EXHIBIT 1
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MAJORCO, L.P.,
A DELAWARE LIMITED PARTNERSHIP
dated as of January 31, 1996
among
SPRINT SPECTRUM, L.P.
TCI NETWORK SERVICES
COMCAST TELEPHONY SERVICES
and
COX TELEPHONY PARTNERSHIP
TABLE OF CONTENTS
SECTION 1. THE PARTNERSHIP.................................................1
1.1 Continuation of the Partnership.................................1
1.2 Name............................................................2
1.3 Purpose.........................................................2
1.4 Principal Executive Office......................................2
1.5 Term............................................................3
1.6 Filings; Agent for Service of Process...........................3
1.7 Title to Property...............................................3
1.8 Payments of Individual Obligations..............................4
1.9 Independent Activities..........................................4
1.10 Definitions.....................................................4
1.11 Additional Definitions..........................................26
1.12 Terms Generally.................................................30
SECTION 2. PARTNERS' CAPITAL CONTRIBUTIONS.................................30
2.1 Percentage Interests; Preservation of Percentages of
Interests Held as General Partners and as Limited
Partners.............................................................30
2.2 Partners' Original Capital Contributions........................31
2.3 Additional Capital Contributions................................31
2.4 Failure to Contribute Capital...................................35
2.5 Other Additional Capital Contributions..........................43
2.6 Partnership Funds...............................................43
2.7 Partner Loans; Other Borrowings.................................43
2.8 Other Matters...................................................45
SECTION 3. ALLOCATIONS.....................................................45
3.1 Profits.........................................................45
3.2 Losses..........................................................46
3.3 Special Allocations.............................................46
3.4 Curative Allocations............................................48
3.5 Loss Limitation.................................................49
3.6 Other Allocation Rules..........................................49
3.7 Tax Allocations: Code Section 704[Copyright]...................49
SECTION 4. DISTRIBUTIONS...................................................50
4.1 Available Cash..................................................50
4.2 Tax Distributions...............................................50
4.3 Amounts Withheld................................................51
SECTION 5. MANAGEMENT......................................................51
5.1 Authority of the Partnership Board..............................51
5.2 Business Plan and Annual Budget.................................56
5.3 Employees.......................................................59
5.4 Limitation of Agency............................................59
5.5 Liability of Partners, Representatives and
Partnership Employees...........................................60
5.6 Indemnification.................................................60
5.7 Temporary Investments...........................................62
5.8 Deadlocks.......................................................62
5.9 Conversion to Corporate Form....................................63
SECTION 6. PARTNERSHIP OPPORTUNITIES; CONFIDENTIALITY......................65
6.1 Competitive Activities..........................................65
6.2 Enforceability and Enforcement..................................68
6.3 General Exceptions to Section 6.1...............................68
6.4 Comcast Exceptions..............................................72
6.5 Freedom of Action...............................................77
6.6 Confidentiality.................................................77
SECTION 7. ROLE OF EXCLUSIVE LIMITED PARTNERS..............................80
7.1 Rights or Powers................................................80
7.2 Voting Rights...................................................80
SECTION 8. TRANSACTIONS WITH PARTNERS; OTHER AGREEMENTS ...................80
8.1 Sprint Cellular.................................................80
8.2 Sprint Brand Licensing Agreement................................81
8.3 Marketing; Branding of Partnership Services.....................81
8.4 Preferred Provider..............................................83
8.5 MFJ.............................................................84
8.6 Interested Party Transactions...................................84
8.7 Access to Technical Information.................................84
8.8 Parent Undertaking..............................................85
8.9 Certain Additional Covenants....................................85
8.10 PioneerCo Preemptive Rights.....................................86
8.11 Foreign Ownership...............................................86
8.12 Product Integration.............................................88
8.13 Provision of Services...........................................91
8.14 Comcast Representative..........................................91
8.15 Purchasing......................................................92
8.16 Advertising Reimbursement.......................................92
SECTION 9. REPRESENTATIONS AND WARRANTIES..................................93
9.1 Representations and Warranties by Partners......................93
9.2 Representation and Warranty of Sprint...........................95
SECTION 10. ACCOUNTING, BOOKS AND RECORDS..............................95
10.1 Accounting, Books and Records...................................95
10.2 Reports.........................................................95
10.3 Tax Returns and Information.....................................97
10.4 Proprietary Information.........................................98
SECTION 11. ADVERSE ACT................................................99
11.1 Remedies........................................................99
11.2 Adverse Act Purchase............................................101
11.3 Net Equity......................................................104
11.4 Gross Appraised Value...........................................105
11.5 Extension of Time...............................................106
SECTION 12. DISPOSITIONS OF INTERESTS..................................106
12.1 Restriction on Dispositions.....................................106
12.2 Permitted Transfers.............................................106
12.3 Conditions to Permitted Transfers...............................107
12.4 Right of First Refusal..........................................110
12.5 Tagalong Rights.................................................114
12.6 Offer and Registration Rights...................................116
12.7 Right of First Offer............................................123
12.8 Prohibited Dispositions.........................................128
12.9 Representations Regarding Transfers.............................128
12.10Distributions and Allocations in Respect of.....................128
SECTION 13. CONVERSION OF INTERESTS....................................129
13.1 Termination of Status as General Partner........................129
13.2 Restoration of Status as General Partner........................129
SECTION 14. DISSOLUTION AND WINDING UP.................................130
14.1 Liquidating Events..............................................130
14.2 Winding Up......................................................131
14.3 Compliance With Certain Requirements of
Regulations..........................................................132
14.4 Deemed Distribution and Recontribution..........................133
14.5 Rights of Partners..............................................133
14.6 Notice of Dissolution...........................................133
14.7 Buy/Sell Arrangements...........................................133
SECTION 15. MISCELLANEOUS ...........................................136
15.1 Notices.........................................................136
15.2 Binding Effect..................................................137
15.3 Construction....................................................137
15.4 Time............................................................137
15.5 Table of Contents; Headings.....................................137
15.6 Severability....................................................137
15.7 Incorporation by Reference......................................137
15.8 Further Action..................................................137
15.9 Governing Law...................................................138
15.10 Waiver of Action for Partition; No ▇▇▇▇ For....................138
15.11 Counterpart Execution..........................................138
15.12 Sole and Absolute Discretion...................................138
15.13 Specific Performance...........................................138
15.14 Entire Agreement...............................................139
15.15 Limitation on Rights of Others.................................139
15.16 Waivers; Remedies..............................................139
15.17 Jurisdiction; Consent to Service of Process....................139
15.18 Waiver of Jury Trial...........................................140
15.19 No Right of Set-Off............................................140
SCHEDULES
Schedule Number
-------- ------
Excluded Businesses; Non-Exclusive Services
and Wireless Exclusive Services............................. 1.10(a)
Sprint Cellular Service Area.................................. 1.10(b)
Initial Percentage Interests.................................. 2.1
Notice Addresses.............................................. 2.2
Simple Majority Vote.......................................... 5.1(i)
Required Majority Vote........................................ 5.1(j)
Unanimous Vote................................................ 5.1(k)
Unanimous Partner Vote........................................ 5.1(l)
Temporary Investments Guidelines.............................. 5.7
EXHIBITS
Exhibit Number
------- ------
Form of Amended and Restated Parent
Undertaking................................................. 1.10(a)
Form of Parents Agreement..................................... 1.10(b)
Form of Default Loan Promissory Note.......................... 2.4(c)(ii)
Form of Partner Loan Promissory Note.......................... 2.7
Form of Amended and Restated Sprint
Trademark License Agreement................................. 8.2
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MAJORCO, L.P.,
A DELAWARE LIMITED PARTNERSHIP
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered
into as of the 31st day of January, 1996, by and among Sprint Spectrum,
L.P., a Delaware limited partnership ("Sprint"), TCI Network Services, a
Delaware general partnership ("TCI"), Comcast Telephony Services, a
Delaware general partnership ("Comcast"), and Cox Telephony Partnership, a
Delaware general partnership ("Cox"), each as a General Partner and a
Limited Partner, pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act, on the following terms and conditions:
WHEREAS, Sprint, TCI, Comcast and Cox entered into that certain
Agreement of Limited Partnership of MajorCo, L.P., dated as of March 28,
1995 (as amended by that certain First Amendment to Agreement of Limited
Partnership dated as of August 31, 1995, the "Prior Partnership
Agreement"), providing for the formation of the Partnership by the filing
of a Certificate of Limited Partnership with the Secretary of State of
Delaware;
WHEREAS, Sprint, TCI, Comcast and Cox wish to further amend the Prior
Partnership Agreement and to restate the Prior Partnership Agreement, as so
amended, in its entirety; and
WHEREAS, Sprint, TCI, Comcast and Cox wish to continue the
Partnership upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein, and in order to set forth the respective
rights, obligations, and interests of the parties to one another, the
parties, intending to be legally bound, hereby agree as follows:
SECTION 1. THE PARTNERSHIP
1.1 Continuation of the Partnership.
The Partnership was formed on March 28, 1995. The Partners hereby
agree to continue the Partnership as a limited partnership pursuant to the
provisions of the Act and upon the terms and conditions set forth in this
Agreement. This Agreement completely amends, restates and supersedes the
Prior Partnership Agreement.
1.2 Name.
The name of the Partnership shall be MajorCo, L.P., and all business
of the Partnership shall be conducted in such name or, in the discretion of
the Partnership Board, under any other names (but excluding a name that
includes the name of a Partner unless such Partner has consented thereto).
1.3 Purpose.
(a) Subject to, and upon the terms and conditions of this
Agreement, the purposes of the Partnership shall be to engage in the
Wireless Business and in the provision of Non-Exclusive Services, either
directly or through one or more Subsidiaries, and to perform such
activities in the furtherance of such Wireless Business and provision of
Non-Exclusive Services as may be approved from time to time by the
Partnership Board. Without a Unanimous Partner Vote, the Partnership shall
not engage in any other business, including any of the Excluded Businesses.
Notwithstanding the preceding sentence, the Partners acknowledge that (i)
pursuant to the Prior Partnership Agreement, the Partnership conducted
certain activities relating to the provision of wireline telecommunications
services, (ii) such activities will be terminated in an orderly manner as
soon as practicable following the date of this Agreement, but in no event
earlier than the end of such period as the Partnership Board may determine
is needed to ensure an orderly disposition by the Partnership of any assets
or rights relating exclusively to such activities and (iii) any assets or
other rights relating exclusively to such activities that are owned by the
Partnership shall be disposed of in such a manner as determined by a
Unanimous Vote of the Partnership Board.
(b) The Partnership shall have all the powers now or hereafter
conferred by the laws of the State of Delaware on limited partnerships
formed under the Act and, subject to the limitations of this Agreement, may
do any and all lawful acts or things that are necessary, appropriate,
incidental or convenient for the furtherance and accomplishment of the
purposes of the Partnership. Without limiting the generality of the
foregoing, and subject to the terms of this Agreement, the Partnership may
enter into, deliver and perform all contracts, agreements and other
undertakings and engage in all activities and transactions as may be
necessary or appropriate to carry out its purposes and conduct its
business.
1.4 Principal Executive Office.
The principal executive office of the Partnership shall be located in
such place as determined by the Partnership Board, and the Partnership
Board may change the location of the principal executive office of the
Partnership to any other place within or without the State of Delaware upon
ten (10) Business Days prior notice to each of the Partners, provided that
such principal executive office shall be located in the United States. The
Partnership Board may establish and maintain such additional offices and
places of business of the Partnership, within or without the State of
Delaware, as it deems appropriate.
1.5 Term.
The term of the Partnership commenced on the date the certificate of
limited partnership described in Section 17-201 of the Act (the
"Certificate") was filed in the office of the Secretary of State of
Delaware in accordance with the Act and shall continue until the winding up
and liquidation of the Partnership and its business is completed following
a Liquidating Event, as provided in Section 14.
1.6 Filings; Agent for Service of Process.
(a) The General Partners caused the Certificate to be filed in
the office of the Secretary of State of Delaware in accordance with the
Act. The Partnership Board shall take any and all other actions reasonably
necessary to perfect and maintain the status of the Partnership as a
limited partnership under the laws of Delaware. The General Partners shall
cause amendments to the Certificate to be filed whenever required by the
Act. The Partners shall be provided with copies of each document filed or
recorded as contemplated by this Section 1.6 promptly following the filing
or recording thereof.
(b) The General Partners shall execute and cause to be
filed original or amended Certificates and shall take any and all other
actions as may be reasonably necessary to perfect and maintain the status
of the Partnership as a limited partnership or similar type of entity under
the laws of any other states or jurisdictions in which the Partnership
engages in business.
(c) The registered agent for service of process on the
Partnership shall be The Corporation Trust Company or any successor as
appointed by the Partnership Board in accordance with the Act. The
registered office of the Partnership in the State of Delaware is located at
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.7 Title to Property.
No Partner shall have any ownership interest in its individual name
or right in any real or personal property owned, directly or indirectly, by
the Partnership, and each Partner's Interest shall be personal property for
all purposes. The Partnership shall hold all of its real and personal
property in the name of the Partnership or its nominee and not in the name
of any Partner.
1.8 Payments of Individual Obligations.
The Partnership's credit and assets shall be used solely for the
benefit of the Partnership, and no asset of the Partnership shall be
Transferred or encumbered for, or in payment of, any individual obligation
of any Partner.
1.9 Independent Activities.
Each Partner and any of its Affiliates shall be required to devote
only such time to the affairs of the Partnership as such Partner determines
in its sole discretion may be necessary to manage and operate the
Partnership to the extent contemplated by this Agreement, and each such
Person, except as expressly provided herein, shall be free to serve any
other Person or enterprise in any capacity that it may deem appropriate in
its discretion.
1.10 Definitions.
Capitalized words and phrases used in this Agreement have the
following meanings:
"Accountants" means, as of any time, such firm of nationally
recognized independent certified public accountants that, as of such time,
has been appointed by the Partnership Board as the accountants for the
Partnership.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as set forth in Del. Code ▇▇▇. tit. 6, Section Section 17-101 to 17-
1109.
"Additional Capital Contributions" means, with respect to each
Partner, the Capital Contributions made by such Partner pursuant to Section
2.3 of the Prior Partnership Agreement on or after January 1, 1996 and
prior to the date of this Agreement, and the Capital Contributions made by
such Partner pursuant to Sections 2.3 (except as otherwise provided in
Sections 2.3(a)(i) and (ii)), 2.4, 2.5 and 8.10, but excluding Special
Contributions, reduced in each case by the amount of any liabilities of
such Partner assumed by the Partnership in connection with such Capital
Contribution or any Nonrecourse Liabilities of such Partner that are
secured by any property contributed by such Partner as a part of such
Capital Contribution. In the event all or a portion of an Interest is
Transferred in accordance with the terms of this Agreement, the transferee
shall succeed to the Additional Capital Contributions of the transferor to
the extent they relate to the Transferred Interest.
"Additional Contribution Agreement" means a contribution
agreement the terms of which have been approved by the Unanimous Vote of
the Partnership Board pursuant to which a Partner makes an Additional
Capital Contribution to the Partnership pursuant to Section 2.5.
"Additional Contribution Notice" means a written notice given
to all Partners, which shall (i) state the Additional Contribution Amount
being requested of all Partners and each Partner's proportionate share
thereof determined as provided in Section 2.3(b)(i) (or, in the case of a
required Additional Capital Contribution in respect of a Declined
Accelerated Contribution, as provided in Section 2.3(b)(ii)(B)), (ii) if
applicable, state that the Additional Capital Contribution being requested
is a Second Tranche Call, (iii) specify in reasonable detail the purposes
for which the Additional Contribution Amount is required, (iv) identify a
date (the "Contribution Date"), not more than forty-five (45) days nor less
than thirty (30) days after the date of such notice, upon which the
Additional Capital Contributions are to be made, (v) specify the account of
the Partnership to which the contribution is to be made and (vi) if the
Additional Capital Contribution is being requested at such time as the
aggregate amount of Original Capital Contributions and Additional Capital
Contributions (including the Additional Capital Contribution being
requested) made or requested to be made in accordance with this Agreement
(excluding any PioneerCo Contribution) exceeds Five Billion Dollars
($5,000,000,000), state the Base Value, the estimated Gross Appraised Value
and the estimated aggregate Adjusted Net Equity of all Partners as of the
applicable Contribution Date.
"Adjusted Capital Account Deficit" means, with respect to any
Exclusive Limited Partner, the deficit balance, if any, in such Exclusive
Limited Partner's Capital Account as of the end of the relevant Allocation
Year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Exclusive Limited Partner is obligated to restore pursuant to any provision
of this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-
2(i)(5); and
(ii) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-
1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith.
"Adverse Act" means, with respect to any Partner, any of the
following:
(i) Such Partner becomes a Defaulting Partner;
(ii) Such Partner Disposes of all or any part of its
Interest except as required or permitted by this Agreement; provided,
however, that no Adverse Act shall be considered to have occurred until
thirty (30) days following the involuntary encumbrance of all or any part
of such Interest if during such thirty (30) day period the affected Partner
acts diligently to, and prior to the end of such thirty (30) day period
does, remove any such encumbrance, including effecting the posting of a
bond to prevent foreclosure where necessary;
(iii) Such Partner has committed a material breach of
any material covenant contained in this Agreement (other than as otherwise
expressly enumerated in this definition) or a material default on any
material obligation provided for in this Agreement (other than as otherwise
expressly enumerated in this definition) and such breach or default
continues for thirty (30) days after the date written notice thereof has
been given to such Partner by any General Partner (with a copy to the
Partnership Board and each other Partner); provided that if such breach or
default is not a failure to pay money and is of such a nature that it
cannot reasonably be cured within such thirty (30) day period, but is
curable and such Partner in good faith begins efforts to cure it within
such thirty (30) day period and continues diligently to do so, such Partner
shall have a reasonable additional period thereafter to effect the cure
(which shall not exceed an additional ninety (90) days unless otherwise
approved by the Partnership Board by Required Majority Vote); and provided
further that if, within thirty (30) days after the date written notice of
such breach or default has been given to such Partner, such Partner
delivers written notice (the "Contest Notice") to the Partnership Board and
all other Partners that it contests such notice of breach or default, such
breach or default shall not constitute an Adverse Act unless and until (and
assuming that such breach or default has not theretofore been cured in full
and that any applicable cure period has expired) (A) the disinterested
Representatives determine in good faith by Required Majority Vote that such
Partner has committed such a breach or default or (B) there is a Final
Determination that such Partner's actions or failures to act constituted
such a breach or default; and provided further that this clause (iii) shall
not apply in the event of a breach of Section 8.5 hereof, which breach
shall constitute an Adverse Act (if at all) pursuant to clause (vii) below;
(iv) The Bankruptcy of such Partner or the occurrence of
any other event which would permit a trustee or receiver to acquire control
of the affairs or assets of such Partner;
(v) The occurrence of a Change in Control of such
Partner without the unanimous written consent of the other General
Partners;
(vi) An IXC Transaction has occurred with respect to
such Partner;
(vii) The occurrence of any event with respect to such
Partner (A) that causes such Partner or the Partnership or any of its
Subsidiaries to become a BOC or (B) that causes the Partnership or any of
its Subsidiaries to become a BOC Affiliated Enterprise or an entity subject
to any restriction or limitation under Section II of the MFJ, provided,
however, that a the circumstances that constitute an Adverse Act under
clause (B) above must have a material adverse effect on the business,
assets, liabilities, results of operations, financial condition or
prospects of the Partnership and its Subsidiaries and (b) no Adverse Act
shall be considered to have occurred if such Partner has taken actions
which have cured the circumstances that would otherwise have constituted an
Adverse Act under clause (A) or (B), as applicable, of this clause (vii)
within ninety (90) days following the date written notice of the occurrence
of such event has been given to such Partner by any General Partner (with a
copy to the Partnership Board and each other Partner); and provided further
that if, within ninety (90) days after the date written notice of such
occurrence has been given to such Partner, such Partner delivers a Contest
Notice to the Partnership Board and all other Partners that it contests
such occurrence (or contests whether such occurrence constitutes an Adverse
Act under this clause (vii)), such occurrence shall not constitute an
Adverse Act unless and until (and assuming that such circumstances have not
theretofore been cured in full and that the applicable cure period has
expired) (a) the disinterested Representatives determine in good faith by
Required Majority Vote that such occurrence constitutes an Adverse Act
under this clause (vii) or (b) there is a Final Determination that such
occurrence constitutes an Adverse Act under this clause (vii); or
(viii) Such Partner otherwise causes a dissolution of
the Partnership in contravention of the terms of this Agreement (other than
solely by reason of the Bankruptcy of such Partner).
An "Adverse Partner" is any Partner with respect to which an
Adverse Act has occurred.
"Affiliate" means, with respect to any Person, any other Person
that directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person. For purposes
of this definition, the term "controls" (including its correlative meanings
"controlled by" and "under common control with") shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the
foregoing, (i) neither the Partnership nor MinorCo, nor any Person
controlled by the Partnership or MinorCo (including WirelessCo), shall be
deemed to be an Affiliate of any Partner or of any Affiliate of any Partner
and (ii) no Partner or any Affiliate thereof shall be deemed to be an
Affiliate of any other Partner or any Affiliate thereof solely by virtue of
the ownership by such Partner or any of its Affiliates of any equity
interest in the Partnership, MinorCo or PhillieCo.
"Agreed Value" means the agreed upon value of a Capital
Contribution by a Partner of the Property identified below, determined as
provided below:
(i) with respect to the Property included in the Original
Capital Contribution of such Partner, the amount set forth next to such
Partner's name in Schedule 2.2 to the Prior Partnership Agreement;
(ii) with respect to the License Contribution by Cox,
$17,647,059; and
(iii) with respect to the Omaha License, an amount equal
to the sum of (A) $995,564.00, together with interest at the rate of 13.4%
per annum computed from November 17, 1994 through the date that the Omaha
License is contributed to the Partnership pursuant to Section 2.3(a)(ii)
plus (B) $4,062,400.00, together with interest at the rate of 13.4% per
annum computed from June 30, 1995 through the date that the Omaha License
is contributed to the Partnership pursuant to Section 2.3(a)(ii).
"Agreement" or "Partnership Agreement" means this Amended and
Restated Agreement of Limited Partnership, including all Schedules hereto,
as amended from time to time.
"Allocation Year" means (i) the period commencing on the date
of the Prior Partnership Agreement and ending on December 31, 1995, (ii)
any subsequent twelve (12) month period commencing on January 1 and ending
on December 31, or (iii) any portion of the period described in clauses (i)
or (ii) for which the Partnership is required to allocate Profits, Losses,
and other items of Partnership income, gain, loss or deduction pursuant to
Section 3.
"Available Cash" means as of any date the cash of the
Partnership as of such date less such portion thereof as the Partnership
Board determines to reserve for Partnership expenses, debt payments,
capital improvements, replacements, and contingencies.
"Bankruptcy" means, with respect to any Person, a "Voluntary
Bankruptcy" or an "Involuntary Bankruptcy." A "Voluntary Bankruptcy" means,
with respect to any Person, the inability of such Person generally to pay
its debts as such debts become due (other than any obligation of such
Person to make capital contributions under this Agreement), or an admission
in writing by such Person of its inability to pay its debts generally or a
general assignment by such Person for the benefit of creditors; the filing
of any petition or answer by such Person seeking to adjudicate it bankrupt
or insolvent, or seeking for itself any liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of such Person 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 such Person
or for any substantial part of its property; or corporate action taken by
such Person to authorize any of the actions set forth above. An
"Involuntary Bankruptcy" means, with respect to any Person, without the
consent or acquiescence of such Person, the entering of an order for relief
or approving a petition for relief or reorganization or any other 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, or the
filing of any such petition against such Person which petition shall not be
dismissed within ninety (90) days, or, without the consent or acquiescence
of such Person, the enter-ing of an order appointing a trustee, custodian,
receiver or liquidator of such Person or of all or any substantial part of
the property of such Person which order shall not be dismissed within sixty
(60) days.
"BOC" means a "BOC" or one of the "▇▇▇▇ Operating Companies" as
defined in Section IV.C of the MFJ.
"BOC Affiliated Enterprise" has the same meaning as the term
"affiliated enterprise" as used with respect to "BOC" or "▇▇▇▇ Operating
Companies" in Section II.D of the MFJ.
"BTA" means a Basic Trading Area, as defined in the FCC rules
to be codified at 47 C.F.R. Section 24.13.
"Business Day" means a day of the year on which banks are not
required or authorized to close in the State of New York.
"Cable Partners" means Comcast, Cox and/or TCI, as the context
may require.
"Cable Subsidiary" has the meaning set forth in the form of
Parents Agreement attached as Exhibit 1.10(b).
"Capital Account" means, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with the
following provisions:
(i) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions, such Partner's distributive
share of Profits and any items in the nature of income or gain which are
specially allocated pursuant to Section 3.3 or Section 3.4, and the amount
of any Partnership liabilities which are assumed by such Partner or secured
by any Property distributed to such Partner as permitted by this Agreement.
(ii) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any Property
distributed or deemed to be distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of Losses
and any items in the nature of expenses or losses which are specially
allocated pursuant to Section 3.3 or Section 3.4, and the amount of any
liabilities of such Partner assumed by the Partnership or any Nonrecourse
Liabilities of such Partner that are secured by any Property contributed by
such Partner to the Partnership.
(iii) In the event all or a portion of an Interest is
Transferred in accordance with the terms of this Agreement, the transferee
shall succeed to the Capital Account of the transferor to the extent it
relates to the Transferred Interest.
(iv) In determining the amount of any liability for
purposes of the definitions of "Additional Capital Contributions" and
"Original Capital Contribution" and subparagraphs (i) and (ii) of this
definition of "Capital Account," there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and
Regulations.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a
manner consistent with such Regulations. In the event the Partnership
Board determines that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including debits or
credits relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership or any
Partner), are computed in order to comply with such Regulations, the
Partnership Board may make such modification, provided that it is not
likely to have a material effect on the amounts distributable to any
Partner pursuant to Section 14 upon the dissolution and winding up of the
Partnership. The Partnership Board also shall (i) make any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital reflected on
the Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any
appropriate modifications in the event unanticipated events might otherwise
cause this Agreement not to comply with Regulations Section 1.704-1(b).
Any such decision or action permitted to be taken by the Partnership Board
under this paragraph shall require the Unanimous Vote of the Partnership
Board.
"Capital Commitment" of any Partner means (i) with respect to
the first Fiscal Year in the Initial Two-Year Period, an amount equal to
the product of (A) such Partner's initial Percentage Interest and (B) the
Planned Capital Amount for such Fiscal Year, and (ii) with respect to the
last Fiscal Year in the Initial Two-Year Period, an amount equal to the
excess, if any, of (A) the product of (1) such Partner's initial Percentage
Interest and (2) the sum of (a) the Planned Capital Amount for such Fiscal
Year plus (b) any Prior Year's Carryforward, over (B) that portion of the
cumulative Accelerated Contribution Amounts requested of and made by such
Partner in the first Fiscal Year in the Initial Two-Year Period that the
Partnership Board has determined pursuant to Section 2.3(b)(i) shall be
applied to reduce the Planned Capital Amount for such last Fiscal Year. In
the event all or a portion of an Interest is Transferred in accordance with
this Agreement, the transferee shall succeed to the Capital Commitment of
the transferor to the extent it relates to the Transferred Interest and has
not been called in full.
"Capital Contribution" means, with respect to any Partner, the
amount of money and the Gross Asset Value at the time of contribution of
any Property (other than money) contributed to the Partnership with respect
to the Interest held by such Partner (including any contribution expressly
excluded from the definition of Additional Capital Contribution). The
principal amount of a promissory note which is not readily traded on an
established securities market and which is contributed to the Partnership
by the maker of the note (or a Partner related to the maker of the note
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c)) shall not
be included in the Capital Account of any Partner until the Partnership
makes a taxable disposition of the note or until (and to the extent)
principal payments are made on the note, all in accordance with Regulations
Section 1.704-1(b)(2)(iv)(d)(2).
"Carrier" has the meaning set forth in the definition of "IXC"
below.
"Change in Control" means, with respect to any Partner that has
a Parent other than itself, such Partner's ceasing to be a Subsidiary of
its Parent other than in connection with a Permitted Transaction.
"Chief Executive Officer" means the chief executive officer of
the Partnership, including any interim chief executive officer.
"Code" means the Internal Revenue Code of 1986.
"Comcast Parent" means Comcast Corporation, a Pennsylvania
corporation and any successor (by merger, consolidation, Transfer or
otherwise) to all or substantially all of its business and assets.
"Consumer Price Index" means the Consumer Price Index "All
Urban Consumers: U.S. city average, all items" (1982-1984 = 100) published
by the Bureau of Labor Statistics of the United States Department of Labor,
or any equivalent successor or substitute index selected by the Partnership
Board and published by the Bureau of Labor Statistics or a successor or
substitute governmental agency selected by the Partnership Board.
"Contest Notice" has the meaning set forth in clause (iii) of
the definition of "Adverse Act."
"Contribution Date" has the meaning set forth in the definition
of "Additional Contribution Notice."
"Controlled Affiliate" of any Person means the Parent of such
Person and each Subsidiary of such Parent. As used in Sections 6, 8.5, 8.9
and 8.11 the term "Controlled Affiliate" shall also include any Affiliate
of a Person that such Person or its Parent can directly or indirectly
unilaterally cause to take or refrain from taking any of the actions
required, prohibited or otherwise restricted by such Section, whether
through ownership of voting securities, contractually or otherwise. As
used in Sections 2.4, 5.1(c), 11.2, 12.4 and 12.5 the term "Controlled
Affiliate" shall also include any Affiliate of a Person that such Person or
its Parent can directly or indirectly unilaterally cause to take or refrain
from taking any action regarding the Partnership, whether through ownership
of voting securities, contractually or otherwise.
"Cox Parent" means ▇▇▇ Communications, Inc., a Delaware
corporation, and any successor (by merger, consolidation, Transfer or
otherwise) to all or substantially all of its business and assets.
"Cox Pioneer Partnership" means a general partnership to be
formed by a Subsidiary of Cox Parent and a Subsidiary of ▇▇▇ Enterprises,
Inc., a Delaware corporation.
"Cox Pioneer Preference License" means the ▇▇ ▇▇▇ "▇" ▇▇▇▇▇ PCS
license granted to Cox Parent on December 14, 1994, for the MTA
encompassing Los Angeles and San Diego, California, which MTA is identified
in the FCC Public Notice regarding the PCS Auction as Market No. M-2
(Report No. AUC-94-04, Auction No. 4).
"Cut-Off Time" means the earlier to occur of (i) the end of the
last Fiscal Year covered by the Initial Business Plan and (ii) such time as
the aggregate amount of Original Capital Contributions and Additional
Capital Contributions made or requested to be made (excluding any PioneerCo
Contribution) first equals or exceeds the Total Mandatory Contributions.
"Debt" means (i) any indebtedness for borrowed money or
deferred purchase price of property whether or not evidenced by a note,
bond, or other debt instrument, (ii) obligations to pay money as lessee
under capital leases, (iii) obligations to pay money secured by any
mortgage, pledge, security interest, encumbrance, lien or charge of any
kind existing on any asset owned or held by the Partnership whether or not
the Partnership has assumed or become liable for the obligations secured
thereby, (iv) any obligation under any interest rate swap agreement (the
principal amount of such obligation shall be deemed to be the notional
principal amount on which such swap is based), and (v) obligations under
direct or indirect guarantees of (including obligations (contingent or
otherwise) to assure a creditor against loss in respect of) indebtedness or
obligations of the kinds referred to in clauses (i), (ii), (iii) and (iv)
above, provided that Debt shall not include obligations in respect of any
accounts payable that are incurred in the ordinary course of the
Partnership's business and are not delinquent or are being contested in
good faith by appropriate proceedings.
"Depreciation" means, for each Allocation Year, an amount equal
to the depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such Allocation Year, except that if
the Gross Asset Value of an asset differs from its adjusted basis for
federal income tax purposes at the beginning of such Allocation Year,
Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such Allocation Year
bears to such beginning adjusted tax basis; provided, that if the adjusted
basis for federal income tax purposes of an asset at the beginning of such
Allocation Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by
the Partnership Board; and provided, further, that, consistent with Section
3.7, Depreciation with respect to Subsidiary Partnership Property shall not
be determined with regard to the distributive share of depreciation expense
directly or indirectly allocated to the Partnership by the Subsidiary
Partnership, but shall be computed with respect to the initial Gross Asset
Value of the Subsidiary Partnership interest contributed to the Partnership
as if such Subsidiary Partnership Property (or the equivalent percentage
thereof) were owned directly by the Partnership and were contributed by the
Partners who contributed the Subsidiary Partnership interests.
"Dispose" (including its correlative meanings, "Disposed of",
"Disposition" and "Disposed"), with respect to any Interest means to
Transfer, pledge, hypothecate or otherwise dispose of such Interest, in
whole or in part, voluntarily or involuntarily, except by operation of law
in connection with a merger, consolidation or other business combination of
the Partnership and except that such term shall not include any pledge or
hypothecation of, or granting of a security interest in, an Interest that
is approved by the Partnership Board in connection with any financing
obtained on behalf of the Partnership.
"Excluded Businesses" has the meaning set forth in Schedule
1.10(a).
"Exclusive Limited Partner" means any Limited Partner that is
not also a General Partner.
"FCC" means the Federal Communications Commission.
"Final Determination" means (i) a determination set forth in a
binding settlement agreement between the Partnership and the Partner
alleged to have committed the Adverse Act, which has been approved by a
Required Majority Vote of the Partnership Board pursuant to Section 8.6 or
(ii) a final judicial determination, not subject to further appeal, by a
court of competent jurisdiction.
"Fiscal Year" means (i) the period commencing on the date of
the Prior Partnership Agreement and ending on December 31, 1995, (ii) any
subsequent twelve (12) month period commencing on January 1, and ending on
December 31, or (iii) the period commencing on the immediately preceding
January 1 and ending on the date on which all Property is distributed to
the Partners pursuant to Section 14.2.
"GAAP" means generally accepted accounting principles in effect
in the United States of America from time to time.
"General Partner" means any Person who (i) is referred to as
such in the first paragraph of this Agreement or has become a General
Partner pursuant to the terms of this Agreement, and (ii) has not, at any
given time, ceased to be a General Partner pursuant to the terms of this
Agreement. "General Partners" means all such Persons.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross fair market
value of such asset, as determined by the contributing Partner and the
Partnership Board in accordance with Section 8.6, provided that the initial
Gross Asset Value of the Property contributed by the Partners pursuant to
Section 2.2 or either of clauses (i) or (ii) of Section 2.3(a) shall be the
sum of (1) the Agreed Value of such Property plus (2) the amount of any
liabilities of the contributing Partner assumed by the Partnership in
connection with such contribution or any Nonrecourse Liabilities of such
Partner that are secured by the contributed Property;
(ii) The Gross Asset Value of all Partnership assets
shall be adjusted to equal their gross fair market value, as determined by
the Partnership Board, as of the following times: (A) the acquisition of
an Interest by any new Partner in exchange for more than a de minimis
Capital Contribution; (B) the distribution by the Partnership to a Partner
of more than a de minimis amount of Property as consideration for an
Interest; (C) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); (D) the conversion of a General
Partner to an Exclusive Limited Partner if, and only if, in the judgment of
the Partnership Board, such adjustment would either cause the Person who is
being converted to an Exclusive Limited Partner to have a deficit balance
in its Capital Account or increase the amount of such a deficit balance;
and (E) the adjustment of the Percentage Interests of the Partners pursuant
to Section 2.4(d)(ii);
(iii) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the gross fair market
value of such asset on the date of distribution as determined by the
distributee and the Partnership Board in accordance with Section 8.6;
(iv) The Gross Asset Values of Partnership assets shall
be increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into account
in determining Capital Accounts pursuant to Regulation Section 1.704-
1(b)(2)(iv)(m) and subparagraph (vi) of the definition of "Profits" and
"Losses" and Section 3.3(g); provided, however, that Gross Asset Values
shall not be adjusted pursuant to this subparagraph (iv) to the extent that
an adjustment pursuant to subparagraph (ii) hereof is made in connection
with a transaction that would otherwise result in an adjustment pursuant to
this subparagraph (iv); and
(v) If Gross Asset Value is required to be determined
for the purpose of Section 11.2 or 14.7, Gross Asset Value shall be
determined in the manner set forth in such Sections.
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to clause (i), (ii) or (iv) of this definition, such
Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Profits
and Losses.
"Hypothetical Federal Income Tax Amount" means for any Fiscal
Year the product of (A) the daily weighted average highest marginal federal
income tax rate applicable to domestic corporations in effect for such
Fiscal Year expressed as a percentage and (B) the excess, if any, of (i)
the cumulative amount of taxable income and gain reported by the
Partnership on its Internal Revenue Service Forms 1065 over its life
determined as of the end of such Fiscal Year, over (ii) the larger of zero
(0) or the cumulative amount of taxable income and gain reported by the
Partnership on its Internal Revenue Service Forms 1065 over its life
determined as of the beginning of such Fiscal Year.
"Initial Two-Year Period" means the period from January 1, 1996
through December 31, 1997.
"Intermediate Subsidiary" means, with respect to any Parent of
a Partner, a Subsidiary of such Parent that holds a direct or indirect
equity interest in such Partner.
"Interest" means, as to any Partner, all of the interests of
such Partner in the Partnership, including any and all benefits to which
the holder of an interest in the Partnership may be entitled as provided in
this Agreement and under the Act, together with all obligations of such
Partner to comply with the terms and provisions of this Agreement.
"IXC" means each of AT&T Corp., MCI Communications Corporation
and British Telecommunications plc (each, a "Carrier"), each successor to
the long distance telecommunications business of any of the foregoing
entities and each respective Affiliate of each such Carrier or successor.
"IXC Transaction" means, with respect to any Partner, that (i)
an IXC has become the beneficial owner of an equity interest in such
Partner or an equity interest in any Intermediate Subsidiary (other than a
Publicly Held Intermediate Subsidiary) of the Parent of such Partner, (ii)
an IXC has become the beneficial owner of securities representing fifteen
percent (15%) or more of the voting power of the outstanding voting
securities of the Parent of such Partner or any Publicly Held Intermediate
Subsidiary of such Parent, and, if such Parent or Publicly Held
Intermediate Subsidiary is subject to a State Statute or has a shareholder
rights plan, such Parent or Publicly Held Intermediate Subsidiary or the
board of directors or other governing body of such Parent or Publicly Held
Intermediate Subsidiary has approved such beneficial ownership or otherwise
has taken action to waive any applicable restrictions with respect to such
ownership or the exercise by the IXC of its rights arising from such
ownership under such State Statute or shareholder rights plan, (iii) an IXC
has become the beneficial owner of securities representing twenty-five
percent (25%) or more of the voting power of the outstanding voting
securities of any such Parent or Publicly Held Intermediate Subsidiary,
provided that, if such IXC is an Affiliate of a Carrier, such Affiliate has
identified a Carrier as a Person controlling such Affiliate either (a)
pursuant to General Instruction C to Schedule 13D, in a Schedule 13D (filed
with the Securities and Exchange Commission in accordance with Section
13(d) of the Securities Exchange Act of 1934) or (b) pursuant to General
Instruction C to Schedule 14D-1, in a Schedule 14D-1 (filed with the
Securities and Exchange Commission in accordance with Section 14(d) of the
Securities Exchange Act of 1934), (iv) any such Parent or Publicly Held
Intermediate Subsidiary has sold or issued beneficial ownership in any
equity interest in such Parent or Publicly Held Intermediate Subsidiary to
an IXC or granted to an IXC any rights with respect to the governance of
such Parent or Publicly Held Intermediate Subsidiary that are not possessed
generally by the owners of outstanding equity interests in such Parent or
Publicly Held Intermediate Subsidiary; or (v) such Partner has otherwise
become an Affiliate of an IXC. Solely for the purposes of this definition
the terms "beneficial owner" and "beneficial ownership" shall have the same
meaning as in Rule- 13d-3 under the Securities Exchange Act of 1934, as
amended.
"Joint Venture Formation Agreement" means the Second Amended
and Restated Joint Venture Formation Agreement of even date herewith among
each of the Parents providing for the formation of PioneerCo and certain
other matters.
"LEC" means a local exchange carrier.
"Limited Partner" means any Person (i) who is referred to as
such in the first paragraph of this Agreement or who has become a Limited
Partner pursuant to the terms of this Agreement, and (ii) who, at any given
time, holds an Interest. "Limited Partners" means all such Persons.
"Local Joint Venture" means any joint venture or other entity
formed by, or any agreement or arrangement entered into between or among,
as applicable, Sprint or its Controlled Affiliates and one or more Cable
Partners or their respective Controlled Affiliates for purposes of
providing or offering local wireline telecommunications services under the
Sprint Brand as contemplated under a Parents Agreement.
"Mandatory Contribution" of any Partner means an amount equal
to the product of (i) such Partner's initial Percentage Interest times (ii)
the Total Mandatory Contributions.
"MFJ" means the Modification of Final Judgment agreed to by the
American Telephone and Telegraph Company and the U.S. Department of
Justice and approved by the U.S. District Court for the District of
Columbia on August 24, 1982, as reported in United States v. Western
Electric Company, Inc., et al., 552 F. Supp. 131 (D.D.C. 1982), aff'd sub
nom Maryland v. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇.▇. ▇▇▇▇ (1983) and any subsequent
orders or amendments issued in connection therewith. Any reference in this
Agreement to Section II of the MFJ shall also include any subsequent
statute, rule, regulation, order or decree which modifies or supersedes
Section II of the MFJ (or any material portion thereof) and imposes any
restriction(s) substantially similar to any of the material restrictions
imposed by Section II of the MFJ.
"Minimum Ownership Requirement" means, with respect to (i) any
Original Partner, as of any date, that the ratio (expressed as a
percentage) of such Original Partner's Percentage Interest to the aggregate
Percentage Interests of all Original Partners is at least eight percent
(8%) or (ii) any Partner not an Original Partner, as of any date, that such
Partner's Percentage Interest is at least eight percent (8%).
"MinorCo" means MinorCo, L.P., the Delaware limited partnership
formed by the Partners for the purpose of holding a limited partnership
interest in WirelessCo and one or more other Subsidiaries of the
Partnership.
"MinorCo Interest" means, as to any Partner, all of the
interests of such Partner in MinorCo, including any and all benefits to
which the holder of an interest in MinorCo may be entitled as provided in
the partnership agreement of MinorCo and under the Act, together with all
obligations of such Partner to comply with the terms and provisions of the
partnership agreement of MinorCo.
"MSA" means a Metropolitan Statistical Area, as determined by
the U.S. Department of Commerce.
"MTA" means a Major Trading Area as defined in FCC rules to be
codified at 47 C.F.R. Section 24.13.
"Non-Exclusive Services" has the meaning set forth in Schedule
1.10(a) hereto.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.
"Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"Omaha License" means the 30 MHz PCS license acquired by Cox
Parent in the PCS Auction for the MTA encompassing Omaha, Nebraska, which
MTA is identified in the FCC Public Notice regarding the PCS Auction as
Market No. M-45 (Report No. AUC-94-04, Auction No. 4).
"Original Capital Contribution" means, with respect to each
Partner, the Capital Contributions made by such Partner prior to January 1,
1996. In the event all or a portion of an Interest is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed
to the Original Capital Contribution of the transferor to the extent it
relates to the Transferred Interest.
"Original Partners" means collectively Comcast, Cox, TCI and
Sprint and any successors or transferees thereof to the extent such
successors or transferees acquired their Interest in accordance with this
Agreement.
"Parent" means, except as otherwise provided below with respect
to a Permitted Transaction, i with respect to Cox (and its Controlled
Affiliates), Cox Parent, ii with respect to Comcast (and its Controlled
Affiliates), Comcast Parent, iii with respect to TCI (and its Controlled
Affiliates), TCI Parent and iv with respect to Sprint (and its Controlled
Affiliates), Sprint Parent. With respect to any other Person hereafter
admitted to the Partnership as a Partner, the Parent with respect to such
Partner shall be the Person identified as such in a Schedule to be attached
to this Agreement in connection with the admission of such Partner. In the
event of a Permitted Transaction, the new Parent of the applicable Partner
immediately following such Permitted Transaction will be the ultimate
parent entity (as determined in accordance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976 and the rules and regulations
promulgated thereunder (the "HSR Act")) of such Partner (or such Partner if
it is its own ultimate parent entity); provided that if such ultimate
parent entity is not a Publicly Held Person then the next highest corporate
entity in the ownership chain from such ultimate parent entity to and
including such Partner which is a Publicly Held Person shall be deemed to
be the new Parent. If there is no intermediate Publicly Held Person, the
Parent shall be the highest entity in the ownership chain from the ultimate
parent entity to and including such Partner which is not an individual.
For purposes of the definition of Controlled Affiliate, the Parent of a
Person that is neither a Partner nor a Controlled Affiliate of a Partner is
the ultimate parent entity (as determined in accordance with the HSR Act)
of such Person.
"Parent Undertaking" means a written instrument in
substantially the form of Exhibit 1.10(a) executed simultaneously with the
execution of this Agreement by each Parent of a Partner.
"Parents Agreement" means, individually and collectively, the
separate agreements between Sprint Parent and each of TCI Parent, Comcast
Parent and Cox Parent, substantially in the form of Exhibit 1.10(b),
executed simultaneously with the execution and delivery of this Agreement.
"Partner Nonrecourse Debt" has the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Debt Minimum Gain" means an amount, with
respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum
Gain that would result if such Partner Nonrecourse Debt were treated as a
Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3)
of the Regulations.
"Partner Nonrecourse Deductions" has the meaning set forth in
Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.
"Partners" means all General Partners and all Limited Partners.
"Partner" means any one of the Partners.
"Partnership" means the partnership formed pursuant to that
certain Agreement of Limited Partnership of MajorCo, L.P. dated as of March
28, 1995, and continued pursuant to this Agreement, and the partnership
continuing the business of this Partnership in the event of dissolution as
herein provided.
"Partnership Board" means the committee of Representatives that
will have the authority and powers set forth in Section 5.1.
"Partnership Minimum Gain" has the meaning set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.
"PCS" means a radio communications system authorized under the
rules for broadband personal communications services designated as Subpart
E of Part 24 of the FCC's rules, including the network, marketing,
distribution, sales, customer interface and operations functions relating
thereto.
"PCS Auction" means the series of simultaneous multiple round
auctions for broadband PCS licenses to be conducted by the FCC under the
authority of Section 309(j) of the Communications Act of 1934, 47 U.S.C.
Section 309(j) (1993), in accordance with the rules promulgated thereunder
by the FCC.
"Percentage Interest" means, with respect to any Partner as of
any relevant date, the ratio (expressed as a percentage) of the sum of such
Partner's Original Capital Contribution and aggregate Additional Capital
Contributions as of such date to the sum of the aggregate Original Capital
Contributions and Additional Capital Contributions of all Partners as of
such date; provided, however, that if any Partner fails for any reason to
make its Requested Contribution or any Preemptive Contribution after such
time as the aggregate amount of Original Capital Contributions and
Additional Capital Contributions made or requested to be made in accordance
with this Agreement (including any Additional Capital Contribution then
being made or requested, but excluding any PioneerCo Contribution) first
equals Five Billion Dollars ($5,000,000,000), then effective as of the
Contribution Date for such Requested Contribution or, with respect to any
Preemptive Contribution, the applicable PioneerCo Contribution Date, and at
all times thereafter, the Percentage Interest of each Partner shall be
determined in accordance with Section 2.4(d)(ii). Additional Capital
Contributions of Premium Dollars pursuant to Section 2.4(a)(v) shall be
valued at their Premium Dollar value for purposes of calculating Percentage
Interests. Such Capital Contributions will be determined after giving
effect to all Capital Contributions made prior to and on the date as of
which the determination of Percentage Interests is made, subject to the
provisions regarding the adjustment of Percentage Interests set forth in
Section 2.4(d). In the event all or any portion of an Interest is
Transferred in accordance with the terms of this Agreement, the transferee
shall succeed to the Percentage Interest of the transferor to the extent it
relates to the Transferred Interest. In the case of an adjustment of Gross
Asset Value pursuant to clause (ii) of the definition of such term or an
adjustment of Percentage Interests pursuant to Section 2.4(d)(ii), any
references in Section 3 to "Percentage Interest" shall be deemed to refer
to the Percentage Interests of the Partners as of the day immediately
preceding the date of any such adjustment.
"Permitted Brand" means a trademark, trade name, service ▇▇▇▇
and/or logo of a Cable Partner, Teleport or their respective Controlled
Affiliates, other than any trademark, trade name, service ▇▇▇▇ or logo of
any RBOC or IXC (as each such term is defined in the form of Parents
Agreement attached as Exhibit 1.10(b)).
"Permitted Transaction" with respect to a Partner means a
transaction or series of related transactions in which (i) such Partner
ceases to be a Subsidiary of its Parent or such Partner Transfers its
Interest to a Person that is not a Controlled Affiliate of such Partner and
(ii) the new Parent of such Partner (or such Partner if it is its own
Parent) or the Parent of the transferee of the Interest after giving effect
to such transaction, or the last transaction in a series of related
transactions, owns, directly and indirectly through its Controlled
Affiliates, all or a Substantial Portion of the cable television system
assets (in the case of a Cable Partner) or long distance telecommunications
business assets (in the case of Sprint) owned by the Parent of such
Partner, directly and indirectly through its Controlled Affiliates,
immediately prior to the commencement of such transaction or series of
transactions. As used herein, "Substantial Portion" means (x) in the case
of a Cable Partner, cable television systems serving 75% or more of the
aggregate number of basic subscribers served by cable television systems in
the United States of America (including its territories and possessions
other than Puerto Rico) owned by the Parent of such Cable Partner, directly
and indirectly through its Controlled Affiliates, and (y) in the case of
Sprint, long distance telecommunications business assets serving 75% or
more of the aggregate number of customers served by the long distance
telecommunications business in the United States of America (including its
territories and possessions other than Puerto Rico) owned by the Parent of
Sprint, directly and indirectly through its Controlled Affiliates.
"Person" means any individual, partnership, corporation, trust,
or other entity.
"PioneerCo" means the Delaware limited partnership to be formed
by Cox Pioneer Partnership and WirelessCo to own the Cox Pioneer Preference
License and to operate a Wireless Business in connection therewith.
"PioneerCo Contribution" means a Capital Contribution of all or
any portion of Cox Pioneer Partnership's interest in PioneerCo as
contemplated under Section 8.10.
"PioneerCo Contribution Date" means a date on which a PioneerCo
Contribution is made.
"PioneerCo Partnership Agreement" means the Agreement of
Limited Partnership of PioneerCo to be entered into between WirelessCo and
Cox Pioneer Partnership.
"Planned Capital Amount" means, with respect to the first
Fiscal Year in the Initial Two-Year Period, $1,131,000,000, and with
respect to the last Fiscal Year in the Initial Two-Year Period,
$767,000,000, as such amount may be revised by the Unanimous Vote of the
Partnership Board or reduced pursuant to Section 2.3(b)(i).
"Premium Call" means a Second Tranche Call that has been
converted by a Simple Majority Vote of the Partnership Board to a Premium
Call pursuant to Section 2.4(a)(v).
"Premium Call Contribution Date" has the meaning set forth in
the definition of "Premium Call Notice."
"Premium Call Notice" means a written notice given to all
Partners, which shall state (i) the amount of the Second Tranche Call
originally requested in the corresponding Additional Contribution Notice,
(ii) that such Second Tranche Call has been converted to a Premium Call,
(iii) the Premium Dollar amount for each dollar to be contributed in
response to the Premium Call Notice, (iv) the date upon which the Premium
Call contributions are to be made (the "Premium Call Contribution Date"),
which date shall not be more than forty-five (45) days nor less than thirty
(30) days after the date of such notice and (v) the account of the
Partnership to which such contribution is to be made.
"Premium Dollar" means, except as otherwise provided in Section
2.4(a)(v), each dollar contributed by a Partner in response to a Premium
Call Notice or a Premium Call Shortfall Notice, each of which dollars will
be valued for the purposes of calculating Percentage Interests at an amount
equal to (i) one dollar ($1.00) divided by (ii) the quotient of (x) the
aggregate Adjusted Net Equity of all Partners (provided that for purposes
of determining Adjusted Net Equity pursuant to this definition, Gross
Appraised Value shall be determined by a Simple Majority Vote of the
Partnership Board in connection with the giving of a Premium Call Notice)
divided by (y) the aggregate amount of the Original Capital Contributions
and Additional Capital Contributions made to the Partnership prior to the
date of the Premium Call Notice.
"Prime Rate" means the rate announced from time to time by
Citibank, N.A. as its prime rate.
"Prior Year's Carryforward" means the amount by which the
aggregate amount of Additional Capital Contributions actually requested of
the Partners pursuant to Section 2.3(b)(i) with Contribution Dates during
the first Fiscal Year in the Initial Two-Year Period was less than the
Planned Capital Amount during such Fiscal Year.
"Profits" and "Losses" means, for each Allocation Year, an
amount equal to the Partnership's taxable income or loss for such
Allocation Year, determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss, or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments (without
duplication):
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in computing
Profits or Losses pursuant to this definition of "Profits" and "Losses"
shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses pursuant to
this definition of "Profits" and "Losses," shall be subtracted from such
taxable income or loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to subparagraph (ii) or (iii) of the
definition of Gross Asset Value, the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset Value
of the Property disposed of, notwithstanding that the adjusted tax basis of
such Property differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such
Allocation Year, computed in accordance with the definition of
Depreciation;
(vi) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b) is required
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into
account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner's Interest, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for
purposes of computing Profits or Losses; and
(vii) Notwithstanding any other provision of this
definition of "Profits" or "Losses," any items which are specially
allocated pursuant to Section 3.3 or Section 3.4 shall not be taken into
account in computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss or deduction
available to be specially allocated pursuant to Sections 3.3 and 3.4 shall
be determined by applying rules analogous to those set forth in this
definition of "Profits" and "Losses."
"Property" means all real and personal property acquired by the
Partnership and any improvements thereto, and shall include both tangible
and intangible property.
"Publicly Held" means, with respect to any Person, that such
Person has a class of equity securities registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934.
"Publicly Held Intermediate Subsidiary" means, with respect to
any Parent of a Partner, an Intermediate Subsidiary of such Parent that is
Publicly Held.
"Regulations" means the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code.
"Representative" means an individual designated by a General
Partner as a member of the Partnership Board.
"Second Tranche Call" means the first Eight Hundred Million
Dollars ($800,000,000) of Additional Capital Contributions requested in
accordance with Section 2.3(b) after the Cut-Off Time; provided that in no
event may a Second Tranche Call be made after December 31, 2002.
"Sprint Brand" means the trademark "Sprint" together with the
related "Diamond" logo.
"Sprint Cellular Service Area" means the areas serviced as of
October 24, 1994 by the cellular operations of Controlled Affiliates of
Sprint, as listed in Schedule 1.10(b).
"Sprint Communications" means Sprint Communications Company,
L.P., a Delaware limited partnership.
"Sprint Parent" means Sprint Corporation, a Kansas corporation,
and any successor (by merger, consolidation, Transfer or otherwise) to all
or substantially all of its business and assets.
"State Statutes" means any business combination statute, anti-
takeover statute, fair price statute, control share acquisition statute or
any other state statute or regulation that contains any similar
prohibition, limitation, obligation, restriction or other provision adopted
and in effect in the jurisdiction of organization of a Person that affects
the rights of any other Person that acquires a specified percentage
ownership interest in such Person without the consent or approval of the
board of directors or other governing body of such other Person, and,
includes (i) with respect to Cox Parent and TCI Parent, Section 203 of the
Delaware General Corporation Law; (ii) with respect to Comcast Parent,
Subchapters E, F and G of Chapter 25 of the Pennsylvania Business
Corporation Law of 1988; and (iii) with respect to Sprint Parent, Sections
17-12,100 and 17-1286 through 1298, et seq. of the Kansas Corporations
Statute.
"Subsidiary" of any Person as of any relevant date means a
corporation, company or other entity (i) more than fifty percent (50%) of
whose outstanding shares or equity securities are, as of such date, owned
or controlled, directly or indirectly through one or more Subsidiaries, by
such Person, and the shares or securities so owned entitle such Person
and/or its Subsidiaries to elect at least a majority of the members of the
board of directors or other managing authority of such corporation, company
or other entity notwithstanding the vote of the holders of the remaining
shares or equity securities so entitled to vote or (ii) which does not have
outstanding shares or securities, as may be the case in a partnership,
joint venture or unincorporated association, but more than fifty percent
(50%) of whose ownership interest is, as of such date, owned or controlled,
directly or indirectly through one or more Subsidiaries, by such Person,
and in which the ownership interest so owned entitles such Person and/or
Subsidiaries to make the decisions for such corporation, company or other
entity.
"Subsidiary Partnership Property" means all property, other
than interests in other Subsidiary Partnerships, held by any Subsidiary
Partnership on the date on which the interests in such Subsidiary
Partnership are contributed to the Partnership.
"Substantial Portion" has the meaning set forth in the
definition of "Permitted Transaction."
"TCI Parent" means Tele-Communications, Inc., a Delaware
corporation, and any successor (by merger, consolidation, Transfer or
otherwise) to all or substantially all of its business and assets.
"Technical Information" means all technical information,
regardless of form and however transmitted and shall include, among other
forms, computer software, including computer program code, and system and
user documentation, drawings, illustrations, diagrams, reports, designs,
specifications, formulae, know-how, procedural protocols and methods and
manuals.
"Technical Information Rights" means all intellectual property
rights which protect or cover Technical Information.
"Teleport" means Teleport Communications Group Inc., a Delaware
corporation, TCG Partners, a New York general partnership, and their
respective Controlled Affiliates, as well as each local joint venture that
is managed by any of the foregoing entities and in which the foregoing
entities collectively own an equity interest of at least thirty percent
(30%), and any successor (by merger, consolidation, Transfer or otherwise)
to all or substantially all of the business and assets of any of the
foregoing.
"Total Mandatory Contributions" of the Partners means an amount
equal to the sum of $4.2 billion plus the Agreed Values of the License
Contribution and the Omaha License.
"Trading Day" means, with respect to any security, a day on
which the principal national securities exchange on which such security is
listed or admitted to trading, or the Nasdaq Stock Market, such security is
listed or admitted to trading thereon, is open for the transaction of
business (unless such trading shall have been suspended for the entire day)
or, if such security is not listed or admitted to trading on any national
securities exchange or the Nasdaq Stock Market, any day other than a
Business Day.
"Transfer" means, as a noun, any sale, exchange assignment or
transfer and, as a verb, to sell, exchange, assign or transfer.
"Voluntary Bankruptcy" has the meaning set forth in the
definition of "Bankruptcy."
"Voting Percentage Interest" means, as of any date and with
respect to any Partner that as of such date is entitled to designate one or
more members of the Partnership Board, the ratio (expressed as a
percentage) of such Partner's Percentage Interest to the aggregate
Percentage Interests of all Partners that are entitled to designate one or
more members of the Partnership Board.
"Wireless Affiliate" means any Person that is an affiliate of
the Partnership's Wireless Business by entering into an Affiliation
Agreement with WirelessCo.
"Wireless Business" means the business of providing Wireless
Exclusive Services.
"WirelessCo" means WirelessCo, L.P., the Delaware limited
partnership formed by the Partners pursuant to that certain Agreement of
Limited Partnership dated as of October 24, 1994, as amended and restated
as of March 28, 1995 to cause WirelessCo to become a Subsidiary of the
Partnership.
"Wireless Exclusive Services" has the meaning set forth in
Schedule 1.10(a).
1.11 Additional Definitions.
Defined Term Defined in
------------ ----------
"1933 Act" Section 5.9(a)
"Accelerated Contribution Amount" Section 2.3(b)(i)
"Accepting Offerees" Section 12.4(d)
"Accepting Partner Note" Section 12.7(e)
"Accepting Partners" Section 12.7(e)
"Additional Contribution Amount" Section 2.3(b)(i)
"Adjusted Net Equity" Section 2.4(d)(ii)
"Adjusted Percentage Interest" Section 2.4(a)(iv)
"Affiliation Agreement" Section 6.1(d)
"Agents" Section 6.6(a)
"Aggregate Contributions" Section 2.4(d)(iv)
"Annual Budget" Section 5.2(c)
"Approved Business Plan" Section 5.2(c)
"Attribution Cap" Section 8.11(a)(v)
"Base Value" Section 2.4(d)(iii)(A)
"Bidding Partner" Section 14.7(e)
"Blocking Limited Partner" Section 5.1(l)(ii)
"Brief" Section 5.8(a)(ii)
"Business Plan" Section 5.2(a)
"Business-Related Information" Section 8.12(b)
"Buy-Sell Price" Section 11.2(a)
"Cable Services" Section 8.3(b)
"Certificate" Section 1.5
"Comcast Area" Section 6.4(g)
"Competitive Activity" Section 6.1(a)
"Confidential Information" Section 6.6(a)
"Contributing Partner" Section 2.4(a)(ii)
"Control Notice" Section 12.5(b)
"Control Offer" Section 12.5(b)
"Control Offer Period" Section 12.5(b)
"Controlling Partner" Section 12.5(b)
"Covered Licensee" Section 8.11(a)(ii)
"Cure Date" Section 2.4(c)(iii)
"Damages" Section 11.1(a)
"Deadlock Event" Section 5.8(b)
"Declining Partner" Section 2.4(a)(i)
"Declined Accelerated Contribution" Section 2.3(b)(ii)(B)
"Default Budget" Section 5.2(d)
"Default Loan" Section 2.4(c)(ii)
"Default Loan Notice" Section 2.4(c)(ii)
"Defaulting Partner" Section 2.4(c)(i)
"Delinquent Partner" Section 2.4(b)
"Designated Matters" Section 8.14
"Election Notice" Section 11.2(a)
"Election Period" Section 11.2(b)
"Excess Contribution Amount" Section 2.3(b)(i)
"extension period" Section 12.6(f)
and 12.7(e)
"Firm Offer" Section 12.4(b)
"Firm Offer Commencement Notice" Section 12.6(c)
"First Appraiser" Section 11.4
"First Offer Period" Section 12.7(c)
"First Offer Sale Notice" Section 12.7(e)
"First Public Appraiser" Section 12.6(a)
"Floating Rate" Section 2.4(f)
"Foreign Ownership Restriction" Section 8.11(a)(i)
"Foreign Ownership Safe Harbor" Section 8.11(a)(iv)
"Foreign Ownership Threshold" Section 8.11(a)(iii)
"Free to Sell Period" Section 12.4(f)
"Funding Commitment" Section 2.4(a)(ii)
"General Partner Percentage Interests" Section 2.1
"Grace Period" Section 2.4(b)
"Gross Appraised Value" Section 11.4
"In-Territory Customers" Section 6.4(e)
"In-Territory Distributors" Section 6.4(e)
"Initial Business Plan" Section 5.2(a)
"Initial Offer" Section 14.7(e)
"Initial Participating Partner" Section 8.12(c)
"Initiating Partner" Section 8.12(b)
"Interested Person" Section 8.6
"Issuance Items" Section 3.3(h)
"Lending Commitment" Section 2.4(c)(ii)
"Lending Partner" Section 2.4(c)(ii)
"License Contribution" Section 2.3(a)(i)
"Liquidating Events" Section 14.1(a)
"Limited Partner Percentage Interests" Section 2.1
"Loan Date" Section 2.4(c)(ii)
"Make-up Amount" Section 2.4(c)(iii)
"MajorCorp" Section 12.6(a)
"MajorCorp Stock" Section 12.6(a)
"Market Value" Section 12.7(g)
"Mediator" Section 5.8(a)(ii)
"Minimum Offering Amount" Section 12.6(a)
"Minimum Secondary Offering Amount" Section 12.7(b)
"Net Equity" Section 11.3
"Net Equity Notice" Section 11.3
"Nextel" Section 6.4(f)
"Non-Adverse Partners" Section 11.1(a)
"Non-Selling Partners" Section 12.7(a)
"Notice Partner" Section 12.6(a)
"Offer" Section 6.1(c)
"Offered Interest" Section 12.4
"Offerees" Section 12.4(b)
"Offer Notice" Section 12.4(b)
"Offer Period" Section 12.4(c)
"Offer Price" Section 12.4(a)
"Offer Statement" Section 14.7(b)
"Ownership Restrictions" Section 8.11
"Overlap Cellular Area" Section 8.1
"Partner Loan" Section 2.7
"Partnership's Businesses" Section 6.4(b)
"Partnership Services" Section 8.3(b)
"Partnership Technical Information" Section 8.7
"Paying Partner" Section 2.4(a)(ii)
"Payment Default" Section 2.4(c)(i)
"Penalty Amount" Section 2.4(b)
"Permitted Period" Section 12.7(f)
"Permitted Transfer" Section 12.2
"PhillieCo" Section 6.3(e)
"PMCI Shares" Section 6.4(f)
"PMV Notice" Section 12.6(b)
"Preemptive Contribution" Section 2.3(c)
"Premium Call Shortfall Notice" Section 2.4(a)(v)
"Premium Call Paying Partner" Section 2.4(a)(v)
"Prior Partnership Agreement" Recitals
"Proposed Budget" Section 5.2(c)
"Proposed Business Plan" Section 5.2(c)
"Proprietary Technical Information" Section 8.12(b)
"Public Appraiser" Section 12.6(a)
"Public Market Value" Section 12.6(b)
"Public Offering" Section 5.9(c)
"purchase commitment" Section 11.2(b), 12.4(d),
12.6(e) and 12.7(d)
"Purchase Notice" Section 11.2(b)
"Purchase Offer" Section 12.4(a)
"Purchaser" Section 12.4(a)
"Purchasing Partner" Section 11.2(b)
"Receiving Party" Section 6.6(a)
"Registered Offering" Section 12.7
"Registering Partner" Section 12.6(c)
"Registration Accepting Offerees" Section 12.6(e)
"Registration Firm Offer" Section 12.6(c)
"Registration Interest" Section 12.6(a)
"Registration Note" Section 12.6(f)
"Registration Notice" Section 12.6(a)
"Registration Offer" Section 12.7(b)
"Registration Offer Period" Section 12.6(d)
"Registration Offerees" Section 12.6(c)
"Registration Sale Notice" Section 12.6(f)
"Regulatory Allocations" Section 3.4
"Related Group" Section 5.1(c)
"Representative" Section 5.1(c)
"Requested Contribution" Section 2.3(b)(i)
"Requested Premium Call Contribution" Section 2.4(a)(v)
"Required Majority Vote" Section 5.1(j)
"Restricted Area" Section 8.14
"Restricted Time" Section 8.14
"Restricted Party" Section 6.6(a)
"Sale Notice" Section 12.4(e)
"Rule 144 Notice" Section 12.7(a)
"Rule 144 Offer" Section 12.7(a)
"Rule 144 Sale" Section 12.7
"Second Appraiser" Section 11.4
"Secondary Registration Notice" Section 12.7(b)
"Second Public Appraiser" Section 12.6(a)
"Section 5.1 Election Period" Section 5.1(l)(ii)
"Seller" Section 12.4
"Selling Partner" Section 12.7
"Senior Credit Agreement" Section 2.7
"Shortfall" Section 2.4(a)(ii)
"Shortfall Notice" Section 2.4(a)(ii)
"Simple Majority Vote Section 5.1(i)
"Special Contribution" Section 2.4(b)
"Sprint Cellular Business" Section 8.1
"Sprint LD" Section 8.3(b)
"Sprint LD Services" Section 8.3(b)
"Subsidiary Partnership" Section 3.7
"Tagalong Notice" Section 12.5(a)
"Tagalong Offer" Section 12.5(a)
"Tagalong Period" Section 12.5(a)
"Tagalong Purchaser" Section 12.5(a)
"Tagalong Transaction" Section 12.5(a)
"Tax Matters Partner" Section 10.3(a)
"Tendering Offeree" Section 12.6(f)
"Tendering Partner" Section 12.7(e)
"Third Appraiser" Section 12.4
"Third Party Provider" Section 8.14
"Timely Partner" Section 2.4(b)
"Trademark License" Section 8.2
"Transferring Partner" Section 12.5(a)
"Unanimous Partner Vote" Section 5.1(l)(i)
"Unanimous Vote" Section 5.1(k)
"Unfunded Shortfall" Section 2.3(b)(ii)(B)
"Unpaid Amount" Section 2.4(b)
"Unreturned Capital" Section 11.2(a)
1.12 Terms Generally.
The definitions in Section 1.10 and elsewhere in this Agreement shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation." The words "herein", "hereof" and "hereunder" and
words of similar import refer to this Agreement (including the Schedules)
in its entirety and not to any part hereof unless the context shall
otherwise require. All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Unless the context shall otherwise require, any
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). Any reference in this Agreement to a "day" or
number of "days" (without the explicit qualification of "Business") shall
be interpreted as 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 such calendar day is not a Business Day, then such action
or notice shall be deferred until, or may be taken or given on, the next
Business Day.
SECTION 2. PARTNERS' CAPITAL CONTRIBUTIONS
2.1 Percentage Interests; Preservation of Percentages of Interests
Held as General Partners and as Limited Partners.
The initial Percentage Interest of each Partner as of the date of
this Agreement is set forth on Schedule 2.1 and represents the sum of the
"General Partner Percentage Interest" and "Limited Partner Percentage
Interest" of such Partner as set forth in such Schedule 2.1. Except as
expressly provided in this Agreement, or as may result from a Transfer of
Interests required or permitted by this Agreement, the Percentage Interest
of a Partner shall not be subject to increase or decrease without such
Partner's prior consent. For purposes of this Agreement, each Partner is
treated as though it holds a single Interest, even though such Partner
(unless and until it becomes an Exclusive Limited Partner) holds ninety-
nine percent (99.0%) of its Interest as a General Partner and one percent
(1.0%) of its Interest as a Limited Partner. Each Partner, unless and
until it becomes an Exclusive Limited Partner, will hold ninety-nine
percent (99.0%) of its Interest as a General Partner and one percent (1.0%)
of its Interest as a Limited Partner and the amount of any Capital
Contributions made by a Partner pursuant to Section 2 and any allocations
and distributions to a Partner pursuant to Section 3 or Section 4 shall,
except as otherwise provided therein, be allocated ninety-nine percent
(99.0%) to the Interest held by the Partner as a General Partner and one
percent (1.0%) to the Interest held by the Partner as a Limited Partner.
In the event that a Partner Transfers all or any portion of its Interest
pursuant to this Agreement, ninety-nine percent (99.0%) of the aggregate
Interest so acquired by any Person shall be treated as attributable to the
Interest held by the transferring Partner as a General Partner and one
percent (1.0%) of the aggregate Interest so acquired shall be treated as
attributable to the Interest held by the transferring Partner as a Limited
Partner. In the event that the Interest of a Partner is otherwise
increased or decreased pursuant to this Agreement, the amount of the
increase or decrease, as the case may be, shall be allocated ninety-nine
percent (99.0%) to the Interest held by such Partner as a General Partner
and one percent (1.0%) to the Interest held by such Partner as a Limited
Partner.
2.2 Partners' Original Capital Contributions.
The Original Capital Contribution of each Partner consists of the
contributions of cash and Property made by such Partner pursuant to the
terms of the Prior Partnership Agreement prior to January 1, 1996.
2.3 Additional Capital Contributions.
(a) Contributions of Certain Property by Cox.
(i) License Contribution by ▇▇▇. ▇▇▇ shall contribute
to the Partnership an undivided fractional interest in the Cox Pioneer
Preference License and certain associated assets (the "License
Contribution"), which the Partnership in turn shall contribute through its
Subsidiaries to the capital of PioneerCo. Such contribution shall be made
concurrently with the contribution by Cox Pioneer Partnership to PioneerCo
of the remaining undivided fractional interest in the Cox Pioneer
Preference License and such associated assets, which shall be made at the
date and time provided in, and in accordance with, the PioneerCo
Partnership Agreement. For purposes hereof, such contributions to the
Partnership and then to PioneerCo may be effected through the direct
conveyance by Cox Parent of the Cox Pioneer Preference License to
PioneerCo. The Agreed Value of the License Contribution shall be credited
against the next Additional Capital Contribution to be made in cash by Cox
under this Agreement to the same extent as if Cox had contributed cash in
the amount of such Agreed Value, and until so credited the License
Contribution shall not constitute an Additional Capital Contribution for
purposes of this Agreement.
(ii) Omaha License Contribution by Cox. As soon as
practicable (taking into account any FCC approval that may be required in
connection with such contribution) following the divestiture by Sprint and
its Controlled Affiliates of their ownership interests in the Sprint
Cellular Businesses, Cox shall contribute the Omaha License to the
Partnership. The Agreed Value of the Omaha License shall be credited
against the next Additional Capital Contribution to be made in cash by Cox
under this Agreement to the same extent as if Cox had contributed cash in
the amount of such Agreed Value, and until so credited the contribution of
the Omaha License shall not constitute an Additional Capital Contribution
for purposes of this Agreement.
(b) Additional Capital Contributions of Cash.
(i) Additional Cash Contributions Generally. Subject to
the limitations of this Agreement, the Partnership Board (or the Chief
Executive Officer pursuant to (x) the authority to be granted in each
Annual Budget to make requests for Additional Capital Contributions in the
amounts, during the periods and subject to the limitations set forth
therein, and (y) such authority as may be delegated to the Chief Executive
Officer from time to time by the Partnership Board (which delegation may
occur only by a vote of the members of the Partnership Board required to
take the action so delegated)) may in accordance with the following
procedures request the Partners to make Additional Capital Contributions to
the Partnership in cash from time to time to fund the cash needs of the
Partnership in conformity with the Annual Budget then in effect, as it may
be modified from time to time in accordance with this Agreement. The
aggregate amount of the Additional Capital Contributions requested pursuant
to this Section 2.3(b)(i) to be made as of any Contribution Date (the
"Additional Contribution Amount") (A) shall be set forth in an Additional
Contribution Notice given to each Partner, (B) shall not exceed the amount
reasonably anticipated by the Partnership Board to be required to fund the
cash needs of the Partnership for the ensuing six (6) months or such
shorter period as may be determined by the Partnership Board, and (C) when
added to the Additional Contribution Amounts stated in all prior Additional
Contribution Notices with Contribution Dates in the then-current Fiscal
Year, (I) shall not exceed the cumulative amount of Additional Capital
Contributions contemplated to be required of the Partners during such
Fiscal Year as set forth in the Annual Budget for such Fiscal Year unless
otherwise approved by a Required Majority Vote of the Partnership Board,
and (II) if such Fiscal Year falls within the Initial Two-Year Period, also
shall not exceed, unless otherwise approved by a Unanimous Vote of the
Partnership Board, (a) with respect to the first Fiscal Year in the Initial
Two-Year Period, the product of (1) 150% times (2) the Planned Capital
Amount for such Fiscal Year, and (b) with respect to the last Fiscal Year
in the Initial Two-Year Period, the sum of (1) the product of (x) 150%
times (y) the Planned Capital Amount for such Fiscal Year (provided that
the amount determined in accordance with this clause (y) will be decreased
by any portion thereof the payment of which the Partnership Board has
previously determined as provided below to accelerate into the first Fiscal
Year in the Initial Two-Year Period), plus (2) 100% of any Prior Year's
Carryforward. For purposes of this Agreement, amounts contributed on or
after January 1, 1996 pursuant to Section 2.3 of the Prior Partnership
Agreement shall be deemed to be Additional Capital Contributions made
pursuant to an Additional Contribution Notice under this Section 2.3(b)(i).
To the extent that the cumulative Additional Contribution Amounts
stated in Additional Contribution Notices pursuant to this Section
2.3(b)(i) with Contribution Dates in any given Fiscal Year in the Initial
Two-Year Period exceed (i) with respect to the first Fiscal Year in the
Initial Two-Year Period, the Planned Capital Amount for such Fiscal Year
and (ii) with respect to the last Fiscal Year in the Initial Two-Year
Period, the sum of (A) the Planned Capital Amount for such Fiscal Year plus
(B) any Prior Year's Carryforward minus (C) any portion of such Planned
Capital Amount that was accelerated to the prior Fiscal Year, such excess
shall constitute an "Excess Contribution Amount." The Partnership Board may
by Required Majority Vote designate any Excess Contribution Amount with a
Contribution Date in the first Fiscal Year of the Initial Two-Year Period
as an "Accelerated Contribution Amount." The amount of any Excess
Contribution Amount that the Partnership Board may designate as an
Accelerated Contribution Amount pursuant to the preceding sentence shall
not exceed the Planned Capital Amount for the last Fiscal Year in the
Initial Two-Year Period (after giving effect to any reduction to such
Planned Capital Amount pursuant to the following sentence with respect to
any prior Excess Contribution Amount). Any Accelerated Contribution Amount
will be applied to reduce the Planned Capital Amount for the last Fiscal
Year in the Initial Two-Year Period.
The amount of the Additional Capital Contribution requested of any
Partner pursuant to this Section 2.3(b)(i) in an Additional Contribution
Notice (the "Requested Contribution") shall be equal to (i) with respect to
Requested Contributions with Contribution Dates during any Fiscal Year in
the Initial Two-Year Period, that amount which represents the same
percentage of the Additional Contribution Amount specified in such
Additional Contribution Notice as such Partner's initial Percentage
Interest and (ii) with respect to Requested Contributions with Contribution
Dates during any Fiscal Year after the end of the Initial Two-Year Period,
that amount which represents the same percentage of the Additional
Contribution Amount specified in such Additional Contribution Notice as
such Partner's Percentage Interest as of the date of such Additional
Contribution Notice; provided that if the aggregate amount of the Original
Capital Contributions and Additional Capital Contributions made or
requested to be made (excluding any PioneerCo Contribution) prior to the
end of the Initial Two-Year Period is less than the Total Mandatory
Contributions, then the Requested Contributions of each Partner shall
continue to be the same percentage of the Additional Contribution Amounts
as such Partner's initial Percentage Interest until the Cut-Off Time.
(ii) Mandatory Additional Capital Contributions.
(A) No Partner may decline to make any of its
Requested Contributions unless, and then only to the extent that, (I) with
respect to Requested Contributions with Contribution Dates during any
Fiscal Year in the Initial Two-Year Period, the amount of the Requested
Contribution of such Partner, when added to the sum of (a) the cumulative
amount of all Requested Contributions theretofore requested of and made by
such Partner during the same Fiscal Year plus (b) the amount of any
Preemptive Contribution made by such Partner during the same Fiscal Year,
would exceed the sum of (x) such Partner's Capital Commitment with respect
to such Fiscal Year and (y) the product of such Partner's initial
Percentage Interest times any Excess Contribution Amount for such Fiscal
Year if and to the extent that such Partner's Representative(s) voted for
approval of the Annual Budget pursuant to which the Excess Contribution
Amount is being requested or voted in favor of requesting (or delegating to
the Chief Executive Officer the authority to request) such Excess
Contribution Amount, and (II) with respect to Requested Contributions with
Contribution Dates during any Fiscal Year after the Initial Two-Year
Period, none of such Partner's Representative(s) voted for approval of the
Annual Budget that provides for the Additional Contribution Amount being
requested and none of such Partner's Representatives voted in favor of
requesting (or delegating to the Chief Executive Officer the authority to
request) such Additional Contribution Amount or such Partner was an
Exclusive Limited Partner at the time of such vote. Notwithstanding the
preceding sentence, a Partner will not be entitled to decline to make any
Requested Contribution with a Contribution Date during the last Fiscal Year
in the Initial Two-Year Period or in any Fiscal Year thereafter covered by
the Initial Business Plan except to the extent such Requested Contribution,
when added to the aggregate amount of Original Capital Contributions and
Additional Capital Contributions made or requested to be made by such
Partner (excluding any PioneerCo Contribution) prior to the Contribution
Date of such Requested Contribution, exceeds such Partner's Mandatory
Contribution.
(B) Subject to Section 2.3(b)(ii)(A), if a Partner
was a Declining Partner with respect to an Accelerated Contribution Amount
(with respect to any such Partner, its "Declined Accelerated
Contribution"), then, to the extent that there is a Shortfall in connection
with a Requested Contribution with a Contribution Date during the last
Fiscal Year in the Initial Two-Year Period that is not fully allocated to
one or more Contributing Partners pursuant to Section 2.4(a) (an "Unfunded
Shortfall"), such Partner shall be required to make an Additional Capital
Contribution to the Partnership up to an amount equal to such Partner's
initial Percentage Interest of the portion of the Planned Capital Amount
set forth in the Initial Business Plan for such last Fiscal Year that was
accelerated to the prior Fiscal Year (but only to the extent of such
Declined Accelerated Contribution and, if there is more than one such
Partner, pro rata in proportion to the aggregate amounts of the previously
unfunded Declined Accelerated Contributions of each such Partner). Any
such required Additional Capital Contribution shall be contributed by such
Partner within ten (10) days of notice to such Partner by the Chief
Executive Officer that there exists an Unfunded Shortfall with respect to
which such Partner is required to make an Additional Capital Contribution
pursuant to the preceding sentence, which notice shall set forth the amount
of the Additional Capital Contribution required of such Partner and the
applicable Contribution Date and shall otherwise constitute an Additional
Contribution Notice for purposes of this Agreement.
(c) Additional Contributions Related to PioneerCo Preemptive
Rights. Each of the Partners (other than Cox) may make Additional Capital
Contributions to the Partnership as and to the extent permitted by Section
8.10 (each a "Preemptive Contribution").
2.4 Failure to Contribute Capital.
(a) Declining Partners.
(i) Any Partner that is entitled to decline to make a
Requested Contribution as provided in Section 2.3(b)(ii) may do so by
notice given to the Chief Executive Officer (with a copy to the Partnership
Board) within fifteen (15) days of the date the applicable Additional
Contribution Notice was given (any such Partner that timely exercises such
right is herein referred to as a "Declining Partner").
(ii) If any Partner is a Declining Partner with respect to
an Additional Contribution Notice and the Partnership Board does not give a
Premium Call Notice pursuant to Section 2.4(a)(v), the Chief Executive
Officer shall, within five (5) days after the date notice was required to
be received under Section 2.4(a)(i), give a notice (a "Shortfall Notice")
to each Partner that made its Requested Contribution in full (each a
"Paying Partner") requesting the Paying Partners to make Additional Capital
Contributions in an aggregate amount equal to the amount not contributed by
the Declining Partner(s) in response to such Additional Contribution Notice
(the "Shortfall"). Each Paying Partner that is willing to commit to fund
all or any portion of the Shortfall (each a "Contributing Partner") shall
so notify the Chief Executive Officer and each other Paying Partner within
ten (10) days after the date the Shortfall Notice was given, setting forth
the maximum amount of the Shortfall, up to one hundred percent (100%)
thereof, that such Contributing Partner is willing to fund (the "Funding
Commitment"). Except as otherwise provided in Section 2.4(a)(iii), if the
aggregate Funding Commitments are less than or equal to one hundred percent
(100%) of the Shortfall, each Contributing Partner shall be entitled to
make an Additional Capital Contribution to the Partnership in response to a
Shortfall Notice in an amount equal to its Funding Commitment. If the
aggregate Funding Commitments made by the Contributing Partners exceed one
hundred percent (100%) of the Shortfall, then except as otherwise provided
in Section 2.4(a)(iii), each Contributing Partner shall be entitled to
contribute an amount equal to the same percentage of the Shortfall as such
Contributing Partner's Percentage Interest represents of the total
Percentage Interests of the Contributing Partners (in each case before
giving effect to any adjustments to the Percentage Interests to be made in
connection with the Additional Contribution Notice with respect to which
the Shortfall occurred), provided that, if any Contributing Partner's
Funding Commitment was for an amount less than its proportionate share of
the Shortfall as so determined, the portion of the Shortfall not so
committed to be funded shall, except as otherwise provided in Section
2.4(a)(iii), continue to be allocated proportionally, in the manner
provided above in this sentence, among the other Contributing Partners
until each has been allocated by such process of apportionment an amount
equal to its Funding Commitment or until the entire Shortfall has been
allocated among the Contributing Partners. The amount of the Additional
Capital Contribution to be made by each Contributing Partner in response to
the Shortfall Notice as determined in accordance with this Section
2.4(a)(ii) shall be specified in a notice delivered by the Chief Executive
Officer to the Contributing Partners and shall, within ten (10) days after
the date of such notice, be paid to the account of the Partnership
designated in the Shortfall Notice.
(iii) Except as otherwise provided in Section 2.4(a)(iv),
if the Declining Partner is a Cable Partner and no Cable Partner's
Percentage Interest, when added to the Percentage Interests of all
Controlled Affiliates of such Partner, is equal to or greater than Sprint's
Percentage Interest, when added to the Percentage Interests of all
Controlled Affiliates of Sprint (in each case determined without regard to
any Additional Capital Contribution made by any Partner pursuant to the
Additional Contribution Notice with respect to which the Shortfall
occurred), the Shortfall shall be allocated first among those of the
Contributing Partners that are Cable Partners in the manner provided in
Section 2.4(a)(ii) as though Sprint were not a Contributing Partner, and if
and to the extent that the aggregate Funding Commitments made by such Cable
Partners are less than one hundred percent (100%) of the Shortfall, the
balance of the Shortfall up to Sprint's Funding Commitment shall be
allocated to Sprint.
(iv) The Shortfall shall be allocated among the Cable
Partners in the manner set forth in Section 2.4(a)(iii) until any Cable
Partner would have a Percentage Interest, when added to the Percentage
Interests of all Controlled Affiliates of such Partner, that is equal to
Sprint's Percentage Interest, when added to the Percentage Interests of all
Controlled Affiliates of Sprint, calculated in each case after giving
effect to the adjustments to the Percentage Interests to be made in
connection with the Additional Contribution Notice with respect to which
the Shortfall occurred assuming that the Additional Capital Contributions
to be made pursuant to this Section 2.4(a) were made up to the aggregate
amount that would yield such result (as to each Partner, its "Adjusted
Percentage Interest"). Any portion of the Shortfall not yet allocated
shall continue to be allocated proportionately among all of the
Contributing Partners (including Sprint, if applicable) in the manner
provided in Section 2.4(a)(ii) without regard to Section 2.4(a)(iii), but
substituting the Adjusted Percentage Interests of the Contributing Partners
for the Percentage Interests that would otherwise be used to determine such
allocation, until each has been allocated by such process an amount equal
to its Funding Commitment or until the entire Shortfall has been allocated
among the Contributing Partners.
(v) Notwithstanding the foregoing, if (A) any Partner is a
Declining Partner with respect to an Additional Contribution Notice that
requests a Second Tranche Call and (B) the Partnership Board determines by
Simple Majority Vote that the aggregate Adjusted Net Equity of all Partners
(provided that for purposes of determining Adjusted Net Equity pursuant to
this Section 2.4(a)(v), Gross Appraised Value shall be determined by a
Simple Majority Vote of the Partnership Board) is less than the aggregate
amount of Original Capital Contributions and Additional Capital
Contributions made to the Partnership through the date of the applicable
Additional Contribution Notice (but excluding the amount set forth in the
Additional Contribution Notice), the Partnership Board may elect to convert
such Second Tranche Call to a Premium Call by giving a Premium Call Notice
(which shall supercede such Additional Contribution Notice) to each Partner
within five (5) days after the date notice was required to be received from
the Declining Partner under Section 2.4(a)(i). Each Partner, including the
Declining Partner, shall have the right to make an Additional Capital
Contribution in response to a Premium Call in an amount which represents
the same percentage of the amount of the Second Tranche Call requested in
the Premium Call Notice as such Partner's Percentage Interest as of the
date of such Premium Call Notice (the "Requested Premium Call
Contribution"). If each Partner makes its Requested Premium Call
Contribution, the amounts so contributed will not be treated as Premium
Dollars. If any Partner fails to make its Requested Premium Call
Contribution, then all amounts contributed pursuant to this Section
2.4(a)(v) with respect to such Premium Call shall be treated as Premium
Dollars. In addition, if any Partner fails to make its Requested Premium
Call Contribution, the Chief Executive Officer shall, within five (5) days
after the Premium Call Contribution Date, give a notice (a "Premium Call
Shortfall Notice") to each Partner that made its Requested Premium Call
Contribution in full (each a "Premium Call Paying Partner") requesting the
Premium Call Paying Partners to make Additional Capital Contributions in an
aggregate amount equal to the amount not contributed by the Declining
Partner (the "Premium Call Shortfall"). The amount of the Premium Call
Shortfall that each Premium Call Paying Partner shall be entitled to make
to the Partnership in response to a Premium Call Shortfall Notice shall be
determined in the same manner as provided in Sections 2.4(a)(ii), (iii) and
(iv) for the determination of the amount of the Additional Capital
Contribution that each Contributing Partner is entitled to make in response
to a Shortfall Notice. The amount of the Premium Call Shortfall to be made
by each Premium Call Paying Partner in response to the Premium Call
Shortfall Notice as so determined shall be specified in a notice delivered
by the Chief Executive Officer to the Premium Call Paying Partners and
shall, within ten (10) days after the date of such notice, be paid to the
account of the Partnership designated in the Premium Call Shortfall Notice
and all amounts so paid shall be treated as Premium Dollars. Any Partner
that fails to make a contribution in response to a Premium Call Notice
shall not be treated as a Delinquent Partner or a Defaulting Partner.
(b) Delinquent Partners. In the event that any Partner other
than a Declining Partner (a "Delinquent Partner") fails to make all or any
portion of its Requested Contribution on or before the related Contribution
Date, an additional amount shall accrue as a penalty with respect to such
unpaid amount (the "Unpaid Amount") at the applicable Floating Rate from
and including the Contribution Date until the Unpaid Amount and the full
amount of the penalty accrued thereon (as of any date of determination, the
"Penalty Amount") are paid as provided in this Section 2.4 or the failure
to pay the same results in such Partner becoming a Defaulting Partner. If
the Delinquent Partner pays the Unpaid Amount to the Partnership at any
time during the period ending at the close of business on the tenth (10th)
day following the related Contribution Date (the "Grace Period"), the
Delinquent Partner shall, at the time of such payment, pay to each other
Partner, if any, that made its Requested Contribution in full on or before
the related Contribution Date and has no uncured Payment Defaults (each a
"Timely Partner"), a pro rata portion of the Penalty Amount (based on the
percentage that the amount of each Timely Partners' Requested Contribution
represents of the total amount of the Timely Partner's Requested
Contributions), but in no event more than the amount that such Timely
Partner would have earned as interest on the amount of its Requested
Contribution, from and including the Contribution Date to the date the
Delinquent Partner pays the Unpaid Amount to the Partnership, if the Timely
Partner had made a loan in such amount to the Partnership with interest at
the Floating Rate applicable during the Grace Period. The balance of the
Penalty Amount, if any, shall be paid by the Delinquent Partner to the
Partnership and the amount so paid shall be deemed to be a "Special
Contribution" by the Delinquent Partner to the capital of the Partnership.
The portion of the Penalty Amount paid to the Timely Partners shall not,
for any purpose, be deemed to be a Capital Contribution.
(c) Defaulting Partners.
(i) If a Delinquent Partner fails to pay the Unpaid Amount
together with the Penalty Amount to the Partnership or the Timely Partners
as provided in Section 2.4(b) on or before the expiration of the Grace
Period, such failure shall constitute a "Payment Default" and, if such
Payment Default is not thereafter cured in full as provided in Section
2.4(c)(iii), the Delinquent Partner shall for all purposes hereof be
considered a "Defaulting Partner" with the effect described herein.
(ii) If a Payment Default occurs, the Chief Executive
Officer shall, within five (5) days after the expiration of the related
Grace Period, give a notice (a "Default Loan Notice") to each Partner that
was a Paying Partner with respect to such Additional Contribution Notice
requesting the Paying Partners to make loans (each a "Default Loan") to the
Partnership in an aggregate amount equal to the Unpaid Amount. Each Paying
Partner that is willing to commit to make a Default Loan (each a "Lending
Partner") shall so notify the Chief Executive Officer and each other Paying
Partner within ten (10) days after the date the Default Loan Notice was
given, setting forth the maximum portion of the Unpaid Amount, up to one
hundred percent (100%) thereof, that such Lending Partner is willing to
lend to the Partnership (the "Lending Commitment"). The amount of the
Default Loan that each Lending Partner shall be entitled to make to the
Partnership in response to a Default Loan Notice shall be determined in the
same manner as provided in Section 2.4(a) for the determination of the
amount of the Additional Capital Contribution that each Contributing
Partner is entitled to make in response to a Shortfall Notice. The amount
of the Default Loan to be made by each Lending Partner in response to the
Default Loan Notice as so determined shall be specified in a notice
delivered by the Chief Executive Officer to the Lending Partners and within
ten (10) days of the date of such notice shall be paid to the account of
the Partnership designated in the Default Loan Notice. Each Default Loan
shall bear interest from the date made (the "Loan Date") until paid in full
or contributed to the Partnership as provided in this Section 2.4 at the
Floating Rate applicable following the Grace Period and shall be evidenced
by a promissory note of the Partnership in the form of Exhibit 2.4(c)(ii)
(with any changes thereto requested by any lender under any Senior Credit
Agreement and consented to by the Lending Partner, which consent shall not
be unreasonably withheld).
(iii) A Delinquent Partner may cure its Payment Default at
any time prior to the close of business on the ninetieth (90th) day
following the Loan Date (the "Cure Date") by transferring to an account of
the Partnership designated by the Chief Executive Officer cash in an amount
equal to the sum of the Unpaid Amount and the Penalty Amount accrued
thereon to the date of such transfer (the "Make-up Amount"). The portion
of the Make-up Amount equal to the Penalty Amount shall be deemed to be a
Special Contribution by the Delinquent Partner to the Partnership and the
balance thereof shall constitute an Additional Capital Contribution by the
Delinquent Partner to the Partnership. The Chief Executive Officer shall
cause the Partnership to apply the funds so received from the Delinquent
Partner to the payment in full of the unpaid principal of and accrued
interest on each Default Loan in accordance with the terms of the note
evidencing the same.
(iv) If a Delinquent Partner has not timely cured its
Payment Default in full in accordance with Section 2.4(c)(iii), then the
Lending Partners shall contribute their respective Default Loans to the
Partnership effective as of the day following the Cure Date and surrender
the notes evidencing the same to the Partnership for cancellation. The
unpaid principal amount of a Lending Partner's Default Loan through the
Cure Date shall constitute an Additional Capital Contribution (and the
accrued interest on such Default Loan shall constitute a Special
Contribution) by the Lending Partner to the Partnership as of the effective
date of such contribution.
(d) Adjustments to Percentage Interests. The Percentage
Interests of the Partners shall be adjusted in accordance with this Section
2.4(d). The Partnership Board shall provide notice of each adjustment to
all Partners and Schedule 2.1 shall be revised to reflect such adjustment.
(i) Except as otherwise provided in clause (ii) of this
Section 2.4(d), the Percentage Interests of the Partners shall be adjusted
in accordance with the definition of "Percentage Interest" to give effect
to Additional Capital Contributions made (or deemed to be made) pursuant to
Section 2.3, Section 2.5 (if applicable) and this Section 2.4, provided
that if there are any Declining Partners or Delinquent Partners with
respect to any Additional Contribution Notice, the determination of the
amount of the adjustment of the Percentage Interests for Additional Capital
Contributions made in response to such notice will be deferred until the
later of the last day for the making of Additional Capital Contributions in
connection with any Shortfall and the expiration of the Grace Period,
provided, however, that such adjustment, whenever determined, shall be
effective as of the Contribution Date. The Percentage Interests of the
Partners will be further adjusted as and when Additional Capital
Contributions, if any, are made as contemplated by clause (iii) or (iv), as
applicable, of Section 2.4(c).
(ii) If any Partner fails for any reason (x) to make its
Requested Contribution with respect to an Additional Contribution Notice
that requests Additional Capital Contributions in an amount that, when
added to the aggregate amount of Original Capital Contributions and
Additional Capital Contributions made or requested to be made in accordance
with this Agreement (excluding any PioneerCo Contribution), would exceed
Five Billion Dollars ($5,000,000,000), or (y) to make a Preemptive
Contribution at such time as the aggregate amount of Original Capital
Contributions and Additional Capital Contributions made or requested to be
made in accordance with this Agreement (excluding any PioneerCo
Contribution but including all Preemptive Contributions made or to be made
in connection with the PioneerCo Contribution with respect to which such
Partner failed to make its Preemptive Contribution) exceed Five Billion
Dollars ($5,000,000,000), the Percentage Interests of the Partners shall be
adjusted and thereafter determined in accordance with this Section
2.4(d)(ii). Such determination shall be made on the later of the last day
for the making of Additional Capital Contributions in connection with any
Shortfall and the tenth (10th) day following the applicable Contribution
Date (or, with respect to a Preemptive Contribution, such other date as may
be determined by the Partnership Board in connection with the related
PioneerCo Contribution) and shall be effective as of the Contribution Date
(or, with respect to a Preemptive Contribution, the applicable PioneerCo
Contribution Date). The adjusted Percentage Interest of a Partner shall be
equal to a fraction (expressed as a percentage) the numerator of which
shall be the sum of (A) the Adjusted Net Equity of such Partner plus (B)
either (1) with respect to a Requested Contribution, the Additional Capital
Contribution made by such Partner with respect to such Additional
Contribution Notice (including any Additional Capital Contributions made by
such Partner in connection with any Shortfall) or (2) with respect to a
Preemptive Contribution, the Preemptive Contribution or PioneerCo
Contribution made by such Partner, as applicable, and the denominator of
which shall be the sum of (C) the aggregate Adjusted Net Equity of all
Partners plus (D) either (i) with respect to a Requested Contribution, the
aggregate Additional Capital Contributions made by all Partners with
respect to such Additional Contribution Notice (including any Additional
Capital Contributions made in connection with any Shortfall) or (2) with
respect to a Preemptive Contribution, the aggregate Preemptive
Contributions made by all Partners and the PioneerCo Contribution to which
such Preemptive Contributions relate. The "Adjusted Net Equity" of a
Partner shall be the amount that would be distributed as of the applicable
Contribution Date or PioneerCo Contribution Date to such Partner in
liquidation of the Partnership pursuant to Section 14.2(a)(iii) if (I) all
of the Partnership's business and assets (including its partnership
interests in WirelessCo, but excluding the amounts of any Additional
Capital Contributions made pursuant to such Additional Contribution Notice
or, with respect to a Preemptive Contribution, the Preemptive Contributions
and PioneerCo Contribution to which such Preemptive Contribution relates)
were sold substantially as an entirety for Gross Appraised Value
(determined in accordance with Section 2.4(d)(iii)), (II) Profits and
Losses and items specially allocated in accordance with Sections 3.3 and
3.4 for the Allocation Year ending on the date of such determination,
including any gain or loss resulting from the deemed sale described in
clause (I), were allocated in accordance with Section 3, (III) the
Partnership paid its accrued, but unpaid, liabilities and established
reserves pursuant to Section 14.2 for the payment of reasonably anticipated
contingent or unknown liabilities and (IV) the Partnership distributed the
remaining proceeds to the Partners in liquidation, all as of such
Contribution Date or applicable PioneerCo Contribution Date.
(iii) (A) Except as otherwise will be provided in the
PioneerCo Partnership Agreement to reflect the principles set forth in Item
8(c) of Exhibit 1.1(b) to the Joint Venture Formation Agreement, whenever
Adjusted Net Equity is required to be determined pursuant to Section
2.4(d)(ii), Gross Appraised Value shall be determined by the Partnership
Board by a Simple Majority Vote based upon the most recent determination of
Gross Appraised Value (the "Base Value") pursuant to Section
2.4(d)(iii)(B). In making its determination of Gross Appraised Value
pursuant to this Section 2.4(d)(iii)(A), the Partnership Board shall adjust
the Base Value for any Capital Contributions by and distributions to the
Partners and for the operating results and other transactions of the
Partnership from the date as of which the Base Value was determined to the
applicable Contribution Date.
(B) Gross Appraised Value shall be determined as
of December 31 of the Fiscal Year immediately preceding the Fiscal Year in
which the amount of Additional Capital Contributions contemplated under the
Annual Budget (or Default Budget, if applicable) for the forthcoming Fiscal
Year, when added to the aggregate amount of Original Capital Contributions
and Additional Capital Contributions theretofore made or requested to be
made in accordance with this Agreement (excluding any PioneerCo
Contribution), would exceed Five Billion Dollars ($5,000,000,000), and
thereafter shall be determined as of December 31 of each Fiscal Year.
Gross Appraised Value shall be determined as provided in Section 11.4, and
the General Partner that (together with its Controlled Affiliates) holds
the largest Voting Percentage Interest shall designate the First Appraiser
not less than twenty (20) days prior to the date as of which Gross
Appraised Value is to be determined, and the General Partner that (together
with its Controlled Affiliates) holds the smallest Voting Percentage
Interest shall appoint the Second Appraiser within ten (10) Business Days
of receiving notice of the appointment of the First Appraiser. The
Partnership Board shall, by Simple Majority Vote, estimate Gross Appraised
Value and the Adjusted Net Equity of the Partners from time to time as
necessary to comply with the notice requirement set forth in clause (vi) of
the definition of Additional Contribution Notice.
(iv) If any Requested Contributions are requested to be
made or any PioneerCo Contribution is made at such time as the aggregate
amount of Original Capital Contributions and Additional Capital
Contributions previously made in accordance with this Agreement (excluding
all PioneerCo Contributions) (collectively, the "Aggregate Contributions")
is less than Five Billion Dollars ($5,000,000,000), but the aggregate
amount of such Requested Contributions or the aggregate amount of
Preemptive Contributions permitted to be made pursuant to Section 2.3(c) in
response to such PioneerCo Contribution, as applicable, when added to the
Aggregate Contributions, exceeds Five Billion Dollars ($5,000,000,000),
then any adjustment of the Percentage Interests of the Partners pursuant to
this Section 2.4(d) shall be determined (A) with respect to that portion of
the amount of such Requested Contributions or Preemptive Contributions, as
applicable, that, when added to the Aggregate Contributions equals Five
Billion Dollars ($5,000,000,000), in accordance with Section 2.4(d)(i), and
(B) with respect to that portion of the amount of such Requested
Contributions or Preemptive Contributions, as applicable, that, when added
to the Aggregate Contributions exceeds Five Billion Dollars
($5,000,000,000), in accordance with Section 2.4(d)(ii).
(e) Paying Partners. A Paying Partner that declines to make a
Funding Commitment or Lending Commitment as contemplated by this Section
2.4 shall not be deemed to be a Delinquent Partner or Defaulting Partner as
a result thereof, nor shall the failure to make such a commitment
constitute a Payment Default with respect to such Partner.
(f) Floating Rate. Subject to the last two sentences of
Section 2.7(b), the term "Floating Rate" means the rate per annum (computed
on the basis of the actual number of days elapsed in a year of 365 or 366
days, as applicable), compounded monthly, equal to the greater of (i) the
Prime Rate (adjusted as and when changes in the Prime Rate occur) plus (x)
during the Grace Period, two percent (2%) and (y) following the Grace
Period, five percent (5%), and (ii) the rate per annum applicable to
borrowings by the Partnership under its principal credit facility, if any,
or, if a choice of rates is then available to the Partnership, the highest
such rate (in either case adjusted as and when changes in such applicable
rate occur) plus, following the Grace Period, two percent (2%).
2.5 Other Additional Capital Contributions.
Each Partner may contribute from time to time such additional cash or
other Property as the Partnership Board may approve by Unanimous Vote or as
may be expressly contemplated by this Agreement, provided that any Capital
Contribution of Property (other than cash or any PioneerCo Contribution)
made pursuant to this Section 2.5 shall be subject to the terms and
provisions of an Additional Contribution Agreement.
2.6 Partnership Funds.
The funds of the Partnership shall be deposited in such bank accounts
or invested in such investments as shall be designated by the Partnership
Board. Partnership funds shall not be commingled with those of any Person
other than any Subsidiary of the Partnership in which the Partnership and
MinorCo own, in the aggregate, directly or indirectly, one hundred percent
(100%) of the outstanding equity interests, without a Unanimous Vote of the
Partnership Board. The Partnership shall not lend or advance funds to, or
guarantee any obligation of, a Partner or any Affiliate thereof without the
prior written consent of all Partners.
2.7 Partner Loans; Other Borrowings.
(a) Partner Loans. In order to satisfy the Partnership's
financial needs, the Partnership may, if so approved by the requisite vote
of the Partnership Board, borrow from (i) banks, lending institutions or
other unrelated third parties, and may pledge Partnership properties or the
production of income therefrom to secure and provide for the repayment of
such loans and (ii) any Partner or an Affiliate of a Partner. Loans made
by a Partner or an Affiliate of a Partner (a "Partner Loan") shall be
evidenced by a promissory note of the Partnership in the form attached as
Exhibit 2.7 and, subject to the last two sentences of Section 2.7(b), shall
bear interest payable quarterly from the date made until paid in full at a
rate per annum to be determined by the Partnership Board that is no less
favorable to the Partnership than if the loan had been made by an
independent third party. Unless a Partner declines to make such loan or is
a Defaulting Partner or a Partner subject to Bankruptcy, Partner Loans
shall be made pro rata in accordance with the respective Percentage
Interests of the Partners (or in such other proportion as the Partnership
Board may approve by Unanimous Vote).
(b) Terms of Partner Loans. Unless otherwise determined by the
Partnership Board, all Partner Loans and Default Loans shall be unsecured
and the promissory notes evidencing the same shall be non-negotiable and,
except as otherwise provided in this Section 2.7 or Section 12.3(c),
nontransferable. Repayment of the principal amount of and accrued interest
on all Partner Loans and Default Loans shall be subordinated to the
repayment of the principal of and accrued interest on any indebtedness of
the Partnership to third party lenders to the extent required by the
applicable provisions of the instruments creating such indebtedness to
third party lenders ("Senior Credit Agreements"). All amounts required to
be paid in accordance with the terms of such notes and all amounts
permitted to be prepaid shall be applied to the notes held by the Partners
in accordance with the order of payment contemplated by Section 14.2(b)(ii)
and (iii). Subject to the terms of applicable Senior Credit Agreements,
Partner Loans shall be repaid to the Partners at such times as the
Partnership has sufficient funds to permit such repayment without
jeopardizing the Partnership's ability to meet its other obligations on a
timely basis. Nothing contained in this Agreement or in any promissory
note issued by the Partnership hereunder shall require the Partnership or
any Partner to pay interest or any amount as a penalty at a rate exceeding
the maximum amount of interest permitted to be collected from time to time
under applicable usury laws. If the amount of interest or of such penalty
payable by the Partnership or any Partner on any date would exceed the
maximum permissible amount, it shall be automatically reduced to such
amount, and interest or the amount of the penalty for any subsequent
period, to the extent less than that permitted by applicable usury laws,
shall, to that extent, be increased by the amount of such reduction.
(c) Purchase of Partner Loans. An election by a Partner to
purchase all or any portion of another Partner's Interest pursuant to
Sections 5.1, 6.4(f), 11, 12.4, 12.5, 12.6 or 14.7 shall also constitute an
election to purchase an equivalent portion of any outstanding Partner Loans
held by such selling Partner, and each purchasing Partner shall be
obligated to purchase a percentage of such Partner Loans equal to the
percentage of the selling Partner's Interest such purchasing Partner is
obligated to purchase for a price equal to the same percentage of the
outstanding principal and accrued and unpaid interest on such Partner Loans
through the date of the closing of such purchase (except in the case of a
Transfer pursuant to Section 12.4, in which case the terms of the Purchase
Offer shall apply).
2.8 Other Matters.
(a) No Partner shall have the right to demand or, except as
otherwise provided in Sections 4.1 and 14.2, receive a return of all or any
part of its Capital Account or its Capital Contributions or withdraw from
the Partnership without the consent of all Partners. Under circumstances
requiring a return of all or any part of its Capital Account or Capital
Contributions, no Partner shall have the right to receive Property other
than cash.
(b) Subject to Sections 5.4 and 14.3, the Exclusive Limited
Partners shall not be liable for the debts, liabilities, contracts or any
other obligations of the Partnership. Except as otherwise provided by any
other agreements among the Partners or mandatory provisions of applicable
state law, an Exclusive Limited Partner shall be liable only to make
Capital Contributions to the extent required by Sections 2.3, 2.5 and 14.3
and shall not be required to lend any funds to the Partnership or, after
such Capital Contributions have been made, to make any additional Capital
Contributions to the Partnership.
(c) No Partner shall have any personal liability for the
repayment of any Capital Contributions of any other Partner.
(d) No Partner shall be entitled to receive interest on its
Capital Contributions or Capital Account except as otherwise specifically
provided in this Agreement.
SECTION 3. ALLOCATIONS
3.1 Profits.
After giving effect to the special allocations set forth in Sections
3.3 and 3.4, Profits for any Allocation Year shall be allocated in the
following order and priority:
(a) First, one hundred percent (100%) to the Partners, in
proportion to, and to the extent of, an amount equal to the excess, if any,
of (i) the cumulative Losses allocated to each such Partner pursuant to
Section 3.5 for all prior Allocation Years, over (ii) the cumulative
Profits allocated to such Partner pursuant to this Section 3.1(a) for all
prior Allocation Years;
(b) Second, one hundred percent (100%) to the Partners, in
proportion to, and to the extent of, an amount equal to the excess, if any,
of (i) the cumulative Losses allocated to each such Partner pursuant to
Section 3.2(c) for all prior Allocation Years, over (ii) the cumulative
Profits allocated to such Partner pursuant to this Section 3.1(b) for all
prior Allocation Years;
(c) Third, to the extent such Profits arise during or after
the Allocation Year in which all or substantially all of the Partnership's
assets are disposed of (or revalued pursuant to clause (ii) of the
definition of Gross Asset Value), to the Partners in such ratios and
amounts as may be necessary to cause the balances in their Capital Accounts
to be as nearly as practicable in the same ratio as their respective
Percentage Interests; and
(d) The balance, if any, among the Partners in proportion to
their Percentage Interests.
3.2 Losses.
After giving effect to the special allocations set forth in Sections
3.3 and 3.4, and subject to Section 3.5, Losses for any Allocation Year
shall be allocated in the following order and priority:
(a) First, one hundred percent (100%) to the Partners, in
proportion to, and to the extent of, the excess, if any, of (i) the
cumulative Profits allocated to each such Partner pursuant to Section
3.1(d) for all prior Allocation Years, over (ii) the cumulative Losses
allocated to such Partner pursuant to this Section 3.2(a) for all prior
Allocation Years;
(b) Second, to the extent such Losses arise during or after the
Allocation Year in which all or substantially all of the Partnership's
assets are disposed of, to the Partners in such ratio and amounts as may be
necessary to cause the balances in their Capital Accounts to be as nearly
as practicable in the same ratio as their respective Percentage Interests;
and
(c) The balance, if any, among the Partners in proportion to
their Percentage Interests.
3.3 Special Allocations.
The following special allocations shall be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other provision
of this Section 3, if there is a net decrease in Partnership Minimum Gain
during any Allocation Year, each Partner shall be specially allocated items
of Partnership income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Partner's share of
the net decrease in Partnership Minimum Gain, determined in accordance with
Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to
be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Sections 1.704-2(f)(6) and
1.704-2(j)(2) of the Regulations. This Section 3.3(a) is intended to
comply with the minimum gain chargeback requirement in Section 1.704-2(f)
of the Regulations and shall be interpreted consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any
other provision of this Section 3, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt
during any Allocation Year, each Partner who has a share of the Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Section 1.704-2(i)(5) of the
Regulations, shall be specially allocated items of Partnership income and
gain for such Allocation Year (and, if necessary, subsequent Allocation
Years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-
2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be determined
in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the
Regulations. This Section 3.3(b) is intended to comply with the minimum
gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and
shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Exclusive
Limited Partner unexpectedly receives any adjustments, allocations, or
distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-
1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of
Partnership income and gain shall be specially allocated to each such
Exclusive Limited Partner in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital Account
Deficit of such Exclusive Limited Partner as quickly as possible, provided
that an allocation pursuant to this Section 3.3(c) shall be made only if
and to the extent that such Exclusive Limited Partner would have an
Adjusted Capital Account Deficit after all other allocations provided for
in this Section 3 have been tentatively made as if this Section 3.3(c) were
not in the Agreement.
(d) Gross Income Allocation. In the event any Exclusive
Limited Partner has a deficit Capital Account at the end of any Allocation
Year which is in excess of the sum of (i) the amount such Exclusive Limited
Partner is obligated to restore pursuant to any provision of this
Agreement, and (ii) the amount such Exclusive Limited Partner is deemed to
be obligated to restore pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such Exclusive
Limited Partner shall be specially allocated items of Partnership income
and gain in the amount of such excess as quickly as possible, provided that
an allocation pursuant to this Section 3.3(d) shall be made only if and to
the extent that such Exclusive Limited Partner would have a deficit Capital
Account in excess of such sum after all other allocations provided for in
this Section 3 have been made as if Section 3.3(c) and this Section 3.3(d)
were not in the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any
Allocation Year shall be specially allocated among the Partners in
proportion to their Percentage Interests.
(f) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Allocation Year shall be specially allocated to the
Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)(1).
(g) Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) to be taken into account
in determining Capital Accounts as the result of a distribution to a
Partner in complete liquidation of its Interest, the amount of such
adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to
the Partners in accordance with their interests in the Partnership in the
event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the
Partner to whom such distribution was made in the event Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(h) Special Interest Allocation. In the event that the
Partnership makes any payment in respect of interest accrued on any Default
Loan in any Allocation Year, the deduction attributable to such payment
shall be specially allocated to the Delinquent Partner with respect to
which such Default Loan was made.
3.4 Curative Allocations.
The allocations set forth in Sections 3.3(a), 3.3(b), 3.3(c), 3.3(d),
3.3(e), 3.3(f), 3.3(g) and 3.5 (the "Regulatory Allocations") are intended
to comply with certain requirements of the Regulations. It is the intent
of the Partners that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with special
allocations of other items of Partnership income, gain, loss or deduction
pursuant to this Section 3.4. Therefore, notwithstanding any other
provision of this Section 3 (other than the Regulatory Allocations), the
Partnership Board shall make such offsetting special allocations of
Partnership income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made,
each Partner's Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of the Agreement and all Partnership items were
allocated pursuant to Sections 3.1, 3.2 and 3.3(h). In exercising its
discretion under this Section 3.4, the Partnership Board shall take into
account future Regulatory Allocations under Sections 3.3(a) and 3.3(b)
that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Section 3.3(e) and 3.3(f).
3.5 Loss Limitation.
The Losses allocated pursuant to Section 3.2 shall not exceed the
maximum amount of Losses that can be so allocated without causing (or
increasing the amount of) any Exclusive Limited Partner to have an Adjusted
Capital Account Deficit at the end of any Allocation Year. All Losses in
excess of such limitation shall be allocated to the Partners who are not
Exclusive Limited Partners in proportion to their Percentage Interests.
3.6 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items
shall be determined on a daily, monthly, or other basis, as determined by a
Required Majority Vote of the Partnership Board using any permissible
method under Code Section 706 and the Regulations thereunder.
(b) The Partners are aware of the income tax consequences of the
allocations made by this Section 3 and hereby agree to be bound by the
provisions of this Section 3 in reporting their shares of Partnership
income and loss for income tax purposes.
(c) Solely for purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Section 1.752-3(a)(3) of the Regulations, the Partners'
interests in Partnership profits are in proportion to their Percentage
Interests.
(d) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the Partnership Board shall endeavor to treat distributions of
cash as having been made from the proceeds of a Nonrecourse Liability or a
Partner Nonrecourse Debt only to the extent that such distributions would
cause or increase an Adjusted Capital Account Deficit for any Exclusive
Limited Partner.
3.7 Tax Allocations: Code Section 704(c).
In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss, and deduction with respect to any property
contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership
for federal income tax purposes and its initial Gross Asset Value using the
traditional method with curative allocations as described in Section 1.704-
3 of the Regulations, applied as necessary in any reasonable manner not
expressly precluded by Section 1.704-3 of the Regulations. In making such
allocations, Section 704(c) shall be applied as if the Partnership's
proportionate share of the assets owned by any partnership, interests in
which are contributed to the Partnership ("Subsidiary Partnership"), were
owned directly by the Partnership and were contributed by the Partners who
contributed the Subsidiary Partnership interests.
In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (ii) of the definition of Gross Asset
Value, subsequent allocations of income, gain, loss, and deduction with
respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the
Regulations thereunder.
Any elections or other decisions relating to such allocations shall
be made by the Partnership Board in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations pursuant to this
Section 3.7 are solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing, any
Partner's Capital Account or share of Profits, Losses, other items, or
distributions pursuant to any provision of this Agreement.
SECTION 4. DISTRIBUTIONS
4.1 Available Cash.
From time to time the Partnership Board by a Required Majority Vote
may determine to distribute Available Cash to the Partners. Except as
otherwise provided in Section 14.2, Available Cash, if any, shall be
distributed to the Partners in proportion to their respective Percentage
Interests in such amounts and at such times as the Partnership Board shall
determine by Required Majority Vote. Prior to making any cash
distributions to the Partners pursuant to this Section 4.1, the Partnership
shall have paid in full all Partner Loans (in accordance with the order of
payment contemplated by Section 14.2(b)).
4.2 Tax Distributions.
(a) Subject to Section 4.2(b), Available Cash shall be
distributed to the Partners in proportion to their Percentage Interests
within one hundred thirty-five (135) days after the end of each Fiscal Year
of the Partnership in an aggregate amount equal to the Hypothetical Federal
Income Tax Amount for such Fiscal Year.
(b) Prior to making any cash distributions to the Partners
pursuant to Section 4.2(a), the Partnership shall have paid in full all
Partner Loans (in accordance with the order of payment contemplated by
Section 14.2(b)).
4.3 Amounts Withheld.
All amounts withheld pursuant to the Code or any provision of any
state or local tax law from any payment or distribution to a Partner shall
be treated as amounts paid or distributed to such Partner pursuant to this
Section 4 for all purposes under this Agreement. The Partnership is
authorized to withhold from payments and distributions to any Partner and
to pay over to any federal, state, or local government any amounts required
to be so withheld pursuant to the Code or any provisions of any other
federal, state, or local law.
SECTION 5. MANAGEMENT
5.1 Authority of the Partnership Board.
(a) General Authority. Subject to the limitations and
restrictions set forth in this Agreement, the General Partners shall
conduct the business and affairs of the Partnership, and all powers of the
Partnership, except those specifically reserved to the Partners by the Act
or this Agreement, are hereby granted to and vested in the General
Partners, which shall conduct such business and exercise such powers
through their Representatives on the Partnership Board.
(b) Delegation. The Partnership Board shall have the power to
delegate authority to such officers, employees, agents and representatives
of the Partnership as it may from time to time deem appropriate. Any
delegation of authority to take any action must be approved in the same
manner as would be required for the Partnership Board to approve such
action directly.
(c) Number and Term of Office. The Partnership Board initially
shall have six voting members, one of which shall be designated by each
Cable Partner and three of which shall be designated by Sprint. The Chief
Executive Officer shall be a non-voting member of the Partnership Board.
During the term of this Agreement, except as otherwise provided below, each
General Partner shall be entitled to designate one Representative to the
Partnership Board, provided that (i) for so long as Sprint is entitled to
representation on the Partnership Board (except as otherwise provided
below), Sprint shall be entitled to designate three Representatives to the
Partnership Board; provided, however, that at any time any other Partner
holds a greater Voting Percentage Interest than Sprint (except as otherwise
provided below), Sprint shall be entitled to designate only two
Representatives to the Partnership Board; and provided, further, that at
any time any other Partner holds a greater Voting Percentage Interest than
Sprint and Sprint's Percentage Interest is less than twenty percent (20%),
Sprint shall be entitled to designate only one Representative to the
Partnership Board, and (ii) those Partners, if any, that are Controlled
Affiliates of the same Parent (a "Related Group") shall collectively be
entitled to designate only the largest number of Representatives as is
entitled to be designated by any single member of the Related Group, which
Representative(s) shall be designated by the Partner that has the largest
Percentage Interest of the Partners in the Related Group. Any Partner
whose Percentage Interest, together with the Percentage Interest(s) of each
other Partner, if any, that is a member of the same Related Group, is, in
the aggregate, less than the Minimum Ownership Requirement shall, for so
long as its Percentage Interest or the aggregate Percentage Interest of its
Related Group, as applicable, is less than the Minimum Ownership
Requirement, not be entitled to designate a Representative to the
Partnership Board, and the Representative of such Partner or Related Group,
as applicable, shall immediately cease to be a member of the Partnership
Board, without any further act by the affected Partner.
Any Partner who becomes an Adverse Partner shall immediately forfeit
the right to designate a member of the Partnership Board, and the
Representative(s) of the affected Partner shall immediately cease to be a
member of the Partnership Board, without any further act by the affected
Partner; provided that if a Partner becomes an Adverse Partner as the
result of the occurrence of an Adverse Act described in clause (iii), (iv),
(vi) or (vii) of the definition of such term in Section 1.10, such Partner
will regain (or its transferee will be entitled to, as applicable) the
right to designate a Representative on the Partnership Board (if otherwise
so entitled thereto under this Agreement) if (i) in the case of a Partner
that is an Adverse Partner other than as a result of the occurrence of an
Adverse Act described in clause (iii) of the definition of such term in
Section 1.10, such Partner Transfers its Interest in compliance with
Section 12 to a Person that is not an Adverse Partner and does not become
an Adverse Partner as a result of such Transfer, (ii) in the case of a
Partner that is an Adverse Partner as a consequence of the occurrence of an
Adverse Act described in clause (iii) of the definition of such term in
Section 1.10, there is a Final Determination that such Partner's actions or
failure to act did not constitute such an Adverse Act, (iii) in the case of
a Partner that is an Adverse Partner as a consequence of Bankruptcy, such
Partner ceases to be in a state of Bankruptcy, (iv) in the case of a
Partner that is an Adverse Partner as a consequence of the occurrence of
any IXC Transaction, such Partner ceases to have the relationship with the
IXC which caused such IXC Transaction to occur, or (v) in the case of a
Partner that is an Adverse Partner as a consequence of the occurrence of an
event described in clause (vii) of the definition of the term "Adverse Act"
in Section 1.10, such Partner takes actions that eliminate the
circumstances that constituted such an Adverse Act within the meaning of
such clause (vii). The membership of the Partnership Board shall be
increased or decreased from time to time in accordance with the foregoing
provisions of this Section 5.1(c).
Each Representative shall hold office at the pleasure of the Partner
that designated such Representative. Any Partner may at any time, and from
time to time, by written notice to the other Partners remove any or all of
the Representatives designated by such Partner, with or without cause, and
appoint substitute Representatives to serve in their stead. Each Partner
shall be entitled to name one or more alternate Representatives to serve in
the place of any Representative appointed by such Partner should any such
Representative not be able to attend a meeting or meetings or any portion
thereof, including in the case of a Representative of Comcast not being
able to attend a meeting to the extent required in order to comply with the
provisions of Section 8.14. Each such alternate shall be deemed to be a
Representative hereunder with respect to any action taken at such meeting
or meetings or any portion thereof. Each Partner shall bear the costs
incurred by each Representative or alternate designated by it to serve on
the Partnership Board, and no Representative or alternate shall be entitled
to compensation from the Partnership for serving in such capacity.
The written notice of a Partner's appointment of a Representative or
alternate shall in each case set forth such Representative's or alternate's
business and residence addresses and business telephone number. Each
Partner shall promptly give written notice to the other Partners of any
change in the business or residence address or business telephone number of
any of its Representatives. Each Partner shall cause its Representatives
on the Partnership Board to comply with the terms of this Agreement. In
the absence of prior written notice to the contrary, any action taken by a
Representative of a Partner shall be deemed to have been duly authorized by
the Partner that appointed such Representative.
(d) Vacancy. In the event any Representative dies or is
unwilling or unable to serve as such or is removed from office by the
Partner that designated him or her, such Partner shall promptly designate a
successor to such Representative.
(e) Place of Meeting/Action by Written Consent. The Partnership
Board may hold its meetings at such place or places within or outside the
State of Delaware as the Partnership Board may from time to time determine
or as may be designated in the notice calling the meeting. If a meeting
place is not so designated, the meeting shall be held at the Partnership's
principal office. Notwithstanding anything to the contrary in this Section
5.1, the Partnership Board may take without a meeting any action
contemplated to be taken by the Partnership Board under this Agreement if
such action is approved by the unanimous written consent of a
Representative of each of the Partners then entitled to designate a
Representative to the Partnership Board (which may be executed in
counterparts). The Partnership Board may meet in person or by means of
conference telephone or similar communications equipment. Each
Representative shall have the right to participate in any meeting by means
of conference telephone or similar communications equipment.
(f) Regular Meetings. The Partnership Board shall hold regular
meetings no less frequently than quarterly and shall establish meeting
times, dates and places and requisite notice requirements and adopt rules
or procedures consistent with the terms of this Agreement. At such
meetings the members of the Partnership Board shall transact such business
as may properly be brought before the meeting.
(g) Special Meetings. Special meetings of the Partnership Board
may be called by any Representative. Notice of each such meeting shall be
given to each member of the Partnership Board by telephone, telecopy,
telegram or similar method (in which case notice shall be given at least
twenty-four (24) hours before the time of the meeting) or sent by first-
class mail (in which case notice shall be given at least five (5) days
before the meeting), unless a longer notice period is established by the
Partnership Board. Each such notice shall state (i) the time, date, place
(which shall be at the principal office of the Partnership unless otherwise
agreed to by all Representatives) or other means of conducting such meeting
and (ii) the purpose of the meeting to be so held. Any Representative may
waive notice of any meeting in writing before, at or after such meeting.
The attendance of a Representative at a meeting shall constitute a waiver
of notice of such meeting, except when a Representative attends a meeting
for the express purpose of objecting to the transaction of any business
because the meeting was not properly called.
(h) Voting. The Representative(s) of each General Partner or of
the General Partners in a Related Group shall together have voting power
equal to the Voting Percentage Interest held by such General Partner or the
aggregate Voting Percentage Interest of the General Partners in such
Related Group, as applicable, as in effect from time to time. If a General
Partner or a Related Group designates only one Representative, such
Representative shall be entitled to vote the entire voting power held by
such General Partner or the General Partners in such Related Group, as
applicable. If a General Partner or Related Group designates more than one
Representative, such Representatives shall vote the entire voting power of
such General Partner or the General Partners in such Related Group as a
single unit. None of the Partners (other than the Partners in a Related
Group) shall enter into any agreements with any other Partner or such other
Partner's Controlled Affiliates regarding the voting of their Interests or
such other Partner's Representatives on the Partnership Board.
(i) Simple Majority Vote. No action may be taken by the
Partnership in connection with any of the matters listed on Schedule 5.1(i)
without the prior approval of the Partnership Board, at a duly called
meeting, of Representatives with voting power of more than fifty percent
(50%) of the Voting Percentage Interests of all Partners whose
Representatives are not required by Section 8.6 or any other express
provision of this Agreement to abstain from such vote (a "Simple Majority
Vote").
(j) Required Majority Vote. Except as provided in Section 5.1(i)
or 5.1(k) or as otherwise expressly provided in this Agreement, all actions
required or permitted to be taken by the Partnership Board (including the
matters listed on Schedule 5.1(j)) must be approved by the affirmative
vote, at a duly called meeting, of Representatives with voting power of
seventy-five percent (75%) or more of the Voting Percentage Interests of
all Partners whose Representatives are not required by Section 8.6 or any
other express provision of this Agreement to abstain from such vote (a
"Required Majority Vote").
(k) Unanimous Vote (Partnership Board). No action may be taken
by the Partnership in connection with any of the matters listed on Schedule
5.1(k) without the prior approval of the Partnership Board by the unanimous
vote of all of the Representatives who are not required to abstain from the
vote with respect to the particular matter as provided for in Section 8.6
of this Agreement or any other express provision of this Agreement, whether
or not present at a Partnership Board meeting (a "Unanimous Vote").
(l) Unanimous Decisions (Partners).
(i) No action may be taken by the Partnership in connection
with any of the matters listed on Schedule 5.1(l) without the prior consent
of all of the Partners (including Exclusive Limited Partners) other than
any Partner required to abstain from the vote with respect to a particular
matter by Section 8.6 or any other express provision of this Agreement (a
"Unanimous Partner Vote").
(ii) If any matter listed on Schedule 5.1(l) or otherwise
required by this Agreement to be approved by the unanimous consent of the
Partners is not approved solely as a result of the failure of one or more
Exclusive Limited Partners to consent to such action (each, a "Blocking
Limited Partner"), the remaining Partners (other than any Exclusive Limited
Partner) may purchase all but not less than all of the respective Interests
of the Blocking Limited Partner(s) pursuant to this Section 5.1(l)(ii) if
the Partnership Board elects to initiate the procedures in this Section.
For a period ending at 11:59 p.m. (local time at the Partnership's
principal office) on the thirtieth (30th) day following the date on which
such Blocking Limited Partner failed to consent to such matter, the
Partnership Board may elect to cause the Net Equity of the Blocking Limited
Partner's Interest to be determined in accordance with Section 11.3. For
purposes of such determination of Net Equity, the Partnership Board shall
designate the First Appraiser as required by Section 11.4 and the Blocking
Limited Partner shall designate the Second Appraiser within ten (10) days
of receiving notice of the First Appraiser. For a period ending at 11:59
p.m. (local time at the Partnership's principal office) on the thirtieth
(30th) day following the date on which notice of the Net Equity of the
Blocking Limited Partner's Interest is given pursuant to Section 11.3 (the
"Section 5.1 Election Period"), except as otherwise provided in Section
11.2(b), each of the Partners (other than any Exclusive Limited Partner)
may elect to purchase all or any portion of the Interest of the Blocking
Limited Partner. Such elections shall be made, and the purchase of the
Blocking Limited Partner's Interest shall occur, in the manner and pursuant
to the procedures set forth in Section 11.2 as if the Blocking Limited
Partner were an Adverse Partner and the Election Period referred to in
Section 11.2 was the Section 5.1 Election Period; provided that the Buy-
Sell Price of the Blocking Limited Partner's Interest shall be equal to the
Net Equity thereof. Notwithstanding the foregoing, the Blocking Limited
Partner will not be subject to the buy-out provisions of this Section
5.1(l)(ii) if the matter to which the Blocking Limited Partner refused to
consent would, if approved, have adversely affected the rights and
obligations under this Agreement of such Blocking Limited Partner or the
Exclusive Limited Partners (taken as a group) in a manner different from
the other Partners.
(m) Proxies; Minutes. Each Representative entitled to vote at a
meeting of the Partnership Board may authorize another Person to act for
him by proxy; provided that such proxy must be signed by the Representative
and shall be revocable by such Representative any time prior to such
meeting. Minutes of each meeting of the Partnership Board shall be
prepared by the Chief Executive Officer or his or her designee and
circulated to the Representatives. Written consents to any action taken by
the Partnership Board shall be filed with the minutes.
5.2 Business Plan and Annual Budget.
(a) At the January 11, 1996 meeting of the Partnership Board, the
Partners adopted by Unanimous Partner Vote (i) a business plan ("Business
Plan") of the Partnership and its Subsidiaries covering the Fiscal Year
ending December 31, 1996 and the succeeding Fiscal Years through the Fiscal
Year ending December 31, 1999, which the Partners hereby agree is the
"Initial Business Plan" for all purposes under this Agreement, and (ii) the
Annual Budget for the Fiscal Year ending December 31, 1996. The Partners
contemplate the Partnership's achieving a capital structure in which debt
(including Partner Loans) represents an equal or greater proportion of the
Partnership's total capitalization than the aggregate Original Capital
Contributions and Additional Capital Contributions and, unless otherwise
approved by Required Majority Vote, the first Proposed Business Plan
presented to the Partnership Board for approval subsequent to the Initial
Business Plan will set forth the means by which the Partnership proposes to
achieve such capital structure.
(b) Nothing contained in the Initial Business Plan (or any
subsequent Business Plan) shall be binding upon the Partners or the
Partnership, except to the extent specifically set forth in the applicable
provisions of this Agreement. Notwithstanding anything to the contrary set
forth in the Initial Business Plan (or any subsequent Business Plan) or
this Agreement, in the event of any conflict or inconsistency between the
Initial Business Plan (or any subsequent Business Plan) and this Agreement,
such conflict or inconsistency shall be resolved in favor of the applicable
terms and provisions of this Agreement to the extent required to give full
effect to such applicable terms and provisions. For example, by voting to
approve the Initial Business Plan (or any subsequent Business Plan), a
Partner will not have thereby agreed that any assumption or set of
assumptions contained in the Initial Business Plan (or any subsequent
Business Plan) (i) is the basis for any agreement by or among the Partners
and/or the Partnership (or any of their respective Affiliates), (ii) cannot
be changed (to the extent any such change would not thereby become
inconsistent with the applicable terms and provisions of this Agreement),
or (iii) is binding with respect to any transaction or other course of
dealing or otherwise between the Partnership and such Partner or between or
among any of the Partners other than as specifically set forth in this
Agreement.
(c) The Chief Executive Officer shall submit annually to the
Partnership Board at least ninety (90) days prior to the start of each
Fiscal Year after the Fiscal Year ending December 31, 1996, (i) a proposed
capital expenditure and operating budget (the "Proposed Budget") for the
forthcoming Fiscal Year including an income statement prepared on an
accrual basis which shall show in reasonable detail the revenues and
expenses projected for the business of the Partnership and its Subsidiaries
for the forthcoming Fiscal Year and a cash flow statement which shall show
in reasonable detail the receipts and disbursements projected for the
business of the Partnership and its Subsidiaries for the forthcoming Fiscal
Year and the amount of any corresponding cash deficiency or surplus, and
the projected Additional Capital Contributions, if any, and any
contemplated borrowings of the Partnership and its Subsidiaries and (ii) a
proposed revised Business Plan ("Proposed Business Plan") for the Fiscal
Year covered by the Proposed Budget and the succeeding four Fiscal Years.
Such Proposed Budget and Proposed Business Plan shall be prepared on a
basis consistent with the Partnership's audited financial statements. If
such Proposed Budget or such Proposed Business Plan is approved by the
Partnership Board, then such Proposed Budget or such Proposed Business
Plan, as the case may be, shall be considered approved and shall constitute
the "Annual Budget" or the "Approved Business Plan," as the case may be,
for all purposes of this Agreement and shall supersede any previously
approved Annual Budget or Approved Business Plan, as the case may be.
Except as provided in Schedule 5.1(k), the approval of each Proposed Budget
and Proposed Business Plan and action by the Partnership or any of its
Subsidiaries constituting any material deviation from any Annual Budget or
Approved Business Plan shall require the Required Majority Vote of the
Partnership Board. No Approved Business Plan or Annual Budget shall be
inconsistent with the provisions of this Agreement, nor shall this
Agreement be deemed amended by any provision of an Approved Business Plan
or Annual Budget. If a Proposed Budget or Proposed Business Plan is not
approved by the Required Majority Vote of the Partnership Board, then the
General Partners shall cause their Representatives to cooperate in good
faith and confer with the Chief Executive Officer and other senior officers
of the Partnership for the purpose of attempting to arrive at a Proposed
Budget or Proposed Business Plan, as the case may be, that can secure the
approval of the Partnership Board.
(d) If, notwithstanding the foregoing procedures, on January 1 of
any Fiscal Year no Proposed Budget has been approved by the Partnership
Board for such Fiscal Year, then the Annual Budget for the prior Fiscal
Year, adjusted (without duplication) to reflect increases or decreases
resulting from the following events, shall govern until such time as the
Partnership Board approves a new Proposed Budget:
(i) the operation of escalation or de-escalation provisions
in contracts in effect at the time of approval of the prior Fiscal Year's
Annual Budget solely as a result of the passage of time or the occurrence
of events beyond the control of the Partnership to the extent such
contracts are still in effect;
(ii) elections made in any prior Fiscal Year under
contracts contemplated by the Annual Budget for the prior Fiscal Year
regardless of which party to such contracts made such elections;
(iii) increases or decreases in expenses attributable to
the annualized effect of employee additions or reductions during the prior
Fiscal Year contemplated by the Annual Budget for the prior Fiscal Year;
(iv) changes in interest expense attributable to any loans
made to or retired by the Partnership or its Subsidiaries (including
Partner Loans);
(v) increases in overhead expenses in an amount equal to
the total of overhead expenses reflected in the Annual Budget for the prior
Fiscal Year multiplied by the increase in the Consumer Price Index for the
prior year, but in no event more than five percent (5%);
(vi) the anticipated incurrence of costs during such Fiscal
Year for any legal, accounting and other professional fees or disbursements
in connection with events or changes not contemplated at the time of
preparation of the Proposed Budget for the prior Fiscal Year;
(vii) the continuation of the effects of a decision made by
the Partnership Board or the Partners in the prior Fiscal Year with respect
to any of the matters referred to on Schedules 5.1(j), 5.1(k) or 5.1(l)
that are not reflected in the Annual Budget for the prior Fiscal Year; and
(viii) decreases in expense attributable to non-recurring
items reflected in the prior Fiscal Year's Annual Budget.
Any budget established pursuant to this Section 5.2(d) is herein
referred to as a "Default Budget."
(e) If a Proposed Business Plan is submitted for approval
pursuant to this Section 5.2 and is not approved by the requisite vote of
the Partnership Board, the Business Plan most recently approved by the
Partnership Board pursuant to Section 5.2(c) shall remain in effect as the
Approved Business Plan; provided, that, if a Proposed Budget is approved
pursuant to Section 5.2(c) (and the corresponding Proposed Business Plan
is not so approved), the Approved Business Plan then in effect shall be
deemed to be amended so that the Fiscal Year therein corresponding to the
Fiscal Year for which such Annual Budget has been approved shall be
consistent with such Annual Budget.
(f) The day-to-day business and operations of the Partnership and
its Subsidiaries shall be conducted in accordance with the Approved
Business Plan and the Annual Budget (or Default Budget) then in effect and
the policies, strategies and standards established by the Partnership
Board. The Partnership Board and the officers and employees of the
Partnership and its Subsidiaries shall implement the Annual Budget and
Approved Business Plan.
5.3 Employees.
The Partnership Board will appoint the senior management of the
Partnership and its Subsidiaries and will establish policies and guidelines
for the hiring of employees by the Partnership and its Subsidiaries. The
Partnership Board may adopt appropriate management incentive plans and
employee benefit plans.
5.4 Limitation of Agency.
The Partners agree not to exercise any authority to act for or to
assume any obligation or responsibility on behalf of the Partnership or any
of its Subsidiaries except (i) as approved by the Partnership Board by
Required Majority Vote, (ii) as approved by written agreement among the
General Partners and (iii) as expressly provided herein. No Partner shall
have any authority to act for or to assume any obligations or
responsibility on behalf of another Partner under this Agreement except (i)
as approved by written agreement among the Partners and (ii) as expressly
provided herein. Subject to Section 5.6, in addition to the other remedies
specified herein, each Partner agrees to indemnify and hold the Partnership
and the other Partners harmless from and against any claim, demand, loss,
damage, liability or expense (including reasonable attorneys' fees and
disbursements and amounts paid in settlement, but excluding any indirect,
special or consequential damages) incurred by or against such other
Partners or the Partnership and arising out of or resulting from any action
taken by the indemnifying Partner in violation of this Section 5.4.
5.5 Liability of Partners, Representatives and Partnership Employees.
No Partner, former Partner or Representative or former
Representative, no Affiliate of any thereof, no partner, shareholder,
director, officer, employee or agent of any of the foregoing, nor any
officer or employee of the Partnership, shall be liable in damages for any
act or failure to act in such Person's capacity as a Partner or
Representative or otherwise on behalf of the Partnership or any of its
Subsidiaries unless such act or omission constituted bad faith, gross
negligence, fraud or willful misconduct of such Person or a violation by
such Person of this Agreement or an agreement between such Person and the
Partnership or a Subsidiary thereof. Subject to Section 5.6, each Partner,
former Partner, Representative and former Representative, each Affiliate of
any thereof, each partner, shareholder, director, officer, employee and
agent of any of the foregoing, and each officer and employee of the
Partnership, shall be indemnified and held harmless by the Partnership, its
receiver or trustee from and against any liability for damages and
expenses, including reasonable attorneys' fees and disbursements and
amounts paid in settlement, resulting from any threatened, pending or
completed action, suit or proceeding relating to or arising out of such
Person's acts or omissions in such Person's capacity as a Partner or
Representative or (except as provided in Section 5.4) otherwise involving
such Person's activities on behalf of the Partnership or any of its
Subsidiaries, except to the extent that such damages or expenses result
from the bad faith, gross negligence, fraud or willful misconduct of such
Person or a violation by such Person of this Agreement or an agreement
between such Person and the Partnership or any of its Subsidiaries. Any
indemnity by the Partnership, its receiver or trustee under this Section
5.5 shall be provided out of and to the extent of Partnership Property
only.
5.6 Indemnification.
Any Person asserting a right to indemnification under Section 5.4 or
5.5 shall so notify the Partnership or the other Partners, as the case may
be, in writing. If the facts giving rise to such indemnification shall
involve any actual or threatened claim or demand by or against a third
party, the indemnified Person shall give such notice promptly (but the
failure to so notify shall not relieve the indemnifying Person from any
liability which it otherwise may have to such indemnified Person hereunder
except to the extent the indemnifying Person is actually prejudiced by such
failure to notify). The indemnifying Person shall be entitled to control
the defense or prosecution of such claim or demand in the name of the
indemnified Person, with counsel satisfactory to the indemnified Person, if
it notifies the indemnified Person in writing of its intention to do so
within twenty (20) days of its receipt of such notice, without prejudice,
however, to the right of the indemnified Person to participate therein
through counsel of its own choosing, which participation shall be at the
indemnified Person's expense unless (i) the indemnified Person shall have
been advised by its counsel that use of the same counsel to represent both
the indemnifying Person and the indemnified Person would present a conflict
of interest (which shall be deemed to include any case where there may be a
legal defense or claim available to the indemnified Person which is
different from or additional to those available to the indemnifying
Person), in which case the indemnifying Person shall not have the right to
direct the defense of such action on behalf of the indemnified Person, or
(ii) the indemnifying Person shall fail vigorously to defend or prosecute
such claim or demand within a reasonable time. Whether or not the
indemnifying Person chooses to defend or prosecute such claim, the Partners
shall cooperate in the prosecution or defense of such claim and shall
furnish such records, information and testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals as may
reasonably be requested in connection therewith. The indemnifying Person
may not control the defense of any claim or demand that involves any
material risk of the sale, forfeiture or loss of, or the creation of any
lien (other than a judgment lien) on, any material property of the
indemnified Person or could entail a risk of criminal liability to the
indemnified Person, without the consent of such indemnified Person.
The indemnified Person shall not settle or permit the settlement of
any claim or action for which it is entitled to indemnification without the
prior written consent of the indemnifying Person (which shall not be
unreasonably withheld), unless the indemnifying Person shall have been
entitled to assume the defense thereof pursuant to this Section 5.6 but
failed to do so after the notice and in the manner provided in the
preceding paragraph.
The indemnifying Person may not without the consent of the
indemnified Person agree to any settlement (i) that requires such
indemnified Person to make any payment that is not indemnified hereunder,
(ii) does not grant a general release to such indemnified Person with
respect to the matters underlying such claim or action, or (iii) that
involves the sale, forfeiture or loss of, or the creation of any lien on,
any material property of such indemnified Person. Nothing contained in
this Section 5.6 is intended to authorize the indemnifying Person, in
connection with any defense or settlement as to which it has assumed
control, to take or refrain from taking, without the consent of the
indemnified Person, any action which would reasonably be expected to
materially impair the indemnification of such indemnified Person hereunder
or would require such indemnified Person to take or refrain from taking any
action or to make any public statement, which such indemnified Person
reasonably considers to materially adversely affect its interests.
Upon the request of any indemnified Person, the indemnifying Person
shall use reasonable efforts to keep such indemnified Person reasonably
apprised of the status of those aspects of such defense controlled by the
indemnifying Person and shall provide such information with respect thereto
as such indemnified Person may reasonably request. If the defense is
controlled by the indemnified Person, such indemnified Person, upon the
request of the indemnifying Person, shall use reasonable efforts to keep
the indemnifying Person reasonably apprised of the status of those aspects
of such defense controlled by such indemnified Person and shall provide
such information with respect thereto as the indemnifying Person may
reasonably request.
5.7 Temporary Investments.
All Property in the form of cash not otherwise invested shall be
deposited for the benefit of the Partnership in one or more accounts of the
Partnership, WirelessCo or any other Subsidiary of the Partnership in which
the Partnership and MinorCo own, in the aggregate, directly or indirectly,
one hundred percent (100%) of the outstanding equity interests, maintained
in such financial institutions as the Partnership Board shall determine, or
shall be invested in accordance with the guidelines set forth in Schedule
5.7 hereto (which guidelines may be modified from time to time by the
Partnership Board), or shall be left in escrow, and withdrawals shall be
made only for Partnership purposes on such signature or signatures as the
Partnership Board may determine from time to time.
5.8 Deadlocks.
(a) Escalation Procedures. Upon the occurrence of a Deadlock
Event, the General Partners shall first use their good faith efforts to
resolve such matter in a mutually satisfactory manner. If, after such
efforts have continued for twenty (20) days, no mutually satisfactory
solution has been reached, the General Partners shall resolve the Deadlock
Event as provided herein:
(i) The General Partners shall (at the insistence of any of
them) refer the matter to the chief executive officers of their respective
Parents for resolution.
(ii) Should the chief executive officers of the Parents
fail to resolve the matter within ten (10) days after it is referred to
them, each General Partner (or any group of General Partners electing to
act together) shall prepare a brief (a "Brief"), which includes a summary
of the issue, its proposed resolution of the issue and considerations in
support of such proposed resolution, not later than ten (10) days following
the failure of the chief executive officers to resolve such dispute, and
such Briefs shall be submitted to such reputable and experienced mediation
service as is selected by the Partnership Board by Required Majority Vote
or, failing such selection, by the Chief Executive Officer (the
"Mediator"). During a period of twenty (20) days, the Mediator and the
General Partners shall attempt to reach a resolution of the Deadlock Event.
(iii) In the event that after such twenty (20) day
period (or such longer period as the Partnership Board may approve by
Required Majority Vote), the General Partners are still unable to reach
resolution of the Deadlock Event (such resolution to be evidenced by the
requisite vote of the Partnership Board with respect to the underlying
matters), the Deadlock Event shall constitute a Liquidating Event as
provided in Section 14.1(a)(iii) unless the Partnership Board determines by
Required Majority Vote not to dissolve.
(b) Deadlock Event. A "Deadlock Event" shall be deemed to have
occurred if (i) after failing to approve a Proposed Budget or Proposed
Business Plan for one Fiscal Year, the Partnership Board has failed to
approve a Proposed Budget or Proposed Business Plan for the next succeeding
Fiscal Year prior to the commencement of such succeeding Fiscal Year, or
(ii) the position of Chief Executive Officer is vacant for a period of more
than sixty (60) days after at least two Partners with an aggregate of at
least thirty-three percent (33%) of the Voting Percentage Interests have
proposed a candidate to fill such vacancy.
5.9 Conversion to Corporate Form.
(a) Procedures. In the event that (i) the Partnership Board
shall determine by Required Majority Vote (or such other vote as may be
required by Item B. of Schedule 5.1(j)) that it is desirable or helpful for
the business of the Partnership to be conducted in a corporate rather than
in a partnership form (for the purposes of conducting a public offering or
otherwise) or (ii) conversion to corporate form is required pursuant to an
election made by a Registering Partner under Section 12.6(c), the
Partnership Board shall incorporate the Partnership in Delaware. In
connection with any incorporation of the Partnership pursuant to the
preceding sentence, the Partnership and MinorCo shall be consolidated and
the Partners shall receive, in exchange for their Interests and MinorCo
Interests, shares of capital stock of such corporation having the same
relative economic interests and other rights as such Partners hold in the
Partnership as set forth in this Agreement, subject in each case to (i) any
modifications required solely as a result of the conversion to corporate
form and (ii) modifications to the provisions of Section 5.1 to conform to
the provisions relating to actions of stockholders and a board of directors
set forth in the Delaware General Corporation Law; provided, that the
relative number of representatives on the board of directors and relative
voting power of the outstanding equity interests of such corporation of
each General Partner shall be as nearly as practicable in proportion to the
relative Voting Percentage Interests of the General Partners immediately
prior to such incorporation. For purposes of the preceding sentence, each
Partner's relative economic interest in the Partnership shall equal such
Partner's Net Equity as compared to the Net Equity of all of the Partners,
as determined in accordance with Section 11.3 except that the Partnership
Board shall by Required Majority Vote select a single Appraiser to
determine Gross Appraised Value. At the time of such conversion, the
Partners shall enter into a stockholders' agreement providing for (i)
rights of first refusal and other restrictions on Transfer equivalent to
those set forth in Sections 12.1 through 12.5 and Section 12.7, provided
that (x) the restrictions on Transfer set forth in Sections 12.1 through
12.4 shall not apply, following the initial Public Offering by the
corporate successor to the Partnership, to sales in broadly disseminated
Public Offerings or sales in accordance with Rule 144 under the Securities
Act of 1933 (the "1933 Act") or Rule 145 under the 1933 Act (in accordance
with the applicable provisions of Rule 144) (or any successor to either of
such Rules), in a transaction that satisfies the manner of sale
requirements of Rule 144 or Rule 145 (whether or not applicable to such
sale) and (y) the restrictions on Transfer set forth in Section 12.5 shall
not apply following the initial Public Offering by the corporate successor
to the Partnership; and (ii) an agreement to vote all shares of capital
stock held by them with respect to the election of directors of the
corporation so as to duplicate as closely as possible the management
structure of the Partnership as set forth in Section 5.1, modified as
contemplated by the second sentence of this Section 5.9(a).
(b) Registration Rights. Upon conversion to corporate form, the
corporate successor to the Partnership shall grant to each of the Partners
certain rights to require such successor to register under the 1933 Act the
shares of capital stock received by the Partners in exchange for their
Interests. Such rights shall be as approved by the Required Majority Vote
of the Partnership Board, provided that the registration rights of each
Partner shall be identical on a proportionate basis and, if the conversion
to corporate form was required by Section 12.6(g), shall consist of not
less than two demand registrations on customary terms and subject to
customary conditions.
(c) Preemptive Rights. Each Partner shall have preemptive
rights, exercisable in accordance with procedures to be established by the
Partnership Board in connection with and following the conversion of the
Partnership to corporate form, to purchase equity securities proposed to be
issued from time to time by a corporate successor to the Partnership or its
successor; provided, however, that no Partner shall have any such
preemptive right with respect to any equity securities which, by a vote of
the board of directors of such corporate successor that is equivalent to a
Required Majority Vote, have been approved for issuance by such corporate
successor in connection with (i) a Public Offering or (ii) any acquisition
(including by way of merger or consolidation) by the corporate successor of
the equity interests or assets of another entity that is not a Partner or
its Affiliate in a transaction pursuant to which the purchase price is paid
by delivery of such equity securities to the seller. A "Public Offering"
means an offering of the securities of the corporate successor to the
Partnership pursuant to a registration statement on a form applicable to
the sale of securities to the general public (including an offering by a
Registering Partner pursuant to a registration statement as contemplated
under Section 12.6(g)).
SECTION 6. PARTNERSHIP OPPORTUNITIES; CONFIDENTIALITY
6.1 Competitive Activities.
(a) In General. For so long as any Person is a Partner, neither
such Person nor any of its Controlled Affiliates shall engage in any
Competitive Activity in the United States of America (including its
territories and possessions other than Puerto Rico) except (i) through the
Partnership and its Subsidiaries, (ii) subject to Section 6.1(d), as
provided in Section 6.1(b) or 6.1(c), (iii) as permitted or contemplated
under Section 8.3, or (iv) as permitted by Section 6.1(f), 6.3, 6.4 or 8.1.
The term "Competitive Activity" means to bid on, acquire or, directly or
indirectly, own, manage, operate, join, control or finance, or participate
in the management, operation, control or financing of, or be connected as a
principal, agent, representative, consultant, beneficial owner of an
interest in any Person, or otherwise with, or use or permit its name to be
used in connection with, any business or enterprise which (i) engages in
the bidding for or acquisition of any Wireless Business license or engages
in any Wireless Business, or (ii) provides, offers, promotes or brands
services that are within the Wireless Exclusive Services.
(b) Bidding for Wireless Business Licenses. Except as permitted
by Section 6.4, no Partner nor any of its Controlled Affiliates shall bid
in the PCS Auction for any Wireless Business licenses unless (i) the
Partnership Board consents to such bid following consultation by such
Partner with the Representatives of the other Partners; or (ii) (A)
WirelessCo has entered a bid or bids for such license, but a third-party
bid has been entered which equals or exceeds the maximum amount that
WirelessCo has determined to bid for such license, (B) if a vote was taken,
such Partner's Representative(s) voted in favor of WirelessCo's increasing
the amount it would bid for such license, and (C) WirelessCo has
determined not to increase its bid in response to such third party bid.
This Section 6.1(b) will not permit a Partner or its Affiliate to bid for
or acquire a Wireless Business license if the bidding for or acquisition of
such license by a Partner or its Affiliate would otherwise violate (or
cause the Partnership or any of the other Partners or their respective
Affiliates to be in violation of) the FCC's rules or orders relating to
Wireless Business license cross-ownership, license attribution standards,
and/or spectrum attribution or aggregation requirements, including Sections
20.6, 24.204 and 24.229(c) of the FCC's rules to be codified at 47 C.F.R.
Section Section 20.6, 24.204 and 24.229(c).
(c) Engaging in Wireless Businesses. If any Partner or any of
its Controlled Affiliates proposes to engage in any Competitive Activity
other than as permitted by Section 6.1(b) (or through a Wireless Business
license acquired as permitted by Section 6.1(b)), 6.3, 6.4 or 8.1, then
such Partner shall first offer to the Partnership the opportunity for the
Partnership or any of its Subsidiaries to engage, in lieu of such Partner
and its Affiliates, in such Competitive Activity (whether by acquiring such
interest itself or itself providing, offering, promoting or branding such
services) (the "Offer"), which Offer shall be made in writing and shall
set forth in reasonable detail the nature and scope of the activity
proposed to be engaged in, including all material terms of any proposed
acquisition. The Partnership, for itself or any of its Subsidiaries (by
Required Majority Vote of the Partnership Board pursuant to Section 8.6),
shall have thirty (30) days from receipt of the Offer to accept or reject
it. If the Partnership does not accept (for itself or any of its
Subsidiaries), the Offer within such thirty (30) day period, it shall be
deemed to have rejected the Offer, and the offering Partner or its
Controlled Affiliate shall be permitted to engage in such Competitive
Activity on terms no more favorable to such Partner or its Controlled
Affiliate than those described in the Offer. If the Partnership, for
itself or any of its Subsidiaries, accepts the Offer, the offering Partner
and its Controlled Affiliates shall not pursue such opportunity to engage
in such Competitive Activity; provided, however, that if the Partnership or
such Subsidiary, as applicable, does not within a commercially reasonable
period of time after such acceptance take reasonable steps to pursue such
opportunity, other than as a result of a violation of this Agreement or
wrongful acts or bad faith on the part of the offering Partner or its
Controlled Affiliates, then the offering Partner or its Controlled
Affiliate shall be permitted to pursue such opportunity on terms no more
favorable to the offering Partner or its Controlled Affiliate than the
terms of the Offer. If the offering Partner or its Controlled Affiliate
does not take reasonable steps to pursue such opportunity contemplated by
the Offer within a reasonable period of time after acquiring the right to
do so in accordance with the foregoing provisions of this Section 6.1(c)
(including, in the case of an acquisition, by entering into a definitive
agreement (subject solely to obtaining the requisite regulatory approvals
and other customary closing conditions) with respect to such acquisition
within one hundred twenty (120) days thereafter), then it shall lose its
right to pursue such opportunity and thereafter be required to reoffer the
opportunity to the Partnership in accordance with, and shall otherwise
comply with, this Section 6.1(c). Notwithstanding the foregoing, a Partner
shall not be permitted to present an Offer to the Partnership (or, except
for Competitive Activities relating to an Offer previously rejected by the
Partnership, otherwise engage in any Competitive Activity in reliance on
this Section 6.1(c)) in any license area (or portion thereof) in which the
Partnership or any of its Subsidiaries is otherwise offering, promoting or
branding Wireless Exclusive Services (or in which the Partnership or any of
its Subsidiaries plans to offer, promote or brand Wireless Exclusive
Services pursuant to or as set forth in the Initial Business Plan or
Approved Business Plan then in effect, as applicable, or pursuant to any
Wireless Business license acquired by the Partnership or an Affiliation
Agreement entered into with the holder of a Wireless Business license
subsequent to the approval of such Initial Business Plan or Approved
Business Plan, as applicable), including pursuant to an Affiliation
Agreement, without a Unanimous Vote of the Partnership Board pursuant to
Section 8.6.
(d) Wireless Business Affiliation Agreements. (i) Any Partner or
Controlled Affiliate thereof that acquires or owns a Wireless Business
license, or directly engages in a Wireless Business, as permitted by the
exceptions provided by Sections 6.1(b), 6.1(c), 6.3(e), 6.3(h) and 8.1 to
the prohibitions on Competitive Activities contained in Section 6.1(a),
shall, subject to applicable law, as a condition to the availability of
such exceptions, offer to enter into an affiliation agreement with respect
to such Wireless Business with WirelessCo on terms and conditions
comparable to those which WirelessCo offers to other affiliated Wireless
Businesses in similar situations (or if no such agreement then exists, such
terms and conditions shall include a provision for competitive pricing),
under which such Wireless Business will provide its services to the public
as an affiliate of WirelessCo's business (as entered into with a Partner or
its Controlled Affiliate or any other Person, an "Affiliation Agreement").
The Partnership Board may waive compliance with all or any part of this
Section 6.1(d) with respect to any transaction by Required Majority Vote of
the Partnership Board pursuant to Section 8.6.
(ii) Each Partner and its Controlled Affiliates shall also
use all commercially reasonable efforts to cause any Affiliate of such
Partner which acquires or owns a Wireless Business license, or otherwise
engages in any Wireless Business, and provides services within the Wireless
Exclusive Services, to (if WirelessCo so desires) enter into an Affiliation
Agreement with WirelessCo.
(e) Geographic Restrictions on Wireless Business. Unless
approved by a Unanimous Partner Vote, the Partnership and its Subsidiaries
will not engage in any Competitive Activities in the Philadelphia,
Charlotte, Cleveland, El Paso, Jacksonville, Knoxville, Omaha or Richmond
MTAs, including bidding for or acquiring any PCS licenses therein; provided
that, to the extent permitted by law, the Partnership and its Subsidiaries
may (or, as provided in Sections 6.3(e) and 8.1, shall) enter into
Affiliation Agreements with Persons engaged in Competitive Activities in
such MTAs; and provided further, that the Partnership and its Subsidiaries
may engage in Competitive Activities in any MTA (other than Philadelphia)
listed in this Section 6.1(e) from and after the time that Sprint and its
Controlled Affiliates have divested of their ownership interests in any of
the Sprint Cellular Businesses in such MTA.
(f) Unrestricted Activities. Nothing in this Section 6 shall
prevent any Person from (i) providing any Non-Exclusive Services or
engaging in any Excluded Business or (ii) complying with any applicable
laws, rules or regulations, including those requiring that any facilities
be made available to any other Person.
6.2 Enforceability and Enforcement.
(a) The Partners acknowledge and agree that the time, scope,
geographic area and other provisions of Section 6.1 have been specifically
negotiated by sophisticated parties and agree that such time, scope,
geographic area, and other provisions are reasonable under the
circumstances. If, despite this express agreement of the Partners, a court
should hold any portion of Section 6.1 to be unenforceable for any reason,
the maximum restrictions of time, scope and geographic area reasonable
under the circumstances, as determined by the court, will be substituted
for the restrictions held to be unenforceable.
(b) The Partnership shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual
damages or posting any bond or other security, to prevent any breach of
Section 6.1, which rights shall be cumulative and in addition to any other
rights or remedies to which the Partnership may be entitled.
6.3 General Exceptions to Section 6.1.
The restrictions set forth in Section 6.1 on Competitive Activities
shall not be construed to prohibit any of the following actions by a
Partner and its Controlled Affiliates, except to the extent any such action
would cause the Partnership (including the ownership of its assets and the
conduct of its business) to be in violation of any law or regulation or
otherwise result in any restriction or other limitation on the
Partnership's and its Subsidiaries' ownership of their respective assets or
conduct of their respective businesses:
(a) The acquisition or ownership of any debt or equity securities
of a Publicly Held Person, provided that such securities (i) were not
acquired from the issuer thereof in a private placement or similar
transaction, (ii) do not represent more than five percent (5%) of the
aggregate voting power of the outstanding capital stock of any Person that
engages in a Competitive Activity (assuming the conversion, exercise or
exchange of all such securities held by such Partner or its Controlled
Affiliates that are convertible, exercisable or exchangeable into or for
voting stock) and (iii) in the case of debt securities, entitle the holder
to receive only interest or other returns that are fixed, or vary by
reference to an index or formula that is not based on the value or results
of operations of such Person;
(b) The acquisition (through merger, consolidation, purchase of
stock or assets, or otherwise) of a Person or an interest in a Person,
which engages (directly or indirectly through an Affiliate that is
controlled by such Person) in any Competitive Activity if either (i) such
acquisition results from a foreclosure or equivalent action with respect to
debt securities permitted to be held under Section 6.3(a) or (ii) the
Competitive Activity does not constitute the principal activity, in terms
of revenues or fair market value, of the businesses acquired in such
acquisition or conducted by the Person in which such interest is acquired,
provided, in each case, that such Partner or Controlled Affiliate divests
itself of the Competitive Activity or interest therein as soon as is
practicable, but in no event later than twenty-four (24) months, after the
acquisition unless the Partnership Board approves the entering into of an
Affiliation Agreement with respect to such Competitive Activity pursuant to
Section 8.6;
(c) The continued holding of an equity interest in a Person that
commences a Competitive Activity following the acquisition of such equity
interest if neither the Partner nor its Controlled Affiliate has any
responsibility or control over the conduct of such Competitive Activity,
does not permit its name to be used in connection with such Competitive
Activity and uses all commercially reasonable efforts, including voting its
equity interest, to cause such Person either (i) to cease such Competitive
Activity or (ii) to offer to enter into an Affiliation Agreement with the
Partnership and its Subsidiaries;
(d) The conduct of any Competitive Activity that is a necessary
component of or an incidental part of the conduct of any Excluded Business
by a Partner or its Controlled Affiliates or the entering into of an
arrangement with an independent third party for the provision of any
services included in the Wireless Exclusive Services which is a necessary
component of or an incidental part of the conduct of such Excluded
Business, so long as, in each case, such Partner or Controlled Affiliate
shall first use all commercially reasonable efforts to negotiate agreements
with the Partnership or one of its Subsidiaries, which are reasonable in
the independent judgment of both parties, pursuant to which the Partnership
or such Subsidiary would provide such services included in the Wireless
Exclusive Services on terms no less favorable to the Partner or such
Controlled Affiliate than such Partner or Controlled Affiliate could obtain
from an independent third party or could provide itself;
(e) The ownership and operation by (i) a partnership of Sprint,
TCI and Cox and/or their respective Affiliates of a PCS license and an
associated Wireless Business in the Philadelphia MTA ("PhillieCo"), (ii)
Cox or its Affiliate of a PCS License and an associated Wireless Business
in the Omaha MTA and (iii) any of Cox, Comcast and TCI or their Affiliates
(acting singly or jointly through a partnership or other entity) of a PCS
license and an associated Wireless Business in any of the Charlotte,
Cleveland, El Paso, Jacksonville, Knoxville and Richmond MTAs, provided in
each case that, subject to applicable law, such owners or entities holding
the licenses enter into Affiliation Agreements with the Partnership and its
Subsidiaries; and provided further, that (x) the exception provided in
clause (ii) of this Section 6.3(e) shall terminate at such time as Cox is
obligated to contribute the Omaha License to the Partnership pursuant to
Section 2.3(a)(ii) and (y) except for any Competitive Activities conducted
in the MTAs listed in clause (iii) of this Section 6.3(e) pursuant to an
agreement entered into or PCS license acquired during the period beginning
on July 1, 1996 and ending on the date that Sprint and its Controlled
Affiliates have divested of their ownership interests in the Sprint
Cellular Businesses, the exception provided in such clause (iii) shall
terminate at such time as Sprint and its Controlled Affiliates have
divested of their ownership interests in the Sprint Cellular Businesses;
(f) The conduct of any Competitive Activity involving the
provision of any product or service that is an ancillary value-added
addition to a Wireless Business and which does not itself require an FCC
license (including operator services, location services and weather, sports
and other information services);
(g) The ownership and operation by Sprint's Controlled Affiliates
of their cellular businesses within the Sprint Cellular Service Area until
such time as Sprint and its Controlled Affiliates have divested of their
ownership interests in the Sprint Cellular Businesses; provided that the
entities succeeding to the Sprint Cellular Businesses shall be entitled to
use the Sprint Brand for a period not to exceed one (1) year following the
closing of such divestiture;
(h) The ownership and operation by Cox or its Affiliate of
PioneerCo, so long as PioneerCo, subject to applicable law, enters into an
Affiliation Agreement with the Partnership prior to offering or providing
any Wireless Exclusive Services;
(i) The continuing ownership by an Affiliate of Sprint of its
current ownership interest in Iridium and the provision of any services by
Iridium so long as Iridium is not an Affiliate of Sprint;
(j) The ownership by a Controlled Affiliate of Comcast of any
ownership interest in Nextel and the provision of any services by Nextel,
subject to Section 6.4(f) of this Agreement;
(k) The continuing ownership by a Controlled Affiliate of TCI of
its current ownership interest in Nextel and the provision of any services
by Nextel so long as Nextel is not an Affiliate of TCI;
(l) The continuing ownership by a Controlled Affiliate of TCI of
its current ownership interest in MTS Limited Partnership ("MTS") and the
provision of any services by MTS so long as MTS is not an Affiliate of TCI;
(m) The continuing ownership by a Controlled Affiliate of TCI of
its current ownership interest in General Communication Inc. ("GCI") and
the provision of any services by GCI so long as GCI is not an Affiliate of
TCI;
(n) The continuing ownership by a Controlled Affiliate of TCI of
its current ownership interest in Western Tele-Communications, Inc.
("WTCI") and the conduct by WTCI of its current business;
(o) The continuing ownership and operation by Sprint's Controlled
Affiliates of their IMTS (mobile radio telephony service) and paging
businesses as such businesses currently are being conducted, so long as the
aggregate annual revenue derived from the operation of such businesses does
not exceed $15,000,000;
(p) The provision by a Partner and its Controlled Affiliates of
Wireless Exclusive Services on a resale basis in geographic areas where
neither the Partnership nor any of its Subsidiaries or Wireless Affiliates
is then providing, offering, promoting or branding Wireless Exclusive
Services and either (i) with respect to Sprint, a Controlled Affiliate of
Sprint owns a LEC property as of the date of this Agreement in such
geographic area or (ii) in the reasonable judgment of such Partner, such
Partner or its Controlled Affiliate must offer in such geographic area
Wireless Exclusive Services in a package with other products and services
of such Partner or its Controlled Affiliates in order to compete with an
actual or anticipated initiative by a service provider that is not a
Controlled Affiliate of such Partner; provided in each case that such
Partner or its Controlled Affiliate must (x) first offer, or cause to be
offered, to the Partnership the opportunity to be the provider of such
Wireless Exclusive Services on terms no less favorable to the Partnership
than those made available to such Partner or its Controlled Affiliate and
(y) use its commercially reasonable efforts to insure that any provision of
such Wireless Exclusive Services is in accordance with the Partnership's
technical requirements in a manner that would facilitate the transition of
such business to the Partnership. At such time as the Partnership
commences providing, offering, promoting or branding Wireless Exclusive
Services within such geographic area, such Partner shall, promptly
following its receipt of written notice from the Partnership, offer, or
cause its Controlled Affiliate to offer, to Transfer to the Partnership
such Partner's or its Controlled Affiliate's business of providing Wireless
Exclusive Services in such geographic area, and (at the Partnership's
option) to Transfer, lease or otherwise make available (at the election of
such Partner or its Controlled Affiliate) to the Partnership the assets
that are utilized in the provision of such Wireless Exclusive Services,
such offer in each case to be at a price equal to the costs that the
Partnership would incur to achieve a like business, including the costs
associated with the creation or acquisition of the customer base of such
business and the replacement cost of any assets so Transferred, leased or
otherwise made available;
(q) Prior to the termination of a Parents Agreement, the
offering, promotion and branding by the Cable Partner whose Parent is a
party to such Parents Agreement and its Controlled Affiliates of the
Partnership's Wireless Exclusive Services under a Permitted Brand at such
times and in such geographic areas as to which Section 2(a)(i) of such
Parents Agreement has ceased to be applicable to the Parent of such Cable
Partner pursuant to Section 4(b) or 4(c) of such Parents Agreement;
(r) Following the termination of a Parents Agreement, the
offering, promotion and branding by the Cable Partner whose Parent is a
party to such Parents Agreement and its Controlled Affiliates of the
Partnership's Wireless Exclusive Services under a Permitted Brand in any
geographic area where (i) neither such Cable Partner, its Controlled
Affiliates nor any Local Joint Venture between such Cable Partner or its
Controlled Affiliate and Sprint or its Controlled Affiliate is providing
Local Telephony Services (as defined in the Parents Agreement) under the
Sprint Brand and (ii) Sprint Parent has not provided or caused to be
provided to such Cable Partner or its applicable Controlled Affiliate on
competitive economic terms Long Distance Telephony Services (as defined in
the Parents Agreement) under the Sprint Brand to offer and promote, and
package with other products and services to offer and promote, to its
customers, and for which it is authorized to act as a non-exclusive sales
agent in that geographic area; and
(s) The offering or promotion on a sales agency basis of any
product or service offered by any Wireless Affiliate pursuant to or in
accordance with an Affiliation Agreement.
Notwithstanding anything to the contrary in this Section 6, any investment
fund in which a Partner or any of its Affiliates has an investment
(including pension funds) that invests funds on behalf of and has a
fiduciary duty to third party investors shall be permitted to engage in or
invest in entities engaged in any activity whatsoever; provided that,
neither such Partner nor any of its Controlled Affiliates, directly or
indirectly, exercises any management or operational control whatsoever in
any such entity engaging in a Wireless Business.
6.4 Comcast Exceptions.
The restrictions set forth in Section 6.1 shall not apply with
respect to the following:
(a) Subject to the limitations set forth in this Section 6.4,
Comcast and its Controlled Affiliates may engage in any Competitive
Activities with respect to any Wireless Business in the Comcast Area.
(b) Comcast and its Controlled Affiliates may participate in a
bid for and/or acquire any interest in a 10 MHz PCS license only in any of
the BTAs in the Philadelphia MTA or the Allentown, Pennsylvania BTA.
Comcast and its Controlled Affiliates may acquire any interest in a 10 MHz
PCS license in any of the following cellular license areas in New Jersey:
Hunterdon County, Middlesex County, Monmouth County and Ocean County;
provided, that at the time of such acquisition Comcast and its Controlled
Affiliates own a controlling interest in a cellular license for such area
and further provided, that the license area of such 10 MHz license shall
not extend beyond such area in other than an immaterial manner. In the
event Comcast and its Controlled Affiliates own a controlling interest in
any such 10 MHz PCS license, then Comcast and its Controlled Affiliates
will, to the extent permitted by applicable law, provide for their
customers receiving services under any such 10 MHz PCS license to receive
roaming services from any of WirelessCo's or its Affiliate's businesses
providing services under any PCS license (the "Partnership's Businesses"),
subject to the conditions that (i) such roaming is technically feasible,
(ii) such roaming is at competitive rates and on other terms and conditions
reasonably acceptable to Comcast and its Controlled Affiliates, (iii) the
Partnership's Businesses support the features and services provided by
Comcast and its Controlled Affiliates to their customers and (iv) subject
to the same conditions, the Partnership's Businesses will provide for their
customers to receive reciprocal roaming services from Comcast and its
Controlled Affiliates in the areas described above at such times as neither
PhillieCo nor WirelessCo owns or has an affiliation with respect to a
Wireless Business license for such areas. Notwithstanding the foregoing,
if the ownership by Comcast or any of its Controlled Affiliates of any 10
MHz PCS license outside of the Philadelphia MTA (A) causes WirelessCo
(including the ownership of its assets and the conduct of its business) to
be in violation of any law or regulation or otherwise results in any
restriction or other limitation on WirelessCo's ownership of its assets or
conduct of its business or (B) in any way impairs, prevents or delays the
ability of WirelessCo to bid for or acquire a Wireless Business license in
any license area in which WirelessCo plans to engage in a Competitive
Activity pursuant to or as set forth in the Initial Business Plan or its
then-current Approved Business Plan, Comcast and its Controlled Affiliates
will be prohibited from making such acquisition or, if such acquisition has
already occurred, will cure the circumstances described above (including,
if required, by divesting its ownership of the 10 MHz PCS license) within a
commercially reasonable period of time after its receipt of notice from
WirelessCo of the existence of such circumstances; provided that, in the
event of such divestiture, Comcast and its Controlled Affiliates will have
the right to resell service in such area provided such resale shall occur
using WirelessCo's facilities if they are available and it is technically
feasible to do so.
(c) The Partnership will, at the request of Comcast and
Affiliates and to the extent permitted by applicable law, (i) provide for
customers receiving Wireless Business services from Comcast and its
Controlled Affiliates in the Comcast Area, to receive roaming services in
areas outside of the Comcast Area at competitive rates and on commercially
reasonable terms and conditions where the Partnership Businesses own or
have an affiliation with respect to a Wireless Business license, subject to
the condition that such roaming is technically feasible; (ii) provide
Comcast and its Controlled Affiliates' Wireless Businesses in the Comcast
Area with SS7 interconnection to the Partnership's facilities on
commercially reasonable terms and conditions and (iii) in the event the
Partnership or its Subsidiaries allow or are required by law to allow
resale of their Wireless Exclusive Services in any part of the Comcast
Area, allow Comcast and its Controlled Affiliates to resell such services
in such part of the Comcast Area on commercially reasonable terms and
conditions.
(d) Comcast and its Controlled Affiliates may engage in any
Competitive Activities with respect to any Wireless Business in the
Kankakee, Illinois RSA cellular license area as well as the cellular
license area served by Indiana Cellular Holdings, Inc., Harrisburg Cellular
Telephone Company, Aurora/Elgin Cellular Telephone Company, Inc. and Joliet
Cellular Telephone Company, Inc.; provided that such Competitive Activities
are confined to the geographic territories of the cellular licenses
currently held by such businesses.
(e) Comcast and its Controlled Affiliates may participate in
regional marketing activities within the Comcast Area for the purpose of:
(i) selling to its "In-Territory Customers" (as defined below) wireless
services within the Washington, D.C., New York and Philadelphia MTAs; and
(ii) obtaining distribution from its "In-Territory Distributors" (as
defined below) of wireless services within the Washington, D.C., New York
and Philadelphia MTAs; provided that (A) Comcast and its Controlled
Affiliates do not maintain or deploy any sales personnel, sales office or
other direct sales presence, or otherwise advertise or promote the Comcast
brand or any other brand, in either the New York MTA or the Washington,
D.C. MTA outside of the Comcast Area, (B) Comcast and its Controlled
Affiliates do not own or lease any wireless transmission facilities outside
of the Comcast Area in connection therewith and (C) in obtaining the
distribution contemplated by Section 6.4(e)(ii), Comcast and its Controlled
Affiliates subcontract the provision of wireless services outside the
Comcast Area to a third party provider only if such services cannot be
subcontracted to WirelessCo without material adverse consequences for
Comcast's and its Controlled Affiliates' ability to participate in such
regional marketing activities. For the purposes hereof, an "In-Territory
Customer" is a customer that has a business location in the Comcast Area
and places the order for the services described above through Comcast and
its Controlled Affiliates in the Comcast Area. For the purposes hereof, an
"In-Territory Distributor" is a distributor that has a business location in
the Comcast Area and requires a regional contract be entered into by
Comcast and its Controlled Affiliates in the Comcast Area. For purposes of
this Section 6.4(e), the term "Comcast Area" shall include any area in
which Comcast and its Controlled Affiliates at such time own a controlling
interest in a PCS license which was permitted to be acquired under Section
6.4(b).
(f) Comcast and its Controlled Affiliates may hold an interest in
Nextel Communications, Inc. ("Nextel"), provided that (i) none of
Comcast's or its Controlled Affiliates' Agents participate in or are
present at any discussions, or receive any information, regarding Nextel's
PCS bidding strategies; and (ii) at the election of Comcast, no later than
October 24, 1995, either (A) Comcast and its Controlled Affiliates shall
own securities representing less than 5.4% of the voting power and equity
of all of the outstanding capital stock of Nextel, (B) no Agent of Comcast
or any of its Controlled Affiliates shall be a director or officer of
Nextel, and no director of Nextel shall be an appointee of Comcast or its
Controlled Affiliates pursuant to any contractual right of Comcast and its
Controlled Affiliates to appoint any director of Nextel, or (C) Comcast
shall elect to become an Exclusive Limited Partner as of such date by
giving written notice of such election to the Partnership; provided,
however, that if Comcast and its Controlled Affiliates (x) fail to satisfy
either of clauses (A) or (B) above at any time after October 24, 1995 or
(y) acquire any additional common stock or other voting securities (or
securities convertible into or exchangeable for common stock or other
voting securities) of Nextel (as to (y) only, other than common stock
acquired as a result of (I) the exercise of its stock option to acquire
25,000,000 shares and warrant to acquire 230,000 shares, (II) the
consummation of its sale of the assets of Philadelphia Mobile
Communications, Inc. to Nextel (the "PMCI Shares") or (III) the exercise by
Comcast and its Controlled Affiliates of purchase rights to maintain, in
the event of certain future share issuances by Nextel, the then current
percentage ownership of Comcast and its Controlled Affiliates in Nextel
assuming the exercise of such stock option and warrant in full and the
receipt of the PMCI Shares (which percentage shall in no event exceed 15%),
granted under that certain Stock Purchase Agreement dated as of September
14, 1992, among Comcast Parent, Comcast FCI, Inc. and Fleet Call, Inc., as
amended; provided, that as a result of any such purchases pursuant to
clauses (I), (II) and (III), Comcast and its Controlled Affiliates do not
own 10% or more of the common stock of Nextel (determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934)), then Comcast
will automatically (without any action required to be taken by the
Partnership or any Partner) become an Exclusive Limited Partner.
Notwithstanding the second proviso in the preceding sentence, if (1) such
acquisition is the result of the exercise by Comcast and its Controlled
Affiliates of such purchase rights and as a result thereof Comcast and its
Controlled Affiliates own 10% or more of the common stock of Nextel as so
determined, (2) Comcast and its Controlled Affiliates exercise any
available registration rights within thirty (30) days following the
acquisition of common stock pursuant to the exercise of such purchase
rights and otherwise seek to Transfer such common stock as soon as
practicable, and (3) an amount of Nextel common stock is Transferred within
two hundred forty (240) days following the date of such acquisition such
that thereafter Comcast and its Controlled Affiliates do not own 10% or
more thereof as so determined, then Comcast will automatically (without any
action required by the Partnership or any Partner) be returned to the
status of General Partner if it satisfies either of clauses (A) or (B)
above and is not otherwise required to be an Exclusive Limited Partner
under this Section 6.4(f). If at any time following the date hereof
Comcast and its Controlled Affiliates own more than 31% of the common stock
of Nextel on a fully diluted basis (provided that at such time Nextel has a
total market capitalization of at least $2,000,000,000), or own 50% or more
of the common stock of Nextel on a fully-diluted basis (regardless of
Nextel's total market capitalization), Comcast shall provide written notice
to the Partnership and to each other Partner of the acquisition of such
ownership interest (or the occurrence of any event causing Comcast and its
Controlled Affiliates to exceed such ownership threshold) within five (5)
days of such acquisition (or the occurrence of such event). The other
Partners will have the option, exercisable within ninety (90) days of the
date of such notice, to purchase the Interest of Comcast for a purchase
price equal to the Net Equity thereof for cash at a closing to be held no
later than ninety (90) days from the date such option is exercised. Such
purchase shall occur in accordance with the procedures set forth in Section
11 as if Comcast were an "Adverse Partner" and each of the other Partners
were a "Purchasing Partner.
(g) The term "Comcast Area" means (i) the following cellular
license areas (or portions thereof) in New Jersey: Hunterdon NJ1 RSA, New
Brunswick MSA, Long Branch MSA, Trenton MSA, Allentown, PA MSA,
Philadelphia MSA, Ocean NJ2 RSA, Atlantic City MSA, Vineland-Millville MSA,
and Wilmington, DE MSA; (ii) Delaware; (iii) Maryland RSA2; (iv)
counties in Pennsylvania in which Comcast and its Controlled Affiliates
engaged in the cellular business as of October 24, 1994, and all counties
in Pennsylvania contiguous thereto; (v) the Philadelphia MTA; and (vi)
minor overlaps into any territory adjoining any of the areas included in
(i) - (v) required to efficiently provide services in such area.
(h) The obligations under Section 6.1(d) shall not apply to
Comcast and its Controlled Affiliates with respect to any Competitive
Activities permitted pursuant to this Section 6.4.
(i) Comcast and its Controlled Affiliates may co-brand or package
any Wireless Exclusive Services permitted to be provided pursuant to this
Section 6.4 together with their cable television offerings; provided that
in such event the only brand name(s) which may be used for any such
Wireless Exclusive Services are any of the following, any combination
thereof or any variants thereof substantially similar thereto: Comcast,
Comcast Cellular, Comcast Metrophone, Metrophone, Comcast Cellular One and
Cellular One, which Comcast represents are currently utilized by its
cellular business in the Comcast Area as of the date hereof; provided
further, however, that Comcast may request that the Partnership approve the
use by Comcast and its Controlled Affiliates of another brand name (other
than that of an inter-exchange carrier), in which case the Partnership's
consent to the use thereof will not be unreasonably withheld.
6.5 Freedom of Action.
Except as set forth in this Section 6, no Partner or Affiliate shall
have any obligation not to (i) engage in the same or similar activities or
lines of business as the Partnership or its Subsidiaries or develop or
market any products or services that compete, directly or indirectly, with
those of the Partnership or its Subsidiaries, (ii) invest or own any
interest publicly or privately in, or develop a business relationship with,
any Person engaged in the same or similar activities or lines of business
as, or otherwise in competition with, the Partnership or its Subsidiaries,
(iii) do business with any client or customer of the Partnership or its
Subsidiaries, or (iv) employ or otherwise engage a former officer or
employee of the Partnership or its Subsidiaries.
6.6 Confidentiality.
(a) Maintenance of Confidentiality. Each Partner and its
Controlled Affiliates and the Partnership (each a "Restricted Party"),
shall cause their respective officers and directors (in their capacity as
such) to, and shall take all reasonable measures to cause their respective
employees, attorneys, accountants, consultants and other agents and
advisors (collectively, and together with their respective officers and
directors, "Agents") to, keep secret and maintain in confidence all
confidential and proprietary information and data of the Partnership and
the other Partners or their Affiliates disclosed to it (in each case, a
"Receiving Party") in connection with the formation of the Partnership and
the conduct of the Partnership's business and in connection with the
transactions contemplated by the Joint Venture Formation Agreement (the
"Confidential Information") and shall not, shall cause their respective
officers and directors not to, and shall take all reasonable measures to
cause their respective other Agents not to, disclose Confidential
Information to any Person other than the Partners, their Controlled
Affiliates and their respective Agents that need to know such Confidential
Information, or the Partnership. Each Partner further agrees that it shall
not use the Confidential Information for any purpose other than monitoring
and evaluating its investment, determining and performing its obligations
and exercising its rights under this Agreement. The Partnership and each
Partner shall take all reasonable measures necessary to prevent any
unauthorized disclosure of the Confidential Information by any of their
respective Controlled Affiliates or any of their respective Agents. The
measures taken by a Restricted Party to protect Confidential Information
shall not be deemed unreasonable if the measures taken are at least as
strong as the measures taken by the disclosing party to protect such
Confidential Information.
(b) Permitted Disclosures. Nothing herein shall prevent any
Restricted Party or its Agents from using, disclosing, or authorizing the
disclosure of Confidential Information it receives in the course of the
business of the Partnership which:
(i) has been published or is in the public domain, or which
subsequently comes into the public domain, through no fault of the
Receiving Party;
(ii) prior to receipt hereunder (or under that certain Agreement
for Use and Non-Disclosure of Proprietary Information, dated as of May 4,
1994, among Affiliates of the Partners) was properly within the legitimate
possession of the Receiving Party or, subsequent to receipt hereunder (or
under such agreement), is lawfully received from a third party having
rights therein without restriction of the third party's right to
disseminate the Confidential Information and without notice of any
restriction against its further disclosure;
(iii) is independently developed by the Receiving Party through
Persons who have not had, either directly or indirectly, access to or
knowledge of such Confidential Information;
(iv) is disclosed to a third party with the written approval of
the party originally disclosing such information, provided that such
Confidential Information shall cease to be confidential and proprietary
information covered by this Agreement only to the extent of the disclosure
so consented to;
(v) subject to the Receiving Party's compliance with paragraph
(d) below, is required to be produced under order of a court of competent
jurisdiction or other similar requirements of a governmental agency,
provided that such Confidential Information to the extent covered by a
protective order or its equivalent shall otherwise continue to be
Confidential Information required to be held confidential for purposes of
this Agreement; or
(vi) subject to the Receiving Party's compliance with paragraph
(d) below, is required to be disclosed by applicable law or a stock
exchange or association on which such Receiving Party's securities (or
those of its Affiliate) are listed.
(c) Notwithstanding this Section 6.6, any Partner may provide
Confidential Information (i) to other Persons considering the acquisition
(whether directly or indirectly) of all or a portion of such Partner's
Interest in the Partnership pursuant to Section 12 of this Agreement, (ii)
to other Persons considering the consummation of a Permitted Transaction
with respect to such Person or (iii) to any financial institution in
connection with borrowings from such financial institution by such Partner
or any of its Controlled Affiliates, so long as prior to any such
disclosure such other Person or financial institution executes a
confidentiality agreement that provides protection substantially equivalent
to the protection provided the Partners and the Partnership in this Section
6.6.
(d) In the event that any Receiving Party (i) must disclose
Confidential Information in order to comply with applicable law or the
requirements of a stock exchange or association on which such Receiving
Party's securities or those of its Affiliates are listed or (ii) becomes
legally compelled (by oral questions, interrogatories, requests for
information or documents, subpoenas, civil investigative demands or
otherwise) to disclose any Confidential Information, the Receiving Party
shall provide the disclosing party with prompt written notice so that in
the case of clause (i), the disclosing party can work with the Receiving
Party to limit the disclosure to the greatest extent possible consistent
with legal obligations, or in the case of clause (ii), the disclosing party
may seek a protective order or other appropriate remedy or waive compliance
with the provisions of this Agreement. In the case of clause (ii), (A) if
the disclosing party is unable to obtain a protective order or other
appropriate remedy, or if the disclosing party so directs, the Receiving
Party shall, and shall cause its employees to, exercise all commercially
reasonable efforts to obtain a protective order or other appropriate remedy
at the disclosing party's reasonable expense, and (B) failing the entry of
a protective order or other appropriate remedy or receipt of a waiver
hereunder, the Receiving Party shall furnish only that portion of the
Confidential Information which it is advised by opinion of its counsel is
legally required to be furnished and shall exercise all commercially
reasonable efforts to obtain reliable assurance that confidential treatment
shall be accorded such Confidential Information, it being understood that
such reasonable efforts shall be at the cost and expense of the disclosing
party whose Confidential Information has been sought.
(e) Any press release concerning the business, affairs and
operation of the Partnership shall be approved in advance by a Required
Majority Vote of the Partnership Board.
(f) The obligations under this Section 6.6 shall survive for a
period of two (2) years from (i) as to all Partners and their respective
Controlled Affiliates, the termination of the Partnership and (ii) as to
any Partner and its Controlled Affiliates, such Partner's withdrawal
therefrom (or otherwise ceasing to be a Partner); provided that such
obligations shall continue indefinitely with respect to any trade secret or
similar information which is proprietary to the Partnership and provides
the Partnership with an advantage over its competitors.
(g) All references in this Section 6.6 to the Partnership
shall, unless the context otherwise requires, be deemed to refer also to
each Subsidiary of the Partnership.
SECTION 7. ROLE OF EXCLUSIVE LIMITED PARTNERS
7.1 Rights or Powers.
The Exclusive Limited Partners shall not have any right or power to
take part in the management or control of the Partnership or its business
and affairs or to act for or bind the Partnership in any way.
7.2 Voting Rights.
The Exclusive Limited Partners shall have the right to vote only on
the matters specifically reserved for the vote or approval of Partners
(including the Exclusive Limited Partners) set forth in this Agreement,
including those matters listed on Schedule 5.1(l).
SECTION 8. TRANSACTIONS WITH PARTNERS; OTHER AGREEMENTS
8.1 Sprint Cellular.
In the event (i) WirelessCo is the winning bidder in the PCS Auction
for a PCS license with respect to a license area and at such time Sprint
and its Controlled Affiliates have an ownership interest in a cellular
business or businesses (a "Sprint Cellular Business") having a service area
which is included within such license area in whole or in part (an "Overlap
Cellular Area") or (ii) WirelessCo has decided, at any time prior to
September 28, 1997, to acquire a PCS license in a license area which
includes an Overlap Cellular Area; and as a result of Sprint's ownership
interest in a Sprint Cellular Business WirelessCo would not be awarded on
an unconditional basis (in the event of clause (i) above) or be permitted
to acquire (in the event of clause (ii) above) such PCS license under FCC
rules and regulations relating to CMRS spectrum cap limitations, then
Sprint agrees that it will divest such portion of such Sprint Cellular
Business, within the time period provided by FCC rules in the event of
clause (i) above, and as soon as commercially reasonable (e.g., to avoid
"fire sale" prices) in the event of clause (ii) above, or take any other
action as is necessary, so that WirelessCo will not be impaired from
holding or acquiring such PCS license. Nothing herein prevents one or more
Partners from acquiring such PCS license if Sprint is unable to divest the
overlap property in a timely manner, provided that, subject to applicable
law, such Partner or Partners enter into an Affiliation Agreement with the
Partnership and its Subsidiaries. This Section 8.1 shall not require
Sprint to divest, or take any other action with respect to, any of the
Sprint Cellular Businesses in the Charlotte, Cleveland, El Paso,
Jacksonville, Knoxville, Omaha or Richmond MTAs.
8.2 Sprint Brand Licensing Agreement.
Simultaneously with the execution and delivery of this Agreement, the
Partnership and Sprint Communications have entered into an Amended and
Restated Trademark License Agreement, a copy of which is attached hereto as
Exhibit 8.2 (the "Trademark License").
8.3 Marketing; Branding of Partnership Services.
(a) Marketing Channels. The Partnership Services will be
marketed directly by the Partnership and through its marketing channels,
which will include Sprint LD, the Cable Subsidiaries and other Controlled
Affiliates of the Cable Partners, and Wireless Affiliates. The Partnership
may enter into sales agency agreements with others, including (if and to
the extent permitted by the original agency agreement) sub-agency
agreements for Sprint LD Services and Cable Services; provided, however,
that such appointment shall be subject to all of the terms and conditions
of the original agency agreement (including performance and quality
standards), and the appointing agent shall be responsible for ensuring
compliance by its distributors and sub-agents with such terms and
conditions.
(b) Sales Agency. Sprint LD, the Cable Subsidiaries and other
Controlled Affiliates of the Cable Partners (except for Cable Subsidiaries
and other Controlled Affiliates of Comcast with respect to the Comcast
Area) will be non-exclusive commission sales agents for the Partnership's
Wireless Exclusive Services and Non-Exclusive Services ("Partnership
Services") pursuant to agency agreements that conform to the provisions of
this Section 8.3 and are otherwise in form and substance reasonably
satisfactory to the parties thereto. The agency agreements will provide
that all Partnership Services will be made available to each of Sprint LD
and the Cable Subsidiaries and other Controlled Affiliates of the Cable
Partners to offer, promote and package.
The Partnership will be a non-exclusive commission sales agent for
such long distance services of Sprint and its Affiliates (other than Sprint
Cellular and any LEC properties owned by Controlled Affiliates of Sprint)
(collectively, "Sprint LD") as Sprint LD may agree to make available to the
Partnership ("Sprint LD Services") and for such services offered by a Cable
Subsidiary or other Controlled Affiliate of a Cable Partner in the areas
served by its local cable system as such Cable Subsidiary (or Controlled
Affiliate) may agree to make available to the Partnership ("Cable
Services"), in each case pursuant to agency agreements that conform to the
provisions of this Section 8.3 and are otherwise in form and substance
reasonably satisfactory to the parties thereto.
Subject to Section 8.3(a), Sprint LD will be a sub-agent of the
Partnership for Cable Services, and the Cable Subsidiaries and other
Controlled Affiliates of the Cable Partners will be sub-agents of the
Partnership for Sprint LD Services, in each case only if and to the extent
that such sub-agency is permitted by the original agency agreement relating
to such services. The Partnership will establish the commission structure
and level for its sub-agents, provided that sub-agents that are Partners or
their Controlled Affiliates will be paid commissions on a pass-through
basis without deduction by the Partnership.
No Partner or Controlled Affiliate thereof shall be required (i) to
make any of its product or service offerings available to the Partnership
to offer or promote pursuant to the first sentence of the second paragraph
of this Section 8.3(b), (ii) to authorize the Partnership to include any
product or service offerings that are made available by such Partner or
Controlled Affiliate in a bilateral package with any Partnership Services
or in a multilateral package with Partnership Services and product or
service offerings of any other Partner or its Controlled Affiliates, or
(iii) to authorize the Partnership to appoint any distributors or sub-
agents for any product or service offerings that such Partner or its
Controlled Affiliates make available to the Partnership, whether as a
condition of its appointment as an agent for Partnership Services or
otherwise.
The sales agency agreements referenced to in this Section 8.3(b) will
include appropriate customer and territorial restrictions. Sprint LD and
the Cable Subsidiaries and other Controlled Affiliates of the Cable
Partners will retain the "retail margins" on the sales of their respective
services by the Partnership, and will pay a sales commission to the
Partnership.
(c) Commissions. Commissions payable to the Partnership under
sales agency agreements for Sprint LD Services and for Cable Services and
commissions payable to Sprint LD and the Cable Subsidiaries and other
Controlled Affiliates of the Cable Partners under sales agency agreements
for Partnership Services will be not less favorable to the agent than those
for comparable agency arrangements (considering churn, marketing support
provided by agent, etc.) of the relevant principal with third parties,
irrespective of volume. The Partners acknowledge that commission
arrangements between Cable Subsidiaries and other Controlled Affiliates of
the Cable Partners and owners of multiple dwelling units, shared tenant
services companies and the like are not comparable agency arrangements for
this purpose. Commissions will be paid on the basis of net customer growth
(i.e., after taking into account churn) and in the case of a sale to an
existing customer will only be paid on the basis of incremental sales
revenue from such customer resulting from such sale, if any.
(d) Exclusivity. The Partnership will require as a condition to
its appointment of Sprint LD, each Cable Subsidiary or other Controlled
Affiliate of the Cable Partners and each Wireless Affiliate as sales agents
for the Partnership Services, that Sprint LD, such Cable Subsidiary or
other Controlled Affiliate of the Cable Partners and such Wireless
Affiliate agree that, except as permitted under Section 6, it will not
offer, promote or package any Wireless Exclusive Services other than the
Partnership Services and, in the case of a Wireless Affiliate, the products
and services of such Wireless Affiliate, during the term of such agency.
(e) Brand. The Partnership Services will be offered, promoted
and packaged solely under the Licensed ▇▇▇▇ (as defined in the Sprint
Trademark License Agreement attached as Exhibit 8.2), except that the
foregoing shall not preclude (i) the inclusion of Partnership Services
bearing the Licensed ▇▇▇▇ (or, if permitted under clause (ii), a Permitted
Brand) in a package with any products or services offered, promoted or
packaged by a Cable Subsidiary or other Controlled Affiliate of a Cable
Partner (whether such package is offered by any of the foregoing or by any
of their respective sub-agents or distributors) that bear a ▇▇▇▇ or brand
other than the Licensed ▇▇▇▇ or (ii) to the extent expressly permitted by
Sections 6.3(q) and 6.3(r), the offering, promoting and packaging of
Partnership Services under a Permitted Brand.
(f) Right to Market Own Products. Nothing in this Section 8.3
shall govern or restrict the right of Sprint LD or any Cable Subsidiary or
other Controlled Affiliate of a Cable Partner to market, sell or distribute
its own products or services.
8.4 Preferred Provider.
The Partnership and its Subsidiaries shall contract with each
Partner, its Affiliates and third parties, as appropriate, on a negotiated
arms-length basis, for services they may require, which may include billing
and information systems and marketing and sales services. The Partnership
and its Subsidiaries may in the normal course of their respective
businesses enter into transactions with the Partners and their respective
Affiliates, provided that the Partnership Board by the requisite vote
pursuant to Section 8.6 has determined that the price and other terms of
such transactions are fair to the Partnership and its Subsidiaries and that
the price and other terms of such transaction are not less favorable to the
Partnership and its Subsidiaries than those generally prevailing with
respect to comparable transactions involving non-Affiliates of Partners.
Subject to the foregoing, the Partnership Board, acting in accordance with
Section 8.6, may in its discretion elect from time to time to provide
rights of first opportunity to various Partners or their Affiliates to
provide services to the Partnership and its Subsidiaries; provided that the
Partnership Board shall have adopted, by Unanimous Vote, procedures
(including conflict avoidance procedures) relating generally to such right
of first opportunity arrangements, and the provision of such rights and all
matters related to the exercise thereof shall be subject to and effected in
a manner consistent with such procedures. The Partnership and its
Subsidiaries are expressly authorized to enter into the agreements
expressly referred to in this Section 8.
8.5 MFJ.
Each Partner agrees that neither it nor any of its Controlled
Affiliates shall take any action that (i) causes such Partner or the
Partnership to become a BOC or (ii) causes the Partnership to become a BOC
Affiliated Enterprise or an entity subject to any restriction or limitation
under Section II of the MFJ, if, in the case of clause (ii) above, the
results referred to in such clause (ii) would have a material adverse
effect on the business, assets, liabilities, results of operations,
financial condition or prospects of the Partnership and its Subsidiaries.
8.6 Interested Party Transactions.
Any contract, agreement, relationship or transaction between the
Partnership or any of its Subsidiaries, on the one hand, and any Partner or
any Person in which a Partner (or any of its Controlled Affiliates) has a
direct or indirect material financial interest (other than the Partnership,
MinorCo, PhillieCo and their respective Subsidiaries) or which has a direct
or indirect material financial interest in such Partner (provided that a
Person shall not be deemed to have such an interest solely as a result of
its ownership of less than 10% (by value) of the outstanding economic
interests in a Publicly Held Parent of a Partner (or a Publicly Held
Intermediate Subsidiary of such Parent)) (each, an "Interested Person") on
the other hand, shall be approved and all decisions with respect thereto
(including a decision to accept or reject an Offer pursuant to Section
6.1(c), the determination to amend, terminate or abandon any such contract
or agreement, whether there has been a breach thereof and whether to
exercise, waive or release any rights of the Partnership with respect
thereto) shall be made (after full disclosure by the interested Partner of
all material facts relating to such matter) by the Partnership Board (with
the Representatives of the interested Partner(s) absent from the
deliberations and abstaining from the vote with respect thereto) by the
requisite affirmative vote of the Representatives of the disinterested
General Partners. For purposes of the foregoing, a disinterested General
Partner is a General Partner that is not a party to, and does not have an
Interested Person that is a party to, the contract, agreement, relationship
or transaction in question.
8.7 Access to Technical Information.
Subject to the provisions of Sections 6 and 10.4 of this Agreement
and to applicable confidentiality restrictions, the Partnership and its
Subsidiaries shall grant to each Partner and its Controlled Affiliates
access to Technical Information of the Partnership and its Subsidiaries
("Partnership Technical Information"). Such access shall be granted at
such reasonable times and locations and on such other reasonable terms as
the Partnership Board may approve by Required Majority Vote pursuant to
Section 8.6. Subject to Section 6, the Partnership and its Subsidiaries
shall grant to any such Partner or its Controlled Affiliate a license to
use any Partnership Technical Information to which it is granted access
pursuant to this Section 8.7 (and to make copies thereof at such Partner's
expense), which license shall provide for royalties and fees and other
terms and conditions that are generally prevailing with respect to
comparable transactions involving unrelated third parties and are at least
as favorable to such Partner or its Controlled Affiliate as those generally
prevailing with respect to comparable licenses (if any) granted to non-
Affiliates of Partners; provided that, except as expressly provided in
Section 8.12, the Partnership shall not grant any Partner or its Controlled
Affiliates access to any Proprietary Technical Information. The rights of
access granted pursuant to this Section 8.7 shall be subject to the pre-
existing rights of any third party to such Partnership Technical
Information.
8.8 Parent Undertaking.
Simultaneously with the execution and delivery of this Agreement,
each Parent has executed and delivered to the Partnership and the other
Partners a Parent Undertaking.
8.9 Certain Additional Covenants.
(a) Each Cable Partner agrees that for so long as such Cable
Partner is a Partner during the Term (as defined in the Parents Agreement)
of the Parents Agreement to which the Parent of such Cable Partner is a
party, neither it nor any of its Controlled Affiliates will engage in any
transaction or series of related transactions, other than a Permitted
Transaction, in which cable television system assets owned directly or
indirectly by the Parent of such Partner are Transferred if, after giving
effect to such transaction or the last transaction in such series of
related transactions, the number of basic subscribers served by the cable
television systems in the United States of America (including its
territories and possessions other than Puerto Rico) owned by the Parent of
such Partner, directly and indirectly through its Controlled Affiliates, is
equal to twenty-five percent (25%) or less of the number of basic
subscribers served by the cable television systems in the United States of
America (including its territories and possessions other than Puerto Rico)
owned by the Parent of such Partner, directly and indirectly through its
Controlled Affiliates, before giving effect to such transaction or the
first transaction in such series of related transactions.
(b) Sprint agrees that for so long as Sprint is a Partner
during the Term (as defined in the Parents Agreement) of any Parents
Agreement, neither it nor any of its Controlled Affiliates will engage in
any transaction or series of related transactions, other than a Permitted
Transaction, in which long distance telecommunications business assets
owned directly or indirectly by Sprint Parent are Transferred if, after
giving effect to such transaction or the last transaction in such series of
related transactions, the number of customers served by the long distance
telecommunications business in the United States of America (including its
territories and possessions other than Puerto Rico) owned by Sprint Parent,
directly and indirectly through its Controlled Affiliates, is equal to
twenty-five percent (25%) or less of the number of customers served by the
long distance telecommunications business in the United States of America
(including its territories and possessions other than Puerto Rico) owned by
Sprint Parent, directly and indirectly through its Controlled Affiliates,
before giving effect to such transaction or the first transaction in such
series of related transactions.
8.10 PioneerCo Preemptive Rights.
The PioneerCo Partnership Agreement will provide that Cox Pioneer
Partnership and the Partnership (or a Subsidiary of the Partnership) will
have certain put and call rights that may result in the acquisition by the
Partnership of Cox Pioneer Partnership's interest in PioneerCo in exchange
for an additional Interest in the Partnership. At the time of such
exchange, each of the Partners (other than Cox) will be permitted to make
Additional Capital Contributions in cash up to the amount necessary to
permit such Partner to avoid any reduction in its Percentage Interest as a
consequence of such exchange (assuming that all such other Partners were to
exercise such right).
8.11 Foreign Ownership.
(a) Certain Definitions and Concepts. For purposes of this
Section 8.11:
(i) "Foreign Ownership Restriction" means any federal law
or regulation restricting the amount of ownership or voting control that
may be held by non-citizens of the United States in holders of licenses or
other authorizations issued by the FCC or in Persons controlling such
holders (including 47 U.S.C. Section 310(b) and the rules and regulations
promulgated thereunder by the FCC).
(ii) "Covered Licensee" means any of the Partnership or any
Subsidiary thereof that holds any license or other authorization issued by
the FCC or that controls the holder of any license or other authorization
for purposes of any Foreign Ownership Restriction.
(iii) "Foreign Ownership Threshold" means, with respect to
any Covered Licensee, the maximum amount of foreign ownership or foreign
voting control of such Covered Licensee that is permitted by any Foreign
Ownership Restriction applicable to such Covered Licensee, less the amount
of foreign ownership or foreign voting control of such Covered Licensee
that is attributable from any Person other than a Partner.
(iv) "Foreign Ownership Safe Harbor" means, with respect to
any Covered Licensee, ninety percent (90%) of the Foreign Ownership
Threshold of such Covered Licensee.
(v) Except as provided in clause (vi) of this Section
8.11(a), a Partner's "Attribution Cap" equals, with respect to the Foreign
Ownership Threshold of any Covered Licensee:
(A) in the case of Sprint, the product of the
Percentage Interest of Sprint times twenty-eight percent (28%), and
(B) in the case of any Cable Partner, the product
of (x) the Foreign Ownership Threshold of such Covered Licensee minus
Sprint's Attribution Cap times (y) the Percentage Interest of such Cable
Partner divided by the aggregate Percentage Interests of all Cable
Partners.
(vi) Notwithstanding clause (v) of this Section 8.11(a), if
(A) the proposed transaction among Deutsche Telekom, France Telecom and
Sprint Parent providing for the purchase by Deutsche Telekom and France
Telecom of certain shares of stock of Sprint Parent is abandoned without
the consummation of all of the stock purchases contemplated thereby and (B)
definitive agreements with respect to a similar alternative transaction
with a non-citizen of the United States have not been entered into by
Sprint Parent prior to March 28, 1997 or such transaction has not been
consummated prior to March 28, 1998, then, with respect to any Covered
Licensee, each Partner's Attribution Cap shall equal the product of the
Percentage Interest of such Partner times the Foreign Ownership Threshold
of such Covered Licensee.
(vii) Notwithstanding clause (v) of this Section 8.11(a),
if the Foreign Ownership Threshold with respect to any Covered Licensee
exceeds 28%, each Partner's Attribution Cap shall equal the product of the
such Partner's Percentage Interest times the Foreign Ownership Threshold of
such Covered Licensee.
(b) Covenant Regarding Foreign Ownership. Subject to Section
8.11(c), no Partner shall cause or permit the amount of foreign ownership
or foreign voting control attributable to any Covered Licensee from such
Partner and its Controlled Affiliates (determined in accordance with the
method of attribution prescribed in the applicable Foreign Ownership
Restrictions) to exceed the Attribution Cap of such Partner applicable to
such Covered Licensee, increased by any portion of any other Partner's
applicable Attribution Cap that such other Partner has authorized such
Partner to use for purposes of determining compliance with this Section
8.11(b), and decreased by any portion of such Partner's applicable
Attribution Cap that such Partner has authorized any other Partner to use
for purposes of determining compliance with this Section 8.11(b).
(c) Right to Cure Potential Violations. So long as a Partner and
its Controlled Affiliates are using their respective commercially
reasonable efforts to cause the amount of foreign ownership and foreign
voting control attributable to each Covered Licensee from such Partner and
its Controlled Affiliates to be reduced below the maximum amount permitted
by Section 8.11(b) (without regard to this Section 8.11(c)), such Partner
shall not be deemed to be in violation of its covenant in Section 8.11(b)
until the earlier of:
(i) such time as the aggregate amount of foreign ownership
or foreign voting control attributable to any Covered Licensee (including
the foreign ownership and foreign voting control attributable from such
Partner and its Controlled Affiliates) exceeds the Foreign Ownership Safe
Harbor, or
(ii) thirty (30) days after such Partner receives
written notice from any other Partner that such other Partner or any of its
Controlled Affiliates desires to engage in any transaction permitted by
section 8.11(b) that, if consummated, would cause the aggregate amount of
foreign ownership or foreign voting control attributable to any Covered
Licensee to exceed the Foreign Ownership Safe Harbor if the foreign
ownership attributable to such Covered Licensee from such Partner and its
Controlled Affiliates continued to exceed the maximum amount permitted by
Section 8.11(b).
(d) Authorization to Use the Attribution Cap of Another Partner.
Any authorization by one Partner to another Partner of the right to use any
portion of the authorizing Partner's applicable Attribution Cap for
purposes of determining compliance with Section 8.11(b) shall be evidenced
by a written instrument delivered by the authorizing Partner to the
Partnership and each other Partner.
8.12 Product Integration.
(a) The Partnership shall undertake to architect and design its
systems, platforms, networks and products in a manner that facilitates
seamless integration of the Partnership's Wireless Exclusive Services with
the telecommunications products and services offered by the Partnership and
its Subsidiaries, each Partner and its Controlled Affiliates, Teleport and
any Local Joint Venture. The adoption of all budgets, plans and procedures
by the Partnership regarding the planning, design and development
activities of the Partnership with respect to the architecture and design
of all systems, platforms, networks and products shall require a Required
Majority Vote of the Partnership Board, and each Partner shall have the
right to participate fully in such planning, design and development
activities and shall have access to and rights to use all Partnership
Technical Information relating to such activities in accordance with
Section 8.7 (except to the extent otherwise provided in Sections 8.12(b),
(c) and (d) below with respect to any Proprietary Technical Information).
(b) Following July 31, 1996, each Partner shall have the right to
cause the Partnership to undertake, in cooperation with such Partner and at
such Partner's cost and expense, the development of Technical Information
that such Partner reasonably believes is necessary to integrate the
Partnership's Wireless Exclusive Services with the wireline
telecommunications products and services of (x) Sprint and its Controlled
Affiliates, if such Partner is Sprint, (y) such Partner and its Controlled
Affiliates and/or Teleport, if such Partner is a Cable Partner, or (z) any
Local Joint Venture in which such Partner or its Controlled Affiliate has
an interest (or to which such Partner or its Controlled Affiliate is a
party) ("Proprietary Technical Information"); provided, that such
undertaking by the Partnership shall not materially interfere with the
Partnership's ongoing planning, design and development activities and any
such integration shall not adversely impact in any material respect the
operating characteristics of the Partnership's existing systems, platforms,
networks or products. The Partner causing the Partnership to develop any
such Proprietary Technical Information (the "Initiating Partner") shall
have the irrevocable, royalty-free exclusive right and license to make (or
have made), use, sell, copy, modify and sublicense such Proprietary
Technical Information; provided, that (i) the Initiating Partner shall have
no such exclusive right as to any pre-existing Partnership Technical
Information used in the development of any such Proprietary Technical
Information, (ii) if (A) the Initiating Partner is Sprint, each other
Partner that has, or has a Controlled Affiliate that has, entered a Local
Joint Venture with Sprint or a Controlled Affiliate of Sprint, or (B) the
Initiating Partner is a Cable Partner, each other Cable Partner and, if
Sprint or a Controlled Affiliate of Sprint has entered a Local Joint
Venture with such Initiating Partner or a Controlled Affiliate of such
Initiating Partner, Sprint, shall be entitled to participate in the
development of Proprietary Technical Information in cooperation with the
Initiating Partner (except that neither Sprint (if a Cable Partner is the
Initiating Partner) nor any of the Cable Partners (if Sprint is the
Initiating Partner) shall be entitled to participate in the development of
any Proprietary Technical Information integrating the Partnership's
Wireless Exclusive Services with telecommunications products and services
designed primarily for non-residential customers ("Business-Related
Information")), and (iii) if one or more other Partners participates in the
development of any Proprietary Technical Information pursuant to clause
(ii) above, the Initiating Partner and each such other Partner shall have
the exclusive (other than as among the Initiating Partner and each such
other Partner) irrevocable, royalty-free right and license to make (or have
made), use, sell, copy, modify and sublicense such Proprietary Technical
Information; however, in such case, no Initiating Partner or such other
Partner having the foregoing rights as to any such Proprietary Technical
Information developed pursuant to this Section 8.12(b) shall sublicense or
otherwise grant rights with respect to such Proprietary Technical
Information to any Person other than such Partner and its Controlled
Affiliates, the Partnership and its Subsidiaries, any Local Joint Venture
in which the Initiating Partner (or its Controlled Affiliate) or such other
Partner (or its Controlled Affiliate) that participated in the development
of such Proprietary Technical Information has an interest (or to which any
of the foregoing is otherwise a party), and Teleport (if a Cable Partner is
the Initiating Partner) (provided that the restrictions set forth in this
clause (iii) shall apply only to the use of such Proprietary Technical
Information in connection with the provision of telecommunications products
and services to customers located in the United States and its territories,
other than Puerto Rico). Subject to Section 8.12(c), the costs and
expenses incurred in the development of Proprietary Technical Information
shall be borne by the Initiating Partner and each such other Partner that
elects to participate in the development of such Proprietary Technical
Information ratably in proportion to their respective Percentage Interests.
(c) To the extent that following the development of any Business-
Related Information, the Initiating Partner or any of its Controlled
Affiliates uses or licenses or permits a sub-license (or otherwise grants
any right) for the use of all or any portion of such Business-Related
Information for an application thereof to a telecommunications product or
service for residential customers to any material extent (other than the
provision by a non-residential customer of access to any such product or
service solely for business purposes, provided that such product or service
is not offered, promoted or packaged to residential customers), the
Initiating Partner shall promptly notify each other Partner that would have
been entitled to participate in such development but for the restriction on
its right to participate in the development of Business-Related Information
contained in the second sentence of Section 8.12(b), and each such other
Partner shall be entitled to an irrevocable right and license to make (or
have made), use, sell, copy, modify or sub-license any such portion of such
Business-Related Information (but subject to the restriction in clause
(iii) of the proviso in the second sentence of Section 8.12(b) above),
subject to the payment by such Partner of a pro rata portion of the
development costs and expenses attributable to the development of such
portion of such Business-Related Information used for such application for
residential customers (which shall be borne by the Initiating Partner, any
other Partner initially participating in the development of such Business-
Related Information (an "Initial Participating Partner"), and any
Partner(s) exercising rights under this paragraph ratably in proportion to
their respective Percentage Interests). Such payment shall be made as a
direct reimbursement to the Initiating Partner and each Initial
Participating Partner of the applicable portion of the development costs
and expenses previously paid to the Partnership by the Initiating Partner
and the Initial Participating Partner.
(d) In connection with the proposed development of any
Proprietary Technical Information, the applicable Partners and the
Partnership shall agree in writing to processes and procedures related to
such development and the actual scope of use, ownership, license and sub-
license rights with respect to such Proprietary Technical Information
(including the nature and extent of any pre-existing Partnership Technical
Information to be used in the development of such Proprietary Technical
Information), which in any such case shall be consistent with this Section
8.12, unless otherwise agreed by the applicable Partners and the
Partnership. If, in connection with any development pursuant to Section
8.12, any Partner or the Partnership develops or invents any technology or
other intellectual property giving rise to any patent rights, subject to
the other provisions of this Section 8.12, common law principles relating
to the ownership of and rights to use patentable inventions shall govern
the ownership of and rights to use such technology or other intellectual
property, unless otherwise agreed by the parties participating in the
development of such technology or other intellectual property.
Notwithstanding anything in this Agreement to the contrary, without such
Partner's prior written consent, no licenses, either express or implied,
are granted to the Partnership, any other Partner or any other entity for
any Proprietary Technical Information or other Technical Information Rights
owned or solely developed by a Partner.
8.13 Provision of Services.
To the extent permitted by applicable law, each Partner agrees that
it and its Controlled Affiliates shall use all commercially reasonable
efforts to cause its local cable television and/or telephone operations to
provide appropriate services to WirelessCo in all its owned and operated
markets as well as markets operating under an Affiliation Agreement with
WirelessCo, including any Affiliation Agreement with PioneerCo. Such
services may include antenna sites and/or strand mounting of RF and
transmission equipment owned by WirelessCo or any Affiliate thereof and
transmission facilities between cell sites and designated switching
locations. Services may also include provision of primary power, standby
power and maintenance. Pricing of the foregoing services will be
negotiated at a local level and is expected to reflect all relevant costs
plus a reasonable return. Notwithstanding the foregoing, Comcast will not
be required to provide any services to WirelessCo under this Section 8.13
in any territories in which Comcast or its Controlled Affiliates operate
Wireless Businesses in the Comcast Area.
8.14 Comcast Representative.
Notwithstanding any other provision of this Agreement, for such time
(the "Restricted Time") as Comcast or any of its Controlled Affiliates
engages in any Competitive Activity in any portion of the Comcast Area,
Comcast agrees to cause any Representative of Comcast who participates in
Designated Matters (as defined below) not to (i) be involved in any
Competitive Activities engaged in by Comcast or its Controlled Affiliates
in the Restricted Area (as defined below) and (ii) disclose or discuss the
Designated Matters with any Agent of Comcast that is involved in
Competitive Activities in the Restricted Area. During the Restricted Time,
each Partner (other than Comcast) and its Controlled Affiliates and the
Partnership and its Subsidiaries shall not, shall cause their respective
officers and directors (in their capacity as such) not to, and shall take
all reasonable measures to cause their respective other Agents not to,
disclose any information (including any financial projections, budgets or
other operating or business plans) regarding the provision, by the
Partnership and its Subsidiaries or by any Third Party Provider (as defined
below) of Wireless Exclusive Services in any portion of the Comcast Area,
to Comcast or any of its Controlled Affiliates or Agents other than such
Representative of Comcast. As used herein, "Designated Matters" means the
participation in any discussions regarding, the obtaining of any
information or the casting of any votes, in each case with respect to any
matter concerning the provision by the Partnership or its Subsidiaries of
Wireless Exclusive Services in a portion (the "Restricted Area") of the
Comcast Area (including the terms of any Affiliation Agreement with any
Person providing such Wireless Exclusive Services (a "Third Party
Provider")).
8.15 Purchasing.
The Partners and their respective Controlled Affiliates will
cooperate with each other in a commercially reasonable manner to structure
arrangements whereby the Partners, their respective Controlled Affiliates,
and the Partnership and its Subsidiaries would, to the extent permitted by
applicable law and regulation, coordinate their respective buying efforts
from third party vendors in a manner such that the benefits of such
coordinated efforts would be available to the Partnership and its
Subsidiaries, each Partner and each Partner's respective Controlled
Affiliates in making such purchases of equipment and materials as may be
required for (i) the accomplishment of the purposes of the Partnership and
its Subsidiaries and (ii) the operations of the permitted businesses of any
Partner or its Controlled Affiliates.
8.16 Advertising Reimbursement.
On December 31, 1996, if by such date Sprint and the Cable Partners
have not entered into an agreement regarding Teleport as contemplated under
Section 3(b) of the Parents Agreements between Sprint and each Parent of
the Cable Partners in the form executed and delivered as of the date
hereof, Sprint will pay to each of the Cable Partners an amount, together
with interest thereon at the rate of six percent (6%) per annum from and
including February 1, 1996 until the date on which such amount is paid, in
cash equal to the sum of (A) the value of the advertising availability
previously made available to the Partnership by such Partner and its
Controlled Affiliates at no charge pursuant to Section 9.13(b) of the Prior
Partnership Agreement and (B) an amount equal to such Cable Partner's
Percentage Interest times the value of the advertising availability
previously purchased by the Partnership and its Subsidiaries pursuant to
Section 9.13(b) of the Prior Partnership Agreement.
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1 Representations and Warranties by Partners.
Each Partner hereby represents and warrants that as of the date hereof:
(a) Due Incorporation or Formation; Authorization of
Agreement. Such Partner is a corporation duly organized or a partnership
duly formed, validly existing and, if applicable, in good standing under
the laws of the jurisdiction of its incorporation or formation and has the
corporate or partnership power and authority to own its property and carry
on its business as owned and carried on at the date hereof and as
contemplated hereby. Such Partner is duly licensed or qualified to do
business and, if applicable, in good standing in each of the jurisdictions
in which the failure to be so licensed or qualified would have a material
adverse effect on its financial condition or its ability to perform its
obligations hereunder. Such Partner has the corporate or partnership power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder and the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate or
partnership action. Assuming the due execution and delivery by the other
parties hereto, this Agreement constitutes the legal, valid and binding
obligation of such Partner enforceable against such Partner in accordance
with its terms, subject as to enforceability to limits imposed by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and the availability of equitable remedies.
(b) No Conflict with Restrictions; No Default. Neither the
execution, delivery and performance of this Agreement nor the consummation
by such Partner of the transactions contemplated hereby (i) will conflict
with, violate or result in a breach of any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree,
determination or award of any court, any governmental department, board,
agency or instrumentality, domestic or foreign, or any arbitrator,
applicable to such Partner or any of its Controlled Affiliates, (ii) will
conflict with, violate, result in a breach of or constitute a default under
any of the terms, conditions or provisions of the articles of
incorporation, bylaws or partnership agreement of such Partner or any of
its Controlled Affiliates or of any material agreement or instrument to
which such Partner or any of its Controlled Affiliates is a party or by
which such Partner or any of its Controlled Affiliates is or may be bound
or to which any of its material properties or assets is subject (other than
any such conflict, violation, breach or default that has been validly and
unconditionally waived), (iii) will conflict with, violate, result in a
breach of, constitute a default under (whether with notice or lapse of time
or both), accelerate or permit the acceleration of the performance required
by, give to others any material interests or rights or require any consent,
authorization or approval under any indenture, mortgage, lease agreement or
instrument to which such Partner or any of its Controlled Affiliates is a
party or by which such Partner or any of its Controlled Affiliates is or
may be bound, or (iv) will result in the creation or imposition of any lien
upon any of the material properties or assets of such Partner or any of its
Controlled Affiliates, which in any such case could reasonably be expected
to have a material adverse effect on the Partnership or to materially
impair such Partner's ability to perform its obligations under this
Agreement or to have a material adverse effect on the consolidated
financial condition of such Partner or its Parent.
(c) Governmental Authorizations. Any registration,
declaration or filing with, or consent, approval, license, permit or other
authorization or order by, any governmental or regulatory authority,
domestic or foreign, that is required to be obtained by such Partner in
connection with the valid execution, delivery, acceptance and performance
by such Partner under this Agreement or the consummation by such Partner of
any transaction contemplated hereby has been or will be completed, made or
obtained, except for any FCC or other regulatory approvals, licenses,
permits or other authorizations required to be obtained by the Partnership
in connection with the acquisition and ownership of Wireless Business
licenses relating to PCS.
(d) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of such Partner or its Parent,
threatened against or affecting such Partner or any of its Controlled
Affiliates or any of their properties, assets or businesses in any court or
before or by any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely determined
(or, in the case of an investigation could lead to any action, suit or
proceeding, which if adversely determined could), reasonably be expected to
materially impair such Partner's ability to perform its obligations under
this Agreement or to have a material adverse effect on the consolidated
financial condition of such Partner or its Parent; and such Partner or any
of its Controlled Affiliates has not received any currently effective
notice of any default, and such Partner or any of its Controlled Affiliates
is not in default, under any applicable order, writ, injunction, decree,
permit, determination or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator,
which default could reasonably be expected to materially impair such
Partner's ability to perform its obligations under this Agreement or to
have a material adverse effect on the consolidated financial condition of
such Partner or its Parent.
(e) MFJ. Such Partner is not a BOC, a BOC Affiliated
Enterprise or an entity subject to any restrictions under Section II of the
MFJ.
(f) Subsidiaries. Such Partner is a direct or indirect wholly
owned Subsidiary of its Parent.
9.2 Representation and Warranty of Sprint.
Sprint hereby represents and warrants that as of the date hereof
Sprint Communications is the primary entity through which Sprint Parent
conducts its long distance telecommunications business in the United States
of America (including its territories and possessions other than Puerto
Rico).
SECTION 10. ACCOUNTING, BOOKS AND RECORDS
10.1 Accounting, Books and Records.
The Partnership shall maintain at its principal office separate books
of account for the Partnership which (i) shall fully and accurately reflect
all transactions of the Partnership, all costs and expenses incurred, all
charges made, all credits made and received, and all income derived in
connection with the conduct of the Partnership and the operation of its
business in accordance with GAAP or, to the extent inconsistent therewith,
in accordance with this Agreement and (ii) shall include all documents and
other materials with respect to the Partnership's business as are usually
entered and maintained by persons engaged in similar businesses. The
Partnership and its Subsidiaries shall use the accrual method of accounting
in preparation of their annual reports and for tax purposes and shall keep
their books and records accordingly. Subject to Section 10.4, any Partner
or its designated representative shall have the right, at any reasonable
time and for any lawful purpose related to the affairs of the Partnership
and its Subsidiaries or the investment in the Partnership and its
Subsidiaries by such Partner, (i) to have access to and to inspect and copy
the contents of such books or records, (ii) to visit the facilities of the
Partnership and its Subsidiaries and (iii) to discuss the affairs of the
Partnership and its Subsidiaries with their respective officers, employees,
attorneys, accountants, customers and suppliers. Neither the Partnership
nor its Subsidiaries shall charge such Partner for such examination and
each Partner shall bear its own expenses in connection with any examination
made for any such Partner's account.
10.2 Reports.
(a) In General. The chief financial officer of the
Partnership shall be responsible for the preparation of financial reports
of the Partnership and the coordination of financial matters of the
Partnership with the Accountants.
(b) Periodic and Other Reports. The Partnership shall cause
to be delivered to each Partner the financial statements listed in clauses
(i) through (iii) below, prepared, in each case, in accordance with GAAP
(and, if required by any Partner for purposes of reporting under the
Securities Exchange Act of 1934, Regulation S-X), and such other reports as
any Partner may reasonably request from time to time, provided that, if the
Partnership Board so determines within thirty (30) days thereof, such other
reports shall be provided at such requesting Partner's sole cost and
expense. Such financial statements shall be accompanied by an analysis, in
reasonable detail, of the variance between the financial condition and
results of operations reported therein and the corresponding amounts for
the applicable period or periods in the Approved Business Plan. The
monthly and quarterly financial statements referred to in clauses (ii) and
(iii) below may be subject to normal year-end audit adjustments.
(i) As soon as practicable following the end of each Fiscal
Year (and in any event not later than seventy-five (75) days after the end
of such Fiscal Year) and at such time as distributions are made to the
Partners pursuant to Section 14.2 following the occurrence of a Liquidating
Event, a consolidated balance sheet of the Partnership and its Subsidiaries
as of the end of such Fiscal Year and the related statements of operations,
Partners' Capital Accounts and changes therein, and cash flows for such
Fiscal Year, together with appropriate notes to such financial statements
and supporting schedules, all of which shall be audited and certified by
the Accountants, and in each case, to the extent the Partnership was in
existence, setting forth in comparative form the corresponding figures for
the immediately preceding Fiscal Year (in the case of the balance sheet)
and the two (2) immediately preceding Fiscal Years (in the case of the
statements).
(ii) As soon as practicable following the end of each of the
first three calendar quarters of each Fiscal Year (and in any event not
later than forty (40) days after the end of each such calendar quarter), a
consolidated balance sheet of the Partnership as of the end of such
calendar quarter and the related consolidated statements of operations,
Partners' Capital Accounts and changes therein, and cash flows for such
calendar quarter and for the Fiscal Year to date, in each case, to the
extent the Partnership was in existence, setting forth in comparative form
the corresponding figures for the prior Fiscal Year's calendar quarter and
interim period corresponding to the calendar quarter and interim period
just completed.
(iii) As soon as practicable following the end of each of the
first two calendar months of each calendar quarter (and in any event not
later than thirty (30) days after the end of such calendar month), a
consolidated balance sheet as of the end of such month and consolidated
statements of operations for the interim period through such month and the
monthly period then ended, setting forth in comparative form the
corresponding figures from the Business Plan for such month and the interim
period through such month.
The quarterly or monthly statements described in clauses (ii) and
(iii) above shall be accompanied by a written certification of the chief
financial officer of the Partnership that such statements have been
prepared in accordance with GAAP or this Agreement, as the case may be.
10.3 Tax Returns and Information.
(a) Sprint, acting in its capacity as a General Partner, shall
act as the "Tax Matters Partner" of the Partnership within the meaning of
Section 6231(a)(7) of the Code (and in any similar capacity under
applicable state or local law) (the "Tax Matters Partner"). If Sprint
shall cease to be a General Partner, then the Partner with the greatest
Voting Percentage Interest, acting in its capacity as a General Partner,
shall thereafter act as the Tax Matters Partner. The Tax Matters Partner
shall take reasonable action to cause each other Partner to be treated as a
"notice partner" within the meaning of Section 6231(a)(9) of the Code. All
reasonable expenses incurred by a Partner while acting in its capacity as
Tax Matters Partner shall be paid or reimbursed by the Partnership. Each
Partner shall be given at least five (5) Business Days advance notice from
the Tax Matters Partner of the time and place of, and shall have the right
to participate (and the Partnership and the Tax Matters Partner shall take
such action as may be necessary to cause the tax matters partner of any
Subsidiary to extend to the Partners the right to participate) in (i) any
material aspect of any administrative proceeding relating to the
determination of partnership items at the Partnership level (or at the
level of any Subsidiary thereof) and (ii) any material discussions with the
Internal Revenue Service relating to the allocations pursuant to Section 3
of this Agreement or pursuant to the partnership agreement of any
Subsidiary. The Tax Matters Partner shall not, and the Partnership shall
not permit the tax matters partner of any Subsidiary to, initiate any
action or proceeding in any court, extend any statute of limitations, or
take any other action contemplated by Sections 6222 through 6232 of the
Code that would legally bind any other Partner, the Partnership or any
Subsidiary without approval of the Partnership Board by a Required Majority
Vote. The Tax Matters Partner shall from time to time upon request of any
other Partner confer, and cause the Partnership's and any Subsidiary's tax
attorneys and Accountants to confer, with such other Partner and its
attorneys and accountants on any matters relating to a Partnership or
Subsidiary tax return or any tax election.
(b) The Tax Matters Partner shall cause all federal, state,
local and other tax returns and reports (including amended returns)
required to be filed by the Partnership or any Subsidiary thereof to be
prepared and timely filed with the appropriate authorities and shall cause
all income or franchise tax returns or reports required to be filed by the
Partnership or any Subsidiary thereof to be sent to each Partner for review
at least fifteen (15) Business Days prior to filing. Unless otherwise
determined by the Partnership Board, all such income or franchise tax
returns of the Partnership shall be prepared by the Accountants. The cost
of preparation of any returns by the Accountants or other outside preparers
shall be borne by the Partnership or the applicable Subsidiary, as the case
may be. In the event of a Transfer of all or part of an Interest, the Tax
Matters Partner shall at the request of the transferee cause the
Partnership to elect, pursuant to Section 754 of the Code, to adjust the
basis of the Partnership's property (and the Partnership shall cause the
tax matters partner of any Subsidiary to make a corresponding Section 754
election with respect to such Subsidiary's property); provided, however,
that such transferee shall reimburse the Partnership and any Subsidiary
promptly for all costs associated with such basis adjustment, including
bookkeeping, appraisal and other similar costs. Except as otherwise
expressly provided herein, all other elections required or permitted to be
made by the Partnership or any Subsidiary under the Code (or applicable
state or local tax law) shall be made in such manner as may be determined
by the Partnership Board to be in the best interests of the Partners as a
group.
(c) The Tax Matters Partner shall cause to be provided to each
Partner as soon as possible after the close of each Fiscal Year (and, in
any event, no later than one hundred thirty-five (135) days after the end
of each Fiscal Year), a schedule setting forth such Partner's distributive
share of the Partnership's income, gain, loss, deduction and credit as
determined for federal income tax purposes and any other information
relating to the Partnership that is reasonably required by such Partner to
prepare its own federal, state, local and other tax returns. At any time
after such schedule and information have been provided, upon at least two
(2) Business Days' notice from a Partner, the Tax Matters Partner shall
also provide each Partner with a reasonable opportunity during ordinary
business hours to review and make copies of all work papers related to such
schedule and information or to any return prepared under paragraph (b)
above. The Tax Matters Partner shall also cause to be provided to each
Partner, at the time that the quarterly financial statements are required
to be delivered pursuant to Section 10.2(b)(ii) above, an estimate of each
Partner's share of all items of income, gain, loss, deduction and credit of
the Partnership for the calendar quarter just completed and for the Fiscal
Year to date for federal income tax purposes.
10.4 Proprietary Information.
Notwithstanding anything to the contrary in this Section 10, an
Exclusive Limited Partner shall only have access to such information
regarding the Partnership as is required by applicable law and shall not
have access for such time as the Partnership Board deems reasonable to such
information relating to the Partnership's business which the Partnership
Board reasonably believes to be in the nature of trade secrets or other
information the disclosure of which the Partnership Board in good faith
believes is not in the best interest of the Partnership or could damage the
Partnership or its business or which the Partnership is required by law or
by agreement with a third party to keep confidential.
SECTION 11. ADVERSE ACT
11.1 Remedies.
(a) If an Adverse Act has occurred with respect to any
Partner, (x) in the case of an Adverse Act specified in clause (vii) of the
definition of such term in Section 1.10, any General Partner may elect or
(y) in the case of any other Adverse Act, the Partnership Board (with the
Representatives of the affected Partner abstaining) may elect:
(i) to cause the Partnership to commence the procedures specified in
Section 11.2 for the purchase of the Adverse Partner's Interest; or
(ii) to cause the Partnership to seek to enjoin such Adverse Act or
to obtain specific performance of the Adverse Partner's obligations or
Damages (as defined and subject to the limitations specified below) in
respect of such Adverse Act.
Notwithstanding anything to the contrary contained in this Section 11, (x)
none of the remedies specified above (nor any other provision of this
Section 11) shall apply to an Adverse Act specified in clause (vi) of the
definition of such term in Section 1.10, (y) the remedies specified in
clause (ii) shall not be available to the Partners with respect to an
Adverse Act specified in clause (vii) of such definition unless the
circumstances under which such event arose also constituted a breach by the
Adverse Partner of the covenant contained in Section 8.5 of this Agreement,
and (z) the remedy specified in clause (i) above and the right to seek
Damages under clause (ii) above may not be pursued and Section 11.1(b) will
not apply to an Adverse Act specified in clause (iii) of the definition of
such term until such time as there is a Final Determination that the
Partner's actions or failure to act constituted an Adverse Act, if the
affected Partner timely delivered a Contest Notice.
In the event of an Adverse Act specified in any clause of the
definition of such term in Section 1.10 other than clause (vii), the vote
of the Partnership Board required to elect to exercise a remedy specified
in clause (i) or (ii) of the first sentence of this Section 11.1(a) shall
be the Required Majority Vote of Representatives of the Partners that are
not actual or alleged Adverse Partners (the "Non-Adverse Partners"),
provided that in the event more than one (1) Partner is alleged to be an
Adverse Partner, such vote shall be taken separately with respect to each
alleged Adverse Partner excluding from such vote only the Partner(s) that
is alleged to be an Adverse Partner as a result of the specific facts or
circumstances with respect to which such vote is being taken. The election
to pursue a remedy specified in clause (i) or (ii) of the first sentence of
this Section 11.1(a) with respect to an Adverse Act for which such remedy
is available may be exercised by notice given to the Adverse Partner (x) in
the case of an Adverse Act specified in clause (i) of the definition of the
term "Adverse Act" in Section 1.10, within ninety (90) days after the
occurrence of such Adverse Act or (y) in the case of any other Adverse Act,
within ninety (90) days after the Partnership Board or the Partner making
such election, as the case may be, obtains actual knowledge of the
occurrence of such Adverse Act, including, if applicable, that any cure
period has expired; provided that, if an election pursuant to clause (ii)
of the first sentence of this Section 11.1(a) is made to seek an
injunction, specific performance or other equitable relief, an action
seeking such relief is commenced promptly thereafter and a final judgment
in such action is rendered denying such equitable remedy and no election
was made pursuant to clause (i) of the first sentence of this Section
11.1(a), then, by notice given within ten (10) days after such final
judgment is rendered, the Partnership Board may elect to pursue the remedy
specified in clause (i) of the first sentence of this Section 11.1(a)
unless (x) prior to the giving of such notice, the Adverse Partner has
cured in full (or caused to be cured in full) the Adverse Act in question
(other than an Adverse Act specified in clause (i) of the definition of
such term in Section 1.10, which may only be cured with the Unanimous Vote
of, and on the terms prescribed by, the Partnership Board) and no other
Adverse Act with respect to such Partner has occurred and is continuing or
(y) the final judgment denying equitable relief specifically held that
there was no Adverse Act.
The foregoing remedies shall not be deemed to be mutually exclusive,
and, subject to the requirements of this Section 11.1(a) regarding the
timing of the election of such remedies, selection or resort to any thereof
shall not preclude selection or resort to the others. The resort to any
remedy pursuant to this Section 11.1(a) shall not for any purpose be deemed
to be a waiver of any other available remedy. Except as provided in
Section 11.1(b), the failure to elect to pursue a remedy within the time
periods provided in the preceding paragraph shall be conclusively presumed
to be a waiver of the remedies provided in this Section 11 with respect to
the subject Adverse Act.
Unless resort to such remedy has been waived as set forth in the
immediately preceding paragraph, the Partnership shall be entitled to
recover from the Adverse Partner in an appropriate proceeding any and all
damages, losses and expenses (including reasonable attorneys' fees and
disbursements) (collectively, "Damages") suffered or incurred by the
Partnership as a result of such Adverse Act; provided that the Partnership
shall not have or assert any claim against the Adverse Partner for punitive
Damages or for indirect, special or consequential Damages suffered or
incurred by the Partnership as a result of an Adverse Act; and provided
further, that if an election is made pursuant to clause (i) of the first
sentence of this Section 11.1(a), the amount the Partnership may recover in
any action for Damages shall be reduced by an amount equal to the
difference, if any, between the Net Equity of the Adverse Partner's
Interest determined in accordance with Section 11.2(a) and the applicable
Buy-Sell Price.
(b) If the Partnership is dissolved pursuant to Section
14.1(a) at any time as a result of a Liquidating Event that occurs prior to
a remedy having been elected pursuant to Section 11.1(a) with respect to
any Adverse Partner, the time periods for such election shall thereupon
expire and the Partnership Board shall deduct from any amounts to be paid
to such Adverse Partner that amount which it reasonably estimates to be
sufficient to compensate the Non-Adverse Partners for Damages incurred by
them as a result of the Adverse Act (subject to the limitations of Section
11.1(a)) and shall pay the same to the Non-Adverse Partners.
11.2 Adverse Act Purchase.
(a) Determination of Net Equity of Adverse Partner's Interest.
If the Partnership Board or any General Partner makes an election pursuant
to Section 11.1(a)(i) to commence the purchase procedures set forth in this
Section 11.2, the Net Equity of the Adverse Partner's Interest shall be
determined in accordance with this Section 11 as of the last day of the
calendar quarter immediately preceding the calendar quarter in which notice
of such election (the "Election Notice") was given to the Adverse Partner,
and the Adverse Partner shall be obligated to sell to the Purchasing
Partners, if any, all but not less than all of the Adverse Partner's
Interest in accordance with this Section 11.2 at a purchase price (the
"Buy-Sell Price") equal to (A) in the case of any Adverse Act (other than
(1) an Adverse Act identified in clause (i) of the definition of such term
that occurs prior to the Cut-Off Time, (2) an Adverse Act identified in
clause (iv) of the definition of such term or (3) unless such Adverse Act
occurred in connection with any breach by such Partner of its obligations
under Section 8.5, an Adverse Act identified in clause (vii) of the
definition of such term), ninety percent (90%) of the Net Equity thereof as
so determined, (B) in the case of an Adverse Act specified in clause (iv)
or, unless such Adverse Act occurred in connection with any breach by such
Partner of its obligations under Section 8.5, clause (vii) of the
definition of such term in Section 1.10, the Net Equity thereof, and (C) in
the case of an Adverse Act specified in clause (i) of the definition of
such term in Section 1.10 that occurred prior to the Cut-Off Time, the
lesser of (A) ninety percent (90%) of the Net Equity thereof as so
determined or (B) eighty percent (80%) of the remainder of (1) the sum of
such Adverse Partner's Original Capital Contribution and aggregate
Additional Capital Contributions minus (2) the cumulative distributions
made to such Partner pursuant to Section 4 ("Unreturned Capital"), with the
amount of such Unreturned Capital determined as of the date on which the
Adverse Partner's Interest is purchased. Such Election Notice shall
designate the First Appraiser as required by Section 11.4 and the Adverse
Partner shall appoint the Second Appraiser within ten (10) Business Days
of receiving such notice designating the First Appraiser.
(b) Election to Purchase Interest of Adverse Partner. For a
period ending at 11:59 p.m. (local time at the Partnership's principal
office) on the thirtieth (30th) day following the day on which notice of
the Adverse Partner's Net Equity is given pursuant to Section 11.3 (the
"Election Period"), except as otherwise provided in Section 11.2(b)(i),
each of the Partners (other than the Adverse Partner and any Exclusive
Limited Partner) may elect, by notice to the Adverse Partner and each other
Partner (the "Purchase Notice"), to purchase all or any portion of the
Adverse Partner's Interest, which notice shall state the maximum Percentage
Interest that such Partner (a "Purchasing Partner") is willing to purchase
(each a "purchase commitment"). If the aggregate purchase commitments made
by the Purchasing Partners are equal to at least one hundred percent (100%)
of the Adverse Partner's Interest, then subject to the following sentence,
each Purchasing Partner shall be obligated to purchase, and the Adverse
Partner shall be obligated to sell to such Purchasing Partner, that portion
of the Adverse Partner's Interest that corresponds to the ratio of the
Percentage Interest of such Purchasing Partner to the aggregate Percentage
Interests of the Purchasing Partners, provided that, if any Purchasing
Partner's purchase commitment was for an amount less than its proportionate
share of the Adverse Partner's Interest as so determined, then the portion
of the Adverse Partner's Interest not so committed to be purchased shall
continue to be allocated proportionally in the manner provided above in
this sentence among the other Purchasing Partners until each has been
allocated, by such process of apportionment, a percentage of the Adverse
Partner's Interest equal to the maximum percentage such Purchasing Partner
committed to purchase or until the Adverse Partner's entire Interest has
been allocated among the Purchasing Partners. In the event that the other
Partners do not elect to purchase the entire Interest of the Adverse
Partner, the Adverse Partner shall be under no obligation to sell any
portion of its Interest to any Partner.
(i) Except as otherwise provided in Section 11.2(b)(ii),
if an Adverse Partner is a Cable Partner and no Cable Partner's Percentage
Interest, when added to the Percentage Interests of all Controlled
Affiliates of such Partner, is equal to or greater than Sprint's Percentage
Interest when added to the Percentage Interests of all Controlled
Affiliates of Sprint, then the Adverse Partner's Interest shall be
allocated first among those of the Purchasing Partners that are Cable
Partners as though Sprint were not a Purchasing Partner and if and to the
extent that the aggregate purchase commitments made by such Cable Partners
are less than one hundred percent (100%) of the Adverse Partner's Interest,
the balance of the Adverse Partner's Interest up to Sprint's purchase
commitment shall be allocated to Sprint.
(ii) The Adverse Partner's Interest shall be allocated
among the Cable Partners in the manner set forth in Section 11.2(b)(i)
until any Cable Partner would have a Percentage Interest, when added to the
Percentage Interests of all Controlled Affiliates of such Partner, equal to
Sprint's Percentage Interest, when added to the Percentage Interests of all
Controlled Affiliates of Sprint, calculated in each case after giving
effect to the adjustments to the Percentage Interests to be made in
connection with the purchases of the Adverse Partner's Interest by the
Cable Partners in accordance with Section 11.2(b)(i) assuming that such
purchases were made up to the amount that would yield such result (as to
each Partner, its "Adjusted Percentage Interest"). Any portion of the
Adverse Partner's Interest not yet allocated shall continue to be allocated
proportionately among all Purchasing Partners (including Sprint, if
applicable) in the manner set forth in this Section 11.2(b) without regard
to Section 11.2(b)(i), but substituting the Adjusted Percentage Interests
of the Purchasing Partners for the Percentage Interests that would
otherwise be used to determine such allocation until each has been
allocated an amount equal to its purchase commitment or until the Adverse
Partner's entire Interest has been allocated among the Purchasing Partners.
(c) Terms of Purchase; Closing. Unless the Purchasing
Partners and the Adverse Partner otherwise agree, the closing of the
purchase and sale of the Adverse Partner's Interest, MinorCo Interest (as
required by Section 12.3(d)) and Partner Loans (as required by Section
12.3(c)) shall occur at the principal office of the Partnership at 10:00
a.m. (local time at the place of the closing) on the first Business Day
occurring on or after the thirtieth (30th) day following the last day of
the Election Period (subject to Section 11.5). At the closing, each
Purchasing Partner shall pay to the Adverse Partner, by cash or other
immediately available funds, that portion of the purchase price for the
Adverse Partner's Interest, MinorCo Interest and Partner Loans for which
such Purchasing Partner is liable (determined in the case of the MinorCo
Interest and Partner Loans in accordance with Section 12.3) and the Adverse
Partner shall deliver to each Purchasing Partner good title, free and clear
of any liens, claims, encumbrances, security interests or options (other
than those created by this Agreement and those securing financing obtained
by the Partnership), to the portion of the Adverse Partner's Interest,
MinorCo Interest and Partner Loans thus purchased. Each Purchasing Partner
shall be liable to the Adverse Partner only for its allocable portion of
the purchase price for the Adverse Partner's Interest, MinorCo Interest and
Partner Loans.
At the closing, the Partners shall execute such documents and
instruments of conveyance as may be necessary or appropriate to effectuate
the transactions contemplated hereby, including the Transfer of the Adverse
Partner's Interest, MinorCo Interest and Partner Loans to the Purchasing
Partner and the assumption by each Purchasing Partner of the Adverse
Partner's obligations with respect to the portion of the Adverse Partner's
Interest Transferred to such Purchasing Partner. The Partnership and each
Partner shall bear its own costs of such Transfer and closing, including
attorneys' fees and filing fees. The cost of determining Net Equity shall
be borne one-half by the Adverse Partner and one-half by the Partnership
and the amount borne by the Partnership shall be treated as an expense of
the Partnership for purposes of such determination.
In the event that any Purchasing Partner shall fail to perform its
obligation to purchase hereunder on the scheduled closing date, and no
other Purchasing Partner elects to purchase the portion of the Adverse
Partner's Interest, MinorCo Interest and Partner Loans thus not purchased
(such election to be made by notice given to the Adverse Partner within
five (5) Business Days thereafter), the Adverse Partner will not be
obligated to sell any portion of its Interest, MinorCo Interest or Partner
Loans to any Purchasing Partner. If one or more of the other Purchasing
Partners timely elects to purchase such portion of the Adverse Partner's
Interest, MinorCo Interest and Partner Loans, such Purchasing Partner(s)
shall be provided an additional fifteen (15) days from the previously
scheduled closing date in which to tender payment therefor.
11.3 Net Equity.
The "Net Equity" of a Partner's Interest, as of any day, shall be the
amount that would be distributed to such Partner in liquidation of the
Partnership pursuant to Section 14.2(a)(iii) if (i) all of the
Partnership's business and assets (including its partnership interests in
WirelessCo) were sold substantially as an entirety for Gross Appraised
Value, (ii) Profits and Losses and items specially allocated in accordance
with Sections 3.3 and 3.4 for the Allocation Year ending on the date that
Net Equity is determined, including any gain or loss resulting from the
deemed sale described in clause (i), were allocated in accordance with
Section 3, (iii) the Partnership paid its accrued, but unpaid, liabilities
and established reserves pursuant to Section 14.2 for the payment of
reasonably anticipated contingent or unknown liabilities, and (iv) the
Partnership distributed the remaining proceeds to the Partners in
liquidation, all as of such day, provided that in determining such Net
Equity, no reserve for contingent or unknown liabilities shall be taken
into account if such Partner (or its successor in interest) (other than a
Partner that is an Adverse Partner as a result of Bankruptcy) agrees to
indemnify the Partnership and all other Partners for that portion of any
such reserve as would be treated as having been withheld pursuant to
Section 14.3 from the distribution such Partner would have received
pursuant to Section 14.2 if no such reserve were established.
The Net Equity of a Partner's Interest shall be determined, without
audit or certification, from the books and records of the Partnership by
the Accountants. The Net Equity of a Partner's Interest shall be
determined within thirty (30) days of the day upon which the Accountants
are apprised in writing of the Gross Appraised Value, and the amount of
such Net Equity shall be disclosed to the Partnership and each of the
Partners by written notice ("Net Equity Notice"). The Net Equity
determination of the Accountants shall be final and binding in the absence
of a showing of manifest error.
11.4 Gross Appraised Value.
"Gross Appraised Value," as of any day, means the price at which a
willing seller would sell, and a willing buyer would buy, the business and
assets of the Partnership (including the Partnership interests in
WirelessCo), free and clear of all liens and encumbrances, substantially as
an entirety and as a going concern in a single arm's-length transaction for
cash, without time constraints and without being under any compulsion to
buy or sell.
Each provision of this Agreement that requires a determination of
Gross Appraised Value (other than Sections 2.4(a)(v) and 2.4(d)(iii) and
the definition of "Premium Dollar" in Section 1.10) also provides the
manner and time for the appointment of two (2) appraisers (the "First
Appraiser" and the "Second Appraiser"). If the Second Appraiser is not
timely designated, the determination of the Gross Appraised Value shall be
made by the First Appraiser. The First Appraiser, or each of the First
Appraiser and the Second Appraiser if the Second Appraiser is timely
designated, shall submit its determination of the Gross Appraised Value to
the Partnership, the Partners and the Accountants within forty-five (45)
days of the date of its selection (or the selection of the Second
Appraiser, as applicable). If there are two (2) Appraisers and their
respective determinations of the Gross Appraised Value vary by less than
ten percent (10%) of the higher determination, the Gross Appraised Value
shall be the average of the two determinations. If such determinations
vary by ten percent (10%) or more of the higher determination, the two
Appraisers shall promptly designate a third appraiser (the "Third
Appraiser"). Neither the Partnership nor any Partner shall provide, and
the First Appraiser and Second Appraiser shall be instructed not to
provide, any information to the Third Appraiser as to the determinations of
the First Appraiser and the Second Appraiser or otherwise influence such
Third Appraiser's determination in any way. The Third Appraiser shall
submit its determination of the Gross Appraised Value to the Partnership,
the Partners and the Accountants within forty-five (45) days of the date of
its selection. The Gross Appraised Value shall be equal to the average of
the two closest of the three determinations, provided that, if the
difference between the highest and middle determinations is no more than
one hundred and five percent (105%) and no less than ninety-five percent
(95%) of the difference between the middle and lowest determinations, then
the Gross Appraised Value shall be equal to the middle determination. The
determination of the Gross Appraised Value in accordance with this Section
11.4 shall be final and binding on the Partnership and each Partner. If
any Appraiser is only able to provide a range in which Gross Appraised
Value would exist, the average of the highest and lowest value in such
range shall be deemed to be such Appraiser's determination of the Gross
Appraised Value. Each Appraiser selected pursuant to the provisions of
this Section 11.4 shall be an investment banking firm or other qualified
Person with prior experience in appraising businesses comparable to the
business of the Partnership and that is not an Interested Person with
respect to any Partner.
11.5 Extension of Time.
If any Transfer of a Partner's Interest in accordance with this
Section 11 or Sections 5.1(l)(ii), 12 or 14.7 requires the consent,
approval, waiver, or authorization of any government department, board,
bureau, commission, agency or instrumentality as a condition to the lawful
and valid Transfer of such Partner's Interest to the proposed transferee
thereof, then each of the time periods provided in this Section 11 or
Sections 5.1(l)(ii), 12 or 14.7, as applicable, for the closing of such
Transfer shall be suspended for the period of time during which any such
consent, approval, waiver, or authorization is being diligently pursued;
provided, however, that in no event shall the suspension of any time period
pursuant to this Section 11.5 extend for more than three hundred sixty-five
(365) days other than in the case of a purchase of an Adverse Partner's
Interest. Each Partner agrees to use its diligent efforts to obtain, or to
assist the affected Partner or the Partnership Board in obtaining, any such
consent, approval, waiver, or authorization and shall cooperate and use its
diligent efforts to respond as promptly as practicable to all inquiries
received by it, by the affected Partner or by the Partnership Board from
any government department, board, bureau, commission, agency or
instrumentality for initial or additional information or documentation in
connection therewith.
SECTION 12. DISPOSITIONS OF INTERESTS
12.1 Restriction on Dispositions.
Except as otherwise permitted by this Agreement, no Partner shall
Dispose of all or any portion of its Interest.
12.2 Permitted Transfers.
Subject to the conditions and restrictions set forth in Section 12.3,
a Partner may at any time Transfer all or any portion of its Interest (a)
to any Controlled Affiliate of such Partner, (b) in connection with a
Permitted Transaction involving such Partner, (c) to the administrator or
trustee of such Partner to whom such Interest is Transferred in an
Involuntary Bankruptcy, (d) pursuant to and in compliance with Section
5.1(l)(ii), 6.4(f), 11.2, 12.4, 12.5, 12.6, 12.7 or 14.7 or (e) with the
prior written consent of the other Partners (each a "Permitted Transfer").
After any Permitted Transfer, the Transferred Interest shall continue
to be subject to all the provisions of this Agreement, including the
provisions of this Section 12 with respect to the Disposition of Interests.
Except in the case of a Transfer of a Partner's entire Interest made in
compliance herewith, no Partner shall withdraw from the Partnership, except
upon the Unanimous Vote of the Partnership Board. The withdrawal of a
Partner, whether or not permitted, shall not relieve the withdrawing
Partner of its obligations under Section 5.4 or 6.6 and shall not relieve
such Partner or any of its Affiliates of its obligations under, or result
in a termination of or otherwise affect, any agreement between the
Partnership and such Partner or Affiliate then in effect, except to the
extent provided therein.
12.3 Conditions to Permitted Transfers.
A Transfer shall not be treated as a Permitted Transfer unless and
until the following conditions are satisfied:
(a) Except in the case of a Transfer involuntarily by
operation of law, the transferor and transferee shall execute and deliver
to the Partnership such documents as may be necessary or appropriate in the
opinion of counsel to the Partnership to effect such Transfer. In the case
of a Transfer of an Interest involuntarily by operation of law, the
Transfer shall be confirmed by presentation to the Partnership of legal
evidence of such Transfer, in form and substance satisfactory to counsel to
the Partnership. In all cases, the Partnership shall be reimbursed by the
transferor and/or transferee for all costs and expenses that it reasonably
incurs in connection with such Transfer (including reasonable attorneys'
fees and expenses, but excluding the portion of the costs of determining
Net Equity that are to be borne by the Partnership as provided in Section
11.2(b));
(b) Except in the case of a Transfer involuntarily by
operation of law, the transferee of an Interest (other than, with respect
to clauses (A) and (B) below, a transferee that was a Partner prior to the
Transfer) shall, by written instrument in form and substance reasonably
satisfactory to the Partnership Board (and, in the case of clause (C)
below, the transferor Partner), (A) make representations and warranties to
the nontransferring Partners equivalent to those set forth in Section 9.1,
(B) accept and adopt the terms and provisions of this Agreement, including
this Section 12, and (C) assume the obligations of the transferor Partner
under this Agreement with respect to the Transferred Interest. The
transferor Partner shall be released from all such assumed obligations
except (x) as otherwise provided in Section 6 in the case of a Transfer to
a Controlled Affiliate, (y) those obligations or liabilities of the
transferor Partner arising out of a breach of this Agreement or pursuant to
Section 5.4 or 6.6 and (z) in the case of a Transfer to any Person other
than a Partner or any of its Controlled Affiliates, those obligations or
liabilities of the transferor Partner based on events occurring, arising or
maturing prior to the date of Transfer;
(c) Except in the case of a Transfer involuntarily by
operation of law, the transferor of any Interest and its Affiliates will be
obligated to sell to the transferee, and the transferee will be obligated
to buy from the transferor and its Affiliates, a percentage of the Partner
Loans (if any) held directly or indirectly by the transferor or an
Affiliate thereof equal to the percentage of the transferor's Interest
being Transferred to the transferee. If the transferee is a Partner or a
Controlled Affiliate thereof, the terms of such purchase will be as
provided in Section 2.7. In connection with any such purchase of Partner
Loans, the transferee shall surrender to the Partnership the promissory
note or notes evidencing such Partner Loans in exchange for the issuance by
the Partnership of a new promissory note made payable to the order of the
transferee in a principal amount equal to the outstanding balance of such
Partner Loans and otherwise having the same terms as the promissory note
surrendered therefor;
(d) Except in the case of a Transfer involuntarily by
operation of law, the transferor of an Interest will be obligated to sell
to the transferee, and the transferee will be obligated to buy from the
transferor, a portion of the MinorCo Interest owned by the transferor
representing the same percentage of the transferor's MinorCo Interest as
the percentage of the transferor's Interest being Transferred to the
transferee. Election by a Partner to purchase all or any portion of
another Partner's Interest pursuant to Section 5.1(l)(ii), 6.4(f), 11,
12.4, 12.5, 12.6 or 14.7 shall also constitute an election to purchase an
equivalent portion of the transferor's MinorCo Interest, and each
purchasing Partner shall be obligated to purchase a portion of such MinorCo
Interest equal to the percentage of the transferor's Interest such
purchasing Partner is obligated to purchase for a price equal to the "Net
Equity" of the transferor's MinorCo Interest (determined as provided in
Section 11.3 as if all references therein and in any defined term used
therein to the Partnership were deemed references to MinorCo and all
references to Section 14 contained therein were deemed references to the
corresponding provisions of the Agreement of Limited Partnership of MinorCo
dated as of March 28, 1995) (except in the case of a Transfer pursuant to
Section 12.4, in which case the terms of the Purchase Offer shall apply,
and except in the case of a Transfer pursuant to Section 12.6, in which
case the Public Market Value shall apply);
(e) Except in the case of a Transfer involuntarily by
operation of law, if required by the Partnership Board, the transferee
shall deliver to the Partnership an opinion, satisfactory in form and
substance to the Partnership Board, of counsel reasonably satisfactory to
the Partnership Board to the effect that the Transfer of the Interest is in
compliance with applicable state and Federal securities laws;
(f) Except in the case of a Transfer involuntarily by
operation of law, if required by the Partnership Board, the transferee
(other than a transferee that was a Partner prior to the Transfer) shall
deliver to the Partnership evidence of the authority of such Person to
become a Partner and to be bound by all of the terms and conditions of this
Agreement, and the transferee and transferor shall each execute and deliver
such other instruments as the Partnership Board reasonably deems necessary
or appropriate to effect, and as a condition to, such Transfer, including
amendments to the Certificate or any other instrument filed with the State
of Delaware or any other state or governmental agency;
(g) Unless otherwise approved by the Partnership Board (with
the Representatives of the transferor General Partner abstaining), no
Transfer of an Interest shall be made except upon terms which would not, in
the opinion of counsel chosen by and mutually acceptable to the Partnership
Board and the transferor Partner, result in the termination of the
Partnership within the meaning of Section 708 of the Code or cause the
application of the rules of Sections 168(g)(1)(B) and 168(h) of the Code or
similar rules to apply to the Partnership. If the immediate Transfer of
such Interest would, in the opinion of such counsel, cause a termination
within the meaning of Section 708 of the Code, then if, in the opinion of
such counsel, the following action would not precipitate such termination,
the transferor Partner shall be entitled (or required, as the case may be)
(i) immediately to Transfer only that portion of its Interest as may, in
the opinion of counsel to the Partnership, be Transferred without causing
such a termination and (ii) to enter into an agreement to Transfer the
remainder of its Interest, in one or more Transfers, at the earliest date
or dates on which such Transfer or Transfers may be effected without
causing such termination. The purchase price for the Interest shall be
allocated between the immediate Transfer and the deferred Transfer or
Transfers pro rata on the basis of the percentage of the aggregate Interest
being Transferred, each portion to be payable when the respective Transfer
is consummated, unless otherwise agreed by the parties to the Transfer. In
the case of a Transfer by one Partner to another Partner, the deferred
purchase price shall be deposited in an interest-bearing escrow account
unless another method of securing the payment thereof is agreed upon by the
transferor Partner and the transferee Partner(s). In determining whether a
particular proposed Transfer will result in a termination of the
Partnership, counsel to the Partnership shall take into account the
existence of prior written commitments to Transfer made pursuant to this
Agreement and such commitments shall always be given precedence over
subsequent proposed Transfers. Each Partner agrees that, solely for
purposes of this Section 12.3(g), any Transfer of an ownership interest in
a Partner that has the same effect as a Transfer of such Partner's Interest
for purposes of determining whether the Partnership has been terminated
within the meaning of Section 708 of the Code shall be treated as a
Transfer of such Partner's Interest. Each Partner shall notify the
Partnership and each other Partner in writing not less than five (5) days
prior to any Transfer of an ownership interest in such Partner to which
this Section 12.3(g) applies. No Partner shall be deemed to have breached
this Section 12.3(g) to the extent that such Partner's failure to comply
with the foregoing provisions in connection with a Transfer of an ownership
interest in such Partner resulted solely from the failure of any other
Partner to comply with the notice obligation set forth in the preceding
sentence;
(h) The transferor or transferee shall furnish the Partnership
with the transferee's taxpayer identification number, sufficient
information to determine the transferee's initial tax basis in the Interest
Transferred, and any other information reasonably necessary to permit the
Partnership to file all required federal and state tax returns and other
legally required information statements or returns. Without limiting the
generality of the foregoing, the Partnership shall not be required to make
any distribution otherwise provided for in this Agreement with respect to
any Transferred Interest until it has received such information;
(i) Except in the case of a Transfer of an Interest
involuntarily by operation of law, if the transferor is a General Partner,
the transferor and transferee shall provide the Partnership with an opinion
of counsel, which opinion of counsel shall be reasonably satisfactory to
the other Partners, to the effect that such Transfer will not cause the
Partnership to become taxable as a corporation for federal income tax
purposes; and
(j) If the Parent of a transferee is not the same Person as
the Parent of the transferring Partner, then the Parent of the transferee
(other than a transferee Partner) shall execute and deliver to the
Partnership and the other Parents a Parent Undertaking. If a Partner
ceases to be a Controlled Affiliate of its former Parent as a result of a
Permitted Transaction, then the new Parent of such Partner shall execute
and deliver a Parent Undertaking to the Partnership and the other Parents.
Upon completion of any Permitted Transfer and compliance with the
provisions of this Section 12.3, the transferee of the Interest (if not
already a Partner) shall be admitted as a Partner without any further
action.
12.4 Right of First Refusal.
After March 1, 2000, a Partner may Transfer all or any portion of its
Interest (the "Offered Interest") if (i) such Partner (the "Seller") first
offers to sell the Offered Interest pursuant to the terms of this Section
12.4, and (ii) the Transfer of the Offered Interest to the Purchaser (as
defined below) would not cause an Adverse Act under clause (vii) of the
definition thereof.
(a) Limitation on Transfers. No Transfer may be made under
this Section 12.4 unless the Seller has received a bona fide written offer
(the "Purchase Offer") from a Person (including another Partner) who is not
a Controlled Affiliate of such Partner (the "Purchaser") to purchase the
Offered Interest for a purchase price (the "Offer Price") denominated and
payable in United States dollars at closing, which offer shall be in
writing signed by the Purchaser and shall be irrevocable for a period
ending no sooner than the Business Day following the end of the Offer
Period, as hereinafter defined.
(b) Offer Notice. Prior to accepting the Purchase Offer, the
Seller shall give to the Partnership and each other Partner other than any
Exclusive Limited Partner written notice (the "Offer Notice") which shall
include a copy of the Purchase Offer and an offer (the "Firm Offer") to
sell the Offered Interest to the other Partners (the "Offerees") for the
Offer Price, payable according to the same terms as (or on more favorable
terms than) those contained in the Purchase Offer, provided that the Firm
Offer shall be made without regard to the requirement of any ▇▇▇▇▇▇▇ money
or similar deposit required of the Purchaser prior to closing. If the
Person making the Purchase Offer is not an entity that is subject to the
periodic reporting requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, the Seller shall also provide any
information concerning the ownership of the Person making the Purchase
Offer that may be reasonably requested by any other Partner, to the extent
such information is available to the Seller.
(c) Offer Period. The Firm Offer shall be irrevocable for a
period (the "Offer Period") ending at 11:59 P.M., local time at the
Partnership's principal place of business, on the sixtieth (60th) day
following the day of the Offer Notice.
(d) Acceptance of Firm Offer. At any time during the Offer
Period, any Offeree may accept the Firm Offer as to all or any portion of
the Offered Interest, by giving written notice of such acceptance to the
Seller and each other Offeree, which notice shall indicate the maximum
Percentage Interest that such Offeree is willing to purchase (the "purchase
commitment"). If the aggregate purchase commitments made by Offerees
accepting the Firm Offer ("Accepting Offerees") are equal to at least one
hundred percent (100%) of the Offered Interest, then, except as otherwise
provided in Section 12.4(d)(i), each Accepting Offeree shall be obligated
to purchase, and the Seller shall be obligated to sell to such Accepting
Offeree that portion of the Offered Interest that corresponds to the ratio
of the Percentage Interest of such Accepting Offeree to the aggregate
Percentage Interests of the Accepting Offerees, provided that if any
Accepting Offeree's purchase commitment was for an amount less than its
proportionate share of the Offered Interest as so determined, then the
portion of the Offered Interest not so committed to be purchased shall
continue to be allocated proportionally in the manner provided above in
this sentence among the other Accepting Offerees until each has been
allocated, by such process of apportionment, a percentage of the Offered
Interest equal to the maximum percentage such Accepting Offeree committed
to purchase or until the entire Offered Interest has been allocated among
the Accepting Offerees. If Offerees do not accept the Firm Offer as to all
of the Offered Interest during the Offer Period, the Firm Offer shall be
deemed to be rejected in its entirety.
(i) Except as otherwise provided in Section 12.4(d)(ii), if
a Seller is a Cable Partner and no Cable Partner's Percentage Interest,
when added to the Percentage Interests of all Controlled Affiliates of such
Partner, is equal to or greater than Sprint's Percentage Interest, when
added to the Percentage Interests of all Controlled Affiliates of Sprint,
then the Offered Interest shall be allocated first among those of the
Accepting Offerees that are Cable Partners as though Sprint were not an
Accepting Offeree and if and to the extent that the aggregate purchase
commitments made by such Cable Partners are less than one hundred percent
(100%) of the Offered Interest, the balance of the Offered Interest up to
Sprint's purchase commitment shall be allocated to Sprint.
(ii) The Offered Interest shall be allocated among the
Cable Partners in the manner set forth in Section 12.4(d)(i) until any
Cable Partner would have a Percentage Interest, when added to the
Percentage Interests of all Controlled Affiliates of such Partner, that is
equal to Sprint's Percentage Interest, when added to the Percentage
Interests of all Controlled Affiliates of Sprint, calculated in each case
after giving effect to the adjustments to Percentage Interests to be made
in connection with the purchase of the Offered Interest by the Cable
Partners in accordance with Section 12.4(d)(i) assuming that such purchase
was made up to the amount that would yield such result (as to each Partner,
its "Adjusted Percentage Interest"). Any portion of the Offered Interest
not yet allocated shall continue to be allocated proportionately among all
Accepting Offerees (including Sprint, if applicable) in the manner set
forth in this Section 12.4(d) without regard to Section 12.4(d)(i), but
substituting the Adjusted Percentage Interests of the Offerees for the
Percentage Interests that would otherwise be used to determine such
allocation, until each has been allocated an amount equal to its purchase
commitment or until the entire Offered Interest has been allocated among
the Accepting Offerees.
(e) Closing of Purchase Pursuant to Firm Offer. If all of the
Offered Interest has been subscribed for in accordance with the terms of
Section 12.4(d), the Seller shall give notice to such effect (the "Sale
Notice") to all Offerees within five days after the end of the Offer
Period. Unless the Accepting Offerees and the Seller otherwise agree, the
closing of any purchase pursuant to this Section 12.4 shall be held at the
principal office of the Seller at 10:00 a.m. (local time at the place of
closing) on the first Business Day on or after the thirtieth (30th) day
following the date on which the Sale Notice is given (subject to Section
11.5). At the closing, each Accepting Offeree shall pay to the Seller, by
cash or other immediately available funds, that portion of the purchase
price for the Offered Interest, MinorCo Interest and Partner Loans of the
Seller for which such Accepting Offeree is liable, and the Seller shall
deliver to each Accepting Offeree good title, free and clear of any liens,
claims, encumbrances, security interests or options (other than those
created by this Agreement and those securing financing obtained by the
Partnership), to the portion of the Offered Interest, MinorCo Interest and
Partner Loans thus purchased. Each Accepting Offeree shall be liable to
the Seller only for its allocable portion of the purchase price for the
Offered Interest, MinorCo Interest and Partner Loans.
At the closing, the Partners shall execute such documents and
instruments of conveyance as may be necessary or appropriate to effectuate
the transactions contemplated hereby, including the Transfer of the Offered
Interest, MinorCo Interest and Partner Loans of the Seller to the Accepting
Offerees and the assumption by each Accepting Offeree of the Seller's
obligations with respect to the portion of the Seller's Interest and
MinorCo Interest Transferred to such Accepting Offerees. Each Partner and
the Partnership shall bear its own costs of such Transfer and closing,
including attorneys' fees and filing fees.
(f) Sale Pursuant to Purchase Offer If Firm Offer Rejected.
If the Firm Offer is not accepted in the manner hereinabove provided, or
the Accepting Offerees fail to close the purchase on the closing date, then
in either such event, but subject to the last sentence of this Section
12.4(f) and subject to Section 12.3, the Seller shall be free for the
period described below (the "Free to Sell Period") to sell the Offered
Interest to the Purchaser upon terms and conditions that are the same as,
or more favorable to the Seller than, those contained in the Purchase Offer
(including at the same or greater price). The Free to Sell Period shall be
the applicable of (i) if the Firm Offer is not accepted, sixty (60) days
after the last day of the Offer Period (subject to Section 11.5) or (ii) if
the Firm Offer is accepted but the purchase is not closed, sixty (60) days
(subject to Section 11.5) after the scheduled closing date, provided that
if the last sentence of this Section 12.4(f) becomes applicable, then such
sixty (60) day period shall be measured from the fifth (5th) Business Day
after the previously scheduled closing date or, if applicable, from the
subsequently scheduled closing date contemplated by such sentence (assuming
the required purchase elections are made). If the Offered Interest is not
so sold within the Free to Sell Period, the Seller's right to Transfer its
Interest shall again be subject to the foregoing restrictions.
Notwithstanding the foregoing, if more than one Offeree elected to purchase
the Offered Interest and at least one Accepting Offeree tendered its
proportionate share of the purchase price therefor at the closing but any
other Accepting Offeree failed to make such tender, then any tendering
Accepting Offeree may elect, by notice given to the Seller within five (5)
Business Days thereafter, to purchase the portion of the Offered Interest
for which payment was not tendered (provided that, after giving effect to
such election, the entire Offered Interest is being purchased) and shall be
provided an additional fifteen (15) days from the previously scheduled
closing date in which to tender payment therefor.
(g) Restrictions on Notice. No notice initiating the
procedures contemplated by this Section 12.4 may be given by any Partner
while any notice, purchase or Transfer is pending under Section 11 or this
Section 12.4 or after a Liquidating Event has occurred. No notice
initiating the procedures contemplated by this Section 12.4 may be given by
an Adverse Partner nor any Delinquent Partner prior to the applicable Cure
Date unless such Partner has cured the underlying Payment Default, and no
Seller shall be required to offer any portion of its Interest to an Adverse
Partner during the period that the Partnership is pursuing any remedy
specified in Section 11.1 with respect to such Adverse Partner. No Partner
may accept a Purchase Offer during any period that, as provided above, such
Partner may not give the notice initiating the procedures contemplated by
this Section 12.4 or thereafter until it has given such notice and
otherwise complied with the provisions of this Section 12.4.
12.5 Tagalong Rights.
(a) Direct Transfers. In the event that (i) a Partner
proposes to Transfer its Interest (as part of a single transaction or any
series of related transactions) to any Person other than a Controlled
Affiliate of such Partner after March 1, 2000, and such Transfer would
cause the proposed transferee (a "Tagalong Purchaser") and its Controlled
Affiliates to own more than fifty-five percent (55%) of the Percentage
Interests (a "Tagalong Transaction") and (ii) the Firm Offer is not
accepted in the manner provided in Section 12.4, the Tagalong Transaction
shall not be permitted hereunder unless the Tagalong Purchaser offers to
purchase the entire Interest of any other Partner that desires to sell its
Interest to the Tagalong Purchaser at the same price per each one percent
(1%) Percentage Interest and on the same terms and conditions as the
Tagalong Purchaser has offered to the Partner proposing to make such
Transfer (the "Transferring Partner"). If such Transfer occurs as part of
a series of related transactions, the price and terms shall be the price
and terms most favorable to the Transferring Partner for which any portion
of the Interest of the Transferring Partner is Transferred as part of such
series of transactions. Prior to effecting any Tagalong Transaction, the
Transferring Partner shall deliver to each other Partner a binding,
irrevocable offer (the "Tagalong Offer") by the Tagalong Purchaser to
purchase the entire Interest of the other Partners at the same price per
each one percent (1%) Percentage Interest and on the same terms and
conditions as the Tagalong Purchaser has offered to the Transferring
Partner (the "Tagalong Notice"). The "Tagalong Offer" shall be irrevocable
for a period (the "Tagalong Period") ending at 11:59 p.m., local time at
the Partnership's principal place of business, (x) with respect to a
Tagalong Purchaser that is an existing Partner or a Controlled Affiliate of
an existing Partner, on the one hundred eightieth (180th) day following the
date of the Tagalong Notice and (y) with respect to any other Tagalong
Purchaser, on the first anniversary of the date of the Tagalong Notice. At
any time during the Tagalong Period, any Partner may accept the Tagalong
Offer as to the entire amount of its Interest by giving written notice of
such acceptance to the Tagalong Purchaser.
(b) Indirect Transfers. Within five (5) days of the Parent of
any Partner (such Partner, a "Controlling Partner") acquiring, indirectly,
Interests in the Partnership (other than through such Controlling Partner's
acquisition of additional Interests), causing such Parent to own, directly
and indirectly through its Controlled Affiliates, more than fifty-five
percent (55%) of the Percentage Interests, such Controlling Partner shall
give to each other Partner written notice of such acquisition (a "Control
Notice"), which shall include an offer (the "Control Offer") by the
Controlling Partner to purchase the entire Interest of each other Partner
at a price equal to the Net Equity thereof (as determined pursuant to
Section 11.3) and shall designate a First Appraiser (as required by Section
11.4). The Representatives of the other General Partners shall by Required
Majority Vote pursuant to Section 8.6 appoint the Second Appraiser within
ten (10) Business Days following the date the Control Notice was given.
The Control Offer shall be irrevocable for a period (the "Control Offer
Period") ending at 11:59 p.m., local time at the Partnership's principal
place of business, on the one hundred eightieth (180th) day following the
date of the Net Equity Notice. At any time during the Control Offer
Period, any Partner may accept the Control Offer as to the entire amount of
its Interest by giving written notice of such acceptance to the Controlling
Partner. The costs of determining the Net Equity shall be borne one-half
by the Controlling Partner and one-half by the Partners that accept the
Control Offer (pro rata based on their respective Percentage Interests) or,
if no Partner accepts the Control Offer, then such costs shall be borne
entirely by the Partnership.
(c) Limitations on Acceptance of Offers. No Adverse Partner
may accept a Tagalong Offer or a Control Offer during any period that an
election may be made to pursue the remedies specified in Section 11.1(a)
against such Partner and, if an election pursuant to clause (i) of the
first sentence thereof to purchase the Adverse Partner's Interest is made,
pending the closing of the purchase thereof, unless, in any such case, such
Adverse Partner agrees that the purchase price for its Interest under this
Section 12.5 will not be greater than the price at which its Interest could
then be purchased under Section 11.
(d) Closing Matters. Unless the Tagalong Purchaser or the
Controlling Partner, as the case may be, on the one hand, and the Partners
accepting the Tagalong Offer or the Control Offer, as the case may be, on
the other hand, otherwise agree, the closing of the purchase and sale of
Interests pursuant to this Section 12.5 shall occur at the principal office
of the Partnership at 10:00 a.m. (local time at the place of the closing)
on the first Business Day occurring on or after the sixtieth (60th) day
following the expiration of the Tagalong Period or the Control Offer
Period, as applicable, subject to Section 11.5. At the closing, the
Tagalong Purchaser or Controlling Partner shall pay to the Partners who
have accepted the applicable offer, by cash or other immediately available
funds, the purchase price for the Interests, MinorCo Interests and Partner
Loans being Transferred, and the Partners selling their Interests, MinorCo
Interests and Partner Loans shall deliver to the Tagalong Purchaser or
Controlling Partner, as applicable, good title, free and clear of any
liens, claims, encumbrances, security interest or options (other than those
created by this Agreement and those securing financing obtained by the
Partnership), to the Interest, MinorCo Interest and Partner Loans thus
purchased.
At the closing, the Partners shall execute such documents and
instruments of conveyance as may be necessary or appropriate to effectuate
the transactions contemplated hereby, including the Transfer of the
Interests, MinorCo Interests and Partner Loans to the Tagalong Purchaser or
Controlling Partner, as applicable, and the assumption by the Tagalong
Purchaser or Controlling Partner, as applicable, of the obligations with
respect to the Interests and MinorCo Interests so Transferred. Each
Partner and the Partnership shall bear its own costs of such Transfer and
closing, including attorneys' fees and filing fees.
12.6 Offer and Registration Rights.
(a) Registration Notice. At any time on or after August 1, 2003
and on or before September 30, 2003 and during the corresponding two-month
periods of each calendar year thereafter, any Partner or group of Partners
(individually, a "Notice Partner" and collectively the "Notice Partners"),
by notice (a "Registration Notice") given to the Partnership Board and each
other Partner, may request that the Partnership convert to corporate form
pursuant to Section 5.9 and that the corporate successor to the Partnership
("MajorCorp") register under the 1933 Act for resale by the Notice
Partner(s) all or a portion of the shares of common stock ("MajorCorp
Stock") that would be issued in exchange for such Notice Partner's Interest
and MinorCo Interest upon such conversion to corporate form. Each
Registration Notice shall (i) identify the Notice Partner(s) giving the
Registration Notice, (ii) specify the percentage (or respective
percentages) of the MajorCorp Stock to be issued in exchange for the
Interest(s) (and MinorCo Interest(s)) of the Notice Partner(s) upon such
conversion of the Partnership that such Notice Partner(s) desire to have
registered for resale (as to each Notice Partner, subject to increase as
provided in Section 12.6(c), its "Registration Interest"), (iii) identify
the Public Appraiser selected by the Notice Partner(s) to make the
determination of Public Market Value and the Minimum Offering Amount (the
"First Public Appraiser") and (iv) set forth the First Public Appraiser's
estimate of the Minimum Offering Amount. If, during the period specified
above of any calendar year, one or more Registration Notices are timely
given as provided above, then each Partner that did not timely give a
Registration Notice will have until October 15th of the same calendar year
to give a Registration Notice, which Registration Notice shall contain only
the information required to be set forth in a Registration Notice by
clauses (i) and (ii) of the second sentence of this Section 12.6(a), and a
Partner giving such a Registration Notice shall be deemed to concur in the
selection of the First Public Appraiser made in the initial Registration
Notice given during the applicable calendar year. All Registration Notices
shall be deemed void if the aggregate Registration Interests specified in
such Registration Notices are less than the Minimum Offering Amount. If a
Registration Notice has been timely given in any calendar year and is not
deemed void pursuant to the previous sentence, then by October 31st of such
year, the Partnership Board shall inform the Partners of its selection of a
Public Appraiser (the "Second Public Appraiser"); provided that if the
Partnership Board has not timely designated the Second Public Appraiser,
then the Second Public Appraiser shall be the Public Appraiser proposed to
the Partnership Board by the General Partner (other than any Notice
Partner) that (together with its Controlled Affiliates) holds the largest
Voting Percentage Interest. For purposes of this Section 12.6 and Section
12.7, a "Public Appraiser" must be an investment banking firm of national
reputation, must not be an Interested Person with respect to any Partner,
and must be one of the ten leading investment banking firms based on
aggregate proceeds of public offerings of common stock in the United States
for which it acted as a managing underwriter during the preceding two full
calendar years. "Minimum Offering Amount" means the percentage (which shall
not be less than one percent (1%)) of the total equity of MajorCorp that
the First Public Appraiser and Second Public Appraiser jointly determine
would be necessary to effect a viable initial public offering and to result
in a sufficient public float for MajorCorp Stock to be actively traded and
to satisfy the applicable listing requirements for the Nasdaq National
Market or The New York Stock Exchange and any applicable market
capitalization requirements for use of the shortest form of registration
statement (excluding Form S-4 and Form S-8) then available for the
registration of a primary offering by an issuer of common stock under the
1933 Act (which form currently is Form S-3) assuming the satisfaction of
all other requirements, including any duration of public reporting
requirements.
(b) Determination of Public Market Value. The "Public Market
Value" of the Registration Interests of the Notice Partners shall equal the
aggregate cash proceeds, net of underwriters' fees, discounts and
commissions and other selling expenses customarily borne by selling
stockholders, that would be received by the Notice Partners from the sale
in an underwritten public offering registered under the 1933 Act of the
MajorCorp Stock issued in exchange for such Registration Interests if such
offering were carried out in an orderly manner over a period not exceeding
eighteen (18) months (excluding any changes in value of MajorCorp over such
time, but otherwise considering all factors that the Public Appraisers may
deem relevant). In determining the Public Market Value of the Registration
Interests, the Public Appraisers shall assume the conversion of the
Partnership to a corporation in accordance with Section 5.9 and the
consolidation of the assets of MinorCo with the Partnership in connection
therewith. The Public Market Value of the Registration Interests will be
determined in accordance with the procedures set forth in the second
paragraph of Section 11.4, substituting the term "Public Market Value" for
the term "Gross Appraised Value", the term "First Public Appraiser" for the
term "First Appraiser" and the term "Second Public Appraiser" for the term
"Second Appraiser." The Public Appraisers shall agree on the Minimum
Offering Amount. The fees and expenses of the Public Appraisers in making
such determination will be paid by the Partnership. Within five (5) days
after the final determination of Public Market Value, the Public Appraisers
shall provide written notice (the "PMV Notice") of such Public Market Value
and the Minimum Offering Amount to each Notice Partner and each other
Partner. The Public Market Value of each Notice Partner's Registration
Interest shall be its allocable share of the Public Market Value of the
Registration Interests.
(c) Offer. By notice given to the Partnership and each other
Partner (other than any Exclusive Limited Partner) within thirty (30) days
after the date of the PMV Notice, any Notice Partner (any such Notice
Partner to then be referred to as a "Registering Partner") may make an
offer (the "Registration Firm Offer") to sell to the other Partners
(including any Notice Partner who has not given a Registration Firm Offer
within the thirty (30) day period for the delivery of such Registration
Firm Offer but excluding any other Registering Partner and any Exclusive
Limited Partner) (the "Registration Offerees") its Registration Interest
for the Public Market Value of such Registration Interest. If the
Partnership receives (i) Registration Firm Offers from all of the Notice
Partners prior to the expiration of such thirty (30) day period or (ii)
Registration Firm Offers from at least one Notice Partner on or before the
thirtieth (30th) day after the date of the PMV Notice, the Partnership
shall promptly give notice (the "Firm Offer Commencement Notice") to each
Partner stating that such Registration Firm Offers have been delivered as
of the date of such Firm Offer Commencement Notice. If the aggregate
amount of Registration Interest(s) for which Registration Firm Offers are
given is less than the Minimum Offering Amount, then each Registering
Partner shall have the right to increase the Registration Interest so
offered by it by the amount by which the aggregate Registration Interest(s)
for which Registration Firm Offer(s) have previously been given is less
than the Minimum Offering Amount (which right as among the Registering
Partners shall be apportioned pro rata based upon the relative Registration
Interests of the Registering Partners unless otherwise agreed), by giving
notice to the Partnership Board and each other Partner amending its
Registration Firm Offer to effect such increase by the tenth (10th) day
following the date of the Firm Offer Commencement Notice; provided, that in
such event the Firm Offer Commencement Notice shall be deemed to have been
given as of the end of such ten (10) day period. If, as of the end of such
ten (10) day period, the aggregate Registration Interest(s) so offered
pursuant to the Registration Firm Offer(s), as so amended, are less than
the Minimum Offering Amount, then all of such Registration Firm Offers
shall be deemed to have been rejected and withdrawn.
(d) Registration Offer Period. Subject to the last sentence of
Section 12.6(c), each Registration Firm Offer shall be irrevocable for a
period (the "Registration Offer Period") ending at 11:59 p.m., local time
at the Partnership's principal place of business, on the thirtieth (30th)
day following the date of the Firm Offer Commencement Notice; provided that
if, as of the end of such period, at least one but fewer than all of the
Registration Offerees have accepted the Registration Firm Offer pursuant to
Section 12.6(e), the Registration Offer Period shall be extended for an
additional fifteen (15) days and any remaining Registration Offeree(s)
shall have the right to accept the Registration Firm Offer during such
fifteen (15) day period.
(e) Acceptance of Registration Firm Offer. At any time during
the Registration Offer Period (as extended by Section 12.6(d), if
applicable), any Registration Offeree may accept the Registration Firm
Offer as to all or any portion of the Registration Interest(s) covered
thereby, by giving notice of such acceptance to each Partner (other than
any Exclusive Limited Partner) which notice shall indicate the maximum
percentage of the Registration Interest of each Registering Partner that
such Registration Offeree is willing to purchase (the "purchase
commitment"); provided that if more than one Registration Interest is being
offered, such Registration Offeree must accept the Registration Firm Offer
as to the same percentage of the Registration Interest of each such
Registering Partner. If the aggregate purchase commitments made by
Registration Offerees accepting the Registration Firm Offer(s)
("Registration Accepting Offerees") exceed one hundred percent (100%) of
each Registration Interest, then, each Registration Accepting Offeree shall
purchase, and each Registering Partner shall sell to such Registration
Accepting Offeree, that portion of such Registering Partner's Registration
Interest that corresponds to the ratio of the Percentage Interest of such
Registration Accepting Offeree to the aggregate Percentage Interests of all
Registration Accepting Offerees; provided that if any Registration
Accepting Offeree's purchase commitment was for an amount less than its
proportionate share of the applicable Registration Interest as so
determined, then the portion of the Registration Interest not so committed
to be purchased by such Registration Accepting Offeree shall continue to be
allocated proportionally in the manner provided above in this sentence
among the other Registration Accepting Offerees until each has been
allocated, by such process of apportionment, a percentage of the
Registration Interest equal to the maximum percentage such Registration
Accepting Offeree committed to purchase or until the entire amount of each
Registration Interest has been allocated among the Registration Accepting
Offerees. Notwithstanding any purported acceptance of a Registration Firm
Offer, all Registration Firm Offers shall be deemed to be rejected by all
such Registration Accepting Offerees in their entirety if the portion not
accepted is in the aggregate greater than zero but less than the Minimum
Offering Amount; provided that all Registration Firm Offers will not be
deemed rejected in their entirety if, within ten (10) days after the
expiration of the Registration Offer Period, the Registration Accepting
Offerees increase or decrease their purchase commitments, by giving notice
to the Partnership Board and each other Partner amending their respective
purchase commitments to the extent required to effect any such increase or
decrease, as applicable, such that the amount accepted for purchase by the
Registration Accepting Offerees constitutes all of the Registration
Interest(s) or the amount not accepted equals or exceeds the Minimum
Offering Amount.
(f) Closing of Purchase Pursuant to Registration Firm Offer. If
the Registration Firm Offer(s) have been accepted in whole or in part in
accordance with the terms of Section 12.6(e), the Registering Partner(s)
shall give notice to such effect (the "Registration Sale Notice") to all
Registration Offerees within five (5) days after the end of the
Registration Offer Period. Unless the Registration Accepting Offerees and
the Registering Partner(s) otherwise agree, the closing of any purchase
pursuant to this Section 12.6 shall be held at the principal office of the
Partnership at 10:00 a.m. (local time at the place of closing) on the
first Business Day on or after the thirtieth (30th) day following the date
on which such Registration Sale Notice is given (subject to Section 11.5).
At the closing, each Registration Accepting Offeree shall (i) pay to each
Registering Partner an amount in cash or other immediately available funds
equal to at least one-third of that portion of the purchase price for the
applicable portion of the Registration Interest and Partner Loans of the
Registering Partner for which such Registration Accepting Offeree is liable
and (ii) issue to each Registering Partner a promissory note (the
"Registration Note") of the Registration Accepting Offeree or its
Controlled Affiliate in a principal amount equal to the remaining portion
of the purchase price for the applicable portion of the Registration
Interest and Partner Loans of the Registering Partner for which such
Registration Accepting Offeree is liable, and the Registering Partner shall
deliver to each Registration Accepting Offeree good title, free and clear
of any liens, claims, encumbrances, security interests or options (other
than those created by this Agreement and those securing financing obtained
by the Partnership), to the applicable portion of the Registration Interest
and Partner Loans thus purchased. The principal amount of the Registration
Note shall be payable in two equal annual installments beginning on the
first anniversary of the closing date under this Section 12.6(f), and shall
bear interest, payable quarterly, in arrears at the rate specified below
from the closing date until the principal amount thereof and all accrued
interest thereon is paid in full. The Registration Note will contain
customary terms, conditions and remedies, including an increased rate of
interest payable after a default in the payment of principal and/or
interest. The interest rate on the Registration Note shall be determined
in connection with the closing and shall be the average of the interest
rates determined independently by the First Public Appraiser and the Second
Public Appraiser as the rate that would be necessary to cause publicly
traded securities with terms, conditions and remedies comparable to the
Registration Note to trade at face value on a fully distributed basis.
Each Registration Accepting Offeree shall be liable to each Registering
Partner only for its allocable portion of the purchase price for the
Registration Interest and corresponding portion of such Registering
Partner's Partner Loans.
At the closing, the Partners shall execute such documents and
instruments of conveyance as may be necessary or appropriate to effectuate
the transactions contemplated hereby, including the Transfer of an
allocable portion of the Registration Interest and Partner Loans of each
Registering Partner to each of the Registration Accepting Offerees and the
assumption by each Registration Accepting Offeree of each Registering
Partner's obligations with respect to such portion of the Registering
Partner's Registration Interest Transferred to such Registration Accepting
Offeree. Each Partner and the Partnership shall bear its own costs of such
Transfer and closing, including attorneys' fees and filing fees.
In the event that any Registration Accepting Offeree shall fail to
perform its obligation to purchase hereunder on the scheduled closing date
and any other Registration Accepting Offeree(s) were prepared to perform
their respective obligations at the closing on such date (each a "Tendering
Offeree"), then the Tendering Offerees shall be entitled to elect by notice
given to the Partnership Board, the Registering Partner(s) and each other
Tendering Offeree within ten (10) days after the originally scheduled
closing date (the "extension period") to increase or decrease their
purchase commitments such that the amount accepted for purchase by the
Tendering Offerees constitutes all of the Registration Interest(s) or the
amount not accepted equals or exceeds the applicable Minimum Offering
Amount, and the closing of the purchase of the Registration Interest(s)
shall be delayed until the date determined in accordance with the following
sentence; provided, however, that the Registering Partner(s) will not be
obligated to sell any portion of their Registration Interest(s) or Partner
Loans if the amount of the Registration Interest(s) not accepted for
purchase after giving effect to such elections is greater than zero but
less than the applicable Minimum Offering Amount. If, after giving effect
to all elections timely made in accordance with the preceding sentence, the
Registering Partner(s) would be required to sell all or any portion of
their Registration Interest(s), then the closing of the purchase of such
Registration Interest(s) and Partner Loans shall be held (i) on the first
Business Day following the expiration of the extension period if no
Tendering Offeree has timely elected to increase its purchase commitment or
(ii) on the fifth (5th) Business Day following the expiration of the
extension period if any Tendering Offeree has timely elected to increase
its purchase commitment. If, pursuant to this paragraph, (x) any Tendering
Offeree decreases its purchase commitment or (y) the Registering Partner(s)
are not obligated to sell any portion of their Registration Interest(s) to
any Tendering Offeree, the eighteen (18) month period described in the last
two sentences of Section 12.6(g) shall be extended to account for the
number of days elapsed between the last day of the applicable Registration
Offer Period and the end of the extension period.
(g) Registration. If the Registration Firm Offer(s) in the
aggregate are for Registration Interest(s) that in the aggregate are equal
to or greater than the Minimum Offering Amount and are not accepted with
respect to all of the Registration Interest(s) in the manner provided in
Section 12.6(e), (i) the Partners will cause the Partnership to be
converted to corporate form in accordance with Section 5.9 no later than
the effective date of the registration contemplated hereunder and will
cause the Partnership and MajorCorp to register the shares of MajorCorp
Stock to be received by such Registering Partner in exchange for its
Registration Interest (other than any portion of such Registration Interest
purchased by the Registration Accepting Offerees pursuant to Sections
12.6(e) and (f)) for sale under the 1933 Act (and any applicable state
securities laws) in accordance with the offering contemplated hereunder and
(ii) subject to such registration, the Registering Partner will sell such
shares to the public in a broadly disseminated firm commitment underwritten
offering subject to customary cutbacks on a pro rata basis. MajorCorp
shall select the managing underwriter for such offering subject to the
approval of the Registering Partner(s) which approval shall not be
unreasonably withheld. To effectuate such offers, MajorCorp and the
Registering Partner(s) will enter into an underwriting agreement with such
managing underwriter on terms and conditions customary for underwriting
agreements in a firm commitment underwritten secondary offering. If the
first sentence of this Section 12.6(g) applies to any Registration Firm
Offer and for any reason the Partnership has not converted to corporate
form in accordance with Section 5.9 within eighteen (18) months from the
expiration of the Registration Offer Period, such Registering Partner's
right to Transfer its Registration Interest shall again be subject to the
restrictions set forth in this Section 12.6. If any shares of MajorCorp
Stock registered and offered pursuant to this Section 12.6(g) are not sold
within eighteen (18) months from the expiration of the Registration Offer
Period, any Transfer of such shares will be subject to the provisions of
the stockholders' agreement contemplated under Section 5.9(a).
(h) Restrictions on Notice. Subject to the provisions of Section
12.6(a), no notice initiating the procedures contemplated by this Section
12.6 may be given by any Partner while the Partnership is undertaking to
effect the registration of MajorCorp Stock pursuant to the exercise by any
Partner of its rights under this Section 12.6 in a prior year or after a
Liquidating Event has occurred. No notice initiating the procedures
contemplated by this Section 12.6 may be given by an Adverse Partner, and
no Registering Partner shall be required to offer any portion of its
Interest to an Adverse Partner during the period that the Partnership is
pursuing any remedy specified in Section 11.1 with respect to such Adverse
Partner.
(i) Right of First Refusal/Tagalong Rights. The provisions of
Sections 12.4 and 12.5 shall not apply to the purchase and sale of a
Registration Interest pursuant to this Section 12.6.
12.7 Right of First Offer.
If the Partnership is converted to corporate form pursuant to Section
12.6(g), the stockholders' agreement contemplated under Section 5.9(a)
shall incorporate the provisions of this Section 12.7, mutatis mutandis.
Any Partner (a "Selling Partner") that proposes to sell its shares of
MajorCorp Stock (i) in accordance with Rule 144 under the 1933 Act or Rule
145 under the 1933 Act (in accordance with the applicable provisions of
Rule 144) (or any successor to either of such Rules), in a transaction
that satisfies the manner of sale requirements of Rule 144 or Rule 145
(whether or not applicable to such sale) (a "Rule 144 Sale"), or (ii) in a
broadly disseminated Public Offering pursuant to a registration statement
filed under the 1933 Act (a "Registered Offering"), must first comply with
the requirements of this Section 12.7.
(a) Open Market Sales. Prior to any sale or disposition by a
Selling Partner of any of its shares of MajorCorp Stock in a Rule 144 Sale,
such Selling Partner shall give notice (a "Rule 144 Notice") to the Board
of Directors of MajorCorp and each other Partner (excluding any Partner
that was an Exclusive Limited Partner at the time the Partnership converted
to corporate form, the "Non-Selling Partners") of the number of shares of
MajorCorp Stock proposed to be sold and the intended manner of disposition.
The Rule 144 Notice shall constitute an irrevocable offer (a "Rule 144
Offer") by such Selling Partner to the Non-Selling Partners to sell the
number of shares of MajorCorp Stock so proposed to be sold at a price equal
to the Market Value of such shares determined as provided in Section
12.7(g).
(b) Registered Offerings. If, pursuant to the registration
rights agreement contemplated under Section 5.9(b) or otherwise, a Selling
Partner intends to sell any of its shares of MajorCorp Stock in a
Registered Offering, such Selling Partner shall first give notice to each
Non-Selling Partner (the "Secondary Registration Notice"). The Secondary
Registration Notice shall (i) specify the number of shares of MajorCorp
Stock proposed to be so registered, (ii) identify the Public Appraiser
selected by such Selling Partner to make the determination of the Minimum
Secondary Offering Amount, which Public Appraiser shall be reasonably
acceptable to MajorCorp, (iii) set forth the Public Appraiser's
determination of the Minimum Secondary Offering Amount (or state that such
Selling Partner has elected to waive the Minimum Secondary Offering Amount
limitations set forth in the following sentence and in Sections 12.7(d) and
12.7(e)), and (iv) set forth the intended method of distribution. The
shares of MajorCorp Stock so specified in the Secondary Registration Notice
shall not be less than the Minimum Secondary Offering Amount (if any)
specified in such Secondary Registration Notice. The Secondary
Registration Notice shall constitute an irrevocable offer (a "Registration
Offer") by such Selling Partner to each Non-Selling Partner to sell such
number of shares of MajorCorp Stock so proposed to be registered at a price
equal to the Market Value of such shares determined in accordance with
Section 12.7(g). "Minimum Secondary Offering Amount" means the number of
shares of MajorCorp Stock that the Public Appraiser selected by the Selling
Partner determines would be necessary to effect a viable secondary public
offering of the MajorCorp Stock considering all relevant factors, including
the intended method of distribution set forth in the Secondary Registration
Notice. Two or more Selling Partner(s) may jointly give a Secondary
Registration Notice.
(c) First Offer Period. A Rule 144 Offer or a Registration
Offer, as applicable, shall be irrevocable for a period (the "First Offer
Period") commencing on the date of delivery by the Selling Partner of the
applicable notice to the Non-Selling Partners and ending at 11:59 p.m.,
local time at MajorCorp's principal place of business, (i) with respect to
a Rule 144 Offer, on the fifth (5th) full Trading Day following the date of
the Rule 144 Notice, and (ii) with respect to a Registration Offer, on the
twentieth (20th) full Trading Day following the date of the Secondary
Registration Notice.
(d) Acceptance of Offers. At any time during the applicable
First Offer Period, any Non-Selling Partner may accept a Rule 144 Offer or
Registration Offer, as applicable, as to all or any portion of the shares
of MajorCorp Stock covered by such Rule 144 Offer or Registration Offer, as
applicable, by giving notice of such acceptance to the applicable Selling
Partner and each other Non-Selling Partner, which notice shall indicate the
maximum number of shares of MajorCorp Stock that such Non-Selling Partner
is willing to purchase (the "purchase commitment") and, with respect to a
Registration Offer in which the aggregate Market Value of the shares of
MajorCorp Stock proposed to be registered exceeds $150,000,000, if
applicable, identify the Public Appraiser selected by such Non-Selling
Partner to determine the interest rate of the Accepting Partner Note. If
the aggregate purchase commitments made by Non-Selling Partners accepting a
Rule 144 Offer or Registration Offer, as applicable ("Accepting Partners"),
exceed the number of shares of MajorCorp Stock covered by such Rule 144
Offer or Registration Offer, as applicable, then each Accepting Partner
shall purchase, and the Selling Partner shall sell to such Accepting
Partner, that portion of the number of shares of MajorCorp Stock covered by
such Rule 144 Offer or Registration Offer, as applicable, that corresponds
to the ratio of the Percentage Interest of such Accepting Partner to the
aggregate Percentage Interests of all Accepting Partners; provided that if
any Accepting Partner's purchase commitment was for an amount less than its
proportionate share of the number of shares of MajorCorp Stock as so
determined, then the number of shares of MajorCorp Stock not so committed
to be purchased shall continue to be allocated proportionally in the manner
provided above in this sentence among the other Accepting Partners until
each has been allocated, by such process of apportionment, a number of
shares of MajorCorp Stock equal to the maximum number of shares such
Accepting Partner committed to purchase or until all of the shares of
MajorCorp Stock covered by such Rule 144 Offer or Registration Offer, as
applicable, have been allocated among the Accepting Partners.
Notwithstanding any purported acceptance of a Registration Offer, the
Registration Offer shall be deemed to be rejected by all such Accepting
Partners in their entirety if the portion not accepted is in the aggregate
greater than zero but less than the Minimum Secondary Offering Amount;
provided that such Registration Offer will be deemed accepted if, within
ten (10) days after the expiration of the First Offer Period, the Accepting
Partners increase or decrease their purchase commitments, by giving notice
to the Board of Directors of MajorCorp and each other Partner amending
their respective purchase commitments to the extent required to effect any
such increase or decrease, as applicable, such that the amount accepted for
purchase by the Accepting Partners constitutes all of the shares of
MajorCorp Stock covered by such Registration Offer or the amount not
accepted equals or exceeds the Minimum Secondary Offering Amount.
(e) Closing of Purchase Pursuant to First Offer. If the Rule 144
Offer or Registration Offer, as applicable has been accepted in whole or in
part in accordance with the terms of Section 12.7(d), the Selling Partner
shall give notice to such effect (the "First Offer Sale Notice") to all
Non-Selling Partners within five (5) days after the end of the applicable
First Offer Period. Unless the Accepting Partners and the Selling Partner
otherwise agree, the closing of any purchase pursuant to this Section 12.7
shall be held at the principal office of MajorCorp at 10:00 a.m. (local
time at the place of closing) on the first Business Day on or after (x)
with respect to a Rule 144 Offer, the fifth (5th) Business Day following
the date on which the First Offer Sale Notice is given, and (y) with
respect to a Registration Offer, the thirtieth (30th) day following the
date on which the First Offer Sale Notice is given. At the closing, each
Accepting Partner shall (i) with respect to a Rule 144 Offer, pay to the
Selling Partner an amount in cash or other immediately available funds
equal to that portion of the purchase price for the shares of MajorCorp
Stock of the Selling Partner for which such Accepting Partner is liable,
and (ii) with respect to a Registration Offer, (A) if the aggregate Market
Value of the shares of MajorCorp Stock covered by the applicable
Registration Offer exceeds $150,000,000, (1) pay to the Selling Partner an
amount in cash or other immediately available funds equal to at least one-
third of that portion of the purchase price for the shares of MajorCorp
Stock of the Selling Partner for which such Accepting Partner is liable and
(2) issue to the Selling Partner a promissory note (an "Accepting Partner
Note") of such Non-Selling Partner or its Controlled Affiliate in a
principal amount equal to the remaining portion of the purchase price for
the shares of MajorCorp Stock of the Selling Partner for which such
Accepting Partner is liable, or (B) if the aggregate Market Value of the
shares of MajorCorp Stock covered by the applicable Registration Offer is
equal to or less than $150,000,000, pay to the Selling Partner an amount in
cash or other immediately available funds equal to that portion of the
purchase price for the shares of MajorCorp Stock of the Selling Partner for
which such Accepting Partner is liable, and the Selling Partner shall
deliver to each Accepting Partner good title, free and clear of any liens,
claims, encumbrances, security interests or options (other than those
created by any stockholders' agreement contemplated under Section 5.9(a))
to the shares of MajorCorp Stock thus purchased. The principal amount of
each Accepting Partner Note shall be payable in two equal annual
installments beginning on the first anniversary of the closing date under
this Section 12.7(e), and shall bear interest, payable quarterly, in
arrears at the rate specified below from the closing date until the
principal amount thereof and all accrued interest thereon is paid in full.
The Accepting Partner Note will contain customary terms, conditions and
remedies, including an increased rate of interest payable after a default
in the payment of principal and/or interest. The interest rate on the
Accepting Partner Note shall be determined in connection with the closing
and shall be the average of the interest rates determined independently by
the Public Appraiser selected by the Selling Partner and the Public
Appraiser selected by the applicable Accepting Partner as the rate that
would be necessary to cause publicly traded securities with terms,
conditions and remedies comparable to the Accepting Partner Note to trade
at face value on a fully distributed basis. Each Accepting Partner shall
be liable to the Selling Partner only for its allocable portion of the
purchase price for the shares of MajorCorp Stock purchased hereunder. The
provisions of the stockholders' agreement contemplated under Section 5.9(a)
will incorporate provisions comparable to this Section 12.7 and additional
appropriate provisions that will address the Partners' relative rights and
obligations in the event the circumstances described in Section 11.5
prevent the Accepting Partners from purchasing any shares of MajorCorp
Stock offered by a Selling Partner hereunder within the time periods
specified in this Section 12.7(e).
At the closing, the Partners and MajorCorp shall execute such
documents and instruments of conveyance as may be necessary or appropriate
to effectuate the transactions contemplated hereby, including the Transfer
of the shares of MajorCorp Stock of the Selling Partner to the Accepting
Partners. Each Partner and MajorCorp shall bear its own costs of such
Transfer and closing, including attorneys' fees and filing fees. In the
event that any Accepting Partner shall fail to perform its obligation to
purchase hereunder on the scheduled closing date and any other Accepting
Partner(s) were prepared to perform their respective obligations at the
closing on such date (each a "Tendering Partner"), then the Tendering
Partners shall be entitled to elect by notice given to the Board of
Directors of MajorCorp, the Selling Partner(s) and each other Tendering
Partner within ten (10) days after the originally scheduled closing date
(the "extension period") to increase or decrease their purchase commitments
such that the amount accepted for purchase by the Tendering Partners
constitutes all of the shares of MajorCorp Stock offered or the amount not
accepted equals or exceeds the applicable Minimum Secondary Offering
Amount, and the closing of the purchase of the shares of MajorCorp Stock
shall be delayed until the date determined in accordance with the following
sentence; provided, however, that the Selling Partner(s) will not be
obligated to sell any portion of their shares of MajorCorp Stock if the
amount of the shares of MajorCorp Stock not accepted for purchase after
giving effect to such elections is greater than zero but less than the
applicable Minimum Secondary Offering Amount. If, after giving effect to
all elections timely made in accordance with the preceding sentence, the
Selling Partner(s) would be required to sell all or any portion of their
shares of MajorCorp Stock, then the closing of the purchase of such shares
of MajorCorp Stock shall be held (i) on the first Business Day following
the expiration of the extension period if no Tendering Partner has timely
elected to increase its purchase commitment or (ii) on the fifth (5th)
Business Day following the expiration of the extension period if any
Tendering Partner has timely elected to increase its purchase commitment.
(f) Sale if First Offer Rejected. Any shares of MajorCorp Stock
not purchased in the manner provided in this Section 12.7 (including any
shares that are not purchased because of the failure of the Accepting
Partners to close any purchase in accordance with Section 12.7(e)), but
subject to the last sentence of this Section 12.7(f), may be sold during
the period described below (the "Permitted Period") in the manner described
in the Rule 144 Notice or pursuant to the intended method of distribution
set forth in the Secondary Registration Notice, as applicable. Except as
otherwise provided in the following sentence, the Permitted Period shall be
the applicable of (i) with respect to shares of MajorCorp Stock covered by
a Rule 144 Notice, twenty (20) full Trading Days after the last day of the
applicable First Offer Period, or (ii) with respect to shares of MajorCorp
Stock covered by a Secondary Registration Notice, one hundred eighty (180)
days after the last day of the applicable First Offer Period (in each case
commencing on the first day following the applicable First Offer Period),
provided that such 180-day period may be extended for an additional period
of up to ninety (90) days if at the end of such 180-day period the Selling
Partner has caused a registration statement to be filed by MajorCorp with
the Securities and Exchange Commission relating to such Registered Offering
and is actively pursuing the consummation of such Registered Offering in
good faith. Notwithstanding the foregoing, if, pursuant to the third
paragraph of Section 12.7(e), (x) any Tendering Partner decreases its
purchase commitment or (y) the Selling Partner is not obligated to sell any
portion of its shares of MajorCorp Stock to any Tendering Partner, the
Permitted Period shall be extended to account for the number of days
elapsed between the last day of the applicable First Offer Period and the
end of the extension period under Section 12.7(e). Any such shares of
MajorCorp Stock not sold within the applicable Permitted Period shall again
be subject to the restrictions set forth in this Section 12.7.
(g) Market Value. The "Market Value" of any shares of MajorCorp
Stock purchased pursuant to this Section 12.7 shall be (i) with respect to
shares of MajorCorp Stock offered pursuant to a Rule 144 Offer, an amount
equal to the product of (A) the number of shares of MajorCorp Stock offered
times (B) the average of the last reported sales prices, regular way, for
the five (5) full Trading Days preceding the date of the Rule 144 Notice as
reported on the principal national securities exchange on which MajorCorp
Stock is listed or admitted for trading or, if MajorCorp Stock is not
listed or admitted for trading on any national securities exchange, on the
Nasdaq National Market or (ii) with respect to shares of MajorCorp Stock
offered pursuant to a Registration Offer, the product of (A) the number of
shares of MajorCorp Stock offered times (B) the average of the last
reported sales prices, regular way, for the twenty (20) full Trading Days
preceding the date of the Secondary Registration Notice as reported on the
principal national securities exchange on which MajorCorp Stock is listed
or admitted for trading or, if MajorCorp Stock is not listed or admitted
for trading on any national securities exchange, on the Nasdaq National
Market.
12.8 Prohibited Dispositions.
Any purported Disposition of all or any part of an Interest that is
not a Permitted Transfer shall be null and void and of no force or effect
whatever; provided that, if the Partnership is required to recognize a
Disposition that is not a Permitted Transfer (or if the Partnership Board,
in its sole discretion, elects to recognize a Disposition that is not a
Permitted Transfer), the Interest Disposed of shall be strictly limited to
the transferor's rights to allocations and distributions as provided by
this Agreement with respect to the Transferred Interest, which allocations
and distributions may be applied (without limiting any other legal or
equitable rights of the Partnership) to satisfy any debts, obligations, or
liabilities for damages that the transferor or transferee of such Interest
may have to the Partnership.
12.9 Representations Regarding Transfers.
Each Partner hereby represents and warrants to the Partnership and
the other Partners that such Partner's acquisition of Interests hereunder
is made as principal for such Partner's own account and not for resale or
distribution of such Interests.
12.10 Distributions and Allocations in Respect of Transferred
Interests.
If any Interest is Transferred during any Fiscal Year in compliance
with the provisions of this Section 12, Profits, Losses, each item thereof,
and all other items attributable to the Transferred Interest for such
Fiscal Year shall be divided and allocated between the transferor and the
transferee by taking into account their varying Percentage Interests during
the Fiscal Year in accordance with Code Section 706(d), using any
conventions permitted by law and selected by the Partnership Board. All
distributions on or before the date of such Transfer shall be made to the
transferor, and all distributions thereafter shall be made to the
transferee. Solely for purposes of making such allocations and
distributions, the Partnership shall recognize such Transfer not later than
the end of the calendar month during which it is given notice of such
Transfer, provided that, if the Partnership is given notice of a Transfer
at least ten (10) Business Days prior to the Transfer, the Partnership
shall recognize such Transfer as of the date of such Transfer, and provided
further that if the Partnership does not receive a notice stating the date
such Interest was Transferred and such other information as the Partnership
Board may reasonably require within thirty (30) days after the end of the
Fiscal Year during which the Transfer occurs, then all such items shall be
allocated, and all distributions shall be made, to the Person who,
according to the books and records of the Partnership, was the owner of the
Interest on the last day of such Fiscal Year. Neither the Partnership nor
the Partnership Board shall incur any liability for making allocations and
distributions in accordance with the provisions of this Section 12.10,
whether or not the Partnership Board or the Partnership has knowledge of
any Transfer of ownership of any Interest.
SECTION 13. CONVERSION OF INTERESTS
13.1 Termination of Status as General Partner.
(a) A General Partner shall cease to be a General Partner upon
the first to occur of (i) the Transfer of such Partner's entire Interest as
a Partner in a Permitted Transfer (in which event the transferee of such
Interest shall be admitted as a successor General Partner and a Limited
Partner upon compliance with Section 12.3), (ii) the Unanimous Vote of the
Partnership Board to approve a request by such General Partner to withdraw,
(iii) any Adverse Act with respect to such Partner, (iv) such Partner's
failure to satisfy the Minimum Ownership Requirement or (v) in the case of
Comcast only, the occurrence of any of the events described in Section
6.4(f) that cause Comcast to become an Exclusive Limited Partner. In the
event a Person ceases to be a General Partner pursuant to clauses (ii),
(iii), (iv) or (v), the Interest of such Person as a General Partner shall
automatically and without any further action by the Partners be converted
into an Interest solely as a Limited Partner, and such Partner shall
thereafter be an Exclusive Limited Partner.
(b) The Partners intend that the Partnership not dissolve as a
result of the cessation of any Person's status as a General Partner;
provided, however, that if it is determined by a court of competent
jurisdiction that the Partnership has dissolved, the provisions of Section
14.1 shall govern.
13.2 Restoration of Status as General Partner.
An Exclusive Limited Partner whose rights to representation on the
Partnership Board have been restored as provided in Section 5.1(c) shall be
restored to the status of a General Partner and its Interest shall
thereafter be deemed held in part as a General Partner and in part as a
Limited Partner as provided in Section 2.1. If Comcast becomes an
Exclusive Limited Partner pursuant to Section 6.4(f), it shall not be
entitled to be restored to the status of General Partner except as
expressly provided in such Section.
SECTION 14. DISSOLUTION AND WINDING UP
14.1 Liquidating Events.
(a) In General. Subject to Section 14.1(b), the Partnership
shall dissolve and commence winding up and liquidating upon the first to
occur of any of the following ("Liquidating Events"):
(i) The sale of all or substantially all of the
Property;
(ii) A Unanimous Vote of the Partnership Board to
dissolve, wind up, and liquidate the Partnership in accordance with Section
5.1;
(iii) The failure of the General Partners to resolve a
Deadlock Event as provided in Section 5.8(a)(iii) unless the Partnership
Board determines by Required Majority Vote not to dissolve; and
(iv) The withdrawal of a General Partner, the assignment
by a General Partner of its entire Interest or any other event that causes
a General Partner to cease to be a general partner under the Act, provided
that any such event shall not constitute a Liquidating Event if the
Partnership is continued pursuant to this Section 14.1.
The Partners hereby agree that, notwithstanding any provision of the Act or
the Delaware Uniform Partnership Act, the Partnership shall not dissolve
prior to the occurrence of a Liquidating Event. Upon the occurrence of any
event set forth in Section 14.1(a)(iv), the Partnership shall not be
dissolved or required to be wound up if (x) at the time of such event there
is at least one remaining General Partner, or (y) if there is not at least
one remaining General Partner, within ninety (90) days after such event all
remaining Partners agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date of such event,
of one or more additional General Partners.
(b) Special Rules. The events described in Sections
14.1(a)(ii), 14.1(a)(iii) or 14.1(a)(iv) shall not constitute Liquidating
Events until such time as the Partnership is otherwise required to
dissolve, and commence winding up and liquidating, in accordance with
Section 14.7.
14.2 Winding Up.
(a) Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its
affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors and Partners and neither the Partnership Board nor
any Partner shall take any action that is inconsistent with, or not
appropriate for, the winding up of the Partnership's business and affairs.
To the extent not inconsistent with the foregoing, this Agreement shall
continue in full force and effect until such time as the Partnership's
Property has been distributed pursuant to this Section 14.2 and the
Certificate has been cancelled in accordance with the Act. The Partnership
Board shall be responsible for overseeing the winding up and dissolution of
the Partnership, shall take full account of the Partnership's liabilities
and Property, shall cause the Partnership's Property to be liquidated as
promptly as is consistent with obtaining the fair value thereof, and shall
cause the proceeds therefrom, to the extent sufficient therefor, to be
applied and distributed in the following order:
(i) First, to the payment of all of the Partnership's
debts and liabilities (other than Partner Loans) to creditors other than
the Partners and to the payment of the expenses of liquidation;
(ii) Second, to the payment of all Partner Loans and all
of the Partnership's debts and liabilities to the Partners in the following
order and priority:
(A) first, to the payment of all debts and
liabilities owed to any Partner other than in respect of Partner Loans;
(B) second, to the payment of all accrued and
unpaid interest on Partner Loans, such interest to be paid to each Partner
and its Affiliates (considered as a group) pro rata in proportion to the
interest owed to each such group; and
(C) third, to the payment of the unpaid principal
amount of all Partner Loans, such principal to be paid to each Partner and
its Affiliates (considered as a group) pro rata in proportion to the
outstanding principal owed to each such group; and
(iii) The balance, if any, to the Partners in accordance
with their Capital Accounts, after giving effect to all contributions,
distributions, and allocations for all periods.
(b) In the discretion of the Partnership Board, a portion of
the distributions that would otherwise be made to the Partners pursuant to
this Section 14.2 may be:
(i) distributed to a trust established for the benefit of
the Partners for the purposes of liquidating Partnership assets, collecting
amounts owed to the Partnership, and paying any contingent or unforeseen
liabilities or obligations of the Partnership or of the General Partners
arising out of or in connection with the Partnership. The assets of any
such trust shall be distributed to the Partners from time to time, in the
reasonable discretion of the Partnership Board in the same proportions as
the amount distributed to such trust by the Partnership would otherwise
have been distributed to the Partners pursuant to Section 14.2; or
(ii) withheld to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the
unrealized portion of any installment obligations owed to the Partnership,
provided that such withheld amounts shall be distributed to the Partners as
soon as practicable.
Each Partner and each of its Affiliates (as to Partner Loans only) agrees
that by accepting the provisions of this Section 14.2 setting forth the
priority of the distribution of the assets of the Partnership to be made
upon its liquidation, such Partner or Affiliate expressly waives any right
which it, as a creditor of the Partnership, might otherwise have under the
Act to receive distributions of assets pari passu with the other creditors
of the Partnership in connection with a distribution of assets of the
Partnership in satisfaction of any liability of the Partnership, and hereby
subordinates to said creditors any such right.
14.3 Compliance With Certain Requirements of Regulations; Deficit
Capital Accounts.
In the event the Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), (a) distributions shall be made
pursuant to this Section 14 to the Partners who have positive Capital
Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2),
and (b) if any Partner's Capital Account has any deficit balance (after
giving effect to all contributions, distributions, and allocations for all
taxable years, including the year during which such liquidation occurs),
such Partner shall contribute to the capital of the Partnership the amount
necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3); provided, however, that the
obligation of an Exclusive Limited Partner to contribute capital pursuant
to this sentence shall be limited to the amount of the deficit balance, if
any, that existed in such Exclusive Limited Partner's Capital Account at
the time it became an Exclusive Limited Partner (taking into account for
this purpose any revaluation of Partnership assets pursuant to subparagraph
(ii)(D) of the definition of Gross Asset Value made as a result of such
Partner's becoming an Exclusive Limited Partner).
14.4 Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Section 14, in the event
the Partnership is liquidated within the meaning of Section 1.704-
1(b)(2)(ii)(g) of the Regulations but no Liquidating Event has occurred,
the Property shall not be liquidated, the Partnership's liabilities shall
not be paid or discharged, and the Partnership's affairs shall not be wound
up. Instead, solely for federal income tax purposes, the Partnership shall
be deemed to have distributed the Property in kind to the Partners, who
shall be deemed to have assumed and taken subject to all Partnership
liabilities, all in accordance with their respective Capital Accounts and,
if any Partner's Capital Account has a deficit balance that such Partner
would be required to restore pursuant to Section 14.3 (after giving effect
to all contributions, distributions, and allocations for all Fiscal Years,
including the Fiscal Year during which such liquidation occurs), such
Partner shall contribute to the capital of the Partnership the amount
necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3). Immediately thereafter, the
Partners shall be deemed to have recontributed the Property to the
Partnership, which shall be deemed to have assumed and taken subject to all
such liabilities.
14.5 Rights of Partners.
Except as otherwise provided in this Agreement, (a) each Partner
shall look solely to the assets of the Partnership for the return of its
Capital Contributions and shall have no right or power to demand or receive
property other than cash from the Partnership, and (b) no Partner shall
have priority over any other Partner as to the return of its Capital
Contributions, distributions, or allocations. If, after the Partnership
ceases to exist as a legal entity, a Partner is required to make a payment
to any Person on account of any activity carried on by the Partnership,
such paying Partner shall be entitled to reimbursement from each other
Partner consistent with the manner in which the economic detriment of such
payment would have been borne had the amount been paid by the Partnership
immediately prior to its cessation.
14.6 Notice of Dissolution.
In the event a Liquidating Event occurs or an event described in
Section 14.1(a)(iv) occurs that would, but for provisions of Section 14.1,
result in a dissolution of the Partnership, the Partnership Board shall,
within thirty (30) days thereafter, provide written notice thereof to each
of the Partners.
14.7 Buy/Sell Arrangements.
(a) As soon as practicable after the occurrence of an event
described in Section 14.1(a)(ii), 14.1(a)(iii) or, subject to the proviso
contained therein, Section 14.1(a)(iv), the Net Equity of the Interests
shall be determined in accordance with Section 11.3 and notice of such
determination shall be delivered to each Partner. For purposes of such
determination of Net Equity pursuant to this Section 14.7(a), the General
Partner that (together with its Controlled Affiliates) holds the largest
Voting Percentage Interest shall designate the First Appraiser as required
by Section 11.4 within thirty (30) days after an occurrence of the
applicable Liquidating Event, and the General Partner that (together with
its Controlled Affiliates) holds the smallest Voting Percentage Interest
shall appoint the Second Appraiser within ten (10) Business Days of
receiving notice of the appointment of the First Appraiser.
(b) Prior to 5:00 p.m. (local time at the principal office of
the Partnership) on the first Business Day on or after the thirtieth (30th)
day following its receipt of notice of the determination of Net Equity
pursuant to Section 14.7(a), each General Partner (individually or together
with one or more other General Partners) must submit sealed statements (the
"Offer Statement") to the Chief Executive Officer notifying the Chief
Executive Officer in writing either (i) that such General Partner or group
of General Partners offers to sell all of its Interest(s), or (ii) that
such General Partner or group of General Partners offers to buy all of the
other Partners' Interests. Except as provided in Section 14.7(g), each
Exclusive Limited Partner shall be automatically deemed to have offered to
sell its Interest hereunder and shall for all purposes under this Section
14.7 be treated as a General Partner that has offered to sell its Interest.
The Chief Executive Officer shall provide a copy of each Offer Statement to
each of the Partners within five (5) days following the last day for
submission of the Offer Statements.
(c) If the Offer Statements indicate that one General Partner
or group of General Partners wishes to buy and all of the other Partners
wish to sell, the Net Equity of the Interests shall thereupon be the price
at which the Interests will be sold.
(d) If the Offer Statements indicate that all Partners wish to
sell their Interests, the Partnership shall dissolve, and commence winding
up and liquidating in accordance with Section 14.2.
(e) If the Offer Statements indicate that more than one
General Partner or group of General Partners wishes to purchase the other
Partners' Interests, then the General Partners or groups of General
Partners wishing to purchase (each General Partner or group of Partners, a
"Bidding Partner") shall begin the bidding pro-cess described below and the
highest bidder (determined as the amount bid per each one percent (1%)
Percentage Interest in the Partnership) shall buy all the other Partners'
Interests. Each of the Bidding Partners may make an initial offer (an
"Initial Offer") to purchase the Interests of the other Partners, which
offer may not be less than the Net Equity of the Interests to be purchased
and shall be made within fifteen (15) days of the last day for submission
of the Offer Statements. If no Bidding Partner makes an Initial Offer by
5:00 p.m. (local time at the principal office of the Partnership) on the
last day of such fifteen (15) day period, the Partnership shall dissolve,
and commence winding up and liquidating in accordance with Section 14.2.
If only one Bidding Partner timely makes an Initial Offer, such offer shall
thereupon be the price at which all other Partners' Interests shall be sold
to such Bidding Partner. If more than one Bidding Partner timely makes an
Initial Offer, each such Bidding Partner must respond within fifteen (15)
days of the last day of the 15-day period for submitting such Initial
Offers either by accepting the highest of such Initial Offers or delivering
a counterof-fer to purchase the Interests of the other Partners. A
counteroffer must be at least one percent (1%) higher than the prior offer
of which the Bidding Partner has received notice. The bidding process
shall continue until all Bidding Partners have either responded by
accepting the highest immediate prior of-fer or failed to make a timely
response, in which case the highest im-mediate prior offer shall be deemed
accepted. An acceptance of an offer shall, if the bidding process
thereafter continues, be deemed to be an acceptance of the highest
succeeding counteroffer. For purposes of this Section 14.7, all offers,
acceptances and counteroffers must be in writing, in a form which is firm
and binding and delivered to the Chief Executive Officer at the principal
office of the Partnership (who shall promptly notify each other Partner of
the identity of the bidder and the amount of such bid); all offers must be
responded to within fifteen (15) days of the last day of the immediately
preceding 15-day period for submitting offers. If no response to an offer
or counteroffer is re-ceived by 5:00 p.m. (local time at the principal
office of the Partnership) on the last day of such fifteen (15) day period,
the highest immediate prior offer shall be deemed to be accepted.
(f) The closing of the purchase and sale of each selling
Partner's Interest, MinorCo Interest and Partner Loans shall occur at the
principal office of the Partnership at 10:00 a.m. (local time at the place
of the closing) on the first Business Day occurring on or after the
thirtieth (30th) day following the date of the final determination of the
purchase price pursuant to Section 14.7(e) (subject to Section 11.5). At
the closing, the purchasing Partner(s) shall pay to each selling Partner,
by cash or other immediately available funds, the purchase price for such
selling Partners' Interest, MinorCo Interest and Partner Loans, and the
selling Partner shall deliver to the purchasing Partner(s) good title, free
and clear of any liens, claims, encumbrances, security interests or options
(other than those created by this Agreement and those securing financing
obtained by the Partnership), to the selling Partner's Interest, MinorCo
Interest and Partner Loans thus purchased.
At the closing, the Partners shall execute such documents and
instruments of conveyance as may be necessary or appropriate to effectuate
the transactions contemplated hereby, including the Transfer of the
Interests, MinorCo Interests and Partner Loans of the selling Partner(s) to
the purchasing Partner(s) and the assumption by each purchasing Partner of
the selling Partner's obligations with respect to the selling Partner's
Interest Transferred to the purchasing Partner(s). Each Partner shall bear
its own costs of such Transfer and closing, including attorneys' fees and
filing fees. The costs of determining Net Equity shall be borne by the
Partners (pro rata based on their respective Percentage Interests as of the
occurrence of the Liquidating Event).
(g) Solely for the purposes of this Section 14.7, Comcast will
have the same rights and obligations as a General Partner hereunder even if
it has become an Exclusive Limited Partner under Section 6.4(f) so long as
Comcast would not otherwise then be an Exclusive Limited Partner under
Section 13.1(a).
SECTION 15. MISCELLANEOUS
15.1 Notices.
Any notice, payment, demand, or communication required or permitted
to be given by any provision of this Agreement shall be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as follows, or to
such other address or number as such Person may from time to time specify
by notice to the Partners:
(a) If to the Partnership, to the address or number set forth
on Schedule 2.2;
(b) If to a Partner or its designated Representative(s), to
the address or number set forth in Schedule 2.2; and
(c) If to the Partnership Board, to the Partnership and to
each General Partner and its designated Representative(s).
Any Person may from time to time specify a different address by notice to
the Partnership and the Partners. All notices and other communications
given to a Person in accordance with the provisions of this Agreement shall
be deemed to have been given and received (i) four (4) Business Days after
the same are sent by certified or registered mail, postage prepaid, return
receipt requested, (ii) when delivered by hand or transmitted by facsimile
(with acknowledgment received and, in the case of a facsimile only, a copy
of such notice is sent no later than the next Business Day by a reliable
overnight courier service, with acknowledgment of receipt) or (iii) one (1)
Business Day after the same are sent by a reliable overnight courier
service, with acknowledgment of receipt.
15.2 Binding Effect.
Except as otherwise provided in this Agreement, this Agreement shall
be binding upon and inure to the benefit of the Partners and their
respective successors, transferees, and assigns.
15.3 Construction.
This Agreement shall be construed simply according to its fair
meaning and not strictly for or against any Partner.
15.4 Time.
Time is of the essence with respect to this Agreement.
15.5 Table of Contents; Headings.
The table of contents and section and other headings contained in
this Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement.
15.6 Severability.
Every provision of this Agreement is intended to be severable. If
any term or provision hereof is illegal, invalid or unenforceable for any
reason whatsoever, that term or provision will be enforced to the maximum
extent permissible so as to effect the intent of the Partners, and such
illegality, invalidity or unenforceability shall not affect the validity or
legality of the remainder of this Agreement. If necessary to effect the
intent of the Partners, the Partners will negotiate in good faith to amend
this Agreement to replace the unenforceable language with enforceable
language which as closely as possible reflects such intent.
15.7 Incorporation by Reference.
Every exhibit and other appendix (other than schedules) attached to
this Agreement and referred to herein is not incorporated in this Agreement
by reference unless this Agreement expressly otherwise provides.
15.8 Further Action.
Each Partner, upon the reasonable request of the Partnership Board,
agrees to perform all further acts and execute, acknowledge, and deliver
any documents which may be reasonably necessary, appropriate, or desirable
to carry out the intent and purposes of this Agreement.
15.9 Governing Law.
The internal laws of the State of- Delaware (without regard to
principles of conflict of law) shall govern the validity of this Agreement,
the construction of its terms, and the interpretation of the rights and
duties of the Partners.
15.10 Waiver of Action for Partition; No ▇▇▇▇ For Partnership
Accounting.
Each Partner irrevocably waives any right that it may have to
maintain any action for partition with respect to any of the Property;
provided that the foregoing shall not be construed to apply to any action
by a Partner for the enforcement of its rights under this Agreement. Each
Partner waives its right to seek a court decree of dissolution (other than
a dissolution in accordance with Section 14) or to seek appointment of a
court receiver for the Partnership as now or hereafter permitted under
applicable law. To the fullest extent permitted by law, each Partner
covenants that it will not (except with the consent of the Partnership
Board) file a ▇▇▇▇ for Partnership accounting.
15.11 Counterpart Execution.
This Agreement may be executed in any number of counterparts with the
same effect as if all the Partners had signed the same document. All
counterparts shall be construed together and shall constitute one
agreement.
15.12 Sole and Absolute Discretion.
Except as otherwise provided in this Agreement, all actions which the
Partnership Board may take and all determinations which the Partnership
Board may make pursuant to this Agreement may be taken and made at the sole
and absolute discretion of the Partnership Board.
15.13 Specific Performance.
Each Partner agrees with the other Partners that the other Partners
would be irreparably damaged if any of the provisions of this Agreement are
not performed in accordance with their specific terms and that monetary
damages would not provide an adequate remedy in such event. Accordingly,
in addition to any other remedy to which the nonbreaching Partners may be
entitled, at law or in equity, the nonbreaching Partners shall be entitled
to injunctive relief to prevent breaches of this Agreement and specifically
to enforce the terms and provisions hereof.
15.14 Entire Agreement.
The provisions of this Agreement set forth the entire agreement and
understanding between the Partners as to the subject matter hereof and
supersede all prior agreements, oral or written, and other communications
between the Partners relating to the subject matter hereof.
15.15 Limitation on Rights of Others.
Nothing in this Agreement, whether express or implied, shall be
construed to give any Person other than the Partners any legal or equitable
right, remedy or claim under or in respect of this Agreement.
15.16 Waivers; Remedies.
The observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) by the party or parties entitled to enforce such term, but
any such waiver shall be effective only if in a writing signed by the party
or parties against which such waiver is to be asserted. Except as
otherwise provided herein, no failure or delay of any Partner in exercising
any power or right under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.
15.17 Jurisdiction; Consent to Service of Process.
(a) Each Partner hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State court sitting in the County of New York or any Federal
court of the United States of America sitting in the Southern District of
New York, and any appellate court from any such court, in any suit, action
or proceeding arising out of or relating to the Partnership or this
Agreement, or for recognition or enforcement of any judgment, and each
Partner hereby irrevocably and unconditionally agrees that all claims in
respect of any such suit, action or proceeding may be heard and determined
in such New York State court or, to the extent permitted by law, in such
Federal court.
(b) Each Partner hereby irrevocably and unconditionally
waives, to the fullest extent it may legally do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to the Partnership or this Agreement
in any New York State court sitting in the County of New York or any
Federal court sitting in the Southern District of New York. Each Partner
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court and further waives the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such Partner.
(c) Each Partner irrevocably consents to service of process in
the manner provided for the giving of notices pursuant to this Agreement,
provided that such service shall be deemed to have been given only when
actually received by such Partner. Nothing in this Agreement shall affect
the right of a party to serve process in any other manner permitted by law.
15.18 Waiver of Jury Trial.
Each Partner 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 the Partnership or this
Agreement.
15.19 No Right of Set-Off.
No Partner shall be entitled to offset against any of its financial
obligations to the Partnership under this Agreement, any obligation owed to
it or any of its Affiliates by any other Partner or any of such other
Partner's Affiliates.
IN WITNESS WHEREOF, the parties have entered into this Amended and
Restated Agreement of Limited Partnership of MajorCo, L.P. as of the date
first above set forth.
SPRINT SPECTRUM, L.P.
By: US Telecom, Inc.,
Its General Partner
By: ___________________________
Title: ______________________
TCI NETWORK SERVICES
By: TCI Network, Inc.,
Its General Partner
By: ___________________________
Title: ______________________
COMCAST TELEPHONY SERVICES
By: Comcast Telephony Services, Inc., Its General
Partner
By: ___________________________
Title: ______________________
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF MAJORCO, ▇.▇.
▇▇▇ TELEPHONY PARTNERSHIP
By: ▇▇▇ Communications Wireless, Inc.,
Its Managing General Partner
By: ___________________________
Title: ______________________
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF MAJORCO, L.P.
SCHEDULE 2.1
INITIAL PERCENTAGE INTERESTS
INITIAL
PARTNER PERCENTAGE INTEREST
------- ------------------
Sprint 40%
TCI 30%
Comcast 15%
Cox 15%
SCHEDULE 2.2
NOTICE ADDRESSES
SPRINT:
Sprint Spectrum, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
with copies to:
Sprint Spectrum, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Secretary
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
TCI:
TCI Network Services
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
with copies to:
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Tele-Communications, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
COMCAST:
Comcast Telephony Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
with copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇:
▇▇▇ Telephony Partnership
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
with copy to:
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Prior to February 16, 1996:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
After February 16, 1996:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
PARTNERSHIP:
MajorCo, L.P.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
with a copy to:
MajorCo, L.P.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
Schedule 5.1(i)
Simple Majority Vote
The following matters with respect to the Partnership require a
Simple Majority Vote:
A. the making of any Second Tranche Call that requests Additional
Capital Contributions that, when added to the amount of Additional Capital
Contributions previously requested of the Partners in such Fiscal Year,
does not exceed the budgeted Additional Capital Contributions set forth in
the Annual Budget for such Fiscal Year;
B. the conversion of a Second Tranche Call to a Premium Call,
including the determination of the Gross Appraised Value required to be
made in connection with the making of a Premium Call; and
C. the determination of Gross Appraised Value required to be made in
connection with an adjustment of Percentage Interests pursuant to Section
2.4(d)(ii).
Schedule 5.1(j)
Required Majority Vote
The following matters, and all other matters required by the Partnership
Board to be submitted to it, except as provided for in Schedule 5.1(i),
Schedule 5.1(k) and Schedule 5.1(l) or as otherwise expressly provided in
this Agreement, require a Required Majority Vote:
A. the incurrence of any Debt by the Partnership or any Subsidiary of
the Partnership for loans (other than Default Loans) made by any Partner or
an Affiliate of a Partner, provided, that in any event all Partners (other
than a Defaulting Partner or a Partner subject to Bankruptcy) shall be
given the opportunity to participate pro rata in accordance with the
respective Percentage Interests of the Partners in making such loans;
B. the conversion by the Partnership or any Subsidiary of the
Partnership to non-partnership form, provided, that such Required Majority
Vote must include the affirmative vote of any Partner that (or which is a
member of a consolidated group for federal income tax reporting purposes
that) is reasonably likely to suffer a material adverse effect for federal
income tax purposes in connection with the conversion to non-partnership
form (other than any material adverse effect which is also reasonably
likely to affect all Partners or their respective consolidated groups on a
similar pro rata basis);
C. the election or removal of the Chief Executive Officer and the
other senior management of the Partnership or any Subsidiary of the
Partnership, except as provided in Item H. of Schedule 5.1(k); the
compensation of the Chief Executive Officer and the other senior management
of the Partnership or any Subsidiary of the Partnership; and the adoption
or amendment of incentive compensation and benefit plans for executive
officers and employees;
D. subject to Item F. of Schedule 5.1(l), the declaration or payment
of any distribution by the Partnership on any Interest or by any non-wholly
owned Subsidiary on any partnership interest or other equity interest of
such Subsidiary;
E. the adoption of a Proposed Business Plan or Proposed Budget or of
a business plan or budget of any Subsidiary (or, in either case, of any
amendment thereto or material deviation therefrom) other than as expressly
provided in Item A. of Schedule 5.1(k);
F. the acquisition by the Partnership or any Subsidiary of the
Partnership of any assets (including stock or other equity interests) in a
transaction or series of transactions that have an aggregate purchase price
in excess of one percent (1%) of the book value of the consolidated assets
of the Partnership or such Subsidiary, as the case may be, as determined in
accordance with GAAP (or such greater or lesser amount (subject to Item O.
of Schedule 5.1(k)) as may be approved from time to time by the Partnership
Board);
G. the disposition by the Partnership or any Subsidiary of the
Partnership of any assets (including stock or other equity interests) in a
transaction or series of transactions that have an aggregate value in
excess of one percent (1%) of the book value of the consolidated assets of
the Partnership or such Subsidiary, as the case may be, as determined in
accordance with GAAP (or such greater or lesser amount (subject to Item P.
of Schedule 5.1(k) as may be approved from time to time by the Partnership
Board);
H. the incurrence of any Debt by the Partnership or any Subsidiary of
the Partnership in an aggregate amount which, together with all other Debt
of the Partnership and its Subsidiaries (other than Debt to the Partners
incurred with the approval of the Partnership Board pursuant to Item E. of
Schedule 5.1(l)), is in excess of $25,000,000 (or such greater or lesser
amount as may be approved from time to time by the Partnership Board) by
Required Majority Vote);
I. the selection of, and changes in, the Accountants or the selection
of any accountants for a Subsidiary of the Partnership (other than the
Accountants);
J. the institution or settlement by the Partnership or any Subsidiary
of the Partnership of any legal action or other proceeding before any court
or other governmental or administrative authority which is reasonably
likely to have a material adverse effect on a Partner or any Affiliate of
such Partner (other than as a result of the diminution of the value of the
Interest of such Partner where such diminution affects all Partners and
their respective Affiliates proportionately), provided, that such Required
Majority Vote shall include the affirmative vote of any Partner so
affected; and
K. the adoption of all budgets, plans and procedures by the
Partnership regarding the planning, design and development activities of
the Partnership with respect to the architecture and design of all systems,
platforms, networks and products pursuant to Section 8.12.
Schedule 5.1(k)
Unanimous Vote of the Partnership Board
The following matters, in addition to any other matters expressly required
by the Agreement, require a Unanimous Vote of the Partnership Board:
A. any amendment or revision to the Planned Capital Amount;
B. the approval or modification of any amendments, modifications or
supplements to this Schedule 5.1(k);
C. the admission of new Partners or other equity holders in the
Partnership or any Subsidiary of the Partnership, other than pursuant to
Transfers expressly permitted by Section 12 of this Agreement;
D. the taking of any action that would result in a Voluntary
Bankruptcy of the Partnership or any Subsidiary of the Partnership;
E. the removal of the initial Chief Executive Officer within one year
of his appointment;
F. the approval of any transaction involving the Partnership or any
Subsidiary of the Partnership which would have the effect of the
Partnership's becoming a BOC or the Partnership's or any Partner's becoming
a BOC Affiliated Enterprise or an entity subject to any restrictions under
Section II of the MFJ;
G. the approval or implementation of any material changes in the
operations, scope or direction of the business of the Partnership or any
Subsidiary of the Partnership (including any disposition of material
assets) that is implemented for the primary purpose of avoiding the
Partnership's becoming a BOC, a BOC Affiliated Enterprise or an entity
subject to any restrictions under Section II of the MFJ in connection with
any proposed, pending or completed transaction involving the Partnership or
any Subsidiary of the Partnership, a Partner or any entity that is related
to a Partner;
H. except as permitted under Section 2.6, the commingling of funds of
the Partnership with those of any other Person;
I. subject to Schedule 5.1(l), the taking of any action that would
make it impossible for the Partnership or any Subsidiary of the Partnership
to carry on its ordinary business or that is in contravention of this
Agreement or that would constitute a breach of or default under any senior
credit agreement of the Partnership or any Subsidiary of the Partnership;
J. the incurrence of any indebtedness for borrowed money that is
recourse to any or all of the Partners and their Affiliates;
K. except as specifically provided for by this Agreement, the
satisfaction by any Partner of its obligations to make Capital
Contributions with property other than cash;
L. any direct or indirect purchase or other acquisition, or any
direct or indirect sale, by the Partnership or any Subsidiary of the
Partnership of any Interest or of any partnership interest or other equity
interest of a Subsidiary of the Partnership;
M. the merger, consolidation or other business combination by the
Partnership or any Subsidiary of the Partnership into or with any other
entity, or entering into a joint venture, partnership or other like
relationship with any other entity, other than any transaction involving
only the Partnership and/or (i) one or more wholly owned Subsidiaries of
the Partnership or (ii) any other Subsidiary of the Partnership in which
the Partnership and MinorCo own, in the aggregate, directly or indirectly,
one hundred percent (100%) of the outstanding equity interests;
N. the approval of a nonjudicial dissolution by the Partnership or
any Subsidiary of the Partnership and, subject to the provisions of this
Agreement, decisions with respect to the winding up by the Partnership or
any Subsidiary of the Partnership including the making of liquidating
distributions on any Interest;
O. the acquisition of any assets by the Partnership or any Subsidiary
of the Partnership (including stock or other equity interests) in a
transaction or series of transactions that have an aggregate purchase price
in excess of twenty percent (20%) of the book value of the consolidated
assets of the Partnership or such Subsidiary, as the case may be, as
determined in accordance with GAAP;
P. the disposition of any assets by the Partnership or any Subsidiary
of the Partnership (including stock or other equity interests) in a
transaction or series of transactions that have an aggregate value in
excess of twenty percent (20%) of the book value of the consolidated assets
of the Partnership or such Subsidiary, as the case may be, as determined in
accordance with GAAP;
Q. any decision or action permitted to be taken by the Partnership
Board pursuant to the last paragraph of the definition of Capital Account
in Section 1.10;
R. the contribution by any Partner of additional cash or other
Property to the Partnership other than as expressly contemplated under the
Agreement and the approval of the terms of any contribution agreement
pursuant to which a Partner makes such an Additional Capital Contribution;
S. the making of Partner Loans other than pro rata in accordance with
the respective Percentage Interests of the Partners, unless a Partner
declines to make such a loan or is a Defaulting Partner or a Partner
subject to Bankruptcy;
T. the granting of permission to a Partner to present an Offer to the
Partnership (or, except for Competitive Activities relating to an Offer
previously rejected by the Partnership, otherwise engage in any Competitive
Activity in reliance upon Section 6.1(c)) in any license area (or portion
thereof) in which the Partnership or any of its Subsidiaries is offering,
promoting or branding Wireless Exclusive Services (or in which the
Partnership or any of its Subsidiaries plans to offer, promote or brand
Wireless Exclusive Services pursuant to or as set forth in the Initial
Business Plan or Approved Business Plan then in effect, as applicable, or
pursuant to any Wireless Business license acquired by the Partnership or an
Affiliation Agreement entered into with the holder of a Wireless Business
license subsequent to the approval of such Initial Business Plan or
Approved Business Plan, as applicable), including pursuant to an
Affiliation Agreement;
U. the adoption of procedures (including conflict avoidance
procedures) relating to the provision by the Partnership of rights of first
opportunity to Partners or their Affiliates to provide services to the
Partnership and its Subsidiaries pursuant to Section 8.4;
V. any decision to treat an Adverse Act specified in clause (i) of
the definition of such term in Section 1.10 as having been cured in full by
the applicable Adverse Partner;
W. except in the case of a Transfer of a Partner's entire Interest
made in compliance with the Agreement, the withdrawal from the Partnership
of any Partner; and
X. the approval of a request by a General Partner to withdraw as a
General Partner.
Schedule 5.1(l)
Unanimous Partner Vote
The following matters, in addition to any other matters expressly required
by the Agreement, require a Unanimous Partner Vote:
A. any amendment to or material deviation from the Initial Business
Plan during the Fiscal Year ending December 31, 1996;
B. the engagement by the Partnership or any Subsidiary of the
Partnership in any Excluded Business or any other business outside the
scope of the Partnership's business as set forth in Section 1.3 of this
Agreement;
C. except with respect to the items listed on Schedules 5.1(j) and
5.1(k), the approval of any amendments, modifications or supplements to
this Agreement, including this Schedule 5.1(l);
D. the loan or advancement by the Partnership or any Subsidiary of
the Partnership of funds to, or the guarantee of any obligations of, a
Partner or any Affiliate thereof;
E. the incurrence of any Debt for loans (other than Default Loans)
made by any Partner or Affiliate of a Partner other than in accordance with
Section 2.7 of this Agreement;
F. the making of any non-pro rata cash or any in-kind distributions
to a Partner in respect of its Interest, other than in accordance with this
Agreement;
G. the approval of any amendment, modification or supplement of, or
deviation from, the procedures to be followed for the winding up of the
Partnership's affairs, it being understood that the determination to
dissolve the Partnership only requires a Unanimous Vote of the Partnership
Board; and
H. the engagement by the Partnership and its Subsidiaries in any
Competitive Activities in the Philadelphia, Charlotte, Cleveland, El Paso,
Jacksonville, Knoxville, Omaha or Richmond MTAs, including bidding for or
acquiring any PCS licenses therein, provided that the Partnership and its
Subsidiaries may engage in Competitive Activities in any MTA (other than
Philadelphia) listed in this Item H. from and after the time that Sprint
and its Controlled Affiliates have divested of their ownership interests in
any of the Sprint Cellular Businesses in such MTA.