries of AirGate PCS, Inc. 23.1* Consent of KPMG LLP 23.2* Consent of Patton Boggs LLP (included in Exhibits 5.1 and 5.2) 24.1* Powers of Attorney 25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Trustee, on Form T-1, in connection with the Senior Subordinated Discount Notes offering 27.1* Financial Data Schedule
- --------------------- * Previously filed **To be filed by amendment +Confidential treatment requested on portions of these documents (b) Financial Statement Schedule No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial statements or related notes. Item 17. Undertakings Each of the Registrants hereby undertakes: (1) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of such Registrant pursuant to the foregoing provisions, or otherwise, such Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by such Registrant of expenses incurred or paid by a director, officer or controlling person of such Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (2) To provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. II-6 (3) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (4) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-7 Pursuant to the requirements of the Securities Act, AirGate PCS, Inc. has duly caused this Amendment No. 4 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Fulton, State of Georgia, on August 6, 1999. Airgate PCS, Inc. By: _________________________________ Name: Thomas M. Dougherty Title: Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name Title Date ---- ----- ---- /s/ Thomas M. Dougherty Chief Executive Officer August 6, 1999 ______________________________________ and Director (Principal Thomas M. Dougherty Executive Officer) /s/ Alan B. Catherall* Chief Financial Officer August 6, 1999 ______________________________________ (Principal Financial and Alan B. Catherall Accounting Officer) /s/ W. Chris Blane* Vice President and August 6, 1999 ______________________________________ Director W. Chris Blane /s/ Thomas D. Body III* Vice President and August 6, 1999 ______________________________________ Director Thomas D. Body III /s/ Barry Schiffman* Director August 6, 1999 ______________________________________ Barry Schiffman /s/ Gill Cogan* Director August 6, 1999 ______________________________________ Gill Cogan /s/ Thomas M. Dougherty August 6, 1999 *By: _________________________________ Thomas M. Dougherty Attorney-in-Fact
Pursuant to the requirements of the Securities Act, AGW Leasing Company, Inc. has duly caused this Amendment No. 4 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Fulton, State of Georgia, on August 6, 1999. AGW Leasing Company, Inc. By: _________________________________ Name: Thomas M. Dougherty Title: Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name Title Date ---- ----- ---- /s/ Thomas M. Dougherty Chief Executive Officer August 6, 1999 ______________________________________ and Director (Principal Thomas M. Dougherty Executive Officer) /s/ Alan B. Catherall* Chief Financial Officer August 6, 1999 ______________________________________ (Principal Financial and Alan B. Catherall Accounting Officer) /s/ W. Chris Blane* Vice President and August 6, 1999 ______________________________________ Director W. Chris Blane /s/ Thomas D. Body III* Vice President and August 6, 1999 ______________________________________ Director Thomas D. Body III /s/ Barry Schiffman* Director August 6, 1999 ______________________________________ Barry Schiffman /s/ Gill Cogan* Director August 6, 1999 ______________________________________ Gill Cogan /s/ Thomas M. Dougherty August 6, 1999 *By: _________________________________ Thomas M. Dougherty Attorney-in-Fact
EX-3.1 2 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION Exhibit 3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF AIRGATE PCS, INC. (ORIGINALLY INCORPORATED OCTOBER 14, 1998 UNDER THE NAME AIRGATE WIRELESS, INC.) FIRST: THE NAME OF THE CORPORATION IS AIRGATE PCS, INC. (HEREINAFTER SOMETIMES REFERRED TO AS THE "CORPORATION"). SECOND: THE ADDRESS OF THE REGISTERED OFFICE OF THE CORPORATION IN THE STATE OF DELAWARE IS CORPORATION TRUST CENTER, 1209 ORANGE STREET, IN THE CITY OF WILMINGTON, COUNTY OF NEW CASTLE. THE NAME OF THE REGISTERED AGENT AT THAT ADDRESS IS THE CORPORATION TRUST COMPANY. THIRD: THE PURPOSE OF THE CORPORATION IS TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY FOR WHICH A CORPORATION MAY BE ORGANIZED UNDER THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE. FOURTH: A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is thirty million (30,000,000) of stock consisting of: 1. twenty-five million (25,000,000) shares of Common Stock, par value one cent ($.01) per share. 2. five million (5,000,000) shares of Preferred Stock, par value one cent ($.01) per share. B. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter referred to as a "Preferred Stock Designation"), to establish from time to time the number of shares to be included in each such series, and to fix the designation powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation. FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its Directors and stockholders: A. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, the Directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation. B. The Directors of the Corporation need not be elected by written ballot unless the Bylaws so provide. C. So long as there is more than one shareholder of the Corporation, no action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. D. Special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board or as otherwise provided in the Bylaws. The term "Whole Board" shall mean the total number of authorized directorships (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption). E. The holders of the Common Stock shall have no preemptive rights to subscribe for any shares of any class of stock of the Corporation whether now or hereafter authorized. SIXTH: A. The number of Directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board. The Directors shall be divided into three classes, as nearly equal in numbers as the then total number of directors constituting the entire Board permits with the term of office of one class expiring each year. At the annual meeting of stockholders in 1999 directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting, and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the 2 Corporation, the terms of the director or directors elected by such holders shall expire at the next succeeding annual meeting of stockholders. At each annual meeting of stockholders following such initial classification and election, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election with each Director to hold office until his or her successor shall have been duly elected and qualified. B. Subject to the rights of holders of any series of Preferred Stock outstanding, the newly created directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been chosen expires. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director. C. Advance notice of stockholder nominations for the election of Directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation. D. Notwithstanding any other provisions of this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, any Director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 80 percent of the voting power of all of the then- outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the provisions of section D of this Article shall not apply with respect to the Director or Directors elected by such holders of Preferred Stock. SEVENTH: The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of a majority of the Whole Board. The term "Whole Board" shall mean the total number of authorized directorships (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board of Directors for adoption). The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Corporation provided, however, that, in addition to any vote of the holders of any class or series of stock of this Corporation required by law or by this Certificate of 3 Incorporation, the affirmative vote of the holders of at least 80 percent of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, shall be required to adopt, amend or repeal any provisions of the Bylaws of the Corporation. EIGHTH: A. In addition to any affirmative vote required by law or this Certificate of Incorporation, and except as otherwise expressly provided in this Article EIGHTH: 1. any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with: (i) any Interested Stockholder (as hereinafter defined); or (ii) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or 2. any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder, or any Affiliate of any Interested Stockholder, of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) equaling or exceeding 25% or more of the combined assets of the Corporation and its Subsidiaries; or 3. the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value (as hereinafter defined) equaling or exceeding 25% of the combined Fair Market Value of the outstanding common stock of the Corporation and its Subsidiaries, except for any issuance or transfer pursuant to an employee benefit plan of the Corporation or any Subsidiary thereof; or 4. the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or 4 5. any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder; shall require the affirmative vote of the holders of at least 80% of the voting power of the then-outstanding shares of stock of the Corporation entitled to vote in the election of Directors (the "Voting Stock") (after giving effect to the provisions of Article FOURTH), voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or by any other provisions of this Certificate of Incorporation or any Preferred Stock Designation or in any agreement with any national securities exchange or otherwise. The term "Business Combination" as used in this Article EIGHTH shall mean any transaction which is referred to in any one or more of paragraphs 1 through 5 of Section A of this Article EIGHTH. B. The provisions of Section A of this Article EIGHTH shall not be applicable to any particular Business Combination, and such Business Combination shall require only the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote after giving effect to the provisions of Article FOURTH, or such vote (if any), as is required by law or by this Certificate of Incorporation, if, in the case of any Business Combination that does not involve any cash or other consideration being received by the stockholders of the Corporation solely in their capacity as stockholders of the Corporation, the condition specified in the following paragraph 1 is met or, in the case of any other Business Combination, all of the conditions specified in either of the following paragraphs 1 or 2 are met: 1. The Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined). 2. All of the following conditions shall have been met: a. The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of Common Stock in such 5 Business Combination shall at least be equal to the higher of the following: (1) (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers' fees, paid by the Interested Stockholder or any of its Affiliates for any shares of Common Stock acquired by it: (i) within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the "Announcement Date"); or (ii) in the transaction in which it became an Interested Stockholder, whichever is higher; or (2) the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article EIGHTH as the "Determination Date"), whichever is higher. b. The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any class of outstanding Voting Stock other than Common Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (b) shall be required to be met with respect to every such class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock): (1) (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers' fees, paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it: (i) within the two-year period immediately prior to the Announcement Date; or (ii) in the transaction in which it became an Interested Stockholder, whichever is higher; or 6 (2) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation; or (3) the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher. c. The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of shares of such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by the Interested Stockholder. The price determined in accordance with subparagraph B.2 of this Article EIGHTH shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event. d. After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (1) except as approved by a majority of the Disinterested Directors (as hereinafter defined), there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding stock having preference over the Common Stock as to dividends or liquidation; (2) there shall have been: (i) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors; and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to so increase such annual rate is approved by a majority of the Disinterested Directors, and (3) neither such Interested Stockholder or 7 any of its Affiliates shall have become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder. e. After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided, directly or indirectly, by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. f. A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (or any subsequent provisions replacing such Act, and the rules or regulations thereunder) shall be mailed to stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). C. For the purposes of this Article EIGHTH: 1. A "Person" shall include an individual, a firm, a group acting in concert, a corporation, a partnership, an association, a joint venture, a pool, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities or any other entity. 2. "Interested Stockholder" shall mean any person (other than the Corporation or any Holding Company or Subsidiary thereof) who or which: a. is the beneficial owner, directly or indirectly, of more than 10% of the voting power of the outstanding Voting Stock; or b. is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the 8 date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding Voting Stock; or c. is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933, as amended. 3. For purposes of this Article EIGHTH, "beneficial ownership" shall be determined in the manner provided in Section C of Article FOURTH hereof. 4. "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date of filing of this Certificate of Incorporation. 5. "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in Paragraph 2 of this Section C, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. 6. "Disinterested Director" means any member of the Board of Directors who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any Director who is thereafter chosen to fill any vacancy of the Board of Directors or who is elected and who, in either event, is unaffiliated with the Interested Stockholder and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of Disinterested Directors then on the Board of Directors. 9 7. "Fair Market Value" means: a. in the case of stock, the highest closing sales price of the stock during the 30-day period immediately preceding the date in question of a share of such stock on the National Association of Securities Dealers Automated Quotation System or any system then in use, or, if such stock is admitted to trading on a principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended, Fair Market Value shall be the highest sale price reported during the 30-day period preceding the date in question, or, if no such quotations are available, the Fair Market Value on the date in question of a share of such stock as determined by the Board of Directors in good faith, in each case with respect to any class of stock, appropriately adjusted for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock; and b. in the case of property other than cash or stock, the Fair Market Value of such property on the date in question as determined by the Board of Directors in good faith. 8. Reference to "Highest Per Share Price" shall in each case with respect to any class of stock reflect an appropriate adjustment for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock. 9. In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash to be received" as used in Subparagraphs (a) and (b) of Paragraph 2 of Section B of this Article EIGHTH shall include the shares of Common Stock and/or the shares of 10 any other class of outstanding Voting Stock retained by the holders of such shares. D. A majority of the Disinterested Directors of the Corporation shall have the power and duty to determine for the purposes of this Article EIGHTH, on the basis of information known to them after reasonable inquiry: (a) whether a person is an Interested Stockholder; (b) the number of shares of Voting Stock beneficially owned by any person; (c) whether a person is an Affiliate or Associate of another; and (d) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has an aggregate Fair Market Value equaling or exceeding 25% of the combined Fair Market Value of the Common Stock of the Corporation and its Subsidiaries. A majority of the Disinterested Directors shall have the further power to interpret all of the terms and provisions of this Article EIGHTH. E. Nothing contained in this Article EIGHTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. F. Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law, this Certificate of Incorporation or any Preferred Stock Designation, the affirmative vote of the holders of at least 80 percent of the voting power of all of the then-outstanding shares of the Voting Stock (after giving effect to the provisions of Article FOURTH), voting together as a single class, shall be required to alter, amend or repeal this Article EIGHTH. NINTH: The Board of Directors of the Corporation, when evaluating any offer of another person to (A) make a tender or exchange offer for any equity security of the Corporation, (B) merge or consolidate the Corporation with another corporation or entity or (C) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, may, in connection with the exercise of its judgment in determining what is in the best interest of the Corporation and its stockholders, give due consideration to all relevant factors, including, without limitation, those factors that Directors of any subsidiary of the Corporation may consider in evaluating any action that may result in a change or potential change in the control of the subsidiary, and the social and economic effect of acceptance of such offer on the Corporation's present and future customers and employees and on the communities in which the Corporation operates or is located and the ability of the Corporation to fulfill its corporate objective under applicable laws and regulations. 11 TENTH: A. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a Director or an Officer of the Corporation or is or was serving at the request of the Corporation as a Director, Officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a Director, Officer, employee or agent or in any other capacity while serving as a Director, Officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section C hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. B. The right to indemnification conferred in Section A of this Article TENTH shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a Director or Officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, services to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections A and B of this Article TENTH shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a Director, Officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators. 12 C. If a claim under Section A or B of this Article TENTH is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expenses of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article TENTH or otherwise shall be on the Corporation. D. The rights to indemnification and to the advancement of expenses conferred in this Article TENTH shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation's Certificate of Incorporation, Bylaws, agreement, vote of stockholders or Directors or otherwise. E. The Corporation may maintain insurance, at its expense, to protect itself and any Director, Officer, employee or agent of the Corporation or subsidiary or Affiliate or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. 13 F. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article TENTH with respect to the indemnification and advancement of expenses of Directors and Officers of the Corporation. ELEVENTH: A Director of this Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the Director derived an improper personal benefit. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification. TWELFTH: The provisions set forth in this Article and in Articles 5(C), 5(D), 5(E), 6, 7, 8, 10 and 11 herein may not be repealed or amended in any respect, and no article imposing cumulative voting in the election of directors may be added, unless such action is approved by the affirmative vote of the holders of not less than eighty percent (80%) of the outstanding shares of Common Stock of this Corporation, subject to the provisions of any series of Preferred Stock which may at the time be outstanding; provided, however, that if there is a related person (as defined in Article 8) such amendment shall also require the affirmative vote of at least 50% of the outstanding shares of Common Stock held by stockholders other than the related person. 14 IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation, which restates and integrates and does further amend the provisions of the Corporation's Certificate of Incorporation and having been duly adopted by the Board of Directors of the Corporation and approved by the stockholders of the Corporation in accordance with the provisions of Sections 242 and 245 of the General Corporation Laws of the State of Delaware, has been executed this 9th day of July, 1999 by Shelley Spencer, its authorized officer. AirGate PCS, Inc. By: /s/ Shelley Spencer --------------------------- Shelley Spencer Title: Vice President and Secretary 15 CERTIFICATE OF AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF AIRGATE PCS, INC. AirGate PCS, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that: I. The amendment to the Corporation's Amended and Restated Certificate of Incorporation set forth below was duly adopted in accordance with the provisions of Section 242 and has been consented to in writing by the sole stockholder in accordance with Section 228 of the General Corporation Law of the State of Delaware. II. Article FIFTH of the Corporation's Amended and Restated Certificate of Incorporation is amended by adding thereto the following paragraph: F. The Corporation and the holders of its Common Stock shall be bound to (i) any and all provisions of Section 11 of the Sprint PCS Management Agreement dated July 22, 1998 (the "Agreement") between AirGate Wireless, LLC, Sprint Spectrum L.P., Sprint Communications Company, L.P. and SprintCom, Inc. assigned to the Corporation in November of 1998, which provide for the sale of the operating assets of the Corporation to SprintCom, Inc. upon non-renewal (as defined under the Agreement) and/or an event of termination (as set forth under Section 11 of the Agreement), said Agreement (including Section 11) having been duly approved and ratified by the Board of Directors of the Corporation and ratified by the sole stockholder of the Corporation; and (ii) the sale of the Operating Assets of the Corporation pursuant to the consent and agreement to be entered into by Sprint Spectrum L.P., Sprint Communications Company, L.P., SprintCom, Inc., and the Corporation's Senior Lenders, said sale of the Operating Assets having been duly approved and ratified by the Board of Directors of the Corporation and ratified by the sole stockholder of the Corporation. The purchase price for such Operating Assets will be based on a formula set forth in Section 11 of the Agreement as modified by the consent and agreement with the Corporation's Senior Lenders. III. Article TWELFTH of the Corporation's Amended and Restated Certificate of Incorporation is amended to read in its entirety as follows: TWELFTH: The provisions set forth in this Article and in Articles 5(C), 5(D), 5(E), 5(F), 6, 7, 8, 10 and 11 herein may not be repealed or amended in any respect, and no article imposing cumulative voting in the election of directors may be added, unless such action is approved by the affirmative vote of the holders of not less than eighty percent (80%) of the outstanding shares of Common Stock of this Corporation, subject to the provisions of any series of Preferred Stock which may at the time be outstanding; provided, however, that if there is a related person (as defined in Article 8) such amendment shall also require the affirmative vote of at least 50% of the outstanding shares of Common Stock held by stockholders other than the related person. IN WITNESS WHEREOF, AirGate PCS, Inc. has caused this Certificate to be executed by Shelley Spencer, its authorized officer, on this 2nd day of August, 1999. /s/ Shelley Spencer ------------------- Shelley Spencer Secretary 2 EX-10.1 3 SPRINT PCS MANAGEMENT AGREEMENT EXHIBIT 10.1 SPRINT PCS MANAGEMENT AGREEMENT This SPRINT PCS MANAGEMENT AGREEMENT is made July 22, 1998, between SprintCom, Inc., a Kansas corporation, and AirGate Wireless, L.L.C., a Delaware limited liability company (but not any Related Party) ("Manager"). The definitions for this agreement are set forth on the "Schedule of Definitions." ------------------------ RECITALS A. Sprint Spectrum L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation, American PCS Communications, LLC, a Delaware limited liability company, PhillieCo Partners I, L.P., a Delaware limited partnership, and Cox Communications PCS, L.P., a Delaware limited partnership, hold and exercise, directly or indirectly, control over licenses to operate wireless services networks. B. The entity or entities named in Recital A that execute this agreement hold, directly or indirectly, the Licenses for the areas identified on the Service Area Exhibit and are referred to in this agreement as "Sprint PCS." - -------------------- Because this agreement addresses the rights and obligations of each license holder with respect to each of its Licenses, each reference in this agreement to "Sprint PCS" refers to the entity that owns, directly or indirectly, the License referred to in that particular instance or application of the provision of this agreement. If Sprint Spectrum does not own the License, it will provide on behalf of Sprint PCS most or all of the services required under this agreement to be provided by Sprint PCS. C. The Sprint PCS business was established to use the Sprint PCS Network, a nationwide wireless services network, to offer seamless, integrated voice and data services using wireless technology. Sprint PCS offers the services to customers under a single national brand. D. This agreement, therefore, includes provisions defining Manager's obligations with respect to: . The design, construction and management of the Service Area Network; . Offering and promoting products and services designated by Sprint PCS as the Sprint PCS Products and Services of the Sprint PCS Network; . Adherence to Program Requirements established by Sprint PCS to ensure seamless interoperability throughout the Sprint PCS Network and uniform and consistent quality of product and service offerings; . Adherence to Customer Service Program Requirements established by Sprint PCS to ensure consistency in interactions with customers (including billing, customer care, etc.); and . Adherence to Program Requirements relating to the marketing, promotion and distribution of Sprint PCS Products and Services. E. Manager wishes to enter into this agreement to help construct, operate, manage and maintain for Sprint PCS a portion of the Sprint PCS Network in the Service Area. Sprint PCS has determined that permitting Manager to manage a portion of the Sprint PCS Network in accordance with the terms of this agreement will facilitate Sprint PCS' expansion of fully digital, wireless coverage under the License and will enhance the wireless service for customers of Sprint PCS. F. All managers of a portion of the business of Sprint PCS, including Manager, must construct facilities and operate in accordance with Program Requirements established by Sprint PCS with respect to certain aspects of the development and offering of wireless products and services and the presentation of the products and services to customers, to establish and operate the Sprint PCS Network successfully by providing seamless, integrated voice and data services, using wireless technology. AGREEMENT In consideration of the recitals and mutual covenants and agreements contained in this agreement, the sufficiency of which are hereby acknowledged, the parties, intending to be bound, agree as follows: 1. MANAGER 1.1 Hiring of Manager. Sprint PCS hires Manager: (a) to construct and manage the Service Area Network in compliance with the License and in accordance with the terms of this agreement; (b) to distribute continuously during the Term the Sprint PCS Products and Services and to establish distribution channels in the Service Area; (c) to conduct continually during the Term advertising and promotion activities in the Service Area (including mutual decisions to "go dark", with respect to advertising and promotion activities, for reasonable periods of time); and (d) to manage that portion of the customer base of Sprint PCS that has the NPA-NXX assigned to the Service Area Network. Sprint PCS has the right to unfettered access to the Service Area Network to be constructed by Manager under this agreement. The fee to be paid to Manager by Sprint PCS under Section 10 is for Manager's utilization of the Service Area Network, sales and marketing costs, management of the Service Area Network, and for all other obligations of Manager under this agreement. 1.2 Program Requirements. Manager must adhere to the Program Requirements established by Sprint PCS and as modified from time to time to ensure uniform and consistent 2 operation of all wireless systems within the Sprint PCS Network and to present the Sprint PCS Products and Services to customers in a uniform and consistent manner under the Brands. 1.3 Vendor Purchase Agreements. Manager may participate in discounted volume-based pricing on wireless-related products and services and in the warranties Sprint PCS receives from its vendors, as is commercially reasonable and to the extent permitted by applicable procurement agreements (e.g., agreements related to network infrastructure equipment, subscriber equipment, interconnection, and collocation). Sprint PCS will use commercially reasonable efforts to obtain for managers the same price Sprint PCS receives from vendors; this does not prohibit Sprint PCS from entering into procurement agreements that do not provide managers with the Sprint PCS prices. Manager must purchase subscriber and infrastructure equipment from a Sprint PCS approved list of products, which will include a selection from a variety of manufacturers. Where required, the products must include proprietary software developed by the manufacturers for Sprint PCS to allow seamless interoperability in the Sprint PCS Network. Sprint PCS or the vendor may require Manager to execute a separate license agreement for the software prior to Manager's use of the software. Manager may only make purchases under this Section 1.3 for items to be used exclusively in the Service Area (e.g., Manager may not purchase base stations under a Sprint PCS contract for use in a system not affiliated with Sprint PCS). 1.4 Interconnection. If Manager desires to interconnect a portion of the Service Area Network with another carrier and Sprint PCS can interconnect with that carrier at a lower rate, then to the extent permitted by applicable laws, tariffs and contracts, Sprint PCS may arrange for the interconnection under its agreements with the carrier and if it does so, Sprint PCS will bill the interconnection fees to Manager. 1.5 Seamlessness. Manager will design and operate its systems, platforms, products and services in the Service Area and the Service Area Network so as to seamlessly interface them into the Sprint PCS Network. 1.6 Forecasting. Manager and Sprint PCS will work cooperatively to generate mutually acceptable forecasts of important business metrics including traffic volumes, handset sales, subscribers and Collected Revenue for the Sprint PCS Products and Services. The forecasts are for planning purposes only and do not constitute Manager's obligation to meet the quantities forecast. 1.7 Financing. The construction and operation of the Service Area Network requires a substantial financial commitment by Manager. The manner in which Manager will finance the build-out of the Service Area Network and provide the necessary working capital to operate the business is described in detail on Exhibit 1.7. Manager will allow Sprint PCS an opportunity to review before - ----------- filing any registration statement or prospectus or any amendment or supplement thereto before distributing any offering memorandum or amendment or supplement thereto, and agrees not to file or distribute any such document if Sprint PCS reasonably objects in writing on 3 a timely basis to any portion of the document that refers to Sprint PCS, its Related Parties, their respective businesses, this agreement or the Services Agreement. 1.8 Ethical Conduct and Related Covenants. Each party must perform its obligations under this agreement in a diligent, legal, ethical, and professional manner. 2. BUILD-OUT OF NETWORK 2.1 Build-out Plan. Manager will build-out the Service Area Network in the Service Area in accordance with a Build-out Plan. Sprint PCS and Manager will jointly develop each Build-out Plan, except Sprint PCS must approve the final Build-out Plan. Manager will report to Sprint PCS its performance regarding the critical milestones included in the Build-out Plan on a periodic basis as mutually agreed to by the parties, but no less frequently than quarterly. The Build-out Plan and the Service Area Network as built must comply with Sprint PCS Program Requirements and federal and local regulatory requirements. Any modifications, additions or expansions to a Build-out Plan will be subject to prior written approval by Sprint PCS. The Build-out Plan in effect as of the date of this agreement is attached as Exhibit 2.1. Each new or ----------- amended Build-out Plan will also become part of Exhibit 2.1. ----------- 2.2 Compliance with Regulatory Rules. During the build-out of the Service Area Network, Sprint PCS authorizes Manager to make all filings with regulatory authorities regarding the build-out, including filings with the Federal Aviation Administration, environmental authorities, and historical districts. Manager may further delegate its duty under this Section 2.2 to a qualified site acquisition company. Manager must ensure that a copy of every filing is given to Sprint PCS. Manager must ensure that Sprint PCS is notified in writing of any contact by a regulatory agency including the FCC with Manager or Manager's site acquisition company regarding any filing. Sprint PCS has the right to direct any proceeding, inquiry, dispute, appeal or other activity with a regulatory or judicial authority regarding any filing made on behalf of Sprint PCS. Manager will amend, modify, withdraw, refile and otherwise change any filing as Sprint PCS requires. Notwithstanding the preceding sentences in this Section 2.2, and in conjunction with Section 16, Sprint PCS is solely responsible for making any and all filings with the FCC regarding the build-out. Manager will notify Sprint PCS of any activity, event or condition related to the build-out that might require an FCC filing. 2.3 Exclusivity of Service Area. Manager will be the only person or entity that is a manager or operator for Sprint PCS with respect to the Service Area and neither Sprint PCS nor any of its Related Parties will own, operate, build or manage another wireless mobility communications network in the Service Area so long as this agreement remains in full force and effect and there is no Event of Termination that has occurred giving Sprint PCS the right to terminate this agreement, except that: 4 (a) Sprint PCS may cause Sprint PCS Products and Services to be sold in the Service Area through the Sprint PCS National Accounts Program Requirements and Sprint PCS National or Regional Distribution Program Requirements; (b) A reseller of Sprint PCS Products and Services may sell its products and services in the Service Area; (c) Sprint PCS may build-out and sell Sprint PCS Products and Services in a New Area, or permit a third party to do so, if Manager has chosen not to build-out the New Area; and (d) Sprint PCS and its Related Parties may engage in the activities described in Sections 2.4(a) and 2.4(b) with Manager in the geographic areas within the Service Area in which one of them owns an incumbent local exchange carrier as of the date of this agreement. 2.4 Restriction. In geographic areas within the Service Area in which Sprint PCS or any of its Related Parties owns an incumbent local exchange carrier as of the date of this agreement, Manager must not offer any Sprint PCS Products or Services specifically designed for the competitive local exchange market ("fixed wireless local loop"), except that: (a) Manager may designate the local exchange carrier that is a Related Party of Sprint to be the exclusive distributor of the fixed wireless local loop product in the territory served by the local exchange carrier, even if a portion of its territory is within the Service Area; or (b) Manager may sell the fixed wireless local loop product under the terms and conditions specified by Sprint PCS (e.g., including designation by Sprint PCS of an exclusive distribution agent for the territory). This restriction exists with respect to a particular geographic area only so long as Sprint PCS or its Related Party owns such incumbent local exchange carrier. Nothing in this Section 2.4 prohibits Manager from offering Sprint PCS Products and Services primarily designed for mobile functionality. The restricted markets as of the date of this agreement are set forth on Exhibit ------- 2.4. - --- 2.5 Manager's Right of First Refusal for New Area Build-out. Sprint PCS grants to Manager the right of first refusal to build-out New Areas. Sprint PCS will give to Manager a written notice of a New Area within the Service Area that Sprint PCS decides should be built-out. Manager must communicate to Sprint PCS within 90 days after receipt of the notice whether it will build-out the New Area, otherwise Manager's right of first refusal terminates with regard to the New Area described in the notice. If Manager decides to build-out the New Area then Manager and Sprint PCS will diligently negotiate and execute an amendment to the Build-out Plan and proceed as set forth in Sections 2.1 and 2.2. The amended Build-out Plan will contain critical milestones that provide 5 Manager a commercially reasonable period in which to implement coverage in the New Area. In determining what constitutes a "commercially reasonable period" as used in this paragraph, the parties will consider several factors, including local zoning processes and other legal requirements, weather conditions, equipment delivery schedules, the need to arrange additional financing, and other construction already in progress by the Manager. Manager will construct and operate the network in the New Area in accordance with the terms of this agreement. If Manager declines to exercise its right of first refusal or Manager fails to build-out the New Area in accordance with the amended Build-out Plan then Sprint PCS may construct the New Area itself or allow a Sprint PCS Related Party or an Other Manager to construct the New Area. Sprint PCS has the right, in a New Area that it constructs or that is constructed by a third party, to manage the network, allow a Sprint PCS Related Party to manage the network, or hire a manager to operate the network in the New Area. Any New Area that Sprint PCS or a third party builds-out is deemed removed from the Service Area and the Service ------- Area Exhibit is deemed amended to reflect the change in the Service Area. If - ------------ Manager does not exercise its right of first refusal with respect to a New Area, Manager's right of first refusal does not terminate with respect to the remainder of the Service Area. 2.6 Purchase of Assets by Manager. If Sprint PCS has assets located in the Service Area that Manager could reasonably use in its construction of the Service Area Network and if Sprint PCS is willing to sell such assets, then Manager agrees to purchase from Sprint PCS and Sprint PCS agrees to sell to Manager the assets in accordance with the terms and conditions of the asset purchase agreement attached as Exhibit 2.6. ----------- 2.7 Microwave Relocation. Sprint PCS will relocate interfering microwave sources in the spectrum in the Service Area to the extent necessary to permit the Service Area Network to carry the anticipated call volume as set out in the Build-out Plan. If the spectrum cleared is not sufficient to carry the actual call volume then Sprint PCS will clear additional spectrum of its choosing to accommodate the call volume. Sprint PCS may choose to clear spectrum one carrier at a time. The parties will share equally all costs associated with clearing spectrum under this Section 2.7. 2.8 Determination of pop. If any provision in this agreement requires the determination of pops in a given area, then the pops will be determined using the census block group pop forecast then used by Sprint PCS, except that a different forecast will be used for any FCC filing and in preparing the Build- out Plan if required by the FCC. Sprint PCS presently uses the forecast of Equifax/NDS, but it may choose in its sole discretion to use another service that provides comparable data. 3. PRODUCTS AND SERVICES; IXC SERVICES 3.1 Sprint PCS Products and Services. Manager must offer for sale, promote and support all Sprint PCS Products and Services within the Service Area, unless the parties otherwise agree in advance in writing. Within the Service Area, Manager may only sell, promote and support wireless products and services that are Sprint PCS Products and Services or are other 6 products and services authorized under Section 3.2. The Sprint PCS Products and Services as of the date of this agreement are attached as Exhibit 3.1. Sprint ----------- PCS may modify the Sprint PCS Products and Services from time to time in its sole discretion by delivering to Manager a new Exhibit 3.1. ----------- 3.2 Other Products and Services. Manager may offer wireless products and services that are not Sprint PCS Products and Services, on the terms Manager determines, if the offer of the additional products and services: (a) does not violate the obligations of Manager under this agreement; (b) does not cause distribution channel conflict with or consumer confusion regarding Sprint PCS' regional and national offerings of Sprint PCS Products and Services; (c) complies with the Trademark License Agreements; and (d) does not materially impede the development of the Sprint PCS Network. Manager will not offer any products or services under this Section 3.2 that are confusingly similar to Sprint PCS Products and Services. Manager must request that Sprint PCS determine whether Sprint PCS considers a product or service to be confusingly similar to any Sprint PCS Products and Services by providing advance written notice to Sprint PCS that describes those products and services that could be interpreted to be confusingly similar to Sprint PCS Products and Services. If Sprint PCS fails to provide a response to Manager within 30 days after receiving the notice, then the products and services are deemed to create confusion with the Sprint PCS Products and Services and the request therefore rejected. In rejecting any request Sprint PCS must provide the reasons for the rejection. If the rejection is based on Sprint PCS' failure to respond within 30 days and Manager requests an explanation for the deemed rejection, then Sprint PCS must provide within 30 days the reasons for the rejection. 3.3 Cross-selling with Sprint. Manager and Sprint and Sprint's Related Parties may enter into arrangements to sell Sprint's services, including long distance service (except those long distance services governed by Section 3.4), Internet access, customer premise equipment, prepaid phone cards, and any other services that Sprint or its Related Parties make available from time to time. Sprint's services may be packaged with the Sprint PCS Products and Services. If Manager chooses to resell the long distance services, Internet access or competitive local telephony services including prepaid phone cards, of third parties (other than Manager's Related Parties), Manager will give Sprint the right of last offer to provide those services on the same terms and conditions as the offer to which Manager is prepared to agree, subject to the terms of any existing agreements Manager was subject to prior to execution of this agreement. Within the Service Area, Manager will facilitate sales by Sprint of the Sprint PCS Products and Services, including the packaging of wireless, local exchange and other products and services with Sprint products and services. 7 3.4 IXC Services. Manager must purchase from Sprint long distance telephony services for the Sprint PCS Products and Services at wholesale rates. Long distance telephone calls are those calls between the local calling area for the Service Area Network and areas outside the local calling area. The local calling area will be defined by mutual agreement of Sprint PCS and Manager. If the parties cannot agree on the extent of the local calling area they will resolve the matter through the dispute resolution process in Section 14. Any arrangement must have terms at least as favorable to Manager (in all material respects) as those offered by Sprint to any wholesale customer of Sprint in comparable circumstances (taking into consideration volume, traffic patterns, etc.). If Manager is bound by an agreement for these services and the agreement was not made in anticipation of this agreement, then the requirements of this Section 3.4 do not apply during the term of the other agreement. If the other agreement terminates for any reason then the requirements of this Section 3.4 do apply. 3.5 Resale of Products and Services. 3.5.1 Mandatory Resale of Products and Services. Sprint PCS must, under FCC rules, permit Sprint PCS' service plans to be resold by a purchaser of the service plan. Sprint PCS will not grant the purchaser of a service plan the right to use any of the support services offered by Sprint PCS, including customer care, billing, collection, and advertising, nor the right to use the Brands. The reseller only has the right to use the service purchased. Consequently, Manager agrees not to interfere with any purchaser of the Sprint PCS Products or Services who resells the service plans in accordance with this agreement and applicable law. Manager will notify purchaser that the purchaser does not have a right to use the Brands or Sprint PCS' support services. In addition, Manager will notify Sprint PCS if it reasonably believes a reseller of retail service plans is using the support services or Brands. 3.5.2 Voluntary Resale of Products and Services. Sprint PCS may choose to offer a resale product under which resellers will resell Sprint PCS Products and Services under brand names other than the Brands, except Sprint PCS may permit the resellers to use the Brands for limited purposes related to the resale of Sprint PCS Products and Services (e.g., to notify people that the handsets of the resellers will operate on the Sprint PCS Network). The resellers may also provide their own support services (e.g., customer care and billing) or may purchase the support services from Sprint PCS. If Sprint PCS chooses to offer a voluntary resale product, it will adopt a program that will be a Program Requirement under this agreement and that addresses the manner in which Manager and Other Managers interact with the resellers. Sprint PCS will discuss such program with Manager during development. Manager must not sell Sprint PCS Products and Services for resale unless Sprint PCS consents to such sales in advance in writing, except as required under the regulations and rules concerning mandatory resale. 3.6 Non-competition. Neither Manager nor any of its Related Parties may offer Sprint PCS Products and Services outside of the Service Area without the prior written approval of Sprint PCS. 8 Within the Service Area, Manager and Related Parties may offer, market or promote telecommunications products or services only under the following brands: (a) products or services with the Brands; (b) other products and services approved under Section 3.2, except no brand of a significant competitor of Sprint PCS or its Related Parties in the telecommunications business may be used by Manager's Related Parties on these products and services; (c) products or services with Manager's brand; or (d) products or services with the brands of Manager's Related Parties, except no brand of a significant competitor of Sprint PCS or its Related Parties in the telecommunications business may be used by Manager's Related Parties on these products and services. If Manager or any of its Related Parties has licenses to provide broadband personal communication services outside the Service Area, neither Manager nor such Related Party may utilize the spectrum to offer Sprint PCS Products and Services without prior written consent from Sprint PCS. Additionally, when Manager's customers from inside the Service Area travel or roam to other geographic areas, Manager will route the customers' calls, both incoming and outgoing, according to the Sprint PCS Network Roaming and Inter Service Area Program Requirements, without regard to any wireless networks operated by Manager or its Related Parties. For example, Manager will program the preferred roaming list for handsets sold in the Service Area to match the Sprint PCS preferred roaming list. 3.7 Right of Last Offer. Manager will offer to Sprint the right to make to Manager the last offer to provide backhaul and transport services for call transport for the Service Area Network, if Manager decides to use third parties for backhaul and transport services rather than self-provisioning the services or purchasing the services from Related Parties of Manager. Sprint will have a reasonable time to respond to Manager's request for last offer to provide backhaul and transport pricing and services, which will be no greater than 5 Business Days after receipt of the request for the services and pricing from Manager. If Manager has an agreement in effect as of the date of this agreement for these services and the agreement was not made in anticipation of this agreement, then the requirements of this Section 3.7 do not apply during the term of the other agreement. If the other agreement terminates for any reason then the requirements of this Section 3.7 do apply. 4. MARKETING AND SALES ACTIVITIES 4.1 Sprint PCS National or Regional Distribution Program Requirements. During the term of this agreement, Manager must participate in any Sprint PCS National or Regional Distribution Program (as in effect from time to time), and will pay or receive compensation for its participation in accordance with the terms and conditions of that program. 9 The Sprint PCS National or Regional Distribution Program Requirements in effect as of the date of this agreement are attached as Exhibit 4.1. ----------- 4.1.1 Territorial Limitations of Manager's Distribution Activities. Neither Manager nor any of its Related Parties will market, sell or distribute Sprint PCS Products and Services outside of the Service Area, except: (a) as otherwise agreed upon by the parties in advance in writing; or (b) Manager may place advertising in media that has distribution outside of the Service Area, so long as that advertising is intended by Manager to reach primarily potential customers within the Service Area. Manager may establish direct local distribution programs in accordance with the Sprint PCS Distribution Program Requirements, subject to the terms and conditions of the Trademark License Agreements and the non-competition and other provisions contained in this agreement. 4.1.2 Settlement of Equipment Sales. Sprint PCS will establish a settlement policy and process that will be included in the Sprint PCS National or Regional Distribution Program Requirements to: (a) reconcile sales of subscriber equipment made in the service areas of Sprint PCS or Other Managers of Sprint PCS, that result in activations in the Service Area; and (b) reconcile sales of subscriber equipment made in the Service Area that result in activations in service areas of Sprint PCS or Other Managers. In general, the policy will provide that the party in whose service area the subscriber equipment is activated will be responsible for the payment of any subsidy (i.e., the difference between the price paid to the manufacturer and the suggested retail price for direct channels and the difference between the price paid to the manufacturer and the wholesale price for third party retailers) and for other costs associated with the sale, including logistics, inventory carrying costs, direct channel commissions and other retailer compensation. 4.1.3 Use of Third-Party Distributors. Manager may request that Sprint PCS and a local distributor enter into Sprint PCS' standard distribution agreement regarding the purchase from Sprint PCS of handsets and accessories. Sprint PCS will use commercially reasonable efforts to reach agreement with the local distributor. Sprint PCS may refuse to enter into a distribution agreement with a distributor for any reasonable reason, including that the distributor fails to pass Sprint PCS' then current credit and background checks or the distributor fails to agree to the standard terms of the Sprint PCS distribution agreement. Any local distributor will be subject to the terms of the Trademark License Agreements or their equivalent. Manager will report to Sprint PCS the activities of any local distributor that Manager believes to be in violation of the distribution agreement. 10 4.2 Sprint PCS National Accounts Program Requirements. During the term of this agreement, Manager must participate in the Sprint PCS National Accounts Program (as in effect from time to time), and will be entitled to compensation for its participation and will be required to pay the expenses of the program in accordance with the terms and conditions of that program. The Sprint PCS National Accounts Program Requirements in effect as of the date of this agreement are attached as Exhibit 4.2. ----------- 4.3 Sprint PCS Roaming and Inter Service Area Program Requirements. Manager will participate in the Sprint PCS Roaming and Inter Service Area Program established and implemented by Sprint PCS, including roaming price plans and inter-carrier settlements. The Sprint PCS Roaming and Inter Service Area Program Requirements in effect as of the date of this agreement are attached as Exhibit 4.3. - ----------- As part of the Sprint PCS Roaming and Inter Service Area Program Requirements, Sprint PCS will establish a settlement policy and process to equitably distribute between the members making up the Sprint PCS Network (i.e., Sprint PCS, Manager and all Other Managers) the revenues received by one member for services used by its customers when they travel into other members' service areas. 4.4 Pricing. Manager will offer and support all Sprint PCS pricing plans designated for regional or national offerings of Sprint PCS Products and Services (e.g. , national inter service area rates, regional home rates, and local price points). The Sprint PCS pricing plans as of the date of this agreement are attached as Exhibit 4.4. Sprint PCS may modify the Sprint PCS ----------- pricing plans from time to time in its sole discretion by delivering to Manager a new Exhibit 4.4. ----------- Additionally, with prior approval from Sprint PCS, which approval will not be unreasonably withheld, Manager may establish price plans for Sprint PCS Products and Services that are only offered in its local market, subject to: (a) the non-competition and other provisions contained in this agreement; (b) consistency with regional and national pricing plans; (c) regulatory requirements; and (d) capability and cost of implementing rate plans in Sprint PCS systems (if used). Manager must provide advance written notice to Sprint PCS with details of any pricing proposal for Sprint PCS Products or Services in the Service Area. If Sprint PCS fails to respond to Manager within 20 days after receiving such notice, then the price proposed for those Sprint PCS Products or Services is deemed approved. At the time Sprint PCS approves a pricing proposal submitted by Manager, Sprint PCS will provide Manager an estimate of the costs and expenses Sprint PCS will incur to implement the proposed pricing plan. Manager agrees to promptly reimburse Sprint PCS for any cost or 11 expense incurred by Sprint PCS to implement such a pricing plan, which will not exceed the amount estimated by Sprint PCS if Manager waited for Sprint PCS' response to Manager's proposal. 4.5 Home Service Area. Sprint PCS and Manager will agree to the initial home service area for each base station in the Service Area Network prior to the date the Service Area Network goes into commercial operation. If the parties cannot agree to the home service area for each base station in the Service Area Network, then the parties will use the dispute resolution process in Section 14 of this agreement to assign each base station to a home service area. 5. USE OF BRANDS 5.1 Use of Brands. (a) Manager must enter into the Trademark License Agreements on or before the date of this agreement. (b) Manager must use the Brands exclusively in the marketing, promotion, advertisement, distribution, lease or sale of any Sprint PCS Products and Services within the Service Area, except Manager may use other brands to the extent permitted by the Trademark License Agreements and not inconsistent with the terms of this agreement. (c) Neither Manager nor any of its Related Parties may market, promote, advertise, distribute, lease or sell any of the Sprint PCS Products and Services or Manager's Products and Services on a non-branded, "private label" basis or under any brand, trademark, trade name or trade dress other than the Brands, except (i) for sales to resellers required under this agreement, or (ii) as permitted under the Trademark License Agreements. (d) The provisions of this Section 5.1 do not prohibit Manager from including Sprint PCS Products and Services under the Brands within the Service Area as part of a package with its other products and services that bear a different brand or trademark. The provisions of this Section 5.1 do not apply to the extent that they are inconsistent with applicable law or in conflict with the Trademark License Agreements. 5.2 Conformance to Marketing Communications Guidelines. Manager must conform to the Marketing Communications Guidelines in connection with the marketing, promotion, advertisement, distribution, lease and sale of any of the Sprint PCS Products and Services. The Marketing Communications Guidelines in effect as of the date of this agreement have been provided to Manager. Sprint and Sprint Spectrum may amend the Marketing Communications Guidelines from time to time in accordance with the terms of the Trademark License Agreements. 12 5.3 Joint Marketing with Third Parties. (a) Manager may engage in various joint marketing activities (e.g., promotions with sports teams and entertainment providers or tournament sponsorships) with third parties in the Service Area from time to time during the term of this agreement with respect to the Sprint PCS Products and Services, except that Manager may engage in the joint marketing activities only if the joint marketing activities: (i) Are conducted in accordance with the terms and conditions of the Trademark License Agreements and the Marketing Communications Guidelines; (ii) Do not violate the terms of this agreement; (iii) Are not likely (as determined by Sprint PCS, in its sole discretion) to cause confusion between the Brands and any other trademark or service mark used in connection with the activities; (iv) Are not likely (as determined by Sprint, in its sole discretion) to cause confusion between the Sprint Brands and any other trademark or service mark used in connection with the activities; and (v) Are not likely (as determined by Sprint PCS, in its sole discretion) to give rise to the perception that the Sprint PCS Products and Services are being advertised, marketed or promoted under any trademark or service mark other than the Brands, except as provided in the Trademark License Agreements. Manager will not engage in any activity that includes co-branding involving use of the Brands (that is, the marketing, promotion, advertisement, distribution, lease or sale of any of the Sprint PCS Products and Services under the Brands and any other trademark or service mark), except as provided in the Trademark License Agreements. (b) Manager must provide advance written notice to Sprint PCS describing those joint marketing activities that may: (i) cause confusion between the Brands and any other trademark or service mark used in connection with the proposed activities; or (ii) give rise to the perception that the Sprint PCS Products and Services are being advertised, marketed or promoted under any trademark or service mark other than the Brands, except as provided in the Trademark License Agreements. (c) If Sprint PCS fails to provide a response to Manager within 20 days after receiving such notice, then the proposed activities are deemed, as the case may be: (i) not to create confusion between the Brands and any other trademark or service mark; or 13 (ii) not to give rise to the perception that Manager's products and services are being advertised, marketed or promoted under any trademark or service mark other than the Brands, except as provided in the Trademark License Agreements. 5.4 Prior Approval of Use of Brands. Manager must obtain advance written approval from Sprint for use of the Sprint Brands to the extent required by the Sprint Trademark License Agreement and from Sprint PCS for use of the Sprint PCS Brands to the extent required by the Sprint PCS Trademark License Agreement. Sprint PCS will use commercially reasonable efforts to facilitate any review of Manager's use of the Brands, if Sprint PCS is included in the review process. 5.5 Duration of Use of Brand. Manager is entitled to use the Brands only during the term of the Trademark License Agreements and any transition period during which Manager is authorized to use the Brands following their termination. 6. ADVERTISING AND PROMOTION 6.1 National Advertising and Promotion. Sprint PCS is responsible for (a) all national advertising and promotion of the Sprint PCS Products and Services, including the costs and expenses related to national advertising and promotions, and (b) all advertising and promotion of the Sprint PCS Products and Services in the markets where Sprint PCS operates without the use of a Manager. 6.2 In-Territory Advertising and Promotion. Manager must advertise and promote the Sprint PCS Products and Services in the Service Area (and may do so in the areas adjacent to the Service Area so long as Manager intends that such advertising or promotion primarily reach potential customers within the Service Area). Manager must advertise and promote the Sprint PCS Products and Services in accordance with the terms and conditions of this agreement, the Trademark License Agreements and the Marketing Communication Guidelines. Manager is responsible for the costs and expenses incurred by Manager with respect to Manager's advertising and promotion activities in the Service Area. Manager will be responsible for a portion of the cost of any promotion or advertising done by third party retailers in the Service Area (e.g., Best Buy) in accordance with any cooperative advertising arrangements based on per unit handset sales. Sprint PCS has the right to use in any promotion or advertising done by Sprint PCS any promotion or advertising materials developed by Manager from time to time with respect to the Sprint PCS Products and Services. Sprint PCS will reimburse Manager for the reproduction costs related to such use. Sprint PCS will make available to Manager the promotion or advertising materials developed by Sprint PCS from time to time with respect to Sprint PCS Products and Services in current use by Sprint PCS (e.g., radio ads, television ads, design of print ads, design of point of sale materials, retail store concepts and designs, design of collateral). Manager will bear the cost 14 of using such materials (e.g., cost of local radio and television ad placements, cost of printing collateral in quantity, and building out and finishing retail stores). 6.3 Review of Advertising and Promotion Campaigns. Sprint PCS and Manager will jointly review the upcoming marketing and promotion campaigns of Manager with respect to Sprint PCS Products and Services (including advertising and promotion expense budgets) and will use good faith efforts to coordinate Manager's campaign with Sprint PCS' campaign to maximize the market results of both parties. Sprint PCS and Manager may engage in cooperative advertising or promotional activities during the term of this agreement as the parties may agree in writing. 6.4 Public Relations. If Manager conducts local public relations efforts, then Manager must conduct the local public relations efforts consistent with the Sprint PCS Communications Policies. The Sprint PCS Communications Policies as of the date of this agreement are attached as Exhibit 6.4. Sprint PCS may ----------- modify the Sprint PCS Communications Policies from time to time by delivering to Manager a new Exhibit 6.4. ----------- 7. SPRINT PCS TECHNICAL PROGRAM REQUIREMENTS 7.1 Conformance to Sprint PCS Technical Program Requirements. (a) Manager must meet or exceed the Sprint PCS Technical Program Requirements established by Sprint PCS from time to time for the Sprint PCS Network. Manager will be deemed to meet the Sprint PCS Technical Program Requirements if: (i) Manager operates the Service Area Network at a level equal to or better than the lower of the Operational Level of Sprint PCS or the operational level contemplated by the Sprint PCS Technical Program Requirements; or (ii) Sprint PCS is responsible under the Services Agreement to ensure the Service Area Network complies with the Sprint PCS Technical Program Requirements. (b) Manager must demonstrate to Sprint PCS that Manager has complied with the Sprint PCS Technical Program Requirements prior to connecting the Service Area Network to the rest of the Sprint PCS Network. Once the Service Area Network is connected to the Sprint PCS Network, Manager must continue to comply with the Sprint PCS Technical Program Requirements. Sprint PCS agrees that the Sprint PCS Technical Program Requirements adopted for Manager will be the same Sprint PCS Technical Program Requirements applied by Sprint PCS to the Sprint PCS Network. 7.2 Establishment of Sprint PCS Technical Program Requirements. Sprint PCS has delivered to Manager a copy of the current Sprint PCS Technical Program Requirements, attached as Exhibit 7.2. Sprint PCS drafted the Sprint PCS ----------- Technical Program Requirements to ensure a minimum, base-line level of quality for the Sprint PCS Network. The Sprint PCS 15 Technical Program Requirements include standards relating to voice quality, interoperability, consistency (seamlessness) of coverage, RF design parameters, system design, capacity, and call blocking ratio. Sprint PCS has selected code division multiple access as the initial air interface technology for the Sprint PCS Network (subject to change in accordance with Section 7.3). 7.3 Handoff to Adjacent Networks. If technically feasible and commercially reasonable, Manager will operate the Service Area Network in a manner that permits a seamless handoff of a call initiated on the Service Area Network to any adjacent PCS network that is part of the Sprint PCS Network, as specified in the Sprint PCS Technical Program Requirements. Sprint PCS agrees that the terms and conditions for seamless handoffs adopted for the Service Area Network will be the same as the terms Sprint PCS applies to the other parts of the Sprint PCS Network for similar configurations of equipment. 8. SPRINT PCS CUSTOMER SERVICE PROGRAM REQUIREMENTS 8.1 Compliance With Sprint PCS Customer Service Program Requirements. Manager must comply with the Sprint PCS Customer Service Program Requirements in providing the Sprint PCS Products and Services to any customer of Manager, Sprint PCS or any Sprint PCS Affiliate. Manager will be deemed to meet the standards if: (a) Manager operates the Service Area Network at a level equal to or better than the lower of the Operational Level of Sprint PCS or the operational level contemplated by the Program Requirements; or (b) Manager has delegated to Sprint PCS under the Services Agreement responsibility to ensure the Service Area Network complies with the Sprint PCS Customer Service Standards. Sprint PCS has delivered to Manager a copy of the Sprint PCS Customer Service Standards, which are attached as Exhibit 8.1. ----------- 9. SPRINT PCS PROGRAM REQUIREMENTS 9.1 Program Requirements Generally. This agreement contains numerous references to Sprint PCS National and Regional Distribution Program Requirements, Sprint PCS National Accounts Program Requirements, Sprint PCS Roaming and Inter Service Area Program Requirements, Sprint PCS Technical Program Requirements and Sprint PCS Customer Service Program Requirements. Sprint PCS may unilaterally amend from time to time in the manner described in Section 9.2 all Program Requirements, guidelines and policies mentioned in this agreement. The most current version of the requirements programs, guidelines and policies mentioned in the first sentence of this Section 9.1 have been provided to Manager. 9.2 Amendments to Program Requirements. Sprint PCS may amend any of the Sprint PCS Program Requirements, subject to the following conditions: 16 (a) The applicable Program Requirements, as amended, will apply equally to Manager, Sprint PCS and each Other Manager, except if Manager and Sprint PCS agree otherwise or if Sprint PCS grants a waiver to Manager. Sprint PCS may grant waivers to Other Managers without affecting Manager's obligation to comply with the Program Requirements; (b) Each amendment will be reasonably required to fulfill the purposes set forth in Section 1.2 with respect to uniform and consistent operations of the Sprint PCS Network and the presentation of Sprint PCS Products and Services to customers in a uniform and consistent manner; (c) Each amendment will otherwise be on terms and conditions that are commercially reasonable with respect to the construction, operation and management of the Sprint PCS Network. With respect to any amendment to Program Requirements, Sprint PCS may provide for reasonable transition periods and, where appropriate, grandfathering provisions for existing activities by Manager that were permitted under the applicable Program Requirements before the amendment; (d) Sprint PCS must give Manager reasonable, written notice of the amendment, but in any event the notice will be given at least 30 days prior to the effective date of the amendment; and (e) Manager must implement any changes in the Program Requirements within a commercially reasonable period of time unless otherwise consented to by Sprint PCS. Sprint PCS will determine what constitutes a commercially reasonable period of time taking into consideration relevant business factors, including the strategic significance of the changes to the Sprint PCS Network, the relationship of the changes to the yearly marketing cycle, and the financial demands on and capacity generally of Other Managers. Notwithstanding the preceding two sentences, Manager will not be required to implement any change in the Service Area Network or the business of Manager required by an amendment to a Program Requirement until Sprint PCS has implemented the required changes in substantially all of that portion of the Sprint PCS Network that Sprint PCS operates without the use of a manager, unless the amendment to the Program Requirement relates to an obligation regarding the Service Area Network mandated by law. When necessary for reasons related to new technical standards, new equipment or strategic reasons, Sprint PCS can require Manager to implement the changes in the Service Area Network or Manager's business concurrently with Sprint PCS, in which case Sprint PCS will reimburse Manager for its costs and expenses if Sprint PCS discontinues the Program Requirement changes prior to implementation. Sprint PCS may grant Manager appropriate waivers and variances from the requirements of any Program Requirements. Sprint PCS has the right to adopt any Program Requirements that implement any obligation regarding the Service Area Network mandated by law. Any costs and expenses incurred by Manager in connection with conforming to any change to the Program Requirements during the term of this agreement are the responsibility of Manager. 17 9.3 Manager's Right to Request Review of Change. If Sprint PCS announces a change to a Program Requirement that will: (a) cause the Manager to spend an additional amount greater than 5% of Manager's shareholder's equity or capital account plus Manager's long-term debt (i.e., notes that mature more than one year from the date issued), as reflected on Manager's books; or (b) cause the long term operating expenses of Manager on a per unit basis using a 10-year time frame to increase by more than 10% on a net present value basis, then Manager may give Sprint PCS a written notice requesting Sprint PCS to reconsider the change. The Sprint PCS Vice President or the designee of the Sprint PCS Chief Officer in charge of the group that manages the Sprint PCS relationship with Manager will review Manager's request. If after the review and decision by the Vice President, Manager is still dissatisfied, then Manager may ask that the Chief Officer to whom the Vice President reports review the matter. If Sprint PCS still requires Manager to implement the change to the Program Requirement, then upon Manager's failure to implement the change Sprint PCS will have the rights under Section 11. 9.4 Sprint PCS' Right to Implement Changes. If Manager requests Sprint PCS to reconsider a change to a Program Requirement as permitted under Section 9.3 and Sprint PCS decides it will not require Manager to make the change, Sprint PCS may, but is not required to, implement the change at Sprint PCS' expense, in which event Manager will be required to operate the Service Area Network, as changed, but Sprint PCS will be entitled to any revenue derived from the change. 9.5 Rights of Inspection. Sprint PCS and its authorized agents and representatives may enter upon the premises of any office or facility operated by or for Manager at any time, with reasonable advance notice to Manager if possible, to inspect, monitor and test in a reasonable manner the Service Area Network, including the facilities, equipment, books and records of Manager, to ensure that Manager has complied or is in compliance with all covenants and obligations of Manager under this agreement, including Manager's obligation to conform to the Program Requirements. The inspection, monitoring and testing may not disrupt the operations of the office or facility, nor impede Manager's access to the Service Area Network. 9.6 Manager's Responsibility to Interface with Sprint PCS. Manager will use platforms fully capable of interfacing with the Sprint PCS platforms in operating the Service Area Network and in providing Sprint PCS Products and Services. Manager will pay the expense of making its platforms fully capable of interfacing with Sprint PCS, including paying for the following: (i) Connectivity; 18 (ii) Any changes that Manager requests Sprint PCS to make to Sprint PCS systems to interconnect with Manager's systems that Sprint PCS, in its sole discretion, agrees to make; (iii) Equipment to run Manager's software; (iv) License fees for Manager's software; and (v) Manager upgrades or changes to its platforms. 10. FEES 10.1 Fees and Payments. 10.1.1 Fee Based on Collected Revenue. Sprint PCS will pay to Manager a weekly fee equal to 92% of Collected Revenues for the week for: (a) utilization of the Service Area Network; (b) sales and marketing costs; (c) Manager's management of the Service Area Network; and (d) all other obligations of Manager under this Agreement. The fee will be due on Thursday of the week following the week for which the fee is calculated. 10.1.2 Payment of Universal Service Funds. Sprint PCS and Manager will share any federal and state subsidy funds (e.g., payments by a state of universal service fund subsidies to Sprint PCS or Manager), if any, received by Sprint PCS or Manager for customers who reside in the portion of the Service Area served by the Service Area Network. Manager is entitled to 92% of any amount received by either party and Sprint PCS is entitled to 8% of such amounts. 10.1.3 Inter Service Area Fees. Sprint PCS will pay to Manager monthly a fee as set out in the Sprint PCS Roaming and Inter Service Area Program, for each minute of use that a customer of Sprint PCS or one of the Other Managers whose NPA-NXX is not assigned to the Service Area Network uses the Service Area Network. Manager will pay to Sprint PCS a fee, as set out in the Sprint PCS Roaming and Inter Service Area Program, for each minute of use that a customer whose NPA-NXX is assigned to the Service Area Network uses a portion of the Sprint PCS Network other than the Service Area Network. Manager acknowledges that the manner in which the NPA-NXX is utilized could change, which will require a modification in the manner in which the inter service area fees, if any, will be calculated. 10.1.4 Interconnect Fees. Manager will pay to Sprint PCS (or to other carriers as appropriate) monthly the interconnect fees, if any, as provided under Section 1.4. 10.1.5 Outbound Roaming Fees. If not otherwise provided under any Program Requirement: (a) Sprint PCS will pay to Manager monthly the amount of Outbound Roaming fees that Sprint PCS collects for the month from end users whose NPA-NXX is assigned to the Service Area; and 19 (b) Manager will pay to Sprint PCS (or to a clearinghouse or other carrier as appropriate) the direct cost of providing the capability for the Outbound Roaming, including any amounts payable to the carrier that handled the roaming call and the clearinghouse operator. 10.1.6 Reimbursements. Manager will pay to or reimburse Sprint PCS for any amounts that Sprint PCS is required to pay to a third party (e.g., a telecommunications carrier) to the extent Sprint PCS already paid such amount to Manager under this Section 10. 10.2 Monthly True Up. Manager will report to Sprint PCS monthly the amount of Collected Revenue received directly by the Manager (e.g., customer mails payment to the business address of Manager rather than to the lockbox or a customer pays a direct sales force representative in cash). Sprint PCS will on a monthly basis true up the fees and payments due under Section 10.1 against the actual payments made by Sprint PCS to Manager. Sprint PCS will provide to Manager a true up report each month showing the true up and the net amount due from one party to the other, if any. If the weekly payments made to Manager exceed the actual fees and payments due to Manager, then Manager will remit the amount of the overpayment to Sprint PCS within 5 Business Days after receiving the true up report from Sprint PCS. If the weekly payments made to Manager are less than the actual fees and payments due to Manager, then Sprint PCS will remit the shortfall to Manager within 5 Business Days after sending the true up report to Manager. If a party disputes any amount on the true up report, the disputing party must give the other party written notice of the disputed amount and the reason for the dispute within 90 days after it receives the true up report. The dispute will be resolved through the dispute resolution process in Section 14. The parties must continue to pay to the other party any undisputed amounts owed under this agreement during the dispute resolution process. The dispute of an item does not stay or diminish a party's other rights and remedies under this agreement. 10.3 Taxes. Manager will pay or reimburse Sprint PCS for any sales, use, gross receipts or similar tax, administrative fee, telecommunications fee or surcharge for taxes or fees levied by a governmental authority on the fees and charges payable by Sprint PCS to Manager. 10.4 Collected Revenues Definition. "Collected Revenues" means actual payments received by or on behalf of Sprint PCS or Manager for Sprint PCS Products and Services from others including the customers whose NPA-NXX is the same as that for the portion of the Service Area served by the Service Area Network. In determining Collected Revenues the following principles will apply. (a) The following items will be treated as follows: (i) Collected Revenues do not include revenues from federal and state subsidy funds; they are handled separately as noted in Section 10.1.2; 20 (ii) Collected Revenues do include any amounts received for the payment of Inbound Roaming charges and interconnect fees when calls are carried on the Service Area Network; and (iii) Collected Revenues do not include any amounts received with respect to any changes made by Sprint PCS under Section 9.4. (b) The following items are not Collected Revenues; Sprint PCS is obligated to remit the amounts received with respect to such items, if any, to Manager, as follows: (i) Inter service area payments will be paid as provided under Section 10.1.3; (ii) Outbound Roaming and related charges will be paid as provided under Section 10.1.5; (iii) Proceeds from the sale or lease of subscriber equipment and accessories will be paid to Manager, subject to the equipment settlement process in Section 4.1.2; (iv) Proceeds from sales not in the ordinary course of business (e.g., sales of switches, cell sites, computers, vehicles or other fixed assets); and (v) Any amounts collected with respect to sales and use taxes, gross receipts taxes, transfer taxes, and similar taxes, administrative fees, telecommunications fees, and surcharges for taxes and fees that are collected by a carrier for the benefit of a governmental authority, subject to Manager's obligation under Section 10.3. (c) The following items are not Collected Revenues; neither party will collect any amounts respecting such items: (i) Reasonable adjustments of a customer's account (e.g., if Sprint PCS or Manager reduces a customer's bill, then the amount of the adjustment is not Collected Revenue); and (ii) Amount of bad debt and fraud associated with customers whose NPA-NXX is assigned to the Service Area (e.g., if Sprint PCS or Manager writes off a customer's bill as a bad debt, there is no Collected Revenue on which a fee is due to Manager). 10.5 Late Payments. Any amount due under this Section 10 that is not paid by one party to the other party in accordance with the terms of this agreement will bear interest at the Default Rate beginning (and including) the 3rd day after the due date until (and including) the date paid. 21 10.6 Setoff Right If Failure To Pay Amounts Due. If Manager fails to pay any undisputed amount due Sprint PCS or a Related Party of Sprint PCS under this agreement, the Services Agreement, or any other agreement with Sprint PCS or a Related Party, then Sprint PCS may setoff against standard payment intervals (e.g. weekly) against the amounts paid to Manager under Section 10.1 until such time as Manager pays any such unpaid amounts. Sprint PCS may setoff the following amounts: (a) any amount that Manager owes to Sprint PCS or a Related Party of Sprint PCS, including amounts due under the Services Agreement; and (b) any amount that Sprint PCS reasonably estimates will be due to Sprint PCS for the current month under the Services Agreement (e.g., if under the Services Agreement customer care calls are billed monthly, Sprint PCS can deduct from the weekly payment to Manager an amount Sprint PCS reasonably estimates will be due Sprint PCS under the Services Agreement). On a monthly basis Sprint PCS will true up the estimated amounts deducted against the actual amounts due Sprint PCS. If the estimated amounts deducted by Sprint PCS exceed the actual amounts due to Sprint PCS, then Sprint PCS will remit the excess to Manager with the next weekly payment. If the estimated amounts deducted are less than the actual amounts due to Sprint PCS and its Related Parties, then Sprint PCS may continue to setoff the payments to Manager against the amounts due to Sprint PCS. This right of setoff is in addition to any other right that Sprint PCS may have under this agreement. 11. TERM; TERMINATION; EFFECT OF TERMINATION 11.1 Initial Term. This agreement commences on the date of execution and, unless terminated earlier in accordance with the provisions of this Section 11, continues for a period of 20 years (the "Initial Term"). 11.2 Renewal Terms. Following expiration of the Initial Term, this agreement will automatically renew for 3 successive 10-year renewal periods (for a maximum of 50 years including the Initial Term), unless at least 2 years prior to the commencement of any renewal period either party notifies the other party in writing that it does not wish to renew this agreement. 11.2.1 Non-renewal Rights of Manager. If this agreement will terminate because Sprint PCS gives Manager timely written notice of non-renewal of this agreement, then Manager may exercise its rights under Section 11.2.1.1 or, if applicable, its rights under Section 11.2.1.2. 11.2.1.1 Manager's Put Right. Manager may within 30 days after the date Sprint PCS gives notice of non-renewal put to Sprint PCS all of the Operating Assets. Sprint PCS will pay to Manager for the Operating Assets an 22 amount equal to 80% of the Entire Business Value. The closing of the purchase of the Operating Assets will occur within 20 days after the later of (a) the receipt by Sprint PCS of the written notice of determination of the Entire Business Value provided by the appraisers under Section 11.7 or (b) the receipt of all materials required to be delivered to Sprint PCS under Section 11.8. Upon closing the purchase of the Operating Assets this agreement will be deemed terminated. The exercise of the put, the determination of the Operating Assets, the representations and warranties made by Manager with respect to the Operating Assets and the business, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. 11.2.1.2 Manager's Purchase Right. (a) If Sprint PCS owns 20 MHz or more of PCS spectrum in the Service Area under the License on the date this agreement is terminated, then Manager may, subject to receipt of FCC approval of the necessary disaggregation and partition, purchase from Sprint PCS the Disaggregated License for an amount equal to the greater of (1) the original cost of the License to Sprint PCS (pro rated on a pops and spectrum basis) plus the microwave relocation costs paid by Sprint PCS or (2) 10% of the Entire Business Value. (b) Upon closing the purchase of the spectrum this agreement will be deemed terminated. The closing of the purchase of the Disaggregated License will occur within the later of: (1) 20 days after the receipt by Manager of the written notice of determination of the Entire Business Value by the appraisers under Section 11.7; or (2) 10 days after the approval of the sale of the Disaggregated License by the FCC. (c) The exercise of the purchase right, the determination of the geographic extent of the Disaggregated License coverage, the representations and warranties made by Sprint PCS with respect to the Disaggregated License, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. (d) After the closing of the purchase Manager will allow: (1) subscribers of Sprint PCS to roam on Manager's network; and (2) Sprint PCS to resell Manager's Products and Services. 23 Manager will charge Sprint PCS a MFN price in either case. 11.2.2 Non-renewal Rights of Sprint PCS. If this agreement will terminate because of any of the following five (5) events, then Sprint PCS may exercise its rights under Section 11.2.2.1 or, if applicable, its rights under Section 11.2.2.2: (a) Manager gives Sprint PCS timely written notice of non- renewal of this agreement; (b) both parties give timely written notices of non- renewal; (c) this agreement expires with neither party giving a written notice of non-renewal; (d) either party elects to terminate this agreement under Section 11.3.4(a); or (e) Manager elects to terminate this agreement under Section 11.3.4(b). 11.2.2.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount equal to 80% of the Entire Business Value. The closing of the purchase of the Operating Assets will occur within 20 days after the later of (a) the receipt by Sprint PCS of the written notice of determination of the Entire Business Value provided by the appraisers under Section 11.7 or (b) the receipt of all materials required to be delivered to Sprint PCS under Section 11.8. Upon closing the purchase of the Operating Assets this agreement will be deemed terminated. The exercise of the purchase right, the determination of the Operating Assets, the representations and warranties made by Manager with respect to the Operating Assets and the business, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. 11.2.2.2 Sprint PCS' Put Right. (a) Sprint PCS may, subject to receipt of FCC approval, put to Manager the Disaggregated License for a purchase price equal to the greater of (1) the original cost of the License to Sprint PCS (pro rated on a pops and spectrum basis) plus the microwave relocation costs paid by Sprint PCS or (2) 10% of the Entire Business Value. (b) Upon closing the purchase of the Disaggregated License this agreement will be deemed terminated. The closing of the purchase of the Disaggregated License will occur within the later of: 24 (1) 20 days after the receipt by Sprint PCS of the written notice of determination of the Entire Business Value by the appraisers under Section 11.7; or (2) 10 days after the approval of the sale of the Disaggregated License by the FCC. (c) The exercise of the put, the determination of the geographic extent of the Disaggregated License coverage, the representations and warranties made by Sprint PCS with respect to the Disaggregated License, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. (d) Manager may, within 10 days after it receives notice of Sprint PCS' exercise of its put, advise Sprint PCS of the amount of spectrum (not to exceed 10 MHz) it wishes to purchase. After the purchase Manager will allow: (1) subscribers of Sprint PCS to roam on Manager's network; and (2) Sprint PCS to resell Manager's Products and Services. Manager will charge Sprint PCS a MFN price in either case. 11.2.2.3 Extended Term Awaiting FCC Approval. If Manager is buying the Disaggregated License as permitted or required under Sections 11.2.1.2 or 11.2.2.2, then the Term of this agreement will extend beyond the original expiration date until the closing of the purchase of the Disaggregated License. The parties agree to exercise their respective commercially reasonable efforts to obtain FCC approval of the transfer of the Disaggregated License. 11.3 Event of Termination. An "Event of Termination" is deemed to occur when a party gives written notice to the other party of the Event of Termination as permitted below: 11.3.1 Termination of License. (a) At the election of either party this agreement may be terminated at the time the FCC revokes or fails to renew the License. Unless Manager has the right to terminate this agreement under Section 11.3.1(b), neither party has any claim against the other party if the FCC revokes or fails to renew the License, even if circumstances would otherwise permit one party to terminate this agreement based on a different Event of Termination, except that the parties will have the right to pursue claims against each other as permitted under Section 11.4(b). 25 (b) If the FCC revokes or fails to renew the License because of a breach of this agreement by Sprint PCS, then Manager has the right to terminate this agreement under Section 11.3.3 and not this Section 11.3.1. 11.3.2 Breach of Agreement: Payment of Money Terms. At the election of the non-breaching party this agreement may be terminated upon the failure by the breaching party to pay any amount due under this agreement or any other agreement between the parties or their respective Related Parties, if the breach is not cured within 30 days after the breaching party's receipt of written notice of the nonpayment from the non-breaching party. 11.3.3 Breach of Agreement: Other Terms. At the election of the non- breaching party this agreement may be terminated upon the material breach by the breaching party of any material term contained in this agreement that does not regard the payment of money, if the breach is not cured within 30 days after the breaching party's receipt of written notice of the breach from the non-breaching party, except the cure period will continue for a reasonable period beyond the 30-day period, but will under no circumstances exceed 180 days after the breaching party's receipt of written notice of the breach, if it is unreasonable to cure the breach within the 30-day period, and the breaching party takes action prior to the end of the 30-day period that is reasonably likely to cure the breach and continues to diligently take action necessary to cure the breach. 11.3.4 Regulatory Considerations. (a) At the election of either party this agreement may be terminated if this agreement violates any applicable law in any material respect where such violation (i) is classified as a felony or (ii) subjects either party to substantial monetary fines or other substantial damages, except that before causing any termination the parties must use best efforts to modify this agreement, as necessary to cause this agreement (as modified) to comply with applicable law and to preserve to the extent possible the economic arrangements set forth in this agreement. (b) At the election of Manager this agreement may be terminated if the regulatory action described under 11.3.4(a) is the result of a deemed change of control of the License and the parties are unable to agree upon a satisfactory resolution of the matter with the regulatory authority without a complete termination of this agreement. 11.3.5 Termination of Trademark License Agreements. If either Trademark License Agreement terminates under its terms, then: (a) Manager may terminate this agreement if the Trademark License Agreement terminated because of a breach of the Trademark License Agreement by Sprint PCS or Sprint; and 26 (b) Sprint PCS may terminate this agreement if the Trademark License Agreement terminated because of a breach of the Trademark License Agreement by Manager. 11.3.6 Financing Considerations. At the election of Sprint PCS this agreement may be terminated upon the failure of Manager to obtain the financing described in Exhibit 1.7 by the deadline(s) set forth on such Exhibit. ----------- 11.3.7 Bankruptcy of a Party. At the election of the non-bankrupt party, this agreement may be terminated upon the occurrence of a Voluntary Bankruptcy or an Involuntary Bankruptcy of the other party. "Voluntary Bankruptcy" means: (a) The inability of a party generally to pay its debts as the debts become due, or an admission in writing by a party of its inability to pay its debts generally or a general assignment by a party for the benefit of creditors; (b) The filing of any petition or answer by a party seeking to adjudicate itself a bankrupt or insolvent, or seeking any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition for itself or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for itself or for substantially all of its property; or (c) Any action taken by a party to authorize any of the actions set forth above. "Involuntary Bankruptcy" means, without the consent or acquiescence of a party: (a) The entering of an order for relief or approving a petition for relief or reorganization; (b) Any petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation; (c) The filing of any petition against a party, which petition is not dismissed within 90 days; or (d) Without the consent or acquiescence of a party, the entering of an order appointing a trustee, custodian, receiver or liquidator of party or of all or any substantial part of the property of the party, which order is not dismissed within 90 days. 27 11.4 Effect of an Event of Termination. (a) Upon the occurrence of an Event of Termination, the party with the right to terminate this agreement or to elect the remedy upon the Event of Termination, as the case may be, may: (i) in the case of an Event of Termination under Sections 11.3.1(a) or 11.3.7, give the other party written notice that the agreement is terminated effective as of the date of the notice, in which case neither party will have any other remedy or claim for damages (except any claim the non-bankrupt party has against the bankrupt party and any claims permitted under Section 11.4(b)); or (ii) in the case of an Event of Termination other than under Section 11.3.1(a), give the other party written notice that the party is exercising one of its rights, if any, under Section 11.5 or Section 11.6. (b) If the party terminates this agreement under Section 11.4(a)(i) then all rights and obligations of each party under this agreement will immediately cease, except that: (i) Any rights arising out of a breach of any terms of this agreement will survive any termination of this agreement; (ii) The provisions of this Section 11.4 and of Sections 12.2, 13, 14 and 16 will survive any termination of this agreement; (iii) The payment obligations under Section 10 will survive any termination of this agreement if, and to the extent, any costs or fees have accrued or are otherwise due and owing as of the date of termination of this agreement from Manager to Sprint PCS or any Sprint PCS Related Party or from Sprint PCS to Manager or any Manager Related Party; (iv) Either party may terminate this agreement in accordance with the terms of this agreement without any liability for any loss or damage arising out of or related to such termination, including any loss or damage arising out of the exercise by Sprint PCS of its rights under Section 11.6.3; (v) The parties will use all commercially reasonable efforts to cease immediately all of their respective efforts to market, sell, promote or distribute the Sprint PCS Products and Services; (vi) Sprint PCS has the option to buy from Manager any new unsold subscriber equipment and accessories, at the prices charged to Manager; 28 (vii) The parties will immediately stop making any statements or taking any action that might cause third parties to infer that any business relationship continues to exist between the parties, and where necessary or advisable, the parties will inform third parties that the parties no longer have a business relationship; and (viii) If subscriber equipment and accessories are in transit when this agreement is terminated, Sprint PCS may, but does not have the obligation to, cause the freight carrier to not deliver the subscriber equipment and accessories to Manager but rather to deliver the subscriber equipment and accessories to Sprint PCS. (c) If the party exercises its rights under Section 11.4(a)(ii), this agreement will continue in full force and effect until otherwise terminated. (d) If this agreement terminates for any reason other than Manager's purchase of the Disaggregated License, Manager will not, for 3 years after the date of termination compile, create, or use for the purpose of selling merchandise or services similar to the Sprint PCS Products or Services, or sell, transfer or otherwise convey to a third party, a list of customers who purchased, leased or used Sprint PCS Products or Services. Manager may use such a list for its own internal analysis of its business practices and operations. If this agreement terminates because of Manager's purchase of the Disaggregated License, then Sprint PCS will transfer to Manager the Sprint PCS customers with a MIN assigned to the Service Area covered by the Disaggregated License, but Sprint PCS retains the customers of a national account and any resellers who have entered into a resale agreement with Sprint PCS. Manager agrees not to solicit, directly or indirectly, any customers of Sprint PCS not transferred to Manager under this Section 11.4(d) for 2 years after the termination of this agreement. 11.5 Manager's Event of Termination Rights and Remedies. In addition to any other right or remedy that Manager may have under this agreement, the parties agree that Manager will have the rights and remedies set forth in this Section 11.5 and that such rights and remedies will survive the termination of this agreement. If Manager has a right to terminate this agreement as the result of the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3, 11.3.5 or 11.3.7 (if Manager is the non-bankrupt party), then Manager has the right to elect one of the following three (3) remedies, except Manager cannot elect its remedies under Sections 11.5.1 or 11.5.2 during the first 2 years of the Initial Term with respect to an Event of Termination under Section 11.3.3. 11.5.1 Manager's Put Right. Manager may put to Sprint PCS within 30 days after the Event of Termination all of the Operating Assets. Sprint PCS will pay to Manager an amount equal to 80% of the Entire Business Value. The closing of the purchase of the Operating Assets will occur within 20 days after the later of: (a) the receipt by Sprint PCS of the written notice of determination of the Entire Business Value by the appraisers under Section 11.7; or 29 (b) the receipt of all materials required to be delivered to Sprint PCS under Section 11.8. Upon closing the purchase of the Operating Assets this agreement will be deemed terminated. The exercise of the put, the determination of the Operating Assets, the representations and warranties made by the Manager with respect to the Operating Assets and the business, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. 11.5.2 Manager's Purchase Right. (a) If Sprint PCS owns 20 MHz or more of PCS spectrum in the Service Area under the License on the date this agreement is executed, then Manager may, subject to receipt of FCC approval, purchase from Sprint PCS the Disaggregated License for the greater of (1) the original cost of the License to Sprint PCS (pro rated on a pops and spectrum basis) plus the microwave relocation costs paid by Sprint PCS or (2) 9% (10% minus a 10% penalty) of the Entire Business Value. (b) Upon closing the purchase of the Disaggregated License this agreement will be deemed terminated. The closing of the purchase of the Disaggregated License will occur within the later of: (1) 20 days after the receipt by Manager of the written notice of determination of the Entire Business Value by the appraisers under Section 11.7; or (2) 10 days after the approval of the sale of the Disaggregated License by the FCC. The exercise of the purchase right, the determination of the geographic extent of the Disaggregated License coverage, the representations and warranties made by Sprint PCS with respect to the Disaggregated License, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. (c) After the closing of the purchase Manager will allow: (1) subscribers of Sprint PCS to roam on Manager's network; and (2) Sprint PCS to resell Manager's Product and Services. Manager will charge Sprint PCS a MFN price in either case. 30 11.5.3 Manager's Action for Damages or Other Relief. Manager may seek damages or other appropriate relief in accordance with the dispute resolution process in Section 14. 11.6 Sprint PCS' Event of Termination Rights and Remedies. In addition to any other right or remedy that Sprint PCS may have under this agreement, the parties agree that Sprint PCS will have the rights and remedies set forth in this Section 11.6 and that such rights and remedies will survive the termination of this agreement. If Sprint PCS has a right to terminate this agreement as the result of the occurrence of an Event of Termination under Sections 11.3.2, 11.3.3, 11.3.5, 11.3.6 or 11.3.7 (if Sprint PCS is the non-bankrupt party), then Sprint PCS has the right to elect one of the following four (4) remedies, except that (i) if Sprint PCS elects the remedies under Sections 11.6.1, 11.6.2 or 11.6.4, Sprint PCS may pursue its rights under Section 11.6.3 concurrently with its pursuit of one of the other three remedies, (ii) Sprint PCS cannot elect its remedies under Sections 11.6.1 or 11.6.2 during the first 2 years of the Initial Term with respect to an Event of Termination under Section 11.3.3 (unless the Event of Termination is caused by a breach related to the Build-out Plan or the build-out of the Service Area Network), and (iii) Sprint PCS cannot elect its remedy under Section 11.6.2 during the first 2 years of the Initial Term with respect to an Event of Termination under Section 11.3.6. 11.6.1 Sprint PCS' Purchase Right. Sprint PCS may purchase from Manager all of the Operating Assets. Sprint PCS will pay to Manager an amount equal to 72% (80% minus a 10% penalty) of the Entire Business Value. The closing of the purchase of the Operating Assets will occur within 20 days after the later of: (a) the receipt by Sprint PCS of the written notice of determination of the Entire Business Value by the appraisers pursuant to Section 11.7; or (b) the receipt of all materials required to be delivered to Sprint PCS under Section 11.8. Upon closing the purchase of the Operating Assets this agreement will be deemed terminated. The exercise of the purchase right, the determination of the Operating Assets, the representations and warranties made by Manager with respect to the Operating Assets and the business, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. 11.6.2 Sprint PCS' Put Right. (a) Sprint PCS may, subject to receipt of FCC approval, put to Manager the Disaggregated License for a purchase price equal to the greater of (1) the original cost of the License to Sprint PCS (pro rated on a pops and spectrum basis) plus the microwave relocation costs paid by Sprint PCS or (2) 10% of the Entire Business Value. 31 (b) Upon closing the purchase of the Disaggregated License this agreement will be deemed terminated. The closing of the purchase of the Disaggregated License will occur within the later of: (1) 20 days after the receipt by Sprint PCS of the written notice of determination of the Entire Business Value by the appraisers under Section 11.7; or (2) 10 days after the approval of the sale of the Disaggregated License by the FCC. (c) The exercise of the put, the determination of the geographic extent of the Disaggregated License coverage, the representations and warranties made by Sprint PCS with respect to the Disaggregated License, and the process for closing the purchase will be subject to the terms and conditions set forth in Section 11.8. (d) Manager may, within 10 days after it receives notice of Sprint PCS' exercise of its put, advise Sprint PCS of the amount of spectrum (not to exceed 10 MHz) it wishes to purchase. After the closing of the purchase Manager will allow: (1) subscribers of Sprint PCS to roam on Manager's network; and (2) Sprint PCS to resell Manager's Products and Services. Manager will charge Sprint PCS a MFN price in either case. 11.6.3 Sprint PCS' Right to Cause A Cure. (a) Sprint PCS' Right. Sprint PCS may, but is not obligated to, take such action as it deems necessary to cure Manager's breach of this agreement, including assuming operational responsibility for the Service Area Network to complete construction, continue operation, complete any necessary repairs, implement changes necessary to comply with the Program Requirements and terms of this agreement, or take such other steps as are appropriate under the circumstances, or Sprint PCS may designate a third party or parties to do the same, to assure uninterrupted availability and deliverability of Sprint PCS Products and Services in the Service Area, or to complete the build-out of the Service Area Network in accordance with the terms of this agreement. In the event that Sprint PCS elects to exercise its right under this Section 11.6.3, Sprint PCS will give Manager written notice of such election. Upon giving such notice: 32 (1) Manager will collect and make available at a convenient, central location at its principal place of business, all documents, books, manuals, reports and records related to the Build-out Plan and required to operate and maintain the Service Area Network; and (2) Sprint PCS, its employees, contractors and designated third parties will have the unrestricted right to enter the facilities and offices of Manager for the purpose of curing the breach and, if Sprint PCS deems necessary, operate the Service Area Network. Manager agrees to cooperate with and assist Sprint PCS to the extent requested by Sprint PCS to enable Sprint PCS to exercise its rights under this Section 11.6.3. (b) Liability. Sprint PCS' exercise of its rights under this Section 11.6.3 will not be deemed an assumption by Sprint PCS of any liability attributable to Manager or any other party, except that, without limiting the provisions of Section 13, during the period that Sprint PCS is curing a breach under this agreement or operating any portion of the Service Area Network pursuant to this Section 11.6.3, Sprint PCS will indemnify and defend Manager and its directors, partners, officers, employees and agents from and against, and reimburse and pay for, all claims, demands, damages, losses, judgments, awards, liabilities, costs and expenses (including reasonable attorneys' fees, court costs and other expenses of litigation), whether or not arising out of third party claims, in connection with any suit, claim, action or other legal proceeding relating to the bodily injury, sickness or death of persons or the damage to or destruction of property, real or personal, resulting from or arising out of Sprint PCS' negligence or willful misconduct in curing the breach or in the operation of the Service Area Network. Sprint PCS' obligation under this Section 11.6.3(b) will not apply to the extent of any claims, demands, damages, losses, judgments, awards, liabilities, costs and expenses resulting from the negligence or willful misconduct of Manager or arising from any contractual obligation of Manager. (c) Costs and Payments. During the period that Sprint PCS is curing a breach or operating the Service Area Network under this Section 11.6.3, Sprint PCS and Manager will continue to make any and all payments due to the other party and to third parties under this agreement, the Services Agreement and any other agreements to which such party is bound, except that Sprint PCS may deduct from its payments to Manager all reasonable costs and expenses incurred by Sprint PCS in connection with the exercise of its right under this Section 11.6.3. Sprint PCS' operation of the Service Area Network pursuant to this Section 11.6.3 is not a substitution for Manager's performance of its obligations under this agreement and does not relieve Manager of its other obligations under this agreement. (d) Length of Right. Sprint PCS may continue to operate the Service Area Network in accordance with Section 11.6.3 until (i) Sprint PCS 33 cures all breaches by Manager under this agreement; (ii) Manager cures all breaches and demonstrates to Sprint PCS' satisfaction that it is financially and operationally willing, ready and able to perform in accordance with this agreement and resumes such performance; (iii) Sprint PCS consummates the purchase of the Operating Assets under Section 11.6.1 or the sale of the Disaggregated License under Section 11.6.2; or (iv) Sprint PCS terminates this agreement. (e) Not Under Services Agreement. The exercise by Sprint PCS of its right under this Section 11.6.3 does not represent services rendered under the Services Agreement, and therefore it does not allow Manager to be deemed in compliance with the Program Requirements under Sections 7.1(a)(ii), 8.1(b). 11.6.4 Sprint PCS' Action for Damages or Other Relief. Sprint PCS may seek damages or other appropriate relief in accordance with the dispute resolution process in Section 14. 11.7 Determination of Entire Business Value. 11.7.1 Appointment of Appraisers. Sprint PCS and Manager must each designate an independent appraiser within 30 days after giving the Purchase Notice under Exhibit 11.8. Sprint PCS and Manager will direct the two ------------ appraisers to jointly select a third appraiser within 15 days after the day the last of them is appointed. Each appraiser must be an expert in the valuation of wireless telecommunications businesses. Sprint PCS and Manager must direct the three appraisers to each determine, within 45 days after the appointment of the last appraiser, the Entire Business Value. Sprint PCS and Manager will each bear the costs of the appraiser appointed by it, and they will share equally the costs of the third appraiser. 11.7.2 Manager's Operating Assets. The following assets are included in the Operating Assets (as defined in the Schedule of Definitions): ----------------------- (a) network assets, including all personal property, real property interests in cell sites and switch sites, leasehold interests, collocation agreements, easements, and rights of way; (b) all of the real, personal, tangible and intangible property and contract rights that Manager owns and uses in conducting the business of providing the Sprint PCS Products and Services, including the goodwill resulting from Manager's customer base; (c) sale and distribution assets primarily dedicated (i.e., at least 80% of their revenue is derived from the sale of Sprint PCS Products and Services) to the sale by Manager of Sprint PCS Products and Services. For example, a retail store that derives at least 80% of its revenue from the sale of 34 Sprint PCS Products and Services is an operating asset. A store that derives 65% of its revenue from Sprint PCS Products and Services is not an operating asset; (d) customers, if any, that use both the other products and services approved under Section 3.2 and the Sprint PCS Products and Services; (e) handset inventory; (f) books and records of the wireless business, including all engineering drawings and designs and financial records; (g) all contracts used by Manager in operating the wireless business including T1 service agreements, service contracts, interconnection agreements, distribution agreements, software license agreements, equipment maintenance agreements, sales agency agreements and contracts with all equipment suppliers. 11.7.3 Entire Business Value. Utilizing the valuation principles set forth below and in Section 11.7.4, "Entire Business Value" means the fair market value of Manager's wireless business in the Service Area, valued on a going concern basis. (a) The fair market value is based on the price a willing buyer would pay a willing seller for the entire on-going business. (b) The appraisers will use the then-current customary means of valuing a wireless telecommunications business. (c) The business is conducted under the Brands and existing agreements between the parties and their respective Related Parties. (d) Manager owns the Disaggregated License (in the case where Manager will be buying the Disaggregated License under Sections 11.2.1.2, 11.2.2.2, 11.5.2 or 11.6.2) or Manager owns the spectrum and the frequencies actually used by Manager under this agreement (in the case where Sprint PCS will be buying the Operating Assets under Sections 11.2.1.1, 11.2.2.1, 11.5.1 or 11.6.1). (e) The valuation will not include any value for the business represented by Manager's Products and Services or any business not directly related to Sprint PCS Products and Services. 11.7.4 Calculation of Entire Business Value. The Entire Business Value to be used to determine the purchase price of the Operating Assets or the Disaggregated License under this agreement is as follows: 35 (a) If the highest fair market value determined by the appraisers is within 10% of the lowest fair market value, then the Entire Business Value used to determine the purchase price under this agreement will be the arithmetic mean of the three appraised fair market values. (b) If two of the fair market values determined by the appraisers are within 10% of one another, and the third value is not within 10% of the other fair market values, then the Entire Business Value used to determine the purchase price under this agreement will be the arithmetic mean of the two more closely aligned fair market values. (c) If none of the fair market values is within 10% of the other two fair market values, then the Entire Business Value used to determine the purchase price under this agreement will be the middle value of the three fair market values. 11.8 Closing Terms and Conditions. The closing terms and conditions for the transactions contemplated in this Section 11 are attached as Exhibit 11.8. ------------ 11.9 Contemporaneous and Identical Application. The parties agree that any action regarding renewal or non-renewal and any Event of Termination will occur contemporaneously and identically with respect to all Licenses. For example, if Manager exercises its purchase right under Section 11.5.2, it must exercise such right with respect to all of the Licenses under this agreement. The Term of this agreement will be the same for all Licenses; Manager will not be permitted to operate a portion of the Service Area Network with fewer than all of the Licenses. 12. BOOKS AND RECORDS; CONFIDENTIAL INFORMATION; INSURANCE 12.1 Books and Records. 12.1.1 General. Each party must keep and maintain books and records to support and document any fees, costs, expenses or other charges due in connection with the provisions set forth in this agreement. The records must be retained for a period of at least 3 years after the fees, costs, expenses or other charges to which the records relate have accrued and have been paid, or such other period as may be required by law. 12.1.2 Audit. On reasonable advance notice, each party must provide access to appropriate records to the independent auditors selected by the other party for purposes of auditing the amount of fees, costs, expenses or other charges payable in connection with the Service Area with respect to the period audited. The auditing party will conduct the audit no more frequently than annually. If the audit shows that Sprint PCS was underpaid then, unless the amount is contested, Manager will pay to Sprint PCS the amount of the underpayment within 10 Business Days after Sprint PCS gives Manager written notice of the determination of the underpayment. If the audit determines that Sprint PCS was overpaid then, unless the amount is 36 contested, Sprint PCS will pay to Manager the amount of the overpayment within 10 Business Days after Sprint PCS determines Sprint PCS was overpaid. Notwithstanding the above provisions of this Section 12.1.2, Sprint PCS may elect to have its own independent auditors certify to the accuracy of the charges with respect to Manager, rather than allow Manager's independent auditors access to Sprint PCS' records. 12.1.3 Contesting an Audit. If the party that did not select the independent auditor does not agree with the findings of the audit, then such party can contest the findings by providing notice of such disagreement to the other party (the "Dispute Notice"). The date of delivery of such notice is the "Dispute Notice Date." If the parties are unable to resolve the disagreement within 10 Business Days after the Dispute Notice Date, they will resolve the disagreement in accordance with the following procedures. The two parties and the auditor that conducted the audit will all agree on an independent certified public accountant with a regional or national accounting practice in the wireless telecommunications industry (the "Arbiter") within 15 Business Days after the Dispute Notice Date. If, within 15 Business Days after the Dispute Notice Date, the three parties fail to agree on the Arbiter, then at the request of either party to this agreement, the Arbiter will be selected pursuant to the rules then in effect of the American Arbitra-tion Association. Each party will submit to the Arbiter within 5 Business Days after its selection and engagement all information reasonably requested by the Arbiter to enable the Arbiter to independently resolve the issue that is the subject of the Dispute Notice. The Arbiter will make its own determina-tion of the amount of fees, costs, expenses or other charges payable under this agreement with respect to the period audited. The Arbiter will issue a written report of its determi-nation in reasonable detail and will deliver a copy of the report to the parties within 10 Business Days after the Arbiter receives all of the information reasonably requested. The determination made by the Arbiter will be final and binding and may be en-forced by any court having jurisdiction. The parties will cooperate fully in assisting the Arbiter and will take such actions as are necessary to expedite the completion of and to cause the Arbiter to expedite its assignment. If the amount owed by a contesting party is reduced by more than 10% or the amount owed to a contesting party is increased by more than 10% then the non- contesting party will pay the costs and expenses of the Arbiter, otherwise the contesting party will pay the costs and expenses of the Arbiter. 12.2 Confidential Information. (a) Except as specifically authorized by this agreement, each of the parties must, for the Term and 3 years after the date of termination of this agreement, keep confidential, not disclose to others and use only for the purposes authorized in this agreement, all Confidential Information disclosed by the other party to the party in connection with this agreement, except that the foregoing obligation will not apply to the extent that any Confidential Information: (i) is or becomes, after disclosure to a party, publicly known by any means other than through unauthorized acts or omissions of the party or its agents; or 37 (ii) is disclosed in good faith to a party by a third party entitled to make the disclosure. (b) Notwithstanding the foregoing, a party may use, disclose or authorize the disclosure of Confidential Information that it receives that: (i) has been published or is in the public domain, or that subsequently comes into the public domain, through no fault of the receiving party; (ii) prior to the effective date of this agreement was properly within the legitimate possession of the receiving party, or subsequent to the effective date of this agreement, is lawfully received from a third party having rights to publicly disseminate the Confidential Information without any restriction and without notice to the recipient of any restriction against its further disclosure; (iii) is independently developed by the receiving party through persons or entities who have not had, either directly or indirectly, access to or knowledge of the Confidential Information; (iv) is disclosed to a third party consistent with the terms of the written approval of the party originally disclosing the information; (v) is required by the receiving party to be produced under order of a court of competent jurisdiction or other similar requirements of a governmental agency, and the Confidential Information will otherwise continue to be Confidential Information required to be held confidential for purposes of this agreement; (vi) is required by the receiving party to be disclosed by applicable law or a stock exchange or association on which the receiving party's securities (or those of its Related Parties) are or may become listed; or (vii) is disclosed by the receiving party to a financial institution or accredited investor (as that term is defined in Rule 501(a) under the Securities Act of 1933) that is considering providing financing to the receiving party and which financial institution or accredited investor has agreed to keep the Confidential Information confidential in accordance with an agreement at least as restrictive as this Section 12. (c) Notwithstanding the foregoing, Manager authorizes Sprint PCS to disclose to the public in public relations announcements and regulatory filings Manager's identity and the Service Area to be developed and managed by Manager. (d) The party making a disclosure under Sections 12.2(b)(v), 12.2(b)(vi) or 12.2(b)(vii) must inform the disclosing party as promptly as is reasonably necessary to enable the disclosing party to take action to, and use the party's reasonable best efforts to, limit the disclosure and maintain confidentiality to the extent practicable. 38 (e) Manager will not except when serving in the capacity of Manager under this agreement, use any Confidential Information of any kind that it receives under or in connection with this agreement. For example, if Manager operates a wireless company in a different license area, Manager may not use any of the Confidential Information received under or in connection with this agreement in operating the other wireless business. 12.3 Insurance. 12.3.1 General. During the term of this agreement, Manager must obtain and maintain, and will cause any subcontractors to obtain and maintain, with financially reputable insurers licensed to do business in all jurisdictions where any work is performed under this agreement and who are reasonably acceptable to Sprint PCS, the insurance described in the Sprint PCS Insurance Requirements. The Sprint PCS Insurance Requirements as of the date of this agreement are attached as Exhibit 12.3. Sprint PCS may modify the Sprint PCS ------------ Insurance Requirements as is commercially reasonable from time to time by delivering to Manager a new Exhibit 12.3. ------------ 12.3.2 Waiver of Subrogation. Manager must look first to any insurance in its favor before making any claim against Sprint PCS or Sprint, and their respective directors, officers, employees, agents or representatives for recovery resulting from injury to any person (including Manager's or its subcontractor's employees) or damage to any property arising from any cause, regardless of negligence. Manager does hereby release and waive to the fullest extent permitted by law, and will cause its respective insurers to waive, all rights of recovery by subrogation against Sprint PCS or Sprint, and their respective directors, officers, employees, agents or representatives. 12.3.3 Certificates of Insurance. Manager and all of its subcontractors, if any, must, as a material condition of this agreement and prior to the commencement of any work under and any renewal of this agreement, deliver to Sprint PCS a certificate of insurance, satisfactory in form and content to Sprint PCS, evidencing that the above insurance, including waiver of subrogation, is in force and will not be canceled or materially altered without first giving Sprint PCS at least 30 days prior written notice and that all coverages are primary to any insurance carried by Sprint PCS, its directors, officers, employees, agents or representatives. Nothing contained in this Section 12.3.3 will limit Manager's liability to Sprint PCS, its directors, officers, employees, agents or representatives to the limits of insurance certified or carried. 13. INDEMNIFICATION 13.1 Indemnification by Sprint PCS. Sprint PCS agrees to indemnify, defend and hold harmless Manager, its directors, managers, officers, employees, agents and representatives from and against any and all claims, demands, causes of action, losses, actions, damages, liability and expense, including costs and reasonable attorneys' fees, against manager, its directors, 39 managers, officers, employees, agents and representatives arising from or relating to the violation by Sprint PCS of any law, regulation or ordinance applicable to Sprint PCS or by Sprint PCS' breach of any representation, warranty or covenant contained in this agreement or any other agreement between Sprint PCS or its Related Parties and Manager or its Related Parties except where and to the extent the claim, demand, cause of action, loss, action, damage, liability and/or expense results solely from the negligence or willful misconduct of Manager. 13.2 Indemnification by Manager. Manager agrees to indemnify, defend and hold harmless Sprint PCS and Sprint, and their respective directors, managers, officers, employees, agents and representatives from and against any and all claims, demands, causes of action, losses, actions, damages, liability and expense, including costs and reasonable attorneys' fees, against Sprint PCS or Sprint, and their respective directors, managers, officers, employees, agents and representatives arising from or relating to Manager's violation of any law, regulation or ordinance applicable to Manager, Manager's breach of any representation, warranty or covenant contained in this agreement or any other agreement between Manager or its Related Parties and Sprint PCS and its Related Parties, Manager's ownership of the operating assets or the operation of the Service Area Network, or the actions or failure to act of any of Manager's contractors, subcontractors, agents, directors, managers, officers, employees and representatives of any of them in the performance of any work under this agreement, except where and to the extent the claim, demand, cause of action, loss, action, damage, liability and expense results solely from the negligence or willful misconduct of Sprint PCS or Sprint, as the case may be. 13.3 Procedure. 13.3.1 Notice. Any party being indemnified ("Indemnitee") will give the party making the indemnification ("Indemnitor") written notice as soon as practicable but no later than 5 Business Days after the party becomes aware of the facts, conditions or events that give rise to the claim for indemnification if: (a) Any claim or demand is made or liability is asserted against Indemnitee; or (b) Any suit, action, or administrative or legal proceeding is instituted or commenced in which Indemnitee is involved or is named as a defendant either individually or with others. Failure to give notice as described in this Section 13.3.1 does not modify the indemnification obligations of this provision, except if Indemnitee is harmed by failure to provide timely notice to Indemnitor, then Indemnitor does not have to indemnify Indemnitee for the harm caused by the failure to give the timely notice. 13.3.2 Defense by Indemnitor. If within 30 days after giving notice Indemnitee receives written notice from Indemnitor stating that Indemnitor disputes or intends to defend against the claim, demand, liability, suit, action or proceeding, then Indemnitor will have the right to select counsel of its choice and to dispute or defend against the claim, demand, liability, suit, action or proceeding, at its expense. 40 Indemnitee will fully cooperate with Indemnitor in the dispute or defense so long as Indemnitor is conducting the dispute or defense diligently and in good faith. Indemnitor is not permitted to settle the dispute or claim without the prior written approval of Indemnitee, which approval will not be unreasonably withheld. Even though Indemnitor selects counsel of its choice, Indemnitee has the right to retain additional representation by counsel of its choice to participate in the defense at Indemnitee's sole cost and expense. 13.3.3 Defense by Indemnitee. If no notice of intent to dispute or defend is received by Indemnitee within the 30-day period, or if a diligent and good faith defense is not being or ceases to be conducted, Indemnitee has the right to dispute and defend against the claim, demand or other liability at the sole cost and expense of Indemnitor and to settle the claim, demand or other liability, and in either event to be indemnified as provided in this Section 13.3.3. Indemnitee is not permitted to settle the dispute or claim without the prior written approval of Indemnitor, which approval will not be unreasonably withheld. 13.3.4 Costs. Indemnitor's indemnity obligation includes reasonable attorneys' fees, investigation costs, and all other reasonable costs and expenses incurred by Indemnitee from the first notice that any claim or demand has been made or may be made, and is not limited in any way by any limitation on the amount or type of damages, compensation, or benefits payable under applicable workers' compensation acts, disability benefit acts, or other employee benefit acts. 14. DISPUTE RESOLUTION 14.1 Negotiation. The parties will attempt in good faith to resolve any dispute arising out of or relating to this agreement promptly by negotiation between or among representatives who have authority to settle the controversy. Either party may escalate any dispute not resolved in the normal course of business to the appropriate (as determined by the party) officers of the parties by providing written notice to the other party. Within 10 Business Days after delivery of the notice, the appropriate officers of each party will meet at a mutually acceptable time and place, and thereafter as often as they deem reasonably necessary, to exchange relevant information and to attempt to resolve the dispute. Either party may elect, by giving written notice to the other party, to escalate any dispute arising out of or relating to the determination of fees that is not resolved in the normal course of business or by the audit process set forth in Sections 12.1.2 and 12.1.3, first to the appropriate financial or accounting officers to be designated by each party. The designated officers will meet in the manner described in the preceding paragraph. If the matter has not been resolved by the designated officers within 30 days after the notifying party's notice, either party may elect to escalate the dispute to the appropriate (as determined by the party) officers in accordance with the prior paragraphs of this Section 14.1. 41 14.2 Unable to Resolve. If a dispute has not been resolved within 60 days after the notifying party's notice, either party may continue to operate under this agreement and sue the other party for damages or seek other appropriate remedies as provided in this agreement. If, and only if, this agreement does not provide a remedy (as in the case of Sections 3.4 and 4.5, where the parties are supposed to reach an agreement), then either party may give the other party written notice that it wishes to resolve the dispute or claim arising out of the parties' inability to agree under such Sections of this agreement by using the arbitration procedure set forth in this Section 14.2. Such arbitration will occur in Kansas City, Missouri, unless the parties otherwise mutually agree, with the precise location being as agreed upon by the parties or, absent such agreement, at a location in Kansas City, Missouri selected by Sprint PCS. Such arbitration will be conducted pursuant to the procedures prescribed by the Missouri Uniform Arbitration Act, as amended from time to time, or, if none, pursuant to the rules then in effect of the American Arbitration Association (or at any other place and by any other form of arbitration mutually acceptable to the parties). Any award rendered in such arbitration will be confidential and will be final and conclusive upon the parties, and a judgment on the award may be entered in any court of the forum, state or federal, having jurisdiction. The expenses of the arbitration will be borne equally by the parties to the arbitration, except that each party must pay for and bear the cost of its own experts, evidence, and attorneys' fees. The parties must each, within 30 days after either party gives notice to the other party of the notifying party's desire to resolve a dispute or claim under the arbitration procedure in this Section 14.2, designate an independent arbitrator, who is knowledgeable with regard to the wireless telecommunications industry, to participate in the arbitration hearing. The two arbitrators thus selected will select a third independent arbitrator, who is knowledgeable with regard to the wireless telecommunications industry, who will act as chairperson of the board of arbitration. If, within 15 days after the day the last of the two named arbitrators is appointed, the two named arbitrators fail to agree upon the third, then at the request of either party, the third arbitrator shall be selected pursuant to the rules then in effect of the American Arbitration Association. The three independent arbitrators will comprise the board of arbitration, which will preside over the arbitration hearing and will render all decisions by majority vote. If either party refuses or neglects to appoint an independent arbitrator within such 30-day period, the independent arbitrator who has been appointed as of the 31st day after the notifying party's notice will be the sole independent arbitrator and will solely preside over the arbitration hearing. The arbitration hearing will commence no sooner than 30 days after the date the last arbitrator is appointed and no later than 60 days after such date. The arbitration hearing will be conducted during normal working hours on Business Days without interruption or adjournment of more than 2 Business Days at any one time or 6 Business Days in the aggregate. The arbitrators will deliver their decision to the parties in writing within 10 days after the conclusion of the arbitration hearing. The arbitration award will be accompanied by findings of fact and a statement of reasons for the decision. There will be no appeal from the written decision, except as permitted by applicable law. The arbitration proceedings, the arbitrators' decision, the arbitration award, and any other aspect, matter, or issue of or relating to the arbitration are confidential, and disclosure of such confidential information is an actionable breach of this agreement. 42 Notwithstanding any other provision of this agreement, arbitration will not be required of any issue for which injunctive relief is properly sought by either party. 14.3 Attorneys and Intent. If an officer intends to be accompanied at a meeting by an attorney, the other party's officer will be given at least 3 Business Days prior notice of the intention and may also be accompanied by an attorney. All negotiations under Section 14.1 are confidential and will be treated as compromise and settlement negotiations for purposes of the Federal Rules of Civil Procedure and state rules of evidence and civil procedure. 14.4 Tolling of Cure Periods. Any cure period under Section 11.3 that is less than 90 days will be tolled during the pendency of the dispute resolution process. Any cure period under Section 11.3 that is 90 days or longer will not be tolled during the pendency of the dispute resolution process. 15. REPRESENTATIONS AND WARRANTIES Each party for itself makes the following representations and warranties to the other party: 15.1 Due Incorporation or Formation; Authorization of Agreements. The party is either a corporation, limited liability company, or limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Manager is qualified to do business and in good standing in every jurisdiction in which the Service Area is located. The party has the full power and authority to execute and deliver this agreement and to perform its obligations under this agreement. 15.2 Valid and Binding Obligation. This agreement constitutes the valid and binding obligation of the party, enforceable in accordance with its terms, except as may be limited by principles of equity or by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally. 15.3 No Conflict; No Default. Neither the execution, delivery and performance of this agreement nor the consummation by the party of the transactions contemplated in this agreement will conflict with, violate or result in a breach of (a) any law, regulation, order, writ, injunction, decree, determination or award of any governmental authority or any arbitrator, applicable to such party, (b) any term, condition or provision of the articles of incorporation, certificate of limited partnership, certificate of organization, bylaws, partnership agreement or limited liability company agreement (or other governing documents) of such party or of any material agreement or instrument to which such party is or may be bound or to which any of its material properties or assets is subject. 15.4 Litigation. No action, suit, proceeding or investigation is pending or, to the knowledge of the party, threatened against or affecting the party or any of its properties, assets or businesses in any court or before or by any governmental agency that could, if adversely determined, reasonably be expected to have a material adverse effect on the party's ability to 43 perform its obligations under this agreement. The party has not received any currently effective notice of any default that could reasonably be expected to result in a breach of the preceding sentence. 16. REGULATORY COMPLIANCE 16.1 Regulatory Compliance. Manager will construct, operate, and manage the Service Area Network in compliance with applicable federal, state, and local laws and regulations, including Siting Regulations. Nothing in this Section 16.1 will limit Manager's obligations under Section 2.2 and the remainder of this Section 16. Manager acknowledges that failure to comply with applicable federal, state, and local laws and regulations in its construction, operation, and management of the Service Area Network may subject the parties and the License to legal and administrative agency actions, including forfeiture penalties and actions that affect the License, such as license suspension and revocation, and accordingly, Manager agrees that it will cooperate with Sprint PCS to maintain the License in full force and effect. Manager will write and implement practices and procedures governing construction and management of the Service Area Network in compliance with Siting Regulations. Manager will make its Siting Regulations practices and procedures available upon request to Sprint PCS in the manner specified by Sprint PCS for its inspection and review, and Manager will modify those Siting Regulations practices and procedures as may be requested by Sprint PCS. Every six months, and at the request of Sprint PCS, Manager will provide a written certification from one of Manager's chief officers that Manager's Service Area Network complies with Siting Regulations. Manager's first certification of compliance with Siting Regulations will be provided to Sprint PCS six months after the date of this agreement. Manager will conduct an audit and physical inspection of its Service Area Network at the request of Sprint PCS to confirm compliance with Siting Regulations, and Manager will report the results of the audit and physical inspection to Sprint PCS in the form requested by Sprint PCS. Manager will bear the cost of Siting Regulations compliance audits and physical inspections requested by Sprint PCS. Manager will retain for 3 years records demonstrating compliance with Siting Regulations, including compliance audit and inspection records. Manager will make those records available upon request to Sprint PCS for production, inspection, and copying in the manner specified by Sprint PCS. Sprint PCS will bear the cost of production, inspection, and copying. 16.2 FCC Compliance. The parties agree to comply with all applicable FCC rules governing the License or the Service Area Network and specifically agree as follows: (a) The party billing a customer will advise the customer that service is provided over spectrum licensed to Sprint PCS. Neither Manager nor Sprint PCS will represent itself as the legal representative of the other before the FCC or any other third party, but will 44 cooperate with each other with respect to FCC matters concerning the License or the Service Area Network. (b) Sprint PCS will use commercially reasonable efforts to maintain the License in accordance with the terms of the License and all applicable laws, policies and regulations and to comply in all material respects with all other legal requirements applicable to the operation of the Sprint PCS Network and its business. Sprint PCS has sole responsibility, except as specifically provided otherwise in Section 2.2, for keeping the License in full force and effect and for preparing submissions to the FCC or any other relevant federal, state or local authority of all reports, applications, interconnection agreements, renewals, or other filings or documents. Manager must cooperate and coordinate with Sprint PCS' actions to comply with regulatory requirements, which cooperation and coordination must include, without limitation, the provision to Sprint PCS of all information that Sprint PCS deems necessary to comply with the regulatory requirements. Manager must refrain from taking any action that could impede Sprint PCS from fulfilling its obligations under the preceding sentence, and must not take any action that could cause Sprint PCS to forfeit or cancel the License. (c) Sprint PCS and Manager are familiar with Sprint PCS' responsibility under the Communications Act of 1934, as amended, and applicable FCC rules. Nothing in this agreement is intended to diminish or restrict Sprint PCS' obligations as an FCC Licensee and both parties desire that this agreement and each party's obligations under this agreement be in compliance with the FCC rules. (d) Nothing in this agreement will preclude Sprint PCS from permitting or facilitating resale of Sprint PCS Products and Services to the extent required or elected under applicable FCC regulations. Manager will take the actions necessary to facilitate Sprint PCS' compliance with FCC regulations. To the extent permitted by applicable regulations, Sprint PCS will not authorize a reseller that desires to sell services and products in only the Service Area to resell Sprint PCS wholesale products and services, unless Manager agrees in advance to such sales. (e) If a change in FCC policy or rules makes it necessary to obtain FCC consent for the implementation, continuation or further effectuation of any term or provision of this agreement, Sprint PCS will use all commercially reasonable efforts diligently to prepare, file and prosecute before the FCC all petitions, waivers, applications, amendments, rule-making comments and other related documents necessary to secure and/or retain FCC approval of all aspects of this agreement. Manager will use commercially reasonable efforts to provide to Sprint PCS any information that Sprint PCS may request from Manager with respect to any matter involving Sprint PCS, the FCC, the License, the Sprint PCS Products and Services or any other products and services approved under Section 3.2. Each party will bear its own costs of preparation of the documents and prosecution of the actions. (f) If the FCC determines that this agreement is inconsistent with the terms and conditions of the License or is otherwise contrary to FCC policies, rules and regulations, or if regulatory or legislative action subsequent to the date of this agreement alters the permissibility of this agreement under the FCC's rules or other applicable law, rules or 45 regulations, then the parties must use best efforts to modify this agreement as necessary to cause this agreement (as modified) to comply with the FCC policies, rules, regulations and applicable law and to preserve to the extent possible the economic arrangements set forth in this agreement. 16.3 Marking and Lighting. Manager will conform to applicable FAA standards when Siting Regulations require marking and lighting of Manager's Service Area Network cell sites. Manager will cooperate with Sprint PCS in reporting lighting malfunctions as required by Siting Regulations. 16.4 Regulatory Notices. Manager will, within 2 Business Days after its receipt, give Sprint PCS written notice of all oral and written communications it receives from regulatory authorities (including but not limited to the FCC, the FAA, state public service commissions, environ-mental authorities, and historic preservation authorities) and complaints respecting Manager's construction, operation, and management of the Service Area Network that could result in actions affecting the License as well as written notice of the details respecting such communications and complaints, including a copy of any written material received in connection with such communications and complaints. Manager will cooperate with Sprint PCS in responding to such communications and complaints received by Manager. Sprint PCS has the right to respond to all such communications and complaints, with counsel and consultants of its own choice. If Sprint PCS chooses to respond to such communications and complaints, Manager will not respond to them without the consent of Sprint PCS, and Manager will pay the costs of Sprint PCS' responding to such communications and complaints, including reasonable attorneys' and consultants' fees, investigation costs, and all other reasonable costs and expenses incurred by Sprint PCS. 16.5 Regulatory Policy - Setting Procedings. Manager will not intervene in or otherwise participate in a rulemaking, investigation, inquiry, contested case, or similar regulatory policy setting proceedings before a regulatory authority concerning the License or construction, operation, and management of the Service Area Network and the Sprint PCS business operated using the Service Area Network. 17. GENERAL PROVISIONS 17.1 Notices. Any notice, payment, demand, or communication required or permitted to be given by any provision of this agreement must be in writing and mailed (certified or registered mail, postage prepaid, return receipt requested), sent by hand or overnight courier, or sent by facsimile (with acknowledgment received and a copy sent by overnight courier), charges prepaid and addressed as described on the Notice Address Schedule attached to the Master Signature Page, or to any other address or number as the person or entity may from time to time specify by written notice to the other parties. All notices and other communications given to a party in accordance with the provisions of this agreement will be deemed to have been given when received. 46 17.2 Construction. This agreement will be construed simply according to its fair meaning and not strictly for or against either party. 17.3 Headings. The table of contents, section and other headings contained in this agreement are for reference purposes only and are not intended to describe, interpret, define, limit or expand the scope, extent or intent of this agreement. 17.4 Further Action. Each party agrees to perform all further acts and execute, acknowledge, and deliver any documents that may be reasonably necessary, appropriate, or desirable to carry out the intent and purposes of this agreement. 17.5 Counterpart Execution. This agreement may be executed in any number of counterparts with the same effect as if both parties had signed the same document. All counterparts will be construed together and will constitute one agreement. 17.6 Specific Performance. Each party agrees with the other party that the party would be irreparably damaged if any of the provisions of this agreement were not performed in accordance with their specific terms and that monetary damages alone would not provide an adequate remedy. Accordingly, in addition to any other remedy to which the non-breaching party may be entitled, at law or in equity, the non-breaching party will be entitled to injunctive relief to prevent breaches of this agreement and specifically to enforce the terms and provisions of this agreement. 17.7 Entire Agreement; Amendments. The provisions of this agreement, the Services Agreement and the Trademark License Agreements (including the exhibits to those agreements) set forth the entire agreement and understanding between the parties as to the subject matter of this agreement and supersede all prior agreements, oral or written, and other communications between the parties relating to the subject matter of this agreement. Except for Sprint PCS' right to amend the Program Requirements in accordance with Section 9.2 and its right to unilaterally modify and amend certain other provisions as expressly provided in this agreement, this agreement may be modified or amended only by a written amendment signed by persons or entities authorized to bind each party and, with respect to the sections set forth on the signature page for Sprint, the persons or entities authorized to bind Sprint. 17.8 Limitation on Rights of Others. Except as set forth on the signature page for Sprint, nothing in this agreement, whether express or implied, will be construed to give any person or entity other than the parties any legal or equitable right, remedy or claim under or in respect of this agreement. 17.9 Waivers. 17.9.1 Waivers - General. The observance of any term of this agreement may be waived (whether generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce the term, but any waiver is effective only if in a writing signed by the party against which the waiver is to be asserted. Except as otherwise provided in this agreement, no failure or delay of either party in exercising any power or right under this 47 agreement will operate as a waiver of the power or right, nor will any single or partial exercise of any right or power preclude any other or further exercise of the right or power or the exercise of any other right or power. 17.9.2 Waivers - Managers. Manager is not in breach of any covenant in this agreement and no Event of Termination will have occurred as a result of the occurrence of any event, if Manager had delegated to Sprint Spectrum under the Services Agreement (or any successor to that agreement) responsibility for taking any action necessary to ensure compliance with the covenant or to prevent the occurrence of the event. 17.9.3 Force Majeure. Neither Manager nor Sprint PCS, as the case may be, is in breach of any covenant in this agreement and no Event of Termination will have occurred as a result of the occurrence of the event, if such party's non-compliance with the covenant results primarily from: (i) any FCC order or any other injunction issued by any governmental authority impeding the party's ability to comply with the covenant; (ii) the failure of any governmental authority to grant any consent, approval, waiver, or authorization or any delay on the part of any governmental authority in granting any consent, approval, waiver or authorization; (iii) the failure of any vendor to deliver in a timely manner any equipment or services; or (iv) any act of God, act of war or insurrection, riot, fire, accident, explosion, labor unrest, strike, civil unrest, work stoppage, condemnation or any similar cause or event not reasonably within the control of such party. 17.10 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. 17.11 Binding Effect. Except as otherwise provided in this agreement, this agreement is binding upon and inures to the benefit of the parties and their respective and permitted successors, transferees, and assigns, including any permitted successor, transferee or assignee of the Service Area Network or of the License. The parties intend that this agreement bind only the party signing this agreement and that the agreement is not binding on the Related Parties of a party unless the agreement expressly provides that Related Parties are bound. 17.12 Governing Law. The internal laws of the State of Missouri (without regard to principles of conflicts of law) govern the validity of this agreement, the construction of its terms, and the interpretation of the rights and duties of the parties. 48 17.13 Severability. The parties intend every provision of this agreement to be severable. If any provision of this agreement is held to be illegal, invalid, or unenforceable for any reason, the parties intend that a court enforce the provision to the maximum extent permissible so as to effect the intent of the parties (including the enforcement of the remaining provisions). If necessary to effect the intent of the parties, the parties will negotiate in good faith to amend this agreement to replace the unenforceable provision with an enforceable provision that reflects the original intent of the parties. 17.14 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR LOSS OF PROFITS, ARISING FROM THE RELATIONSHIP OF THE PARTIES OR THE CONDUCT OF BUSINESS UNDER, OR BREACH OF, THIS AGREEMENT, EXCEPT WHERE SUCH DAMAGES OR LOSS OF PROFITS ARE CLAIMED BY OR AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION AGAINST WHICH A PARTY TO THIS AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY ANOTHER PARTY TO THIS AGREEMENT. 17.15 No Assignment; Exceptions. 17.15.1 General. Neither party will, directly or indirectly, assign this agreement or any of the party's rights or obligations under this agreement without the prior written consent of the other party, except as otherwise specifically provided in this Section 17. Sprint PCS may deny its consent to any assignment or transfer in its sole discretion except as otherwise provided in this Section 17. Any attempted assignment of this agreement in violation of this Section 17.15 will be void and of no effect. A party may assign this agreement to a Related Party of the party, except that Manager cannot assign this agreement to a Related Party that is a significant competitor of Sprint, Sprint PCS or their respective Related Parties in the telecommunications business. Except as provided in Section 17.15.5, an assignment does not release the assignor from its obligations under this agreement unless the other party to this agreement consents in writing in advance to the assignment and expressly grants a release to the assignor. Except as provided in Section 17.15.5, Sprint PCS must not assign this agreement to any entity that does not also own the License covering the Service Area directly or indirectly through a Related Party. Manager must not assign this agreement to any entity (including a Related Party), unless such entity assumes all rights and obligations under the Services Agreement, the Trademark License Agreements and any related agreements. 17.15.2 Assignment Right of Manager to Financial Lender. If Manager is no longer able to satisfy its financial obligations and other duties, then Manager has the right to assign its obligations and rights under this agreement to its Financial Lender, if: 49 (a) Manager or Financial Lender provides Sprint PCS at least 10 days advance written notice of such assignment; (b) Financial Lender cures or commits to cure any outstanding material breach of this agreement by Manager prior to the end of any applicable cure period. If Financial Lender fails to make a timely cure then Sprint PCS may exercise its rights under Section 11; (c) Financial Lender agrees to serve as an interim trustee for the obligations and duties of Manager under this agreement for a period not to exceed 180 days. During this interim period, Financial Lender must identify a proposed successor to assume the obligations and rights of Manager under this agreement; (d) Financial Lender assumes all of Manager's rights and obligations under the Services Agreement, the Trademark License Agreements and any related agreements; and (e) Financial Lender provides to Sprint PCS advance written notice of the proposed successor to Manager that Financial Lender has identified ("Successor Notice"). Sprint PCS may give to Financial Lender written notice of Sprint PCS' decision whether to consent to such proposed successor within 30 days after Sprint PCS' receipt of the Successor Notice. Sprint PCS may not unreasonably withhold such consent, except that Sprint PCS is not required to consent to a proposed successor that: (i) has, in the past, materially breached prior agreements with Sprint PCS or its Related Parties; (ii) is a significant competitor of Sprint PCS or its Related Parties in the telecommunications business; (iii) does not meet Sprint PCS' reasonable credit criteria; (iv) fails to execute an assignment of all relevant documents related to this agreement including the Services Agreement and the Trademark License Agreements; or (v) refuses to assume the obligations of Manager under this Agreement, the Services Agreement, the Trademark License Agreements and any related agreements. If Sprint PCS fails to provide a response to Financial Lender within 30 days after receiving the Successor Notice, then the proposed successor is deemed rejected. Any Financial Lender disclosed on the Build-out Plan on Exhibit 2.1 is ----------- deemed acceptable to Sprint PCS. 17.15.3 Change of Control Rights. If there is a Change of Control of Manager, then: 50 (a) Manager must provide to Sprint PCS advance written notice detailing relevant and appropriate information about the new ownership interests effecting the Change of Control of Manager. (b) Sprint PCS must provide to Manager written notice of its decision whether to consent to or reject the proposed Change of Control within 30 days after its receipt of such notice. Sprint PCS may not unreasonably withhold such consent, except that Sprint PCS is not required to consent to a Change of Control in which: (i) the final controlling entity or any of its Related Parties has in the past materially breached prior agreements with Sprint PCS or its Related Parties; (ii) the final controlling entity or any of its Related Parties is a significant competitor of Sprint PCS or its Related Parties in the telecommunications business; (iii) the final controlling entity does not meet Sprint PCS' reasonable credit criteria; (iv) the final controlling entity fails to execute an assignment of all relevant documents related to this agreement including the Services Agreement and the Trademark License Agreements; or (v) the final controlling entity or its Related Parties refuse to assume the obligations of Manager under this agreement. (c) In the event that Sprint PCS provides notice that it does not consent to the Change of Control, Manager is entitled to either: (i) contest such determination pursuant to the dispute resolution procedure in Section 14; or (ii) abandon the proposed Change of Control. (d) Nothing in this agreement requires Sprint PCS' consent to: (i) a public offering of Manager that does not result in a Change of Control (i.e., a shift from one party being in control to no party being in control is not a Change of Control); or (ii) a recapitalization or restructuring of the ownership interests of Manager that Manager determines is necessary to: (A) facilitate the acquisition of commercial financing and lending arrangements that will support Manager's operations and efforts to fulfill its obligations under this agreement; and 51 (B) does not constitute a Change of Control. (e) "Change of Control" means that in any one transaction or series of related transactions occurring during any 365-day period, the ultimate parent entity of the Manager changes. The ultimate parent entity is to be determined using the Hart-Scott-Rodino Antitrust Improvements Act of 1976 rules. A Change of Control does not occur if: (i) a party changes the form of its organization without materially changing their ultimate ownership (e.g., converting from a limited partnership to a limited liability company); or (ii) one of the owners of the party on the date of this agreement or on the date of the closing of Manager's initial equity offering for purposes of financing its obligations under this agreement ultimately gains control over the party, unless such party is a significant competitor of Sprint PCS or its Related Parties in the telecommunications business. 17.15.4 Right of First Refusal. Notwithstanding any other provision in this agreement, Manager grants Sprint PCS the right of first refusal described below. If Manager determines it wishes to sell an Offered Interest, upon receiving any Offer to purchase an Offered Interest, Manager agrees to promptly deliver to Sprint PCS an Offer Notice. The Offer Notice is deemed to constitute an offer to sell to Sprint PCS, on the terms set forth in the Offer, all but not less than all of the Offered Interest. Sprint PCS will have a period of 60 days from the date of the Offer Notice to notify Manager that it agrees to purchase the Offered Interest on such terms. If Sprint PCS timely agrees in writing to purchase the Offered Interest, the parties will proceed to consummate such purchase not later than the 180th day after the date of the Offer Notice. If Sprint PCS does not agree within the 60-day period to purchase the Offered Interest, Manager will have the right, for a period of 120 days after such 60th day, subject to the restrictions set forth in this Section 17, to sell to the person or entity identified in the Offer Notice all of the Offered Interest on terms and conditions no less favorable to Manager than those set forth in the Offer. If Manager fails to sell the Offered Interest to such person or entity on such terms and conditions within such 120-day period, Manager will again be subject to the provisions of this Section 17.15.4 with respect to the Offered Interest. 17.15.5 Transfer of Sprint PCS Network. Sprint PCS may sell, transfer or assign the Sprint PCS Network, including its rights and obligations under this agreement, the Services Agreement and any related agreements, to a third party without Manager's consent so long as the third party assumes the rights and obligations under this agreement and the Services Agreement. Manager agrees that Sprint PCS and its Related Parties will be released from any and all obligations under and with respect to any and all such agreements upon such sale, transfer or assignment in accordance with this Section 17.15.5, without the need for Manager to execute any document to effect such release. 17.16 Provisions of Services by Sprint Spectrum. As described in the Recitals, the party or parties to this agreement that own the Licenses are referred to in this agreement as 52 "Sprint PCS." Sprint Spectrum will provide most or all of the services required to be provided by Sprint PCS under this agreement on behalf of Sprint PCS, other than the services to be rendered by Manager. For example, Sprint Spectrum is the party to the contracts relating to the national distribution network, the roaming and long distance services, and the procurement arrangements. Accordingly, Sprint PCS and Manager will deal with Sprint Spectrum to provide many of the attributes of the Sprint PCS Network. 17.17 Number Portability. Manager understands that the manner in which customers are assigned to the Service Area Network could change as telephone numbers become portable without any relation to the service area in which they are initially activated. To the extent the relationship between NPA-NXX and the Service Area changes, Sprint PCS will develop an alternative system to attempt to assign customers who primarily live and work in the Service Area to the Service Area. The terms of this agreement will be deemed to be amended to reflect the new system that Sprint PCS develops. 17.18 Disclaimer of Agency. Neither party by this agreement makes the other party a legal representative or agent of the party, nor does either party have the right to obligate the other party in any manner, except if the other party expressly permits the obligation by the party or except for provisions in this agreement expressly authorizing one party to obligate the other. 17.19 Independent Contractors. The parties do not intend to create any partnership, joint venture or other profit-sharing arrangement, landlord-tenant or lessor-lessee relationship, employer-employee relationship, or any other relationship other than that expressly provided in this agreement. Neither party to this agreement has any fiduciary duty to the other party. 17.20 Expense. Each party bears the expense of complying with this agreement except as otherwise expressly provided in this agreement. The parties must not allocate any employee cost or other cost to the other party, except as otherwise provided in the Program Requirements or to the extent the parties expressly agree in advance to the allocation. 17.21 General Terms. (a) This agreement is to be interpreted in accordance with the following rules of construction: (i) The definitions in this agreement apply equally to both the singular and plural forms of the terms defined unless the context otherwise requires. (ii) The words "include," "includes" and "including" are deemed to be followed by the phrase "without limitation". (iii) All references in this agreement to Sections and Exhibits are references to Sections of, and Exhibits to, this agreement, unless otherwise specified; and (iv) All references to any agreement or other instrument or statute or regulation are to it as amended and supplemented from time to time (and, in the case of a statute or regulation, to any corresponding provisions of successor statutes or regulations), unless the context otherwise requires. 53 (b) Any reference in this agreement to a "day" or number of "days" (without the explicit qualification of "Business") is a reference to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular calendar day, and the calendar day is not a Business Day, then the action or notice may be taken or given on the next Business Day. 17.22 Conflicts with Other Agreements. The provisions of the Management Agreement govern over those of the Services Agreement if the provisions contained in this agreement conflict with analogous provisions in the Services Agreement. The provisions of each Trademark License Agreement governs over those of this agreement if the provisions contained in this agreement conflict with analogous provisions in a Trademark License Agreement. 17.23 Announced Transaction. Sprint Enterprises, L.P., TCI Telephony Services, Inc., Comcast Telephony Services and Cox Telephony Partnership have executed a Restructuring and Merger Agreement and related agreements that provide for restructuring the ownership of Sprint Spectrum L.P., SprintCom, Inc., PhillieCo Partners I, L.P., and Cox Communications PCS, L.P. Upon consummation of the transactions contemplated by those agreements, Sprint would control each of the four entities. While Sprint and Sprint PCS anticipate the proposed transactions will be consummated, there can be no assurances. 17.24 Additional Terms and Provisions. Certain additional and supplemental terms and provisions of this agreement, if any, are set forth in the Addendum to Sprint PCS Management Agreement attached hereto and incorporated herein by this reference. Manager represents and warrants that the Addendum also describes all existing contracts and arrangements (written or verbal) that relate to or affect the rights of Sprint PCS or Sprint under this agreement (e.g., agreements relating to long distance telephone services (Section 3.4) or backhaul and transport services (Section 3.7)). 17.25 Master Signature Page. Each party agrees that it will execute the Master Signature Page that evidences such party's agreement to execute, become a party to and be bound by this agreement, which document is incorporated herein by this reference. 54 Sprint PCS Management Agreement BETWEEN SprintCom, Inc. AND AirGate Wireless, L.L.C. July 22, 1998 ADDENDUM I TO SPRINT PCS MANAGEMENT AGREEMENT Manager: Airgate Wireless, L.L.C. Service Area: Anderson, SC BTA Asheville-Hendersonville, NC BTA Augusta, GA BTA Charleston, SC BTA Columbia, SC BTA Florence, SC BTA Goldsboro-Kinston, NC BTA Greenville-Washington, NC BTA Greenville-Spartanburg, SC BTA Greenwood, SC BTA Hickory-Lenoir-Morganton, NC BTA Jacksonville, NC BTA Myrtle Beach, SC BTA New Bern, NC Orangeburg, SC BTA Roanoke Rapids, NC BTA Rocky Mount-Wilson, NC BTA Savannah, GA BTA Sumler, SC BTA Wilmington, NC BTA Camden County, NC Currituck County, NC Dare County, NC Pasquotank County, NC This Addendum contains certain additional and supplemental terms and provisions of that certain Sprint PCS Management Agreement (the "Management Agreement") entered into contemporaneously with and by the same parties as this Addendum. The terms and provisions of this Addendum control, supersede and amend any conflicting terms and provisions contained in the Management Agreement. Except for express modifications made in this Addendum, the Management Agreement continues in full force and effect. Capitalized terms used and not otherwise defined in this Addendum have the meanings ascribed to them in the Management Agreement. Section and Exhibit references are to Sections and Exhibits of the Management Agreement unless otherwise noted. The Management Agreement is modified as follows: 1. Microwave Relocation. Sprint PCS will bear all costs associated with clearing spectrum under Section 2.7. The last sentence of Section 2.7 is deleted. 2. Manager's Right to Request Review of Changes. The last sentence of Section 9.3 is deleted. The following is added at the end of Section 9.3: "If Sprint PCS still requires Manager to implement the change to the Program Requirement, then Manager may either submit the matter for resolution under the procedure set forth in Section 14 or implement the change to the Program Requirement. If Manager does not submit the matter to resolution under Section 14 within 10 days after the Chief Officer's determination is communicated to Manager and fails to implement the change, then Sprint PCS will have the rights under Section 11." 3. Reimbursement. The following sentences replace the sentence in Section 10.1.6: "If Sprint PCS pays an amount to Manager under this Section 10, which amount is for the payment of a third party (e.g., a telecommunications carrier), and Manager fails to make payment of such amount to said third party, then Manager will pay to or reimburse Sprint PCS for any amounts that Sprint PCS is subsequently required to pay to said third party, to the extent of such previous payment made to Manager. If Manager pays an amount to Sprint PCS under this Section 10, which amount is for the payment of a third party (e.g., a telecommunications carrier), and Sprint PCS fails to make payment of such amount to said third party, then Sprint PCS will pay to or reimburse Manager for any amounts that Manager is subsequently required to pay to said third party, to the extent such previous payment was previously made to Sprint PCS." 4. Taxes. The following sentence is added at the end of Section 10.3: "Sprint PCS will remit to the governmental authority the amount that Sprint PCS receives from Manager for such taxes or fees pursuant to this Section 10.3." 5. Sprint's Subsequent Acquisition of Additional Spectrum. If Sprint PCS acquires additional spectrum in the Service Area, Sprint PCS may amend the Service Area Exhibit to the Management Agreement in its sole discretion to add - -------------------- such newly acquired spectrum to said Exhibit. Such additional spectrum will, ------- upon inclusion in the Services Area Exhibit, become part of the License, as such --------------------- term is defined in the Schedule of Definitions. If additional spectrum is included in the Service Area Exhibit and the License is then for 20 MHz or more -------------------- of PCS spectrum in the Service Area, then the word "executed" is replaced by the word "terminated" in Sections 11.2.1.2 and 11.5.2. Further, Sprint PCS and Manager may exercise any and all rights under the Management Agreement, and in particular Sections 11.2.2.2 and 11.6.2 thereof, that are available to the parties when a Disaggregated License is sold to Manager. If the stipulations of this paragraph are met then the reference in Section 11.5.1 to 80% will remain 80% (i.e., the change from 80% to [*] pursuant to paragraph 8 of this Addendum is amended). 6. Manager's Action for Damages or Other Relief. The sentence in Section 11.5.3 is replaced with the following: "Manager, in accordance with the dispute resolution process in Section 14, may seek damages or other appropriate relief." _______________________ * Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. 7. Sprint PCS' Action for Damages or Other Relief. The sentence in Section 11.6.4 is replaced with the following: "Sprint PCS, in accordance with the dispute resolution process in Section 14, may seek damages or other appropriate relief." 8. Manager's Put Right. The reference in Section 11.5.1 to 80% is changed to [*,] except as provided in paragraphs 5 and 10(b)(iii) of this Addendum. 9. Limitation of Liability. The following is added to the end of Section 17.14: "Notwithstanding the preceding sentence, a party may make a claim for loss of profits in the limited case where a breach is directly attributable to a revenue generating product or price and where the loss of profits is directly attributable to such breach. Such a claim for loss of profits may include only those potential profits that would have been generated during the 180-day period that begins no earlier than 90 days immediately preceding the earlier of: (a) the date on which suit for recovery of such lost profits is filed, or (b) if applicable, the date on which a dispute resolution proceeding, pursuant to Section 14 of this agreement originates." 10. Manager's Spectrum. Manager represents that it owns the licenses described on the attached Schedule 10. ----------- (a) Utilization of Manager's Spectrum. Manager may not during the Term of the Management Agreement utilize the spectrum described on Schedule -------- 10 or any other spectrum that Manager acquires or obtains the right to use -- (collectively "Manager's Spectrum"), except as expressly permitted under the Management Agreement. (b) Manager's Right to and Ownership of Spectrum. The following provisions apply if, upon termination of the Management Agreement, Manager owns any Manager's Spectrum: (i) Customers. If Sprint PCS does not purchase the Operating Assets, (A) Section 11.4(d) will apply the same as if the Management Agreement terminated because of Manager's purchase of a Disaggregated License, and (B) subscribers of Sprint PCS may roam on Manager's network at MFN prices and Sprint PCS may resell Manager's Products and Services at MFN prices. (ii) Termination Rights. Notwithstanding any provision to the contrary, Sprint PCS may exercise any and all rights under the Management Agreement that are available to Sprint PCS when it sells a Disaggregated License to Manager. ________________________ * Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. (iii) Purchase Price of Manager's Put Right. The reference in Section 11.5.1 to 80% will remain at 80% (i.e., the change from 80% to [*] pursuant to paragraph 8 of this Addendum is amended). 11. Survival Upon Termination. The provisions of Sections 10, 11.4, 11.5, 11.6, 12.2, 13, 14, 16 and 17 of the Management Agreement and paragraphs 3, 4, 5, 6, 7, 8, 9, 10 and 11 of this Addendum will survive any termination of the Management Agreement. 12. Local Telephone Exchange Build-out. Manager and Sprint PCS acknowledge that Manager's Build-out Plan as detailed on Exhibit 2.1 to the ----------- Management Agreement includes full (i.e., 100%) coverage of that portion of the following local telephone exchanges located within the Service Area:
Exchange: Current NPA/NXX(s): -------- ------------------ 1) Catawba 704 or 828/241 2) Elm City 919/236 3) Farmville 919/753 4) Fountaine 919/749 5) Greenville 919/355, 551, 557 6) Holly Ridge 919/329 7) Jacksonville 919/340, 346 8) Litteton 919/586 9) Pinetops 919/827 10) Richlands 919/324 11) Rocky Mt. 919/442, 443, 446 12) Sherrills Ford 704 or 828/478 13) Sneads Ferry 919/327 14) Spring Hope 919/478 15) Swansboro 919/326, 354, 339 16) Tarboro 919/641, 823 17) Wilson 919/237, 243, 291, 293
Sprint PCS agrees to consider any proposals submitted by Manager to reduce the coverage within the above listed exchange boundaries if Manager reasonably demonstrates that such coverage is impractical or unfeasible due to extreme conditions (i.e., impenetrable zoning restrictions, significantly low population or traffic density, or uneconomic terrain). Sprint PCS agrees to not unreasonably withhold consent to such proposals. 13. Ownership Retention. (a) Manager represents and warrants that the attached Schedule 13 ----------- describes the existing ownership and voting rights of AirGate, L.L.C. and the proforma organizational and ownership structure of Manager and the entities labeled "Holding Company" and "Intermediate Wholly-Owned Subsidiary" when the latter two entities are formed. _________________________ * Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. (b) The following events will be an Event of Termination under Section 11.3.3 of the Management Agreement: (i) The sale, transfer, assignment, gift or pledge (each being a "Transfer") by W. Chris Blane, Thomas D. Body, III, David C. Roberts, Shelley L. Spencer or the Robert E. Gourlay and Associates, L.P. (each being a "Principal," including Robert E. Gourlay individually, and collectively being the "Principals"), of such Principal's equity or voting interest in any of the entities described on Schedule 13 for five years after the date of the Management ----------- Agreement, except that the following Transfers are permitted so long as and to the extent they are permitted under the Management Agreement: (A) a Transfer of a direct or indirect ownership interest in AirGate, L.L.C. to such Principal's spouse, child, adopted child, stepchild, grandchild, parent or sibling, or to a trust established for the benefit of any of the foregoing, provided that the Principal retains control of the voting rights associated with the ownership interest and remains bound by the terms of this paragraph 13 of this Addendum; (B) a Transfer upon the death of a Principal, provided that such Transfer is to another Principal or to a person whose interest is subject to paragraph 13 of this Addendum; and (C) a Transfer of up to 30% of such Principal's equity interest in each such entity after the third anniversary of the Management Agreement, so long as after any such Transfer, the Principals control, directly or indirectly, the right to elect or designate more than 50% of the managers of AirGate, L.L.C. (ii) For five years after the date of the Management Agreement or until an initial public offering of equity in any of the entities described in Schedule 13, whichever occurs first, the failure ----------- of the Principals to elect or designate or to cause to be elected or designated Principals or other individuals acceptable to Sprint PCS, which acceptance will not be unreasonably withheld, to hold more than 50% of the manager positions of AirGate, L.L.C. and more than 50% of the manager positions of Manager. (iii) The failure of AirGate, L.L.C. during the five-year period beginning on the date of the Management Agreement to meet the FCC's minimum voting requirements to qualify as the control group for C or F block PCS licenses as such voting requirements exist on the date of the Management Agreement. (c) Upon the occurrence of an Event of Termination under paragraph 13(b) or a breach of a representation, warranty or obligation under paragraphs 13(a) or 14(c): (i) Manager will be deemed to be the breaching party; (ii) Neither Manager nor any Principal or person will have a right to cure the breach; (iii) Sprint PCS will have the right to elect a remedy under Sections 11.6.1 or 11.6.2, notwithstanding any of the limitations set forth in Section 11.6 (e.g., Sprint PCS can exercise its purchase right under Section 11.6.1 during the first two years of the Initial Term); and (iv) If Sprint PCS elects to purchase the Operating Assets under Section 11.6.1, the purchase price will be the lesser of (A) an amount equal to 72% (80% minus a 10% penalty) of the Entire Business Value, and (B) the net invested capital directly expended on the Service Area Network (i.e., the cash directly expended minus the cash received in connection with the Service Area Network), adjusted to reflect a 16% annual rate of return on the equity component thereof. (d) The term "manager" as used in paragraphs 13(b)(i)(C) and 13(b)(ii) means a manager of Airgate Wireless, L.L.C. or of Manager, as the case may be, elected, designated, or appointed under the terms of such limited liability company's limited liability company agreement to manage such limited liability company's business. 14. Noncompetition; Primary Business. (a) Each Principal agrees that such Principal will not, for five years after the date of the Management Agreement, directly or indirectly: (i) engage in the wireless telecommunications business within the Service Area, except that AirGate Wireless L.L.C. may dispose of the four PCS licenses described on Schedule 10 in a ----------- transaction in which the Principals receive a direct or indirect minority interest in the acquiring company so long as no Principal is directly or indirectly active in the management of such acquiring company; or (ii) engage in any other business activity that causes such Principal's primary business activity to be other than such Principal's involvement with Manager. Manager will cause each Principal to enter into an agreement with Manager that gives Manager the right to enforce the obligations of such Principal as set forth in this paragraph 14(a). (b) Manager will cause each person who becomes employed by Manager at a level of senior vice president or higher, including the chief executive officer, chief operating officer, chief financial officer, chief marketing officer, chief network officer, chief business development officer and chief legal officer (which refers to the top-ranking officer in each of such areas of responsibility), or who owns directly or indirectly at least one percent of the outstanding equity interest of AirGate, L.L.C. or Manager, to execute an agreement with Manager that prohibits such person from directly or indirectly engaging in the wireless telecommunications business in the Service Area during the term of such person's employment by Manager and for 18 months after such employee's termination or resignation. (c) Upon a breach by a Principal or a person of his or her obligations under paragraphs 14(a) or 14(b), Manager agrees to take immediate legal action to enforce such Principal's or person's obligations under such paragraph and the agreement that evidences such obligation to Manager. If Manager fails to take such immediate legal action and to diligently pursue its rights under such agreement, then Sprint PCS may notify Manager that an Event of Termination under Section 11.3.3 of the Management Agreement has occurred, and the rights set forth in paragraph 13(c) will apply. 15. Expiration Upon Change of Control. The restrictions set forth in paragraphs 13(b) and 14(a)(ii) will expire upon a Change of Control of Sprint or Sprint PCS, other than the Change of Control contemplated as described in Section 17.23 of the Management Agreement, if within one year of such Change in Control at least one-third of the corporate officers of Sprint or Sprint PCS, as the case may be, leave such company. 16. Blue Penciling. If and only if a provision of the type contained in this sentence is enforceable in the jurisdiction in question, if any provision contained in paragraphs 13 and 14 of this Addendum is for any reason held to be excessively broad as to duration, geographic scope, activity or subject in its application to any person or circumstance, such provision will, with respect to such person or circumstance, be construed by limiting or reducing it so as to be enforceable in such jurisdiction. If a court exercises its rights under the preceding sentence, paragraphs 13 and 14 of this Addendum will not be affected with respect to their application to other persons or circumstances, unless and except to the extent a court otherwise determines. If a court does not exercise its rights under the first sentence in this paragraph 16, unless and except to the extent the court otherwise determines, its finding that a provision contained in paragraphs 13 or 14 of this Addendum or the application of a provision in such paragraphs to any person or circumstance is invalid or unenforceable, will not affect the application of the remaining provisions in such paragraphs with respect to such person or circumstances or the application of such provision as is held invalid or unenforceable with respect to its application to other persons or circumstances. 17. Change in Program Requirements. In Section 7.2, the second parenthetical is changed to reference Section 9.1 instead of Section 7.3. [The remainder of this page is intentionally left blank.] ADDENDUM II TO SPRINT PCS MANAGEMENT AGREEMENT Manager: AIRGATE WIRELESS, INC. Service Area: Anderson, SC BTA Asheville-Henderson, NC BTA Augusta, GA BTA Charleston, SC BTA Columbia, SC BTA Florence, SC BTA Goldsboro-Kinston, NC BTA Greenville-Washington, NC BTA Greenville-Spartanburg, SC BTA Greenwood, SC BTA Hickory-Lenoir-Morgantown, NC BTA Jacksonville, NC BTA Myrtle Beach, SC BTA New Bern, NC Orangeburg, SC BTA Roanoke Rapids, NC BTA Rocky Mount-Wilson, NC BTA Savannah, GA BTA Sumter, SC BTA Wilmington, NC BTA Camden County, NC Currituck County, NC Dare County, NC Pasquotank County, NC This Addendum II (this "Addendum"), dated as of May 24, 1999, contains certain additional and supplemental terms and provisions to that certain Sprint PCS Management Agreement entered into as of July 22, 1998, by the same parties as this Addendum, which Management Agreement was further amended by that certain Addendum I entered into as of July 22, 1998 (the Management Agreement, as amended by Addendum I, being the "Management Agreement"). The terms and provisions of this Addendum control, supersede and amend any conflicting terms and provisions contained in the Management Agreement. Except for express modifications made in this Addendum, the Agreement continues in full force and effect. Capitalized terms used and not otherwise defined in this Addendum have the meanings ascribed to them in the Management Agreement. Section and Exhibit references are to Sections of, and Exhibits to, the Management Agreement unless otherwise noted. The Management Agreement is modified as follows: 1. Term. In the event AirGate PCS, Inc. completes an initial public offering of stock during the Initial Term, the Management Agreement will automatically renew for one 10 year renewal period (the "First Renewal Term") unless an event occurs during the Initial Term that if not cured in the time permitted under the Management Agreement, if any, or waived by Sprint PCS, will become an Event of Termination. If the Initial Term would expire before the applicable cure period has expired, the Initial Term will be extended for the duration of the cure period. If Manager cures within the applicable cure period, or the breach is waived by Sprint PCS, regardless of whether the Initial Term has been extended, the Management Agreement will renew, and the First Renewal Term is deemed to have commenced on July 22, 2018. If Manager does not cure within the applicable cure period, Sprint PCS may terminate the Management Agreement in accordance with its terms. 2. Revised Financing Plan. Exhibit 1.7 attached to this Addendum supersedes and replaces in its entirety Exhibit 1.7 attached to the Management Agreement. 3. Revised Build-out Plan. Exhibit 2.1 attached to this Addendum supersedes and replaces in its entirety Exhibit 2.1 attached to the Management Agreement. 4. Amendments to Section 13 of Addendum I to Management Agreement. (i) Manager represents and warrants that it will enter into agreements with each of the Principals (as defined below), pursuant to which each Principal is bound to comply with the restrictions set forth in Sections 13 and 14 of Addendum I, as modified by this Addendum; such agreements with the Principals will contain penalty provisions acceptable to Sprint PCS. (ii) If AirGate PCS, Inc. does not complete an initial public offering of stock by December 31, 1999, the following amendments to Section 13 of Addendum I will be of no force and effect. Unless AirGate PCS, Inc. does not complete an initial public offering of stock by December 31, 1999, Section 13 of Addendum I to the Management Agreement will be amended to read as follows: "(a) Manager represents and warrants that the attached Schedule 13 describes the existing ownership rights of AirGate PCS, Inc. and the organizational and ownership structure of Manager and entities labeled "AirGate PCS, Inc.", "AirGate Wireless, Inc." and "AGW Leasing Company, Inc.". (b) The following events will be deemed a material breach of a material term of the Management Agreement under Section 11.3.3 of the Management Agreement when a party gives written notice to the other party of the occurrence of such event: The sale, transfer, assignment, gift or pledge (each being a "Transfer") by W. Chris Blane, Thomas D. Body, III, David C. Roberts, Shelley L. Spencer or Robert E. Gourlay and Associates, L.P. (each being a "Principal," including Robert E. Gourlay individually, and collectively being the "Principals"), of such Principal's equity or voting interest in any of the entities described in Schedule 13 ----------- 2 for five years after the date of the Management Agreement, except that the following Transfers are permitted so long as and to the extent they are permitted under the Management Agreement: (A) a Transfer of a direct or indirect ownership in AirGate PCS, Inc. to such Principal's spouse, child, adopted child, stepchild, grandchild, parent or sibling, or to a trust established for the benefit of any of the foregoing, provided that the Principal retains control of the voting rights associated with the ownership interest and remains bound by the terms of this paragraph 13 of the Addendum; (B) a Transfer upon the death of a Principal, provided that such Transfer is to another Principal or to a person whose interest is subject to paragraph 13 of this Addendum; and (C) a Transfer of up to 30% of the such Principal's equity interest in AirGate PCS, Inc. after the third anniversary of the Management Agreement." Sections (b)(ii) and (b)(iii) of Addendum I to the Sprint PCS Management Agreement will be deleted in their entirety. (c) Upon the occurrence of an Event of Termination under paragraph 13(b) or a breach of a representation, warranty or obligation under paragraphs 13(a) or 14(c): (i) Management will have an opportunity to cure pursuant to Section 11.3.3 by taking immediate legal action to enforce such Principal's or person's obligations under such paragraph and the agreement that evidences such obligation to Manager. If Manager takes such action immediately and pursues its rights diligently, Sprint PCS will not terminate the Management Agreement. If Manager fails to take such immediate legal action and to diligently pursue its rights under such agreement, then Manager will be deemed to be the breaching party and Sprint PCS may terminate the Management Agreement upon 30 days' notice to Manager. (ii) Sprint PCS will have the right to elect a remedy under Sections 11.6.1 or 11.6.2, notwithstanding any of the limitations set forth in Section 11.6 (e.g., Sprint PCS can exercise its purchase right under Section 11.6.1 during the first two years of the Initial Term). (iii) If Sprint PCS elects to purchase the Operating Assets under Section 11.6.1, the purchase price will be an amount equal to 72% (80% minus a 10% penalty) of the Entire Business Value. 5. Services Agreement. Section 2.1.3 of the Services Agreement is amended to add the following paragraph: "In the event AirGate PCS, Inc. completes an initial public offering of stock prior to December 31, 1999, Sprint Spectrum will not provide Manager with notice of the discontinuance of an Available Service until at least March 31, 2001, with such discontinuance to be effective as of December 31, 2001. 3 IN WITNESS WHEREOF, the parties have cause this Addendum to be executed as of this 24th day of May, 1999. AIRGATE WIRELESS, INC. BY: /s/ Shelley Spencer ------------------- Name: Shelley Spencer --------------- Title: Corporate Secretary ------------------- SPRINTCOM, INC. BY: /s/ Bernie Bianchino -------------------- Name: Bernie Bianchino ---------------- Title: Chief Business Development Officer ---------------------------------- 4 ADDENDUM III TO SPRINT PCS MANAGEMENT AGREEMENT Manager: Airgate PCS, Inc. (formerly AirGate Wireless, Inc.) Service Area: Anderson, SC BTA Asheville-Henderson, NC BTA Augusta, GA BTA Charleston, SC BTA Columbia, SC BTA Florence, SC BTA Goldsboro-Kinston, NC BTA Greenville-Washington, NC BTA Greenville-Spartanburg, SC BTA Greenwood, SC BTA Hickory-Lenoir-Morgantown, NC BTA Jacksonville, NC BTA Myrtle Beach, SC BTA New Bern, NC Orangeburg, SC BTA Roanoke Rapids, NC BTA Rocky Mount-Wilson, NC BTA Savannah, GA BTA Sumter, SC BTA Wilmington, NC BTA Camden County, NC Currituck County, NC Dare County, NC Pasquotank County, NC This Addendum III (this "Addendum"), dated as of August 2, 1999, contains certain additional and supplemental terms and provisions to that certain Sprint PCS Management Agreement entered into as of July 22, 1998, by the same parties as this Addendum, which Management Agreement was further amended by Addendum I entered into as of July 22, 1998, and further amended by Addendum II entered into as of May 24, 1999 (the Management Agreement, as amended by Addenda I, II, and III, being the "Management Agreement"). The terms and provisions of this Addendum control, supersede and amend any conflicting terms and provisions contained in the Management Agreement. Except for express modifications made by this Addendum, the Agreement continues in full force and effect. Capitalized terms used and not otherwise defined in this Addendum have the meanings ascribed to them in the Management Agreement. Section and Exhibit references are to Sections of, and Exhibits to, the Management Agreement unless otherwise noted. The Management Agreement is modified as follows: 1. Amendments to Section 13 of Addendum I and Addendum II to the Management Agreement. Section 13 of Addendum I and Addendum II of the Management Agreement are amended to read as follows: (a) Manager represents and warrants that the attached Schedule 13 describes the existing ownership rights of AirGate PCS, Inc. and the organizational structure of Manager and the entities labeled "AirGate PCS, Inc." and "AGW leasing Company, Inc." (b) As used in Section 13(b) the Principals' equity or ownership interest in any of the entities described in Schedule 13 shall not include any equity or ownership interest granted to a Principal after July 22, 1998 pursuant to an incentive stock option plan adopted by AirGate PCS, Inc. for its employees. 2. Use of Loan Proceeds. Sprint PCS is entering into that certain Consent and Agreement with Lucent Technologies, Inc. ("Lucent") (which Consent and Agreement, as amended and modified from time to time, is referred to as the "Lucent Consent and Agreement") to enable Manager to obtain loans (the "Loans") from Lucent and its successors and assigns (collectively, the "Lenders"). Manager agrees that notwithstanding the permitted uses of the proceeds of the Loans, it will not use the proceeds from any loan or other obligation to which the Lucent Consent and Agreement relates or from any other loan or extension of credit to which the Lucent Consent and Agreement relates for any purpose other than to construct and operate the Service Area Network within the Service Area (as may be amended form time to time) as contemplated under the Management Agreement. 3. Consent and Agreement Not Assignable. Except as a expressly required or permitted in the Lucent Consent and Agreement, Manager may not assign the Lucent Consent and Agreement. 4. Notices. Manager agrees to promptly give Sprint PCS a copy of any notice Manager receives from the Administrative Agent or any Lender (as those terms are defined in the Lucent Consent and Agreement) and a copy of any notice Manager gives to the Administrative Agent or any Lender. Sprint PCS agrees to promptly give Manager a copy of any notice that Sprint PCS gives to any of such persons. 5. Sale of Operating Assets. Manager agrees that in the event of a purchase of its Operating Assets by Sprint PCS pursuant to the Management Agreement, the Lucent Consent and Agreement, a foreclosure sale or a bankruptcy proceeding, Manager will cause any Operating Assets owned by its Related Parties to be transferred to Sprint PCS in connection with such purchase. 6. No Defaults Under Credit Documents or Sprint Agreements. Manager warrants and represents that as of the date hereof, no Default or Event of Default under any of the Credit Documents has occurred, and no Event of Termination under the Management Agreement or event that if not cured, or if notice were to be provided, would constitute and Event of Termination under the Management Agreement, has occurred. 7. Revised Financing Plan. Exhibit 1.7 to this Addendum supersedes and replaces in its entirety Exhibit 1.7 attached to the Management Agreement and Addendum II. 8. Counterparts. This Addendum may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one agreement. IN WITNESS WHEREOF, the parties have cause this Addendum III to be executed by the respective authorized officers as of the date and year first above written. SPRINT SPECTRUM L.P. BY: /s/ Bernard A. Bianchino ---------------------------------- Bernard A. Bianchino Chief Business Development Officer SPRINTCOM, INC. BY: /s/ Bernard A. Bianchino ------------------------ Bernard A. Bianchino Vice President SPRINT COMMUNICATIONS COMPANY, L.P. BY: /s/ Thomas E. Weigman ---------------------------------- Thomas E. Weigman Senior Vice President, Consumer Market Strategy and Communications AIRGATE PCS, INC. BY: /s/ Shelley L. Spencer ---------------------- Shelley L. Spencer Vice President of Law EX-10.5 4 MASTER SITE AGREEMENT EXHIBIT 10.5 MASTER SITE AGREEMENT --------------------- THIS MASTER SITE AGREEMENT (hereinafter referred to as this "MSA"), is made as of the 6th day of August, 1998 (the "MSA Commencement Date"), by and between BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership, BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware corporation, each doing business as BELLSOUTH MOBILITY DCS, and their respective BellSouth Affiliates, successors and assigns (hereinafter collectively referred to as "BellSouth") and AIRGATE WIRELESS, L.L.C., a Delaware limited liability company, and its successors and permitted assigns (hereinafter referred to as the "User"). WHEREAS, BellSouth is the owner of communications towers located on property either owned, leased or licensed by BellSouth (individually, a "Tower", collectively, "Towers"); WHEREAS, User is a provider of certain wireless digital communications services in the United States as such services are more particularly defined in Section 3 hereinbelow ("User's Wireless Business"); WHEREAS, BellSouth and User desire to enter into this MSA which will establish the general terms and conditions whereby User will lease, sublease, license or sublicense, as applicable, from BellSouth space on one or more of BellSouth's Towers and ground space on BellSouth's land (real property owned, leased or licensed by BellSouth with respect to each Site (as defined below) hereinafter the "Property") for the construction of an equipment shelter or cabinet(s) for the placement of User's communications equipment for operation of User's Wireless Business; WHEREAS, BellSouth and User will enter into a Site Agreement in form and substance substantially similar to Schedule "I" attached hereto and by reference ------------ made a part hereof (individually, a "Site Agreement"; collectively, "Site Agreements") which will establish the terms for use of a specific Site. NOW, THEREFORE, for valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereby agree as follows: 1. MSA. This MSA sets forth the general terms and conditions upon which --- all Sites, as defined below, shall be leased,, subleased, licensed or sublicensed to User. From time to time during the term hereof, User and BellSouth may, execute Site Agreements in the form attached hereto as Schedule -------- "I" and by reference made a part hereof. Each Site Agreement shall identify a - ---- particular Site made subject to this MSA and more fully set forth specific terms particular to that Site. In the event of a conflict or inconsistency between the terms of this MSA and a Site Agreement, the terms of the Site Agreement shall govern and control for that Site. 2. Demise. ------- (a) Leasing Program. Subject to the following terms and conditions, --------------- BellSouth hereby agrees to lease, sublease, license or sublicense, as applicable, to User certain space on one or more of BellSouth's Towers together with sufficient space on the Property with easements for access and utilities. User's use of the Tower and Property shall be limited to the Tower and Property, together with easements for access and utilities described and depicted in Exhibit "A" to - ----------- each Site Agreement (the Property, the space upon BellSouth's Tower utilized by User and any easements providing access and utilities to the Property are sometimes referred to herein individually as a "Site" or collectively as "Sites"). With respect to any Sites which User may desire to lease, sublease, license or sublicense, as applicable, User shall give written notice to BellSouth at the address provided in Section 27 hereof of such desire. After receipt of written notice from User of such desire to add a Site to this MSA, BellSouth shall provide User with a Site Application to be completed by User. Upon receipt by BellSouth of the completed Site Application, together with any application fee required by BellSouth, BellSouth shall evaluate the feasibility of utilization of each Site requested by User to be added to this MSA. Except in extraordinary circumstances, as determined by BellSouth in its discretion, the application fee generally will not exceed $ [ * ] per Site. The Site Application fee, once received by BellSouth shall in all instances under this MSA be applied toward the first base rent payments due under the applicable Site Agreement. BellSouth will use reasonable best efforts to respond promptly to initial requests for a Site Application and to Site Applications submitted by User. BellSouth may decline additional Sites for any reason whatsoever. If BellSouth desires to lease or to license any Site to User, BellSouth shall deliver to User three (3) completed, unexecuted counterparts of a Site Agreement pertaining to such Site. User shall have a period of fifteen (15) business days from User's receipt of such Site Agreement to execute and return same to BellSouth. If User fails to return all counterparts of the Site Agreement, properly executed and unmodified by User, together with the Site Cost Reimbursement Amount (as defined herein) set forth in the Site Agreement, within such fifteen (15) day period such Site Agreement shall immediately be deemed null and void. Upon receipt of the properly executed, unmodified counterparts of the Site Agreement, BellSouth will execute same and return a fully executed original of the Site Agreement to User, whereupon the Site Agreement shall be deemed to be added to this MSA. (b) Right of Refusal Sites. In addition to the standard leasing ---------------------- program described above, User shall have a right of first refusal on certain BellSouth Towers as described herein (each a "First Right Site"). Certain payment obligations and rights of User differ with respect to the First Right Sites. Except for differences specifically noted in this MSA with respect to the First Right Sites, the First Right Sites shall for all purposes be treated as Sites governed by this MSA. Within [ * ] business days of the execution of this MSA, User shall submit to BellSouth a list of approximately [ * ] of BellSouth's Towers on which User may wish to locate. The list shall include the applicable Site number of the BellSouth Tower, as well as User's contemplated antenna type and mounting height for each First Right Site. Until [ * ], User shall then have a first right of refusal to locate on the listed Towers at the specified heights and with the specified equipment shown on User's list (subject to existing users, including other users with applications submitted to BellSouth). In the event that a third-party potential user submits a site application or similar request to BellSouth for one of the [ * ] Towers, BellSouth shall notify User in writing. The form of notice shall be substantially as shown on Schedule III attached hereto. User shall then have ------------ [ * ] business days to return to BellSouth a countersigned copy of the notice, an executed Site Application, together with the Site Application fee and first annual installment of rent. The Site Application fee shall be credited toward the rental payment, and thus reduce by [ * ] the payment of the first annual installment of rent. The return of this material by User shall constitute User's binding agreement to execute a Site Agreement for that particular Site. In the event that User does not forward an executed Site Application, together with the above referenced related fees, to - --------------- [ * ] Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. 2 BellSouth within said [ * ] business days, User shall be presumed to have declined use of that particular Tower and BellSouth will be free to proceed with the third -party user. In the event that SprintCom (as defined herein) has previously delivered a Site Application for a particular Site listed on the [ * ] Towers referenced above, and a third-party potential user submits an application for that Tower, BellSouth shall notify User. User shall have [ * ] business days to notify BellSouth in writing that it intends to accept such Site (in which case the prior SprintCom Site Application shall be accepted as User's Site Application, except that information contained in User's initial list of [ * ] potential First Right Sites shall be deemed to amend information to the extent inconsistent with SprintCom's Site Application) and User shall submit the first years annual rent and the Site Application fee (if not previously paid). (c) Expense Amount. At the time User submits the above-referenced -------------- list of [ * ] potential Tower Sites, User shall submit to BellSouth a fee of [ * ] Dollars [ * ] to be used in accordance with this paragraph (the "Expense Amount"). The Expense Amount shall be used by BellSouth to reimburse BellSouth for all fees of GlobalComm, Arcadis, or other agents or consultants of BellSouth used in the preparation and processing of Tower Sites. BellSouth shall reasonably document amounts of the Expense Amount used by BellSouth for such reimbursement. In the event that the Expense Amount is depleted such that it is less than [ * ] Dollars [ * ], the User shall replenish the Expense Amount by not less than [ * ] Dollars [ * ]. In the event that following User's commencement or declining of the [ * ] Towers referenced above, there are funds remaining in the Expense Amount held by BellSouth, the excess amount shall be applied to the next-due rents under Sites leased by User, in a manner determined by BellSouth. (d) Submission of Site Application in Grows of Forty. User shall make ------------------------------------------------ all reasonable efforts to submit Site Applications for Sites (other than First Right Sites submitted following notification of a potential third-party user as described in Section 2(b) above) in groups of approximately [ * ] Site Applications at a time, in order to make the processing of Site Agreements as easy and efficient as possible. (e) Minimum Site Application Requirement. User agrees that it shall ------------------------------------ submit not less than [ * ] Site Applications, together with the Site Application fee, not later than ninety (90) days from the date of this MSA. In the event that User fails to submit at least [ * ] Site Applications, together with related fees, not later than ninety (90) days from the date of this MSA, BellSouth may, at its option, terminate this MSA and retain any unspent amount of the Expense Amount. 3. Permitted Use. Subject to the terms of this MSA and the Site ------------- Agreement for each respective Site, User shall be permitted the non-exclusive right to install, maintain, operate, service, and subject to BellSouth's prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed, modify and replace its communication equipment as more particularly described on the User's Co-Location Application attached as Exhibit "C" to each ----------- Site Agreement (the "Facilities") at such Site, including without limitation, BellSouth's Tower, which Facilities shall be utilized for the transmission and reception of wireless voice and data communications using digital communications services technology. These shall be the only - ------------- [ * ] Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. 3 permissible uses under this MSA and each Site Agreement, and User specifically acknowledges that microwave facilities are not permitted uses. 4. Master Lease/License. A Site Agreement shall be subject and -------------------- subordinate to all of the terms and conditions of the agreement pursuant to which BellSouth has rights in and to the Property (the "Master Lease/License"), which are incorporated in the Site Agreement by reference and a copy of which has been or will be delivered to User and attached to the Site Agreement as Exhibit "A-I" subject to redaction of the financial terms set forth therein or - ------------- as otherwise required by confidentiality and non-disclosure provisions contained therein. If applicable, BellSouth agrees to provide User with copies of all amendments to, extensions of and renewal notices given pursuant to the Master Lease/License, subject to redaction of the financial terms set forth therein or as otherwise required by confidentiality and non-disclosure provisions contained therein. BellSouth represents to User that as of the Execution Date of a Site Agreement neither BellSouth nor BellSouth's Landlord ("Master Landlord") is in default under the Master Lease/License. 5. Conditions Precedent. -------------------- (a) Conditions Precedent Based On Consent of Master Landlord. If -------------------------------------------------------- BellSouth is party to a Master Lease/License for a Site, the Site Agreement for such Site shall be contingent upon BellSouth and/or User, as applicable, being able to satisfy one (1) of the following conditions precedent within thirty (30) days of the Execution Date of the Site Agreement, if required by the Master Lease/License, in BellSouth's sole reasonable opinion. (i) Notice to Master Landlord of [Sublease/License]. If notice ----------------------------------------------- to the Master Landlord of the sublease, license or sublicense, is required by the Master Lease/License, in BellSouth's sole reasonable opinion, BellSouth shall so notify the Master Landlord and shall deliver, upon User's request, evidence of such notification; or (ii) Consent of Master Landlord to [Sublease/License] of Tower --------------------------------------------------------- Space and Ground Space. BellSouth or User, at BellSouth's option, will obtain - ---------------------- the written consent of Master Landlord to BellSouth's [sublease, license, sublicense] to User of Tower Space and Ground Space (as such terms are defined in the Site Agreement), if required by the Master Lease/License, in BellSouth's sole reasonable opinion; (iii) Consent of Master Landlord to [Sublease/License] of --------------------------------------------------- Tower Space and Master Landlord Leasing Ground Space to User. BellSouth or User, - ------------------------------------------------------------ at BellSouth's option, will obtain (aa) the written consent of Master Landlord to BellSouth's [sublease, license, sublicense) to User of Tower Space, if required by the Master Lease/License, in BellSouth's sole reasonable opinion, and (bb) a written ground lease from the Master Landlord providing for the [lease/license) of ground space from the Master Landlord to User for User's Ground Facilities (as defined in the Site Agreement), upon terms and conditions acceptable to User in User's sole and absolute discretion. BellSouth and User shall cooperate with one another in efforts to obtain the consent of the Master Landlord pursuant to Sections 5(a)(ii) and 5(a)(iii) hereof. 4 If BellSouth or User is able to obtain the written consent of the Master Landlord to BellSouth's sublease, license or sublicense to User of Tower Space and Ground Space pursuant to Section 5(a)(ii), (aa) BellSouth or User shall deliver to the other a copy of such written consent, (bb) the condition precedent to BellSouth leasing Tower Space and Ground Space to User shall be deemed satisfied, and (cc) the term "Leased Space" as used in the Site Agreement shall mean Tower Space and Ground Space and the term "Facilities" as used in the Site Agreement shall mean the Tower Facilities and Ground Facilities. If BellSouth or User is able to obtain the written consent of Master Landlord to BellSouth's lease to User of Tower Space (but not to BellSouth's sublease, license or sublicense to User of the Ground Space) and BellSouth or User is able to obtain a ground lease from the Master Landlord pursuant to Section 5(a)(iii) hereof, (aa) BellSouth or User shall deliver to the other a copy of such written consent, (bb) User shall deliver to BellSouth a copy of the certification as to the ground lease or license from the Master Landlord to User in substantially the form of Exhibit D attached to the Site Agreement, (cc) the condition --------- precedent set forth in Section 5(a)(ii) hereof shall not have been satisfied but the condition precedent set forth in Section 5(a)(iii) hereof shall be deemed satisfied, and (dd) the term "Leased Space" as used in the Site Agreement shall mean Tower Space only and the term "Facilities" as used in the Site Agreement shall mean Tower Facilities only. If BellSouth elects to obtain the ground lease described in Section 5(a)(iii), then such ground lease shall be subject to User's prior approval and User shall be responsible for the payment of BellSouth's reasonable, documented costs in obtaining the ground lease and of all rents and other sums due under the ground lease, as and when such sums are due and payable. If BellSouth or User is unable to satisfy the condition set forth in Section 5(a)(ii) or BellSouth or User is unable to satisfy the conditions set forth in Section 5(a)(iii) within thirty (30) days of the Execution Date of the Site Agreement, the Site Agreement shall automatically terminate and become null and void, unless extended in writing by mutual consent of BellSouth and User. Upon such termination, neither BellSouth nor User shall have any obligations to the other except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, arising prior to the date of termination. (b) Conditions Precedent to Site Commencement Date. Each Site ---------------------------------------------- Agreement is further contingent upon User being able to satisfy the following conditions prior to the Site Commencement Date, as defined in the Site Agreement: (i) Approvals. User obtaining, after the Execution Date of the --------- Site Agreement, all certificates, permits, licenses and other approvals that may be required by any federal, state or local authorities (the "Approvals") to permit User's intended use of the Leased Space. BellSouth shall cooperate, at User's cost, with User in its effort to obtain such Approvals. In the event that User notifies BellSouth that (aa) any application for an Approval is rejected, (bb) an Approval is canceled, expires, lapses, or is otherwise withdrawn or terminated for any reason whatsoever prior to installation of the Facilities by User, or (cc) any application for Approval is not likely to be obtained or approved, as determined in User's sole discretion, the Approvals shall be deemed to not have been obtained by User. 5 (ii) Radio Frequency Propagation Test. User determining, in -------------------------------- User's sole discretion, that the results of any radio frequency propagation tests are satisfactory, such that User is able to use the Leased Space for User's intended use. (iii) Utilities and Access. User determining, in User's sole, -------------------- reasonable discretion, that (aa) telephone and electric utilities are available at the Leased Space or Tower of sufficient capacity to accommodate User's Facilities and (bb) ingress and egress is available to and from the Leased Space and to and from a publicly dedicated road. (iv) Tower Capacity. User determining in User's sole, -------------- reasonable discretion based on a Tower analysis satisfying the requirements of Section 10 (ii) hereof that the Tower is of sufficient capacity to accommodate the load requirements of User's Facilities. (v) Title. User determining in User's sole discretion that the ----- status of title as to the Leased Space and easements granted herein are acceptable to User. (vi) Hazardous Substances. User determining in User's sole -------------------- discretion that the Leased Space and Property are free of all Hazardous Substances, as defined in Section 15 (b) hereof. If any one (1) of the conditions set forth above will not be satisfied as of the Site Commencement Date of the Site Agreement, User shall have the right to terminate the Site Agreement by giving BellSouth written notice thereof. If User elects to terminate the Site Agreement, the Site Agreement shall terminate as of the date BellSouth receives such notice from User and neither BellSouth nor User shall have any further obligation under this Site Agreement except for any indemnity obligations and User's obligation to remove its Facilities from the Property. (c) Site Cost Reimbursement Amount. User shall pay a one-time site ------------------------------ cost reimbursement amount ("Site Cost Reimbursement Amount") to BellSouth, paid by User to BellSouth not later than (a) the execution and delivery of the Site Agreement with respect to such Site for all Sites other than First Right Sites, and (b) the Site Commencement Date with respect to such Site for all First Right Sites. Except in certain circumstances, as set out herein, the Site Cost Reimbursement Amount generally will not exceed [ * ] Dollars [ * ] per Site. BellSouth and User acknowledge and agree that the Site Cost Reimbursement Amount reflects an equitable sharing of the capital costs incurred by BellSouth with respect to the construction of the Tower and the ability of User to locate its Facilities thereon. Consequently, the Site Cost Reimbursement Amount is independent of and in addition to, and not in substitution or reduction of, all or any part of the Base Rent specified in such Site Agreement, or the fair market value of the rent applicable to such Site. The preceding notwithstanding, in the event that User has not on or before [ * ] (a) executed and returned [ * ] or more Site Agreements, and (b) paid (i) any applicable Site Cost Reimbursement Amount for each of said [ * ] or more Sites (for Sites other than First Right Sites), or (ii) the first annual installment of base rent on each of said [ * ] or more Sites (for First Right Sites), BellSouth may look back to all existing Sites as well as those Sites for which Site Agreements have been executed but the Site Commencement Date has not yet occurred and charge - --------------- [ * ] Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. 6 User an additional Site Cost Reimbursement Amount of [ * ] Dollars [ * ] per Site regardless of whether any Site Cost Reimbursement Amount had previously been paid on that Site. The preceding notwithstanding, in the event that User has (i) executed and returned [ * ] or more Site Agreements, and (b) paid (i) any applicable Site Cost Reimbursement Amount for each of said [ * ] or more Sites (for Sites other than First Right Sites), or (ii) the first annual installment of base rent on each of said [ * ] or more Sites (for First Right Sites), the Site Cost Reimbursement Amount to be paid to BellSouth, for every Site in excess of [ * ] shall be [ * ] Dollars [ * ]. In the event that User finds it necessary to structurally enhance or otherwise to upgrade the Tower prior to locating on the Tower, any such enhancement or upgrades shall be subject to BellSouth's prior written approval and the costs which User incurs in performing said upgrade shall be applied and credited to the Site Cost Reimbursement Amount for that particular Site. Beginning January 1, 1999, the Site Cost Reimbursement Amount for each new Site shall then be based upon the amount for the Site Cost Reimbursement Amount referenced above on the [ * ] deadline. In the event User has submitted less than [ * ] Site Applications, together with related fees, by [ * ], the Site Cost Reimbursement Amount shall remain at [ * ] Dollars [ * ] per Site until User has submitted [ * ] Site Applications, with related fees, at which point future Site Cost Reimbursement Amounts shall be [ * ] Dollars [ * ] per Site. In the event User has submitted between [ * ] and [ * ] Site Applications, together with related fees, by [ * ], the Site Cost Reimbursement Amount shall remain at [ * ] Dollars [ * ] per Site until User has submitted [ * ] Site Applications, with related fees, at which point future Site Cost Reimbursement Amounts shall be [ * ] Dollars [ * ] per Site. In the event User has submitted [ * ] or more Site Applications, together with related fees, by [ * ], the Site Cost Reimbursement Amount shall remain at [ * ] Dollars [ * ] per Site. 6. Term. ---- (a) MSA Term. The MSA term shall begin on the MSA Commencement Date -------- and shall continue until midnight of the tenth (10th) anniversary of the MSA Commencement Date, unless terminated earlier in accordance with the terms hereof (the "Term"). (b) Site Agreement Term and Renewal. The initial term of each Site ------------------------------- Agreement and any renewal terms are provided in each Site Agreement. Notwithstanding the expiration of this MSA, the terms and conditions of this MSA shall continue to apply to each Site Agreement until the Site Agreement Term, including any renewal terms expires or terminates. User shall have the right to terminate a Site Agreement for a First Right Site if the conditions precedent in Section 5 are not satisfied through no fault of User. 7. Rent. ---- (a) Base Rent. During the Initial Term of any Site Agreement, User --------- shall pay annual rent in equal annual installments in the amount set forth in each Site Agreement, (a) in advance on or before the Site Commencement Date and then on each anniversary date of the Site - --------------- [ * ] Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. 7 Commencement Date for Sites other than First Right Sites and (b) in advance on or before the delivery of the fully executed Site Agreement and then on each anniversary date of the Site Commencement Date for First Right Sites. If the Site Agreement for a First Right Site is terminated pursuant to Section 6(B), the annual rent that User had paid shall be credited towards annual rent for a separate Tower Site leased by User hereunder. Rent shall be payable by check, and checks shall be made payable to the order of the BellSouth entity specified in the applicable Site Agreement and shall be mailed to the address designated in the applicable Site Agreement. In the event that the initial base rent is paid by User but the Site Agreement does not commence because of a failure of a condition precedent described in Section 5 or such other reason as described herein, through no fault of User, BellSouth shall refund the initial annual payment of base rent. (b) Taxes. ----- (i) Property Taxes. User shall be responsible for the reporting -------------- and payment when due of any tax directly related to User's ownership or operation of the Facilities and such reporting and payment shall be made directly to the appropriate tax authorities. (ii) Sales Taxes. BellSouth shall be responsible for billing, ----------- collecting, reporting, and remitting sales taxes directly related to rent payments received pursuant to this MSA and any Site Agreement, if any. User shall be responsible for reimbursing BellSouth for all sales taxes billed related to rent payments received pursuant to this MSA and any Site Agreement, such reimbursement to be due and payable within thirty (30) days of BellSouth's delivery to User of a written invoice and copies of paid tax receipts specifying the payments made by BellSouth. (c) Site Agreement Renewal Terms. If and when one or more of the Site ---------------------------- Agreement Renewal Terms (as defined in the applicable Site Agreement) are exercised by the User, upon the commencement of each Renewal Term, the annual rent for each Renewal Term shall increase by the percent set forth in such Site Agreement over the annual rent for the immediately preceding term. (d) Additional Facilities. If, after the installation of the --------------------- Facilities, User, with the, prior written approval of BellSouth as required by Section 10 hereof, modifies the Facilities by adding additional equipment to the Tower which materially increases the size or structural or windload on the Tower or is in a different location on the Tower than the Facilities such that additional rent is payable pursuant to Section 10 (vi) hereof, BellSouth and User acknowledge that the rent for the Site shall be increased by an amount set forth in the Site Agreement for each piece of additional equipment. If the Site Agreement is silent on rent for additional equipment, BellSouth and User acknowledge that the rent for the Site shall be increased by a mutually agreed upon amount. In the event BellSouth and User cannot agree upon the increased rent, the increase in rent shall be the fair market rental value for the additional equipment placed on the Tower, which shall be determined by BellSouth and User each designating, within five (5) days of the dispute, an independent MAI appraiser with demonstrated experience appraising similar property and telecommunication uses and shall be the average of the two appraisals prepared by the appraisers. Each party shall pay the fees of its appraiser. 8. BellSouth to Locate on User's Towers. As additional consideration for ------------------------------------ BellSouth's agreement to lease, sublease, license or sublicense, as applicable, the Site to User, User hereby agrees 8 to lease, sublease, license or sublicense, as applicable, to BellSouth space on User's tower and ground space adjacent to such tower for the construction and placement of an equipment shelter or cabinet (such tower and ground space collectively referred to as a "Reciprocal Site") and shall be evidenced by a site agreement and master site agreement, in substantially the same form as the Site Agreement for BellSouth's Tower and Property and this MSA. In the event User refuses to lease, sublease, license or sublicense, as applicable, a Reciprocal Site to BellSouth, for reasons unrelated to User's capacity, zoning, permits, licenses and other required approvals, or environmental issues with respect to such Reciprocal Site, BellSouth may elect to terminate any existing Site Agreement with respect to a Site in the same geographic market as the proposed Reciprocal Site refused by User in accordance with the provisions set forth in Section 20(b) hereof. 9. Relocation of Facilities. ------------------------ (a) With respect to any Site, BellSouth reserves the right to change the location of User's Facilities upon sixty (60) days written notice to User to accommodate the communications equipment (including a change in frequency) of BellSouth. User shall relocate or remove the Facilities, at BellSouth's expense, within sixty (60) days of receipt of any such notice by User; provided, however, if the relocated space is unacceptable to User, in User's reasonable discretion, User shall have the right to terminate the Site Agreement upon written notice to BellSouth, which termination shall be effective the earlier of (i) the date set forth in User's termination notice, or (ii) two hundred forty (240) days from User's receipt of BellSouth's relocation notice. Upon such termination, the parties to the Site Agreement shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, and User's obligation to remove the Facilities from the Property. In the event BellSouth needs additional capacity at a Site for its equipment and there is no space on the Tower in which to relocate User's Facilities, upon two hundred and forty (240) days notice, BellSouth may terminate a Site Agreement, and thereafter the Site Agreement shall be of no further force and effect, and except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, and User's obligation to remove the Facilities from the Property, and BellSouth's obligation to reimburse User for the book value (to be determined. at the date of termination of the Site Agreement) of any structural enhancements made by User to such Site, the parties hereto shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement. (b) In the event of a termination under this Section 9 within the Initial Term of the terminated Site Agreement, BellSouth shall also reimburse User a prorata portion of the Site Cost Reimbursement Amount applicable to such Site Agreement based on a five-year proration of the full Site Cost Reimbursement Amount. The amount reimbursed by BellSouth shall be equal to the prorata portion of the Site Cost Reimbursement Amount from the date of termination to the expiration of the Initial Term. BellSouth shall deliver such reimbursement to User within thirty (30) days of the termination date of the Site Agreement. 10. Installation, Modification and Relocation. ----------------------------------------- During the term of the Site Agreement, including any renewal terms, User shall have the right, at User's expense, to install, and with BellSouth's prior written approval, which approval shall 9 not be unreasonably withheld, delayed or denied, relocate and modify the Facilities on the Site. User's installation, maintenance, relocation, modification, and removal shall be in compliance with the following requirements: (i) Facilities. With regard to a modification or relocation of ---------- the Facilities, User shall provide BellSouth with an updated Exhibit "C" listing ----------- all communications equipment to be located on the Site. (ii) Tower Analysis. User shall submit to BellSouth a -------------- completedTower analysis, prepared by licensed structural engineer approved by BellSouth (a) describing any and all installations, modifications, or relocations, as the case may be, of the Facilities on the Tower, (b) including information demonstrating continued compliance with the Tower manufacturer's warranty requirements, if delivered to User, current EIA/TIA standards, other legal requirements for the Tower, and any other information reasonably requested by BellSouth and (c) demonstrating that the installation, modification, or relocation, as the case may be, does not exceed the load capacity of the Tower. The Tower analysis shall be based on all Facilities listed on Exhibit "C " ------------ regardless of whether User does not intend to initially install all Tower Facilities. If the Tower is a monopole, User, at User's cost, shall be responsible for the installation of any platforms and cutting of portals required to install User's Tower Facilities; provided, however, User shall not cut any portal in the Tower if the cutting of such portal would adversely affect the manufacturer's warranty on the Tower, if any, or the integrity of the Tower. If the Tower is structurally inadequate to accommodate User's proposed installation, modification or relocation, User, subject to BellSouth's consent, which consent shall not be unreasonably withheld or delayed, shall have the right to structurally enhance the Tower to accommodate User's proposed installation, modification or relocation of User's Tower Facilities, provided User complies with the, following additional requirements: (1) Plans and Specifications for Structural Enhancement. User --------------------------------------------------- shall submit to BellSouth all plans and specifications for structurally enhancing the Tower, the proposed architect, engineer and/or contractor involved in the structural enhancement, and a structural analysis demonstrating that the Tower, as structurally enhanced, will accommodate all equipment located on the Tower at the time of the structural enhancement and the proposed installation, modification, or relocation of User's Tower Facilities, as the case may be, all of which shall be approved by BellSouth, which approval shall not be unreasonably withheld, conditioned or delayed. (2) Payment of Costs. User shall pay all costs incurred in ---------------- structurally enhancing the Tower including, without limitation, all material costs, all architectural, engineering and contracting fees, all certificate, permit, license and approval fees, and all actual, reasonable costs incurred by BellSouth to review the plans and specifications and structural analysis. (3) Ownership of Structural Enhancements. Upon completion of and ------------------------------------ payment by User for the structural enhancements, such structural enhancements shall become the property of BellSouth, and upon request, User shall promptly provide to BellSouth any bills of sale or documentation evidencing BellSouth's ownership of said enhancements. (iii) Insurance. User shall provide BellSouth with insurance --------- certificates for each Site evidencing that the insurance required by Section 17 of this MSA is in full force and effect 10 including, without limitation, worker's compensation insurance and the insurance required of User's contractors and subcontractors. (iv) Compliance with Laws. User's installation, modification or -------------------- replacement of the Facilities on the Site and structural enhancement of the Tower, if any, shall be in compliance with all applicable laws, regulations and requirements of any federal, state or local authority, including without limitation, OSHA work practice standards for performing said work. BellSouth, at no cost to BellSouth, agrees to cooperate with User to obtain such compliance. (v) Availability of Space. With regard to the relocation of the --------------------- Facilities, space on the Tower must be available at the levels, and/or space on the ground must be available at the locations, to which User desires to relocate and, if consent of the Master Landlord is required to relocate the Ground Facilities, then such consent must be obtained prior to relocation. (vi) Additional Rent. User shall pay BellSouth additional rent, in an --------------- amount determined in accordance with the provisions of Section 7(d) hereof. (vii) Plans and Specifications; Contractor. User shall submit to ------------------------------------ BellSouth (i) the plans and specifications, a detailed site plan and any other construction documents setting forth the proposed construction, installation and other work to be performed on the Site and Tower and (ii) the names of the proposed contractors and subcontractors performing any such construction, installation or other work, all of which shall be approved by BellSouth, such approval not to be unreasonably withheld, conditioned or delayed. Following the completion of any installation, modification or relocation, User shall provide to BellSouth, at User's expense, updated, as-built drawings, initialed by User, documenting all installed Facilities on the Site and conforming to the plans and specifications, site plan, and any other construction documents approved by BellSouth. The as-built drawings shall include an as-built survey locating the Site to a monument or the Tower (the "As-Built Survey"). Upon receipt and provided the As-Built Survey conforms to the plans and specifications, site plan and any other construction documents approved by BellSouth, BellSouth shall initial the As-Built Survey. (viii) Liens. User shall keep the Site, Tower, Property and ----- Facilities free from any liens arising from any work performed, materials furnished or obligations incurred by or at the request of User in accordance with the provisions of Section 16 (c) hereof, with the sole exception of any liens with respect to equipment financing obtained by User for such Facilities provided that such equipment financing liens do not encumber, attach to or affect, in any manner, BellSouth's or the Master Landlord's right, title or interest in and to all or any part of the Towers or the Property. (ix) Pre-construction Meeting; Other Construction Meetings. Prior to ----------------------------------------------------- commencing any installation and/or construction, a duly authorized representative of User shall meet with a duly authorized representative of BellSouth at the Tower site to mutually approve the construction methods and procedures, such approval not to be unreasonably withheld, conditioned or delayed by either party. BellSouth and User agree to cooperate with one another in scheduling such pre-construction meeting. In addition, BellSouth and User will meet during and upon substantial completion of construction to mutually approve grounding and punch-list items, respectively, and BellSouth and User agree to cooperate with one another in scheduling such meetings. 11 11. Ingress and Egress. ------------------ (a) Upon the Execution Date of a Site Agreement, BellSouth hereby grants to User, as well as User's contractors, subcontractors, agents, affiliates, or employees, subject to the limitations set forth herein or in the applicable Site Agreement, (i) the non-exclusive right to use the Tower, at locations mutually agreed upon by User and BellSouth, for the term hereof for ingress, egress, and access to the Tower Space adequate to service the Tower Facilities and (ii) if the term "Leased Space" as used in the Site Agreement includes Ground Space, a non-exclusive easement for the term hereof, for ingress, egress, and access to the Leased Space, on a twenty-four (24) hours per day, seven (7) days per week basis, across (aa) the Property in locations mutually agreed upon by BellSouth and User and (bb) if the Property is leased or licensed by BellSouth, across the property of the Master Landlord to the extent and in the locations of the Master Landlord-granted ingress, egress and access easements to BellSouth in the Master Lease/License. User or User's qualified, insured contractors under User's direct supervision, as well as SprintCom, Inc., a Kansas corporation ("SprintCom") shall have access to the Tower upon twenty- four (24) hours notice to BellSouth, which access shall be subject to the accompaniment, at BellSouth's option, of BellSouth's field personnel to provide an escort and/or supervision, and User shall reimburse BellSouth for BellSouth's actual, reasonable costs related thereto within thirty (30) days of BellSouth's delivery to User of a written invoice for such costs. The foregoing notwithstanding, User and SprintCom shall have access to the Leased Space and User's Facilities immediately and without notice in the event of an emergency, and User shall notify BellSouth as soon as practicable of User's access (SprintCom's) during such emergency. Other security measures required for a particular Site may be set forth in the Site Agreement. User shall be responsible to ensure that User's contractors, subcontractors, agents, affiliates, employees, as well as SprintCom, are adequately insured prior to gaining access to any Site. Without in any way limiting the scope of Section 18, User shall indemnify, protect and hold harmless BellSouth for any loss, claim, or damages resulting from access to any Site permitted in this paragraph. (b) Prior to the Execution Date of a Site Agreement, User may have access to a Property and the Tower situated thereon only upon the execution and delivery by BellSouth and User of an entry and testing agreement in form and substance substantially similar to Schedule "II" attached hereto and by ------------- reference made a part hereof (an "Entry and Testing Agreement") which will establish the terms under which User may access the Property and Tower for the "Permitted Activities," as defined in the applicable Entry and Testing Agreement. 12. Utilities, Cable Runs. Upon execution of a Site Agreement, BellSouth --------------------- hereby grants to User the non-exclusive right to use the Tower for the term hereof to place any cable runs on the Tower, at locations mutually agreed upon in writing by BellSouth and User, in order to service or operate the Facilities, subject to BellSouth's prior written approval of the design and installation method and procedures, such approval not to be unreasonably withheld, conditioned or delayed. If the term "Leased Space" as used in the Site Agreement includes the Ground Space, upon execution of the Site Agreement, BellSouth hereby grants to User a non-exclusive easement for the term hereof to place any utilities or cable runs on or bring utilities across the Property and if the Property is leased or licensed by BellSouth, the property of the Master Landlord to the extent and in the locations the Master Landlord granted utility and cable run easements. User shall pay the cost of all utility service necessary to install, maintain and operate the Facilities. Where practicable, User shall 12 install a separate meter for User's use. If installation of a meter is not practicable, the parties shall prorate such charges based on approximate actual use within thirty (30) days of receipt by BellSouth of any invoice from an applicable utility company. User shall obtain and pay the cost of telephone connections. Installation of telephone service shall be in compliance with the procedures for installation and maintenance of Facilities set forth herein. 13. User's Covenants. User covenants that from the Execution Date of a ---------------- Site Agreement, that the Facilities, and all installation, operation, modification, relocation and maintenance associated therewith, will: (a) In no way damage BellSouth's Tower, Property, any other structure or accessories thereto, any Prior User's, as defined below, equipment or facilities or any Subsequent User's, as defined below, equipment or facilities, normal wear and tear excepted. If damage, other than normal wear and tear, occurs and such damage is caused by User, or User's employees, agents, contractors, or subcontractors, then User shall be liable for repair or reimbursement of repair for said damages; (b) Not interfere with BellSouth's operation on the Tower or the operations of any Prior User (as defined herein). For purposes hereof, a "Prior User" shall mean any other user of the Tower that has submitted to BellSouth a site application in good faith prior to the submission of User's Site Application for such Tower, which site application serves as the basis for a written agreement for the use of the Tower by such user. In the event BellSouth determines, in its sole discretion based on standard and accepted engineering practices, that User's Facilities are interfering with the operation of BellSouth's or a Prior User's equipment, authorized frequency spectrum or signal strength, User shall, within forty-eight (48) hours of notification, take all steps necessary to eliminate the interference, with the exception of ceasing User's operations. If User cannot eliminate or resolve such interference within the forty-eight (48) hour period, BellSouth shall have the right to require that User turn off its Facilities and only turn on its Facilities during off-peak hours specified by BellSouth in order to test whether such interference continues or it has been satisfactorily eliminated. In the event that User is unable to resolve or eliminate, to the satisfaction of BellSouth, such interference within thirty (30) days from the initial notification of such interference, User will immediately remove or cease operations of the objectionable Facilities and BellSouth shall have the right to terminate the applicable Site Agreement. User shall not on any Site interfere with BellSouth's use of the Site, the provision of services to BellSouth's customers, or the use of the Site by other Prior Users. Such interference shall be deemed a material breach of the Site Agreement. (c) Not interfere with the maintenance of BellSouth's Tower and the Tower lighting system; (d) Keep the Facilities in a state of repair acceptable to BellSouth in BellSouth's reasonable discretion; (e) Identify the Facilities with metal tags fastened securely to its bracket on the Tower and to each transmission line; 13 (f) Comply with all applicable rules and regulations of the Federal Communications Commission ("FCC") and all federal, state and local laws governing use of the Facilities on the Site; (g) Comply with all applicable laws and ordinances and promptly discharge or bond off any lien for labor or material within thirty (30) days of filing same; (h) Within thirty (30) days after the expiration or termination of a Site Agreement, remove all Facilities from the Property and restore the Tower and the Site to its original condition, normal wear and tear excepted. In the event User has not removed the Facilities at the time of expiration or termination of the Site Agreement, User shall pay rent at the then existing monthly rate or on the existing monthly pro-rata basis if based upon a longer payment term until such time as the removal of the Facilities is completed. In the event User does not remove its Facilities within thirty (30) days after the expiration or termination of the Site Agreement, BellSouth shall have the right to remove and store the Facilities, at User's sole expense, and User shall reimburse BellSouth for such expenses upon demand. If BellSouth removes the Facilities, BellSouth shall not be responsible for any damage to the Facilities during the removal and storage thereof unless caused by the gross negligence of BellSouth. Notwithstanding the foregoing, except as may be required under any lease or license agreement pursuant to which BellSouth has rights in and to the Property, User shall not be required to remove any concrete pads upon which User's equipment shelters or cabinets may have been located upon the expiration or termination of a Site Agreement; (i) Upon the completion of the initial installation of the Facilities on the Site, within thirty (30) days of the completion of the relocation of the Facilities or installation of additional Facilities on the Site and, for any year in which User has performed a site audit on the Site or the Facilities or User's operations at the Site have changed or been modified, by December 1 of each year throughout the term of the Site Agreement, User shall provide BellSouth with the number of batteries, battery model numbers, battery manufacturers, the number of cells in each battery and the amount of sulfuric acid in User's batteries on the Site in order for BellSouth or if, the property is leased or licensed by BellSouth, the Master Landlord, to file such information with the Environmental Protection Agency ("EPA") and any state and local authorities as required by applicable law. Further, within thirty (30) days of User's receipt of a written request from BellSouth, User will provide BellSouth with any other information and copies of documents relating to the Facilities located on the Site which BellSouth or Master Landlord may be required to file with the FCC, EPA or any other governmental agencies. User agrees to indemnify and hold BellSouth harmless from any liabilities resulting from any inaccuracies in such information or documentation delivered by User to BellSouth or User's failure to provide BellSouth with such information or documentation in accordance with the provisions of this Section 13(i); (j) Be coordinated through BellSouth and User shall cooperate with BellSouth. (k) It is recognized that certain construction, such as the erection of an antenna support structure, can have an effect on a given AM Signal Array within certain parameters. This issue is addressed in Part 22 of the FCC Rules and Regulations. A statement of this policy regarding structures erected or modified by Commission Licensees in the vicinity of broadcast AM Stations is found in the FCC Report No. CL-90-40, "Re-Publication of Standard Broadcast Re- Radiation and Tower Construction Authorized Under Part 22 of the Rules." This policy states that "Licensees and 14 Permitees planning to construct or modify a tower within 2 miles of a directional AM array or within .5 miles of a non-directional AM tower should take certain precautions..." to protect the array of said AM Station(s). BellSouth has constructed its Towers in compliance with the rules and regulations of the FCC. By User's collocation on any BellSouth Tower, User accepts full responsibility (including financial responsibility) to take any and all measures to comply with the FCC mandate as it pertains to modifications of existing towers. After this mandate has been satisfied, all documentation to substantiate compliance will be forwarded to BellSouth for records maintenance. In the event that the applicable Tower at any Site was fitted with a detuning apparatus to protect the array of a given AM Station, User will be responsible for following the procedure set forth below to ensure that the Tower remains in compliance: Prior to actual collocation on the existing BellSouth Tower, a certified letter will be sent from User to the AM station(s) in question advising said station(s) of the intent to collocate on the BellSouth existing Tower. This document will reference that BellSouth has detuned the structure with the installation of a detuning apparatus; furthermore, the Tower will not be increasing in electrical height and therefore this collocation will cause no further perturbation to the AM Signal. A copy of this letter will be furnished to BellSouth for record purposes. After the collocation has been completed, User will ensure the proper working condition of the detuning apparatus by retaining the appropriate BellSouth detuning consultant to take proximity measurements of the Tower to adjust said apparatus to include the new antenna. This course of action is necessary because the detuning apparatus will need to be rendered inert during the actual installation of any additional antennas to the structure. Any costs involved in following this procedure will be the responsibility of User. If, due to User's collocation, it becomes necessary to modify the actual height of the Tower, it will be the responsibility of User to retain a detuning consultant and perform a partial proof of performance report and/or install/modify detuning apparatus to ensure the integrity of a given AM Signal. 14. BellSouth's Covenants. BellSouth covenants that during the term of a --------------------- Site Agreement it shall: (a) Maintain the Tower and surrounding area in a safe condition; (b) Except as otherwise set forth in this MSA, take no action which would adversely affect the User's proposed use of the Site; (c) Upon User's payment of rent and performance of its covenants, but subject to the terms of any Master Lease/License pursuant to which BellSouth has rights in and to the Property, and subject to any prior lien or encumbrance on the Property, ensure User's quiet use and enjoyment of the Site; 15 (d) Comply with all applicable rules and regulations of the FCC, the FAA, and all federal, state and local laws governing the Tower and Property; (e) Not permit any Subsequent User (as defined herein) to interfere with the operation of User's equipment, authorized frequency spectrum, signal strength or Facilities. For purposes hereof, a "Subsequent User" shall mean any other user of the Tower that submits to BellSouth a site application for the use of such Tower after the submission of User's Site Application for such Tower. In the event BellSouth determines, in its sole discretion based on standard and accepted engineering practices, that the Subsequent User is interfering with the operation of User's equipment, authorized frequency spectrum, signal strength or Facilities, BellSouth shall, within forty-eight (48) hours of notification, take all steps reasonably necessary to eliminate the interference, with the exception of ceasing the Subsequent User's operations. If the Subsequent User cannot eliminate or resolve such interference within the forty-eight (48) hour period, BellSouth shall take all steps reasonably necessary to require that the Subsequent User turn off its facilities and only turn on its facilities during off-peak hours specified by BellSouth in order to test whether such interference continues or it has been satisfactorily eliminated. In the event that the Subsequent User is unable to resolve or eliminate, to the satisfaction of BellSouth, such interference within thirty (30) days from the initial notification of such interference, the Subsequent User will immediately remove or cease operations of the objectionable facilities. Notwithstanding the foregoing, if the Subsequent User is a governmental entity, BellSouth shall have the right to give the governmental entity five (5) business days notice prior to BellSouth being required to take any actions required by this Section 14(e) to cure such interference. BellSouth shall give such governmental entity written notice of the interference within two (2) business days of BellSouth's determination that such action is reasonably necessary. BellSouth's notice to the governmental entity shall be deemed given on the day it is delivered by hand or on the day it is deposited with an overnight courier or the United States mail; (f) Not permit any Prior User or Subsequent User to damage User's Facilities or the Site, normal wear and tear excepted. If damage by BellSouth, a Prior User, or Subsequent User, other than normal wear and tear, occurs to User's Facilities or the Site, then BellSouth, such Prior User, or Subsequent User, shall be liable for repair or reimbursement of repair for such damages caused by such party; (g) Use reasonable efforts not to violate or breach any term of the Master Lease/License giving the Master Landlord the right, with the passage of time and/or giving of notice, to terminate the Master Lease/License; deliver to User copies of every notice of default, non-renewal or non-conformance received from Master Landlord immediately upon receipt thereof by BellSouth, and User shall have the right, but not the obligation, to cure any such defaults of BellSouth within the periods afforded BellSouth under the Master Lease; (h) Provide the Master Landlord with the information necessary to enable the Master Landlord to comply with the reporting requirements of the EPA or any other governmental agency; provided, however, BellSouth shall have no obligation to provide the Master Landlord with information regarding the User's Facilities if User has not provided BellSouth with such information in accordance with the provisions of Section 13(i) hereof. 16 15. Compliance with Laws. -------------------- (a) FCC and FAA Compliance. BellSouth acknowledges that it is aware ---------------------- of its obligations under Section 303 of the Communications Act of 1934 (47 U.S.C. 303), as amended, to maintain the painting and illumination of Towers as prescribed by the FCC. BellSouth further acknowledges that it is aware that it is subject to forfeitures assessed by the FCC for violations of such rules and requirements. BellSouth further acknowledges that it, and not User, shall be responsible for compliance with all Tower or building marking and lighting requirements which may be required by the Federal Aviation Administration ("FAA") or the FCC. BellSouth shall indemnify and hold harmless User from any fines or other liabilities caused by BellSouth's failure to comply with such requirements. Further, should User be cited by either the FCC or FAA because a Tower is not in compliance within the time frame allowed by the citing agency, User may terminate the Site Agreement for such Tower immediately upon notice to BellSouth, or, at User's option, cause the Tower to comply with FAA or FCC requirements and BellSouth shall be responsible for reimbursing User for its actual, reasonable costs incurred to bring the Tower into compliance with FAA or FCC requirements. Notwithstanding the foregoing, if FAA or FCC compliance requires the removal and/or relocation of the Tower, User's sole remedy shall be to terminate the Site Agreement for such Tower. Upon such termination, the parties to the Site Agreement shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, and User's obligation to remove the Facilities from the Property. (b) Hazardous Substances. BellSouth and User agree that they will not -------------------- use, store, dispose, or release any Hazardous Substances on the Property in violation of any applicable federal, state or local law, regulation, or order. "Hazardous Substances" means any hazardous material or substance which is or becomes defined as a hazardous substance, pollutant or contaminant subject to reporting, investigation or remediation pursuant to any federal, state or local law, regulation or order; and any substance which is or becomes regulated by any federal, state or local governmental authority; and any oil, petroleum products and their by-products. BellSouth and User acknowledge that User, BellSouth, Prior Users and Subsequent Users may each use diesel fuel and batteries in appropriate small quantities from time to time to operate emergency back-up generators provided that the transportation, delivery, storage, use and disposal by User, BellSouth, a Prior User, or a Subsequent User, as the case may be, is in compliance with all federal, state and local laws, regulations and orders. BellSouth agrees to indemnify and save harmless the User against any and all claims, liabilities, demands, causes of action, losses, damages, orders, judgments, penalties, clean-up costs, costs and expenses including, without limitation, attorneys fees and costs, arising from BellSouth's misrepresentation, breach of warranty or breach of agreement contained in this Section 15(b). User agrees to indemnify and save harmless BellSouth against any and all claims, liabilities, demands, causes of action, losses, damages, orders, judgments, penalties, clean-up costs, costs and expenses including, without limitation, attorneys fees and costs arising from User's misrepresentation, breach of warranty or breach of agreement, contained in this Section 15(b). The obligations of BellSouth and User to indemnify the other pursuant to this Section 15(b) shall survive the termination or expiration of this MSA and each Site Agreement. (c) Phase I - Environmental Site Assessment. After the execution and --------------------------------------- delivery by BellSouth and User of an Entry and Testing Agreement for a Site User may perform a Phase I -environmental site assessment on the Property pertaining to such Site provided such Phase I -environmental site assessment does not involve any subsurface soils testing and further provided 17 that User provides BellSouth with a complete written copy of the Phase I - environmental site assessment within ten (10) days of completion at no expense to BellSouth. Only with BellSouth's prior written consent and subject to BellSouth's supervision may User perform a Phase II - environmental site assessment on the Property. (d) National Environmental Policy Act Compliance. Upon execution of a -------------------------------------------- Site Agreement, and except as provided in a Site Agreement, BellSouth represents that the Tower and Property comply with the applicable provisions of the National Environmental Policy Act, 47 C.F.R. Section 1.1301 et seq. (`NEPA'). BellSouth acknowledges that it, and not the User, shall be responsible for compliance with all applicable provisions of NEPA. BellSouth shall indemnify and hold harmless User from any fines or other liabilities caused by BellSouth's failure to comply with NEPA. In no event shall BellSouth be responsible to User for lost profits, market share or consequential damages. Further, should BellSouth be cited for noncompliance with NEPA and fail to bring the Tower and/or Property into compliance, User, in addition to any and all other remedies available to User at law or in equity, may terminate this Site Agreement immediately upon written notice to BellSouth, or, at User's option, cause the Tower to comply with NEPA and BellSouth shall be responsible for reimbursing User for its actual, reasonable costs incurred to bring the Tower into compliance with NEPA requirements. Notwithstanding the foregoing, if NEPA compliance requires the removal and/or relocation of the Tower, User's sole remedy shall be to terminate the Site Agreement for such Tower. Upon such termination, the parties hereto shall be released from all duties, obligations, liabilities and responsibilities under this Site Agreement except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, and User's obligation to remove the Facilities from the Property. (e) User acknowledges and understands that BellSouth has installed or will install certain signage and/or physical barriers pertaining to radio frequency exposure from BellSouth's transmitter and other equipment. User shall instruct all of its personnel and its contractors performing work at the site to read carefully all such signage, to follow the instructions provided in such signage, and to honor all physical barriers. In no event shall User's personnel or contractors tamper with any such signage or barriers. User shall be responsible for placement of signage or physical barriers at or near its facilities at the Site in order to comply with applicable FCC radio frequency exposure guidelines. BellSouth agrees that it shall cooperate with User in these efforts and that BellSouth shall instruct its personnel and contractors performing work at the Site to read carefully all such signage, to follow the instructions provided in such signage, and to honor all physical barriers. In no event shall BellSouth's personnel or contractors tamper with any such signage or barriers. BellSouth and User shall cooperate in good faith to minimize any confusion or unnecessary duplication that could result from similar signage being posted respecting other carriers' transmission equipment (if any) at or near the Site. 16. Assignment or Subletting; No Liens. ---------------------------------- (a) Assignment by User. User shall not assign, convey, or transfer ------------------ its interest in this MSA or any Site Agreement without first obtaining BellSouth's written approval, which approval may not be unreasonably withheld, conditioned, or delayed. User is not permitted to sublease or to license its interest in this MSA or any Site Agreement. Notwithstanding the foregoing, User has the right, without the necessity of obtaining BellSouth's consent, to assign this 18 MSA or any Site Agreement to a User Affiliate (as defined herein), provided that User notifies BellSouth in writing of such assignment. For purposes hereof, "User Affiliate" shall mean any entity which controls, is controlled by, or is under common control with User or to any entity resulting from the merger or consolidation of User, or to any person or entity which acquires substantially all of the assets of User, provided that such assignee assumes in full all of the obligations of User under this MSA and the Site Agreements that may be assigned. Notwithstanding the above, in the event of a termination of User's management relationship with SprintCom, User shall be permitted to assign its rights under any Site Agreements to SprintCom, upon written notice to BellSouth. (b) Assignment by BellSouth. BellSouth shall have the right to assign ----------------------- this MSA or any Site Agreement to a BellSouth Affiliate (as defined herein) or an assignee who purchases an MSA, RSA, BTA or MTA, as defined by the FCC, without User's prior approval, and shall notify User within a reasonable time of any such assignment. For purposes of this MSA and the Site Agreements, "BellSouth Affiliate" shall mean any entity which controls, is controlled by, or is under common control with BellSouth Carolinas PCS, L.P. ("BSCP") or BellSouth Personal Communications, Inc. ("BPCI"), to any entity resulting from the merger or consolidation of BSCP or BPCI, or to any person or entity which acquires substantially all of the assets of BSCP or BPCI, provided that such assignee assumes in full all of the obligations of BellSouth, under this MSA and the Site Agreements that may be assigned. (c) Liens. Except as provided in Section 10 (viii) hereof, User shall ----- keep the Property, the Tower, the Site and the Facilities free from any liens arising from any work performed, materials furnished or obligations incurred by or at the request of User. All persons either contracting with User or furnishing or rendering labor and materials to User shall be notified in writing by User that they must look only to User for payment for any labor or materials. If any lien is filed against the Property, the Tower, the Site or the Facilities as a result of the acts or omissions of User, its employees, agents or contractors or subcontractors, User shall discharge it or bond it off within thirty (30) days after User learns that the lien has been filed. 17. Insurance, Risk of Loss. ----------------------- (a) User's Insurance. Prior to installation of the Facilities and to ---------------- having access to a Site and at all times during the term of a Site Agreement, User shall provide proof of insurance for each individual Site, as outlined below, satisfactory to BellSouth, and maintain the coverages specified below during the term of a Site Agreement and until all Facilities are removed from the Site following termination of a Site Agreement: (i) Commercial General Liability Insurance with limits of not less than $2,000,000 per occurrence and in the aggregate. (ii) Workers' Compensation coverage in the statutory amount. (iii) Employers Liability coverage with limits of not less than $500,000 each accident, $500,000 each employee by disease and $500,000 policy limit by disease. (iv) Automobile Liability for Owned and Non-Owned Autos, Combined Single Limit of $1,000,000. 19 (v) All Risk Insurance with Replacement Value coverage of User's Facilities and personal property located on the Property. (b) BellSouth's Insurance. At all times during the term of a Site --------------------- Agreement, BellSouth shall maintain insurance for such Site as outlined below: (i) Commercial General Liability Insurance with limits of not less than $2,000,000 per occurrence and in the aggregate. (ii) Workers' Compensation coverage in the statutory amount. (iii) Employers Liability coverage with limits of not less than $500,000 each accident, $500,000 each employee by disease and $500,000 policy limit by disease. (iv) Automobile Liability for Owned and Non-Owned Autos, Combined Single Limit of $1,000,000. (v) All Risk Insurance with Replacement Value coverage of the Tower and BellSouth's personal property located on the Property. (c) Additional Insured. BellSouth shall be named as additional ------------------ insured on the policy listed in Section 17(a)(i) above. User shall be named as additional insured on the policy listed in Section 17(b)(i) above. Additionally, each party shall obtain a waiver of subrogation from its insurer on the policies listed in Section 17(a)(i) and Section (b)(i) above. BellSouth and User may satisfy this requirement by obtaining appropriate endorsements to any master or blanket policy of liability insurance User or BellSouth, as applicable, may maintain. No policy may be cancelable or subject to reduction of coverage except after thirty (30) days prior written notice to BellSouth or User. (d) Third Parties. User and BellSouth shall require their respective ------------- contractors and subcontractors to `carry workers' compensation insurance and adequate liability insurance in conformity with the minimum requirements listed above. (e) Risk of Loss; Limitation of Liability. Notwithstanding anything ------------------------------------- herein to the contrary, each party shall bear the risk of loss of or damage to the respective personal property during the term of each Site Agreement except to the extent caused by the negligence or willful misconduct of the other party. Neither party shall be liable for any damage to the other party's personal property except to the extent caused by a party's negligence or willful misconduct. Notwithstanding anything herein to the contrary, the parties shall not be liable for any consequential or incidental damages incurred by the other party due to any malfunction, vandalism, acts of God (including, without limitation, lightning, wind, rain, hail, fire or storms) or any other damage resulting from any reason. In the event the Tower or other portions of the Site are destroyed or so damaged as to be unusable, BellSouth or User shall be entitled to elect to cancel and terminate the Site Agreement, or in the alternative may elect to restore the Site, in which case User and BellSouth shall remain bound hereby but shall be entitled to an abatement of rent during the loss of use, if the User or BellSouth has not elected to cancel the Site Agreement. In no event shall the leasehold or 20 other interest created by the Site Agreement be specifically enforceable and in no event shall either BellSouth or User be responsible to any party for consequential damages, lost business opportunities, profits or market share. (f) Removal of Facilities. User's obligation to provide the insurance --------------------- coverages set forth in this Section 17 shall survive the expiration or termination of the Site Agreement until the User's Facilities are removed from the Property. 18. Indemnification. User does hereby agree to indemnify and save --------------- BellSouth harmless from any and all claims, liabilities, demands, causes of action, losses, damages, orders, judgments, penalties, costs and expenses, including without limitation, reasonable attorneys fees and costs (i) for property damage or personal injuries or death caused by the negligence or willful misconduct of User, User's agents, employees, and contractors arising out of User's occupancy of the Site or the installation, maintenance, operation and removal of the Facilities, or (ii) resulting from the User's breach of any term or condition of this MSA or a Site Agreement. BellSouth does hereby agree to indemnify and save User harmless from any and all claims, liabilities, demands, causes of action, losses, damages, orders, judgments, penalties, costs and expenses, including without limitation, reasonable attorneys fees and costs (i) for property damage or personal injuries or death caused by the negligence or willful misconduct of BellSouth, BellSouth's agents, employees, and contractors arising out of BellSouth's occupancy of the Site or the installation, maintenance and operation of the Facilities, or (ii) resulting from BellSouth's breach of any term or condition of this MSA or a Site Agreement. The obligations to indemnify and hold harmless set forth in this Section shall survive the expiration or termination of this MSA and each respective Site Agreement. 19. Default. ------- (a) User's Default. Each of the following shall be considered a -------------- default of a Site Agreement by the User: (i) The failure to pay any rent or other charges required pursuant to this MSA and the Site Agreement within thirty (30) days after receipt of BellSouth's written notice of such failure; (ii) The failure to cure, within (30) days after receipt of BellSouth's written notice thereof, any breach of any other term of this MSA or the Site Agreement, provided, however, that if such breach is not capable of being cured within such period but User has undertaken efforts to cure such breach, and such breach is capable of being cured, such thirty (30) day period shall be extended for so long as User is diligently attempting in good faith, to cure such breach, not to exceed an additional thirty (30) calendar days (except for promises relating to interference as set forth in Section 13 (b) hereof); (iii) Abandonment of the Site ("Abandonment" being defined as user not using the Site for sixty (60) consecutive days); (iv) The failure of User to eliminate interference problems as set forth in Section 13(b); or 21 (v) If (a) User gives notice to any governmental body of its insolvency or pending insolvency or makes an assignment for the benefit of creditors or takes any other similar action for the protection or benefit of its creditors, or files an answer admitting the material allegations of, or consenting to, or defaults in answering any pleading filed with respect to the commencement of any case or proceeding respecting User under any bankruptcy or insolvency law, or (b) any order for relief is entered against User in any case in bankruptcy, any order, judgment or decree is entered against User by a court of competent jurisdiction appointing a receiver, trustee, custodian or liquidator of User or of all or a substantial part of its assets, and such order, judgment, or decree continues unstayed and in effect for a period of ninety (90) consecutive days, or any proceeding for the reorganization of a party under, or for an arrangement under, any bankruptcy or insolvency law applicable to User is commenced whether by or against User and not dismissed within ninety (90) days from commencement thereof. Upon default of a Site Agreement by User, in addition to all other remedies provided at law or in equity, BellSouth may, at its option: (aa) elect to remove all of the Facilities by legal process, thereby terminating the Site Agreement, and store the Facilities at User's expense, payable upon demand by BellSouth. (bb) elect to treat the Site Agreement in full force and effect and shall be entitled to collect the rent provided for hereunder. Upon the termination of a Site Agreement pursuant to Section (aa) above, the parties hereto shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement except for indemnity obligations, including without limitation, environmental indemnity and tax obligations, any obligations arising prior to the date of termination, and User's obligation to remove its Facilities from the Property. (b) BellSouth's Default. Each of the following shall be considered a ------------------- default of a Site Agreement by BellSouth: (i) The failure to cure, within (30) days after receipt of User's written notice thereof, any breach of any other term of this MSA or the Site Agreement, provided, however, that if such breach is not capable of being cured within such period but BellSouth has undertaken efforts to cure such breach, and such breach is capable of being cured, such thirty (30) day period shall be extended for so long as BellSouth is diligently attempting in good faith, to cure such breach, not to exceed an additional thirty (30) calendar days (except for promises relating to interference by a Subsequent User as set forth in Section 14 (e) which must be cured within the time frame set forth in Section 14 (e) and except for any breach of the Master Lease/License which must be cured within the time frames set forth in the Master Lease/License); or (ii) The failure of BellSouth to eliminate interference problems as set forth in Section 14 (e). Upon default of a Site Agreement by BellSouth, in addition to all other remedies provided at law or in equity, User may, at its option: 22 (aa) elect to cure BellSouth's default, in which event User shall have the right to offset any and all reasonable costs incurred in curing BellSouth's default against any rent or other amounts due BellSouth; or (bb) elect to terminate the Site Agreement as of the date of the default and to recover from BellSouth all damages (except those for which BellSouth is not liable under the terms of this MSA) incurred by User as a result of such default. Upon such termination, the parties hereto shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, obligation to pay damages, and User's obligation to remove the Facilities from the Property. 20. Termination. ----------- (a) Termination of Site Agreement. ----------------------------- (i) Termination by User. Notwithstanding anything to the ------------------- contrary contained in this MSA, User shall be entitled to terminate a Site Agreement after the Commencement Date, with written notice to BellSouth in the event: (a) any Approval is canceled, expires, lapses, or is otherwise withdrawn or terminated through no fault of the User; or (b) any notice by BellSouth of relocation of User's Facilities pursuant to Section 9 hereof is unacceptable to User. Any such termination by User shall be effective thirty (30) days after receipt of written notice by BellSouth. Upon such termination, the Site Agreement shall terminate and be of no further force and effect, and except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, and User's obligations to remove the Facilities from the Property, the parties hereto shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement. (ii) Termination by BellSouth. ------------------------ (a) In the event BellSouth's right to occupy the Property is terminated at any time following execution of a Site Agreement as a result of the termination or expiration of the Master Lease/License, the Site Agreement shall automatically terminate upon the effective termination date of the Master Lease/License and be of no further force and effect, and except for any indemnity obligations and User's obligation to remove the Facilities from the Property, the parties hereto shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement. It is specifically understood that BellSouth is under no obligation to extend the term of the Master Lease/License, irrespective of the term stated in the Site Agreement. The applicable Site Agreement shall expire upon the expiration or termination of the applicable Master Lease/License 23 (b) In the event BellSouth needs additional capacity at a Site for its equipment, BellSouth may terminate a Site Agreement as provided in Section 9 hereof. In the event User refuses to lease, sublease, license or sublicense, as applicable, a Reciprocal Site to BellSouth, for reasons unrelated to User's capacity, zoning, permits, licenses and other required approvals, or environmental issues with respect to such Reciprocal Site, BellSouth may elect to terminate any existing Site Agreement in the same geographic market as the proposed Reciprocal Site refused by User, effective thirty (30) days after receipt by User of written notice. Upon termination of any Site Agreement, such terminated Site Agreement shall be of no further force and effect and the parties hereto shall be released from all duties, obligations, liabilities, and responsibilities under the terminated Site Agreement, except for indemnity obligations, User's obligation to remove the Facilities from the terminated Site, and User's obligations set forth in Section 13 (h) hereof. In the event User does not remove its Facilities from the terminated Site as provided in Section 9 or Section 13 (h) hereof, as applicable, BellSouth shall have the right to remove and store User's Facilities, at User's expense. 21. Condemnation. If the whole of the Property or Site which are subject ------------ of any Site Agreement or so much thereof as to interfere with the use thereof shall be taken or condemned by any competent authority for any public or quasi- public use or purpose, such Site Agreement shall terminate as of the date when possession is taken. In such event, BellSouth shall be under no liability to User resulting from such condemnation and User shall be entitled to no part of any condemnation award except so much thereof as the condemning authority expressly allocates to that portion of the proceeds directly attributable to the value of User's Facilities on the Tower, its leasehold interest in the Site, and moving or relocation expenses incurred by User. BellSouth shall provide User with notice in writing of any actual or threatened condemnation proceedings promptly after receiving notice thereof. Upon such termination, the parties to the Site Agreement shall be released from all duties, obligations, liabilities and responsibilities under the Site Agreement except for any indemnity obligations, including without limitation, environmental indemnity and tax obligations, and User's obligation to remove the Facilities from the Property. 22. Mortgage by BellSouth. This MSA and each Site Agreement is and shall --------------------- be subject to a security interest or mortgage which might now or hereafter constitute a lien upon the Site. This MSA and each Site Agreement is and shall be subject and subordinate in all respects to any and all such mortgages on the Site and to all renewals, modifications, consolidations, replacements and extensions thereof. In the event any proceedings are brought for foreclosure or in the event of the exercise of the power of sale under any mortgage covering any Site, the User shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the lessor/licensor, as applicable, under this MSA and the applicable Site Agreement(s); provided that so long as the User is not in default hereunder, this MSA and the applicable Site Agreement(s) shall remain in full force and effect, and User's use and occupancy pursuant to this MSA and applicable Site Agreements shall not be disturbed. 23. Entirety. This MSA and Site Agreement, including all Schedules and -------- Exhibits hereto and thereto, constitute the entire agreement between BellSouth and User and any modification to the MSA or Site Agreement, any Schedule or Exhibits hereto or thereto, must, in order to be effective, be in writing, signed by authorized representatives of each party. 24 24. Waiver. Failure or delay on the part of either party to exercise any ------ right, power, privilege or remedy hereunder shall not operate as a waiver thereof; nor shall any single or partial exercise of any right under this MSA of under a Site Agreement preclude any other or further exercise thereof or the exercise of any other right. 25. Binding Effect. This MSA and the Site Agreements shall extend to and -------------- bind the heirs, personal representatives, successors, permitted assigns, or its successors in interest of the parties hereto. 26. Governing Law. This MSA and each Site Agreement and performance ------------- hereunder and thereunder shall be governed, interpreted, construed and regulated by the laws of the state where the Property and Site are located. 27. Notice. All notices hereunder shall be deemed validly given if sent ------ by certified mail, return receipt requested, or with a nationally recognized courier which provides notice of receipt, postage fully prepaid, addressed as follows, or to such other addresses as may be given from either party in writing to the other: BellSouth: BellSouth Personal Communications, Inc. 3353 Peachtree Road, N.E., Suite 300 Atlanta, GA 30326 Attn: Real Estate Manager with a copy to: BellSouth Personal Communications, Inc. 3353 Peachtree Road, N.E., Suite 400 Atlanta, GA 30326 Attn: Legal Department User: AirGate Wireless, LLC 4201 Congress Street, Suite 400 Charlotte, NC 28209 Attn: Chief Operating Officer with a copy to: AirGate Wireless, LLC 230 Peachtree Street, Suite 1700 Atlanta, GA 30303 Attn: Legal Department 28. Headings. Section headings in this MSA and in each Site Agreement are -------- included for the convenience of reference only and shall not constitute a part of this MSA or the Site Agreement for any other purpose. 25 29. Brokerage. User warrants and represents to BellSouth that it has not --------- dealt with a real estate agent or broker with respect to this MSA or any Site Agreement, and shall hold BellSouth harmless against all claims by any real estate agent or broker claiming a commission hereunder or thereunder on behalf of User. BellSouth warrants and represents to User that except for GlobalComm, Inc., it has not dealt with a real estate agent or broker with respect to this MSA or any Site Agreement, and shall hold User harmless against all claims by any real estate agent or broker claiming a commission hereunder or thereunder on behalf of BellSouth. 30. Memorandum of Lease. At the request of User, BellSouth hereby agrees ------------------- to execute a memorandum or short form of lease (a "Memorandum of Lease"), in form satisfactory for recording, and such Memorandum of Lease may be filed of record by the User, at User's sole cost, including taxes or assessments incurred in connection therewith. The parties understand and agree that this MSA and the Site Agreements shall not be recorded of record. User agrees to prepare, execute and record, at its expense, a release, within thirty (30) days of expiration or termination of a Site Agreement. In the event User fails to do so, BellSouth has a contractual right as User's agent for this limited purpose to prepare, execute and record such release and User shall reimburse BellSouth, upon demand, for all expenses, including attorney fees and filing fees, incurred in connection therewith. 31. Counterparts. This MSA and each Site Agreement may be executed in any ------------ number of counterparts, each. of which shall be an original, but all of which together shall constitute but one instrument. 32. Authority. Each party hereby represents and warrants to the other --------- that all necessary corporate authorizations required for execution and performance of this MSA and each Site Agreement have been given and that the undersigned officer is duty authorized to execute this MSA and each Site Agreement and bind the party for which it signs. 33. Severability. If any term, covenant, condition or provision of this ------------ MSA or the Site Agreement or any application hereof or thereof shall, to any extent, be invalid or unenforceable, the remainder of this MSA and each Site Agreement shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law. [Remainder of page intentionally left blank.) 26 IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first above written. BellSouth: ---------- BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership (SEAL) By: BellSouth Personal Communications, Inc., a Delaware corporation, its general partner By: /s/ Bill C. Mayberry ----------------------------------- Name: Bill C. Mayberry -------------------------------- Title: Asst. Vice President-Real Estate -------------------------------- Attest: /s/ Mark Van Dyke -------------------------------- Name: Mark Van Dyke -------------------------------- Title: Asst. Secretary -------------------------------- [AFFIX CORPORATE SEAL] BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware corporation By: [sig] -------------------------------------- Name: Bill C. Mayberry ------------------------------------ Title: Asst. Vice President-Real Estate ----------------------------------- Attest: [sig] ---------------------------------- Name: Mark Van Dyke ----------------------------------- Title: Asst. Secretary ----------------------------------- [AFFIX CORPORATE SEAL] 27 IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first above written. User: ----- AIRGATE WIRELESS, L.L.C. a Delaware limited liability company (SEAL) By [sig] --------------------------------- Name: W. Chris Blane -------------------------------- Title: Manager ------------------------------- Witness: [sig] ----------------------------- Name: Elizabeth A. Prothero -------------------------------- Title: ------------------------------- STATE OF GEORGIA ) ) FULTON COUNTY ) I, a Notary Public for said County and State, do hereby certify that Mark ---------- Van Dyke personally appeared before me this day and acknowledged that - ------------- he/she is Asst. Secretary of BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware corporation, individually and as general partner of BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership, and that by authority and as the act of the corporation, individually and on behalf of the partnership, the foregoing instrument was signed in its name by its Asst. Vice President, sealed with its corporate seal, and attested by him/her as its Asst. Secretary. [sig] ------------------------------- Notary Public, State of Georgia My Commission Expires: 4/1/02 [NOTARIAL SEAL] STATE OF GEORGIA ) ) FULTON COUNTY ) I, a Notary Public for said County and State, do hereby certify that H. Chris ---------- Blane , a manager of AIRGATE WIRELESS, L.L.C., a Delaware limited liability - ------- company personally appeared before me this day and acknowledged the due execution of the foregoing instrument on behalf of said limited liability company. [sig] ------------------------------- Notary Public, State of Georgia My Commission Expires: FEB. 12, 2001 [NOTARIAL SEAL] FIRST AMENDMENT TO MASTER SITE AGREEMENT ---------------------------------------- THIS FIRST AMENDMENT TO MASTER SITE AGREEMENT ("Amendment") is made as of the 26 , day of March , 1999 by and between BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership, BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware corporation, each doing business as BELLSOUTH MOBILITY DCS, and their respective BellSouth Affiliates, successors and assigns (hereinafter collectively referred to as "BellSouth") and AIRGATE WIRELESS, L.L.C., a Delaware limited liability company ("LLC"), AIRGATE WIRELESS, INC., a Delaware corporation ("AirGate"), AGW LEASING COMPANY, INC., a Delaware corporation ("AGW"), and their respective successors and permitted assigns (AirGate and AGW sometimes hereinafter collectively referred to as the "User"). This Amendment is further executed by SPRINTCOM, INC., a Kansas corporation ("SprintCom"), to evidence their consent and agreement hereto, in accordance with certain provisions hereof. WITNESSETH: THAT WHEREAS, BellSouth and LLC are parties to a Master Site Agreement dated the 6th day of August, 1998 (the "MSA"); and WHEREAS, BellSouth and User wish to amend certain terms and provisions of the MSA. NOW THEREFORE, for the mutual promises herein contained and other valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, BellSouth and User agree as follows: 1. Capitalized Terms. Capitalized terms contained herein and not ----------------- otherwise defined in this Amendment shall have the remaining set forth in the MSA. 2. Assignment and Assumption. LLC hereby assigns all of its right, title ------------------------- and interest as "User" in and to the MSA and any Site Agreements executed as of this date to AirGate and AGW. AirGate and AGW hereby jointly and severally assume all of LLC's right, title and interest in and to the MSA and any Site Agreements executed as of this date. AirGate and AGW are each parties to the MSA as if they had been original signatories thereto. LLC is hereby released of all obligations and liabilities under the MSA and existing Site Agreements and AirGate and AGW expressly and jointly and severally assumes all such obligations and liabilities. 3. Elimination of First Right Site Concept. Section 2(b) of the MSA is --------------------------------------- deleted in its entirety. Reference in the MSA to First Right Sites shall no longer be applicable to the MSA, except as to Sites which are First Rights Sites for which Site Agreements have already been executed or first rights have been previously exercised. A list of such sites is attached as Exhibit A attached hereto and incorporated herein. 4. Execution of Certain Site Agreements; Commencement Date for Initial ------------------------------------------------------------------- Sites. - ----- (a) User has submitted approximately * Site Applications to BellSouth, for Sites which are referenced in Exhibit B attached hereto and incorporated herein by reference (the "Initial Sites"). User agrees, following the date hereof and in accordance with the terms of this Amendment, to proceed to promptly execute Site Agreements on each of the Initial Sites. (b) User agrees to execute and return Site Agreements on * of the Initial Sites on or before * . (c) User agrees to execute and return Site Agreements on * more of the Initial Sites on or before * . (d) User agrees to execute and return Site Agreements on the remaining * Initial Sites on or before * . (e) The Site Commencement Date for each Initial Site shall be the earlier to occur of the following for the applicable Initial Site: (i) The date when User commences the installation of its Facilities on the Tower for that particular Initial Site; or (ii) Forty-five (45) days from the date of full execution of the Site Agreement for that particular Initial Site. (f) Although the Site Commencement Date for the Initial Sites shall be the dates stated above, the first * Dollars ($ * ) installment of base annual rent for the Initial Sites shall not be due until the earlier to occur of the following: (i) the date when User commences the installation of its Facilities on the Tower for that particular Initial Site (it being understood, however, that User shall make such payment prior to actually beginning work at the Tower); or (ii) * ; or (iii) * (g) It is contemplated that some of the Site Agreements may be executed prior to the completion and approval by User and BellSouth of all structural analysis, site plan/sketch, and tower elevation sketch work. Such work shall be done in a prompt and diligent manner. In the event that the results of any such work demonstrates that the particular Site is not suitable and not functional for its intended purpose, then any party may terminate that Site Agreement prior to the Site Commencement Date and that particular Site Agreement shall terminate and be of no further force or effect. All such work shall be completed prior to the Site Commencement Date, however, if all such work cannot be completed by the Site Commencement Date due to circumstances beyond - --------------- *Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the commission. 2 User's reasonable control, the parties will extend the date by which such work shall be completed for a reasonable period of time. BellSouth shall notify User of any such unsatisfactory results promptly upon learning of the results and any Site Cost Reimbursement Amount paid for such Site by User shall be credited toward its replacement as described in Section 4(h) below. User agrees to immediately authorize the commencement of all such work. (h) User acknowledges that it is contractually obligated to enter into all * Site Agreements referenced above within the time frames referenced above and to make the payment of the Site Cost Reimbursement Amount as described below, subject to the possible termination of Site Agreements under Section 4(g) of this Amendment. If any Site Agreements for Initial Sites are terminated pursuant to Section 4(g) of this Amendment, User shall submit or designate applications for additional Sites (which Sites shall be subject to the reasonable approval of SprintCom, which approval or disapproval shall be granted by SprintCom within five (5) business days of SprintCom's receipt of a request) that shall become Initial Sites under this Amendment up to an aggregate number of Initial Sites not to exceed * . In such event, any Site Cost Reimbursement Amount or other charges previously paid shall be credited toward the replacement Site. Without limiting BellSouth's remedies in the event of a failure of User to execute such Site Agreements, BellSouth shall be entitled to retain the Site Cost Reimbursement Amount. (i) User acknowledges and agrees that all Initial Sites not terminated under Section 4(g) of this Amendment shall become fully operational by User as telecommunication facilities for the transmission and receipt of wireless communications not later than * . The failure of User to meet the foregoing date shall constitute an event of default for the applicable Site Agreement. 5. Modification to Site Cost Reimbursement Amount Process. Section 5(c) ------------------------------------------------------ of the MSA is deleted in its entirety and replaced with the following: (c) Site Cost Reimbursement Amount. ------------------------------ (i) User shall pay a one-time site cost reimbursement amount ("Site Cost Reimbursement Amount") to BellSouth, paid by User to BellSouth not later than the execution and delivery of the Site Agreement (expect as provided in Section 5(c)(ii) below). Except in certain circumstances, as set out herein, the Site Cost Reimbursement Amount will not exceed [*] Dollars ($ [*] ) per Site except for unusual Sites which, as a result of peculiar characteristics required a greater capital expenditure by BellSouth (and except as provided in Section 5(c)(ii) below). BellSouth and User acknowledge and agree that the Site Cost Reimbursement Amount reflects an equitable sharing of the capital costs incurred by BellSouth with respect to the construction of the Tower and the ability of User to locate its Facilities thereon. Consequently, the Site Cost Reimbursement Amount is independent of and in addition to, and not in substitution or reduction of, all or any part of the Base Rent specified in such Site Agreement, or the fair market value of the rent applicable to such Site. In the event that User finds it necessary to structurally enhance or otherwise to upgrade the Tower prior to locating on the Tower, any such enhancement or upgrades shall be subject to BellSouth's prior written approval and the costs which User incurs in performing - --------------- *Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the commission. 3 said upgrade shall be applied and credited to the Site Cost Reimbursement Amount for that particular Site. (ii) * 6. Modification of Expense Amount. * ------------------------------ 7. Assignment and Assumption Involving SprintCom. The terms of this --------------------------------------------- Section shall apply for each Site Agreement entered into from and after the date hereof as well as User's contractual obligations described herein; provided, SprintCom shall not be liable for any obligations or liabilities arising prior to, or based on actions prior to, the date of assignment or assumption under this Section 7, except for the obligation of User to make all rent and Site Cost Reimbursement Amount payments under this Amendment and to execute, commence and maintain the Site Agreements in the manner provided in this Amendment. All Site Agreements for all Initial Sites and the MSA (to the extent the MSA governs the applicable Site Agreements) shall be automatically, and without the need for a further writing, assigned by User to SprintCom and assumed by SprintCom, in the event that: (a) [ * ] or (b) there is an event of termination under the terms of that certain "Management Agreement between SprintCom, Inc. and AirGate Wireless, LLC" dated July 22, 1998 as assigned or amended, that results in the transfer of User's assets, including the Initial Sites, to SprintCom (it being understood that in the event of any such default, SprintCom shall immediately provide BellSouth with written notice and BellSouth shall be entitled for all purposed to rely upon such written notice). SprintCom's obligation and agreement to assume such Site Agreements of User (not terminated under Section 4(g) of this Amendment) following the occurrence of either of the items described in subparagraphs (a) and (b) above shall expire upon the occurrence of each of (i) the Commencement Date for such Site Agreement having occurred; and (ii) User having paid the first annual installment of base rent for the applicable Site Agreement; and (iii) such applicable Site becoming fully operational by User and a telecommunications facility for the transmission and receipt of wireless communications. Notwithstanding the preceding sentence, condition (iii) shall no longer apply following the occurrence of (i) no more than [ * ] of the Initial Sites being fully operational by User as telecommunications facilities for the transmission and receipt of wireless communications and (ii) User having obtained necessary and sufficient financing such that it can provide reasonable evidence to BellSouth that User has the financial resources to make annual rental payments on the Initial Sites for not less that [ * ] SprintCom is executing this Amendment to consent to the provisions of this Section and to be bound hereunder. SprintCom acknowledges that it has had the opportunity to review the MSA and agrees to the provisions of this Amendment and this Section. Upon such assignment and assumption, SprintCom and BellSouth each agree to execute such additional documentation as may be reasonably requested by either party to further evidence such assignment and assumption. In the event that such assignment and assumption occurs, SprintCom shall have all rights, privileges and obligations under the MSA as amended herein as the MSA relates - --------------- *Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the commission. 4 to the applicable Site Agreements. Following any such assignment and assumption, the applicable Site Agreements shall continue to be governed by the terms of this MSA rather than the terms of the master agreement currently in place between BellSouth and SprintCom. It is expressly understood that SprintCom's obligations and agreements set forth above shall continue to be binding upon SprintCom irrespective of any insolvency proceedings by User, including (without limitation) any rejection of any or all Site Agreements by User in any insolvency proceedings. It is agreed that SprintCom shall assume any Site Agreements whether accepted by User (and then subsequently assigned by virtue of a User default described above) or rejected by User in a bankruptcy proceeding. Notwithstanding the preceding sentence, SprintCom shall not be obligated to assume any Site Agreements during the period of User's insolvency proceeding as established by the bankruptcy courts in which User has the option of accepting or rejecting the applicable Site Agreements. Nonetheless, so long as SprintCom's rights herein continue, during the continuing period of such bankruptcy proceeding of User, SprintCom following its assumption of the contractual obligations of User under this Amendment agrees that it shall immediately cure any rent payment default of User under this Amendment, the MSA, or any applicable Site Agreements which default is continuing on or after [ * ]. 8. Assignment. Section 16(a) of the MSA is amended to provide that User ---------- shall have the right to assign its rights in the MSA and the Site Agreements, in whole or in part, to SprintCom without the further consent of BellSouth. Section 16(b) of the MSA is amended to provide that BellSouth shall have the right to assign its rights in the MSA and the Site Agreements, in whole or in part, to any party agreeing in writing to be bound to the terms thereof without the further consent of User or SprintCom. In the event of any such assignment, notice shall be given to the other party. 9. Tower Enhancement. In the event that User and BellSouth find it ----------------- necessary to structurally enhance or otherwise to upgrade the Tower prior to User's locating on the Tower, any such proposed enhancement shall be subject to BellSouth's prior approval in BellSouth's sole discretion. In the event that BellSouth consents to the upgrade, the cost for such upgrade shall be shared as between BellSouth and User as follows: (i) the first [ * ] Dollars ($ [ * ] ) shall be paid by User; (ii) for all amounts in excess of [ * ] Dollars ($ [ * ] ), such amounts shall be shared equally between User and BellSouth. The manner and style or upgrade, including the parties performing the upgrade, shall be subject to BellSouth's approval, which approval shall not be unreasonably withheld. User shall receive a credit of up to [ * ] Dollars ($ [ * ] ) toward the first annual installment of base rent for User's costs associated with such tower enhancement. 10. AGW as Subtenants. It is understood that AGW is a wholly owned ----------------- subsidiary of AirGate and that AGW may be the subtenant of the various Site Agreements. The obligations of User under the MSA and this Amendment are joint and several obligations of AirGate and AGW. AGW has had the opportunity to review the MSA (as amended herein) and agrees to be bound by, and agrees that it is bound by, the terms thereof. AGW covenants that is a corporation in good standing and is fully authorized to enter this Amendment. - -------------- [ * ] Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the commission. 5 11. Modification of Conditions Precedent. As it relates to the Initial ------------------------------------ Sites only, Section 5(b) of the MSA is deleted in its entirety and replaced with the following (as it relates to all Sites other than Initial Sites, Section 5(b) remains unchanged) (section references are to the MSA): (b) Conditions Precedent to Site Commencement Date. Each Site ---------------------------------------------- Agreement is further contingent upon User being able to satisfy the following conditions prior to the Site Commencement Date, as defined in the Site Agreement: (i) Approvals. User obtaining, after the Execution Date of the --------- Site Agreement, all certificates, permits, licenses and other approvals that may be require by any federal, state or local authorities (the "Approvals") to permit User's intended use of the Leased Space. BellSouth shall cooperate, at User's cost, with User in its effort to obtain such Approvals. In the event that User notifies BellSouth that (aa) any application for an Approval is rejected following due and diligent efforts by User to obtain the same, or (bb) any application for Approval is not likely to be obtained or approved, as determined in User's reasonable discretion after due and diligent efforts by User to obtain the same, the Approvals shall be deemed to not have been obtained by User. In the event no such notification is received by BellSouth prior to the Commencement Date, this condition shall be deemed satisfied. (ii) Radio Frequency Propagation Test. User determining, in -------------------------------- User's reasonable discretion, that the results of any radio frequency propagation tests are satisfactory, such that User is able to use the Leased Space for User's intended use. (iii) Utilities and Access. User determining, in User's -------------------- reasonable discretion, that (aa) telephone and electric utilities are available at the Leased Space or Tower of sufficient capacity to accommodate User's Facilities and (bb) ingress and egress is available to and from the Leased Space and to and from a publicly dedicated road. (iv) Tower Capacity. User determining in User's reasonable -------------- discretion, on a Tower analysis satisfying the requirements of Section 10 (ii) hereof that the Tower is of sufficient capacity to accommodate the load requirements of User's Facilities. (v) Title. User determining in User's reasonable discretion that ----- the status of title as to the Leased Space and easements granted herein are acceptable to User. (vi) Hazardous Substances. User determining in User's reasonable -------------------- discretion that the Leased Space and Property are free of all Hazardous Substances, as defined in Section 15(b) hereof. If any one (1) of the conditions set forth above will not be satisfied, User shall provide BellSouth with evidence satisfactory to BellSouth as to the nature of the failure. In the event that such evidence is reasonably approved by BellSouth, User shall have the right to terminate the Site Agreement by giving BellSouth written notice thereof, which notice must be received on or before the Site Commencement Date. If User elects to terminate the Site Agreement, the Site Agreement shall terminate as of the date BellSouth receives such notice from User and neither BellSouth nor User shall have any further obligation under this Site Agreement except for any indemnity obligations and User's obligation to remove its Facilities from the Property. 6 12. Full Force and Effect. Except as modified herein, the MSA remains --------------------- unchanged and in full force and effect and applies to the Initial Sites subject to this Amendment. 13. Authority. Each party hereby represents, covenants, and warrants to --------- the other that all necessary authorizations required for the execution and performance of this Amendment, the MSA as amended, and the Site Agreements have been given and that the undersigned officer is duly authorized to execute this Amendment and each Site Agreement and bind the party for which it signs. 14. Binding Effect. This Amendment shall be binding on the parties -------------- hereto, as well as their permitted successors and assigns. 15. Additional Provisions. This Amendment and the MSA cannot be modified --------------------- except by a written agreement executed by BellSouth, User and SprintCom. The headings and captions contained in this Amendment are for convenience purposes only and shall not be considered in construing or interpreting the provisions of this Amendment. This Amendment contains all agreements, promises, and understandings of the parties as to the subject matter herein contained, and no verbal agreements, promises or statements by either party shall be binding upon the parties as to the subject matter herein. This Amendment may be executed in several counterparts, each of which shall be treated as an original. This Amendment has been negotiated by BellSouth and User, each had a hand in the drafting of this Amendment, and there shall be no presumption in favor of either party based upon the party drafting this Amendment. 16. AGW and AirGate Authority. INTENTIONALLY OMITTED. ------------------------- 7 17. BellSouth Notice. Section 27 of the MSA is amended to provide that ---------------- BellSouth's notice address shall be as follows: BellSouth Personal Communications, Inc. 1100 Peachtree Street, N.E., 8th Floor Atlanta, Georgia 30309 Attn: Real Estate Manager with a copy to: BellSouth Personal Communications, Inc. 1100 Peachtree Street, N.E., Suite 910 Atlanta, Georgia 30309 Attn: Legal Department 18. Sealed Instrument. This Amendment is executed under seal. The ----------------- parties agree, however, that at the request of either party, the Site Agreements need not be executed under seal. 19. SprintCom Notice. For the purposes of this Amendment, SprintCom's ---------------- notice address shall be as follows: SprintCom, Inc. 2330 Shawnee Mission Parkway Westwood, Kansas 66205 Attn: Corporate Secretary with a copy to: SprintCom, Inc., 8140 Ward Parkway Kansas City, Missouri 64114 Attn: Vice President Law, General Business and Technology Remainder of This Page Intentionally Left Blank Signature Page Attached Hereto and Incorporated Herein by Reference 8 Counterpart Signature Page to First Amendment to Master Site Agreement ---------------------------------------------------------------------- IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal the day and year first above written. BELLSOUTH: BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership (SEAL) By: BellSouth Personal Communications, Inc., a Delaware corporation By: __________________________________ Its: __________________________________ Date: __________________________________ Attest: _____________________________ Assistant Secretary [CORPORATE SEAL] Witness: __________________________________ __________________________________ BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware corporation By: __________________________________ Its: __________________________________ Date: __________________________________ Attest: _____________________________ Assistant Secretary [CORPORATE SEAL] Witness: __________________________________ __________________________________ 9 Counterpart Signature Page to First Amendment to Master Site Agreement ---------------------------------------------------------------------- IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal the day and year first above written. LLC: AIRGATE WIRELESS, L.L.C.., a Delaware limited liability company (SEAL) By: __________________________________(SEAL) Its: __________________________________ Date: __________________________________ Witness: _____________________________ _____________________________ 10 Counterpart Signature Page to First Amendment to Master Site Agreement ---------------------------------------------------------------------- IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal the day and year first above written. USER: AGW LEASING COMPANY, INC., a Delaware corporation By: __________________________________ Its: __________________________________ Date: __________________________________ Attest: ________________________ [_____] Secretary [CORPORATE SEAL] Witness: _____________________________ _____________________________ AIRGATE WIRELESS, INC., a Delaware corporation By: __________________________________ Its: __________________________________ Date: __________________________________ Attest: ________________________ [_____] Secretary [CORPORATE SEAL] Witness: _____________________________ _____________________________ 11 Counterpart Signature Page to First Amendment to Master Site Agreement ---------------------------------------------------------------------- IN WITNESS WHEREOF, the undersigned have executed this Amendment under seal the day and year first above written. SPRINTCOM: SPRINTCOM, INC., a Kansas corporation By: __________________________________ Its: __________________________________ Date: __________________________________ Attest: ________________________ Assistant Secretary [CORPORATE SEAL] Witness: _____________________________ _____________________________ 12 EX-10.6 5 SERVICES AGREEMENT EXHIBIT 10.6 SERVICES AGREEMENT This Agreement is entered into on this 1st day of August, 1998 by and between AirGate Wireless, LLC ("AirGate" or "Company"), a Delaware limited liability company, with a location at 4201 Congress Street, Suite 440, Charlotte, NC 28209 and COMPASS Telecom Services, LLC ("COMPASS" or "Service Provider"), a Georgia limited liability company with a location at 1230 Johnson Ferry Road, Suite F-10, Marietta, Georgia 30068. WHEREAS, AirGate has entered into a Sprint PCS Management Agreement with SprintCom, Inc. to construct and operate a CDMA PCS network (the "PCS Network") in a Service Area that consists of 20 Basic Trading Areas in North Carolina, South Carolina and Georgia; WHEREAS, the Sprint Agreement imposes specific technical and operational standards for the PCS network; WHEREAS, the Sprint Agreement includes a Build Out Plan that requires AirGate to launch its PCS network to meet agreed to deadlines set forth in the Build Out Plan; WHEREAS, AirGate has selected Compass to serve as its construction and project manager in design and construction of the PCS network; and WHEREAS, COMPASS has provided certain Services to the Company prior to the execution of this Agreement and has received payment therefor towards the Contract Price. NOW, THERFORE, in consideration of the mutual promises, covenants, and conditions herein contained, the Company and Service Provider agree as follows: 1. DEFINITIONS. ----------- The following terms shall have the meanings set forth below for purposes of this Agreement: "Additional Services" means those services not included on Exhibit A to this Agreement that are governed by a Supplemental Statement of Services agreed to in writing by the Company and Service Provider. "Build Out Plan" means the Build Out Plan attached as Exhibit 2.1 to the Sprint Agreement. "Contract Price" means the fixed price for Services provided under this Agreement set forth in Section 3.1. "Documentation" means all or any portion of the following: database summaries, flow charts, program listings, and other supporting or programming materials generated as part of this Agreement. "PCS Network" means the CDMA PCS network to be constructed by the Company pursuant to the Sprint Agreement. "Services" means the tasks, performances, reports, services, Documentation, and other items which are to be furnished by the Service Provider to the Company pursuant to this Agreement, including all writings, inventions, improvements or discoveries, whether or not copyrightable or patentable, which are written, conceived, made or discovered by Service Provider and are in any way related to the performance of this Agreement. "Sprint Agreement" means the Sprint PCS Management Agreement between SprintCom, Inc. and AirGate Wireless, L.L.C. dated July 22, 1998. "Sprint Standards" means the standards and program requirements set forth in the Sprint Agreement. 2. Services -------- 2.1 Services to be Provided. Service Provider will provide Company with ------------------------ the Services set forth in the Statement of Services attached to this Agreement as Exhibit A (Program Management, Construction Management, Material Management & Fixed Network). All Services will be provided on a full-time basis in a professional manner and will be of high grade, nature and quality. 2.2 Additional Services. Services not included in an exhibit hereto shall -------------------- be considered Additional Services governed by a supplemental statement of services document (as provided for in Exhibit A) agreed to in writing by both parties before the performance of any Additional Services. 3. Payment ------- 3.1 Contract Price. Company shall pay Service Provider for the Services a --------------- fixed price of [*] . All of the Service prices set forth in Exhibit A, including the prices for Additional Services, shall be fixed for the term of the Agreement. 3.2 Included Expenses. All travel, transportation, and per diem expenses ------------------ are included within the Contract Price. Other expenses such as, but not limited to, outside printing, overnight _______________ * Portions of the specified exhibit has been omitted pursuant to a request for confidential treatment and filed separately with the Commission. delivery and office connectivity are also included within the Contract Price, but are subject to review and modification during the term of this Agreement. Any modifications that result in fees to the Company in excess of the Contract Price must be approved in advance and in writing by the Company. 3.3 Additional Expenses. Billing for any additional expense reimbursements -------------------- must be approved by the Company and included along with normal monthly billings for Services. Payment for expenses will be handled in the same manner as described in Paragraph 3.1. 3.4 Credit Towards Contract Price. The Company has made payments to the ------------------------------ Service Provider for Services provided on an interim basis prior to the execution of this Agreement as set forth on Exhibit B. These payments will be credited towards payment of the Contract Price. 3.5 Payment Terms. Service Provider will submit invoices on a monthly -------------- basis for payment of the portion of the Contract Price directly related to the Services provided during the prior month. The charges will be documented and include a detailed listing of Service Provider's time and/or expenses. The Company will pay invoices within thirty (30) days from the date or receipt by the Company. Service Provider shall accept no income, payment or compensation of any kind from any third party in connection with, or related in any way to the provision by such third party of goods or services of any kind to the Company. 3.6 Billing Address. Service Provider will submit invoices to Company at ---------------- the following address: AirGate Wireless, LLC 230 Peachtree Street Suite 1700 Atlanta, GA 30303 Attn: Ed Horner, President & COO 3.7 Payment Address. Payments willl be made to Service Provider at the ---------------- following address, unless otherwise requested by Service Provider: COMPASS Telecom Services, LLC 1230 Johnson Ferry Road, Suite F-10 Marietta, GA 30068 Attn: Matt Prather or JC Massey, Vice President(s) 4. Term ---- 4.1 Term. The term of this Agreement shall be for the period ---- beginning on May 1, 1998 and ending on the earlier of: (1) December 31, 2000; or (2) completion of the Services. 4.2 Renewal. This Agreement may be renewed or extended upon the written -------- agreement of both parties. 4.3 Return of Property and Documentation upon Termination. Upon ------------------------------------------------------ termination of this Agreement, Service Provider will return to the Company all physical property and Documentation in the possession of Service Provider including, but not limited to, all equipment leased or purchased for Service Provider's use during the term of this Agreement. Notwithstanding anything herein to the contrary, any outstanding obligations for Services performed or to be performed hereunder which extends beyond the expiration or termination of the Agreement shall be concluded pursuant to the terms and conditions of this Agreement. 5. Service Provider's Representations and Warranties ------------------------------------------------- The Service Provider makes the following representations and warranties to the Company: 5.1 Due Incorporation and Formation. Service Provider is a limited -------------------------------- liability company duly organized, validly existing and in good standing under the laws of (Georgia). Service Provider is qualified to do business and in good standing in every jurisdiction in which the Services are to be performed. Service Provider has the full power and authority to execute and deliver this agreement and to perform its obligations under this Agreement. 5.2 Authorization of Agreements. The execution, delivery and performance --------------------------- by the Service Provider of this Agreement are within the power of the Service Provider and have been duly authorized by all necessary actions on the part of the Service Provider. This Agreement constitutes the valid and binding obligation of the Service Provider, enforceable in accordance with its terms. 5.3 Valid and Binding Obligation. Service Provider's execution of this ---------------------------- Agreement and Service Provider's performance of its obligations hereunder do not now and will not in the future violate any agreement between Service Provider and any third party, or any obligation of the Service Provider to any third party, including without limitation any non-compete agreement or obligation. 5.4 Litigation. No action, suit, proceeding or investigation is pending ---------- or, to the knowledge of the Service Provider, threatened against or affecting the Service Provider or any of its assets or businesses in any court or before or by any governmental agency that could, if adversely determined, reasonably be expected to have a material adverse effect on the Service Provider's ability to perform its obligations under this Agreement. 5.5 Compliance with Registration and Licensing Requirements. Service -------------------------------------------------------- Provider warrants that Service Provider has complied with all applicable registration and licensing requirements to enable Service Provider to act as an independent contractor under the terms of this Agreement. 5.6 Necessary Skills. Service Provider has the skill necessary to perform ---------------- the Services required pursuant to this Agreement, and all Services provided by Service Provider shall be performed in a professional manner and shall be of a high grade, nature and quality. 5.7 Compliance with Sprint Standards. Service Provider acknowledges that -------------------------------- the Sprint Agreement contains Sprint Standards that the Company must meet in constructing the PCS Network and that failure to meet the Sprint Standards could result in a breach of the Sprint Agreement. Service Provider has reviewed the Sprint Standards and represents that the Services will comply with the Sprint Standards. 5.8 Compliance with Build Out Plan; Time Is of the Essence. Service ------------------------------------------------------ Provider acknowledges that the Sprint Agreement includes the Build Out Plan that obligates the Company to complete construction of the PCS Network, and portions thereof, in specific time frames. Service Provider has reviewed the Build Out Plan and acknowledges that time is of the essence in performance of the Services under this Agreement. 5.9 Subcontractors. Notwithstanding the foregoing, Company acknowledges -------------- that Service Provider will engage certain licensed professionals to perform or assist Service Provider in performing certain services hereunder. 6. Conflict of Interest -------------------- During the term of this Agreement and for a period of twelve (12) months following the expiration or termination of this Agreement, Service Provider shall not disclose to others nor use on its own behalf or on the behalf of any other entity for purposes of competing with Company any ideas, concepts, know- how and techniques developed by Service Provider under this Agreement. Nothing set forth in the preceding sentence is intended to alter or limit any other obligations imposed by the Non-Disclosure Agreement referenced in Section 12.11 7. Indemnification --------------- Each party hereto hereby agrees to indemnify, defend and hold harmless the other party and its officers, directors, employees and agents from and against all claims, damages, losses, liabilities, fines, penalties, costs and expenses (including out-of-pocket expenses and reasonable attorneys fees) arising out of or resulting from any claim, action or other proceeding based upon, relating to or arising from (a) any breach of this Agreement or (b) the negligent acts or omissions or willful misconduct of such party or its employees. Notwithstanding the foregoing, to the extent any agreement entered into between Service Provider and any subcontractor rendering professional services contains a provision entitling the Company to third-party beneficiary status thereunder, Company agrees to satisfy any claims relating to services performed by such persons directly from such person. 8. Termination ----------- 8.1 Breach. Either party may terminate this Agreement immediately upon ------ written notice if the other party is in breach of a material provision or representation and warranty of this Agreement and the breach has not been cured within sixty (60) days after written notice thereof. 8.2 Termination of Sprint Agreement. The Company may terminate this ------------------------------- Agreement on thirty (30) days notice, if the Sprint Agreement is terminated. 8.3 Documentation. In the event of termination of this Agreement for any ------------- reason whatsoever, including the conclusion of Scope of Services identified in Exhibit A, Service Provider shall immediately, at Company's option and request, document in detail the status of the Services that have been terminated and either deliver to Company or dispose of, in accordance with the Company's instructions, any materials relating to the Services, Software, Documentation in progress or within its or any third party's possession. 8.4 Effect of Termination In the event of termination of this Agreement, --------------------- all rights and obligations of the Company for payment for any Services not provided as of the date of termination shall cease. 9. Regulations and Applicable Laws ------------------------------- 9.1 Compliance with Immigration Laws. Service Provider warrants and -------------------------------- represents that it will not allow any unauthorized aliens under the Immigration Reform and Control Act of 1986 or its implementing regulations to perform the Services to be rendered hereunder. Service Provider shall indemnify and hold harmless Company from and against any and all liabilities, damages, losses, claims or expenses (including attorneys' fees) arising out of any breach by Service Provider of this section. 9.2 Compliance with Laws. Service Provider shall, while on Company -------------------- property or performing Services hereunder, comply with all applicable local, state and federal laws and regulations, including, without limitation, laws and regulations under the Occupational Safety and Health Act ("OSHA"). 10. Assignment ---------- 10.1 Assignment by the Company. Company may assign any or all rights and/or ------------------------- obligations arising under this Agreement to any of its parent, subsidiaries or affiliates and to SprintCom, Inc., its successors, affiliates and related parties upon notice to Service Provider. Company may assign any or all rights and/or obligations arising under this agreement to any other party upon the consent of the Service Provider, which consent shall not be unreasonably withheld, conditioned or delayed. Upon such assignment, the Company will be released from any and all obligations under this Agreement. 10.2 Assignment by the Service Provider. Service Provider may of its ---------------------------------- parent, subsidiaries or affiliates upon prior consent of the Company, which consent shall not be unreasonably withheld or delayed. 11. Insurance --------- 11.1 Minimum Levels. Service Provider, at Service Provider's expense, -------------- shall maintain during the term of this Agreement, all insurance and/or bonds required by law or the Agreement, including but not limited to (i) statutory workers' compensation as required by the law of the state in which the work is to be performed and of no less than $500,000 per accident or disease; (ii) employer's liability with limits of at least $500,000 per person, $500,000 per accident/injury and (iii) commercial general liability insurance with limits of at least $1,000,000 per occurrence; (iv) business automobile insurance covering the ownership, maintenance or use of any owned, non-owned or hired automobile with coverage of not less than $1,000,000 combined single limit per accident for bodily injury and property damage liability; (v) umbrella excess liability insurance with a limit of not less than $5,000,000 combined single limit. Service Provider agrees to name the Company as an additional insured under the above coverage. 11.2 Proof of Insurance. Service Provider shall, at Company's request, ------------------ provide to Company certificates of insurance showing adequate proof of the insurance required hereunder. 11.3 Subcontractor Insurance. Service Provider shall also require its ----------------------- agents or subcontractors, if any, who may enter upon Company's premises to maintain the insurance coverage required herein, and at Company's request, furnish to Company adequate proof of such insurance. 11.4 Additional Insured. AirGate agrees to name COMPASS as an additional ------------------ insured on its commercial liability, builder's risk and property liability insurance for the duration of the project. In addition, COMPASS will be named as an additional insured by AirGate's agents, contractors, or subcontractors. 12. MISCELLANEOUS ------------- 12.1 No Agency. Neither party by this agreement makes the other party a --------- legal representative or agent of the party, nor does either party have the right to obligate the other party in any manner, except if the other party expressly permits the obligation by the party. 12.2 Independent Contractors. The parties do not intend to create any ----------------------- partnership, joint venture or other profit-sharing arrangement, employer- employee relationship, or any other relationship other than that expressly provided in this Agreement. 12.3 Responsibility for Taxes. Service Provider shall be solely ------------------------ responsible and the Company shall have no liability for the payment of all taxes, including social security taxes, and any other sums due any government entity as a result of payments made to Service Provider by Company or for which Service Provider may otherwise be liable, and for any health, liability or life insurance Service Provider may hold or acquire. 12.4 Limitation on Damages. Notwithstanding any provisions herein to the --------------------- contrary, neither party shall, under any circumstances be liable for any special, incidental or consequential damages. 12.5 Entire Agreement. This Agreement and the exhibits hereto reflect the ---------------- entire agreement of the parties and supersede all other agreements (excluding the existing Non Disclosure Agreement) or understandings whether written or oral in connection with the subject matter of the Agreement. 12.6 Governing Law. This Agreement shall be construed both as to validity ------------- and performance and enforced in accordance with the laws of the State of Georgia without giving reference to its principles of conflicts of law. 12.7 Attorneys' Fees. In the event of any action at law or equity between --------------- the parties arising out of this Agreement, the prevailing party shall be entitled to recover from the other party all reasonable costs and expenses thereof, including reasonable attorneys' fees and other related costs. 12.8 No Waiver. The failure of either party to insist upon the strict --------- performance of any terms, covenants or conditions of this Agreement at any time, or in any one or more instances, or its failure to take advantage of any of its rights hereunder, or any course of conduct or dealing shall not be construed as a waiver or relinquishment of any such rights or conditions at any future time and shall in no way effect the continuance in full force and effect of all the provisions of this Agreement. 12.9 Specific Performance. The parties agree that damages may be -------------------- inadequate to compensate for the unique losses to be suffered in the event of a breach hereof, and that the damaged party will be entitled, in addition to any other remedy it may have under this Agreement or at law, to seek and obtain injunctive relief and other equitable relief, including specific performance of the terms of this Agreement. 12.10 Marketing. Service Provider shall not advertise, market or otherwise --------- disclose to others any information relating to this Agreement, nor commercially use the Company's trade name or trademarks or those of any of its affiliated companies without Company's prior written consent. 12.11 Confidentiality. This Agreement shall be governed by the terms and --------------- conditions of the Non-Disclosure Agreement executed by the parties and dated February 19, 1998. 12.12 Arbitration. In the event of any dispute between the Service ----------- Provider and the Company as to any matter referred to herein or as to the interpretation of any part of this Agreement, or entitlements arising from or related to this Agreement or as to the calculation of any amounts payable under this Agreement, the parties agree that such dispute will not be referred to any court but will be referred to binding arbitration. At any time a party may submit to the other a written notice to the effect that there exists a matter that requires resolution as between the parties and requiring that such matter be resolved by arbitration (the "Arbitration Notice"). In the period of twenty- one days following the receipt of the Arbitration Notice, the parties will attempt to resolve the dispute. If the dispute is not resolved within that period, each party to the dispute will within the next twenty-one-day period name one arbitrator and those two arbitrators within the next ten days will name a third who will act as chair of the arbitration panel. Once a panel of three arbitrators is appointed, each of the parties will have fifteen days to provide to the arbitrators and to the other party a written statement setting forth its position, with respect to the matter in the Arbitration Notice. The arbitration shall be held in Atlanta, Georgia and governed by the rules of the American Arbitration Association. The arbitrators shall resolve all disputed matters within one-hundred twenty days following their appointment and their decision with respect to all disputed matters shall be final and binding and without appeal and shall be enforceable pursuant to the terms thereof. The costs of any arbitration, including the reasonable fee for the arbitrators, shall be borne by such party or parties, and in such proportions, as shall be determined by the arbitrators. 12.13 Material Change to Business Plan If during the term of this -------------------------------- Agreement, there is a material change to the Company's business plan which requires a reduction in the Services to be provided by the Service Provider, the parties agree to negotiate in good faith to amend this Agreement on terms that reasonably reflect the changes to the business plan. 12.14 Additional Authorizations. Each party agrees to perform all further ------------------------- acts and execute, acknowledge, and deliver any documents that may be reasonably necessary, appropriate or desirable to carry out the intent and purpose of this Agreement. 12.15 Counterparts. This agreement may be executed in any number of ------------ counterparts with the same effect as if both parties had signed the same document. All counterparts will be construed together and will constitute one agreement. 12.16 Separability. In case any provision of this Agreement shall be held ------------ invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions hereof shall not in any way be affected or impaired thereby, but shall, subject to the discretion of such court, remain in full force and effect, and any invalid, illegal or unenforceable provision shall be deemed, without further action on the part of the parties hereto, amended and limited to the extent necessary to render the same valid, legal and enforceable. IN WITNESS WHEREOF the parties execute this Agreement and bind themselves to its terms as of the date of execution of this Agreement. AirGate Wireless, LLC /s/ Ed Horner - ------------------------------ Ed Horner (Date) President & COO COMPASS Telecom Services, LLC COMPASS Telecom Services, LLC /s/ Matt Prather /s/ Jc Massey - ------------------------------ ------------------------------ Matt Prather (Date) JC Massey (Date) Vice President Vice President EX-10.14 6 ASSIGNMENT OF AGREEMENTS WITH SPRINT EXHIBIT 10.14 November 20, 1998 SprintCom, Inc. Sprint Communications Company, L.P. c/o Sprint Corporation 2330 Shawnee Mission Parkway Westwood, KS 66205 Attention: Bill Blessing Sprint Spectrum L.P. 4900 Main Street 3rd Floor Kansas City, MO 64112 Attention: Tom Mateer Re: Assignment of Sprint PCS Management Agreement, Sprint Spectrum Services Agreement and Trademark and Service Mark Agreements from AirGate Wireless, L.L.C. to AirGate Wireless, Inc. Dear Messrs. Blessing and Mateer: Pursuant to Sections 17.15.3(d)(ii) and 17.15.3(e)(i) of the Sprint PCS Management Agreement between SprintCom, Inc. and AirGate Wireless, L.L.C. dated July 22, 1998 (the "Management Agreement"), this letter provides notice that AirGate Wireless, L.L.C. intends to assign the Management Agreement and all related agreements to AirGate Wireless, Inc./1/ Specifically, AirGate Wireless, L.L.C. is assigning all of its obligations, now existing or hereafter arising, and all rights and benefits under the Agreements to AirGate Wireless, Inc. The entity to which the Agreements are being assigned is a newly-formed Delaware corporation, has the same ownership as AirGate Wireless, L.L.C., and will be the "Manager" under the Agreements. The organizational structure set forth on Schedule 13 to the Addendum I to the Management Agreement remains unchanged, except that AirGate Wireless, Inc., rather than AirGate Wireless, L.L.C., will be the Manager under the Agreements. This assignment is being made to separate the ownership of the F-block licenses that AirGate Wireless, L.L.C. presently owns but is in the process of selling, from the assets necessary to operate the Sprint PCS business, and to change the form of the legal organization from a limited liability company to a corporation without changing the ultimate ownership of the Manager. AirGate Wirless, L.L.C. agrees that it will transfer to AirGate Wireless, Inc., no later than February 15, 1999, all of the employees and all of the assets necessary to act as Manager under the - ------------ /1/ For purposes of this letter, the Management Agreement, the Sprint Spectrum Services Agreement and the Trademark and Service Mark Agreements entered into between AirGate Wireless, L.L.C. and SprintCom, Inc., Sprint Spectrum L.P. and Sprint Communications Company, L.P., respectively, and all dated as of July 22, 1998, are referred to collectively as the "Agreements". Agreements. AirGate Wireless, L.L.C. represents and warrants that it is not in default under any of the Agreements. Pursuant to Section 9.14 of the Sprint PCS Services Agreement between Sprint Spectrum L.P. and AirGate Wireless, L.L.C. dated July 22, 1998 (the "Services Agreement"), AirGate Wireless, L.L.C. intends to assign the Services Agreement to AirGate Wireless, Inc. Pursuant to Section 14.1 of the Sprint Trademark and Service Mark License Agreement between Sprint Communications Company, L.P. and AirGate Wireless, L.L.C. dated as of July 22, 1998, AirGate Wireless L.L.C. seeks consent to assign the Sprint Trademark and Service Mark License Agreement to AirGate Wireless, Inc. Pursuant to Section 14.1 of the Sprint Spectrum Trademark and Service Mark License Agreement between Sprint Spectrum L.P. and AirGate Wireless L.L.C. dated as of July 22, 1998, AirGate Wireless L.L.C. seeks consent to assign the Sprint Spectrum Trademark and Service Mark License Agreement to AirGate Wireless, Inc. Please acknowledge your consent to these assignments below. Upon the assignment, SprintCom, Inc., Sprint Spectrum L.P. and Sprint Communications Company, L.P. release AirGate Wireless, L.L.C. from all of its obligations under the Agreements, except any liabilities for actions or failures to act under the Agreements between their effective dates and the effective dates of their assignments. Sincerely, /s/ Shelly Spencer Shelley Spencer Manager AirGate Wireless, L.L.C. Acknowledged and Agreed to: SprintCom, Inc. Sprint Communications Company, L.P. By: /s/ William R. Blessing By: /s/ William R. Blessing ---------------------------- ---------------------------------------- Name: William R. Blessing Name: William R. Blessing --------------------- --------------------------------- Title: VP Wireless Title: VP Wireless --------------------- --------------------------------- Sprint Spectrum L.P. By: /s/ Bernie Bianchino ---------------------------------------- Name: Bernie Bianchino --------------------------------- Title: Chief Businss Development Officer --------------------------------- AirGate Wireless, Inc. agrees to be bound by the terms of the Agreements and to assume all obligations and liabilities thereunder as if an original party thereto. AirGate Wireless, Inc. agrees to execute a Master Signature Page that evidences this content to be bound. AirGate Wireless, Inc. By: /s/ Shelley Spencer ----------------------------------------- Shelley Spencer Manager EX-25.1 7 STATEMENT OF ELIGIBILITY AND QUALIFICATION T-1 EXHIBIT 25.1 - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)__________ -------------------- BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices)
Bankers Trust Company Legal Department 130 Liberty Street, 31st Floor New York, New York 10006 (212) 250-2201 (Name, address and telephone number of agent for service) -------------------- AirGate PCS, Inc. DELAWARE 58-2422929 AGW Leasing Company DELAWARE 582441171 (Exact name of Registrants as (State or other jurisdiction of (I.R.S. employer specified in its Charter) Incorporation or organization) identification no.)
233 PEACHTREE STREET, N.E. HARRIS TOWER Suite 1700 ATLANTA, GEORGIA 30303 (404) 525-7272 (Address, including zip code, and telephone number of Registrants principal executive offices) Senior Subordinated Discount Notes (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. Name Address ---- ------- Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. Item 3.-15. Not Applicable Item 16. List of Exhibits. Exhibit 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated June 21, 1995 - Incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33-65171, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 20, 1996, incorporate by referenced to Exhibit 1 filed with Form T-1 Statement, Registration No. 333-25843 and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated June 19, 1997, copy attached. Exhibit 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 4 - Existing By-Laws of Bankers Trust Company, as amended on November 18, 1997. Copy attached. -2- Exhibit 5 - Not applicable. Exhibit 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. Exhibit 7 - The latest report of condition of Bankers Trust Company dated as of March 31, 1999. Copy attached. Exhibit 8 - Not Applicable. Exhibit 9 - Not Applicable. -3- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 3RD day of August, 1999 BANKERS TRUST COMPANY By: _______________________________ Marc J. Parilla Assistant Vice President -4- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 3rd day of August, 1999. BANKERS TRUST COMPANY By: /s/ Marc J. Parilla ------------------------ Marc J. Parilla Assistant Vice President -5- State of New York, Banking Department I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section 8005 of the Banking Law," dated June 19, 1997, providing for an increase in authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 600 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of $1,000,000 each designated as Series Preferred Stock. Witness, my hand and official seal of the Banking Department at the City of New York, this 27th day of June in the Year of our Lord --------- ----------- one thousand nine hundred and ninety-seven. Manuel Kursky ------------------------------ Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law ----------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of march, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is One Billion, Six Hundred and One Million, Six Hundred Sixty- Six Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 600 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each designated as Common Stock and 1000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 19th day of June, 1997. James T. Byrne, Jr. ------------------------------------ James T. Byrne, Jr. Managing Director Lea Lahtinen ------------------------------------ Lea Lahtinen Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ------------------------------------ Lea Lahtinen Sworn to before me this 19th day of June, 1997. Sandra L. West - ------------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 1998 BY-LAWS JUNE 22, 1999 Bankers Trust Corporation (Incorporated under the New York Business Corporation Law) 1 BANKERS TRUST CORPORATION ---------------------------------------------------------- BY-LAWS ---------------------------------------------------------- ARTICLE I SHAREHOLDERS SECTION 1.01 Annual Meetings. The annual meetings of shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the third Tuesday in April of each year, if not a legal holiday, and if a legal holiday then on the next succeeding business day, at such hour as shall be designated by the Board of Directors. If no other hour shall be so designated such meeting shall be held at 3 P.M. SECTION 1.02 Special Meetings. Special meetings of the shareholders, except those regulated otherwise by statute, may be called at any time by the Board of Directors, or by any person or committee expressly so authorized by the Board of Directors and by no other person or persons. SECTION 1.03 Place of Meetings. Meetings of shareholders shall be held at such place within or without the State of New York as shall be determined from time to time by the Board of Directors or, in the case of special meetings, by such person or persons as may be authorized to call a meeting. The place in which each meeting is to be held shall be specified in the notice of such meeting. SECTION 1.04 Notice of Meetings. A copy of the written notice of the place, date and hour of each meeting of shareholders shall be given personally or by mail, not less than ten nor more than fifty days before the date of the meeting, to each shareholder entitled to vote at such meeting. Notice of a special meeting shall indicate that it is being issued by or at the direction of the person or persons calling the meeting and shall also state the purpose or purposes for which the meeting is called. Notice of any meeting at which is proposed to take action which would entitle shareholders to receive payment for their shares pursuant to statutory provisions must include a statement of that purpose and to that effect. If mailed, such notices of the annual and each special meeting are given when deposited in the United States mail, postage prepaid, directed to the shareholder at his address as it appears in the record of shareholders unless he shall have filed with the Secretary of the corporation a written request that notices intended for him shall be mailed to some other address, in which case it shall be directed to him at such other address. SECTION 1.05 Record Date. For the purpose of determining the shareholders entitled to notice of or to vote any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the Board of Directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action. SECTION 1.06 Quorum. The presence, in person or by proxy, of the holders of a majority of the shares entitled to vote thereat shall constitute a quorum at a meeting of shareholders for the transaction of business, except as otherwise provided by statute, by the Certificate of Incorporation or by the By-Laws. The shareholders present in person or by proxy and entitled to vote at any meeting, despite the absence of a quorum, shall have power to adjourn the meeting from time to time, to a designated time and place, without notice other than by announcement at the meeting, and at any adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. However, if after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice. SECTION 1.07 Notice of Shareholder Business at Annual Meeting. At an annual meeting of shareholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any shareholder of the corporation who complies with the notice procedures set forth in this Section 1.07. For business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than thirty days nor more than fifty days prior to the meeting; provided, however, that in the event that less than forty days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the corporation's books, of the shareholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the shareholder and (d) any material interest of the shareholder in such business. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 1.07 and Section 2.03. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section 1.07 and Section 2.03, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. ARTICLE II BOARD OF DIRECTORS SECTION 2.01 Number and Qualifications. The business of the corporation shall be managed by its Board of Directors. The number of directors constituting the entire Board of Directors shall be not less than seven nor more than fifteen, as shall be fixed from time to time by vote of a majority of the entire Board of Directors. Each director shall be at least 21 years of age. Directors need not be shareholders. No Officer-Director who shall have attained age 65, or earlier relinquishes his responsibilities and title, shall be eligible to serve as a director. SECTION 2.02 Election. At each annual meeting of shareholders, directors shall be elected by a plurality of the votes to hold office until the next annual meeting. Subject to the provisions of the statute, of the Certificate of Incorporation and of the By-Laws, each director shall hold office until the expiration of the term for which elected, and until his successor has been elected and qualified. SECTION 2.03 Nomination and Notification of Nomination. Subject to the rights of holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, nominations for the election of directors may be made by the Board of Directors or to any committee appointed by the Board of Directors or by any shareholder entitled to vote in the election of directors generally. However, any shareholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if written notice of such shareholder's intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the corporation not later than (i) with respect to an election to be held at an annual meeting of shareholders ninety days in advance of such meeting, and (ii) with respect to an election to be held at a special meeting of shareholders for the election of directors, the close of business on the seventh day following the date on which notice of such meeting is first given to shareholders. Each such notice shall set forth: (a) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the shareholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (d) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had the nominee been nominated, or intended to be nominated, by the Board of Directors; and (e) the consent of each nominee to serve as a director of the corporation if so elected. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the corporation that information required to be set forth in a shareholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in the By-Laws. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these By-Laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. SECTION 2.04 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such places and times as may be fixed from time to time by resolution of the Board and a regular meeting for the purpose of organization and transaction of other business shall be held each year after the adjournment of the annual meeting of shareholders. SECTION 2.05 Special Meetings. The Chairman of the Board, the Chief Executive Officer, the President, the Senior Vice Chairman or any Vice Chairman may, and at the request of three directors shall, call a special meeting of the Board of Directors, two days' notice of which shall be given in person or by mail, telegraph, radio, telephone or cable. Notice of a special meeting need not be given to any director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him. SECTION 2.06 Place of Meeting. The directors may hold their meetings, have one or more offices, and keep the books of the corporation (except as may be provided by law) at any place, either within or without the State of New York, as they may from time to time determine. SECTION 2.07 Quorum and Vote. At all meetings of the Board of Directors the presence of one-third of the entire Board, but not less than two directors, shall constitute a quorum for the transaction of business. Any one or more members of the Board of Directors or of any committee thereof may participate in a meeting of the Board of Directors or a committee thereof by means of a conference telephone or similar communications equipment which allows all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such a meeting. The vote of a majority of the directors present at the time of the vote, if a quorum is present at such time, shall be the act of the Board of Directors, except as may be otherwise provided by statute or the By-Laws. SECTION 2.08 Vacancies. Newly created directorships resulting from increase in the number of directors and vacancies in the Board of Directors, whether caused by resignation, death, removal or otherwise, may be filled by vote of a majority of the directors then in office, although less than a quorum exists. ARTICLE III EXECUTIVE AND OTHER COMMITTEES SECTION 3.01 Designation and Authority. The Board of Directors, by resolution adopted by a majority of the entire Board, may designate from among its members an Executive Committee and other committees, each consisting of three or more directors. Each such committee, to the extent provided in the resolution or the By-Laws, shall have all the authority of the Board, except that no such committee shall have authority as to: (i) the submission to shareholders of any action as to which shareholders' authorization is required by law. (ii) the filling of vacancies in the Board of Directors or any committee. (iii) the fixing of compensation of directors for serving on the Board or on any committee. (iv) the amendment or appeal of the By-Laws, or the adoption of new By-Laws. (v) the amendment or repeal of any resolution of the Board which by its terms shall not be so amendable or repealable. The Board may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee. Each such committee shall serve at the pleasure of the Board of Directors. SECTION 3.02 Procedure. Except as may be otherwise provided by statute, by the By-Laws or by resolution of the Board of Directors, each committee may make rules for the call and conduct of its meetings. Each committee shall keep a record of its acts and proceedings and shall report the same from time to time to the Board of Directors. ARTICLE IV OFFICERS SECTION 4.01 Titles and General. The Board of Directors shall elect from among their number a Chairman of the Board and a Chief Executive Officer, and may also elect a President, a Senior Vice Chairman, one or more Vice Chairmen, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Principals, one or more Vice Presidents, a Secretary, a Controller, a Treasurer, a General Counsel, a General Auditor, and a General Credit Auditor, who need not be directors. The officers of the corporation may also include such other officers or assistant officers as shall from time to time be elected or appointed by the Board. The Chairman of the Board or the Chief Executive Officer or, in their absence, the President, the Senior Vice Chairman or any Vice Chairman, may from time to time appoint assistant officers. All officers elected or appointed by the Board of Directors shall hold their respective offices during the pleasure of the Board of Directors, and all assistant officers shall hold office at the pleasure of the Board or the Chairman of the Board or the Chief Executive Officer or, in their absence, the President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors may require any and all officers and employees to give security for the faithful performance of their duties. SECTION 4.02 Chairman of the Board. The Chairman of the Board shall preside at all meetings of the shareholders and of the Board of Directors. Subject to the Board of Directors, he shall exercise all the powers and perform all the duties usual to such office and shall have such other powers as may be prescribed by the Board of Directors or the Executive Committee or vested in him by the By- Laws. SECTION 4.03 Chief Executive Officer. The Board of Directors shall designate the Chief Executive Officer of the corporation, which person may also hold the additional title of Chairman of the Board, President, Senior Vice Chairman or Vice Chairman. Subject to the Board of Directors, he shall exercise all the powers and perform all the duties usual to such office and shall have such other powers as may be prescribed by the Board of Directors or the Executive Committee or vested in him by the By-Laws. SECTION 4.04 Chairman of the Board, President, Senior Vice Chairman, Vice Chairmen, Executive Vice Presidents, Senior Vice Presidents, Principals and Vice Presidents. The Chairman of the Board or, in his absence or incapacity the President or, in his absence or incapacity, the Senior Vice Chairman, the Vice Chairmen, the Executive Vice Presidents, or in their absence, the Senior Vice Presidents, in the order established by the Board of Directors shall, in the absence or incapacity of the Chief Executive Officer perform the duties of the Chief Executive Officer. The President, the Senior Vice Chairman, the Vice Chairmen, the Executive Vice Presidents, the Senior Vice Presidents, the Principals, and the Vice Presidents shall also perform such other duties and have such other powers as may be prescribed or assigned to them, respectively, from time to time by the Board of Directors, the Executive Committee, the Chief Executive Officer, or the By-Laws. SECTION 4.05 Controller. The Controller shall perform all the duties customary to that office and except as may be otherwise provided by the Board of Directors shall have the general supervision of the books of account of the corporation and shall also perform such other duties and have such powers as may be prescribed or assigned to him from time to time by the Board of Directors, the Executive Committee, the Chief Executive Officer, or the By-Laws. SECTION 4.06 Secretary. The Secretary shall keep the minutes of the meetings of the Board of Directors and of the shareholders and shall have the custody of the seal of the corporation. He shall perform all other duties usual to that office, and shall also perform such other duties and have such powers as may be prescribed or assigned to him from time to time by the Board of Directors, the Executive Committee, the Chairman of the Board, the Chief Executive Officer, or the By-Laws. ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS SECTION 5.01 The corporation shall, to the fullest extent permitted by Section 721 of the New York Business Corporation Law, indemnify any person who is or was made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, whether involving any actual or alleged breach of duty, neglect or error, any accountability, or any actual or alleged misstatement, misleading statement or other act or omission and whether brought or threatened in any court or administrative or legislative body or agency, including an action by or in the right of the corporation to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the corporation is serving or served in any capacity at the request of the corporation by reason of the fact that he, his testator or intestate, is or was a director or officer of the corporation, or is serving or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement, and costs, charges and expenses, including attorneys' fees, or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 5.02 The corporation may indemnify any other person to whom the corporation is permitted to provide indemnification or the advancement of expenses by applicable law, whether pursuant to rights granted pursuant to, or provided by, the New York Business Corporation Law or other rights created by (i) a resolution of shareholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, it being expressly intended that these By-Laws authorize the creation of other rights in any such manner. SECTION 5.03 The corporation shall, from time to time, reimburse or advance to any person referred to in Section 5.01 the funds necessary for payment of expenses, including attorneys' fees, incurred in connection with any action or proceeding referred to in Section 5.01, upon receipt of a written undertaking by or on behalf of such person to repay such amount(s) if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. SECTION 5.04 Any director or officer of the corporation serving (i) another corporation, of which a majority of the shares entitled to vote in the election of its directors is held by the corporation, or (ii) any employee benefit plan of the corporation or any corporation referred to in clause (i), in any capacity shall be deemed to be doing so at the request of the corporation. In all other cases, the provisions of this Article V will apply (i) only if the person serving another corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise so served at the specific request of the corporation, evidenced by a written communication signed by the Chairman of the Board, the Chief Executive Officer, the President, the Senior Vice Chairman or any Vice Chairman, and (ii) only if and to the extent that, after making such efforts as the Chairman of the Board, the Chief Executive Officer, or the President shall deem adequate in the circumstances, such person shall be unable to obtain indemnification from such other enterprise or its insurer. SECTION 5.05 Any person entitled to be indemnified or to the reimbursement or advancement of expenses as a matter of right pursuant to this Article V may elect to have the right to indemnification (or advancement of expenses) interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time indemnification is sought. SECTION 5.06 The right to be indemnified or to the reimbursement or advancement of expenses pursuant to this Article V (i) is a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the corporation and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto. SECTION 5.07 If a request to be indemnified or for the reimbursement or advancement of expenses pursuant hereto is not paid in full by the corporation within thirty days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses of prosecuting such claim. Neither the failure of the corporation (including its Board of Directors, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification of or reimbursement or advancement of expenses to the claimant is proper in the circumstances, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel, or its shareholders) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled. SECTION 5.08 A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in Section 5.01 shall be entitled to indemnification only as provided in Sections 5.01 and 5.03, notwithstanding any provision of the New York Business Corporation Law to the contrary. ARTICLE VI SEAL SECTION 6.01 Corporate Seal. The corporate seal shall contain the name of the corporation and the year and state of its incorporation. The seal may be altered from time to time at the discretion of the Board of Directors. ARTICLE VII SHARE CERTIFICATES SECTION 7.01 Form. The certificates for shares of the corporation shall be in such form as shall be approved by the Board of Directors and shall be signed by the Chairman of the Board, the Chief Executive Officer, the President, the Senior Vice Chairman or any Vice Chairman and the Secretary or an Assistant Secretary, and shall be sealed with the seal of the corporation or a facsimile thereof. The signatures of the officers upon the certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the corporation itself or its employees. ARTICLE VIII CHECKS SECTION 8.01 Signatures. All checks, drafts and other orders for the payment of money shall be signed by such officer or officers or agent or agents as the Board of Directors may designate from time to time. ARTICLE IX AMENDMENT SECTION 9.01 Amendment of By-Laws. The By-Laws may be amended, repealed or added to by vote of the holders of the shares at the time entitled to vote in the election of any directors. The Board of Directors may also amend, repeal or add to the By-Laws, but any By-Laws adopted by the Board of Directors may be amended or repealed by the shareholders entitled to vote thereon as provided herein. If any By-Law regulating an impending election of directors is adopted, amended or repealed by the Board, there shall be set forth in the notice of the next meeting of shareholders for the election of directors the By-Laws so adopted, amended or repealed, together with concise statement of the changes made. ARTICLE X SECTION 10.01 Construction. The masculine gender, when appearing in these By- Laws, shall be deemed to include the feminine gender. I, Marc J. Parilla, Assistant Vice President of Bankers Trust Company, New York, New York, hereby certify that the foregoing is a complete, true and correct copy of the By-Laws of Bankers Trust Company, and that the same are in full force and effect at this date. -------------------------- Marc J. Parilla Assistant Vice President DATED: , 1999 ---------- Legal Title of Bank: Bankers Trust Company Call Date: 03/31/99 ST-BK: 36-4840 FFIEC 031 Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1 City, State ZIP: New York, NY 10006 11 FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for March 31, 1999 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter. Schedule RC--Balance Sheet
-------------------------- C400 -------------------------- Dollar Amounts in Thousands RCFD Bil Mil Thou - ------------------------------------------------------------------------------------------------------------------------ ASSETS / / / / / / / / / / / / 1. Cash and balances due from depository institutions (from Schedule RC-A): / / / / / / / / / / / / a. Noninterest-bearing balances and currency and coin (1)............................ 0081 1,695,000 1.a. b. Interest-bearing balances (2).................... 0071 1,308,000 1.b. 2. Securities: / / / / / / / / / / / / a. Held-to-maturity securities (from Schedule RC-B, column A)......................... 1754 0 2.a. b. Available-for-sale securities (from Schedule RC-B, column D)......................... 1773 6,150,000 2.b. 3. Federal funds sold and securities purchased under agreements to resell................. 1350 29,512,000 3. 4. Loans and lease financing receivables: / / / / / / / / / / / / a. Loans and leases, net of unearned income (from Schedule RC-C)...................... RCFD 2122 18,869,000 / / / / / / / / / / / / 4.a. b. LESS: Allowance for loan and lease losses....... RCFD 3123 571,000 / / / / / / / / / / / / 4.b. c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 / / / / / / / / / / / / 4.c. d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c)......................................... 2125 18,298,000 4.d. 5. Trading Assets (from schedule RC-D).................. 3545 34,815,000 5. 6. Premises and fixed assets (including capitalized leases).................................. 2145 916,000 6. 7. Other real estate owned (from Schedule RC-M)......... 2150 88,000 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)............ 2130 883,000 8. 9. Customers' liability to this bank on acceptances outstanding.............................. 2155 307,000 9. 10. Intangible assets (from Schedule RC-M)............... 2143 302,000 10. 11. Other assets (from Schedule RC-F).................... 2160 4,645,000 11. 12. Total assets (sum of items 1 through 11)............. 2170 98,919,000 12. --------------------------
__________________________ (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: Bankers Trust Company Call Date: 03/31/99 ST-BK: 36-4840 FFIEC 031 Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2 City, State ZIP: New York, NY 10006 12 FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
Schedule RC--Continued
-------------------------- Dollar Amounts in Thousands RCFD Bil Mil Thou - ------------------------------------------------------------------------------------------------------------------------ LIABILITIES / / / / / / / / / / / / 13. Deposits: / / / / / / / / / / / / a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part 1)............... RCON 2200 17,829,000 13.a. (1) Noninterest-bearing(1)..................... RCON 6631 2,939,000 / / / / / / / / / / / / 13.a.(1) (2) Interest-bearing........................... RCON 6636 14,890,000 / / / / / / / / / / / / 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, part II)......................... RCON 2200 20,634,000 13.b. (1) Noninterest-bearing........................ RCFN 6631 1,878,000 / / / / / / / / / / / / 13.b.(1) (2) Interest-bearing........................... RCFN 6636 18,756,000 / / / / / / / / / / / / 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase............................ RCFD 2800 13,513,000 14. 15. a. Demand notes issued to the U.S. Treasury........ RCON 2840 0 15.a. b. Trading liabilities (from Schedule RC-D)........ RCFD 3548 22,010,000 15.b. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): / / / / / / / / / / / / a. With a remaining maturity of one year or less... RCFD 2332 6,400,000 16.a. b. With a remaining maturity of more than one year through three years............................. A547 2,347,000 16.b. c. With a remaining maturity of more than three years..................................... A548 2,321,000 16.c 17. Not Applicable. / / / / / / / / / / / / 17. 18. Bank's liability on acceptances executed and outstanding..................................... RCFD 2920 307,000 18. 19. Subordinated notes and debentures (2)............... RCFD 3200 438,000 19. 20. Other liabilities (from Schedule RC-G).............. RCFD 2930 6,129,000 20. 21. Total liabilities (sum of items 13 through 20)...... RCFD 2948 91,928,000 21. 22. Not Applicable / / / / / / / / / / / / 22. EQUITY CAPITAL / / / / / / / / / / / / 23. Perpetual preferred stock and related surplus....... RCFD 383 1,500,000 23. 24. Common stock........................................ RCFD 3230 2,127,000 24. 25. Surplus (exclude all surplus related to preferred stock).................................... RCFD 3839 541,000 25. 26. a. Undivided profits and capital reserves.......... RCFD 3632 3,291,000 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities................... RCFD 8434 ( 59,000) 26.b. c. Accumulated net gains (losses) on cash flow hedges.......................................... RCFD 4336 0 26.c. 27. Cumulative foreign currency translation adjustments. RCFD 3284 ( 409,000) 27. 28. Total equity capital (sum of items 23 through 27)... RCFD 3210 6,991,000 28. 29. Total liabilities and equity capital (sum of items 21 and 28).................................... RCFD 3300 98,919,000 29. -------------------------- Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for Number the bank by independent external auditors as of any -------------- date during 1998.................................... RCFD 6724 1 M.1. --------------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external conducted in accordance with generally accepted auditing auditors standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external submits a report on the consolidated holding company auditors (but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work) 3 = Directors' examination of the bank conducted in 8 = No extermal audit work accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority)
______________________ (1) Including total demand deposits and noninterest-bearing time and savings deposits. (2) Includes limited-life preferred stock and related surplus. -----END PRIVACY-ENHANCED MESSAGE-----