Addendum VI to Sprint PCS Management Agreement between UbiquiTel Operating Company and Sprint Entities (February 21, 2001)
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This addendum modifies the existing Sprint PCS Management Agreement between UbiquiTel Operating Company and several Sprint entities. It becomes effective if UbiquiTel acquires control of VIA Wireless, LLC. The addendum outlines obligations for network conversion, spectrum transition, and discontinuation of certain pricing plans in specified service areas. It also details cost responsibilities and conditions under which the addendum is void if the acquisition does not occur. Most terms take effect upon the acquisition, with some provisions effective immediately and surviving even if the deal is not completed.
EX-10.36 12 a2044242zex-10_36.txt EXHIBIT 10.36 Exhibit 10.36 ADDENDUM VI TO SPRINT PCS MANAGEMENT AGREEMENT DATED AS OF FEBRUARY 21, 2001 MANAGER: UBIQUITEL OPERATING COMPANY
This Addendum VI (this "ADDENDUM"), dated as of February 21, 2001 (the "ADDENDUM DATE"), contains certain additional and supplemental terms and provisions to that certain Sprint PCS Management Agreement entered into as of October 15, 1998, by UbiquiTel L.L.C. (but subsequently transferred to UbiquiTel Operating Company) (the "MANAGER"), Sprint Spectrum L.P., WirelessCo, L.P. and Sprint Communications Company, L.P., which Management Agreement was further amended by certain addenda (the Management Agreement, as amended by Addendum I, Addendum II, Addendum III, Addendum IV and Addendum V, being the "MANAGEMENT AGREEMENT"). This Addendum (and its modification of the Management Agreement) becomes effective upon the consummation of the proposed acquisition by Manager of indirect control of VIA Wireless, LLC ("VIA") in the transaction to which Sprint PCS consented on February 20, 2001 (such consummated transaction being the "MERGER", and the effective date of the Merger and of this Addendum being the "EFFECTIVE DATE"). If the Merger is not consummated for any reason (the date on which the Merger is abandoned, terminated or cancelled, or for any other reason determined it will not be consummated, being the "TERMINATION DATE"), this Addendum shall be void and have no further force and effect. Notwithstanding the Effective Date and the Termination Date described in the two preceding sentences, the terms of paragraphs 2, 3, 5, 8, 9, 10, 11, 12 and 13 below become effective upon the Addendum Date, and the terms of paragraphs 8, 9, 10 and 11 will remain in full force and effect between the parties to this Addendum after the Termination Date. The terms and provisions of this Addendum, as of the Effective Date (or as of the Addendum Date, as the case may be), will 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 of, and Exhibits to, the Management Agreement, unless otherwise noted. The Management Agreement is modified as follows effective as of the Effective Date or the Addendum Date, as the case may be: 1. TYPE II CONVERSION SCHEDULE AND COSTS. If VIA has not completed the conversion (the "TYPE II CONVERSION") of its Service Area Network (the "VIA SERVICE AREA NETWORK") from Type III (I.E., where VIA designates Option #3 on Exhibit 2.1.2 to the Services Agreement) to Type II (I.E., where VIA designates Option #2 on Exhibit 2.1.2 to the Services Agreement) by the Effective Date, Manager agrees to complete such conversion no later than July 8, 2001 (PROVIDED, that if Manager's failure to complete the Type II Conversion by such date results primarily from Sprint PCS' failure to perform all items necessary on its part, Manager may 2 claim that an event under Section 17.9.3 has occurred), or such other date as may be mutually agreed upon between Manager and Sprint PCS. Sprint PCS will pay for the actual costs Sprint PCS incurs to input customer information for customers with Manager's NPA-NXXs (or VIA's NPA-NXXs if the Type II Conversion has not been completed by the Effective Date) in the six BTAs that constitute VIA's Service Area (the "VIA SERVICE AREA") into Sprint PCS' billing system and for Sprint PCS' employee resources to facilitate the Type II Conversion. Manager will be responsible for the payment of all other costs, including (i) the actual costs Manager and VIA incur to migrate customer information from Manager's or VIA's billing system to Sprint PCS' billing system, (ii) any incremental costs incurred by Sprint PCS resulting from any non-standard Type II Conversion activities (E.G., additional customer care calls) or incremental support unique to pricing plans established by VIA (E.G., additional fields on billing records), and (iii) other costs incurred by Manager and VIA in implementing and maintaining a Type II network. 2. SPECTRUM TRANSITION. On the Effective Date, Manager and VIA will complete the transition of the operation of the VIA Service Area Network from using the FCC licenses held by VIA or its Related Parties to using the PCS Spectrum described on the SERVICE AREA EXHIBIT attached to this Addendum (the "SPECTRUM TRANSITION"). Manager agrees to complete the Spectrum Transition at its sole expense (except as provided below in paragraph 9). Manager will not consummate the Merger until it completes the Spectrum Transition. To effect the Spectrum Transition (a) the Affiliation Agreement entered into in January, 1999, between VIA (f/k/a Central Wireless Partnership) and Sprint PCS, as amended (the "VIA AFFILIATION AGREEMENT") and all other agreements with Sprint PCS and its Related Parties to which VIA is a party will be terminated (although VIA and Manager will continue to be responsible for any pre-termination liabilities and obligations under the VIA Affiliation Agreement and all such other agreements), (b) the VIA Service Area Network will become part of the Service Area Network under the Management Agreement, and (c) the VIA Service Area will become part of the Service Area under the Management Agreement as described on the SERVICE AREA EXHIBIT attached to this Addendum. 3. DISCONTINUATION OF UNLIMITED PLANS. If VIA has not already done so, Manager and Sprint PCS agree that Manager will cease on or before the sixtieth (60 th ) day after the Addendum Date (or such later date as the Manager and Sprint PCS may mutually agree) (the "UNLIMITED PLAN TERMINATION DATE") to promote and sell in the VIA Service Area any pricing plans with unlimited minutes of use or availability in specific area codes only that are not included as part of the Sprint PCS national pricing plan offer (E.G., VIA Plus Plans and Unlimited Plus Plans). Sprint PCS will provide billing support to customers who activated under such plans on or before the Unlimited Plan Termination Date, until all such customers change to a Sprint PCS national or regional pricing plan or discontinue Sprint PCS service. 4. COMPLETION OF VIA SERVICE AREA BUILD-OUT REQUIREMENT. Manager will, on or before September 1, 2001, complete the build-out requirements for the VIA Service Area as set forth on EXHIBIT 2.1.1 (taking into account the coverage footprint map, the Pops analysis table and the narrative description of the build-out) (the "VIA SERVICE AREA BUILD-OUT REQUIREMENT"), except for the following exceptions, each of which Manager agrees to complete the build-out within a commercially reasonable period: (a) to the extent Manager's failure to complete any portion of the build-out results primarily from one of the events described in Section 17.9.3; or (b) Manager may complete after September 1, 2001, construction of not more than three of the cell sites needed to provide coverage for Mendota (Fresno BTA); Orosi, Woodlake, 3 Dinuba and Kingsburg (Visalia-Porterville-Hanford BTA); Shafter and Wasco (Bakersfield BTA); Atwater and Winton (Merced BTA); and due east of Ceres along Highway 99 northwest to J7 to include Hughson, Empire, Hickman and Waterford (Modesto BTA); or (c) the cell site that needs to be located on land owned by Tejon Corporation to provide coverage along I-5 to meet Sprint PCS coverage at the southern Bakersfield BTA border. If Manager delivers to Sprint PCS, within 10 days after the Addendum Date, copies of the original documents that VIA delivered to Manager to disclose the status of all current and planned cell sites, then to the extent Manager verifies to Sprint PCS that a material discrepancy exists between the documents delivered to Sprint PCS and the actual status of such cell sites, Sprint PCS will give Manager a commercially reasonable period of time to complete the build-out taking into consideration the level of such material discrepancy. Subject to the limitation set forth below in paragraph 5 of this agreement, if Manager does not complete the VIA Service Area Build-out Requirement as described in this paragraph 4, Sprint PCS may declare an Event of Termination under the Management Agreement, and Manager waives any right to a cure period under the Management Agreement. 5. NO DECLARATION OF BREACH. Sprint PCS agrees that until September 1, 2001, it will not declare VIA or Manager in breach of the VIA Affiliation Agreement or the Management Agreement, as the case may be, based on their respective failure to complete any of the VIA Service Area Build-out Requirement; PROVIDED, that Sprint PCS' agreement to not declare VIA in breach of the VIA Affiliation Agreement under this paragraph 5 terminates on the Termination Date. 6. REVISED FINANCING PLAN. EXHIBIT 1.7 attached to this Addendum supersedes and replaces in its entirety EXHIBIT 1.7 attached to the Management Agreement. 7. REVISED BUILD-OUT PLAN. At the time of the Spectrum Transition, EXHIBIT 2.1.1 attached to this Addendum will be made part of Manager's existing EXHIBIT 2.1 attached to the Management Agreement expressly subject to the terms, conditions and provisions of paragraph 4 above. 8. EXCLUSIVITY OF SERVICE AREA. In Section 2.3 and the Schedule of Definitions, the phrase "wireless mobility communications network" is replaced by the phrase "Wireless Mobility Communications Network". 9. MICROWAVE RELOCATION. Manager requests that Sprint PCS begin clearing PCS Spectrum in the VIA Service Area in the manner described in Section 2.7, even though the VIA Service Area is not yet part of the Service Area. Manager and Sprint PCS will share all costs (including costs incurred or for which Sprint PCS becomes obligated prior to the Effective Date) related to clearing such PCS Spectrum. If the Merger is not consummated for any reason, Manager agrees to reimburse Sprint PCS for all costs Sprint PCS incurs or for which Sprint PCS becomes obligated in connection with clearing such PCS Spectrum after the Addendum Date and prior to the Termination Date. 10. NOTICE OF MERGER TERMINATION. Manager agrees to give Sprint PCS written notice that the proposed Merger has been abandoned, terminated, cancelled or will not be consummated for any reason, within one business day after the Termination Date. 4 11. REAFFIRMATION OF SPRINT AGREEMENTS. Each of the undersigned reaffirms in their entirety, together with their respective rights and obligations thereunder, the Management Agreement, the Services Agreement, the Amended and Restated Consent and Agreement dated as of April 5, 2000, among Sprint Spectrum L.P., Sprint Communications Company, L.P., WirelessCo, L.P., Cox Communications PCS, L.P., Cox PCS License, L.L.C. and Paribas (the "CONSENT AND AGREEMENT"), a Letter Agreement dated January 19, 2001, the Assignment of Leases and Bill of Sale dated October 31 2000, a Letter Agreement dated October 13, 2000, a Letter Agreement dated September 28, 2000, the Master Services Agreement dated April 18, 2000, the Assignment of Leases and Bill of Sale dated April 14, 2000, the Deferred Amount Note dated April 5, 2000, the First Amendment to Asset Purchase Agreement dated as of December 28, 1999, the Asset Purchase Agreement dated December 28, 1999, the Amended and Restated Interim Network Operating Agreement dated December 20, 1999, a Letter Agreement dated November 17, 1999, and the License Agreements dated October 15, 1998. 12. CONSENT AND AGREEMENT. The parties acknowledge that the Consent and Agreement will require conforming revisions to address the Merger, another deferred amount note will need to be executed, and another addendum to the Management Agreement might also be necessary. The parties agree to work together in good faith to complete these documents by May 31, 2001, in forms consistent with the Consent and Agreement and with the forms of documents typical in similar transactions involving Other Managers. 13. COUNTERPARTS. This Addendum may be executed in two or more counterparts, each of which shall constitute an original but all which when taken together shall constitute but one agreement. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 5 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this Addendum as of the date first above written. SPRINT SPECTRUM L.P. By:____________________________ Thomas E. Mateer Vice President - Affiliations WIRELESSCO, L.P. By:____________________________ Thomas E. Mateer Vice President - Affiliations COX COMMUNICATIONS PCS, L.P. By:____________________________ Thomas E. Mateer Vice President - Affiliations COX PCS LICENSE, L.L.C. By:____________________________ Thomas E. Mateer Vice President - Affiliations SPRINT COMMUNICATIONS COMPANY, L.P. By:____________________________ Ed Mattix Senior Vice President - Public Affairs UBIQUITEL OPERATING COMPANY By:____________________________ Dean E. Russell Chief Operating Officer 6 EXHIBIT 1.7 (Amended) BUILD-OUT AND WORKING CAPITAL FINANCING This Amended Exhibit 1.7 sets forth the build-out and working capital financing for the expansion of the Service Area under the Management Agreement to include the BTAs included within the VIA Service Area (as defined in Addendum VI to the Management Agreement), specifically including BTA No. 28 (Bakersfield), BTA No. 157 (Fresno), BTA No. 291 (Merced), BTA No. 303 (Modesto), BTA No. 434 (Stockton), and BTA No. 158 (Visalia-Porterville-Hanford) (the "VIA Expansion"), along with the build-out and working capital financing for the existing Service Area of Manager (prior to the VIA Expansion). The combined Equity, Senior Debt and Subordinated Debt as described below will provide the necessary working capital to meet the build-out and working capital requirements of the VIA Expansion and to operate the entirety of the business through cash flow break even. Expected uses of funds through cash flow break even (year 2003) for the combined existing Service Area of the Manager (prior to the VIA Expansion) and the VIA Expansion are as follows:
EXHIBIT 2.1.1 To the Ubiquitel Management Agreement VIA Service Build-out Requirement Build-Out Plan Narrative Description Included in the coverage specified in the map and table of this Exhibit 2.1.1 is the following coverage which must be completed by September 1, 2001, except as permitted in Addendum VI of the Management Agreement. Fresno BTA - ---------- Manager agrees to provide coverage for the town of Mendota and to complete coverage for the portion of I-5 located in the Fresno BTA. Bakersfield BTA - --------------- Manager agrees to provide coverage for Shafter, Wasco, LaMont and Arvin or, in the alternative, to provide drive test data showing that these cities are covered. Manager also agrees to provide coverage along I-5 to meet Sprint PCS coverage at the southern Bakersfield BTA border. Visalia-Porterville-Hanford BTA - ------------------------------- Manager agrees to provide coverage for Orosi, Woodlake, Dinuba and Kingsburg or, in the alternative, to provide drive test data showing that these cities are covered. Merced BTA - ---------- Manager agrees to provide coverage for Atwater and Winton or, in the alternative, to provide drive test data showing that these cities are covered. Manager agrees to provide coverage along Highway 152 to the Merced BTA border. Modesto BTA - ----------- Manager agrees to provide coverage due east of Ceres along Highway 99 and northwest to J7 to include the towns of Hughson, Empire, Hickman, and Waterford or, in the alternative, to provide drive test data showing that this area is covered. Stockton BTA - ------------ Manager agrees to provide coverage in the I-205/580 area along I-205 and along I-580 south from the junction of I-205 and I-580 to I-5, including all Sprint PCS meetpoints. EXHIBIT 2.1.1 TO THE UBIQUITEL MANAGEMENT AGREEMENT VIA SERVICE AREA BUILD-OUT REQUIREMENT
February 20, 2001 SERVICE AREA EXHIBIT TO UBIQUITEL MANAGEMENT AGREEMENT
