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EXHIBIT 10.1
EXPANSION TERRITORY ASSET TRANSFER AND REIMBURSEMENT AGREEMENT
Between
NEXTEL WIP CORP.
and
NEXTEL PARTNERS OPERATING CORP.
Dated as of September 9, 1999
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EXPANSION TERRITORY ASSET TRANSFER AND
REIMBURSEMENT AGREEMENT
This EXPANSION TERRITORY ASSET TRANSFER AND REIMBURSEMENT AGREEMENT
(this "Agreement"), dated as of September 9, 1999, is between Nextel Partners
Operating Corp., a Delaware corporation (the "Company"), and Nextel WIP Corp., a
Delaware corporation ("NWIP"). Capitalized terms used in this Agreement, but not
defined herein or in Schedule A attached hereto, have the meanings set forth in
Article 1 of the JV Agreement.
RECITALS
A. Nextel, through its Subsidiaries, operates an iDEN-based wireless
communications system through which it provides wireless communications services
in various markets throughout the United States. To enhance its ability to
provide its customers with greater geographic coverage that is consistent with
its existing service, operations and objectives, Nextel, through NWIP, entered
into a contractual joint venture with NPI and its wholly owned Subsidiaries,
including the Company.
B. The agreement of the parties with respect to the formation and
operation of the contractual joint venture is set forth in the JV Agreement and
various Collateral Agreements.
C. Pursuant to the JV Agreement, NPI and the Company have elected to
expand and market Nextel's iDEN wireless telecommunications services in the
Expansion Territory.
D. NWIP desires to transfer to the Company, and the Company desires to
acquire from NWIP, certain assets, properties, rights and interests to be used
in connection with the construction and operation of the Company's iDEN-based
wireless communications system in the Expansion Territory (the "Business"), all
upon the terms and conditions and in exchange for the consideration set forth
herein.
In consideration of the mutual promises and covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, NWIP and the Company hereby agree as follows:
AGREEMENT
1. TRANSFER OF ASSETS.
1.1 ASSET TRANSFER. On the terms and subject to the provisions
of this Agreement, NWIP hereby transfers, conveys and assigns to the Company,
and the Company hereby purchases, accepts and receives, all of NWIP's right,
title and interest in and to assets and rights described below (the "Assets"):
1.1(a) The owned tangible personal property and equipment used
in or relating to the operation of the Business including but not
limited to base radios, EBTS, combiners, other digital mobile radio
transmission equipment, antennas, antenna dishes, base units,
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GPS units, tower top amplifiers, controller racks, converters,
enclosures and RF distribution racks;
1.1(b) The leases for tangible personal property, the
subscriber agreements, other contracts and commitments, and other
agreements for the purchase or sale of goods or services relating to
the Business as identified on Schedule 1.1(b);
1.1(c) The construction plans, site acquisition plans, RF
design plans and other records and plans relating exclusively to the
Business, customer deposits and prepayments made by customers of the
Business, other payables and receivables of the Business and permits
relating exclusively to the Business; and
1.1(d) The lessee's interest under the leases of real property
(including leases for raw land) located in the Expansion Territory and
used exclusively or acquired to be used exclusively in the Business,
together with any improvements owned by NWIP or the lessee and located
thereon, as identified on Schedule 1.1(d) (the "Leases") subject to
Section 1.3. At the option of the Company, in lieu of a direct
assignment of such leases to the Company, NWIP may assign all of the
Leases to Nextel WIP Lease Corp., a Delaware corporation ("Lease Co.").
To the extent that NWIP is not the holder of the lessee's or
sublessee's interests under the Leases, NWIP will cause such lessees or
sublessees to execute and deliver assignments of the Leases to the
Company or, at the election of the Company, to Lease Co. At the request
of the Company, NWIP will execute or cause to be executed confirmatory
assignments by the holder or holders of the possessory interests under
the Leases being assigned.
1.2 EXCLUDED ASSETS. No assets of NWIP, other than the Assets,
are transferred to the Company under this Agreement. No assets of any
member of the Nextel Group other than NWIP are transferred to the
Company under this Agreement. Additionally, the Assets transferred
under this Agreement specifically exclude any ownership or lease rights
in:
1.2(a) FCC licenses;
1.2(b) Sites and Antenna Sites;
1.2(c) Any assets owned by third parties;
1.2(d) Trademarks, service marks, and all other intellectual
property owned by NWIP, Nextel or any member of the Nextel Group;
1.2(e) Any assets located outside the Territory or Expansion
Territory owned by NWIP, Nextel or any member of the Nextel Group;
1.2(f) Any assets used by NWIP, Nextel or any other member of the
Nextel Group in the Expansion Territory in businesses other than the
Business, including, but not limited to, those used in the operation of
analog based communications services;
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1.2(g) Any leases of real property located in the Expansion
Territory and not identified on Schedule 1.1(d);
1.2(h) Any subscribers and the relevant billing and accounting
records relating to such subscribers in the Expansion Territory. These
subscribers and records will be transferred at a later date and on
terms to be agreed upon by NWIP and the Company. Until that time, any
subscribers in the Expansion Territory will remain subscribers of
Nextel; and
1.2(i) The SMR Management Agreement, by and between Twin Cities
Technologies, Inc. and Pittencrieff Communications, Inc., dated as of
July 1, 1999.
1.3 NONASSIGNABLE RIGHTS.
1.3(a) NONASSIGNABILITY. To the extent that any contract, permit,
right, lease or agreement enumerated in Section 1.1 cannot be validly
assigned, transferred or subleased without the consent or waiver of the
issuer thereof or another party thereto or any third person (including
a government or governmental unit), or if such assignment, transfer or
sublease or attempted assignment, transfer or sublease would constitute
a breach thereof or a violation of any law, decree, order, regulation
or other governmental edict, this Agreement is not an assignment,
transfer or sublease thereof, or an attempted assignment, transfer or
sublease thereof.
1.3(b) NWIP TO USE BEST REASONABLE EFFORTS. NWIP is not obligated
to transfer to the Company any of the Assets described in Section
1.3(a) without first having obtained all necessary consents and
waivers. Upon request of the Company, NWIP shall use its best
reasonable efforts, and the Company shall reasonably cooperate with
NWIP, to obtain any consents and waivers necessary to convey or cause
to be conveyed to the Company or Lease Co. any of the Assets described
in Section 1.3(a). NWIP shall promptly convey to the Company or to
Lease Co. at the Company's election any Assets described in Section
1.3(a) for which NWIP has received the necessary consents and waivers.
NWIP will not be obligated to pay any additional consideration to the
person from whom any consent or waiver is requested unless the Company
requests in writing that NWIP make such payment and the parties agree
how to share that cost.
1.3(c) IF WAIVERS OR CONSENTS CANNOT BE OBTAINED. If, after using
its best reasonable efforts, NWIP is unable to obtain any of the
necessary consents or waivers described in Section 1.3(a), NWIP shall,
as to any particular contract, permit, right, lease or agreement, only
with respect to the current term thereof as of the date of this
Agreement (i) provide to the Company, to the fullest extent possible,
the benefits of any license, permit or approval and of any lease,
contract, license or other agreement or commitment, all as referred to
in Section 1.3(a), and (ii) cooperate in any reasonable and lawful
arrangement designed to provide such benefits to the Company. The
Company shall promptly pay or reimburse NWIP for all costs and expenses
paid by NWIP to the appropriate third party under the terms of such
contract, permit, right, lease or agreement. At the end of the current
term of any such contract, permit, right, lease or agreement, NWIP
shall have no further duties or obligations hereunder with respect to
such licenses,
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permits and approvals and such leases, contracts, licenses and other
agreements and commitments and the failure to obtain any necessary
consent or waiver with respect thereto will not be a breach of this
Agreement.
1.3(d) COMPANY TO PERFORM. To the extent that the Company is
provided, pursuant to this Section 1.3, the benefits of any contract,
permit, right, lease or agreement (each a "Provided Obligation"), the
Company shall perform for the benefit of the issuer thereof or the
other party or parties thereto, the obligations of NWIP or of any other
member of the Nextel Group thereunder or in connection therewith as
such obligations relate to the Business or the Assets. If the Company
fails to perform as required by this Section 1.3(d), NWIP will
thereafter cease to be obligated under this Section 1.3 with respect of
the Provided Obligation that is the subject of the failure to perform
until the earliest of the following: (i) the situation is remedied,
(ii) at the sole option of NWIP, the Company promptly pays or
reimburses NWIP for all costs incurred by NWIP during the period of
failure of performance, or (iii) NWIP's responsibilities with respect
to the Provided Obligation expire under Section 1.3(c). The Company
shall indemnify NWIP and hold it harmless from and against any and all
loss, cost, damage or expense arising from or related to the Company's
failure to perform any Provided Obligation.
2. ASSUMPTION OF LIABILITIES.
2.1 DISCLOSED LIABILITIES. The Company hereby assumes and agrees
to pay, perform and discharge when due the liabilities and obligations of NWIP
and of any other member of the Nextel Group, whether primary or secondary,
absolute or contingent, direct or indirect, that are identified on Schedule 2.1.
2.2 ORDINARY COURSE LIABILITIES. The Company hereby assumes and
agrees to pay, perform and discharge when due the liabilities and obligations of
NWIP and of any other member of the Nextel Group, whether primary or secondary,
absolute or contingent, direct or indirect, that arose or were incurred in the
ordinary course of business consistent with the past practice of the Nextel
Group in connection with the construction, design or operation of an ESMR
Network in the Expansion Territory before the date of this Agreement or that
arise from the ownership or operation of the Assets. If there are any such
liabilities that relate to a particular asset that were not taken into account
in the value of the asset for purposes of the payment under Section 5.1(b), it
will be corrected in the True Up.
2.3 UNDISCLOSED LIABILITIES. Subject to its indemnity rights under
Section 2.4, the Company hereby assumes and agrees to pay, perform and discharge
when due the undisclosed liabilities and obligations of NWIP and of any other
member of the Nextel Group whether primary or secondary, absolute or contingent,
direct or indirect, that arose or were incurred outside the ordinary course of
business (including violations of law and breaches of contract) before the date
of this Agreement and that arise from the ownership or operation of the Assets
(collectively, "Undisclosed Liabilities").
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2.4 LIMITATION ON COMPANY LIABILITY.
2.4(a) The maximum aggregate liability of the Company and its
subsidiaries for Undisclosed Liabilities is $125,000, and NWIP hereby
agrees to defend, indemnify and hold the Company and its subsidiaries
harmless from and against any Undisclosed Liabilities in excess of
$125,000. To make a claim for indemnification under this Section 2.4,
the Company must provide written notice to NWIP, within 180 days after
the date of this Agreement, describing in reasonable detail (to the
extent known) each Undisclosed Liability for which indemnification is
sought, including the nature and amount thereof, all relevant parties
and their relationships to the Assets, and copies of any relevant
documents. Promptly after receiving any additional information about
any claim made hereunder, the Company will forward such information to
NWIP. NWIP shall pay the Company the amount of any such Undisclosed
Liability (in excess of $125,000) in cash within 20 days after receipt
of any such notice. Any dispute under this Section 2.4 shall be
resolved under the dispute resolution procedures set forth in Article
12 of the JV Agreement.
2.4(b) The Company's right of indemnification under this Section
2.4 relates only to Undisclosed Liabilities and is limited to any
claims made before the date that is 180 days from the date of this
Agreement. If any such claim for indemnification is asserted by the
Company, it may be made only in the manner and during the 180-day
period provided in Section 2.4(a). Indemnification may not be sought
under this Section 2.4 for any liabilities or obligations other than
Undisclosed Liabilities. Once the 180-day period expires, this right of
indemnification is then extinguished, and the Company may make no
further claims for indemnification regarding any liabilities (whether
undisclosed or otherwise) relating to the Assets against NWIP or any
other member of the Nextel Group except for continuing claims for
Undisclosed Liabilities for which the Company gave the notice required
by Section 2.4(a) within the 180-day period. If the Company fails to
make a claim for indemnification in compliance with this Section 2.4
within 180 days after the date of this Agreement, then this right of
indemnification will immediately expire, and the Company may make no
claim for indemnification regarding any liabilities (whether
undisclosed or otherwise) relating to the Assets against NWIP or any
other member of the Nextel Group.
2.5 SUBROGATION OF COMPANY. The Company is subrogated to all
rights of NWIP and any other subsidiary of Nextel under any insurance policies
covering any liabilities assumed by the Company under this Article 2 ("Assumed
Liabilities") and with respect to such assumed liabilities, shall be named as an
additional insured under any such policies, and any proceeds of any such
policies that are received by NWIP or any other subsidiary of Nextel in respect
of any such liability shall be held in trust for the benefit of the Company.
NWIP will use its best reasonable efforts to ensure such subrogation of the
Company. The Company may assert any counterclaim of NWIP or of any other
subsidiary of Nextel so long as the counterclaim relates only to the Assets or
the Business and does not relate to any other business of any member of the
Nextel Group in or outside the Expansion Territory or to any assets retained by
any other member of the Nextel Group.
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2.6 LIABILITIES ARISING AFTER THE CLOSING. The Company is
responsible for all liabilities and obligations relating to the Assets, whether
known or unknown, primary or secondary, absolute or contingent, direct or
indirect, that arise or are incurred on or after the date of this Agreement.
3. REPRESENTATIONS AND WARRANTIES.
3.1 ASSETS. NWIP represents and warrants to the Company that as of
the date of this Agreement, it (or, in the case of any leases of real
property constituting Assets, one or more of its affiliates) has good
and marketable title to the Assets free and clear of all Liens other
than Permitted Liens. EXCEPT AS OTHERWISE STATED IN THIS SECTION 3.1,
(i) THE ASSETS ARE TRANSFERRED TO THE COMPANY AS IS, WHERE IS, AND (ii)
NWIP DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
4. PAYMENT AND ADJUSTMENTS.
4.1 PAYMENT. The Company shall pay to NWIP upon execution and
delivery hereof (the "Closing") the amount of $10,593,033 payable in immediately
available funds by wire transfer to an account designated by NWIP in writing for
this purpose. This payment (the "Closing Date Payment") is the sum of the
following:
(a) $7,022,857 as reimbursement for certain costs and expenses;
plus
(b) $3,570,176 as payment for the other Assets.
4.2 POST-CLOSING ADJUSTMENT. The Closing Date payment is subject
to a post-closing adjustment as set forth in Schedule 5.2.
4.3 TAXES. The Company must pay sales and use taxes, and NWIP must
pay transfer taxes relating to or arising from the transfer of the Assets to the
Company.
5. MISCELLANEOUS.
5.1 FURTHER ASSURANCES.
5.1(a) After the date of this Agreement, NWIP shall, from time to
time, at the Company's request, execute and deliver to the Company such
other instruments of conveyance and transfer and take such other action
as the Company may reasonably request to more effectively transfer,
assign, deliver and vest in the Company title to and possession of the
Assets as provided in this Agreement or otherwise to consummate the
transactions contemplated by this Agreement. After the date of this
Agreement, the Company shall from time to time, at NWIP's request,
execute and deliver such other
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instruments of assumption and take such other action as NWIP may
reasonably request to more effectively assume the Assumed Liabilities
or otherwise to consummate the transactions contemplated by this
Agreement.
5.1(b) After the date of this Agreement, if NWIP learns of
agreements or permits that were used or acquired for use exclusively in
connection with the Business in the Expansion Territory, NWIP may
identify them in writing to the Company and the Company will, if such
agreement or permit does not conflict with obligations undertaken by
the Company, assume the new agreement as an additional Assumed
Liability hereunder.
5.1(c) After the date of this Agreement, if NWIP learns of
Assets that were used or acquired for use exclusively in connection
with the Business in the Expansion Territory and were not transferred
to the Company on the date hereof, NWIP will identify them in writing
to the Company, and the Company may, if such Asset does not conflict
with obligations undertaken by the Company, accept such Assets as
additional Assets hereunder. Any consent required for the assignment of
any such Asset to the Company shall be obtained by and at the expense
of NWIP.
5.2 WAIVER OF BULK SALES COMPLIANCE. To the extent they apply, the
Company waives compliance by NWIP with the provisions of the "bulk sales" law of
any state including, without limitation, the provisions of Article 6 of the
Uniform Commercial Code as enacted in any applicable state.
5.3 CHOICE OF LAW. This Agreement shall be governed by New York
law, without regard to choice of law rules that would result in the application
of another state's law.
5.4 EXCUSABLE DELAY/TIME EXTENSION. Where performance by any party
to this Agreement is delayed by reason of an Excusable Delay (as defined in the
JV Agreement), 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.
5.5 AMENDMENTS. This Agreement may be amended only by a writing
executed by the parties.
5.6 ENTIRE AGREEMENT. This Agreement and the other Expansion
Transaction Documents, together with the 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.
5.7 NOTICES. Any notice, request or other communication required
or permitted hereunder must be in writing and is given: (a) when received if
personally delivered; (b) 12 hours after being sent by telecopy, with confirmed
answerback; or (c) 1 business day after being sent by priority delivery by
established overnight courier, to the parties at their respective addresses set
forth below.
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To NWIP: Nextel WIP Corp.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
To the Company: Nextel Partners Operating Corp.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
With a copy to: Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Any party by written notice to the others given in accordance with this Section
6.7 may change the address or the persons to whom notices or copies thereof are
to be directed.
5.8 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.
5.9 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.
5.10 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 any rights or remedies hereunder.
5.11 SEVERABILITY. If any provision of this Agreement or the
application of such provision is invalid, illegal or
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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.
5.12 CONSTRUCTION.
5.12(a) Words used in this Agreement, regardless of the number or
gender specifically used, will be deemed and construed to include any
other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context requires. The parties hereto have
participated equally in the drafting of this Agreement and no
presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any provision of this Agreement.
5.12(b) The schedules and exhibits attached to this Agreement 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.
5.12(c) 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.
5.13 AGREEMENT. This Agreement is to be construed as if it were
one of the Collateral Agreements identified in the JV Agreement, so that certain
provisions of the JV Agreement by their terms apply to this Agreement,
including, without limitation, Section 2.6, Article 12, and Section 13.2, and
Section 13.10.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the day and year
first above written.
NEXTEL WIP CORP.
By: Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
NEXTEL PARTNERS OPERATING CORP.
By: Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer and Treasurer
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DISCLOSURE SCHEDULES FOR THE
EXPANSION TERRITORY ASSET TRANSFER AND
REIMBURSEMENT AGREEMENT
BETWEEN NEXTEL WIP CORP. AND NEXTEL PARTNERS OPERATING CORP.
DATED AS OF SEPTEMBER 9, 1999
The Schedules attached hereto are subject to the following terms and conditions:
1. The introductory language and headings in the Schedules are inserted for
convenience only and shall not create a different standard for disclosure
than the language set forth in this Agreement.
2. The inclusion of any item in the Schedules when listing a "material" item
or an action "not in the ordinary course of business" is not deemed to be
an admission or representation that the included item is "material" or is
"not in the ordinary course of business."
3. Each capitalized term used herein and not otherwise defined shall have the
meaning given to such term in this Agreement.
4. Any matter disclosed in any section or subsection of the Schedules shall be
deemed disclosed for the purposes of any other schedule in which it is
reasonably clear that such disclosure may be relevant.
5. This Schedule is fully incorporated into and made a part of the Expansion
Territory Asset Transfer and Reimbursement Agreement, dated as of September
9, 1999, between Nextel WIP Corp. and Nextel Partners Operating Corp.
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SCHEDULE A
DEFINED TERMS
"Agreement" has the meaning set forth in the preamble to this Agreement.
"Antenna Site" has the meaning set forth in the Master Site Lease.
"Assets" has the meaning set forth in Section 1.1.
"best reasonable efforts" has the meaning set forth in the JV Agreement.
"Business" has the meaning set forth in the recitals to this Agreement.
"Company" has the meaning set forth in the preamble to this Agreement.
"Expansion Territory" means the option sections described on Schedule B.
"Expansion Transaction Documents" means this Agreement, Expansion
Territory Interim Management Agreement, by and between the Company and NWIP, of
even date herewith and Expansion Subscription and Contribution Agreement by and
between NPI, NWIP, DLJ Merchant Banking Partners II, L.P., Eagle River
Investments, L.L.C., Motorola, Inc. and the other investors named therein, of
even date herewith.
"JV Agreement" means the Joint Venture Agreement, by and among NWIP, NPI
and the Company, dated as of January 29, 1999.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset unless the agreement related to such financing is listed
on any Schedule hereto, and (c) any purchase option or other right or interest
of a third party thereto.
"Master Site Lease" means the Master Site Lease, between NWIP and the
Company, dated as of January 29, 1999.
"Nextel" means Nextel Communications, Inc., a Delaware corporation.
"NPI" means Nextel Partners, Inc., a Delaware corporation.
"NWIP" has the meaning set forth in the preamble to this Agreement.
"Permitted Liens" means (i) liens imposed by law for taxes that are not
yet due or are being contested, (ii) carriers', warehouseman's, mechanics',
landlords', lessors', materialmans', repairman's and other like liens imposed by
law, arising in the ordinary course of business and
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securing obligations that are not overdue by more than 30 days, (iii) pledges
and deposits made in the ordinary course of business in compliance with workers
compensation, unemployment insurance and other social security laws or
regulations, (iv) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeals bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business, (v) easements, zoning restrictions, rights of way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of the Business, (vi) precautionary Uniform Commercial Code filings made
with respect to office and similar equipment, or vehicles, leased in the
ordinary course of business under operating leases (i.e., leases not required to
be classified and accounted for as capital leases on a balance sheet under
GAAP), and (vii) Uniform Commercial Code filings made with respect to the sale
or assignment of customer lease contracts (and related rental payments) or the
portion of accounts receivable and related payments due under customer service
contracts, or as set forth in customer account statements, that are attributable
to the rental or leasing of subscriber equipment leased to customers of Nextel
or the Business.
"Site" has the meaning set forth in the Master Site Lease.
"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.
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SCHEDULE B
EXPANSION TERRITORY
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PTNR PTNR
Service Service Section Nextel Section Launch Build Service Area Name State Type
Area Number Area Category Number Name Quarter Year
18 Option 0 Xxxxx Xxxxxxxx X000 0 XXXXXXXXXXXX-XXXXXXXXXX XX Urban
34 Option 9 North Arkansas Q101 3 FORT XXXXX (AR-OK) AR Urban
136 Option 30 Little Rock Q400 2 LITTLE ROCK-NORTH LITTLE RO AR Urban
137 Option 00 Xxxxxx Xxxx X000 0 XXXX XXXXX XX Urban
182 Option 30 Little Rock Q101 3 I 00 XX Xxxxxxx
212 Option 00 Xxxxxx Xxxx X000 0 Xxxxxxxxxxx XX Urban
213 Option 00 Xxxxxx Xxxx X000 0 Xxxx XX Urban
224 Option 0 Xxxxx Xxxxxxxx X000 0 Xxxxxxxxxxx XX Urban
225 Option 00 Xxxxxx Xxxx X000 0 Xxxxxx XX Urban
227 Option 0 Xxxxx Xxxxxxxx X000 0 Xxxxxxxxxxxx XX Urban
325 Option 00 Xxxxxx Xxxx X000 0 Xxx Xxxxxxx XX Urban
442 Option 30 Little Rock Q101 3 I 00 XX Xxxxxxx
000 Xxxxxx 0 Xxxxx Xxxxxxxx Q101 3 I 00 XX Xxxxxxx
444 Option 30 Little Rock Q400 2 I 00 XX Xxxxxxx
89 Option 34 Georgia Cities Q300 2 MACON GA Urban
100 Option 20 Dothan Q400 2 COLUMBUS (GA-AL) GA Urban
110 Option 34 Georgia Cities Q400 2 WARNER ROBINS GA Urban
145 Option 20 Dothan Q300 2 ALBANY GA Urban
163 Option 34 Georgia Cities Q300 2 I 00 XX Xxxxxxx
236 Option 00 Xxxxxxx Xxxxxx X000 0 Xxxxxx XX Urban
261 Option 20 Dothan Q400 2 I 000 XX Xxxxxxx
265 Option 20 Dothan Q400 0 XX Xxx 00 XX Xxxxxxx
378 Option 00 Xxxxxx X000 0 Xxxxxxxx XX Urban
398 Option 34 Georgia Cities Q300 2 Valdosta GA Urban
555 Option 20 Dothan Q400 2 I 00 XX Xxxxxxx
559 Option 34 Georgia Cities Q300 2 I 00 XX Xxxxxxx
561 Option 34 Georgia Cities Q300 2 I 00 XX Xxxxxxx
000 Xxxxxx 00 Xxxx Xxxxxxx Q300 2 I 00 XX Xxxxxxx
102 Option 3 Evansville Q101 3 EVANSVILLE (IN-KY) IN Urban
122 Option 4 Central IL Q400 2 I 70 IN Roadway
134 Option 4 Central IL Q400 2 TERRE HAUTE IN Urban
149 Option 3 Evansville Q101 3 I 64 IN Roadway
228 Option 4 Central IL Q400 2 Crawfordsville IN Urban
274 Option 4 Central IL Q400 0 XX Xxx 00 XX Xxxxxxx
289 Option 3 Xxxxxxxxxx X000 0 XX Xxx 00 XX Xxxxxxx
339 Option 3 Evansville Q101 3 Vincennes IN Urban
355 Option 3 Evansville Q101 3 Mount Xxxxxx IN Urban
366 Option 4 Central IL Q101 3 Russellville IN Urban
369 Option 3 Evansville Q101 3 Princeton IN Urban
824 Option 4 Central IL Q400 2 I 74 IN Roadway
86 Option 0 Xxxxxxxxxx X000 0 XXXXXXXXX XX Urban
574 Option 3 Xxxxxxxxxx X000 0 XX Xxx 00 XX Xxxxxxx
805 Option 9 North Arkansas Q101 3 I 40 OK Roadway
Start End Avail SQ_MI Avail '97 POP
18 454 132,776
34 417 140,428
136 758 393,323
137 328 73,077
000 Xxxxxxxxx, XX XXXXXX XXXX-XXXXX XXXXXX XXXX, XX 806 56,687
212 77 12,811
213 77 13,165
224 77 10,159
225 77 40,819
227 77 32,985
325 77 41,550
000 XXXXXX, XXXXXXX XXXXXX XXXXXX XXXX-XXXXX XXXXXX XXXX, XX 89 10,890
000 XXXXXX, XXXXXXXX XXXXXX XXXX XXXXX, AR-OK 696 41,370
444 ST. XXXXXXX COUNTY BORDER, XXXX XXXXXX XXXX-XXXXX XXXXXX XXXX, XX 412 17,179
89 516 222,174
100 815 260,788
110 168 48,801
145 441 116,140
000 XXXXX, XX Xxxxxxx XXXXXX, XXXX 642 33,175
236 77 27,621
000 X-00 XXXXXXXXXXXX XXXXXXXX, GA-AL 180 4,848
000 XXXX XXXXXX XXXXXX, XXXX XXXXXX, XX 134 12,478
378 77 20,924
398 27 3,739
000 XXXXXX XXXXXX XXXXXX, XXXXX XXXXXX-XXXXXXX, XX 348 68,423
000 XXXXX XXXXXX XXXXXX, XXXXX XXXXX, XX 167 10,095
000 XXXXX, XX Xxxxxxxx Border 1141 152,616
000 Xxxxx XXXXXX XXXXXX, XXXXXXXXX Xxxxxxx XXXXXX BORDER, WEST 336 9,437
102 625 244,359
000 Xxxxxx Xxxxxx - Xxxxxx Xxxxxx Xxxxxx Xxxxx Xxxxx, XX 231 11,644
134 453 112,881
000 XXXXXXXX XXXXXX XXXXXX, XXXX XXXXXXXXXX COUNTY BORDER, WEST 1256 63,446
228 77 20,849
274 TERRE HAUTE, IN XXXX COUNTY BORDER, NORTH 221 15,324
000 XXXXXXXX XXXXXX XXXXXX, XXXXX X-00 XXXXXXXXXXXX, XXXXXX XXXXXX 259 11,329
339 77 24,777
355 77 9,791
366 77 1,994
369 77 11,992
824 CRAWFORDVILLE, IN DANVILLE, IL 310 14,856
86 285 80,502
574 EVANSVILLE, IN-KY Xxxxxxx Xxxxxxxx Xxxx XXXXXXXXXXXX, Xxxxxxx Xxxxxx 217 7,883
805 FORT XXXXX, AR-OK Muskogee COUNTY BORDER, EAST 273 22,068
17
SERVICE SERVICE SECTION NEXTEL SECTION NAME PTNR PTNR BUILD SERVICE AREA NAME
AREA NUMBER AREA CATEGORY NUMBER LAUNCH QUARTER YEAR STATE TYPE
90 Option 13 Central Texas Q101 3 ABILENE TX Urban
469 Option 13 Central Texas Q101 3 I 20 TX Roadway
609 Option 00 Xxxxx Xxxxx Q400 2 LAREDO TX Urban
611 Option 00 Xxxxx Xxxxx X000 0 XXXXXXX-XXXXXXXX-XXXXXXX XX Urban
612 Option 00 Xxxxx Xxxxx X000 0 XXXXXXXXXXX XX Urban
613 Option 00 Xxxxx Xxxxx Q400 2 HARLINGEN TX Urban
641 Option 00 Xxxxx Xxxxx Q400 2 I 35 TX Roadway
807 Option 00 Xxxxx Xxxxx X000 0 XX Xxx 00 XX Roadway
809 Option 00 Xxxxx Xxxxx Q400 2 US Hwy 281 TX Roadway
SERVICE
AREA NUMBER START END AVAIL SQ_MI AVAIL '97 POP
90 507 119,550
000 XXXXXXX, XX XXXX XXXXX XXXXXX XXXXXX, XXXXX 000 22,126
609 389 171,182
611 630 472,159
612 189 168,130
613 203 112,190
000 Xxxxxx Xxxxxx XXXXXX, XXXXX Xxxxxx, XX 804 18,863
000 Xxxxxxx XXXXXX XXXXXX, XXXXX XXXXXXXXX, XX 671 19,293
809 Xxx Xxxxx COUNTY XXXXXX, XXXXX MCALLEN-EDINBURG-MISSION, TX 501 9,545
Arkansas Total: 4,422 1,017,219
Georgia Total: 5,069 991,259
Indiana Total: 3,740 543,242
Kentucky Total: 502 88,385
Oklahoma Total: 273 22,068
Texas Total: 4,399 1,113,038
------- ------------
Optional Territory: 18,405 3,775,211
18
SCHEDULE 1.1(b)
CONTRACTS
None
19
SCHEDULE 1.1(d)
LEASES
00
XXXXXXX XXXXXXXXXXX
NEXTEL SITE ID INFORMATION
Partner's Service Project Name
Region # Section # Service Area # Area Name Project Code (Site Name) Nextel's Market Name
2 4 122 I-70W: Xxxxxxxxxxxx-Xxxxx Xxxxx XX0000 Xxxxx Xxxxx Xxx Xxxx
0 0 000 X-00X: Xxxxxxxxxxxx-Xxxxx Xxxxx XX0000 Xxxxxxx Xxxx Xxx Xxxx
0 0 000 X-00X: Xxxxxxxxxxxx-Xxxxx Xxxxx XX0000 Reelsville Mid West
NEXTEL SITE ID INFORMATION
Partner's Service Xxxxx
Xxxxxx # Xxxxxxx # Xxxxxxx Xxxx # Xxxx Name Site Leased Lease Rate Commencement Date
2 4 122 I-70W: Indianapolis-Terre Haute Complete $ 600 C or 7/1/99
2 4 122 I-70W: Indianapolis-Terre Haute Complete $3000 per yr ComOp* or 7/1/99
2 4 122 I-70W: Indianapolis-Terre Haute Complete $ 334 C or 7/1/99
*Commercial Operation
21
LEASES
ARKANSAS TERRITORIES
NEXTEL SITE ID INFORMATION
Partner's Project
Service Name
Region # Section # Service Area Project (Site Nextel's Lease
Area # Name Code Name) Market Name Site Leased Lease Rate Commencement Date
3 30 182 I-30 AR8019 Taturn Blanket Complete $500.00 C or 10/1/98
3 30 182 I-30 AR8023 Xxxx Blanket Complete $500.00 C or 10/1/98
3 30 182 I-30 AR8024 Three Lakes Blanket Complete $500.00 C or 10/1/98
4 30 444 I-40 AR8010 Jacksonville Blanket Complete $500.00 C or 10/1/98
4 30 444 I-40 AR8011 Lonoke Blanket Complete $500.00 C or 10/1/98
4 30 444 I-40 AR8012 Xxxxxxxxx Blanket Complete $500.00 C or 10/1/98
4 30 444 I-40 AR8013 AG Pro Tank Blanket Complete $500.00 C or 10/1/98
4 30 182 I-30 AR8032 Xxxx Blanket Complete $500.00 C or 10/1/98
22
TEXAS TERRITORIES
NEXTEL SITE ID INFORMATION
Project Name Lease
Project Code (Site Name) Nextel's Market Name Site Leased Lease Rate Commencement Date
23
GEORGIA TERRITORIES
NEXTEL SITE ID INFORMATION
REGION # SECTION # SERVICE PARTNER'S SERVICE PROJECT PROJECT NAME NEXTEL'S MARKET SITE LEASED
AREA # AREA NAME CODE (SITE NAME) NAME
3 34 559 X-00 Xxxxx XX0000 Forsyth Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Bollingorolex
3 34 561 X-00 Xxxxx XX0000 Buckeye Road
3 34 561 X-00 Xxxxx XX0000 Xxxxxxxxx Xxxxxx Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Unidilla Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxxx Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Gum Creek Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Ashburn Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Chula Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxxxxxxx Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxxxxxxxx Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxxx Xxxx Xxxxxxxxx Complete
3 34 561 X-00 Xxxxx XX0000 Remerton/Phippe Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxx Xxxx Xxxxxxxxx Complete
3 20 261 I-185 GA1063 Trimble Southeast Complete
3 20 000 X-000 XX0000 Xxx Xxxxx Southeast Complete
3 20 100 Columbus GA1066 Mountain Hill Southeast Complete
3 20 100 Columbus GA1067 Xxxxxxx Southeast Complete
3 20 555 I-85 GA1068 Dinglewood Southeast Complete
3 20 261 I-185 GA1094 Beech Creek Southeast Complete
3 20 145 Albany GA1095 Hopewell Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxx Xxxxxx Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Arabi Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Macon East Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Smarr Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Johnstonville Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxxxxxxx St Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxx Southeast Complete
3 34 561 X-00 Xxxxx XX0000 Xxxxx Southeast Complete
3 34 89 Macon GA1266 Skipperton Southeast Complete
3 34 89 Macon GA1687 Bloomfield Southeast Complete
3 34 110 Warner Xxxxxxx GA1690 Farion Southeast Complete
3 34 89 Macon GA1691 Warner Southeast Complete
3 34 89 Macon GA1698 Dry Branch Southeast Complete
3 34 89 Macon GA1700 Strip Mines Southeast Complete
3 20 555 X-00 XX0000 Xx. Xxxxx Xxxxxxxxx Complete
3 34 561 X-00 Xxxxx XX0000 Bliss Southeast Complete
3 33 89 Macon GA1704 Rutland Southeast Complete
3 34 561 X-00 Xxxxx XX0000 FortValley Southeast Complete
NEXTEL SITE ID INFORMATION
REGION # LEASE RATE LEASE COMMENCEMENT DATE
3 $ 500 10/1/94
3 $ 300 12/1/94
3 $ 800 8/25/97
3 $ 800 9/12/97
3 $ 800 9/10/97
3 $ 800 8/2/97
3 $ 800 7/29/97
3 $ 800 11/18/97
3 $ 800 10/18/97
3 $ 800 10/29/97
3 $ 800 11/25/97
3 $ 800 10/3/97
3 $ 1,345 10/1/94
3 $ 800 9/2/97
3 $ 350 10/1/94
3 $ 265 12/1/95
3 $ 667 5/1/95
3 $ 250 10/1/94
3 $ 417 12/1/95
3 $ 333 1/1/95
3 $ 500 12/1/95
3 $ 800 9/20/97
3 $ 800 8/14/97
3 $ 1,500 8/1/97
3 $ 250 11/1/94
3 $ 167 12/1/94
3 $ 420 6/1/94
3 $ 1,500 12/21/94
3 $ 1,500 11/1/97
3 $ 1,500 11/1/97
3 $ 450 4/20/98
3 $ 500 4/3/98
3 $ 500 4/27/98
3 $ 1,200 9/1/98
3 $ 500 4/27/98
3 $ 300 4/13/98
3 $ 500 5/4/98
3 $ 450 4/3/98
3 $ 500 9/1/98
00
XXX XXXXX XXXXXXXXXXX
NEXTEL SITE ID INFORMATION
Project
Partner's Name Nextel's Lease
Region # Section # Service Service Project (Site Market Site Lease Commencement
Area # Area Name Code Name) Name Leased Rate Date
C or
2 3 102 Evansville KY5150 Evansville - Xxxx Blanket Complete $500.00 8/19/99*
2 3 000 Xxxxxxxxxx XX0000 Hout Blanket Complete $400.00 5/1/99
2 3 000 Xxxxxxxxxx XX0000 Xxxxxxxx Blanket Complete $850.00 5/17/99
*Copy at NS
00
XXXXXXX XXXXXXXXXXX
NEXTEL SITE ID INFORMATION
Partner's Service Project Name
Region # Section # Service Area # Area Name Project Code (Site Name) Nextel's Market Name
2 4 122 I-70W: Xxxxxxxxxxxx-Xxxxx Xxxxx XX0000 Xxxxx Xxxxx Xxx Xxxx
0 0 000 X-00X: Xxxxxxxxxxxx-Xxxxx Xxxxx XX0000 Xxxxxxx Xxxx Xxx Xxxx
0 0 000 X-00X: Xxxxxxxxxxxx-Xxxxx Xxxxx XX0000 Reelsville Mid West
NEXTEL SITE ID INFORMATION
Partner's Service Xxxxx
Xxxxxx # Xxxxxxx # Xxxxxxx Xxxx # Xxxx Name Site Leased Lease Rate Commencement Date
2 4 122 I-70W: Indianapolis-Terre Haute Complete $ 600 C or 7/1/99
2 4 122 I-70W: Indianapolis-Terre Haute Complete $3000 per yr ComOp* or 7/1/99
2 4 122 I-70W: Indianapolis-Terre Haute Complete $ 334 C or 7/1/99
*Commercial Operation
26
SCHEDULE 2.1
DISCLOSED LIABILITIES
None
27
SCHEDULE 5.2
TRUE-UP PROCEDURES
------------------
POST CLOSING ADJUSTMENTS TO CLOSING DATE PAYMENT
1. POST CLOSING ADJUSTMENTS. On or before the 60th day after the date of
this Agreement, NWIP and the Company will make adjustments to the Closing Date
Payment according to the procedures set forth on this Schedule 5.2.
2. ADJUSTMENTS RELATED TO TANGIBLE ASSETS.
2.1 For purposes of the adjustments to be made in accordance with this
Schedule 5.2 only, NWIP and the Company agree that the portion of the Closing
Date Payment attributable to certain tangible assets transferred to the Company
on the date hereof and to be inventoried by the Company is $3,570,176 (the
"Tangible Asset Purchase Price").
2.2 After the date of this Agreement, the Company will conduct a physical
inventory of :
2.2(a) tangible assets of the type identified on Schedule 5.2A to the
Asset and Stock Transfer and Reimbursement Agreement, by and between the Company
and NWIP, dated as of January 29, 1999, located or installed in or at all cell
sites in the Expansion Territory; and
2.2(b) subscriber equipment, accessories and EBTS located or stored in
any sales offices in the Expansion Territory (the assets in clauses A and B,
collectively, the "Tangible Assets").
As part of the inventory process, the Company will count only the Tangible
Assets that were transferred to the Company by NWIP as part of this Agreement
and will exclude any Tangible Assets purchased or acquired by the Company after
the date of this Agreement. The Company will notify NWIP of the time schedule
for the physical inventory, and NWIP may, at its election and its expense,
observe all or any part of the physical inventory.
2.3 The Company and NWIP acknowledge and agree that Nextel is currently
undertaking a similar inventory of its fixed assets and is utilizing a fixed
asset tracking system that, among other things, identifies certain types or
categories of fixed assets and assigns a value to each such asset. To assist the
Company in its inventory, the parties created Schedule 5.2D, attached to the
Asset and Stock Transfer and Reimbursement Agreement, by and between the Company
and NWIP, dated as of January 29, 1999. Schedule 5.2D utilizes the fixed asset
tracking methodologies currently used by Nextel to describe the categories or
types of Tangible Assets to be inventoried and the value to be ascribed to each
inventoried item. The Company and NWIP agree that the Tangible Assets to be
inventoried by the Company and the values to be ascribed to such assets will, to
the greatest extent possible, conform to the tracking and valuation methodology
currently employed by Nextel as set forth on Schedule 5.2D.
2.4 On or before the 60th day after the date of this Agreement, the
Company shall submit to NWIP in writing the results of the Company's inventory
of the Tangible Assets. The
28
results shall include, based on the methodology set forth in section 2.3 above,
a description of the Tangible Assets found, the quantities of each, the value
ascribed to each and a total dollar value for all of the inventoried Tangible
Assets (the "Tangible Assets Inventory Value").
3. ADJUSTMENTS RELATED TO CAPITALIZED INTEREST.
3.1 The parties acknowledge that as of the date hereof: (1) NWIP will
transfer to the Company certain cell sites in various stages of development; (2)
that Nextel assigns capitalized interest charges to such sites pursuant to a
formula based on milestones in the site's development, and (3) that the
capitalized interest charges related to the transferred sites have been
reimbursed by the Company to NWIP (the "Reimbursed Capitalized Interest
Charges"). For purposes of the adjustments to be made in accordance with this
Schedule 5.2 only, the parties acknowledge and agree that the following sites
have achieved at Closing the development milestones indicated below and that the
Company has reimbursed NWIP for the capitalized interest charges set forth next
to each listed site:
Milestone Capitalized Number Total Capitalized
Achieved as of Interest Charged of Interest Reimbursed
Closing for that Milestone Sites by Company
--------------------------------------- ----------------------- ---------------------- -------------------------------
Designed and/or Leased 2400 46 110,400
--------------------------------------- ----------------------- ---------------------- -------------------------------
Zoned and/or Building Permit 9600 11 105,600
Issued and/or Construction Started
--------------------------------------- ----------------------- ---------------------- -------------------------------
Construction Complete 14,400 0 -0-
--------------------------------------- ----------------------- ---------------------- -------------------------------
On-Air 16,000 24 384,000
--------------------------------------- ----------------------- ---------------------- -------------------------------
Totals 81 600,000
--------------------------------------- ----------------------- ---------------------- -------------------------------
3.2 After the date hereof, the Company will perform an inspection of each
of the sites transferred to the Company hereunder and of the records relating to
that site to verify the development milestone attained by each site as of the
date hereof. Based on this inspection, the Company will prepare a written chart
in substantially the same format as shown above, which shall list for each
inspected site the actual development milestone achieved as of the Closing.
Based on the actual milestones achieved, the Company will calculate the total
capitalized interest associated with the actual milestones achieved (the "Actual
Capitalized Interest Charges"). On or before the 60th day after the date of this
Agreement, the Company shall submit to NWIP in writing the results of the
Company's inspection of the transferred cell sites.
4. ADJUSTMENTS RELATED TO OPERATING EXPENSES.
4.1 NWIP and the Company will adjust the amounts paid by the Company at
Closing to reflect revenues related to the transferred Assets generated prior to
Closing and which were not credited to the Company at closing and operating
expenses accrued by NWIP and reimbursed by Company at Closing but that are
actually paid by Company after Closing. An example is accounts payable accrued
by NWIP and reimbursed to NWIP by the Company at Closing, but subsequently paid
by the Company to the vendor or other third party after Closing.
4.2 NWIP will receive credit for operating expenses related to the
transferred Assets
-2-
29
that it incurred prior to transfer of the Assets and which
were not reimbursed by the Company at Closing. The parties will make all other
similar adjustments and pro-rations of operating expenses as necessary and
appropriate.
5. Calculation and Payment of Adjustments.
5.1 Within 60 days after the date of this Agreement, the Company shall
submit to NWIP the written results of its physical inventory as described in
section 2 above, the written results of its site inspections and review of site
records as described in section 3 above and its determination of the adjustments
to revenue, operating expenses and current assets and current liabilities as
described in section 4 above together with any supporting documentation for all
such information as NWIP may reasonably request. In addition, the Company will
calculate the following: (1) the difference, if any, between the Tangible Asset
Purchase Price and the Tangible Asset Inventory Value (the "Tangible Asset
Adjustment"); (2) the difference, if any, between the Reimbursed Capitalized
Interest Charges and the Actual Capitalized Interest Charges (the "Capitalized
Interest Adjustment"); and (3) the net amount due to either party as a result of
the adjustment, credits and other pro-rations to be made as described in section
4 (the "Operating Expense Adjustment"). The Company will add the Tangible Asset
Adjustment, the Capitalized Interest Adjustment, and the Operating Expense
Adjustment in order to calculate a net adjustment (the "Net Adjustment").
5.2 If the Net Adjustment is less than two percent (2%) of the Closing
Date Payment, neither party will be obligated to pay to the other party the
amount of the Net Adjustment.
5.3 If the Net Adjustment is two percent (2%) or greater than the Closing
Date Payment, the party that owes the Net Adjustment shall pay the Net
Adjustment amount to the other party in cash within thirty days after the
Company submits to NWIP the written information and calculations detailed in
section 5.1 above.
5.4 NWIP will have thirty (30) days after receipt from the Company of the
information set forth in section 5.1 of this Schedule 5.2 to dispute the
information supplied by the Company. If NWIP does not raise any dispute within
such time period, the Company's calculation of the Net Adjustment will be deemed
accurate. If NWIP timely raises any such dispute, the Net Adjustment amount as
calculated by the Company shall nevertheless be paid by the appropriate party
within the time frame set forth in section 5.3; provided, however, the parties
will resolve such dispute in accordance with Article 12 of the JV Agreement.
Promptly upon resolution of any dispute, the parties shall make any and all
adjustments to the amount paid by either party consistent with the dispute
resolution.
-3-
