Exhibit 10.8
AMENDED AND RESTATED
OPERATING AGREEMENT
This Amended and Restated Operating Agreement (this "Agreement") is
made and entered into effective as of May 17, 2002, by and between Teletouch
Communications, Inc., a Delaware corporation ("Operator") and Teletouch
Licenses, Inc., a Delaware corporation ("Licensee").
WHEREAS, the Operator (in its individual capacity and as successor in
interest to each of Beepers Plus of Memphis, Inc., a Tennessee corporation, and
Beepers Plus of Nashville, Inc., a Tennessee corporation) and Licensee are party
to an Operating Agreement dated as of December 29, 1994 (the "Existing Operating
Agreement"); and
WHEREAS, the Operator and Licensee desire to amend the Existing
Operating Agreement in certain respects and, as so amended, to restate the
Existing Operating Agreement in its entirety; and
WHEREAS, Licensee holds Federal Communications Commission (the "FCC")
licenses (the "Licenses") in connection with the operation of paging systems
(the "Systems") in Texas, Arkansas, Tennessee, Mississippi, Alabama, Missouri,
Louisiana and other states; and
WHEREAS, Licensee and Operator are under common corporate control; and
WHEREAS, Operator owns the assets (the "Assets") that are used in the
operation of the Systems; and
WHEREAS, Operator employs the staff (the "Staff") that is presently
used in the operation of the Systems, which Staff has extensive experience and
knowledge in the operation of paging systems; and
WHEREAS, the parties have agreed to enter into an agreement for the
operation of the Systems by Operator, subject to the supervision and control of
Licensee; and
WHEREAS, the parties desire by this Agreement to convey to Licensee, as
an agent, the contractual right to use the Assets and Staff of the Operator in
the operation of the Systems, subject to Licensee's judgment and discretion as
to the continued use of such Assets and Staff; and
WHEREAS, the person directly in charge of the Systems is and will
continue to be a corporate officer of Licensee and responsible as such directly
to Licensee's Board of Directors; and
WHEREAS, Operator owns 100% of the common stock of Licensee; and
WHEREAS, Operator and Licensee are obligated to ING Prime Rate Trust, a
Massachusetts business trust, formerly known as Pilgrim America Prime Rate Trust
("Pilgrim") under a Promissory Note and have entered into the Second Amended and
Restated Credit Agreement with Pilgrim; and
WHEREAS, pursuant to the Guarantee and Security Agreement, executed by
Operator and Licensee, Operator has granted a security interest in 100% of the
common stock of Licensee to
Pilgrim and Licensee has granted to Pilgrim a security interest in the general
intangible right of Licensee to receive monies or other consideration upon the
sale, assignment or transfer of Licensee's FCC Licenses (the "FCC License
Proceeds"); and
WHEREAS, Licensee is also obligated to Pilgrim under that Promissory
Note and is also a party to the Second Amended and Restated Credit Agreement
with Pilgrim and as such is subject to certain terms and conditions set forth
therein; and
WHEREAS, the Operator and the Licensee have covenanted in the Second
Amended and Restated Credit Agreement not to amend, modify, or waive the
provisions of this Agreement without the consent of its lenders, given that in
the event of a default by Operator and/or Licensee under the Promissory Note,
Second Amended and Restated Credit Agreement or the Guarantee and Security
Agreement, Pilgrim is empowered to exercise its security interest over the
common stock of Licensee or Licensee's FCC Licenses; provided that Pilgrim
undertakes such actions in accordance with the provisions of the Communications
Act of 1934, as from time to time amended, and rules, regulations and policies
of the FCC and any other Governmental Authority, in such event, the relationship
of the Operator and the Licensee may affect substantive rights of Pilgrim and
the ability of Pilgrim to realize upon the value of the collateral. Pilgrim
shall be a third party beneficiary under this Agreement.
1. Effective Date and Term. This Agreement shall only take effect on
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the date hereof (the "Effective Date"). Unless terminated pursuant to Section 6,
this Agreement shall have a term of 10 years from the Effective Date (the
"Term"). Operator shall have the option to renew this Agreement and extend the
Term for an additional five (5) years automatically upon delivery of written
notice to Licensee at least 60 days prior to the end of the Term.
2. Systems Operation. Subject to the terms of this Agreement and to the
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ultimate control of Licensee, Operator agrees to provide all assets and services
required in connection with the operation of the Systems and to oversee all
aspects of the Systems's operations, including programming, sales, hiring and
firing of personnel and finances. At all times during the Term, Operator's
actions shall be subject to the supervision and control of Licensee. Without
limiting the generality of the preceding paragraph, and subject at all times to
the supervision and control of Licensee, the services to be provided by Operator
shall include the following:
(a) General Authority. Operator shall implement all policies of Licensee
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pertaining to development, administration, operations, hiring, training,
marketing and advertising for the Systems and shall have the authority to
contract for, place orders for, purchase and obtain equipment, operating
supplies and other goods and services required for the operation of the Systems,
and shall generally supervise all day-to-day operations of the Systems. Operator
shall have the authority to employ and terminate employment of any and all
Systems personnel, except for the officers of Licensee, whose employment and
termination shall require ratification by the Board of Directors of Licensee.
(b) Assets. At all times, Operator shall provide at its own cost and
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expense all tangible and other Assets that are necessary for the operation of
the Systems. Operator will maintain such Assets and will replace them
periodically as needed. Operator shall be responsible for all capital and other
expenditures associated with the Systems.
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(c) Financial and Accounting Services. Operator agrees that it shall
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maintain in connection with the operation of the Systems appropriate accounting
and management control systems. The Operator, as part of their services to be
rendered hereunder, shall review and control disbursements and receipts
(including, without limitation, all bank accounts of Licensee), and perform
internal auditing functions relating to records of the Licensee and the Systems.
3. FCC Compliance. The parties agree to comply with all applicable FCC
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rules and regulations governing the Licenses or the Systems and specifically
agree as follows:
(a) Required Actions and Filings. Licensee shall, in cooperation with
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Operator, take all actions necessary to keep the Licenses in force and shall
prepare and submit to the FCC or any other relevant authority all reports,
applications, renewals, filings or other documents necessary to keep the
Licenses in force and in good standing.
(b) License Control. Licensee shall, at all times, retain ultimate
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supervisory control over the operations of the Systems. In particular, and
without limitation, Licensee shall have the right to control the physical
facilities of the Systems.
(c) Licensee Responsibility. Licensee and Operator are familiar with a
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paging licensee's responsibilities under the Communications Act of 1934, as
amended, and applicable FCC rules, regulations and policies. Nothing in this
Agreement is intended to diminish or restrict Licensee's obligations as an FCC
licensee and both parties desire that this Agreement be in compliance with the
rules and regulations of the FCC. In the event that the FCC determines that any
provision of this Agreement violates any FCC rules, policy or regulation, both
parties will make good faith efforts to correct the problem immediately, and to
bring this Agreement into compliance, consistent with the intent of this
Agreement.
4. Systems Revenues and Expenses; Operator's Compensation. During the
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Term, Operator shall be entitled to all revenues from the Systems's operations
and shall be responsible for all expenses associated therewith, provided,
however, that Operator shall pay to Licensee such amounts as Licensee may
reasonably request in order to carry out its obligations hereunder.
5. Restrictive Covenants. During the Term, Operator (i) shall not take
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any action which would jeopardize the Licenses, the Systems or the rights of
Licensee under this Agreement; (ii) shall immediately notify Licensee of any
pending or threatened action by the FCC or any other court or governmental
agency or third party to suspend, revoke, terminate or challenge the Licenses;
and (iii) shall not take any action that would result in the violation of any
covenant or agreement, or otherwise constitute a default under the agreements or
instruments evidencing any indebtedness of the Licensee.
6. Termination.
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(a) Occurrences of Termination. This Agreement shall automatically
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terminate upon the earlier to occur of (i) the end of the Term, or (ii) the
loss, revocation or expiration without renewal of the Licenses. In addition,
Licensee shall have the right to terminate this Agreement at any time, upon its
unilateral determination that continued operation of the Systems by the Operator
under
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this Agreement is not in the best interests of the Systems or the public that it
serves. Any termination of this Agreement by Licensee pursuant to the preceding
sentence of this paragraph shall be by written notice to Operator, and shall be
effective at the time specified in the written notice.
(b) Obligations Upon Termination. If this Agreement should be
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terminated pursuant to this Section 6, each party shall be released from any
obligations hereunder from and after the effective termination date except that:
(i) Operator shall be entitled to receive any compensation earned prior
to the effective termination date; and
(ii) Operator shall deliver to Licensee all books and records
pertaining to the Systems, whether located at the Systems's offices or
elsewhere, and will, to the extent requested by Licensee, make such of
its personnel available to Licensee, at Licensee's expense, for such
reasonable period of time, not to exceed 90 days, as may be reasonably
necessary to permit a transition to Licensee's operation by the
Licensee or a replacement operator;
(iii) Operator shall cooperate with Licensee, and, if requested by
Licensee, shall deliver such affidavits or other written statements as
may be required in connection with any FCC proceeding, including any
inquiry or proceeding relating to the renewal of the License.
7. Notices. All notices and other communications hereunder shall be in
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writing and shall be given to the respective parties at the following addresses
(or at least such other address for a party as shall be specified by written
notice):
(a) If to Licensee, to:
Teletouch Licenses, Inc.
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(b) If to Operator, to:
Teletouch Communications, Inc.
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With a copy of all notices to be sent to:
ING Prime Rate Trust
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8. Amendment. This Agreement may not be amended, modified or changed
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except in writing signed by all parties hereto.
9. Successors and Assigns; Limitation on Rights of Others. This
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Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective heirs, representatives,
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successors and permissible assigns, subject to any applicable requirements of
law as to prior FCC consent to an assignment of the Licensee or transfer of
control of the Licensee.
10. Governing Law; Severability. This Agreement shall be governed by
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and construed in accordance with the laws of the State of Texas and the
Communications Act of 1934, as amended. In the event that any provision herein
is held to be invalid, void, or illegal by any court of competent jurisdiction,
the remaining provision of this Agreement shall remain in full force and effect
and this Agreement shall be construed reasonably to preserve the original intent
of the parties hereto insofar as practical.
11. Interpretation. This Agreement is to be construed fairly and simply
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and not strictly for or against either of the parties hereto. The section
headings contained herein are for convenience of reference only, and are not
part of this Agreement, and shall not affect the meaning or interpretation of
any provision hereof.
12. Waiver of Rights; Remedies. Any failure of a party to comply with
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any obligation, covenant, agreement or condition contained in this Agreement may
be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure of compliance. The rights and remedies of the
parties under this Agreement are cumulative and are not exclusive of any rights
or remedies which the parties would otherwise have.
13. Counterparts. This Agreement may be executed by the parties in
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separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same document. This Agreement shall become effective when one or more
counterparts have been signed by each party and delivered to each other party.
14. Termination. In the event that Operator and/or Licensee default
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under the terms and conditions of the Promissory Note, Second Amended and
Restated Credit Agreement and/or Guarantee and Security Agreement, such that
Pilgrim is empowered to exercise its rights in the event of default thereunder,
then this Agreement shall terminate upon the assignment or transfer of control
of the Licenses to a third party for value.
Executed as of the 17/th/ day of May, 2002.
OPERATOR:
TELETOUCH COMMUNICATIONS, INC.
By: ___________________________
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President
LICENSEE:
TELETOUCH LICENSES, INC.
By: __________________________________
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President
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