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EXECUTION COPY
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TRANSITION SERVICES AGREEMENT
between
AT&T WIRELESS SERVICES, INC.
and
DOBSON CELLULAR SYSTEMS, INC.
Dated as of December 24, 2002
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<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 TRANSITION
SERVICES..................................................1
Section 1.1 Transition
Services.......................................1
Section 1.2 Provision of Transition
Services..........................2
Section 1.3 Purchase of Additional or Modified Transition
Services....2
Section 1.4 Pre-Closing Services; Transition
Plan.....................3
Section 1.5 Transitional
Cooperation..................................4
Section 1.6 Contact Persons; Transition
Teams.........................7
ARTICLE 2 TERM AND
TERMINATION.................................................7
Section 2.1
Term......................................................7
Section 2.2
Termination...............................................7
Section 2.3 Survival Upon Expiration or
Termination...................8
ARTICLE 3
COMPENSATION.........................................................8
Section 3.1
Compensation..............................................8
Section 3.2 Payment
Terms.............................................9
ARTICLE 4 END USER
CONTACT.....................................................9
ARTICLE 5 DISPUTE
RESOLUTION..................................................10
Section 5.1 Dispute Resolution
Procedures............................10
Section 5.2 Claims
Procedures........................................10
Section 5.3 Negotiation
Procedure....................................10
Section 5.4 Binding
Arbitration......................................10
ARTICLE 6 LIMITATION OF
LIABILITY.............................................12
ARTICLE 7
INDEMNIFICATION.....................................................12
Section 7.1
General..................................................12
Section 7.2 Indemnification
Procedures...............................12
ARTICLE 8 FORCE
MAJEURE.......................................................12
ARTICLE 9
NOTICES.............................................................13
Section 9.1
Notices..................................................13
ARTICLE 10
REMEDIES...........................................................14
Section 10.1 Remedy Upon Material
Breach.............................14
ARTICLE 11
CONFIDENTIALITY....................................................14
Section 11.1 Confidentiality
Obligation..............................14
Section 11.2 Non-Disclosure
Covenant.................................15
Section 11.3
Exceptions..............................................15
Section 11.4
Limitations.............................................15
Section 11.5 Confidentiality of this Agreement; Protective
Arrangements............................................16
ARTICLE 12 OTHER REPRESENTATIONS, WARRANTIES AND
COVENANTS....................17
Section 12.1 Compliance with
Laws....................................17
Section 12.2
Performance.............................................17
Section 12.3
Personnel...............................................18
Section 12.4 Equipment and
Software..................................18
Section 12.5 Effect on Business and End
Users........................18
Section 12.6 Books and
Records.......................................18
Section 12.7 Repurchase of
Inventory.................................18
ARTICLE 13
MISCELLANEOUS......................................................19
Section 13.1 Relationship of the
Parties.............................19
Section 13.2
Employees...............................................19
Section 13.3 Governing
Law...........................................19
Section 13.4
Assignment..............................................19
Section 13.5 Entire
Agreement........................................20
Section 13.6 Amendments and
Waivers..................................20
Section 13.7
Headings................................................20
Section 13.8
Severability............................................20
Section 13.9 No Third-Party
Beneficiaries............................21
Section 13.10 Remedies
Cumulative....................................21
Section 13.11
Expenses...............................................21
Section 13.12
Counterparts...........................................21
Section 13.13
Construction...........................................21
Section 13.14 Specific
Performance...................................21
<PAGE>
Exhibits
--------
Exhibit A - Preliminary Description of
Services.....................A-1
Exhibit B - DCS Transition
Plan.....................................B-1
Exhibit C - AWS Transition
Plan.....................................C-1
Exhibit D - Contact
Persons.........................................D-1
Exhibit E - Invoice
Format..........................................E-1
<PAGE>
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (this "Agreement") is made
and entered
into as of the 24th day of December, 2002, by and between
AT&T Wireless
Services, Inc., a Delaware corporation ("AWS"), and Dobson
Cellular Systems,
Inc., an Oklahoma corporation ("DCS"). Capitalized terms used
but not otherwise
defined in this Agreement shall have the meanings given to such
terms in the
Exchange Agreement referred to below.
R E C I T A L S
WHEREAS, AWS and DCS are all of the parties to the Asset
Exchange Agreement
of even date herewith (the "Exchange Agreement"), pursuant to
which AWS is
exchanging with DCS the Alaska Assets in exchange for the
California Assets;
WHEREAS, the Exchange Agreement provides that AWS and DCS shall
enter into
a Transition Services Agreement in connection with the
transactions contemplated
by the Exchange Agreement; and
WHEREAS, in light of the complexity of the transition of the
California
System and California Assets to AWS, the parties acknowledge
that the execution
and delivery of this Agreement is a material inducement to AWS's
entering into
the Exchange Agreement.
WHEREAS, in light of the complexity of the transition of the
Alaska System
and the Alaska Assets to DCS, the parties acknowledge that the
execution and
delivery of this Agreement is a material inducement to DCS's
entering into the
Exchange Agreement.
NOW, THEREFORE, in consideration of the premises hereof and the
mutual
covenants and agreements contained herein, and for other good
and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and
intending to be legally bound, the parties agree as follows:
ARTICLE 1
TRANSITION SERVICES
Section 1.1 Transition Services
This Agreement sets forth the terms and conditions for the
provision of
various transition services by DCS to AWS (the "DCS Transition
Services") and by
AWS to DCS (the "AWS Transition Services"), as described herein
and in the
Service Attachment (the "Service Attachment") attached hereto as
Exhibit A
(collectively, the "Transition Services"). "Service Attachment"
from the time of
signing this Agreement until otherwise provided in this Section
1.1 shall refer
to the "Preliminary Description of Services" ("PDS") attached
hereto at the time
of signing, which shall be a preliminary description of the
Transition Services
to be provided under this Agreement, including, without
limitation, the name of
each service and scope. Within ninety (90) days after signing of
this Agreement,
the parties shall prepare a more detailed "Final Description of
Services",
including the fee to be charged for each Transition Service,
which will be
attached hereto, and become part hereof, and from that date
forth supersede the
PDS and be referred to herein as the Service Attachment. The
Service Attachment
and Transition Services shall be deemed to include any modified
or additional
Transition Services provided pursuant to Section 1.3.
Section 1.2 Provision of Transition Services
(a) Commencing on the Closing Date, DCS shall provide or cause
to be
provided (whether by an Affiliate or a third party service
provider) each of the
DCS Transition Services for the time set forth in the Service
Attachment, except
(i) as automatically modified by termination of a DCS Transition
Service by AWS
in accordance with this Agreement, (ii) as otherwise agreed to
by the parties in
writing, or (iii) until the termination of this Agreement. DCS
may omit from any
DCS Transition Service any information regarding markets other
than the
California Markets unless the omission of such information would
prevent DCS
from providing any DCS Transition Service in accordance with the
provisions of
this Agreement (it being understood that any such information
shall be treated
by AWS as Proprietary Information of DCS for purposes of Article
13).
(b) Commencing on the Closing Date, AWS shall provide or cause
to be
provided (whether by an Affiliate or a third party service
provider) each of the
AWS Transition Services for the time set forth in the Service
Attachment, except
(i) as automatically modified by termination of a AWS Transition
Service by DCS
in accordance with this Agreement, (ii) as otherwise agreed to
by the parties in
writing, or (iii) until the termination of this Agreement. AWS
may omit from any
AWS Transition Service any information regarding markets other
than the Alaska
Markets unless the omission of such information would prevent
AWS from providing
any AWS Transition Service in accordance with the provisions of
this Agreement
(it being understood that any such information shall be treated
by DCS as
Proprietary Information of AWS for purposes of Article 13).
(c) Any functions, responsibilities, activities or tasks that
are not
specifically described in this Agreement or the Service
Attachment, but that are
reasonably required for the proper performance and delivery of
the Transition
Services and are a necessary or inherent part of the Transition
Services, shall
be deemed to be implied by and included within the scope of the
Transition
Services (subject to any limitations set forth in this Agreement
or in the
Service Attachment) to the same extent and in the same manner as
if specifically
described in this Agreement or the Service Attachment, as
applicable.
Section 1.3 Purchase of Additional or Modified Transition
Services
(a) Each party may request that the other party provide
additional or
modified transition services that are not described in the
Service Attachment,
including transition services that constitute performance of
ongoing operating
functions and integration/migration services relating to the
switchover in
responsibility for such functions from one party to the other.
Notwithstanding
the foregoing, a party shall not be required to provide
additional or modified
transition services that are not described in the Service
Attachment if such
party or an Affiliate was not providing such additional or
modified transition
service to the California Markets or Alaska Markets (as
applicable) during the
four months prior to the Closing Date.
(b) Subject to Section 1.3(a), DCS will use commercially
reasonable efforts
to accommodate any reasonable requests by AWS to provide
additional or modified
DCS Transition Services. In order to initiate a request for
additional or
modified DCS Transition Services, AWS shall submit a request in
writing to DCS
specifying the nature of the additional or modified transition
services and
requesting a cost estimate and time frame for completion. DCS
shall respond
within five business days to such written request. Only if AWS
accepts DCS's
pricing to provide the additional or modified transition
services will such
additional or modified transition services be provided hereunder
and according
to the terms agreed to by the parties in writing.
(c) Subject to Section 1.3(a), AWS will use commercially
reasonable efforts
to accommodate any reasonable requests by DCS to provide
additional or modified
AWS Transition Services. In order to initiate a request for
additional or
modified AWS Transition Services, DCS shall submit a request in
writing to AWS
specifying the nature of the additional or modified transition
services and
requesting a cost estimate and time frame for completion. AWS
shall respond
within five business days to such written request. Only if DCS
accepts AWS's
pricing to provide the additional or modified transition
services will such
additional or modified transition services be provided hereunder
and according
to the terms agreed to by the parties in writing.
Section 1.4 Pre-Closing Services; Transition Plan
(a) During the period from the date hereof to the Closing Date,
the parties
will use commercially reasonable efforts to work together in
good faith to begin
the process of migrating the respective Transition Services from
one party to
the other such that the completion of the migration of the
Transition Services
shall occur as soon as practicable after the Closing Date.
(b) Within 90 days following the date hereof, AWS will deliver
to DCS a
comprehensive project plan for the transition (the "DCS
Transition") of the
California Assets to AWS, which plan will set forth in
reasonable detail a
description of the tasks, responsibilities and deadlines
contemplated in
connection with the DCS Transition. Within ten business days
after delivery of
such project plan to DCS, the parties will commence discussions
regarding the
plan, and thereafter will use their commercially reasonable
efforts to finalize
the plan as promptly as practicable but in no event later than
the earlier if
(i) the 30th day following delivery of the initial draft to DCS
and (ii) the
Closing Date. The project plan in its final form shall be
referred to herein as
the "DCS Transition Plan" and shall be attached hereto as
Exhibit B and made a
part hereof.
(c) Within 90 days following the date hereof, DCS will deliver
to AWS a
comprehensive project plan for the transition (the "AWS
Transition") of the
Alaska Assets to DCS, which plan will set forth in reasonable
detail a
description of the tasks, responsibilities and deadlines
contemplated in
connection with the AWS Transition. Within ten business days
after delivery of
such project plan to AWS, the parties will commence discussions
regarding the
plan, and thereafter will use their commercially reasonable
efforts to finalize
the plan as promptly as practicable but in no event later than
the earlier of
(i) the 30th day following delivery of the initial draft to AWS
and (ii) the
Closing Date. The project plan in its final form shall be
referred to herein as
the "AWS Transition Plan" and shall be attached hereto as
Exhibit C and made a
part hereof.
Section 1.5 Transitional Cooperation
(a) General. DCS and AWS will use commercially reasonable
efforts to
cooperate in good faith to assure an orderly and efficient DCS
Transition and
AWS Transition. Each party shall make available, as reasonably
requested by the
other party, sufficient resources and timely decisions,
approvals and
acceptances, in order that each party may perform its
obligations under this
Agreement in a timely and efficient manner.
(b) Information
(i) So long as any DCS Transition Services are being provided
under
this Agreement and thereafter (but not longer than 90 days after
the DCS
Transition with respect to billing functions is complete), DCS
will provide
AWS with copies of all then existing files, records and
financial and
operational data relating to such DCS Transition Services as may
be
reasonably requested by AWS, including reasonable access to such
employees
of DCS having knowledge of such DCS Transition Services.
(ii) So long as any AWS Transition Services are being provided
under
this Agreement and thereafter (but not longer than 90 days after
the AWS
Transaction with respect to billing functions is complete), AWS
will
provide DCS with copies of all then existing files, records and
financial
and operational data relating to such AWS Transition Services as
may be
reasonably requested by DCS, including reasonable access to such
employees
of AWS having knowledge of such AWS Transition Services.
(c) Access by AWS
(i) Access to DCS Personnel, Systems and Information. Subject
to
subparagraph (c)(ii) below, AWS's transition team, escorted by
DCS's
transition team or designated staff, will have the following
access to
DCS's personnel, systems and information prior to Closing in
order to
accomplish the following:
(A) meet with functional area leads (either in-market or
centrally located) who are familiar with the California Systems
and
can respond to questions regarding the California Systems'
staff,
vendors, facilities, stores and processes sufficiently for AWS
to
create a functional gap analysis;
(B) obtain information regarding all information technology
systems currently used to support the California Systems in
sufficient
detail to enable AWS to identify the data to be transferred, the
DCS
Transition Services to be provided, and the processes for which
DCS
will be responsible during the Term;
(C) prepare the DCS Transition Plan based on the functional
gap
analysis;
(D) obtain the information set forth on Schedule 1.5(c); and
(E) obtain payroll and benefits data relating to employees of
the
California Systems in sufficient detail to enable an orderly
transition of such employees to AWS at Closing in accordance
with the
Exchange Agreement.
(ii) Limitations on AWS Access. AWS's access to DCS's
personnel,
systems and facilities pursuant to subparagraph (c)(i) above
shall be
limited as follows:
(A) AWS shall notify DCS of and, at DCS's discretion, AWS
shall
be accompanied by DCS personnel during, all physical access to
any DCS
facility. Notification shall be given to, and site visits shall
be
arranged by, DCS's representative identified in Exhibit B or
any
successor office;
(B) DCS may restrict or place limitations on such access if,
in
the reasonable judgment of DCS, such access is unreasonably
interfering with DCS's ability to operate the California
Systems;
(C) AWS shall be responsible for obtaining any consents of
third
parties, including landlords, necessary or desirable to permit
such
access, and DCS shall cooperate at AWS's expense in obtaining
such
consents; and
(D) AWS shall not perform any civil engineering work or
install
any equipment at DCS's facilities if, in the reasonable judgment
of
DCS, such work or installation unreasonably interferes with
the
quality of the network services provided by DCS, including but
not
limited to frequency interference.
(d) Access by DCS
(i) Access to AWS Personnel, Systems and Information. Subject
to
subparagraph (d)(ii) below, DCS's transition team, escorted by
AWS's
transition team or designated staff, will have the following
access to
AWS's personnel, systems and information prior to Closing in
order to
accomplish the following:
(A) meet with functional area leads (either in-market or
centrally located) who are familiar with the Alaska Systems and
can
respond to questions regarding the Alaska Systems' staff,
vendors,
facilities, stores and processes sufficiently for DCS to create
a
functional gap analysis;
(B) obtain information regarding all information technology
systems currently used to support the Alaska Systems in
sufficient
detail to enable DCS to identify the data to be transferred, the
AWS
Transition Services to be provided, and the processes for which
AWS
will be responsible during the Term; and
(C) prepare the AWS Transition Plan based on the functional
gap
analysis; and
(D) obtain the information set forth on Schedule 1.5(d); and
(E) obtain payroll and benefits data relating to employees of
the
Alaska Systems in sufficient detail to enable an orderly
transition of
such employees to DCS at Closing in accordance with the
Exchange
Agreement.
(ii) Limitations on DCS Access. DCS's access to AWS's
personnel,
systems and facilities pursuant to subparagraph (d)(i) above
shall be
limited as follows:
(A) DCS shall notify AWS of and, at AWS's discretion, DCS
shall
be accompanied by AWS personnel during, all physical access to
any AWS
facility. Notification shall be given to, and site visits shall
be
arranged by, AWS's representative identified in Exhibit B or
any
successor office;
(B) AWS may restrict or place limitations on such access if,
in
the reasonable judgment of AWS, such access is unreasonably
interfering with AWS's ability to operate the Alaska
Systems;
(C) DCS shall be responsible for obtaining any consents of
third
parties, including landlords, necessary or desirable to permit
such
access, and AWS shall cooperate at DCS's expense in obtaining
such
consents;
(D) DCS shall not perform any civil engineering work or
install
any equipment at AWS's facilities if, in the reasonable judgment
of
AWS, such work or installation unreasonably interferes with
the
quality of the network services provided by AWS, including but
not
limited to frequency interference; and
Section 1.6 Contact Persons; Transition Teams
(a) Each party shall appoint a person for the purpose of
coordinating the
DCS Transition and the AWS Transition and the provision of the
Transition
Services. The initial representatives of the parties are the
persons set forth
on Exhibit D.
(b) Each party acknowledges that maintaining a single point of
contact for
the other, and an adequate transition team, is essential to each
party's ability
to perform its obligations under this Agreement.
ARTICLE 2
TERM AND TERMINATION
Section 2.1 Term
The Term (the "Term") of this Agreement shall commence as of the
date
hereof and shall continue until all of the DCS Transition
Services shall have
been performed or migrated from DCS to AWS and all of the AWS
Transition
Services shall have been performed or migrated from AWS to DCS
but in no event
later than 12 months after Closing, subject to earlier
termination pursuant to
the terms of this Article 2, or written agreement otherwise by
the parties (the
"End Date").
Section 2.2 Termination
(a) By AWS. At any time and from time to time during the Term,
AWS shall
have the right to terminate any DCS Transition Service, in whole
or in part,
upon 30 business days prior written notice to DCS. In the event
that AWS shall
not be able to complete its migration of the DCS Transition
Services within such
30 business day period, AWS shall have the right to request and
cause DCS to
provide up to 30 more business days (but not beyond the End
Date) of such DCS
Transition Service to AWS. If all DCS Transition Services shall
have been
migrated or terminated under this provision prior to the End
Date, then AWS
shall have the right to terminate this Agreement with respect to
DCS Transition
Services by giving written notice to DCS.
(b) By DCS. At any time and from time to time during the Term,
DCS shall
have the right to terminate any AWS Transition Service, in whole
or in part,
upon 30 business days prior written notice to AWS. In the event
that DCS shall
not be able to complete its migration of the AWS Transition
Services within such
30 business day period, DCS shall have the right to request and
cause AWS to
provide up to 30 more business days (but not beyond the End
Date) of such AWS
Transition Service to DCS. If all AWS Transition Services shall
have been
migrated or terminated under this provision prior to the End
Date, then DCS
shall have the right to terminate this Agreement with respect to
AWS Transition
Services by giving written notice to AWS.
(c) This Agreement shall automatically terminate upon
termination of the
Exchange Agreement in accordance with its terms. Except as
otherwise provided
herein, the parties shall pay for their own expenses (i)
incidental to the
preparation of this Agreement, (ii) the carrying out of the
provisions of this
Agreement and (iii) the consummation of the transactions
contemplated hereby.
Section 2.3 Survival Upon Expiration or Termination
The provisions of Section 2.2, Article 5 (Dispute Resolution),
Article 7
(Indemnification), Article 9 (Notices), Article 11
(Confidentiality) and Article
13 (Miscellaneous) shall survive the termination or expiration
of this
Agreement.
ARTICLE 3
COMPENSATION
Section 3.1 Compensation
(a) Subject to the other terms and conditions of this Agreement,
the fee
payable by AWS or DCS in connection with the performance of IT
Systems Support
Services, Customer Services and Legal Requirements Services by
the other party
shall be *
(b) Notwithstanding paragraph (a) above, if in connection with
the
performance of a Transition Service the party performing such
Transition Service
(the "Transition Service Provider") incurs costs not
contemplated in the fee
structure for such Transition Service due to the fact that,
although the
specific action requested to be performed by the party
requesting such
Transition Service (the "Requesting Party") falls within a
Transition Service
category, such requested action is not an action that is or has
been regularly
performed by the Transition Service Provider during the four
months prior to
Closing, then the Transition Service Provider shall be entitled
to charge the
Requesting Party an additional amount not to exceed the
additional costs
incurred by the Transition Service Provider.
(c) If during the period from the date hereof to the Closing
Date, a party
hereto incurs out-of-pocket costs in connection with the
performance of services
associated with the transition migration efforts contemplated in
Section 1.4
above at the request of the other party, the party requesting
such services
shall reimburse the party performing such services for such
out-of-pocket costs
promptly upon receipt of an itemized list of such expenses
together with
reasonable support documentation evidencing such out-of-pocket
costs.
Section 3.2 Payment Terms
Each party shall pay by electronic funds transfer or other
method
satisfactory to DCS and AWS, in full, the undisputed amount of
the monthly
invoiced amount within 30 days after the date it receives the
monthly invoice
from the other. The format of such invoice is attached as
Exhibit E hereto and
shall include, without limitation, the applicable Transition
Service, the bill
period, applicable rates units, and such other information as
the receiving
party may reasonably request. Any undisputed amount not received
by the payment
due date shall be subject to a late payment charge equal to the
balance overdue
times the annual interest rate set forth as the Prime Rate in
the "Money Rates"
table of The Wall Street Journal from time to time (the "Prime
Rate"), for the
number of calendar days from the payment due date up to and
including the date
payment is actually made.
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