Exhibit 10.1
JOINT VENTURE AGREEMENT
by and among
Nextel Partners, Inc.,
Nextel Partners Operating Corp.,
and
Nextel WIP Corp.
Dated as of January 29, 1999
NEXTEL PARTNERS, INC.
JOINT VENTURE AGREEMENT
TABLE OF CONTENTS
Page
RECITALS 1
1. DEFINITIONS 1
2. OPERATING ARRANGEMENTS 10
2.1 Company Responsibilities 10
2.2 Territory 11
2.3 Exclusivity 11
2.5 Sufficiency of Rights 12
2.6 Nondiscrimination; Standard of Care 12
2.7 Special NWIP Approval Rights 13
3. TERM 14
3.1 Initial Term; Renewal Terms 14
4. FREQUENCIES AND LICENSES 14
4.1 Contribution of Licenses in Initial Sections 14
4.2 Contribution of Licenses in Option Sections. 15
4.3 Other Acquisitions of Licenses from Nextel Group 15
4.4 Swaps and Exchanges of Licenses with Nextel Group 16
4.5 Acquisitions of Licenses from Third Parties 17
4.6 Frequency Auctions 17
4.7 Cooperation 18
4.8 Transactions to Create Contiguous Spectrum 18
4.9 Nextel Analog Operations 18
4.10 Reserved 19
4.11 Compliance with FCC Rules 19
4.12 FCC Proceedings 20
4.13 Transfer Restrictions 21
4.14 NWIP Right of First Refusal 22
4.15 Company Rights of First Refusal 22
4.16 NWIP Option Upon Change in Control of the Company 23
4.17 Representations and Warranties 24
5. COMPANY ACCESS TO PROPRIETARY TECHNOLOGY AND NETWORK COMPONENTS 25
5.1 Coordination of Equipment Orders and Purchases 25
5.2 Access to Vendor Equipment and Agreements 25
5.3 Future Improvements and Enhancements to Technology or
Network 26
5.4 [RESERVED] 28
5.5 Access to National Switching Network 28
5.6 Integration with Nextel Owned Switching Facilities 29
5.7 Company Owned Network Switches and Other Facilities 29
5.8 Access to Systems Platform 30
5.9 Certain System and Network Services 30
6. BUILD-OUT REQUIREMENTS 32
6.1 Required Services 32
6.2 Build-out Requirement and Target Launch Dates 32
6.3 Launch Criteria 34
6.4 Frequency Design Standards 34
6.5 Site Acquisition Standards 34
6.6 Construction Standards 35
6.7 Telco Standards 35
6.8 Switching Facility Standards 35
6.9 Company Towers 36
6.10 Potential Relaxation of Performance Standards 37
7. OPERATIONS 37
7.1 Network Performance Requirements 37
7.2 Customer Care 37
7.3 Customer Satisfaction 38
A. Measurement 38
B. Sample 38
C. Targets 38
7.4 Employees 38
8. MARKETING AND ADVERTISING 39
8.1 Brand Identity 39
8.2 Brand Awareness 39
8.3 Creative Services 39
8.4 Media Services 40
8.5 Direct Mail 40
8.6 Telemarketing 40
8.7 Collateral Marketing Materials 41
8.8 World Wide Website 41
8.9 Market Research 41
8.10 Subscriber Transfer Fee 42
9. SERVICE AND EQUIPMENT PRICING 42
9.1 Service Pricing Structure 42
9.2 Service Pricing Plans - Local 43
9.3 Service Pricing Plans - National 43
9.4 Service Pricing Plans - International 44
9.5 Subscriber Equipment Pricing 44
10. SALES AND DISTRIBUTION 45
10.1 Objective 45
10.2 Local Sales and Distribution 45
10.3 National Indirect Distribution 45
11. NATIONAL ACCOUNTS/PRIVATE SYSTEMS 45
12. BREACH; DEFAULT; DISPUTE RESOLUTION 46
12.1 Non-Material Breach 46
12.2 Company's Material Breach 47
12.3 NWIP's Material Breach 48
12.4 Procedures for a Material Breach 48
12.5 Excusable Delay/Time Extension 49
12.6 Alternate Dispute Resolution 49
12.7 Arbitration 50
12.8 Equitable Remedies 50
12.9 Damages and Termination for Material Breach 52
A. Procedure 52
B. Right to Nextel Name and Trademarks 52
C. Determination Required for Termination Remedy 52
D. Termination Awarded to NWIP 52
E. Termination Awarded to the Company 53
F. Limitations on Damages 53
13. MISCELLANEOUS 54
13.1 Choice of Law 54
13.2 Attorneys Fees 54
13.3 Pass-Throughs 54
13.4 [RESERVED] 54
13.5 Monitoring 54
13.6 Payment 55
13.7 Company Audit Right 55
13.8 Company Personal Obligation 55
13.9 Disclaimer of Partnershi 56
13.10 Confidentiality. 56
13.11 Amendments 57
13.12 Entire Agreement 57
13.13 Notices 57
13.14 Counterparts 58
13.15 Waiver 58
13.16 Third Parties 58
13.17 Schedules and Exhibits 59
13.18 Headings 59
13.19 Severability 59
13.20 Jurisdiction 59
13.21 Waiver of Jury Trial 59
EXHIBITS
Exhibit I Transaction Documents & Collateral Agreements
Exhibit 4.1 Initial Frequencies and Option Frequencies
Exhibit 4.4 Nextel Group Frequencies
Exhibit 4.13 Commitments Required of Secured Lenders
Exhibit 5.7A Charges for Company Switch and RSO Monitoring
Exhibit 5.7B Trigger Points for Network Elements
Exhibit 5.9B Charges for NDS Backbone Network
Exhibit 6 Territory (Including map, Sections and Build Areas)
Exhibit 6.1 Required Services
Exhibit 6.4 Certain Frequency Design Agreements
Exhibit 6.5 Certain Site Acquisition and Construction Agreements
Exhibit 6.9 Tower Sites Committed by Company to Another Builder
Exhibit 7.2 Certain Billing and/or Customer Care Agreements
Exhibit 9.1A Nextel Service Pricing Structure
NEXTEL PARTNERS, INC.
JOINT VENTURE AGREEMENT
This is the JOINT VENTURE AGREEMENT (this "Agreement"), dated as of
January 29, 1999, by and among Nextel Partners, Inc., a Delaware corporation
(the "Company"), Nextel Partners Operating Corp., a Delaware corporation
("Opco"), and Nextel WIP Corp., a Delaware corporation ("NWIP"). Capitalized
terms used herein have the meanings set forth or cross referenced in Article 1,
unless otherwise stated.
RECITALS
A. Nextel Communications, Inc. ("Nextel") through its
subsidiaries operates digital networks for wireless communications services
throughout the United States. Nextel's digital networks are integrated
wireless systems that use a single transmission technology (iDEN, as defined
below) to serve large cities throughout the United States. Nextel's wireless
telecommunications service competes with, but is distinguished from, the
services offered by other telecommunications companies by, among other things,
features of its subscriber equipment (for example, push to talk transmission),
and by its pricing structure (for example, per second billing and home rate
charges).
B. The Company and Opco have been formed to build and operate a
wireless communications system using iDEN technology to provide service in
certain mid-sized and smaller cities and towns throughout the United States,
most of which are not presently served by Nextel.
C. By expanding the geographic area in which such services are
offered, by providing services with similar features and functions under the
same national brand, and by allowing their subscribers to travel and obtain
service in each other's territory, the parties intend, among other things, to
make iDEN wireless communications service available to more people over a
broader area.
D. NWIP, an indirect, wholly owned subsidiary of Nextel, the
Company and Opco desire to enter into this contractual joint venture to
accomplish the foregoing.
AGREEMENT
NOW THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS
For purposes of the Agreement, the following terms have the meanings
set forth or cross referenced below:
"Accelerated Areas" -- see Section 6.2C.
"Agreement" -- see Preamble.
"Affiliate" means, with respect to the specified person, any other
person who, directly or indirectly, controls, is controlled by, is under common
control with, or is a director or officer of such specified person; provided,
that neither NWIP nor any other member of the Nextel Group shall, for purposes
of this Agreement, be considered Affiliates of the Company or any of its
Subsidiaries.
"Alternate Dispute Resolution Process" means the dispute resolution
process set forth in Section 12.6.
"Analog Management Agreement" means the Management Agreement dated the
same date as this Agreement between Opco and NWIP, as amended and in effect
from time to time.
"Analog Services" means wireless communications services provided by
Analog Systems.
"Analog Systems" means wireless communications systems that use analog
transmission technology.
"Arbitration Rules" -- see Section 12.7.
"Asset Purchase Agreement" means the Asset Transfer and Reimbursement
Agreement by and between Opco and NWIP, dated the same date as this Agreement,
as amended and in effect from time to time.
"Augmented Company Value" -- see Section 12.9E.
"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3,
13d-5 or 16a-1 under the Securities Exchange Act of 1934 (the "Exchange Act")
(or any successor rules), including the provision of such Rules that a Person
shall be deemed to have beneficial ownership of all securities that such person
has a right to acquire within 60 days, but such provision of the Rules will
apply only if (i) all conditions (other than payment of the purchase or
acquisition price of such securities) to such person's exercise of such rights
have been satisfied and (ii) such securities (if options, warrants, or similar
derivatives) are "in-the-money," provided that in all cases a person shall not
be deemed a Beneficial Owner of, or to own beneficially, any securities if such
beneficial ownership (1) arises solely as a result of a revocable proxy
delivered in response to a proxy delivered in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange Act and the
applicable rules and regulations thereunder, and (2) is not also then
reportable on Schedule 13D under the Exchange Act.
"best reasonable efforts," where required of a party by this Agreement
or any of the Collateral Agreements, means the party will expend only such sums
as are normally incidental to the performance of the relevant task, such as
payment of salaries of the persons carrying out such
efforts and such persons' incidental travel and other related expenses, and in
no event will require the payment of any sum to any third-party from whom
performance of the relevant task is sought, nor the retention or compensation
of outside agents, brokers, consultants or other professionals to obtain the
desired outcome.
"Board" means the Board of Directors of the Company.
"Build Areas" means the (i) MSAs, (ii) cities and towns with
populations in excess of 20,000 people that are not otherwise included within
an MSA boundary and (iii) all other rural areas, in each case, identified on
Exhibit 4.1.
"Build Out" means the completion of the construction of a Section as
described in Section 6.2A.
"Build Site" -- see Section 6.9A.
"Build Year" means the year by which the Build Out for any Build Area
must be completed. The first Build Year shall commence on the date hereof and
terminate on the day 30 days after the first anniversary of the date hereof;
the second Build Year shall commence on the day after the end of the first
Build Year and terminate 365 days later; and the third Build Year shall
commence on the day after the end of the second Build Year and terminate 365
days later.
"Business Objectives" -- see Section 2.7(ii).
"Change in Control of the Company" -- see Section 4.16B.
"Claimant" -- see Section 12.9A.
"Collateral Agreements" means the agreements identified as the
Collateral Agreements on Exhibit I.
"Company" -- see Preamble.
"Company Group" means the Company and its Subsidiaries.
"Company Indemnitees" -- see Section 4.11B.2.
"Company Transferor" -- see Section 4.14A.
"Comparable Service Areas" or "Comparable Sections" means service
areas or Sections in the Territory which are roughly equal in size and share
similar topographic, population and economic characteristics including but not
limited to population density, number of business customers and per capita
income as service areas in the NDS territory (and vice versa).
"Completion Notice" -- see Section 6.9B.
"Constructed Frequencies" -- see Section 4.18A
"Constructed Site" -- see Section 6.9D.
"Digital Services" means wireless communications services provided by
Digital Systems.
"Digital Systems" means wireless communications systems that use
digital transmission technology.
"Election Period" -- see Section 6.2B.
"ESMR Network" means a wide-area network of specialized mobile radio
base stations that uses iDEN digital technology to provide wireless
communications services including voice, dispatch, interconnected telephone and
data services, using SMR Frequencies.
"Equity" means (i) prior to the initial public offering of the
Company's equity securities, shares of Series C Preferred Stock, and (ii) after
the initial public offering of the Company's equity securities, shares of Class
B Common Stock.
"Equity Value" -- of a share of Equity means (i) during the first 24
months following the date hereof, the price per share of Series C Preferred
Stock issued on the date hereof, compounded on a monthly basis at an annual
rate of twenty percent (20%) per annum, (ii) after 24 months from the date
hereof and until the common stock of the Company is traded on a national stock
exchange or NASDAQ National Market (the "Interim Period"), a value set annually
by the Board that is generally applicable to issuances of Equity, including,
without limitation, for cash or property or for options for which the exercise
price is fair market value at the date of agreement by the Company at or about
the relevant time (e.g., used to set the strike price for options awarded
under the Company's incentive stock option plan during such year), and (iii)
after there has been an initial public offering of common stock of the Company,
the arithmetic average of the closing sales price for the Company's common
stock on a national stock exchange or NASDAQ National Market for the twenty
trading days immediately preceding the date as of which Equity Value is to be
determined. During the Interim Period NWIP has the right to challenge the
value set by the Board, by giving written notice to the Company not later than
the later of (a) 30 days after NWIP is notified that the Board has established
a new Equity Value, or (b) 30 days after NWIP (or any other member of the
Nextel Group) is notified that it is required by this Agreement to assign
licenses for additional frequencies to the Company. In its notice NWIP will
state its proposed Equity Value. Within 10 days after receipt of the Notice,
the Company and NWIP will either mutually agree on an appraiser that
will be retained and instructed to determine the value of a share of the
Company's common stock for purposes of making payment with Equity as provided
by Article 4, or will implement the procedures of Section 4.04 of the
Shareholders' Agreement to select three appraisers. The value established by
the Board and NWIP's proposed value will not be disclosed to the appraiser(s)
who will be instructed to complete the valuation within 30 days. If the value
determined by the appraiser(s) is closer to the value that was established by
the Board, the value determined by the Board will be the Equity Value for the
applicable period, and NWIP will reimburse the Company for any out-of-pocket
expenses incurred by the Company in connection with determining the value
(including,
without limitation, any fees or expenses of the appraiser(s)). If the value
determined by the appraiser(s) is closer to the value that was proposed by
NWIP, the value proposed by NWIP will be the Equity Value for the applicable
period, and the Company will reimburse NWIP for any out-of pocket expenses
incurred by NWIP in connection with determining the value (including, without
limitation, any fees or expenses of the appraiser(s)).
"Excusable Delay" -- see Section 12.5.
"Exhibit 4.1 Value" means, with respect to each Build Area in the
Territory, the per frequency dollar value of a Useable Frequency in such Build
Area as identified on Exhibit 4.1.
"Fair Market Value" means, with respect to any frequencies, the fair
market value thereof as agreed to by the parties or, if the parties fail to
agree within 10 days, as determined by arbitration in accordance with Section
12.7.
"FCC" means the Federal Communications Commission or any similar
regulatory authority established in replacement thereof.
"FCC Change of Control" means the granting or withholding of any
rights, powers or obligations, that either individually or in combination,
would require the approval of the FCC pursuant to Section 310(d) of the
Communications Act or any of the FCC Rules or policies implementing Section
310(d).
"FCC Rules" -- see Section 4.12C.
"4.14 Notice" -- see Section 4.14A.
"4.18D Frequencies" -- see Section 4.18D.
"Frequency Acquisition Amount" means $20,439,979 on the date hereof,
subject to adjustment as provided in Section 4.4 or 4.5A.
"Frequency Delay" -- see Section 12.5.
"Frequency Value" means:
(i) for purposes of Section 4.4:
(A) with respect to Old Frequencies or New
Frequencies owned by any member of the Nextel Group on the date
hereof, the Exhibit 4.1 Value of such frequencies, and
(B) with respect to Old Frequencies or New
Frequencies that are not owned by any member of the Company Group or
Nextel Group on the date hereof, the cost to the Company or the
applicable member of the Company Group or Nextel Group,
as the case may be, of such frequencies (including incidental
transaction costs and costs of any related assets acquired with the
frequencies and conveyed to the transferee); and
(ii) for purposes of Sections 4.3 and 4.14:
(A) with respect to frequencies owned by any
member of the Nextel Group on the date hereof, the Exhibit 4.1 Value
of such frequencies, and
(B) with respect to frequencies that are not owned by
any member of the Company Group or the Nextel Group on the date
hereof, the historical cost to the Company of such frequencies
(including incidental transaction costs and costs of any related
assets acquired with the frequencies and conveyed to the Nextel
Group).
"iDEN" means Motorola's integrated Dispatch Enhanced Network wireless
communications technology, or any other successor technology designated under
Section 7.03 of the Shareholders' Agreement as such may exist from time to time
and at any time during the term of this Agreement, including any Renewal Terms.
"Improvements" -- see Section 5.3A.
"Initial Assets" means the assets transferred to Opco by NWIP under
the Asset Purchase Agreement.
"Initial Asset Transfer" means the transfer of the Initial Assets to
Opco effected pursuant to the Asset Purchase Agreement.
"Initial Frequencies" means the frequencies covered by the Initial
Licenses.
"Initial Licenses" means the FCC licenses set forth on Schedule C to
the Subscription Agreement.
"Initial Sections" means the Sections of the Territory described as
Initial Sections on Exhibit 6.
"Initial Site Notice" -- see Section 6.9A.
"Initial Term" -- see Section 3.1.
"Interim Management Agreement" means the frequency Management
Agreement, dated the same date as this Agreement, between NWIP and Opco, as
amended and in effect from time to time.
"Launch Criteria" -- see Section 6.3.
"License Co." means Nextel WIP License Corp., a Delaware corporation.
"Licensed Marks" means the "Nextel" name and the other marks licensed
to Opco under the Trademark License Agreement.
"Losses" -- see Section 4.11B.1.
"Marketing Services Vendor" means the person that, from time to time,
provides market research services and compiles customer satisfaction data for
the Company or Opco and the NDS.
"Master Site Lease" means the Master Site Lease Agreement dated the
same date as this Agreement, by and between NWIP and Opco, as amended and in
effect from time to time.
"Material Breach" means, with respect to the Company, the breaches
described in Section 12.2 and, with respect to NWIP, the breaches described in
Section 12.3.
"May 20th Frequencies" -- see Section 4.18B.
"Motorola" means Motorola, Inc., a Delaware corporation.
"MSA" means a metropolitan statistical area as defined by the U.S.
Office of Management and Budget.
"National Accounts" -- see Section 9.3.
"NDS" means, individually, a Nextel Subsidiary operating all or any
portion of an ESMR Network in the United States and "the NDS" means,
collectively, all of Nextel's Subsidiaries operating all or any portion of an
ESMR Network in the United States.
"New License" or "New Frequency" means an FCC license or SMR frequency
which is acquired by the Company from a member of the Nextel Group, but does
not include licenses or frequencies contributed to the Company by NWIP pursuant
to Sections 4.1 and 4.2
"Nextel" -- see Recitals.
"Nextel Agreement" means the Agreement Specifying Obligations of, and
Limiting Liability and Recourse to, Nextel, dated the same date as this
Agreement, among Nextel, the Company and Opco, as amended from time to time.
"Nextel Group" means Nextel and its Subsidiaries.
"Nextel Indemnitees" -- see Section 4.11B.1.
"Nextel Retained Frequencies" -- see Section 4.4B.
"Nextel Transferor" -- see Section 4.15A.
"NWIP" -- see Preamble.
"NWIP Call Right" has the meaning set forth in the Shareholders'
Agreement and, after Section 5.1(a)(i) of the Company Amended and Restated
Certificate of Incorporation becomes effective, means the NWIP Call Right as
defined therein.
"NWIP Response" -- see Section 4.3.
"Old License" or "Old Frequency" means an FCC license or SMR frequency
which was previously contributed to the Company by a member of the Nextel Group.
"Opco"-- see Preamble.
"Option Frequencies" -- see Section 4.2.
"Option Licenses" -- see Section 4.2.
"Option Sections" means the "Option Sections" on Exhibit 6 that may be
added to the Territory under Section 6.2.
"Option Territory" means, collectively, the Option Sections with
respect to which the Company's rights under Section 6.2 have not expired or
been exercised.
"Partner Auction" -- see Section 4.6.
"Partner Frequency" means an 800 MHz SMR or a 900 MHz SMR frequency
owned by, licensed to or managed or used by the Company (or a Company
Subsidiary).
"person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, any governmental or political subdivision or
department thereof, any governmental or regulatory body, commission, board,
bureau, agency or instrumentality, any pension, profit sharing or other benefit
plan or trust, or other entity.
"Recommended Systems" -- see Section 5.8.
"Remedial Plan" -- see Section 12.1.
"Renewal Term" -- see Section 3.1.
"Required Services" -- see Section 6.1.
"Required Systems" -- see Section 5.8.
"Roaming Agreement" means the Roaming Agreement, dated the same date
as this Agreement, between Opco and NWIP, as amended and in effect, from time
to time.
"SCI" -- see Section 7.3C.
"Section" means each of the Sections identified in Exhibit 6, whether
an Initial Section or an Option Section.
"Section 4.3 Frequencies" -- see Section 4.3.
"Service Pricing Structure" -- see Section 9.1.
"Shareholders' Agreement" means the Shareholders Agreement, dated the
same date as this Agreement, among the Company, NWIP and the other stockholders
of the Company named therein, as amended and in effect, from time to time.
"Site Acquisition Work" means, with respect to each tower site, taking
the following actions in material compliance with all applicable laws: (i)
obtaining from a qualified surveyor a recent (i.e. prepared or updated no more
than six months before the date of the Completion Notice, if any) ground survey
depicting the boundaries and areas of the site location, all easements, rights
of way and other matters affecting title thereto, any improvements thereon,
applicable setback lines, if any, information regarding flood plain location
and any encroachments affecting the site, (ii) obtaining all building permits
and FAA and FCC approvals (if any) needed to construct the tower and related
assets on such site, (iii) obtaining all zoning approvals or designations
necessary to construct and operate the tower and related assets on such site,
(iv) obtaining an environmental transaction screening of such site and a
related report, which report shall be addressed to NWIP and to the Company, and
(v) obtaining a title commitment or abstract for the site, dated within six
months of the Completion Notice (if any), provided that the Company will not be
penalized for failure to comply with (i) - (iv) above to the extent that the
average level of compliance achieved by the NDS during the same relevant period
does not exceed the level of the Company's compliance.
"SMR Frequencies" means 800 MHz specialized mobile radio frequencies.
"Special Option Sections" means those Option Sections designated as
"Special Option Sections" on Exhibit 6.
"Subsidiary" of a specified person means a corporation, partnership,
limited liability company or other entity in which the specified person
directly or indirectly owns or controls the shares of stock having ordinary
voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability
company or other entity.
"Substantial Agreement" means each of the Collateral Agreements except
the Transition Services Agreement and the Analog Management Agreement.
"swaps" -- see Section 4.8.
"Switch Sharing Agreement" means the Switch Sharing Agreement, dated
the same date as this Agreement, between Opco and NWIP, as amended and in
effect from time to time.
"Territory" means, at the date hereof, the Initial Sections, and, if
and when the Company elects to add Option Sections under Section 6.2, will
include such Option Sections, and will also include or exclude, from time to
time, as the case may be, Sections or service areas that are removed or
returned pursuant to Section 6.2C or 6.2D.
"Total Common Equity" of the Company means, as of any day of
determination, the product of (i) the aggregate number of shares of fully
diluted common stock of the Company on such day and (ii) the average closing
price of such common stock over the 20 consecutive trading days immediately
preceding such day. If no such closing price exists with respect to shares of
any such class, the value of such shares for purposes of clause (ii) of the
preceding sentence shall be determined by the Board in good faith and evidenced
by a resolution of such Board.
"Trademark License Agreement" means the Trademark License Agreement,
dated the same date as this Agreement, between NWIP and Opco, as amended and in
effect from time to time.
"Transaction Documents" means the agreements or instruments identified
on Exhibit I.
"Trigger Point" -- see Section 5.7B.
"Upper 200" -- see Section 4.8.
"Useable Frequency" with respect to each type of Build Area has the
meaning specified in Exhibit 4.1.
"Voting Stock" of any person means capital stock of such person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"VPN" -- see Section 11D.
"Year One Build Areas" are the areas identified with the number "1" in
the "PTNR Build Year" column of Exhibit 6.
2. OPERATING ARRANGEMENTS
2.1 The Company will be responsible for the construction and ongoing
operation of an ESMR Network in the Territory. Except as otherwise required by
this Agreement or any Collateral Agreement, the Company's responsibilities
include, without limitation, the following activities in the Territory:
A. Planning, supervising, and monitoring the Build Out
of the local ESMR Network;
B. RF design work;
C. Securing site leases or other similar real property
rights to install and maintain cell sites;
D. Acquiring and deploying the infrastructure equipment
(essentially cell sites);
E. Securing adequate financing for capital expenditures
and working capital;
F. Provisioning necessary telco facilities to connect
to the national ESMR Network of the NDS;
G. Ongoing maintenance and operation of local cell
sites and telco facilities;
H. Local area advertising and marketing;
I. Local sales and customer support;
J. Fulfillment, billing, collections, customer care,
accounting, equipment and systems monitoring and other standard general and
administrative functions;
K. Preserving and maintaining FCC licenses to use SMR
Frequencies held by the Company (or any of its Subsidiaries); and
L. Clearing of the upper 200 SMR Frequencies to create
contiguous spectrum, so long as Nextel is acting under Section 4.8.
2.2 Territory. Exhibit 6 identifies (i) the Initial Sections; (ii)
the Option Sections that may be added to the Territory under Section 6.2; (iii)
the Build Areas in each Section; and (iv) the Build Year by which the Build Out
for Build Areas must be completed.
2.3 Exclusivity. NWIP will cause the Nextel Group to recognize the
Company's exclusive right, subject to the next sentence, to build and operate
an ESMR Network and to provide wireless communications services in the
Territory and, until the Company's right to include the Option Sections in the
Territory has expired, in the Option Sections. The Company's exclusive right
is subject to the rights of NWIP and other members of the Nextel Group set
forth in Sections 2.4A, B, and C, 6.2C and D, 8.2, 8.4, 8.6, 8.8, 9.2 (the last
sentence), 9.3, 9.5, 10.3, 11, 12.1, 12.4 of this Agreement, and Sections 2.1
(a) and 2.2(c) of the Roaming Agreement and to any other exceptions to or
limitations on such exclusive rights as may be agreed to in writing with any
required approval of the Board (or the Board of Directors of a relevant
Subsidiary) from time to time after the date hereof between the Company,
Opco or any other Company Subsidiary, on the one hand, and NWIP or any other
member of the Nextel Group, on the other.
2.4 Nextel Operations.
A. Except to the extent required to satisfy its
obligations under Section 4.18, NWIP has no obligation to contribute, assign,
or otherwise transfer to the Company any rights or assets of the Analog Systems
or Analog Services in the Territory (nor Analog Services customer revenue nor
Analog Systems fixed assets) nor, subject to 2.4D, any non-800 MHz frequencies,
other assets or contracts.
B. No member of the Nextel Group may operate Digital
Systems or provide Digital Services in the Territory using 800 MHz frequencies,
except as permitted by Sections 12.1 and 12.4. The Nextel Group may operate
Analog Systems and provide Analog Services in the Territory and the Option
Territory using 800 MHz frequencies, provided that such Analog Systems and
Analog Services (1) are not operated or offered under any of the Licensed Marks
or any similar branding or product or service identification and (2) do not
involve the use of iDEN or any other digital transmission technology with
respect to 800 MHz.
C. Subject to Section 2.4D, the Nextel Group may
operate Digital Systems and provide Digital Services in the Territory and the
Option Territory using non-800 MHz frequencies, provided that such Digital
Systems and Digital Services (1) are not operated or offered under any of the
Licensed Marks or any similar branding or product or service identification,
(2) do not involve the use of iDEN or any other digital transmission technology
with respect to 800 MHz frequencies and (3) do not offer interconnection with
landline telecommunications providers.
D. NWIP and the Company shall negotiate in good faith
with each other (and with any relevant third parties) to reach agreement on
arrangements whereby the Company would be permitted to have the first right to
own and operate any business that proposes to use or manage the use of 900 MHz
frequencies in the Territory and/or in the Option Territory. If the Company,
NWIP and any relevant third party are unable to reach a mutually satisfactory
agreement on such arrangements within 90 days after the start of negotiations,
NWIP, another Nextel Subsidiary or such third party may operate the business
using or managing the use of 900 MHz frequencies licensed to one or more
members of the Nextel Group, but only in compliance with Section 2.4C, and the
terms of the arrangements between NWIP or any other Nextel Subsidiary and any
such third party are not, taken as a whole, more favorable to such third party
than the terms offered to the Company. For a period of 365 days after the
conclusions of negotiations with the Company, the business using or managing
the use of the 900 MHz frequencies shall not be sold or otherwise transferred
to any third party on terms that are, taken as a whole, more favorable to such
third party than the terms that were offered to the Company.
2.5 Sufficient of Rights. During the period that any of the
Collateral Agreements is in force, NWIP will obtain from the relevant member
of the Nextel Group the ownership, leasehold, or other authorized use rights of
any NDS that are needed by NWIP to perform its obligations under each such
Collateral Agreement that is in force.
2.6 Nondiscrimination; Standard of Care.
A. All products, services and systems that NWIP is
required to make available to the Company pursuant to this Agreement and the
Collateral Agreements will (1) except as provided herein or therein, be the
same products, services and systems provided to or used by the NDS, and (2) be
made available to the Company in the manner and on the schedule and at the same
service levels as provided to or used by the NDS. NWIP will provide or cause
to be provided to the Company all such products, services, and systems, and
will otherwise deal with the Company under this Agreement and the Collateral
Agreements in a manner that does not discriminate against the Company in favor
of the NDS, but, except as otherwise provided in this Agreement or the
Collateral Agreements, no member of the Nextel Group is required to provide any
product, service, or system, or take any action for or on behalf of the Company
or any of its Subsidiaries that is not provided to or taken for the NDS.
Neither NWIP nor any member of the Nextel Group will be liable for damages, or
shall be subject to any claim for monetary recovery against or from them, under
this Agreement or any Collateral Agreement with respect to such products,
services or systems unless there has been negligence or wilful misconduct in
providing (or failing to provide) such products, services or systems and where
such damages or monetary recoveries are allowed, the limitations of Section
12.9F will be applicable.
B. To the extent that, as provided herein and in the
Collateral Agreements, the Company in designing, constructing, operating and
maintaining the ESMR Network in its Territory is required to comply with
requirements, procedures and standards in effect from time to time and
applicable generally to the corresponding activities relating to the NDS ESMR
Network, NWIP will communicate to the Company such requirements, procedures and
standards at the same time and in substantially the same manner as such
requirements, procedures and standards are communicated to the NDS (which may
be in writing or may be by presentation or discussion at meetings).
C. The Company acknowledges that the products, services,
and systems used by the NDS were designed and are operated and maintained for
their businesses, and that the NDS expect to continue to develop, operate and
maintain their products, services and systems for their businesses. If the
products, services and systems made available to the Company are provided as
stated in Section 2.6A and B, and those products, services or systems are not
as effective in the Company's businesses as they are in the businesses of the
NDS, NWIP will not be in violation of the terms of this Agreement or any of the
Collateral Agreements with respect to any such reduced effectiveness.
D. If NWIP is required under this Agreement or any of the
Collateral Agreements to provide or cause to be provided to the Company
products, services or systems that are materially different from or not
provided to the NDS, neither NWIP nor any member of the Nextel Group will be
liable for damages, or shall be subject to any claim for monetary recovery
against or from them, under this Agreement or any Collateral Agreement with
respect to such products, services or systems unless there has been gross
negligence or wilful misconduct in providing (or failing to provide) such
products, services or systems and where such damages or monetary recoveries are
allowed, the limitations of Section 12.9F will be applicable.
E. Except as otherwise provided herein or a Collateral
Agreement, the schedule for the Company's implementation of, or compliance
with, the requirements, procedures and standards of the NDS will be the
schedule in effect at the relevant time and applicable generally to the NDS.
F. No claim can be made or relief sought for the Company's
violation of this Agreement or any Collateral Agreement to the extent that the
Company's compliance with the requirements, procedures, and standards that
apply to the NDS, equals or exceeds the compliance achieved by the NDS
generally.
2.7 Special NWIP Approval Rights.
No action by the Company, License Co., Opco or any other
Subsidiary (including but not limited to any action by the Board or any
committee thereof or the board of directors or any committee thereof of the
relevant Subsidiary) shall be taken after the date hereof with respect to any
of the following matters without the prior written approval (which shall be
given or withheld within 30 days of the Company's written request therefor) of
the NWIP Designee (as defined in the Shareholders' Agreement), provided, that
(a) approval by the NWIP Designee of the matters referred to in paragraph (ii)
below will no longer be required on the earlier of the date on which (x) NWIP
transfers any Shares (as defined in the Shareholders' Agreement) owned by NWIP
as of the date hereof to a Person (other than the Company) that is not a
"Permitted Transferee" under the Shareholders' Agreement and (y) the NWIP Call
Right expires and (b) approval by the NWIP Designee (as defined in the
Shareholders' Agreement) of the matters referred to in this Section 2.07 will
no longer be required if the Nextel Shareholders transfer their Shares (as
defined in the Shareholders' Agreement) pursuant to Section 3.08 of the
Shareholders' Agreement:
(i) any material change in the technology used by the
Company;
(ii) any decision to expand or to broaden the scope of the
Company's business beyond building and operating an ESMR digital mobile
communications network in the Territory including any decision to make any
acquisition other than 800 MHz or 900 MHz frequency licenses (the "Business
Objectives");
(iii) any modification or change in the Business Objectives
that is inconsistent with the Company's or any of its Subsidiaries' duties and
obligations under this Agreement or any of the Transaction Documents; or
(iv) any sale, exchange or other disposition of all or
substantially all of the assets of the Company; or
(v) the entering into any agreement or series of agreements
the terms of which would be materially altered if Nextel or NWIP either
exercised or elected not to exercise its right to acquire the relevant Company
Capital Stock (as defined in the Shareholders' Agreement) under Sections 3.05,
3.07, 4.01, 4.02, 5.03, 7.03 or 7.04 of the Shareholders' Agreement or
otherwise
acquired beneficial ownership of a majority of the outstanding or Fully Diluted
(as defined in the Shareholders' Agreement) shares of the Company Capital Stock.
3. TERM
3.1 Initial Term; Renewal Terms. The term of this Agreement is for
an initial term of ten years, plus an additional time period equal to the
period of any postponement of the NWIP Call Right under Section 4.02(a) of the
Shareholders' Agreement (the "Initial Term"), and is subject to renewal for up
to four additional ten-year terms (each, a "Renewal Term") at the Company's
option exercisable by providing 180 days' written notice prior to the end of
the Initial Term or any Renewal Term. Any extension of the Initial Term of
this Agreement or any renewal of this Agreement for a Renewal Term will
automatically extend and continue the terms of the Collateral Agreements so
that (unless the arbitrators have determined pursuant to Section 12.9D, that
the Trademark License Agreement should be terminated) the term of those
agreements are the same as this Agreement. Either the Company or NWIP may
terminate the Collateral Agreements at any time upon or after termination of
this Agreement (unless the arbitrators have determined pursuant to Section
12.9D that the Trademark License Agreement should continue).
4. FREQUENCIES AND LICENSES
4.1 Contribution of Licenses in Initial Sections.
A. Prior hereto, members of the Nextel Group have assigned
to License Co. the Initial Licenses. On the date hereof, NWIP is filing with
the FCC an application for approval to permit the Company to acquire all of the
outstanding capital stock of License Co. Pending FCC approval of the transfer
of the License Co. stock to the Company, NWIP has agreed to grant to the
Company certain rights to manage the use of the Initial Frequencies, subject to
the terms and conditions of the Interim Management Agreement being entered into
on the date hereof. In consideration for, among other things, entering into
the Interim Management Agreement, the Company is issuing shares of Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock of the
Company to NWIP pursuant to the Subscription and Contribution Agreement, in an
aggregate amount equal to the aggregate Exhibit 4.1 Value of the Initial
Frequencies (that are identified on Exhibit 4.1). Upon FCC approval for the
transfer of the stock of License Co. to the Company, License Co. will become a
wholly owned Subsidiary of the Company and the Interim Management Agreement
will terminate in accordance with its terms.
B. The parties will use their respective reasonable best
efforts to obtain FCC approval for the transfer of control of License Co. to
the Company and (if applicable) the arrangements contemplated by the
Transaction Documents as in effect on the date hereof.
C. Within 60 days after such FCC approval is granted, the
Company will notify NWIP of the number of Useable Frequencies that License Co.
is licensed to use in each Build Area of the Initial Sections. In the event of
any discrepancy between such number of Useable Frequencies and the number of
Useable Frequencies to which the Company is entitled as set forth on Exhibit
4.1 which discrepancy is not the result of the matters described in Part I of
Exhibit D to the Subscription and Contribution Agreement (identified on Exhibit
I), the parties
will promptly make such filings and take such other actions as are necessary to
ensure that License Co. is licensed to use the number of Useable Frequencies
set forth on Exhibit 4.1 (but no more than that).
D. If, as a direct result of the ultimate outcome
(including any judicial review or appeals) of Case No. 95F 860 that is
identified in Part II of Schedule D to the Subscription and Contribution
Agreement, the Company loses the right to an Initial Frequency (a "Chadmoore
Lost Frequency"), then at the Company's request (delivered to NWIP within sixty
(60) days after such ultimate outcome), NWIP will (or will cause the
appropriate member of the Nextel Group to) make such filings and take such
other actions as are necessary so that, for each Chadmoore Lost Frequency in
any Build Area, the Company receives in replacement therefor a Nextel Retained
Frequency in that Build Area (so long as any Nextel Retained Frequency is
available in that Build Area). If there are not sufficient Nextel Retained
Frequencies in a Build Area to replace all Chadmoore Lost Frequencies in that
Build Area, then at the Company's request, NWIP will (or will cause the
appropriate member of the Nextel Group to) make such filings and take such
other actions as are necessary to transfer to the Company Nextel Retained
Frequencies in any other Build Area for the Lost Chadmoore Frequencies
being replaced so long as the Exhibit 4.1 Value of such Nextel Retained
Frequencies is equal to or less than the Exhibit 4.1 Value of Lost Chadmoore
Frequencies being replaced (any Nextel Retained Frequency so acquired, a
"4.1D Frequency"). NWIP shall have no further obligations under this Section
4.1D and shall have no other liability or obligation in respect of or otherwise
connected with any Chadmoore Lost Frequency upon the earlier to occur of (i)
all Chadmoore Lost Frequencies being replaced pursuant to this Section 4.1D and
(ii) no Nextel Retained Frequency having an Exhibit 4.1 Value equal to or less
than the Chadmoore Lost Frequencies that have not been replaced.
4.2 Contribution of Licenses in Option Sections. If the Company
elects to include any Option Section in the Territory pursuant to Section 6.2,
NWIP will, within 30 days thereafter, cause appropriate applications to be
filed with the FCC for the approval of the assignment to License Co. of
licenses (the "Option Licenses") for that number of Useable Frequencies for
each Build Area within such Option Section as set forth on Exhibit 4.1 (the
"Option Frequencies"). Pending FCC approval of any such assignment, NWIP will,
if the Company so requests, grant to License Co. the right to manage the use of
the Option Frequencies, subject to the terms and conditions of a management
agreement in substantially the form of the Interim Management Agreement, such
grant to be made on or prior to the date of filing of the transfer applications
with the FCC. Upon the earlier of the granting of FCC approval of the
assignment of the Option Licenses to License Co. or, if applicable, the
granting by NWIP of management rights with respect to the Option Frequencies,
the Company will issue to NWIP a number of shares of Equity equal to the
aggregate Exhibit 4.1 Value of such frequencies divided by the Equity Value on
the date hereof, as appropriately adjusted for stock splits and combinations,
stock dividends and the like.
4.3 Other Acquisitions of Licenses from Nextel Group. If the
Company requires frequencies in any Build Area in the Territory in addition to
the Initial Frequencies or Option Frequencies in such Build Area, the Company
may ask NWIP whether any member of the Nextel Group is licensed to use any
frequencies in such Build Area. NWIP will respond to such request
within 30 days, indicating the number and its estimate of the fair market value
of any such frequencies. Within 10 days after receiving NWIP's response (the
"NWIP Response"), the Company may notify NWIP of the frequencies that it wants
to use (the "Section 4.3 Frequencies"). Within 30 days after receipt of such
notice, NWIP will cause appropriate applications to be filed with the FCC for
the approval of the assignment to License Co. of licenses for the Section 4.3
Frequencies in such Build Area. Pending FCC approval of such assignment, NWIP
will, if the Company so requests, grant to License Co. the right to manage the
use of the Section 4.3 Frequencies, subject to the terms and conditions of a
management agreement in substantially the form of the Interim Management
Agreement, such grant to be made on or prior to the date of filing of the
assignment applications with the FCC. Notwithstanding the foregoing, NWIP will
not be obligated to assign any such license, or to grant to License Co. the
right to manage the use of any such Section 4.3 Frequency, that is being used
by the Nextel Group to provide Analog Services, prior to 180 days following the
date of the Company's request. Upon the earlier of the granting of FCC approval
of the assignment of such licenses to License Co. or, if applicable, the
granting by NWIP of management rights with respect to the Section 4.3
Frequencies, the Company will (i) issue to NWIP a number of shares of Equity
equal to the aggregate Fair Market Value of the Section 4.3 Frequencies divided
by the Equity Value on the date of issuance or (ii) assign to NWIP, in
accordance with Section 4.4, Old Licenses for frequencies with an aggregate
Frequency Value equal to the aggregate Frequency Value of the Section 4.3
Frequencies; provided, that the issuance of shares by the Company or the
assignment of licenses by License Co., and the assignment of licenses or
granting of management rights by NWIP, will take place simultaneously and will
be delayed until the aggregate Fair Market Value of the Section 4.3 Frequencies
is determined.
4.4 Swaps and Exchanges of Licenses with Nextel Group. In lieu of
issuing Equity in consideration for licenses as provided in Section 4.3, the
Company may elect to assign Old Licenses for Old Frequencies to NWIP in
exchange for New Licenses for New Frequencies, in accordance with the following
provisions:
A. If the Frequency Acquisition Amount is greater than
zero (after giving effect to any proposed license or frequency exchange
pursuant to this Section 4.4), the Company may exchange an Old Frequency in any
Build Area for a New Frequency in the same or any other Build Area without
NWIP's consent or approval.
B. After the Frequency Acquisition Amount has been reduced
to zero, the Company shall have the right to exchange:
1. for a New Frequency in any Build Area, an Old
Frequency in the same Build Area:
a. without the consent of NWIP, if the Old
Frequency has substantially the same coverage characteristics as the New
Frequency, and
b. with the consent of NWIP not to be
unreasonably withheld, if the Old Frequency does not have substantially the
same coverage characteristics as the New Frequency; and
2. for a New Frequency in any Build Area, an Old
Frequency in a different Build Area, with the consent of NWIP not to be
unreasonably withheld, if the New Frequency is licensed to any member of the
Nextel Group (other than License Co.) on the date hereof. Exhibit 4.4 lists
the frequencies that are licensed on the date of this Agreement to a member of
the Nextel Group (other than License Co.) (the "Nextel Retained Frequencies").
C. For any exchange, the Company shall cause appropriate
applications to be filed with the FCC for the approval of the assignment to
NWIP (or another member of the Nextel Group designated by NWIP) of such Old
Licenses. Pending FCC approval of such assignment, the Company will, if NWIP
so requests, or will cause License Co. to, grant to NWIP (or such other member
of the Nextel Group) the right to manage the use of the frequencies subject to
such Old Licenses, subject to the terms of a management agreement in
substantially the form of the Interim Management Agreement, such grant to be
made on or prior to the date of filing of the assignment applications with the
FCC.
D. For any exchange, the aggregate Frequency Value of the
Old Frequencies being exchanged, together (if necessary) with Equity issued to
NWIP pursuant to Section 4.3, must be equal to the aggregate Frequency Value of
the New Frequencies being acquired.
E. For any exchange, the Frequency Acquisition Amount, if
not already zero, will be reduced by an amount equal to the aggregate Frequency
Value of the Old Frequencies being exchanged.
4.5 Acquisitions of Licenses from Third Parties.
A. The Company may acquire FCC licenses for frequencies from
third parties on such terms as the Company and such third parties may agree,
and the Company will pay the purchase price of such licenses and otherwise be
responsible for such acquisitions; provided, that so long as the Frequenc
Acquisition Amount has not been reduced to zero (after giving effect to any
transaction pursuant to this Section), the provisions of this Section 4.5A will
apply. At the closing of any such acquisition, (i) NWIP will pay the purchase
price of such licenses to the extent of any remaining Frequency Acquisition
Amount (or any portion thereof properly specified by the Company) to the
Company or (at the Company's request) directly to the third party seller,
whereupon the Frequency Acquisition Amount will be reduced by the amount of
such payment, (ii) the third party seller will assign such licenses to License
Co. and (iii) License Co. will assign to NWIP (or another member of the Nextel
Group designated by NWIP) Old Licenses for Old Frequencies in any Build Area
with an aggregate Exhibit 4.1 Value equal to the purchase price (or portion
thereof) paid by NWIP under clause (i) above. The Company will give NWIP at
least 10 days' notice of any such closing, and it will be a condition precedent
to NWIP's obligations under this Section that the FCC shall have granted
approval for the assignment of licenses to NWIP under clause (iii) above.
B. The Company and NWIP will coordinate their frequency
acquisition efforts, among other reasons, to avoid conflict with NWIP's
activities under Section 4.8. If any party becomes aware that licenses
are available for acquisition in the Territory or the Option Territory, it
will promptly notify the other party. For 90 days thereafter, the Company, upon
notice to NWIP of its intent to acquire such licenses, will have the
exclusive right to negotiate with the prospective seller of such licenses. If
the Company elects not to pursue the acquisition of such licenses, it will
promptly notify NWIP, whereupon any member of the Nextel Group may acquire such
licenses.
4.6 Frequency Auctions. NWIP will have the right to participate in
any FCC auction of licenses for frequencies (whether or not in the 800 MHz
frequency band and whether in the Territory or elsewhere in the United States)
and may assign such right to any other member of the Nextel Group. The Company
will have the right to participate in any FCC auction of licenses for 800 MHz
or 900 MHz frequencies in the Territory (a "Partner Auction") either with NWIP
or NWIP's assignee (collectively referred to in this Section 4.6 as "NWIP") or
independently if NWIP elects not to participate. If both NWIP and the Company
desire to participate in a Partner Auction, NWIP and the Company will enter into
a consortium agreement to form an auction consortium to bid on and fund the
purchase of any auction licenses in the Territory acting in accordance with FCC
Rules. In the consortium agreement, the Company will control the bidding and
have the right to fund 100% of the auction cost (in which case License Co. will
be the licensee of any license awarded in the auction). If the Company elects to
withdraw from the auction, or from bidding on any individual auction license,
NWIP will have the right to assume control of the bidding and fund the cost of
the auction (or individual auction license(s), as the case may be) independent
of the Company, in which case NWIP (or another member of the Nextel Group) will
be the licensee of any such license awarded in the auction.
4.7 Cooperation.
A. NWIP and the Company will cooperate so that, to the maximum
extent possible, those frequencies of each Nextel Subsidiary that become
Partner Frequencies are clear from co-channel interference and existing analog
customers.
B. NWIP, on behalf of the NDS, and the Company (on behalf of
itself and its Subsidiaries) will cooperate with respect to the use of
frequencies along border areas between the NDS ESMR Network and the ESMR Network
in the Territory, to make efficient use of spectrum, to preserve both parties'
rights as incumbent licensees 22DBU service contours and facilitate roaming by
subscribers using either party's service. Such cooperation will include, among
other things, agreements between the parties (or their relevant Subsidiaries) to
co-channel short spacing to make efficient use of spectrum.
4.8 Transactions to Create Continguous Spectrum. The Company will use
its reasonable best efforts and will expend commercially reasonable funds to
achieve contiguous spectrum in the upper 200 block of the SMR Frequency spectrum
(the "Upper 200") in the Territory. The Company hereby engages NWIP, and NWIP
hereby accepts such appointment, to act as the exclusive agent of the Company to
negotiate transactions that, by exchanges of frequencies ("swaps") or by other
arrangements will give the Company (as licensee) the benefit of additional
frequencies in the Upper 200. The Company will make available for possible
exchange all Partner Frequencies that are outside the Upper 200, except for
frequencies that are then required in the existing or contemplated operation of
the ESMR Network in the Territory. NWIP will report to the Company in writing
the proposed terms of any such arrangement or
transaction (including, without limitation, any costs, and the number,
location, and precise frequencies of the Company that are subject to any such
transaction), which terms will be subject to approval by the Company. The
Company (or one or more of its Subsidiaries, and not NWIP or any member of the
Nextel Group) will (i) directly enter into exchange or other transactions
affecting frequencies licensed to the Company, (ii) be responsible for any
amounts payable to the relevant third party, and reasonable out-of-pocket costs
or expenses of NWIP, associated with the exchange or other transaction, and
(iii) be entitled to the benefit of the frequencies obtained in the Upper 200 as
a result of such transaction or arrangement.
4.9 Nextel Analog Operations.
A. The Company will be responsible for the migration of any
analog customers from frequencies being used in the Company's ESMR Network as
deemed necessary by the Company. If the Company elects to migrate any
such analog customers, the Company will contract with NWIP to provide migration
management services for a one time fee of $20 per analog unit. Such services
would include, at the Company's request, the mailing of letters to the affected
analog customers stating the terms under which such customers could migrate to
the Company's ESMR Network. The Company will be responsible for all normal costs
(such as trade-in allowances, subsidies, loading expenses, analog unit returning
or refurbishment expenses) associated with any such offers to or migration of
such analog customers, and NWIP will not be entitled to any commission if such
customer is moved to the Company's ESMR Network. NWIP will be responsible for
the operation of the affected analog system in the Territory during the
migration process. Costs, expenses, liabilities and similar amounts incurred by
reason of claims asserted by such analog customers who have been identified for
migration, or by reason of actions taken by such customers to delay or prevent
such migration, shall be divided between and borne equally by the Company and
NWIP.
B. The Company has the right to solicit any analog customer of
any Nextel Subsidiary in the Territory who is not otherwise affected by
frequency migration under Section 4.9A. If the Company converts any such
customer to the Company's ESMR Network, the Company will pay NWIP a one time fee
of $150 per unit as compensation for such customer.
C. Under the Analog Management Agreement, Nextel Subsidiaries
will be entitled to operate Analog Systems and offer Analog Services
(on a basis consistent with Section 2.4B) using any frequencies licensed to
License Co. (or another member of the Company Group) that are not then being
used in the ESMR Network in the Territory.
4.10 Reserved.
4.11 Compliance with FCC Rules.
A. General. Subject to Section 4.12, the Company will be
responsible for complying with FCC Rules relating to all Partner Frequencies.
The Company will also be responsible for complying with all FCC or state
mandated programs (including, without limitation, federal universal
service fund, enhanced 911, telecommunications relay services for the hearing
impaired, local number portability, potential "calling party pays" services, and
potential priority access services), and for paying all applicable
fees, surcharges or taxes, applicable to or arising out of the Company's
operations in the Territory. Subject to Section 4.12, NWIP will be responsible
for complying with FCC Rules relating to any frequencies used by any Nextel
Subsidiary as part of its analog operations in the Territory.
B. Indemnification.
1. Except as provided in Section 4.12, the Company and Opco will,
jointly and severally, indemnify and hold harmless NWIP and the other
members of the Nextel Group, and their respective directors, officers,
shareholders, employees and agents (collectively, the "Nextel
Indemnitees"), from and against any and all claims, liabilities,
damages, losses and costs ("Losses") that arise under FCC Rules from
the conduct of business activities or other use of Partner Frequencies
by any member of the Company Group in a manner contrary to law or to
such indemnifying party's contractual obligations, except to the
extent that any such Losses arise out of or result from the gross
negligence or willful misconduct of any Nextel Indemnitee.
2. Except as provided in Section 4.12, NWIP will indemnify and
hold harmless the Company and Opco and the other members of the
Company Group, and their respective directors, officers, shareholders,
employees and agents (collectively, the "Company Indemnitees"), from
and against any and all Losses that arise under FCC Rules from the
conduct of business activities or other use of frequencies licensed,
managed or otherwise used by any member of the Nextel Group in a
manner contrary to law or to such indemnifying party's contractual
obligations, except to the extent that any such Losses arise out of or
result from the gross negligence or willful misconduct of any Company
Indemnitee.
C. Construction. Except as provided in Section 4.18, the
Company will have the obligations described in Article 6 with respect to all
frequencies in its ESMR Network consistent with the Build-Out schedule of
Exhibit 6, and the Company will be responsible for any construction of Partner
Frequencies required by the FCC Rules. NWIP may from time to time require the
Company to utilize frequencies that are not Partner Frequencies in the Company's
ESMR Network to comply with FCC Rules. In such event, NWIP will grant to License
Co. the right to manage the use of such frequencies under a management agreement
in substantially the form of the Interim Management Agreement. The Company will
not be required to pay any additional consideration to NWIP for managing the use
of such included frequencies. NWIP will have the right at any time upon
ten business days' notice to amend such management agreement so that such
included frequencies are no longer subject to its terms, except that the Company
can acquire such frequencies if the Company so notifies NWIP of its intention to
acquire such frequencies pursuant to Section 4.3 prior to the expiration of such
ten business days.
4.12 FCC Proceedings.
A. Obligations of Nextel Group. As licensee, NWIP (or another
member of the Nextel Group) will represent License Co. (or other members of the
Company Group) before
the FCC with respect to any matters relating to the licenses for
frequencies subject to the Interim Management Agreement (or any other management
agreement between NWIP as licensee and a member of the Company Group as manager)
and will have authority and responsibility for FCC correspondence and filings
with respect to such licenses. NWIP will timely provide copies of such FCC
correspondence and filings to the Company and will provide a full and
comprehensive flow of information on such matters to the Company in consultation
with, and with the cooperation and participation by the Company, on any issues
related to the Interim Management Agreement or any other Collateral Agreements.
The Company will timely provide information to NWIP necessary for NWIP to make
such FCC filings. NWIP (or another member of the Nextel Group) will have primary
responsibility for interacting with the FCC, in consultation with, and with the
cooperation and participation by the Company on any issues related to
frequencies that are subject to the Interim Management Agreement (or any other
management agreement between NWIP as licensee and a member of the Company Group
as manager). NWIP will pay any costs (including any fines) related to any FCC
inquiries or actions related to any breach by any member of the Nextel Group of
its obligations under this Section 4.12A.
B. Obligations of Company Group. As licensee, the Company (or
a Company Subsidiary) will represent NWIP (or other members of the Nextel Group)
before the FCC with respect to any matters relating to the licenses for
frequencies subject to the Analog Management Agreement (or any other management
agreement between NWIP as manager and a member of the Company Group as licensee)
and will have authority and responsibility for FCC correspondence and filings
with respect to such licenses. The Company will timely provide copies of such
FCC correspondence and filings to NWIP and will provide a full and comprehensive
flow of information on such matters to NWIP in consultation with, and with the
cooperation and participation by NWIP, on any issues related to the Analog
Management Agreement or any such other management agreement. NWIP will timely
provide information to the Company necessary for the Company to make such FCC
filings. The Company (or a Company Subsidiary) will have primary responsibility
for interacting with the FCC, in consultation with, and with the cooperation and
participation by NWIP (or other members of the Nextel Group) on any issues
related to frequencies that are subject to the Analog Management Agreement (or
any other management agreement between NWIP as manager and a member of the
Company Group as licensee). The Company will pay any costs (including any fines)
related to any FCC inquiries or actions related to any breach by any member of
the Company Group of its obligations under this Section 4.12B.
C. No Unauthorized Change of Control. The parties intend that
this Agreement, either alone or together with the other Collateral Agreements,
not (i) create an unauthorized FCC Change of Control or (ii) otherwise violate
the statutes, rules or regulations administered by the FCC (collectively, "FCC
Rules"). If the FCC formally or informally advises any party that the terms of
the Interim Management Agreement, the Analog Management Agreement or any other
management agreement executed pursuant to this Agreement, either alone or
together with the terms of any of this Agreement or the Collateral Agreements,
constitute in whole or in part, an unauthorized FCC Change of Control, then such
party will promptly notify the other party, and NWIP and the Company will
negotiate (i) to resolve the FCC concerns or directives to the satisfaction of
NWIP, the Company and the FCC, and (ii) to the extent necessary, modify the
terms of any management agreement then in effect between them or
this Agreement or any other Collateral Agreements in a manner most consistent
with the arrangements described herein or therein.
4.13 Transfer Restrictions.
A. Except as contemplated by this Agreement, the Company will not
(and will not permit any Subsidiary to) make any direct or indirect sale,
exchange, assignment, pledge, transfer or other disposition, in whole or in
part, of (i) ownership interests in any Company Subsidiary that holds licenses
for Partner Frequencies or (ii) licenses for, or other rights to use or to
manage the use of, Partner Frequencies. Notwithstanding the provisions of the
foregoing sentence, the Company and its Subsidiaries may (i) pledge ownership
interests in any Company Subsidiary that holds licenses for Partner Frequencies,
grant a security interest in licenses held by any member of the Company Group,
and collaterally assign rights to use or to manage the use of Partner
Frequencies, in each case to senior lenders to the Company or Opco that have
granted to members of the Nextel Group the rights described on Exhibit 4.13 (or
other rights as NWIP may agree), (ii) in connection with joint ventures in which
it participates in the Territory, grant rights to use or to manage the use of
Partner Frequencies on terms consistent with the provisions of this Agreement
(including without limitation this Section 4.13 and Section 4.14) and the other
Collateral Agreements, and (iii) subject to NWIP's rights under Section 4.14,
sell, transfer or otherwise dispose of 4.1D Frequencies.
B. Except as contemplated by this Agreement, NWIP will not
(and will not permit any member of the Nextel Group to) make any direct or
indirect sale, exchange, assignment, pledge, transfer or other disposition, in
whole or in part, of (i) ownership interests in any member of the Nextel Group
that holds licenses for frequencies or (ii) licenses for, or other rights to use
or rights to manage the use of, frequencies, in each case that are (at the time
of such disposition) subject to the Interim Management Agreement or any other
management agreement with members of the Company Group.
4.14 NWIP Right of First Refusal.
A. If any member of the Company Group (a "Company Transferor")
proposes to assign, directly or indirectly, a license for any frequency in the
Territory to a Person other than another member of the Company Group, the
Company Transferor must give NWIP written notice (the "4.14 Notice") stating
(i) the name and address of the proposed transferee, (ii) a description of the
license and frequency being transferred, (iii) a representation that the
proposed transferee has been informed of the right of first refusal provided in
this Section 4.14 and has agreed to be bound by its terms, (iv) a complete copy
of any related documents, and (v) a description of any common ownership or other
relationships between any member of the Company Group and the proposed
transferee and its Affiliates.
B. For a period of 30 days after delivery of the 4.14 Notice,
NWIP has the right to elect to purchase the license described in the 4.14 Notice
on the terms stated in this Section 4.14B. To exercise this right, NWIP must
deliver to the Company Transferor within such 30-day period a notice stating
that NWIP is irrevocably exercising its option to acquire the licenses for a
purchase price equal to the purchase price to be received from the proposed
transferee or, if less, the aggregate Frequency Value of the frequencies
subject to the license. If NWIP makes such election, within 30 days thereafter
the Company will cause the appropriate filings to made with the FCC to assign
to NWIP (or another member of the Nextel Group) such licenses, and the purchase
and sale will close within 45 days after FCC approval of the assignment
of such license is obtained. If the license covers a 4.1D Frequency, then NWIP
will pay the purchase price in cash. If the license does not cover a 4.1D
Frequency, the purchase price will be paid, at NWIP's election, in shares of
Company capital stock (other than Series B Preferred Stock) valued at the Equity
Value or in shares of Nextel common stock (valued at the average closing price
of Nextel common stock for the ten trading days preceding the date of delivery),
or in cash. If payment of the purchase price in shares of Series C or D
Preferred (or Class B Common Stock) would violate covenants of, or create an
event of default or result in other adverse consequences under any agreement for
money borrowed to which the Company is a party, the purchase price for
frequencies that are not 4.1D Frequencies may be paid in shares of Series B
Preferred valued at the fair market value of such Series B Preferred.
C. If NWIP does not irrevocably elect to acquire any license
described in the 4.14 Notice within such 30-day period, the Company Transferor
may assign such license to the transferee identified in the 4.14 Notice, on
terms that are no more favorable to the proposed transferee than those described
in the 4.14 Notice, so long as the application to transfer such license is filed
with the FCC within 60 days after delivery of the 4.14 Notice to NWIP.
D. NWIP's rights under this Section 4.14 terminate upon the
consummation of a Section 3.08 Sale (as defined in the Shareholders' Agreement)
or a Section 5.5 Sale (as defined in the Restated Certificate of Incorporation
of the Company).
4.15 Company Rights of First Refusal.
A. If any member of the Nextel Group (a "Nextel Transferor")
proposes to assign, directly or indirectly, a license for any 800 MHz frequency
in the Territory or the Option Territory to a Person other than another member
of the Nextel Group, the Nextel Transferor must give the Company written notice
(the "Section 4.15 Notice") stating (i) the name and address of the proposed
transferee, (ii) a description of the license and frequency being transferred,
(iii) a representation that the proposed transferee has been informed of the
right of first refusal provided in this Section 4.15 and has agreed to be bound
by its terms, and (iv) a complete copy of any related documents.
B. For a period of 30 days after delivery of the Section 4.15
Notice, the Company has the right to elect to purchase the license described in
the Section 4.15 Notice on the terms stated in this Section 4.15B. To exercise
this right, the Company must deliver to the Nextel Transferor within such 30-day
period a notice stating that the Company is irrevocably exercising its option to
acquire the licenses for a cash purchase price equal to the price offered by the
proposed transferee; provided, that if the Frequency Acquisition Amount has not
then been reduced to zero, the Company may acquire the licenses by assigning to
NWIP (or another member of the Nextel Group) Old Licenses in accordance with the
provisions of Section 4.4.
C. If the Company does not irrevocably elect to acquire any
license described in the Section 4.15 Notice within such 30-day period, the
Nextel Transferor may assign such license to the transferee identified in the
Section 4.15 Notice, on terms that are no more favorable to the proposed
transferee than those described in the Section 4.15 Notice, so long as the
application to transfer such license is filed with the FCC within 60 days after
delivery of the Section 4.15 Notice to the Company.
4.16 NWIP Option Upon Change in Control of the Company.
A. If there is a Change in Control of the Company, NWIP has the
option, exercisable within 90 days after such Change in Control, to acquire for
$1.00 the licenses covering all (but not less than all) of the Partner
Frequencies. Not more than 30 days after receiving written notice from NWIP that
it is irrevocably exercising this option, the Company will cause the appropriate
filings to made with the FCC to assign to NWIP (or another member of the Nextel
Group) either (i) the licenses for the Partner Frequencies or (ii) the stock in
License Co. or other Company Subsidiary that is the licensee of such
frequencies. Upon FCC approval of the assignment, and in consideration thereof,
NWIP as licensee and the Company (or a Company Subsidiary) as manager will enter
into a management agreement, substantially in the form of the Interim Management
Agreement, with respect to the Partner Frequencies.
B. "Change in Control of the Company" means the occurrence of
any of the following events:
(a) any person or group (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act and the regulations thereunder) (i) is
or becomes the Beneficial Owner or more than 50% of the total Voting
Stock or Total Common Equity of the Company, or (ii) otherwise has the
power to direct the management and policies of the Company, directly
or through one or more intermediaries, whether through the ownership
of voting securities, by contract or otherwise, except that no change
of control will be deemed to have occurred under this clause (ii) as a
result of customary rights granted (A) in any indenture, credit
agreement or other agreement for borrowed money or (B) to holders of
non-convertible, mandatorily redeemable, preferred stock unless and
until action occurs that would otherwise cause a "Change in Control of
the Company" as herein defined, provided that such rights were granted
pursuant to a transaction in the financial markets and not as part of
a strategic alliance or similar transaction;
(b) the Company sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
Person in one or a series of related transactions;
(c) the Company, directly or indirectly, consolidates with, or
merges with or into, another Person, or any Person, directly or
indirectly, consolidates with, or mergers with or into, the Company,
and pursuant to such transaction (or series of transactions) either:
(i) the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, but excluding a
transaction (or series of transactions) where (A) the outstanding
Voting Stock of the Company is converted into or exchanged for Voting
Stock of the surviving or transferee person and (B) the holders of
Voting Stock of the Company immediately preceding such transaction
received more than 50% of the total Voting Stock and Total Common
Equity of the surviving or transferee person in substantially the same
relative proportions as such holders had prior to such transaction; or
(ii) new shares of Voting Stock of the Company are issued so that
immediately following such transaction, the holders of Voting Stock of
the Company immediately preceding such transaction own less than 50%
of the Voting Stock and Total Common Equity of the surviving person;
or
(d) during any period of two consecutive years after the date
hereof, individuals who at the beginning of such period constituted
the board of directors of the Company (together with any directors who
are members of the board of directors of the Company on the date
hereof, and any new directors whose election by such board of
directors or whose nomination for election by the stockholders of the
Company was approved by a vote of 66-2/3% of the directors then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the board of
directors of the Company then in office; provided, that no change in
the composition of the Board by reason of any substitution of one
director for another so long as both directors are nominated by the
same person, shall constitute a Change in Control of the Company for
purposes of this paragraph (d).
(e) notwithstanding the foregoing, no "Change of Control of the
Company" shall occur merely by reason of a transfer by Eagle River
Investments, LLC ("Eagle River") to another Person of the capital
stock of the Company owned by Eagle River so long as ▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇") controls (as defined in Section 4.01(h) of the Shareholders'
Agreement) such Person whether or not ▇▇▇▇▇ owns a majority of the
equity interests of such Person, unless such transfer, sale or
disposition, alone or in conjunction with other transactions, results
in the occurrence of an event of the type described in any of clauses
(a), (b), (c) or (d) above.
C. NWIP's rights under this Section 4.16 terminate upon the
consummation of a Section 3.08 Sale (as defined in the Shareholders' Agreement)
or a Section 5.5 Sale (as defined in the Restated Certificate of Incorporation
of the Company).
4.17 Representations and Warranties. In connection with any
assignment of licenses hereunder from a member of the Nextel Group to a member
of the Company Group, or vice versa, the assignee will be entitled to receive
representations and warranties by the assignor regarding such licenses and the
documents governing such assignment that are substantially identical to the
representations and warranties made by NWIP in Sections 4.01, 4.02, 4.03, 4.04
and 4.11 of the Subscription Agreement (it being understood that for purposes
of Section 4.16A only, if the Company and its Subsidiaries have pledged
ownership interests in any Company Subsidiary that holds licenses for
Partner Frequencies, granted a security interest in licenses held by any
member of the Company Group, or collaterally assigned rights to use or to manage
the use of Partner Frequencies, in each case to the Company's or Opco's senior
lenders, such pledge,
security interest or collateral assignment will remain in full force and effect
notwithstanding any assignment of licenses from a member of the Company Group to
a member of the Nextel Group).
4.18 Frequency Construction.
A. For licenses and frequencies in the Territory (licensed to
or managed by any of the Company or a member of the Nextel Group) that are
constructed on the date of this Agreement at their licensed sites with analog
scanning repeaters ( the "Constructed Frequencies"), NWIP hereby leases to the
Company for $1.00 the equipment used to construct any Partner Frequencies at
such sites until such time as such equipment is no longer needed to meet FCC
construction requirements. NWIP and the Company will each pay one half of the
ongoing operating costs associated with the Constructed Frequencies until such
time as the site, or its operation, is no longer necessary to meet FCC
construction requirements.
B. For licenses and frequencies in the Territory (licensed to
or managed by any of Partner or a member of the Nextel Group) that have a
construction deadline under FCC Rules of May 20, 1999 or earlier (the "May 20th
Frequencies"), NWIP and the Company will (a) each pay one half of the
construction or ongoing operational costs to construct and operate such
frequencies at their licensed sites, and (b) construct such frequencies using
analog scanning repeaters in a manner similar to the construction of the
Constructed Frequencies.
C. NWIP and the Company will each use their reasonable best
efforts to (a) seek orders or other action by the FCC that will provide relief
from the construction requirements, and (b) minimize the cost of the
construction required to meet the FCC construction requirements. Unless
otherwise agreed between NWIP and the Company, they will (i) keep all
Constructed Frequencies constructed and operating, and (ii) construct all May
20th Frequencies prior to the construction deadline under the FCC Rules, and,
following construction, will operate such frequencies. NWIP (or another member
of the Nextel Group) will manage the construction and deconstruction process for
the Constructed Frequencies and the May 20th Frequencies for so long as
construction using analog scanning repeaters is required. Internal costs
incurred by any member of the Nextel Group or by the Company under this Section
4.18 will not be included in the construction or operating costs to be shared by
the parties.
D. If, at any time, for any reason, the parties agree that
construction or operation using analog scanning repeaters is not required or no
longer required for a Constructed Frequency or for a May 20th Frequency (such a
frequency, a "4.18D Frequency"), NWIP will no longer have responsibility for
construction or operating costs associated with a 4.18D Frequency that is a
Partner Frequency, and the Company will no longer have responsibility for
construction or operating costs associated with a 4.18D Frequency that is
licensed to a member of the Nextel Group (other than License Co. if it is still
a member of the Nextel Group).
5. COMPANY ACCESS TO PROPRIETARY
TECHNOLOGY AND NETWORK COMPONENTS
5.1 Coordination of Equipment Orders and Purchases. NWIP (on behalf
of the Nextel Group) and the Company (or Opco, in either case, on behalf of the
Company and its
Subsidiaries) will each forecast periodically (not more frequently than
quarterly) its subscriber and infrastructure equipment requirements and
coordinate regarding assumptions and methodologies to create accurate forecasts
to which each will have access. The Company (on behalf of Opco and its other
Subsidiaries) and NWIP (on behalf of the Nextel Group) will coordinate their
equipment orders with the major vendors in order, to the extent possible, to
avoid potential equipment shortages. If such shortages arise, equipment will
be allocated pro-rata, to the Company, based on the population in the
Territory, and to the Nextel Group, based on the population in the territory
in which the Nextel Group has rights to operate ESMR Networks (worldwide), as
adjusted to reflect NWIP's judgment of the realistic needs for equipment that
may be relevant in markets outside the United States. In no event will NWIP or
the Nextel Group have any obligation to pay for or guarantee purchases of
equipment by the Company.
5.2 Access to Vendor Equipment and Agreements.
A. Upon expiration of the Company's Infrastructure Equipment
Purchase Agreement with Motorola, NWIP will use its best reasonable efforts to
induce Motorola to enter into an agreement with Opco or to extend its agreement
with Opco, which will allow: (i) Opco to obtain the same prices then available
to the NDS for such equipment; (ii) Opco to have rights to use Motorola
trademarks and trade names comparable to those trademark and trade name usage
rights granted by Motorola to the NDS; and (iii) Opco to have access to system
upgrades, improvements and technology enhancements made available by or through
Motorola comparable to those available by or through Motorola to the NDS.
Neither NWIP nor any NDS (nor any other Nextel Subsidiary or Affiliate operating
internationally) will be obligated to make any out-of-pocket payments or
otherwise make any concessions in its agreements with Motorola in order to
achieve the Company's or Opco's objectives. If Motorola seeks to impose such
payments or obtain such concessions in connection with achieving the Company's
or Opco's objectives, NWIP will advise the Company and provide the Company with
a good faith estimate of the aggregate total dollar amount of such payments and
the cost to Nextel (on a consolidated basis) of such concessions. If the Company
indicates that it wants to achieve the objectives, the Company will be obligated
to reimburse NWIP in full for all such payments made and costs incurred,
promptly on demand after payment or incurrence by Nextel or its Subsidiaries,
for all such payments and/or concessions imposed on or incurred by Nextel or any
of its Subsidiaries (or any Nextel Affiliate operating internationally) and
NWIP's obligation to continue performance under this Section 5.2A is conditioned
on NWIP's timely receipt of such reimbursement amounts.
B. NWIP will use its best reasonable efforts to enable the
Company to obtain from third party vendors (other than Motorola) access to
equipment and services that are of the same quality and functionality and on the
same terms and conditions as the equipment or services being purchased by the
NDS from such third party vendors. If such arrangements are obtained, the
Company will enter into direct contracts with such outside vendors for the
purchase of equipment or services. Neither NWIP nor any other member of the
Nextel Group will be obligated to make any out-of-pocket payments or otherwise
make any concessions in its agreements with such vendors in order to achieve the
desired terms for the Company. If a vendor seeks to impose such payments or
obtain such concessions in connection with achieving the desired terms for the
Company, NWIP will advise the Company and provide to the Company a good faith
aggregate estimate of the total dollar amount of any payments and the cost to
the
Nextel Group (on a consolidated basis) of any concessions being sought by such
vendor. If the Company indicates that it wants to achieve the desired terms,
then the Company will be obligated to reimburse NWIP in full for all such
payments made and costs incurred, promptly on demand after payment or
incurrence by any member of the Nextel Group, for all such payments and/or
concessions imposed on or incurred by any member of the Nextel Group, and NWIP's
obligation to continue performance under this Section 5.2B is conditioned on
NWIP's timely receipt of such reimbursement amounts. If the Company is unable to
obtain the NDS terms under a separate contract with a vendor, and if the
contract is a contract for equipment or services that are material to the
Company and cannot be acquired by the Company, after using its best reasonable
efforts, from any other third party vendor on commercially reasonable terms and
conditions that are not materially less favorable than the NDS terms, then: (i)
if such action does not involve any adverse impact or consequence to or breach
by an NDS under the terms of the relevant contracts with such vendors, NWIP will
purchase equipment or services on the Company's behalf in order to make
available to the Company the NDS terms; or (ii) if there is an adverse impact or
consequence to NWIP or an NDS, but there are commercially reasonable
accommodations to avoid such adverse impact or consequence, NWIP will provide
the Company with a description of the commercially reasonable accommodations,
and a good faith estimate of the dollar amount required and a statement of the
other actions required from the Company. If the Company wants the benefit of the
NDS terms, then the Company will pay such amount and take such actions, and NWIP
will purchase the equipment or services on behalf of the Company in order to
make available to the Company the NDS terms. If actions to provide the Company
with the benefits of a contract would cause NWIP or an NDS to breach a contract
with a third party, none of NWIP or the NDS are required to take any action
under the preceding sentence. The Company will pay NWIP for any equipment
ordered or services to be provided through this intermediary process at the time
of placing such order to ensure that neither NWIP nor any other member of the
Nextel Group has any economic exposure to the vendor for the Company's purchases
of equipment or services and, if the amount so paid exceeds $250,000, NWIP will
pay to the Company interest earned on the relevant payment during the period
until payment is made to the vendor.
5.3 Future Improvements and Enhancements to Technology or Network.
A. Subject to having access to the enhancements described in
this Section 5.3 or obtained from Motorola (under separate agreements between
the Company and Motorola) or elsewhere as contemplated by Section 5.2, (i) the
Company will be required to implement any changes, modifications, upgrades, or
enhancements to the iDEN technology or other network components ("Improvements")
which are also implemented and in use by NDS on a national level or in
Comparable Service Areas and (ii) the Company will be responsible for the cost
of any Improvements in the Territory and will share pro-rata based on the
population in the Territory and in the area served by the NDS (or based on the
population in the area served by Nextel and its Affiliates worldwide, to the
extent any of such Affiliates are implementing, or are planning to implement,
the Improvement outside the United States) in the cost of any research and
development expenditures incurred by the Nextel Group directly in connection
with Improvements (other than Improvements owned solely by the Nextel Group)
that are implemented on a national level or in Comparable Service Areas (to the
extent such research and development expenditures are not otherwise charged to
the Company at a switch level).
B. NWIP will use its best reasonable efforts to enable the
Company to obtain from third parties agreements between the Company and the
third party that will enable the Company to have access to any Improvements used
by any of the NDS in their national network. Only if NWIP provides the Company
with access to Improvements on the same terms as the NDS can NWIP require the
Company to implement such Improvements.
C. NWIP will make available to the Company any Improvements
that the NDS own (or claim ownership of) and are then using on a national level
or in Comparable Service Areas. Whether or not NWIP notifies the Company that
the Company is required to implement such Improvements, such Improvements will
be made available by NWIP to the Company only on an "as is" basis, with all
faults, and without any representation or warranty whether of title or fitness
for a particular purpose (even if such Improvements are being used by the
Company for the same purpose as they are used by the NDS) or otherwise. The
Company will use any such Improvements for zero cost but at its sole risk,
and neither NWIP nor any other member of the Nextel Group will have any
liability to the Company in connection therewith, except as provided in Section
5.3D.
D If a third party brings a claim against the Company alleging
that the Company's use of any Improvement (other than any Improvement obtained
from Motorola) is contrary to or otherwise infringes on such third party's
rights, then NWIP will not require the Company to continue using such
Improvements unless NWIP agrees to indemnify and hold the Company harmless from
and against the excess of (1) any costs the Company incurs in connection with
such claims, over (2) the benefits (net of costs) the Company realizes through
its use of such Improvement. In addition, in the event of such third party
claims, NWIP also has the right to require the Company to immediately cease
using (upon written notice to that effect given by NWIP to the Company) the
Improvement at issue, so long as NWIP will indemnify and hold the Company
harmless from and against the excess of (i) any costs the Company incurs in
ceasing such use (including removal or decommissioning of any related
equipment), over (ii) the cumulative benefits (net of costs) the Company has
realized through its use of such Improvements prior to the time it ceases to use
them.
E. If a third party brings a claim against the Company, NWIP,
or any other member of the Nextel Group alleging that the Company's use of any
Improvement (other than any Improvement obtained from Motorola) is contrary to
or otherwise infringes on such third party's rights, and the Company is not
required to use the Improvement under this Section 5.3, the Company will
immediately cease using the Improvement if NWIP so requests in writing and, if
NWIP does not so request, and the Company wishes to continue using such
Improvement, the Company will indemnify and hold NWIP and each other member of
the Nextel Group harmless from such continued use.
F. If the Company (or any of its Affiliates) develops any
Improvements for its (or their) use, the Company will make such Improvements
available to the NDS on an "as is" basis, with all faults, and without any
representation or warranty whether of title or fitness for a particular purpose
(even if such Improvements are being used by the NDS for the same purpose as
they are used by the Company) or otherwise. The NDS will be entitled to use such
Improvements for zero cost, but at its (or their) sole risk, and neither the
Company nor any other
member of the Company Group will have any liability to the NDS in connection
therewith except as provided in this Section 5.3F. If the Company (or any
of its Affiliates) license from third parties any Improvements, the Company will
use its best reasonable efforts to make those Improvements available to the NDS
on the same terms as the Company obtains the Improvements from the third party.
If a third party brings a claim against the Company, any of its Affiliates, or
any of the NDS alleging that the NDS's use of any Improvement that is licensed
by the Company to the NDS under this Section 5.3F is contrary to or otherwise
infringes on such third party's rights, then the NDS will immediately cease
using the Improvement if the Company so requests in writing, and, if the Company
does not so request, and the NDS wish to continue using such Improvement, NWIP
will indemnify and hold the Company harmless from such continued use.
G. Notwithstanding anything to the contrary in this Section
5.3, the Company's obligation to implement any Improvements is subject to
Section 7.04 of the Shareholders' Agreement, provided that the Company's
obligation to implement any Improvement and Nextel's obligation to comply with
such Section 7.04 terminates when no member of the Nextel Group owns an equity
interest in the Company.
5.4 [RESERVED]
5.5 Access to National Switching Network. NWIP and the Company will
cooperate to establish a switch configuration for the Company's network in the
Territory, and to deploy switches in a manner which best meets the following
objectives: (i) allowing the Company to integrate its cell sites into the NDS's
national switching infrastructure; (ii) allowing both the NDS and the Company to
provide Direct Connect coverage to logical communities of interest; and (iii)
minimizing the costs to both the NDS and the Company and maximizing the quality
of service to subscribers of both the NDS and the Company; provided, that
neither NWIP nor the Company will be required to configure or deploy switches in
a manner that results in degradation of existing service. To facilitate
cooperation in network planning, representatives of the Company will participate
in regular meetings and planning for national network configuration. The Company
will be required to provide to NWIP quarterly forecasts (or forecasts covering
such other period(s) as may from time to time be generally applicable to
forecasts made by the NDS) of expected cell site build out, traffic growth in
the Territory, anticipated timetables for the implementation of any
Company-owned switches, and such other measurement criteria as are generally
supplied in forecasts made by the NDS, covering a rolling 18-month period (or
such other period as may from time to time be generally applicable to forecasts
made by the NDS), in a format and on such additional terms as agreed to by NWIP
and the Company. NWIP will cause the NDS not to discriminate against the Company
in configuring or revising their switching networks.
5.6 Integration with Nextel Owned Swithing Facilities. The Company
will have the option to integrate its cell sites with the NDS switching
facilities pursuant to the Switch Sharing Agreement.
5.7 Company Owned Network Switches and Other Facilities.
A. The Company will have the option to install its own switching
facilities within the Territory. This may consist of deployment of a combined
interconnect and dispatch switching facility, an interconnect only switching
facility, or a dispatch only switching facility. Any Company deployment of a
switching facility will require prior coordination with NWIP, and any Company
deployment of a dispatch switching facility will require NWIP approval. NWIP
will not unreasonably withhold such approval; provided, that any switching
configuration changes that adversely impact Direct Connect communities of
interest will be among the bases for withholding approval. The Company will be
responsible for designing, installing, commissioning, managing and operating
each switching facility that it installs in the Territory and will be entitled
to employ its own switch technicians at any Company-owned switch. NWIP will be
responsible for assuring that the monitoring services are provided to the
Company owned switching facilities for the charges set forth on Exhibit 5.7A.
The parties will agree on any other switch services that each is to provide to
the other. The Company will be responsible for the installation and any
incremental cost of any national management system hardware components required
to be installed in the Company's switch to allow NWIP to arrange for the
switching facility to be monitored on a remote basis, provided that such
equipment is comparable to equipment installed at other switching facilities of
the NDS.
B. In connection with the Company's operation of an ESMR Network
in the Territory, NWIP will provide the Company (or Opco) with access to certain
network elements owned or operated by the NDS in connection with the NDS ESMR
Network, as provided for in this Agreement or certain of the Collateral
Agreements. In light of the forecasted growth of the Company's subscriber base
and operational cell sites in the Territory, and the resulting burden on the NDS
network elements and the NDS ESMR Network, the Company (or its Affiliates) will,
subject to Section 5.5, be required to have in place its own BSC, HLR, MSO, SMS
and VMS when its subscriber unit or cell site levels reach the levels set forth
on Exhibit 5.7B, as amended by the parties from time to time during the term of
this Agreement (each a "Trigger Point"). The parties contemplate that amendments
to Exhibit 5.7B will be made to reflect changes in capacity of the NDS network
elements. At a reasonable time prior to reaching any Trigger Point, the Company
will (or will cause one or more of its Affiliates to) (i) acquire and install
(for the Company's account and at the Company's sole expense) the appropriate
network element(s) and (ii) coordinate with NWIP and the NDS with respect to the
installation and implementation of such network element(s). At or prior to the
time that it reaches any Trigger Point, the Company will implement (or will
cause its Affiliates to implement) such network element(s). NWIP and the NDS
will cooperate with the Company (and its Affiliates) to facilitate the
implementation of all network elements to be installed by the Company pursuant
to this Agreement and the transition of the Company's subscribers from the
appropriate NDS network element(s) to the network element(s) acquired and
installed by the Company and its Affiliates. If NWIP and the Company agree that
it is in the best interests of the subscribers of the NDS and the Company to
delay the Company's acquisition of one or more network elements or to acquire
one network element in lieu of another, NWIP and the Company will do so.
5.8 Access to Systems Platform. To minimize demand on system
resources associated with the accommodation of the Company's systems and to
service needs that are agreed to be met through access to and utilization of the
internal systems developed, operated and maintained by or for NDS, and in order
to maintain a consistent back-office operating process
that permits an exchange of similar network, operating, and customer information
between the Company and NDS, the Company will be required to use certain
components of systems infrastructure used by NDS that are necessary to achieve
these objectives. NWIP will identify, from time to time, the components of the
NDS system infrastructure that are necessary to enable the NDS and the Company
(and its Subsidiaries) to exchange information about their respective networks,
customer provisioning, and system usage, and any other information required to
enable consistent back-office operations (the "Required Systems"). The Company
will be responsible for its own internal operating costs and activities
necessary to interact with systems of the NDS. To the extent that certain
operating activities, such as customer provisioning, cannot be performed by the
Company, NWIP will make reasonably suitable arrangements for such services to be
provided to or on behalf of the Company, and the Company will pay for such
services based on the actual costs incurred by the Nextel Group. The monthly
charges payable to NWIP by the Company for Required Services will be revised,
from time to time, to reflect changes agreed to between the Company and NWIP.
Other system infrastructure components that are recommended (but not required)
may, by mutual agreement of NWIP and the Company, be obtained from NWIP on
arms-length terms or the Company may obtain them from third parties. In the
future, the Company will be permitted to implement its own operating systems if
such systems do not adversely impact the Company's interaction with or use of
the Required Systems. If the Company wishes to implement an operating system
that alters or replaces the Required Systems, the Company must first obtain
NWIP's approval, provided that such approval shall not be withheld as long as
such system does not (1) create inconsistencies between the services provided by
the NDS and the Company to their respective customers or result in
inconsistencies in network, operating and customer information exchanged between
the NDS and the Company that adversely impacts operations or ability to serve
customers of the NDS, (2) require the NDS to incur additional systems
implementation or operating costs unless such costs are paid in full by the
Company, or (3) adversely affect the ability of NWIP or any other member of the
Nextel Group to provide or arrange for the provision of any product or services
to or for the Company in accordance with the provisions of this Agreement, any
Collateral Agreement or agreement with a third party vendor or supplier.
5.9 Certain System and Network Services.
A. The Company will have the right to use the NDS's SS7 network
at the price set forth in Exhibit A of the Switch Sharing Agreement.
B. The NDS own and operate backbone networks and in the future
expect to construct and operate additional backbone networks (each, an "NDS
Backbone Network") for the purpose of carrying voice, data or other signals and
traffic.
(i) The Company and Opco hereby grant to NWIP and the NDS the
right to locate NDS Backbone Network equipment in facilities and shelters
transferred by the NDS to Opco or its Affiliates that are located in p arts of
the State of Texas that are, or subsequent to the date hereof may be, part of
the Territory (collectively, the "Transferred Texas Sites"). Representatives of
NWIP or the NDS will be entitled to reasonable access, as and when requested or
necessary, to each of the Transferred Texas Sites to maintain, repair, augment
or install NDS Backbone Network equipment.
(ii) With respect to any shelters and facilities owned, acquired
or leased by Opco or its Affiliates that are now, or subsequent to the date
hereof may be, located in the Territory (collectively, the "Additional Sites"),
NWIP may, upon receipt of Opco's consent, which consent will not be unreasonably
withheld, locate NDS Backbone Network equipment at any Additional Site.
Representatives of NWIP or the NDS will be entitled to reasonable access, as and
when requested or necessary, to each Additional Site for which consent to locate
NDS Backbone Network equipment has been given, to maintain, repair, augment or
install any such equipment. At no time will Opco or its Affiliates be required
to install additional shelters or facilities solely to accommodate NDS Backbone
Network equipment, nor will Opco or its Affiliates be obligated to maintain
possession of the Transferred Texas Sites or any Additional Sites if they
determine that it is not in their best interest to do so. If Opco decides that
it will no longer retain rights of possession to any such site, it will promptly
notify NWIP of the decision. Notwithstanding anything herein to the contrary,
the Company and Opco will have no obligation to negotiate with the owner of any
tower facilities to provide access on any tower for any NDS
Backbone Network antennas.
(iii) In exchange for the rights provided to NWIP and the NDS
under this Section 5.9B, Opco will be entitled to use each NDS Backbone Network
operating in the Territory if it pays NWIP the service charges detailed on
Exhibit 5.9B. Exhibit 5.9B will be subject to revision annually by mutual
agreement of the parties, provided, however, that in no event will NWIP or the
NDS be obligated to provide service to Opco on any NDS Backbone Network at less
than the cost to the NDS of providing such service.
(iv) Neither Opco nor any of its Affiliates will have any
ownership rights with respect to any NDS Backbone Network equipment or any
portion of any NDS Backbone Network by virtue of the terms of this Section 5.9B
or the location of any NDS Backbone Network equipment at any of the Transferred
Texas Sites or Additional Sites. Neither NWIP nor any of its Affiliates will
have any ownership rights with respect to the Transferred Texas Sites or
Additional Sites by virtue of the terms of this Section 5.9B or the location of
any NDS Backbone Network equipment at any of the Transferred Texas Sites or
Additional Sites.
(v) NWIP and the NDS will be responsible for the maintenance and
operation of the NDS Backbone Networks. Opco and its Affiliates will be
responsible for the maintenance and operation of any other equipment at any of
the Transferred Texas Sites or Additional Sites and the maintenance of the
Transferred Texas Sites and Additional Sites.
(vi) The foregoing provisions of this Paragraph B are subject to
the following: NWIP and the NDS shall exercise the rights and take the actions
permitted hereunder in such manner as shall not interfere with the use by Opco
or its Affiliates of the Transferred Texas Sites and any Additional Sites, and
shall be responsible for any liabilities, costs or expenses asserted against
Opco or any of its Affiliates and arising out of NWIP's or the NDS' exercise of
such rights or taking of such actions.
6. BUILD-OUT REQUIREMENTS
6.1 Required Services. The Company will be required to offer all
customers operating in the Territory the products, services and capabilities
identified in Exhibit 6.1, as amended from time to time by NWIP ("Required
Services"). The Company will have an opportunity to participate in and
contribute to discussions regarding modifications to the list of Required
Services, but final decisions relating to such services will be made by NWIP, in
its sole discretion, and will be binding on the Company. If a Required Service
is to be provided nationally by the NDS, the Company must implement the service.
To the extent the NDS elect to offer a Required Service that is tailored to
particular service areas based on geographic location, size, or other factors,
the Company will be required to offer that Required Service in its service areas
that are Comparable Service Areas to those service areas in which an NDS offers
such Required Service. In either case, a Required Service must be offered by the
Company in the Territory as soon as reasonably practicable, but in no event more
than six months from NWIP providing notice to the Company of NWIP's decision to
designate a Required Service, provided that the Company will not be obligated to
offer any Required Service before an NDS has implemented such Required Service
in a Comparable Service Area. Notwithstanding anything to the contrary in this
paragraph, the Company's obligation under this Section 6.1 to implement any
Required Service (not set forth on Exhibit 6.1 on the date hereof) or to modify
a Required Service is subject to Section 7.04 of the Shareholders' Agreement,
provided that the Company's obligation to implement any Required Service and
Nextel's obligation to comply with such Section 7.04 terminates when no member
of the Nextel Group owns an equity interest in the Company.
6.2 Build-out Requirement and Target Launch Dates.
A. The Company must Build Out each Section by the Build Year
stated on Exhibit 6. "Build Out" means the ESMR Network in that Section
(i) provides coverage to the Build Areas for that Section; and (ii) has met the
Launch Criteria for that Section; and (iii) has commenced commercial service in
that Section; and (iv) is capable of serving Nextel subscribers roaming into the
Build Areas for that Section of the Territory. The Company will provide NWIP
with monthly updates on actual and forecasted coverage areas in the Territory.
B. The Company has the right (but not the obligation) to elect by
written notice delivered to NWIP, from time to time (but in any event prior to
the end of the Election Period), to include some or all of the Special Option
Sections in the Territory. In addition, if the Company completes the Build Out
of all Year One Build Areas in the Initial Sections before the end of the 19th
month from the date hereof (such period, as extended by any period of Excusable
Delay that extends the time in which Build Out is to be completed, the "Election
Period"), from the date that such Build Out is complete until the end of the
Election Period, the Company has the right (but not the obligation) to elect by
written notice delivered to NWIP, from time to time, to include some or all of
the Option Sections (other than the Special Option Sections) in the Territory;
provided, that such other Option Sections will be included only if and to the
extent such actions would not involve breach or violation of any loan agreement
or similar debt or related documents to which any member of the Nextel Group is
a party. NWIP shall, and shall cause the Nextel Group to, use best reasonable
efforts to obtain such amendments, waivers or
consents as may be required to permit such Option Sections to be included
without involving or resulting in any such breach or violation. Subject to the
foregoing, if the Company elects to include an Option Section in the Territory,
(1) the Company will be required to Build Out all Build Areas in such Option
Section in accordance with Section 6.3; (2) the Company will be entitled to the
Initial Frequency Right as to such Option Section as set out in Section 4.1D;
and (3) any related fixed network equipment and operational contracts existing
in or with respect to such Option Section at the time of the Company's election
will be transferred to the Company upon payment of a cash purchase price
calculated in the same manner as the reimbursement under the Asset Purchase
Agreement and otherwise on the same terms as the Initial Asset Transfer.
C. Before the Election Period has expired, if the NDS wants to
construct Build Areas in an Option Section and the Company has not elected to
include that Option Section in the Territory, NWIP will notify the Company in
writing specifying the Build Areas the NDS desires to build out (the
"Accelerated Areas") and the revised build schedule for the Accelerated Areas
(which must be commercially reasonable in order to trigger NWIP's rights under
this provision). NWIP shall not give such notice unless the Option Section(s) to
which it relates may be included in the Territory without breaching or violating
any loan or debt agreement or similar document to which any member of the Nextel
Group is a party. Not more than 30 days after receiving the notice from NWIP,
the Company can elect to include such Option Sections in the Territory and build
out the Accelerated Areas in accordance with the revised schedule (and any other
Build Areas in that Option Section in accordance with the original schedule),
but the Company will still be obligated to build out the Initial Sections as
described in this Agreement and any relevant Collateral Agreements. If the
Company does not make the election under the preceding sentence, NWIP or the NDS
will be entitled to construct (or to cause the construction of) that Option
Section and such Option Section will no longer be part of, or subject to
inclusion in, the Territory; provided that if NWIP or the NDS has reacquired
rights to an Option Section under this Section 6.2C, but has failed to build out
the Accelerated Areas in that Option Section materially on the revised schedule
(extended by any applicable period of Excusable Delay), that Option Section will
once again become available to the Company under Section 6.2B.
D. On or after the earlier of (i) the beginning of the 9th month
after NWIP notifies the Company that, notwithstanding a Frequency Delay, a Build
Area affected by a Frequency Delay is to be launched and the related Build Out
completed and (ii) the beginning of the 54th month after the date hereof, with
respect to any service areas within the Territory where the Company is not
providing coverage, NWIP shall have the right to give notice of service areas
for which it wishes coverage to be provided and to identify reasonable time
frames within which coverage should be provided. The Company will then have
ninety days from the date of notice to advise NWIP in writing whether it elects
to provide coverage in accordance with the terms of the notice from NWIP. If the
Company elects to provide coverage by so advising NWIP in writing, it will
diligently proceed in accordance with the schedule set forth in the initial
notice received from NWIP. If the Company elects not to provide coverage in any
of the identified service areas, NWIP or the NDS will be entitled to do so and,
upon NWIP's or the NDS' causing completion of the Build Out and providing
coverage in accordance with the schedule and other elements of the notice, those
service areas shall no longer be part of the Territory. NWIP will pay cash to
the Company, upon the transfer of all licenses to a member of the Nextel Group
designated by
NWIP, for any licenses or frequency rights previously acquired by the Company in
any service area that is acquired or reacquired by any member of the Nextel
Group pursuant to this Section 6.2D, at the Company's actual cost to obtain
licenses or rights to such spectrum (including incidental transaction costs and
costs of related assets acquired by the Company and sold to NWIP, if any).
6.3 Launch Criteria. Prior to offering commercial service in a
Section, the Company will be required to provide coverage to all the Build Areas
in that Section that have the earliest Build Year and to meet the general launch
criteria that are in effect at the relevant time and applicable generally to the
NDS ESMR Network (the "Launch Criteria"). The Company will notify NWIP at least
60 days prior to the proposed launch date of any Section, at which time NWIP
will have the right, using such representatives as NWIP designates for the
purpose, promptly to review the Company's operations for that area in order to
validate compliance with all Launch Criteria. In the event the Company believes
it is necessary to launch service in a given area prior to completing the Build
Out of all Build Areas that have the earliest Build Year in the Section (e.g.,
in competitive situations), the Company must obtain NWIP's prior approval, such
approval not to be unreasonably withheld, provided, NWIP's approval of the
Company's proposed launch of any Section, Build Area or other area shall not
release or excuse the Company from satisfying its Build Out obligations with
respect thereto as set forth in this Agreement, and approval of the launch of
service of any system in any area prior to completion of the Build Out of all
Build Areas in the Section will not alter the Company's obligation to complete
the Build Out of all Build Areas in that Section in the Build Year as set out in
Exhibit 6. Failure of the Build Out of the system to comply with the Launch
Criteria in the affected area will be considered a reasonable basis for
withholding approval.
6.4 Frequency Design Standards. The Company will be responsible for
the frequency design in the Territory and will be required to adhere to
standards for the use of the radio frequencies in the ESMR Network as in effect
at the relevant time and applicable generally to the NDS ESMR Network
operations. Subject to any restrictions imposed by agreements with third
parties, NWIP will provide the Company with reasonable access to the frequency
design tools and expertise available within or to the NDS in order to facilitate
the Company's compliance with the standards, and the Company will bear all costs
and expenses associated with the Company's obtaining and utilizing such tools
and expertise. The Company will participate in periodic frequency engineering
meetings of the NDS, to the extent such access is permitted under the terms of
relevant agreements with third parties. NWIP, through such representatives as it
designates, will have the right to monitor the frequency designs and actual
frequency signal performance levels in the Company's service areas on a regular
basis in order to ensure compliance with the required standards. If the Company
requests, from time to time, and at NWIP's sole discretion, NWIP may make
suitable arrangements for frequency design services to be provided to the
Company on an arms length basis as will be agreed between the Company and NWIP.
If NWIP requests, the Company will be required to comply with the terms of any
existing regional or national agreements that impact the Territory related to
frequency design services that are identified on Exhibit 6.4.
6.5 Site Acquisition Standards. The Company will be responsible for
site acquisition activities in the Territory and will be required to adhere to
the site acquisition
standards that are in effect at the relevant time and applicable generally to
and followed by the NDS. NWIP has provided and will provide the Company, from
time to time, with standard form leases (that will be substantially identical to
the form then being used by the NDS) to be used when securing lease rights to
radio communications sites. Neither NWIP nor any other member of the Nextel
Group will be required to provide any other services to the Company related to
site acquisition. NWIP, through such representatives as it designates, will have
the right to review internal documents related to such sites, including site
leases, title documents, and other compliance documents, on a regular basis in
order to ensure compliance with the required standards. If the Company requests,
from time to time, and at NWIP's sole discretion, NWIP may make suitable
arrangements for site acquisition services to be provided to the Company on an
arms length basis as will be agreed to between the Company and NWIP. If NWIP
requests, the Company will be required to comply with the terms of any existing
regional or national agreements that impact the Territory related to site
acquisition services that are identified on Exhibit 6.5.
6.6 Construction Standards. The Company will be responsible for the
construction of its cell sites in the Territory and will be required to adhere
to the construction standards that are in effect at the relevant time and
applicable generally to construction by the NDS, including the requirement to
select from the group of pre-selected vendors designated for certain types of
equipment needed to construct cell sites; provided, however, that the Company
shall have the right to propose alternative equipment and vendors for approval
by NWIP, which approval will not be unreasonably withheld. NWIP will provide,
from time to time, the standard specifications and drawings for cell sites
(substantially in the form then being used by the NDS) in order to facilitate
the Company's compliance with such standards. Neither NWIP nor any other member
of the Nextel Group will be required to provide any other services to the
Company related to cell site construction. NWIP, through such representatives as
it designates, will have the right to inspect cell sites in the Territory in
order to ensure compliance with the construction standards. If the Company
requests, from time to time, and at NWIP's sole discretion, NWIP may make
suitable arrangements for construction services to be provided to the Company on
an arms length basis as will be agreed to between the Company and NWIP. If NWIP
requests, the Company will be required to comply with the terms of any existing
regional or national construction agreements that impact the Territory that are
identified on Exhibit 6.5.
6.7 Telco Standards. The Company will be responsible for the
provisioning and maintenance of leased lines to connect its cell sites to the
appropriate switching facility. In so doing, the Company will be required to
adhere to the telco standards that are in effect at the relevant time and
applicable generally to and followed by the NDS, including the types of
connection permitted, the requirements for contracts with other
telecommunications providers, and the manner in which such connections are
required to be brought to a switching facility of the NDS or otherwise connected
to the NDS national ESMR Network. In the event the Company installs its own
switching facility pursuant to Section 5.7, the Company will also be responsible
for all telco connections at that switching facility to the local landline,
public switched telephone network and arranging for local and long distance
origination and termination of interconnect calls being routed through the
Company's switching facility.
6.8 Switching Facility Standards. In the event the Company elects to
purchase and install its own switching facility, the Company will be required to
adhere to the construction and operating standards that are in effect at the
relevant time and applicable generally to and followed by the NDS. The Company
also agrees to provide any operating Subsidiary of Nextel with access to any of
the Company's switching facilities and any related services provided by or for
the Company on the same terms (including at the same prices) as offered by the
NDS to the Company under the Switch Sharing Agreement.
6.9 Company Towers.
A. Within 20 days after the beginning of each calendar quarter,
the Company shall give NWIP notice designating the number and general location
of all tower sites that the Company needs to construct as part of the Build Out
of its ESMR Network for that quarter, other than Excepted Tower Sites. As used
in this Agreement, "Excepted Tower Sites" means and tower sites located in the
Build Areas identified on Schedule 6.9. The parties agree that the Site
Acquisition Work and construction of the Excepted Tower Sites identified on
Schedule 6.9 that are located in Kentucky will be performed pursuant to the Site
Commitment Agreement dated as of July 11, 1997 with Castle Tower Corporation
("Castle"), with such modifications thereto as the Company and Castle may agree
with the consent of NWIP, such consent not to be unreasonably withheld. The
parties agree that the Site Acquisition Work for the Excepted Tower Sites
identified on Schedule 6.9 that are located in Pennsylvania will be performed by
the Company or its contractors and the construction of such sites will be
performed by the tower aggregator or other party designated by NWIP. When site
acquisition work is complete on the Excepted Tower Sites located in
Pennsylvania, the Company shall notify NWIP and NWIP shall purchase such
Excepted Tower Sites from the Company. The purchase price shall be equal to the
Company's cost to perform the Site Acquisition Work. NWIP shall pay the Company
in cash within twenty (20) days after receiving the Company's notice for all
Excepted Tower Sites identified in the notice. Upon payment, the Company will
assign to NWIP each ground lease associated with such Excepted Tower Sites. NWIP
shall, upon completion of construction of each tower relating to each Excepted
Tower Site, allow Opco to lease space on all such Excepted Tower Sites pursuant
the Master Site Lease or a Replacement Lease (as defined below).
B. Except as set forth in Section 6.9A, NWIP will be
responsible for timely completion of all Site Acquisition Work and tower
construction relating to all tower sites designated by the Company under Section
6.9A. NWIP may, in its discretion, hire third party contractors or consultants
to perform any Site Acquisition Work or construction; provided that NWIP must
cause any such third party contractors or consultants to abide by the terms and
conditions of this Section 6.9. Any delay in Site Acquisition Work or
construction relating to any designated tower site (or any Excepted Tower Site
for which NWIP is responsible for construction) that impedes or disrupts the
Company's Build Out of its ESMR Network in accordance with the Build Out
schedule contained in Exhibit 6 will constitute an Excusable Delay as set forth
in Section 12.5. To the extent that the delays in Site Acquisition Work or
construction of a tower (other than a delay caused by weather, acts of God or
other events beyond the control of the party performing the work) delay launch
or completion of the Build Out in any Build Area for a period of 30 days or more
and such delay is reasonably expected to have (or has had) a material adverse
effect on the business, operations, or financial condition of the Build
Area in which the work is being done, the Company (upon notice in writing given
to NWIP) may complete, or may hire third parties to complete, the Site
Acquisition Work or tower construction at the affected site. To compensate for
the unascertainable damages that the Company will have suffered as a result of
such delay, NWIP will pay to the Company a one time payment equal to 10% of the
estimated reasonable cost (under the circumstances, including recognition of the
time constraints on the process) of completing the Site Acquisition Work or
tower construction at the affected site. NWIP will be entitled to purchase the
tower when completed at a price equal to the Company's actual and reasonable
documented out of pocket costs incurred in order to complete the Site
Acquisition Work or tower construction. If the parties agree that the number of
delays in Site Acquisition Work or tower construction have reached an
unreasonable level, then NWIP and the Company will negotiate in good faith to
structure arrangements that will provide the Company with reasonable assurances
of timely completion of any remaining Site Acquisition Work and tower
construction in the Territory while providing NWIP the right to buy completed
towers, all in a manner consistent with the intent of the parties expressed in
this Section 6.9.
C. NWIP shall, and shall cause any third party contractors or
consultants hired by NWIP to perform Site Acquisition Work or tower site
construction to, coordinate all such work with the Company in order to satisfy
the Company's needs and specifications for Build Out of its ESMR system and to
ensure conformity with the site acquisition standards described in Section 6.5
and the construction standards described in Section 6.6. NWIP will take or cause
to be taken all necessary and appropriate actions (including but not limited to
obtaining all necessary consents, permits and approvals) to ensure that upon
completion of each tower site, Opco will be permitted, subject to the Master
Site Lease, to install and locate on or at each tower site all necessary
shelters, cabling, electronics, antennas and other such equipment needed by the
Company to utilize the tower in the Company's ESMR Network. Upon completion of
each such tower site, NWIP will allow Opco to lease space on or at each tower in
accordance with the terms of the Master Site Lease (or a Replacement Lease
(defined below) if NWIP determines that a tower should be subject to a
Replacement Lease, as provided in Section 6.9 E.).
D. The Company's and NWIP's respective obligations under
Section 6.9 A.-C. will expire upon that date (the "Build Stop Date") that is the
earlier of (i) the sixth anniversary of the date of this Agreement, or (ii) the
date that any tower build to suit arrangement entered into by NWIP or another
member of the Nextel Group in connection with a tower joint venture arrangement
of the type described in Section 6.9E expires. NWIP shall give the Company
notice of the expiration of the term of any such tower build to suit arrangement
at least 90 days before the expiration of the term of the arrangement. The
expiration of any such tower build to suit arrangement will not relieve NWIP of
its obligations to perform Site Acquisition Work and tower site construction
with respect to any tower site designated by the Company before the Build Stop
Date.
E. The parties contemplate that NWIP or other members of the
Nextel Group will enter into one or more joint venture arrangements with one or
more tower aggregators, and that the towers subject to the Master Site Lease
(including any towers to later become subject to the Master Site Lease under
Section 6.9 A.-C.) will become part of those arrangements. In connection with
consummation of each such joint venture, Opco shall, as directed by NWIP,
enter into, with the tower aggregator, a new master lease or similar agreement
(a "Replacement Lease") relating to the tower sites subject to the joint
venture. As a condition to Opco's obligation to enter into any Replacement
Lease, NWIP shall ensure that the terms of the Replacement Lease are
substantially the same as the terms of the equivalent lease or similar agreement
entered into between NWIP and the tower aggregator and NWIP shall comply with
the conditions set forth in Section 6.9F. Concurrently with the execution of
each Replacement Lease, NWIP and Opco shall amend the Master Site Lease to
remove the tower sites subject to the Replacement Lease from the Site Schedules
attached to the Master Site Lease. After any Replacement Lease has been
executed, if Section 6.9 C. requires that a tower be added to the Master Site
Lease, NWIP may direct that the tower instead be added to the Replacement Lease
of NWIP's choosing.
F. Set forth below is a chart of certain financial terms that
NWIP has agreed to make available to Opco, regardless of the requirements of any
Replacement Lease. To the extent that the financial terms of any Replacement
Lease (regardless of the characterization of such financial terms) are less
beneficial to Opco than those shown below, NWIP shall, on a monthly basis,
reimburse Opco for the difference between the amount paid by Opco and the amount
Opco would have paid if the Replacement Lease had instead included the financial
terms listed below. NWIP has no obligations under this Section 6.9 F. with
respect to tower sites that are not first made subject to any Replacement Lease
before the Build Stop Date.
initial Per Site Rental Rate* $1,200 per set of Tenant Facilities*,
per month
period during which the initial Per 3 years after the Closing Date*
Site Rental Rate* is applicable
Per Site Rental Rate* on the 3rd the lesser of: (a) $1,600 per set of
anniversary of the Closing Date* Tenant Facilities*, per month, and (b)
fair market value rent per set of Tenant
Facilities*, per month
annual increases to Per Site Rental 3%
Rate* beginning on the 4th anniversary
of the Closing Date*
* These terms have the meaning defined in the Master Site Lease Agreement.
G. NWIP, the Company and Opco shall deliver such further
documents or assurances as may be reasonably required by NWIP, the Company, Opco
or any tower aggregator to further confirm the execution of any Replacement
Lease or the applicability of any tower site to any Replacement Lease.
6.10 Potential Relaxation of Performance Standards. Without limiting
the provisions of Section 12.5, to the extent the Company, exercising its best
reasonable efforts and complying in good faith with the other provisions of this
Agreement and the Collateral Agreements, is unable to fully comply with the
performance requirements of this Agreement in any one or more international
border service areas within the Territory, due principally to a lack of
sufficient available frequencies, the parties will negotiate in good faith to
reach agreement on
the extent and duration of the relief from such performance requirements that is
appropriate in the circumstances.
7. OPERATIONS
7.1 Network Performance Requirements. The Company will meet or
exceed the minimum network performance requirements in effect at the relevant
time and applicable generally to the NDS ESMR Network operations, provided that
the Company will not be penalized for failure to meet such requirements to the
extent the average level of performance on such measurements achieved by the NDS
during the same relevant period does not exceed the level of the Company's
performance. Network performance for the first six months following launch in
any service area will not be included in performance measurements for either
party. At reasonable times and with advance notice, NWIP, through such
representatives as it designates, will have the right to monitor system
performance in the Territory in order to determine the Company's compliance with
the required standards.
7.2 Customer Care. The Company will provide a minimum standard of
care to its customers as in effect at the relevant time and applicable generally
to the NDS ESMR Network operations, provided that the Company will not be
penalized for failure to meet such requirements to the extent the average level
of performance on such measurements achieved by the NDS during the same relevant
period does not exceed the level of the Company's performance. Customer care
activities, as they relate to any particular service area or subscribers based
in such service area, during the first six months following launch in such
service area, will not be included in performance measurements for either party.
NWIP will make suitable arrangements to provide the Company access to the NDS'
customer care facilities and training sessions at agreed upon times in order to
facilitate the Company's compliance with such standards. All costs associated
with such transfer of operational practices to the Company, its employees and
agents will be paid by the Company. At reasonable times and with advance notice,
NWIP, through such representatives as it designates, will have the right to
monitor the Company's customer care activities on a regular basis in order to
ensure compliance with the customer care standards. If the Company requests,
from time to time, and at NWIP's sole discretion, NWIP may make suitable
arrangements for billing and customer care services to be provided to the
Company on an arms length basis and otherwise on such terms as the parties may
agree. If NWIP requests, the Company will be required to comply with the terms
of any existing regional or national billing and/or customer care agreements
that are identified on Exhibit 7.2.
7.3 Customer Satisfaction. Nextel has established minimum criteria
levels of customer loyalty. The Company will adhere in the Territory to the
customer loyalty measurements and targets as in effect at the relevant time and
applicable generally to the NDS ESMR Network operations, provided that the
Company will not be penalized for failure to meet such requirements to the
extent the average level of performance achieved by the NDS during the same
relevant period does not exceed the level of the Company's performance.
A. Measurement. The Company will be required to measure
customer satisfaction within the Territory. The NDS employ a customer
satisfaction monitoring system that uses a Marketing Services Vendor. The
Company will enter into a separate contract to
purchase customer satisfaction interviewing from the Marketing Services Vendor
used by the NDS as of the date of this Agreement, or subject to NWIP's prior
written approval, from a Marketing Services Vendor of the Company's (or Opco's)
choosing. NWIP will use its best reasonable efforts to induce its Marketing
Services Vendor to make those services available to the Company at the same cost
per interview as paid by the NDS. The Company and its Marketing Services Vendor
must use the 1998 questionnaire (a copy of which has been provided to the
Company), as updated from time to time by NWIP. Additional questions may be
added at the Company's discretion, but the Company recognizes that additional
questions may cause its cost per interview to be higher than that paid by the
NDS, and any additional questions will not be used for any measurement or
comparison for purposes of Section 7.3C or under the Roaming Agreement.
B. Sample. The Company will be required to conduct a minimum
of 750 interviews per quarter (3,000 per annum). The Company and the NDS must
adhere to random sampling principles and will conduct surveys yielding a
confidence level of plus or minus two percent (2%).
C. Targets. The overall measurement of customer loyalty used
by the NDS is called the "Secure Customer Index" or "SCI." SCI is a combination
of three factors: overall customer satisfaction, a customer's willingness to
recommend the service to others, and likelihood of a customer to continue using
the service, and will be more fully defined by agreement of the parties in
accordance with the NDS approach and methodology being employed at the relevant
time. The Company will be required to maintain an SCI equal to or better than
the lesser of the then current NDS SCI goal or the average actual SCI for the
NDS for the comparable period. Survey results during the first six months
following launch in any service area will not be included in the measurement for
either party.
7.4 Employees. The Company (on behalf of itself, Opco and other
Subsidiaries) and NWIP (on behalf of itself and other members of the Nextel
Group) agree not to actively solicit the other party's employees, but will be
flexible with regard to employee transfers to the extent they are consistent
with each company's needs and objectives.
8. MARKETING AND ADVERTISING
8.1 Brand Identity.
A. The Company has the right to offer, provide, and market
services using Partner Frequencies, and the NDS national switching networks only
under the Licensed Marks. From time to time, if the NDS use additional
trademarks or service marks owned by any member of the Nextel Group, NWIP will
amend Exhibit A to the Trademark License Agreement to provide the Company with
the right to use such additional marks as provided. In the case of licensed or
other non-owned names or marks, NWIP will provide the Company the right to use
such name or marks, but only to the extent that use by the Company is consistent
with (and will not result in any additional costs or other adverse effects or
consequences to the Nextel Group under) the agreements with the third parties
that own or license the marks or names to Nextel, and subject to the Trademark
License Agreement, or, in the case of non-owned marks, a license
agreement in substantially the same form. If, after using its reasonable best
efforts, neither NWIP nor the Company can obtain for the Company the right to
use a name or ▇▇▇▇ that is not owned by a member of the Nextel Group and if the
NDS offers a service that is distributed and identified primarily with that name
or ▇▇▇▇, that service cannot be a Required Service unless the Company is
afforded the right to use that name or ▇▇▇▇ on the same terms as the NDS. If
Nextel elects to make a material change in its brand identity, NWIP will notify
the Company and the Company will be required to implement such change in the
same manner and time frame as Comparable Service Areas of the NDS, provided that
if such change is to be implemented in fewer than twelve months, NWIP will
compensate the Company for its reasonable out-of-pocket costs attributable to
such change.
B. The Company will have an opportunity to participate in and
contribute to discussions regarding the NDS's future marketing and advertising
plans as they relate to United States marketing, but final decisions relating to
such plans will be made by Nextel, in its sole discretion.
8.2 Brand Awareness. As part of its national branding strategy,
Nextel and the NDS engage in national advertising, promotions, and sponsorships.
Unless NWIP agrees otherwise in writing, Nextel and/or the NDS retains the
exclusive right to advertise in national publications or other national media.
Nextel and the NDS can place advertisements advertising a price structure
consistent with Exhibit 9.1A in regional and/or local publications or other
regional and/or local media anywhere in the United States, but NWIP will provide
the Company advance notice of such advertising, if it is reasonably intended or
designed for circulation or exposure in the Territory.
8.3 Creative Services. The NDS use outside agencies for creative
development of their advertising and direct mail literature. NWIP will make
creative work developed in-house available to the Company for use in local
advertising, and NWIP will use its best reasonable efforts to induce such
outside agencies to agree to permit the Company to use creative work done for
any member of the Nextel Group on the same terms as were extended to the NDS by
the outside agency. The Company's advertising will be consistent with specific
creative standards as will be outlined from time to time by NWIP, so long as
such creative standards are substantially identical to those being adhered to by
the NDS. The Company will have the option to contract with any of the outside
agencies used by the NDS for creation of local advertising or direct mail
literature in compliance with NWIP standards, and the Company may also elect to
use another agency provided that any creative work used by the Company in its
advertising or direct mail literature must meet such NWIP standards. In the
event the Company wishes to deviate from the NDS creative standards for
advertisements, the Company must first obtain NWIP approval. NWIP will use its
best reasonable efforts to respond to such requests as promptly as practicable.
The Company will make available to NWIP (for use by the NDS) any creative work
done by or for the Company on the same terms as NWIP makes available to the
Company creative work done by or for the NDS.
8.4 Media Services. The NDS use an outside agency for planning and
placement of their advertising in the media. The Company will have the option to
contract with that outside agency for such services in the Company's local
service areas, and NWIP will use its best
reasonable efforts to induce the outside agency to agree to permit the Company
to obtain the same terms for such services as were extended to the NDS by the
outside agency. The Company may utilize other media buyers or outlets at its
sole discretion. If planning and placement of advertising are performed
in-house, the Company will have access thereto on the same basis as the NDS. The
NDS and the Company each have the right to advertise in their respective
territories. Outside their territories:
A. National advertising, and any advertising, whether national,
regional or local, outside the United States, will be the exclusive right of the
Nextel Group.
B. Each of (a) NWIP, Nextel and the NDS and (b) the Company
have the right to place advertising focused within its territory that results in
incidental or unavoidable extra-territorial publication (e.g., out-of-state
newspaper distribution).
C. National indirect or national retail promotions (e.g., Hello
Direct Catalogs) will be the exclusive right of the Nextel Group.
D. Each of the Nextel Group and the Company may, subject to
Section 8.8, maintain world wide website advertising.
8.5 Direct Mail. Subject to the terms of any agreement between
Nextel and/or the NDS and the agency, the Company will have the option to use
the creative work developed for Nextel and the NDS by such agency for direct
mail literature and can purchase direct mail pieces from such agency. The
Company will have the option to contract with the supplier to obtain mailing
lists previously acquired by Nextel and/or the NDS from Dun and Bradstreet or
other sources that contain names of potential subscribers residing in the
Territory. NWIP will use its best reasonable efforts to induce such sources to
charge the Company no more than the same per name cost that is charged to Nextel
or the NDS by Dun and Bradstreet. The Company may use other vendors in its sole
discretion (but any materials sent out must comply with Section 8.7).
8.6 Telemarketing. The NDS maintain a telemarketing operation that
handles both inbound and outbound calls. Inbound calls are generally in response
to Nextel's national advertising and the use of the 1-800-NEXTEL9 telephone
number. The Company will have access to this inbound number and will be
forwarded all calls or leads, which are generated from potential customers whose
billing address is located in the Territory. Beginning one month before service
is expected to launch in a Section of the Territory, the Company will be
required to provide NWIP with contacts within the Company to receive such leads,
and the Company will insure that the designated employees contact these leads
within 72 hours of receipt. The Company may contract with any outside vendor to
handle inbound calls generated by other mediums that have been specifically
tailored by the Company (i.e., non 1-800-NEXTEL9 calls).
8.7 Collateral Marketing Materials. NWIP will be responsible for
obtaining collateral materials (including, without limitation, sales sheets,
spec sheets, product brochures) that have been designed by or for the NDS, and
will make these designs available to be used by the Company. The Company will be
allowed to use collateral materials that vary materially from those designed by
or for the NDS only with the approval of NWIP. NWIP will use its best
reasonable efforts to respond to any requests for the Company's use of
previously unauthorized designs as promptly as practicable. The Company may
enter into a contract with the vendor used by the NDS for production and
fulfillment of collateral orders. The Company will have the option to contract
with any of the outside agencies used by the NDS for creation of collateral
marketing materials in compliance with the then existing standards that are in
effect with respect to substantially identical collateral marketing materials of
the NDS. NWIP will use its best reasonable efforts to enable the Company to
obtain such work at the same rates as are charged to the NDS. The Company may
elect to use another agency provided that any creative work used by the Company
in its advertising or direct mail literature must meet the then existing
relevant standards for such advertising or direct mail literature of the NDS.
The Company may elect to use another vendor for production and fulfillment
provided the designs used by the Company are approved by NWIP as provided in
this Section 8.7, such approval not to be unreasonably withheld. The Company
will make available to NWIP (for use by the NDS) any collateral marketing
materials developed by or for the Company on the same terms as the materials
available to the NDS are made available to the Company.
8.8 World Wide Website. Nextel maintains a site on the world wide
web that provides certain information, including a description of services
available to potential customers. The Company must provide a link to Nextel's
website, and NWIP will cause Nextel to provide a link to the Company's website,
but in each case with a disclaimer that, among other things, expressly disclaims
the referring party's responsibility for the accuracy and completeness of any
information on the other party's website. The Company will be required to
provide on its website and to update on a regular basis, coverage maps, rate
plans, and other relevant information for service areas that have launched
service. Except for the link to the Nextel website, any description on the
Company's website of Nextel or the NDS or services offered by Nextel or the NDS
will be used only with NWIP's prior approval. Any customer leads that are
generated from either party's website that pertain to the service areas of the
other will be forwarded to the other party as promptly as reasonably possible.
The recipient will contact these leads as promptly as practicable. In the
future, Nextel expects to automate its website to automatically activate and
fulfill a customer order placed on the website. If the Company elects to use
Nextel's website activation service, the Company will pay for Nextel's
operational costs of activation of customers in the Territory.
8.9 Market Research. The NDS conduct primary market research,
including research to support product development, market trials, advertising,
promotion, pricing, network deployment, segment identification, billing,
ergonomics, voice quality performance and retention, as they consider
appropriate to the needs, growth, and development of their respective
businesses. In the past, such research has been used to supplement new product
development, identify target customer segments, and to tailor the Nextel brand
message. The Company will have the opportunity to participate in and contribute
to discussions regarding any significant future market researching activities
proposed to be conducted by or for the NDS, but final decisions relating to such
plans will be in NWIP's sole discretion. The Company will be provided with the
results of all such market research conducted by the NDS. If the Company or any
of its Subsidiaries conduct primary market research, NWIP will be provided with
the results of all such market research.
8.10 Subscriber Transfer Fee. In the event a digital subscriber
moves between the territory of any NDS and the Territory and becomes a
subscriber of any NDS or of the Company in the new territory, the
recipient of the subscriber's business shall pay to the other party the sum of
$200 for each such subscriber.
9. SERVICE AND EQUIPMENT PRICING
9.1 Service Pricing Structure.
A. The Company will adhere to the NDS established nationwide
service pricing structure set forth in Exhibit 9.1A as amended from time to time
by NWIP. The Company will have an opportunity to participate in and contribute
to discussions regarding modifications to the existing specific pricing
structures or introduction of new or replacement specific pricing structures,
but final decisions relating to such pricing structures will be made by NWIP, in
its sole discretion. Subject to the Company's rights to participate in the
relevant pricing structure decision making process described in the preceding
sentence, NWIP or the NDS may revise its service pricing structure at any time
in its sole discretion. The Company is required to implement in the Territory
pricing structures that NWIP or the NDS have generally implemented in Comparable
Service Areas or Comparable Sections. The Company will be required to implement
any pricing structure that is implemented by the NDS on a national level.
Pricing structure for purposes of this Section 9.1 does not include
determination of the rates left to the Company's discretion under Section 9.2.
Notwithstanding anything to the contrary in this paragraph, the Company's
obligation under this Section 9.1A to implement any service pricing structure
(not set forth on Exhibit 9.1A on the date hereof) is subject to Section 7.04 of
the Shareholders' Agreement, provided that the Company's obligation to implement
any service pricing structure and Nextel's obligation to comply with such
Section 7.04 terminates when no member of the Nextel Group owns an equity
interest in the Company.
B. The Company may, from time to time, propose to NWIP the
adoption of a service pricing structure that is outside the framework of
Exhibit 9.1A. The proposal must include (i) the proposed pricing structure, (ii)
a plan to test the proposed pricing structure in up to two Build Areas in the
Territory, (iii) the schedule for the test and the Company's proposed criteria
and methodology for determining and interpreting the results of the test. The
Company will supplement its proposal and provide such additional detail as NWIP
may reasonably request. NWIP's approval of the proposed test plan will not be
unreasonably withheld, but NWIP's approval of the test plan is not concurrence
by NWIP that the results of the test demonstrate that the proposed pricing
structure is acceptable. If NWIP approves the test plan, the Company may
implement the plan, but the Company can make no material change in the test plan
without obtaining NWIP's prior approval (which will not be unreasonably
withheld). Promptly following the conclusion of the test, the Company will
report the test results to NWIP. If the Company and NWIP agree that the test
demonstrates that the proposed pricing structure is acceptable, the Company may
implement the proposed pricing structure in the Territory. Testing or
implementation of a pricing structure that has been approved by NWIP under this
Section 9.1B will not affect (1) the service(s) that the Company is required to
provide to a customer of the NDS in the Territory, (2) the service(s) that an
NDS is required to provide to a Company customer in the service area of that
NDS, nor (3) the charges that NWIP and the Company will
pay to each other for such services under the this Agreement or any of the
relevant Collateral Agreements.
9.2 Service Pricing Plans - Local. The Company will be responsible
for developing and executing local pricing plans in the Territory that are
consistent with the service pricing structure established under Section 9.1 as
well as with the capabilities of the information systems platform used by the
NDS (more specifically addressed in Section 5.8). The Company will be
responsible for setting local rates for basic monthly access and air time,
determining the number of minutes included with various plans, and determining
the price points for enhanced services (including, without limitation, voice
mail and short message service). The Company is also responsible for setting the
local price points for additional services (including, without limitation,
installation, repair, and warranty prices), and service add-ons (including,
without limitation, fees for joining DAP affinity groups, and disabling cellular
capability). Along border areas between the service areas of the Company and NDS
territories, NWIP (by coordination with the NDS) and the Company (by
coordination with Opco and its other Subsidiaries) will cooperate with each
other to promote Nextel services (whether provided by the Company or the NDS) as
opposed to the services of competitors, including avoiding the use or
implementation of pricing plans that might result in customers switching between
the Company and the NDS territories.
9.3 Service Pricing Plans - National. The NDS enter into contracts
with customers requiring service in multiple service areas across the country
("National Accounts"). The Company will have the opportunity to participate in
and contribute to discussions regarding National Account pricing plans, but
final decisions relating to such contracts will be made by NWIP (or another
member of the Nextel Group) in its sole discretion. To maintain consistent
pricing for National Accounts, the Company will be required to honor the pricing
plans established by the NDS for National Accounts and will be entitled to
obtain the benefit of those plans in the Territory, provided that the rate, or
the negotiated discount to local rates, is the same for both the Company and NDS
service areas except that the Company will not be required to provide service to
such customers at less than the Company's cost of service. In the event the
Company or any of its Subsidiaries fulfills the requirements set forth in
Sections 11.A and 11.B and the Company establishes National Accounts, the NDS
will be required to honor the pricing plans established by the Company or any of
its Subsidiaries for National Accounts and will be entitled to obtain the
benefit of those plans in the Territory, provided that the rate, or the
negotiated discount to local rates, is the same for both the Company and NDS
service areas, and provided that the NDS will not be required to provide service
to such customers at less than the NDS' cost of service. If the NDS acquires a
local customer, which requires service in the Company's service area in addition
to service in the NDS' service area(s), the NDS will be permitted to establish a
National Account rate plan that is consistent with the National Accounts pricing
schedule that is then in effect and being utilized by the Company (as the same
may be amended from time to time). The National Account pricing schedule(s) in
effect from time to time will be honored by the Company and by all of the NDS;
provided, that the rate, or the negotiated discount to local rates, is the same
for all of the NDS' and the Company's service areas.
9.4 Service Pricing Plans - International. Nextel and the NDS have
and expect to continue to enter into reciprocal agreements with international
wireless carriers to further the
goal of worldwide contiguous service. If such agreements do not discriminate
against the Company and the Company is entitled to all rights and other
privileges granted as part of such agreements to the Nextel Group member that is
the relevant contracting party, then after any such agreement has been provided
to the Company (if NWIP is able to make suitable arrangements, using its best
reasonable efforts with the relevant international carrier), the Company will
become a signatory party (by amendment, addendum or other suitable means) to
such agreement and thereafter will honor the terms of such agreement. If at any
time (i) none of the Company, Opco, or the Company's other Subsidiaries are
sharing elements of the NDS ESMR Network, (ii) the Company or Opco has its own
service provider code, (iii) the Company, Opco or the Company's other
Subsidiaries enter into reciprocal agreements with international wireless
carriers, and (iv) such agreements do not discriminate against any member of the
Nextel Group and the members of the Nextel Group are entitled to all rights and
other privileges granted as part of such agreements to the Company or the
Subsidiary of the Company that is the relevant contracting party, then, after
any such agreement has been provided to the members of the Nextel Group (if the
Company is able to make suitable arrangements, using its best reasonable efforts
with the relevant international wireless carrier), the members of the Nextel
Group will become signatory parties (by amendment, addendum or other suitable
means) to such agreement, and thereafter will honor the terms of such
agreements. The Company shall have no liability under any of the agreements
described in this Section 9.4 for any act or activity thereunder involving any
member of the Nextel Group or its customers, and no member of the Nextel Group
shall have any liability under any such agreement for any act or activities
thereunder involving the Company or any of its Subsidiaries or any of their
customers.
9.5. Subscriber Equipment Pricing. The Company will be responsible
for determining the price points for sale of subscriber equipment, including
handsets and accessories, for both direct and indirect distribution outlets of
the Company in the Territory, provided, that indirect dealers and national
retailers will be allowed to determine their own price points for such
equipment. The price for equipment and accessories to be sold to National
Accounts covered by Sections 11 A-C must be consistent with Nextel's National
Accounts pricing schedule that is then in effect and is being utilized by the
NDS, as updated from time to time. The Company will purchase equipment and
accessories manufactured by or for Motorola directly from Motorola as discussed
in Section 5.2A. Except for authorized National Accounts (as discussed in
Section 11), other sales as discussed in Section 10, and as otherwise is
provided in this Section 9.5, the Company and each NDS each has the exclusive
right to sell ESMR Network subscriber equipment and accessories in its
geographic territory and neither of them will sell ESMR Network subscriber
equipment or accessories outside its territory without prior approval of the
other.
10. SALES AND DISTRIBUTION
10.1 Objective. The sales and distribution objective of the NDS and
the Company is to maximize product placement within their respective territories
to allow them to more effectively compete with other telecommunications service
providers.
10.2 Local Sales and Distribution. Subject to the Company's
obligations under Section 10.3 and the last sentence of this Section 10.2, the
Company will have complete
flexibility in the Territory to develop and manage both direct and indirect
distribution channels at the local level. The Company will require local
indirect dealers to adhere to the same terms and conditions as are generally
applicable to any "Nextel Communications" authorized local indirect dealer. The
Company will not establish any indirect distribution channel that will result in
distribution in both NDS and the Company territory, unless NWIP has approved
such action.
10.3 National Indirect Distribution. The NDS have and expect to
continue to enter into contracts with both national authorized dealers (e.g.,
Hello Direct) and national retailers (e.g., Ritz Camera). The Company will have
the opportunity to participate in and contribute to discussions regarding
contracts with national authorized dealers and national retailers, but final
decisions relating to such contracts will be made by NWIP (or another member of
the Nextel Group) in its sole discretion. The Company will share in the benefits
available under such agreements on a basis that is equitable under the
circumstances and be required to support any national indirect distribution
outlets in the Territory that are covered by a contract with any member of the
Nextel Group. NWIP will be responsible for supporting the operational aspects of
these contracts on a national level, in effect at the relevant time and
applicable generally to the NDS, including activation and fulfillment in all
territories and management of commission payments to the national distributors.
The Company will be responsible for the costs of equipment subsidies,
commissions, and all operational costs for subscriber unit sales and activation
under these contracts in the Territory. The Company will also be responsible for
providing local training and operational support of national promotions with
such distributors and providing service that meets or exceeds the minimum
performance standards set forth in this Agreement (and the relevant Collateral
Agreements) to the customers of the distribution channel.
10.4 Websites and Telemarketing. The Company and NWIP (on behalf of
the NDS) will cooperate so that any sales made over the internet or using
telemarketing are made by the Company if the purchaser is in the Territory and
are made by the NDS if the subscriber is outside the Territory. To the extent
this does not occur, the parties will make appropriate adjustments so that the
subscriber receives service from the party with operations where the subscriber
is located.
11. NATIONAL ACCOUNTS/PRIVATE SYSTEMS
A. With the Nextel national network, the NDS have a unique
opportunity to attract National Accounts and private systems users who are
national in scope and size. These accounts and users vary from time to time and
the NDS will have and exercise "exclusive" national negotiation rights to such
accounts and users as NWIP has identified in writing to date and thereafter
those that NWIP will periodically identify in writing to the Company, subject to
the Company's approval, which shall not be unreasonably withheld. The Company is
not permitted to market to these accounts or users without prior approval from
NWIP.
B. If a customer in the Territory requires multi-service-area
coverage and requests a single point of contact for fulfillment and ongoing
maintenance of the customer relationship, the Company may serve as the single
point of contact if (i) the Company is able to provide the required service at a
level at least equal to that provided by the NDS that would otherwise serve as
the single point of contact; and (ii) the Company adheres to the established
NDS National Accounts activation and fulfillment process. Otherwise, the Company
will transfer such customers to the National Accounts group or one of the
regional markets of the NDS for fulfillment and ongoing maintenance of the
customer relationship. Subject to the Company's meeting the service requirements
and adherence to the activation and fulfillment requirements set forth above,
the Company and NWIP will exercise reasonable judgment as to which party should
logically be the point of contact for a customer based on, among other factors,
location of traffic generated by the customer and location of the customer's
headquarters.
C. Each subscriber handset that is part of a National Account
will be treated as a subscriber of either the Company (or one of its
Subsidiaries) or one of the NDS based on the telephone number of the handset.
Calls made by that handset will be treated accordingly, and each of the Company
and the NDS will include in its revenue the revenue from subscribers with phone
numbers based within their respective service areas without regard to whether
the ▇▇▇▇ is prepared and sent by Nextel (or an NDS) or the Company (or one of
its Subsidiaries).
D. In addition to National Accounts, NWIP has identified a
category of customers who have traditionally built and operated private
communications systems for internal use. As part of their marketing effort, the
NDS typically seek to provide a virtual private network ("VPN") solution for
such customers, which blends the private system control and exclusivity with the
national ESMR Network of the NDS. Nextel has had discussions with Motorola
regarding a contract that would permit Motorola to market and serve specific
customers who are interested in a VPN solution on an exclusive basis. Should the
Company elect to provide a VPN solution to its customers, it will be required to
do so under the terms of any contract between any member of the Nextel Group and
Motorola and/or one or more of its Subsidiaries.
12. BREACH; DEFAULT; DISPUTE RESOLUTION
12.1 Non-Material Breach. Remedies for breaches of this Agreement or
any of the Collateral Agreements that are not Material Breaches as defined in
Section 12.2 or 12.3 shall be governed by this Section 12.1. If either party
gives notice to the other of a breach that is governed by this Section 12.1, the
breaching party must either (i) remedy the breach within 15 days of receiving
notice, (ii) if the breach cannot be remedied in 15 days, formulate a reasonable
plan to remedy the breach as promptly as practicable and deliver a copy of such
plan to the other party within 15 days (a "Remedial Plan") and commence
implementation of the Remedial Plan as promptly as reasonably possible or (iii)
dispute the occurrence of a breach in accordance with Sections 12.6 and 12.7 and
prevail in the assertion that no breach has occurred. If the party receiving a
Remedial Plan believes that the length of time provided for remedy of the
relevant breach is unreasonably long, such party may request that a reasonable
time to effect such remediation be determined in accordance with Sections 12.6
and 12.7. If at the expiration of the period for cure (under clause (i) or (iii)
of the preceding sentence, 15 days; under clause (ii) the time period stated in
the Remedial Plan or the time period determined pursuant to Sections 12.6 and/or
12.7, as applicable) no cure has been accomplished, the non-breaching party will
have the right to remedy the breach with its own or third party forces and to
recover its costs of doing so from the breaching party, or, where such a remedy
is not practical, to recover damages for the breach and to pursue any other
remedy at law or under this Agreement or the Collateral Agreements, provided,
however, that in the case of a dispute under clause (iii), the ultimate rights
and obligations of the parties will be determined pursuant to Sections 12.6 and
12.7. Notwithstanding the foregoing, in no event will the Company be permitted
to operate or to exercise any control over the business or systems of Nextel or
any of its Affiliates (other than the Company's own business and systems), and
in no event, except as provided in this Agreement or the Collateral Agreements,
is any member of the Nextel Group permitted to operate or to exercise any
control over the business or systems of the Company. Notwithstanding anything in
this Section 12.1 to the contrary, in the event of any conflict or
inconsistency, relating to or arising from any breach involving the provision of
goods, services or systems pursuant to this Agreement or any of the Collateral
Agreements, between the provisions of this Section 12.1 and Section 2.6, the
parties agree and acknowledge that Section 2.6 shall govern.
12.2 Company's Material Breach. The Company's failure to comply with
provisions of this Agreement or any of the Collateral Agreements in any of the
following ways shall be deemed to be a Material Breach:
A. in any Build Year, a delay of 180 days or more (based on
the Schedule set out on Exhibit 6) of (i) the launch for any two Sections, or
(ii) the completion of the Build Out in any two Sections;
B. materially failing to offer a Required Service as set out in
Section 6.1;
C. failing to meet either the network performance requirements
set out in Section 7.1 or the customer care standards set out in Section 7.2 for
3 consecutive months or for 6 months in any 12-month period;
D. failing to a material degree to adhere to the Pricing
Structure set out in Section 9.1 or to the brand strategy set out in
Section 8.1;
E. repeatedly failing to pay amounts due to NWIP under this
Agreement or any of the Collateral Agreements where the cumulative amount due is
greater than $1,000,000;
F. failing to take actions or taking actions in breach of its
contractual obligations to NWIP that (i) adversely affects Partner Frequencies
and materially and adversely affects the Company's ability to launch service or
operate two or more Sections of the Territory or that (ii) adversely affects
Partner Frequencies with a fair market value of $10 million or more;
G. failing, after notice and an opportunity to cure under
Section 12.1, in any other material respect to construct and operate the ESMR
Network in the Territory in compliance with its contractual obligations to NWIP;
H. any other act or omission in breach of its contractual
obligations to NWIP that, following notice and failure to cure under
Section 12.1, prevents NWIP from realizing a material benefit of any of this
Agreement or any of the Transaction Documents or other agreements between the
Company or any of its Subsidiaries and NWIP or any other Transaction Documents
between NWIP and any other holder of Equity in the Company relating to the
transactions contemplated hereby.
12.3 NWIP's Material Breach. The Nextel Agreement no longer being in
full force and effect (or any assertion by Nextel to such effect) or NWIP's
failure to comply with provisions of this Agreement or any of the Collateral
Agreements in any of the following ways shall be deemed to be a Material Breach:
A. materially failing to provide spectrum, access to network
systems or services, including switch access, or to Nextel developed technology
as required herein or pursuant to the terms of the relevant Transaction
Documents, as appropriate;
B. committing any act or omission in breach of its contractual
obligations to the Company that materially adversely affects the Company's
ability to operate an ESMR Network in the Territory in a manner consistent with
the ESMR Network in areas in the United States served by NWIP or the NDS;
C. committing any act or omission in breach of its contractual
obligations to the Company, including failure to timely supply spectrum, access
to network systems or services or to any Nextel developed technology required by
this Agreement or any of the Collateral Agreements, that materially delays or
otherwise materially adversely affects the Company's ability to achieve Build
Out or to launch service;
D. repeatedly failing to pay amounts due to the Company under
this Agreement, any of the Collateral Agreements or Sections 7.03 or 7.04 of the
Shareholders' Agreement where the cumulative amount due is greater than
$1,000,000;
E. any other act or omission in violation of this Agreement,
any of the relevant Collateral Agreements, or Sections 7.03 or 7.04 of the
Shareholders' Agreement that, following notice and failure to cure under
Section 12.1, prevents the Company from realizing a material benefit of any of
this Agreement or any of the Transaction Documents or other agreements between
the Company or any of its Subsidiaries and NWIP, or any other Transaction
Documents between the Company and any other holders of Equity in the Company
relating to the transactions contemplated hereby.
12.4 Procedures for a Material Breach. In the event of a Material
Breach, after written notice of such a Material Breach, the breaching party must
(i) remedy the breach within 15 days of receiving notice, (ii) if the breach
cannot be remedied in 15 days, formulate a Remedial Plan and deliver a copy of
such Remedial Plan to the non-breaching party within 15 days and commence
implementation of the Remedial Plan as promptly as reasonably possible or (iii)
dispute the occurrence of a Material Breach in accordance with Sections 12.6 and
12.7 and prevail in the assertion that no Material Breach has occurred. If the
party receiving a Remedial Plan believes that the length of time provided for
remedy of the relevant breach is unreasonably long, such party may request that
a reasonable time to effect such remediation be determined in accordance with
Sections 12.6 and 12.7. If at the expiration of the period for cure (under
clause (i) or (iii) of the preceding sentence, 15 days; under clause (ii) the
time period stated in the Remedial Plan or the time period determined pursuant
to Sections 12.6 and/or 12.7, as applicable) no cure has been accomplished, the
non-breaching party will have the right to remedy the breach with its own or
third party forces and to recover its costs of doing so from the
breaching party, or, where such a remedy is not practical, to recover damages
for the breach and to pursue any other remedy at law or under this Agreement or
the relevant Collateral Agreements, provided, however, that in the case of a
dispute under clause (iii), the ultimate rights and obligations of the parties
will be determined pursuant to Sections 12.6 and 12.7. Notwithstanding the
foregoing, in no event will the Company be permitted to operate or to exercise
any control over the business or systems of the Nextel Group (other than the
Company's own business and systems), and in no event, except as provided in this
Agreement or the relevant Collateral Agreements, shall any member of the Nextel
Group be permitted to operate or to exercise any control over the business or
systems of the Company.
12.5 Excusable Delay/Time Extension. An Excusable Delay in either
party's performance of any obligation under this Agreement or any of the
relevant Collateral Agreements means any delay caused by an event that is beyond
the reasonable control of the party with the duty of performance (which shall
include the duty to exercise reasonable foresight and/or precautions) and is not
primarily attributable to the fault or negligence of that party, including any
delay arising from one of the following: acts of any government in its sovereign
capacity, which shall include zoning or licensing actions; war or insurrection;
strike or work slowdown; extreme weather; fire, earthquake, flood, epidemic, or
quarantine restriction; and acts of God. To the extent that any delay in NWIP's
or the Company's performance of any of its own obligations under this Agreement
or any of the Collateral Agreements is proximately caused by inability or
failure of the other party or its Affiliates to fulfill its obligations under
such agreement, such delay shall also be an Excusable Delay. Excusable Delay
includes delay caused by the inability to acquire rights to use or manage the
use of frequencies but only if all commercially reasonable efforts have been
made to mitigate the consequences, including, without limitation, construction
of additional cell sites to maximize use of frequencies that are available to
the Company (such delay, a "Frequency Delay"). Where performance is delayed by
reason of an Excusable Delay, the time for performance, and any otherwise
applicable time limit, schedule or deadline, shall be extended for a period of
time equal to the period of Excusable Delay.
12.6 Alternate Dispute Resolution.
A. In the case of any dispute arising between the parties in
connection with the interpretation or performance of this Agreement, or with the
interpretation or performance of any Collateral Agreement, or any other dispute
between the parties relating to this contractual joint venture, before either
party may initiate a formal proceeding in any tribunal, including arbitration or
judicial proceedings, the parties will exhaust the Alternate Dispute Resolution
Process provided in this Section 12.6. The party wishing to initiate a
proceeding shall provide written notice to the other party that includes all
elements required to be included in the arbitration demand under Section 12.7.
B. Within five business days of receipt of the notice, one or
more executives of each party, including at least one executive from each party
not lower than the first executive tier below President or Chief Executive
Officer, will meet and seek to resolve the dispute. Not less than 30 days after
the notice is given under Section 12.6A, if either party determines that further
progress toward resolution is not taking place at that level, that party can
give written notice to that effect, and within five business days of that notice
the executive of each party at the
highest level below the Board of Directors will meet and confer to seek to
resolve the dispute. Following at least one such meeting, upon either party's
determining that no further progress toward resolution is occurring at the
highest executive level, and providing written notice to that effect, the
Alternate Dispute Resolution Process will be concluded. Thereafter, any dispute
in connection with the interpretation or performance of this Agreement, or with
the interpretation or performance of any Collateral Agreement, or any other
dispute between the parties relating to this contractual joint venture, shall be
resolved by arbitration using the arbitration procedure set forth in Section
12.7.
12.7 Arbitration. If the parties are unable to resolve a dispute
under Section 12.6, either party may serve a demand for arbitration in
accordance with the Center for Public Resources Non-Administered Arbitration
Rules ("Arbitration Rules") in which, in addition to any other requirements of
those Rules, the party serving the demand states the specific nature of the
claimed breach and the specific nature of and period for the cure allegedly
required, and demands a determination by the arbitrators of the parties' rights
together with any other relief sought (subject to the provisions of Sections 2.6
and 12.9F). Three arbitrators shall be chosen, and the proceedings conducted, in
general accordance with the Arbitration Rules; provided, however, (i) the
parties shall choose three arbitrators through a self-administered process of
striking names from a list of potential arbitrators and shall not employ the
method provided for in the Arbitration Rules; (ii) the rules of evidence
employed in the federal courts at the time shall apply; and (iii) discovery
shall be permitted in accordance with the Federal Rules of Civil Procedure. The
decision of the arbitrators will be final and binding on the parties to the
maximum extent permitted under applicable law, and a final judgment may be
entered on the award in any court of competent jurisdiction.
12.8 Equitable Remedies
A. The rights and obligations of the parties enumerated in this
Section 12.8 are deemed by the parties to be so unique and fundamental to their
bargain that, in the event of non-performance, it is agreed that the appropriate
remedy is injunctive or other equitable relief. With respect to these
obligations, the parties agree that damages alone are an inadequate remedy
because not all damages will be ascertainable with any reasonable degree of
certainty, and because the essence of the parties' bargain is for performance of
these obligations. With respect to these obligations, the complex
interrelationship of the elements of the parties' bargain is such that only
performance (coupled with such other relief, including, without limitation,
money damages, as any court, arbitration panel, or other appropriate tribunal
may, subject to Sections 2.6 and 12.9F, deem appropriate) can restore the
benefit of the bargain to the non-breaching party. The parties stipulate that,
in the event of a dispute over any of the items enumerated below, neither party
will urge, argue or claim that damages alone are an adequate remedy or should be
the preferred remedy if the tribunal should determine that non-performance has
occurred. The rights and obligations are:
1. NWIP's and the Company's rights to the operation of an ESMR
Network in their respective territories in accordance with this Agreement or any
of the relevant Collateral Agreements and to performance of all actions provided
for in this Agreement or in such Collateral Agreements that are necessary to
achieve such operation.
2. The Company's and NWIP's rights to the use of spectrum
as provided herein and in any applicable Collateral Agreement, where the failure
to honor such rights (following notice and an opportunity to cure) materially
and adversely affects either (i) the Company realizing the benefits of NWIP's
obligation to provide spectrum as described in Article 4 or the Interim
Management Agreement or (ii) NWIP's (or other members of the Nextel Group's)
realizing the benefits of the Company's obligation to (a) provide spectrum as
described in the Analog Management Agreement or (b) transfer to NWIP (or its
designee) any SMR Frequencies as required pursuant to Section 4.14 or 4.16, as
appropriate.
3. NWIP's obligations to provide access to network systems and
services, including switch access, and access to any Nextel developed technology
where the failure to do so (following notice and an opportunity to cure)
materially and adversely affects the Company's ability to achieve the Build Out
schedule or performance requirements required by this Agreement or any of the
relevant Collateral Agreements, provided that the Company's failure to avail
itself of opportunities to obtain equivalent technology or network systems and
services from other sources in a timely manner will be considered in determining
whether a material, adverse effect has resulted from NWIP's failure to perform.
4. The Company's rights (subject to its compliance with the
requirements of this Agreement or any of the relevant Collateral Agreements) to
be the exclusive operator in the Territory of a digital wireless communication
system using the Partner Frequencies.
5. NWIP's approval rights under this Agreement and any such
approval rights so designated under the Transaction Documents.
6. The Company's obligations to (i) timely meet its Build Out
obligations under Section 6.2, (ii) adhere to service pricing structures as
required by Section 9.1, (iii) take or refrain from taking particular actions
relating to the acquisition, maintenance, disposition, preservation and use of
frequencies in the Territory in accordance with Article 4, and NWIP's rights
related to each of the foregoing.
B. Where the non-breaching party cannot be fully restored to
the position it would have enjoyed in the event of timely performance of the
obligation to which an order of specific performance relates without additional
relief, including monetary compensation (subject to Sections 2.6 and 12.9F),
this subsection shall not preclude the award of such supplemental relief in
addition to (but in any event not in lieu of) specific performance. This
subsection is also not intended to limit judicial or arbitrator discretion in
ordering specific performance with respect to other obligations of the parties
where such a remedy is determined by the tribunal to be appropriate in the
circumstances.
12.9 Damages and Termination for Material Breach.
A. Procedure. If a Material Breach occurs and is not timely
cured or disputed under clause (iii) of Section 12.4 or if the breach is not
capable of cure, then, in addition to its other remedies as provided herein, the
non-breaching party ("Claimant") may terminate this Agreement and all other
agreements in force between the parties other than the Shareholders'
Agreement, but only strictly in accordance with this subsection and subject to
the limitations on remedy provided for in this Section. Following the expiration
of the applicable notice period, Claimant must proceed as follows in order to
exercise any right of termination: (1) pursue the Alternate Dispute Resolution
Process described in Section 12.6; and (2) at the conclusion of that Process
proceed with arbitration under Section 12.7. In addition to resolving any other
issues presented by the parties, the arbitrators shall determine whether a
Material Breach has occurred, whether additional time should be allowed for
cure, whether damages should be awarded and whether and under what circumstances
a right of termination shall exist under the criteria of this Section 12.9. Only
upon and in accordance with a determination by the arbitrators that a right of
termination exists shall Claimant exercise, or purport to exercise, any such
right, and no such right shall exist except as specifically provided in this
Agreement or in the relevant Collateral Agreements.
B. Right to Nextel Name and Trademarks. In the event the
arbitrators determine that the Company has committed a Material Breach, NWIP
shall be entitled to terminate the Trademark License Agreement and, subject to
the provisions of the Trademark License Agreement, withdraw any right the
Company has to the continued use of the Nextel name and Nextel trademarks, if
the arbitrators determine, taking into account the harm that the Material Breach
caused to the licensed marks, that termination of the Trademark License
Agreement is an appropriate remedy in the circumstances. In the event the
arbitrators determine that NWIP has committed a Material Breach, the Company
shall be entitled to maintain the Trademark License Agreement if,
notwithstanding the termination of this Agreement and all other Collateral
Agreements, the arbitrators determine that continuation of the Trademark License
is appropriate in the circumstances.
C. Determination Required for Termination Remedy. Termination
shall be an available remedy only if the procedure of Section 12.7 is followed
and the arbitrators make the following determinations:
(i) There has been a Material Breach.
(ii) Neither an order of specific performance nor an award
of damages nor a combination of the two will substantially restore the benefit
of the bargain to the non-breaching party in the absence of termination.
(iii) Termination is an equitable remedy under all of the
facts and circumstances, including any conditions or limitations the arbitrators
impose in connection with termination to achieve equity.
D. Termination Awarded to NWIP. If NWIP is the Claimant and
NWIP has sought and has been awarded termination of all the agreements in force
between the parties as a remedy, then, if at that time any member of the Nextel
Group owns an equity interest in the Company, NWIP must acquire pursuant to
Section 5.1(a)(i)(C) of the Company's Restated Certificate of Incorporation for
a price equal to 80% of the Company Equity Value as described in the last
sentence of Section 5.1(a)(iii) thereof all outstanding capital stock (excluding
any shares of the Company's Series B Preferred Stock owned by any member of the
Nextel Group)
and any other equity interests in the Company. The balance of the Company Equity
Value, under such Section 5.1(a)(iii) will be retained by NWIP as liquidated
damages for any breach occurring prior to or in connection with the events
giving rise to such termination and to compensate for the unascertainable
damages arising from such termination, and no additional compensation shall be
owing for any damages resulting from such a breach or termination.
E. Termination Awarded to the Company. If the Company is the
Claimant, and the Company has sought and has been awarded termination of all the
agreements in force between the parties as a remedy, and if at that time any
member of the Nextel Group owns an equity interest in the Company, as liquidated
damages for all breaches occurring prior to or in connection with the events
giving rise to termination and to compensate for the unascertainable damages
arising from such termination, the Company will be entitled at its option, to
entry of an order requiring that NWIP must pay pursuant to Section 5.1(b)(i)(D)
of the Company's Restated Certificate of Incorporation a sum equal to the amount
described in Section 5.1(b)(iii)(D) thereof and no additional compensation will
be owing for any damages from such termination, or for any breach occurring
prior to or in connection with the events giving rise to such termination. In
the event that the Company requests a ruling on its right to terminate and is
determined to be entitled to terminate one or more Substantial Agreements, but
elects not to terminate, then the Company will be entitled to entry of an order
requiring the price to be paid by NWIP upon the subsequent exercise of the NWIP
Call Right to be no less than (x) the Company Equity Value determined under the
Shareholders' Agreement as of a point in time immediately prior to the
breach(es) that resulted in the termination, plus (y) an amount equal to 20% of
the amount described in clause (x) (the "Premium"), minus (z) NWIP's
proportionate share of such sum (but the decision whether or not to exercise
such option shall remain in the sole discretion of NWIP). The Premium amount
included in the price paid by NWIP will constitute liquidated damages for any
breach occurring prior to or in connection with the events giving rise to the
right to terminate, and to compensate for the unascertainable damages arising
from such termination, and no additional compensation shall be owing for any
damages resulting from such a breach or for any breach occurring prior to or in
connection with the events giving rise to the order.
F. Limitations on Demages. Neither NWIP (nor any other member
of the Nextel Group) nor the Company (nor Opco, nor any other Affiliate of the
Company) is entitled to seek or recover consequential, punitive or exemplary
damages in respect of this Agreement or the Collateral Agreements or any other
agreement between the Company or any of its Subsidiaries, on the one hand, and
NWIP or any other member of the Nextel Group, on the other, under any
circumstances or for any reason including, without limitation, upon or in
connection with any termination of this Agreement or any of such other
agreements. Consequential damages are, without limitation, lost profits, lost
revenue and the like but do not include the actual costs incurred in obtaining
substitute performance where there has been a failure to perform an obligation
under an agreement. This Section 12.9F shall not limit any party's right to full
recovery of liquidated damages as provided in Section 12.9E.
13. MISCELLANEOUS
13.1 Choice of Law. This Agreement and each of the Collateral
Agreements shall be governed by New York law, provided that those portions of
this Agreement, the Interim Management Agreement and the Analog Management
Agreement that involve topics covered by FCC Rules shall be governed thereby.
13.2 Attorneys Fees. If a dispute relating to this Agreement or any
Collateral Agreement, or any transaction or matter contemplated hereby or
thereby, results in any proceeding (arbitration, litigation or other
proceeding), the judge's, arbitrator's or panel's decision or award may provide
that the prevailing party shall be entitled to recover reasonable attorneys'
fees, expenses and costs from the non-prevailing party, and the amount of the
fees, expenses or costs so recoverable.
13.3 Pass-Throughs. If the Company cannot obtain from a third party
any product or service that is necessary for the Company to perform its
obligations under one or more of this Agreement or any of the Collateral
Agreements, then, as an accommodation to the Company, NWIP will make available
to the Company the product or services that is available to the NDS that the
Company has been unable to obtain. NWIP will have no obligation to make this
accommodation if it would breach the terms of or would otherwise result in any
adverse effect or consequence (other than any additional costs or charges that
the Company will pay as required by the last sentence of this Section) to NWIP
or to any member of the Nextel Group under any agreement with a third party.
NWIP and the other members of the Nextel Group retain the right to modify or
terminate their agreements with third parties, in their sole discretion and
without any liability or responsibility to the Company. If any product or
service is made available to the Company by a pass-through as contemplated by
this Section, the Company will look solely to the third party for performance.
Neither NWIP nor any member of the Nextel Group makes any representation or
warranty and none of them will have any liability for the failure of the third
party to perform. If there is any cost or charge to any member of the Nextel
Group for a pass-through arrangement, NWIP need not make it available to the
Company until the Company has paid such cost or charge.
13.4 [RESERVED]
13.5 Monitoring. In addition to specific monitoring rights
contemplated elsewhere, the Company and NWIP will have the right to such
periodic reports from each other as they may reasonably request from time to
time, and NWIP has the right (which may be exercised at reasonable times and on
reasonable advance notice by appropriate representatives) to inspect and audit
the Company's operations to confirm compliance with this Agreement or any of the
Collateral Agreements (and the Company will have the right of access to the NWIP
and/or NDS operations also at reasonable times and on reasonable advance notice,
in order to permit the Company and its personnel to understand such operations
in order that the Company may comply with the terms of this Agreement or any of
the relevant Collateral Agreements). Absent an emergency, inspections and audits
shall be during normal business hours.
13.6 Payment.
A. NWIP will submit to the Company after the end of each
calendar month a reasonably detailed invoice listing (i) all charges due and
payable by the Company or Opco to NWIP under this Agreement or any Collateral
Agreement for the prior month (including pass-throughs for telco or other third
party charges, if any), and (ii) all charges due and payable by NWIP to the
Company or Opco under this Agreement or any Collateral Agreement for the prior
month. After the amounts under clause (i) and (ii) of the preceding sentence
have been netted against each other, the party that owes the other will pay such
invoice in full within thirty (30) days of receipt thereof, without deduction or
offset.
B. In the event a billing dispute arises between the parties,
the party with an amount owing will pay 100% of the disputed amount by the
payment due date. If the Company believes that any invoice is incorrect, not
more than 30 days after the date of the invoice, it will provide NWIP with a
written explanation of the discrepancy or claimed error. NWIP will review any
written explanation received from the Company within ten business days of
receipt thereof and respond thereto by either (i) making an appropriate
correction, or (ii) sending to the Company a written explanation with reasonably
detailed supporting information describing why NWIP does not believe a billing
error has been made. If, upon review of NWIP's response, the Company reasonably
still believes that a billing error exists, the parties will resolve their
dispute under Article 12.
C. A late payment charge of the greater of one and one-half
percent (1-1/2%) per month or the maximum interest rate permitted by law will be
applied to any unpaid balance of any invoice delivered under this Section 13.6,
if the payment is not paid by the due date. Late payment charges will be
calculated by multiplying the total unpaid amount carried forward to a
subsequent invoice by the applicable interest rate. The late payment charges
hereunder are a penalty for a default of non-payment of any payment when due and
will not be deemed interest payments. This late payment charge will be in
addition to and not in lieu of any other remedies available to the party
entitled to payment.
13.7 Company Audit Right. If the Company or Opco is charged by NWIP
either based on a pass-through of charges imposed by a third party on NWIP (or
any other member of the Nextel Group) or based on a portion of the charges that
any member on the Nextel Group pays to third parties, the Company will have the
right, on reasonable advance notice and during regular business hours, to review
the books and records of the NWIP (or the Nextel Group) relating to such
third-party charges. The Company agrees that any information provided to it
pursuant to this Section 13.7 (other than that relating solely to actual pass
through charges billed to the Company) is confidential information to which
Section 13.10 shall apply.
13.8 Company Personal Obligation.
A. All of the Company's rights under this Agreement or any of
the Collateral Agreements entered into as contemplated herein, including the
Company's rights to use any frequencies made available by any member of the
Nextel Group in the Territory and the rights to own and operate the ESMR Network
in the Territory are personal to the Company. Subject to
the foregoing and the approval of NWIP, the Company may (i) assign its rights
and delegate its duties to wholly owned direct or indirect Subsidiaries, or (ii)
subcontract or obtain from others products and services necessary to perform its
obligations under this Agreement or any of the Collateral Agreements, but, in
either case, the Company shall be and remain responsible and liable for the due,
proper, full and timely performance of such obligations. The Company is jointly
and severally liable for all obligations and liabilities of Opco and any other
Company Subsidiary arising under this Agreement or any Collateral Agreement. If
NWIP has consented to an assignment or confirmed in writing that a particular
group of the Company's or Opco's senior secured lender(s) have complied with the
requirements of Section 4.13A, the Company and Opco may make a collateral
assignment of their respective right, title and interest under (but not any of
their obligations, liabilities or duties with respect to this Agreement and
(notwithstanding any provisions of any of the Collateral Agreements to the
contrary) any of the Collateral Agreements to such lenders. No more than one
such assignment will be in effect at any time.
B. Any assignment by the Company and/or Opco of rights under
this Agreement and any of the Collateral Agreements permitted pursuant to clause
(i) of the first sentence of paragraph A hereunder to wholly owned direct or
indirect subsidiaries must by its terms cease to be effective at any time that
the assignee ceases to be a wholly owned direct or indirect subsidiary of the
Company. No assignment of this Agreement or any Collateral Agreement (except as
expressly provided otherwise therein) by any party shall release the assignor of
any obligations, duties or liabilities hereunder or thereunder and the assignor
shall be and remain directly and fully liable, on a primary basis together with
the assignee, for all such matters. Such direct, primary obligations,
liabilities and duties of the assignor shall remain in effect and shall not be
reduced, diminished, avoided or released, in whole or in part, notwithstanding
any insolvency, bankruptcy or reorganization of any assignee.
C. Except for the Company's rights under clause (i) of
paragraph A and the last sentence of paragraph A, neither party may assign this
Agreement or any of the Collateral Agreements without the consent of the other,
except that NWIP may assign an agreement to any wholly owned direct or indirect
Subsidiary of Nextel that assumes NWIP's obligations and is approved by the
Company, provided that the Company may withhold such approval based only on the
Company's reasonable determination that the assignee lacks financial or other
capacity to perform equivalent to that of NWIP.
13.9 Disclaimer of Partnership. Neither this Agreement nor any of the
Collateral Agreements contemplated hereby, nor any other agreement between the
parties, or any action or relationship contemplated therein, creates a
partnership or any other fiduciary relationship between the parties, nor between
NWIP and any of the other stockholders of the Company. It is expressly
understood and agreed that the obligations and relationships so created are
contractual in nature, are for the benefit of and may be enforced only by the
parties signatory thereto and their permitted assignees and successors, and are
subject to the limitations on liability and disclaimers set forth therein
including those set forth in the Nextel Agreement.
13.10 Confidentiality.
A. Except (i) for the use of information as required in
connection with any filing with the Securities and Exchange Commission, (ii) for
any other governmental filing required in order to complete the transactions
contemplated by this Agreement or by any of the Collateral Agreements, and (iii)
as NWIP and the Company may agree or consent in writing, all information
received by NWIP and the Company and their respective representatives pursuant
to the terms of this Agreement and each of the Collateral Agreements shall be
kept in strictest confidence by the receiving party and its representatives.
Neither NWIP nor the Company will make any press release or other disclosure of
the transactions contemplated in this Agreement or in any of the Collateral
Agreements without the prior written consent of the other party. Notwithstanding
the foregoing, if counsel for either NWIP or the Company advises that a press
release or public disclosure is required by law or the rules of any stock
exchange or the NASDAQ National Market, then that party must notify the other,
and the parties shall use their best reasonable efforts to cause a mutually
acceptable press release to be issued, and in all events the party required to
make such disclosure will be free to do so. Any party may disclose the existence
and terms of this Agreement and any of the Collateral Agreements and the
transactions contemplated hereby and thereby to financial institutions in
connection with financings or as required under any agreements, provided that
confidential treatment is requested from any such person to whom such
information is disclosed.
B. The foregoing confidentiality provisions shall not apply to
such portions of the information received which (i) are or become generally
available to the public through no action by the receiving party or by such
party's representatives or (ii) are or become available to the receiving party
on a nonconfidential basis from a source, other than the disclosing party or its
Affiliates or its representatives, which the receiving party believes, after
reasonable inquiry, is not prohibited from disclosing such portions to it by a
contractual, legal or fiduciary obligation.
C. If a party or its Affiliates or representatives becomes
legally compelled by law, process or order of any court or governmental agency
or otherwise to disclose any confidential information, such party will give the
disclosing party prompt notice thereof to permit the disclosing party to seek a
protective order or to take other appropriate action. A party will be relieved
of its confidentiality obligations under this Section 13.10 only to the extent
that it becomes legally compelled to disclose confidential information, subject
to protective orders or other restrictions imposed on or granted by the court,
governmental agency or other entity receiving the confidential information. If
requested by the disclosing party, the compelled party will cooperate in seeking
to obtain protective treatment for any confidential information that the
compelled party is legally compelled to disclose.
D. NWIP and the Company hereby acknowledge that as a result of
disclosures by Nextel, NWIP, and the Company contemplated under this Agreement
and certain of the Collateral Agreements, the parties and their Affiliates may,
from time to time, have material, non-public information concerning Nextel, the
Company, and other companies. Nextel, NWIP, and the Company confirm that each of
them and their Affiliates are aware and each of them has advised their
representatives that (i) the United States securities laws may prohibit a person
who has material, non-public information from purchasing or selling securities
of any company to which such information relates, and (ii) material non-public
information shall not be communicated to any other person except as permitted
herein.
13.11 Amendments. This Agreement may be amended only by a writing
executed by the parties.
13.12 Entire Agreement. This Agreement and the other Transaction
Documents set forth the entire understanding of the parties hereto and thereto
with respect to the subject matter hereof and thereof, and supersede all prior
contracts, agreements, arrangements, communications, discussions,
representations and warranties, whether oral or written, between the parties,
including, but not limited to, the Memorandum of Agreement, dated as of May 1,
1998, among Wireless Investment Partners, L.L.C., NWIP and Nextel, as amended,
the letter agreement dated August 13, 1998, among DLJ Merchant Banking II, Inc.,
DLJ Capital Corp., Nextel, the Company and Eagle River Investments, LLC., and
the letter agreement dated December 4, 1998, among DLJ Merchant Banking II,
Inc., DLJ Capital Corp., Nextel, the Company, Eagle River Investment, LLC, and
Motorola, Inc.
13.13. Any notice, request or other communication required or
permitted hereunder must be in writing and will be duly given: (a) when received
if personally delivered; (b) within 12 hours after being sent by telecopy, with
confirmed answerback; or (c) within 1 business day of being sent by priority
delivery by established overnight courier, to the parties at their respective
addresses set forth below.
To NWIP: Nextel WIP Corp.
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ Day ▇▇▇▇▇▇ & ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: Nextel Partners, Inc.
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Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Opco: Nextel Partners Operating Corp.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party by written notice to the others given in accordance with this Section
13.13 may change the address or the persons to whom notices or copies thereof
and to be directed.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, and all of which
together will constitute one and the same instrument.
13.15 Waiver. Except as otherwise provided in this Agreement, any
party may waive, in writing, compliance by the other parties thereto (to the
extent such compliance is for the benefit of the party giving such waiver) with
any of the terms, covenants or conditions contained in this Agreement (except as
may be imposed by law). Any waiver by any party of any violation of, breach of,
or default under, any provision of any of this Agreement, by any other party
will not be construed as, or constitute, a continuing waiver of such provision,
or waiver of any other violation of, breach of, or default under, any other
provision of this Agreement.
13.16 Third Parties. Nothing expressed or implied in this Agreement
is intended, or may be construed, to confer upon or give any person or entity
other than the parties hereto (and the indemnified persons referred to in
Sections 4.11 and 5.3) any rights or remedies hereunder or by reason of the
Collateral Agreements or any other agreement between the Company or any of its
Subsidiaries, on the one hand and NWIP or any other member of the Nextel Group,
on the other.
13.17 Schedules and Exhibits. The schedules and exhibits attached to
this Agreement (as the same may be amended, supplemented or otherwise modified
from time to time as provided herein) are incorporated herein and are part of
this Agreement for all purposes. Unless otherwise stated, any reference in this
Agreement to an exhibit, section or schedule is to an exhibit, section or
schedule of this Agreement.
13.18 Headings. The headings in this Agreement are solely for
convenience of reference and are not to be given any effect in the construction
or interpretation of this Agreement.
13.19 Severability. If any provision of this Agreement or the
application of such provision is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision of this Agreement or
invalidate or render unenforceable such provision in any other jurisdiction. The
parties will, to the extent lawful and practicable, use their best reasonable
efforts to enter into arrangements to reinstate the intended benefits of any
provision held invalid, illegal or unenforceable.
13.20 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may only be brought
in the United States District Court for the Southern District of New York or any
New York State court sitting in New York City, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 13.12 shall be deemed effective service of process on such
party.
13.21 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Joint Venture
Agreement to be executed this 29th day of January, 1999.
NEXTEL PARTNERS, INC.
By: s/▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, President and Chief
Executive Officer
NEXTEL PARTNERS OPERATING CORP.
By: s/▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial
Officer
NEXTEL WIP CORP.
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
