1
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.38
NEXTWAVE RESALE AGREEMENT
WITH
PERSONAL COMMUNICATIONS NETWORK, INC.
2
NEXTWAVE RESALE AGREEMENT
This PCS ("Personal Communications Services") Resale Agreement
("Agreement") is entered into and is in effect as of October 29, 1996, by and
between NEXTWAVE WIRELESS INC. and its Affiliates, a Delaware corporation, with
principal offices located at 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000 ("NEXTWAVE") and PERSONAL COMMUNICATIONS NETWORK, INC and its Affiliates,
a Delaware corporation, with principal offices located at 00 Xxxx Xxxx,
Xxxxxxxxx, XX 00000 ("COMPANY") and the terms of which are contained herein.
A. NextWave Personal Communications Inc. ("NextWave PCI") is a
wholly owned subsidiary of NextWave Telecom Inc. a Delaware corporation.
NextWave PCI was formed to participate in the Federal Communications
Commission's ("FCC's") PCS auctions;
B. NextWave is a wholly owned subsidiary of NextWave Telecom Inc.
organized to construct facilities, deploy PCS network equipment, and provide
PCS in the licensed markets.
C. NextWave PCI has successfully bid for 63 licenses covering
approximately 110 million POPs (based on current census data) in various
markets across the United States (see ATTACHMENT B).
D. NextWave intends to construct facilities, deploy PCS network
equipment and provide PCS in those licensed markets.
E. Subject to the terms and conditions set forth herein, in the
PCS markets awarded to NextWave in the C-block auction and any other PCS
markets NextWave is awarded in the FCC's D, E, and F-block auctions, COMPANY
desires to purchase PCS minutes of use ("MOUs") on a resale basis from NextWave
pursuant to a ten (10) year commitment by COMPANY to purchase digital wireless
voice services from NextWave in all markets where COMPANY desires to resell
digital wireless voice services where NextWave provides service. NextWave
desires to sell PCS minutes of use to COMPANY for resale in those markets under
a single 24-hour flat rate service, excluding interconnection charges with no
access fee based upon COMPANY's advance commitment to purchase minutes of use.
COMPANY will be responsible to provide customer acquisition (i.e., sales,
marketing, advertising and customer activation), billing, collections, customer
service/care, customer retention, handset fulfillment and any other services
required to acquire and retain retail customers.
THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements hereinafter set forth, NextWave and COMPANY agree as
follows:
1. DEFINITIONS.
(a) AFFILIATE means, with respect to any party, any person,
corporation or other legal entity that, directly or indirectly, controls, is
controlled by or is under common control with such
1
3
party. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), means the possession, directly or indirectly, of the power (i) to vote
securities having ordinary voting power sufficient to elect a majority of the
directors of such party or (ii) to direct or cause the direction of the
management and policies (including investment policies) of that party, whether
by contract or otherwise.
Presently, NextWave's Affiliates consist of: NextWave Telecom Inc., NextWave
PCI, NextWave Partners, NextWave Power Partners, and TELE*code.
Presently, COMPANY's Affiliates consist of: Electronics Communications Corp.,
Electrocomm Wireless, Inc., Threshold Communications, Inc., and General Towers
of America, Inc.
(b) FULL MOBILITY SERVICE means the provision of digital wireless
voice airtime with mobile inter-cell (base station) hand-off capability.
(c) LICENSES means PCS licenses held by NextWave.
(d) PCS AUCTIONS means the auction conducted by the FCC to assign
licenses to the successful bidders for 120 MHz of spectrum as broadband PCS
licenses in the 1850-1990 MHz band. The PCS band has been sub-divided into
three 30 MHz blocks (blocks A, B, and C) and three 00 XXx xxxxxx (xxxxxx X, X
and F). The FCC has allocated a portion of the broadband PCS spectrum (blocks
C and F) to certain entities called "Entrepreneurs". The FCC completed the
C-block auction in July, 1996. Together these two blocks make up the
"Entrepreneurs' Band".
(e) MINUTE OF USE ("MOU") means the particular use interval
provided by NextWave for digital mobile voice service for resale to end-users
and is measured from time of seizure of a control channel to the time of
release of the channel on NextWave's network.
(f) BASE MOU PRICE means NextWave's MOU price prior to any
discounts. Usage is billed in 60 second intervals and partial minutes are
rounded up to the next full minute.
(g) BTA (Basic Trading Area) means a particular market boundary as
defined by Rand XxXxxxx & Company and the FCC.
(h) ROAMING AGREEMENTS means any agreement whereby NextWave or its
Affiliates has the ability to purchase airtime from, interconnect with and/or
use the wireless network facilities of another operator of a wireless network.
(i) TERM has the meaning set forth in ARTICLE 9.
(j) TRANSFER OF CONTROL AND OWNERSHIP shall mean the completion of
any transaction where upon the holder of COMPANY's outstanding voting
securities immediately prior to the transaction either (i) own less than fifty
(50) percent of COMPANY's outstanding voting securities immediately after the
completion of the transaction, or (ii) transfer a number of the
2
4
outstanding voting securities of the COMPANY sufficient to permit the acquiring
party to elect a majority of the board of directors of the COMPANY.
2. PROVISION OF AIRTIME.
2.1 PROVISION OF SERVICES. NextWave shall sell Full Mobility
Services to COMPANY in each BTA for which NextWave or any of its Affiliates is
awarded or otherwise obtains a License, or enters into a Roaming Agreement.
2.2 SERVICES DESCRIPTION. Full Mobility Services shall involve
the establishment and maintenance of wireless circuits for the continuous
transmission of digital voice signals.
2.3 COMPANY FORECAST. Ninety (90) days prior to the offering of
commercial Full Mobility Service in any BTA, as communicated to COMPANY by
NextWave at least One Hundred and Twenty-Days (120) prior to the offering of
such commercial Service, COMPANY will provide NextWave with a forecast of
anticipated Full Mobility Service requirements for that BTA for the remainder
of the calendar year. COMPANY will provide NextWave with quarterly updates to
its initial and annual forecasts.
2.4 NETWORK FEATURE FUNCTIONALITY. As practicable, NextWave is
committed to maintain its infrastructure with the most recent commercial
releases of vendor software available that implements the standards and
protocols described in the J-STD-008 air interface and associated standards as
detailed in ATTACHMENT E, and new feature functionality that operates with such
standards and protocols. For those capabilities that affect end users or
subscribers, NextWave will share with COMPANY its timeline and schedule of
infrastructure upgrades as they become available.
2.5 ROAMING ARRANGEMENTS. NextWave will make reasonable efforts
to negotiate favorable roaming agreements and rates with other wireless
licensees in the United States, and wireless operators in Canada, Mexico, and
other countries that may provide for roaming from PCS networks in the United
States for traffic to and from each other's wireless licensed markets.
NextWave will make available rapid roaming clearing capabilities through, at
NextWave's sole discretion, either a direct interface to other networks with
which it has roaming arrangements or via industry clearing houses.
2.6 INTERCONNECTION.
(a) LEC INTERCONNECTION. NextWave has the responsibility to
negotiate interconnect agreements with local carriers. COMPANY and NextWave
agree on the need to minimize interconnect charges for MOUs originating and
terminating on NextWave's network. NextWave will continue its efforts to
influence lower interconnect rates through the regulatory agencies and
processes. MOU pricing is exclusive of interconnection fees for both
originating and terminating traffic from and to non-NextWave networks, which
shall be charged to COMPANY at the negotiated base rate.
3
5
If COMPANY elects facilities-based resale, it will be responsible for
the fixed and recurring costs of providing, operating, and maintaining the
circuits between NextWave's and COMPANY's switches and between COMPANY's switch
and the Public Switched Telephone Network ("PSTN").
(b) IXC INTERCONNECTION. NextWave intends to interconnect with the
major interexchange carriers (e.g., AT&T, MCI, Sprint) via trunk connections
with their points of presence at the expense of the IXC. Similarly, as COMPANY
requires, NextWave will use reasonable efforts to interconnect with other long
distance services under similar conditions. NextWave's price for MOUs includes
origination for direct interconnection with IXCs for mobile-to-land calls to
the extent that the costs of such interconnection are borne by the IXC. If the
IXC does not bear the cost of such interconnection or if direct interconnection
with the IXC is not feasible or practicable, then any interconnection charges
shall be borne by COMPANY on a pass-through basis.
If COMPANY elects facilities-based resale, it will be responsible for
the fixed and recurring costs of providing, operating, and maintaining the
circuits between NextWave's and COMPANY's switches and between COMPANY's switch
and the PSTN.
2.7 NUMBER OWNERSHIP.
(a) PURCHASE AND ALLOCATION OF NUMBERS. COMPANY shall obtain
numbers ("Numbers") from North American Numbering Plan Administration ("NANPA")
for activation by NextWave on the Network. In the event COMPANY is not
authorized or is otherwise unable to obtain Numbers, NextWave shall obtain
Numbers, in entire block increments, on a pass-through cost basis. In the
event there is a shortage of Numbers and an allocation of Number blocks is
required, NextWave may allocate Number blocks pro rata among its airtime
customers based on the relative number of subscribers.
(b) NUMBER TRANSFERS. COMPANY will pay a nominal fee for the
engineering and administrative charges associated with the moving of COMPANY's
numbers to another network. COMPANY will be charged a comparable rate to other
carriers' rates and industry practices, a standard rate per number and all
non-recurring charges associated with forwarding COMPANY's traffic to any
number on a non-NextWave network. In the event the governing agencies mandate
number portability, NextWave will support, in a timely manner, the guidelines
specified in the ruling.
(c) TRANSFER SUPPORT. NextWave will support COMPANY's move of the
numbers to the new wireless network, for a nominal charge, ensuring proper
addressing and recording for the Local Exchange Routing Guide ("LERG").
2.8 RESELLER SWITCH INTERFACE.
(a) NON-FACILITIES BASED. NextWave will make available to
COMPANY, at a mutually agreed upon fee, access to customer care capabilities
including, but not limited to, home location register services (i.e., customer
profile management and customer features service
4
6
management), authentication, and if practicable, call detail recording ("CDR")
access. COMPANY will be responsible for providing personnel and all other
resources required to deliver customer care services to COMPANY's subscribers.
(b) FACILITIES-BASED. NextWave will make available a T1/T3
interface to a COMPANY owned and operated switch for the delivery of COMPANY's
calls to and from the PSTN. COMPANY's numbers must be activated on NextWave's
switch to allow NextWave to properly provide mobility to those customers. The
demarcation point will be at NextWave's switch and COMPANY will be responsible
for the provisioning and costs, both recurring and non-recurring, of all
circuits between COMPANY's switch and demarcation point at NextWave's switch.
If COMPANY desires, NextWave will engineer and maintain these circuits at a
mutually agreed fee.
2.9 SERVICE ACTIVATIONS, DE-ACTIVATIONS AND CHARGES.
(a) SERVICE ACTIVATION PLATFORM. NextWave will offer COMPANY a
direct datalink interface to NextWave's service activation platform to allow
COMPANY an automated mechanism to perform customer on-line activations,
de-activations, and service change orders. NextWave reserves the right to set
the interface standard for connections to its service activation platform.
NextWave's service activation platform will collect COMPANY service orders,
format the requests, and download them into NextWave's switches and appropriate
sub-systems in as near real time as practicable. COMPANY will be responsible
for all of the costs associated with providing and maintaining its own on-site
computer terminal, software and modem/datalink connection.
(b) NUMBER REMOVAL CHARGES. COMPANY's service activation for each
customer is free of any activation fee as long as COMPANY purchases its PCS
numbers directly from NANPA. COMPANY will be charged a $10 removal fee for
those situations when a number is removed from a NextWave switch. The fee is
required to cover administrative expenses. In the event the governing agencies
mandate number portability, NextWave will support, in a timely manner, the
guidelines specified in the ruling.
2.10 HANDSET SOURCING AND FULFILLMENT.
(a) VOLUME PURCHASE ORDERS AND DELIVERY. If COMPANY desires,
NextWave, through its association with specific strategic partners and
suppliers, will use reasonable efforts to allow COMPANY to participate in any
NextWave volume purchase arrangements. NextWave will make arrangements for the
ordering of the handsets and accessories and the equipment will be drop shipped
by the manufacturer to COMPANY. COMPANY and supplier will be responsible for
making, shipping, delivery and payment arrangements.
(b) PRICING AND THIRD PARTY EQUIPMENT. Pricing of the services in
(a) above is not available at this time, but will be determined and shared with
COMPANY in advance of NextWave's commercial service introduction. Further,
COMPANY is free to purchase any licensed subscriber equipment directly from
equipment manufacturers as long as purchased
5
7
subscriber equipment is in full compliance with the established TIA, CTIA and
NextWave's network air-interface and performance standards.
2.11 ENHANCED SERVICES.
(a) COMPANY PROVIDED SERVICES. NextWave will offer COMPANY the
opportunity to provide its own enhanced services platform. If COMPANY desires
to provide additional vertical services to its customers through its own or
through a third-party's enhanced services platform and if such addition to
NextWave's network is practicable, COMPANY and NextWave will make reasonable
efforts to jointly develop and mutually agree to the technical procedures and
lockdown requirements to properly test the service prior to its introduction on
the NextWave network. NextWave reserves its right to set its interface
standard for any connections to NextWave's switches. Engineering and set-up
fees for such service configurations will be determined on a case-by-case basis
and mutually agreed-to prior to service introduction. The interconnection to
COMPANY's enhanced services platform will be based upon NextWave's standard
interface. The demarcation point will be at NextWave's switch. COMPANY will
be responsible for all of the recurring and non-recurring interconnection costs
associated with providing and maintaining the connection to COMPANY's enhanced
services platform. Hardware, software and tangible resources (i.e., switching,
processing or storage of data) on NextWave's master switching center and
network that are required to support features and functionality provided by
COMPANY's enhanced services platform shall be made available by NextWave, to
the extent practicable, at prices based on NextWave's reasonable, direct and
allocable expenses relating to such hardware, software or tangible resources
utilization.
(b) NEXTWAVE PROVIDED SERVICES. NextWave plans to offer a family
of enhanced services which may include voice mail, enhanced voice (with
out-dial-to-a-pager capability), short messaging, custom calling features
(i.e., call waiting, three-way calling, call forwarding, no answer transfer,
etc.), single number service, fax store and forward, e-mail, star features and
information services. These services will be offered to COMPANY on an
individual and/or package basis on terms to be agreed upon.
(c) ENHANCED SERVICES PRICING. The parties agree that service
features, enhanced services, and their associated pricing must be competitive.
Pricing for NextWave's features and enhanced services will be competitive with
prevailing retail pricing. NextWave will price services either individually or
provide bulk pricing for global feature activation in a market. NextWave
recognizes that switch-based features and enhanced services will increasingly
be packaged at retail with airtime and become a "tablestakes" for the business.
Prior to commercial availability, the parties agree to develop a plan for
enhanced services to identify COMPANY's needs, refine NextWave implementation
approaches that might include use of COMPANY AIN platforms, and agree on
wholesale pricing for such services. For situations where COMPANY purchases
enhanced services from NextWave and subsequently migrates to another enhanced
services platform, the parties will develop a plan to minimize COMPANY's
subscriber churn and to recover NextWave's capital investment.
6
8
2.12 NETWORK SERVICE TRAINING AND TROUBLE REPORTING.
(a) SCOPE OF SERVICES. NextWave will provide COMPANY network
service training and documentation prior to COMPANY's introduction of any
NextWave enhanced services offering in any market. Scheduling for such
training will be mutually agreed upon by both parties.
(b) NOTIFICATION OF SERVICE. NextWave will promptly notify
COMPANY's customer care department or COMPANY's assigned point of contact of
service enhancements, network expansions, and major services outages. NextWave
and COMPANY will mutually agree to the notification procedures prior to
NextWave's commercial service offering. Additionally, NextWave will routinely
provide COMPANY with updated NextWave service maps as service is expanded.
2.13 NETWORK ACCESS TO LOCAL CUSTOMER CARE. NextWave, at no cost to
COMPANY, will provide COMPANY with one (1) customer care "star feature" (e.g.,
*CARE) that will directly connect COMPANY's customer to COMPANY's local
customer care center. COMPANY will be responsible for any network access
charges related to interconnection and transport of such calls from NextWave's
switches to COMPANY's customer care center. For the situation where these star
feature customer service calls originate in a roaming market and are routed
directly to COMPANY's customer care center, COMPANY will be responsible for
local network interconnection and transport charges.
3. PURCHASE COMMITMENT.
3.1 Subject to the terms and conditions hereof, NextWave agrees to
provide Full Mobility Service MOUs for resale and COMPANY agrees to purchase on
a take-or-pay basis from NextWave a minimum of Five Billion (5,000,000,000)
minutes of Full Mobility Service during the Term in all of the BTAs in which
NextWave has a license (the "Commitment").
3.2 Subject to the quality provisions detailed in ATTACHMENTS D
AND E and NextWave's build out conditions detailed in SECTION 11.3, COMPANY
shall purchase at least 5% of its Commitment within the three (3) year period
following the date NextWave first offers Full Mobility Service on a commercial
basis in a NextWave BTA ("Commercial Service Date") and 25% of its Commitment
within the five (5) year period following the Commercial Service Date.
In the event COMPANY fails to satisfy the Initial Purchase Commitment by the
third anniversary of the Commercial Service Date (the "Third Anniversary
Date"), COMPANY shall remit to NextWave, within five (5) business days thereof,
an amount in cash equal to the difference between the Initial Purchase
Commitment and the actual number of minutes of Full Mobility Service purchased
by COMPANY prior to the Third Anniversary Date multiplied by the then
applicable purchase price per minute being charged to COMPANY in accordance
with SECTION 4.1 hereof.
In the event COMPANY fails to satisfy the Secondary Purchase Commitment by the
fifth anniversary of the Commercial Service Date (the "Fifth Anniversary
Date"), COMPANY shall
7
9
remit to NextWave, within five (5) business days thereof, an amount in cash
equal to the difference between the Secondary Purchase Commitment and the
actual number of minutes of Full Mobility Service purchased by COMPANY prior to
the Fifth Anniversary Date multiplied by the then applicable purchase price per
minute being charged to COMPANY in accordance with SECTION 4.1 hereof.
In the event COMPANY fails to purchase one hundred percent (100%) of
the Commitment prior to the tenth anniversary of the Commercial Service Date
(the "Tenth Anniversary Date"), COMPANY shall remit to NextWave, within five
(5) business days thereof, an amount in cash equal to the difference between
the Commitment and the actual number of minutes of Full Mobility Service
purchased by COMPANY prior to the Tenth Anniversary Date multiplied by the then
applicable purchase price per minute being charged to COMPANY in accordance
with SECTION 4.1 hereof.
3.3 In addition to the amount of any purchase price to be paid by
COMPANY under this Agreement, COMPANY agrees to pay to NextWave, and NextWave
will in turn regularly remit to a third party escrow agent designated by
NextWave, the amount of two cents ($0.02) per minute (the "Escrow Payment") for
the first Four Billion (4,000,000,000) minutes used by COMPANY under this
Agreement to ensure the purchase of the full Commitment by COMPANY. NextWave
will include such Escrow Payment on its regular invoices to COMPANY for
billable MOUs. If and when COMPANY purchases and NextWave receives all
payments for the full Commitment, then the aggregate amount of the Escrow
Payments in escrow, together with accrued interest, if any, less the reasonable
costs of the escrow agent, shall be promptly returned to COMPANY. If COMPANY
fails to purchase the full Commitment within the time required by this
Agreement, or if this Agreement expires or is otherwise terminated (other than
for the convenience of or breach by NextWave) prior to COMPANY's purchase of
the full Commitment, then the aggregate amount of the Escrow Payment held in
escrow, together with accrued interest, if any, shall be permanently retained
by NextWave. Nothing contained herein shall release COMPANY from its
obligations under SECTION 3.2 of this Agreement nor shall it limit NextWave's
remedies, rights or relief under this Agreement or at law or equity.
4. PRICING AND PAYMENT TERMS.
4.1 FULL MOBILITY PRICING. Pricing for Full Mobility Service,
measured in one minute increments, for each BTA will be as set forth for in the
Pricing Schedule attached hereto as ATTACHMENT C. NextWave's pricing
illustrated in ATTACHMENT C is exclusive of the interconnection fees and
enhanced services that are listed in ARTICLE 9.
4.2 RESALE TO FACILITIES-BASED CARRIERS. If COMPANY resells Full
Mobility Service to facilities-based carriers and in connection therewith
requires NextWave to implement a PIC/CIC code, then COMPANY shall pay NextWave
an additional fee of *______* per minute of Full Mobility Service sold to each
such carrier of management of PIC/CIC and associated databases.
* CONFIDENTIAL TREATMENT REQUESTED
8
10
4.3 ROAMING AGREEMENTS. Pricing for Full Mobility Service provided
pursuant to a Roaming Agreement will be the greater of (i) the Full Mobility
Service price set forth in the Pricing Schedule in ATTACHMENT C or (ii)
NextWave's incremental cost of usage under the Reciprocal Agreement plus
*_____* per minute.
4.4 WIRELESS LOCAL LOOP SERVICES. The Parties also desire to
enter into an arrangement in the future whereby NextWave would provide COMPANY
with a wireless local loop service ("Wireless Local Loop") which would be a
premises based wireless communication service similar in application to today's
narrowband wireline service offerings. The Parties intend to negotiate in good
faith the terms and conditions including, but not limited to the performance
specifications and pricing of the Wireless Local Loop service sometime following
the execution of this Airtime Agreement. Any MOUs committed or used under this
Agreement are for Full Mobility Service only. Wireless Local Loop MOUs will
require a separate commitment and will be priced separately from this Agreement.
4.5 E911 SERVICE. Emergency (911 and E911) and Lawful Intercept
calls will be handled by NextWave, unless otherwise required by regulatory
authorities. Each airtime invoice shall include a monthly charge (calculated on
a per subscriber basis in the maximum amount allowed by applicable regulatory
authority), for the provision of Emergency and Lawful Intercept services.
COMPANY shall pay such charges within the timeframe specified for payment of
Full Mobility Services. If regulatory authorities subsequently change the
requirements for Emergency or Lawful Intercept calls or mandate the provision of
other services, the parties shall cooperate in the provision of such services
with associated fees and charges to be handled in a similar manner to the
Emergency and Lawful Intercept Services.
4.6 INVOICES.
(a) NextWave will offer COMPANY either (i) a datalink interface to
electronically deliver COMPANY's monthly billing data or (ii) a magnetic tape
version of the same. Magnetic billing tapes are NextWave's standard means of
delivering COMPANY's billing data. If COMPANY desires a datalink interface,
COMPANY will be responsible for all costs of providing and maintaining the
datalink.
(b) NextWave's billing data to COMPANY will include the customer's
mobile number, electronic serial number and peak/off-peak indicators, dialed
number, originating and terminating call site identification, and/or time
stamps on a call-by-call basis.
(c) If COMPANY desires its billing data transferred in shorter
intervals other than monthly (i.e., bi-monthly, etc.), NextWave and COMPANY
will negotiate in good faith, the terms and conditions of providing billing
data in shorter intervals.
(d) NextWave will offer multiple billing cycles from which COMPANY
can choose to allow COMPANY flexibility as to when it will be billed. COMPANY
must formally request
9
* CONFIDENTIAL TREATMENT REQUESTED
11
its selected billing cycle in writing (or by some mutually agreed to means).
Absent a formal request, NextWave will assign COMPANY a billing cycle.
(e) Invoices are payable in full upon receipt. Each invoice will
contain a Due Date. Such Due Date will be calculated based on the date the
bills are generated plus 30 days. If payment is not received by the Due Date,
then a Late Payment Penalty equal to 1.5% of the balance due will be assessed.
Additionally, a Late Payment Charge equal to 0.06% of the unpaid past due
balance will be assessed for each day that payment is not received.
(f) At NextWave's sole discretion, service may be restricted or
interrupted if payment of any undisputed past due amount is not made within ten
days after the Due Date.
(g) At NextWave's sole discretion, an additional security deposit
or letter of credit may be assessed if COMPANY incurs a Late Payment Penalty
more than once in any six month period.
(h) If NextWave commences legal proceedings to collect any
undisputed past due amount, COMPANY will be liable for all charges (including,
without limitation, collection costs, court costs and attorney's fees)
reasonably incurred by NextWave in enforcing its rights hereunder.
4.7 DISPUTED CHARGES. COMPANY shall provide NextWave with written
notice of any disputed charges on or before the Due Date of such charges. Any
disputed charges will be handled under the dispute resolution process described
in ARTICLE 8 herein. If a disputed amount is not resolved within twenty (20)
days after the Due Date or if either party seeks resolution in accordance with
SECTION 8.2, then the disputed amounts shall be placed into an escrow account
pending resolution. Failure to place such amounts in an escrow account will
result in such amounts being treated as undisputed past due amounts. Any
earned interest accrued on these amounts will pass to the party being awarded
the disputed amounts. If the disputed amounts are shared in any manner between
the parties, the accrued interest will be shared in the same proportion as the
disputed amounts. Any Late Payment Penalties or Late Payment Charges incurred
as a result of past due amounts that are ultimately credited to the COMPANY
will be reversed.
4.8 TAXES AND SURCHARGES. The prices paid by COMPANY for MOUs are
exclusive of any applicable sales, use, personal property or other taxes or
surcharges attributable to periods during the Term based upon or measured by
the MOUs and any associated services provided or used by NextWave in performing
its obligations under this Agreement. COMPANY shall reimburse NextWave on a
pass-through basis for those taxes paid by NextWave that are attributable to
COMPANY pursuant to this SECTION 4.8. Each party shall provide and make
available to the other any resale certificates, information regarding
out-of-state sales or use of equipment, materials or services, and other
exemption certificates or information reasonably requested by the other party.
The parties will also work together to segregate into separate payment streams,
any taxable, nontaxable or items for which a sales, use or similar tax has
already been paid by NextWave.
10
12
4.9 RETAIL BAD DEBT AND FRAUD RESPONSIBILITY; DETECTION AND
PREVENTION.
(a) RETAIL BAD DEBT AND SUBSCRIPTION FRAUD. Retail bad debt and
fraudulent usage as a result of subscription fraud is COMPANY's sole
responsibility. COMPANY will be responsible for all originating and
terminating fees, long distance and roaming charges, and MOUs used on
NextWave's network incurred from retail bad debt and subscription fraud.
(b) CLONING FRAUD. NextWave will make reasonable efforts to limit or
eliminate cloning fraud on its network. NextWave's development of CDMA
technology and its "coding of each call" is anticipated to reduce exposure to
cloning fraud. Additionally, NextWave will make reasonable efforts to deploy
systems to monitor usage patterns, traffic patterns and the like to detect
potential cloning fraudulent use on a number. Upon detection of suspected
cloning activity, NextWave will notify COMPANY to investigate the number
further and take proper action. COMPANY will have 24 hours to substantiate the
customer's usage or to suspend service or change the mobile number/serial
number combination to correct the situation. If COMPANY determines that
cloning fraud was committed, NextWave will credit COMPANY for the local Airtime
usage only deemed to be fraudulent and incurred prior to NextWave's notice to
COMPANY. In situations where the COMPANY identifies cloning fraud that
NextWave did not detect, the COMPANY may submit a request to NextWave for
credit for the local Airtime usage only deemed to be fraudulent. In either
case, the COMPANY must supply NextWave with reasonable evidence that cloning
fraud did in fact occur. COMPANY will be responsible for all other charges,
including but not limited to long distance, international, and roaming charges,
and for any costs incurred by the COMPANY associated with preventing, detecting
or correcting a cloning fraud occurrence. NextWave and COMPANY will work
together in good faith to curtail cloning fraud, and will follow
customer-industry practice for billing and crediting of fraudulent usage. In
the event that COMPANY, its employees or Affiliates were negligent in taking
reasonable measures to prevent cloning fraud, COMPANY will be responsible for
all charges and will not receive any credits from NextWave.
4.10 AUDITS OF FINANCIAL RECORDS. NextWave and COMPANY each shall
keep adequate books and records in sufficient detail to enable the amounts to
be paid under ARTICLE 4 of this Agreement. Each party shall be entitled to have
an accounting firm of national recognition reasonably acceptable to the other
party audit the relevant books and records of the other party for the purpose
of confirming the accuracy of the calculation of the amounts due under ARTICLE
4. The auditor will disclose to the reviewing party only the information
necessary to verify the calculation of the amounts due under ARTICLE 4 and not
any confidential information of the other party, including but not limited to
any customer lists of the other party. Any such audit shall be performed at the
requesting party's expense (except if such audit reveals an overcharge of more
than five percent (5%) of the correct amount due under ARTICLE 4, then such
audit shall be at the expense of the other party), during normal business hours
after reasonable notice and, at the request of the audited party, shall be
subject to the independent agent's execution of a reasonable confidentiality
agreement. Such audits shall be conducted no more frequently than once every
year. In no event may a party commence an inspection of any statement later
than two (2) years from the date of such statement. Prior to any inspection by
a party, the parties will in good faith
11
13
meet, discuss and attempt to resolve any objection or discrepancy claimed by
the party requesting the audit.
5. CONFIDENTIALITY.
5.1 CONFIDENTIAL INFORMATION. By virtue of this Agreement, the
parties may have access to, or exchange, information that is confidential to
one another. As used in this Agreement, the term "Confidential Information"
shall mean only such information of the other party that may be reasonably
understood from legends, the nature of such information itself and/or the
circumstances of such information's disclosure, to be confidential and/or
proprietary to the other Party or to third-parties to which the other Party
owes a duty of non-disclosure. Notwithstanding the foregoing, NextWave agrees
that all of the following information which NextWave may receive or otherwise
obtain in the course of its performance under this Agreement, including without
limitation in the course of providing the Service, shall be deemed the
Confidential Information of COMPANY for purposes for this Agreement: (i)
COMPANY Subscriber lists and numbers, account information, usage, and
information regarding business planning and operations of COMPANY and COMPANY's
administrative, financial information, forecasts, predictions or marketing
reports or activities; (ii) all Subscriber and other customer information; and
(iii) COMPANY network and Intelligent Network capabilities, interconnection
arrangements, architecture, strategies, development and implementation plans,
and vendor relationships. Notwithstanding the foregoing, COMPANY agrees that
all of the following information which COMPANY may receive or otherwise obtain
in the course of its performance under this Agreement shall be deemed
Confidential Information of NextWave for purposes for this Agreement:
information concerning NextWave's Network, Network performance trials,
equipment requirements, Network system engineering and design specifications,
cell-site location planning strategies, Network usage and performance data,
development plans for its intelligent network and enhanced features and
services, financial, accounting or marketing reports, and business plans,
analyses, forecasts, and predictions.
5.2 RESTRICTIONS ON DISCLOSURE AND USE. Each of the Parties
agrees that as to any Confidential Information relating to one party
("Discloser") obtained in any manner by the other party ("Recipient")
hereunder:
(a) to use such Confidential Information only in the
performance of this Agreement or as otherwise expressly permitted by this
Agreement or by the Discloser;
(b) not to make copies of any such Confidential
Information or any part thereof except to the extent required to fulfill the
Party's obligations under this Agreement;
(c) not to disclose any such Confidential Information to
any third-party, using the same degree of care used to protect Recipient's own
confidential or proprietary information of like importance, but in any case
using no less than reasonable degree of care; provided, however, that Recipient
may disclose Confidential Information received hereunder to (i) its Affiliates
who are bound to protect the received Confidential Information from
unauthorized use and disclosure under the terms of a written agreement
(including without limitation a pre-existing
12
14
written agreement), and (ii) its employees, consultants and agents, and it
Affiliates' employees, consultants and agents, who have a need to know to
perform or exercise rights under this Agreement, and who are bound to protect
the received Confidential Information from unauthorized use and disclosure
under the terms of a written agreement (including without limitation a
pre-existing written agreement). Confidential Information shall not otherwise
be disclosed to any third-party without the prior written consent of the
Discloser; and
(d) to return to the other party, or destroy, all of such
party's Confidential Information received hereunder, whether in any tangible
medium of expression or electronic or other form or format, promptly upon the
expiration or termination this Agreement.
5.3 EXCEPTIONS. The restrictions set forth in this Article 5 on
the use and disclosure of Confidential Information shall not apply to
information that:
(a) was publicly known at the time of Discloser's
communication thereof to Recipient;
(b) becomes publicly known through no fault of Recipient
subsequent to the time of Discloser's communication thereof to Recipient;
(c) is in Recipient's possession free of any obligation
of confidence at the time of Discloser's communication thereof to Recipient;
(d) is developed by Recipient independently of and
without use of any of Discloser's Confidential Information or other information
that Discloser disclosed in confidence to any third-party;
(e) is rightfully obtained by Recipient without
restriction from third-parties authorized to make such disclosure; or
(f) is identified by Discloser in writing as no longer
proprietary or confidential.
5.4 DISCLOSURE PURSUANT TO LEGAL REQUIREMENT. In the event
Recipient is required by law, regulation or court order to disclose any of
Discloser's Confidential Information, Recipient will promptly notify Discloser
in writing prior to making any such disclosure in order to facilitate Discloser
seeking a protective order or other appropriate remedy from the proper
authority. Recipient agrees to cooperate with Discloser in seeking such order
or other remedy. Recipient further agrees that if Discloser is not successful
in precluding the requesting legal body from requiring the disclosure of the
Confidential Information, it will furnish only that portion of the
Confidential Information which is legally required and will exercise all
reasonable efforts to obtain reliable assurances that confidential treatment
will be accorded the Confidential Information.
5.5 PUBLICITY. The Parties expressly agree that the terms and
conditions of this Agreement, and any activities contemplated hereby or
performed hereunder, are the Confidential
13
15
Information of the Parties and shall not be disclosed in any manner without the
prior written approval of the other Party (which shall not be unreasonably
withheld); provided, however, that (i) COMPANY and NextWave agree that NextWave
shall have the right to issue a news release to announce the transaction
contemplated herein and (ii) the Parties acknowledge that NextWave has filed a
registration statement with the Securities and Exchange Commission and will be
required to disclose the existence of this Agreement and describe the material
terms contained herein. To the extent any information has been disclosed to
the public pursuant to this SECTION 5.5, such information shall not be deemed
Confidential Information. Notwithstanding the foregoing, each party agrees
that the Airtime pricing terms contained in ATTACHMENT C are confidential and
shall not be disclosed, except as may be required by law or pursuant to any
legal proceeding, in which case the provisions of SECTION 5.4 shall apply. The
Parties acknowledge that NextWave will be required to file this Agreement with
the Securities and Exchange Commission as an exhibit to its registration
statement. NextWave shall seek confidential treatment of the Airtime pricing
terms.
5.6 PROPRIETARY NOTICES. Each Party shall reproduce and maintain
on any copies of the other Party's Confidential Information received or made
hereunder such proprietary legends or notices (whether of the party providing
the Confidential Information or of a third-party) as are contained in or on
the original.
5.7 RETURN OF CONFIDENTIAL INFORMATION. Each party agrees to
return to the other Party or destroy all of such other Party's Confidential
Information promptly upon the termination of this Agreement. Neither party
shall thereafter retain any such Confidential information or any copies thereof
fixed in any tangible medium of expression in whatever form or format.
5.8 COOPERATION. In the event either Party becomes aware that any
Person (including, without limitation, any employee or agent of a party) is
taking or threatens to take any action which would violate any of the foregoing
provisions, such Party shall promptly and fully advise the other Party (with
written confirmation as soon as practicable thereafter) of all facts known to
it concerning such action or threatened action. Neither Party shall in any way
aid, abet or encourage any such action or threatened action. Each Party agrees
to cooperate in all reasonable ways to prevent such action or threatened
action, including, without limitation, assigning any cause of action it may
have related to the violation of the foregoing provisions, to the other Party,
and each Party agrees to do all reasonable things and cooperate in all
reasonable ways as may be requested by the other Party to protect the trade
secret and proprietary rights of such other Party in and to the Confidential
Information. A Party shall also be liable for any breach of the terms of this
ARTICLE 5 in the event that Confidential Information received from the other
party is disclosed by an employee, agent or consultant of such Party or a
third-party to whom such Party has disclosed such information and such
disclosure would violate the terms of this ARTICLE 5 were such employee, agent,
consultant or third-party a party hereto.
5.9 NO USE OF NEXTWAVE INTELLECTUAL PROPERTY RIGHTS. Nothing herein
shall be deemed to grant to COMPANY any right, license or other interest in or
under, or right to use, and COMPANY shall not use, any patents, copyrights,
trade secrets, trademarks, service marks,
14
16
trade names or other similar designation, or any other intellectual property
rights of NextWave or any of its Affiliates.
NO USE OF COMPANY INTELLECTUAL PROPERTY RIGHTS. Nothing herein shall
be deemed to grant to NextWave any right, license or other interest in or
under, or right to use, and NextWave shall not use, any patents, copyrights,
trade secrets, trademarks, service marks, trade names or other similar
designation, or any other intellectual property rights of COMPANY or any of its
Affiliates.
6. LIMITED LIABILITY.
6.1 IN NO EVENT WILL EITHER PARTY AND/OR ANY OF ITS AFFILIATES BE
LIABLE TO OR THROUGH THE OTHER PARTY FOR ANY OF THE FOLLOWING:
(a) DAMAGES CAUSED BY OTHER PARTY'S AND/OR ITS AFFILIATES' OR
SUPPLIERS' FAILURE TO PERFORM THEIR OBLIGATIONS OR RESPONSIBILITIES;
(b) CLAIMS OR DEMANDS BROUGHT AGAINST THE OTHER PARTY BY
THIRD PARTIES OTHER THAN THOSE THIRD PARTY CLAIMS IN RESPECT OF WHICH SUCH
PARTY IS EXPRESSLY OBLIGATED TO INDEMNIFY THE OTHER PARTY PURSUANT TO A
PROVISION OF THIS AGREEMENT; OR
(c) ANY LOST PROFITS, LOSS OF BUSINESS, LOSS OF USE (OR
INTERRUPTIONS OF BUSINESS), LOST SAVINGS, LOST OPPORTUNITIES OR OTHER
CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT, EXEMPLARY OR PUNITIVE DAMAGES;
ANY OR ALL OF WHICH ARISE FROM OR IN CONNECTION WITH THE DELIVERY,
USE, OR PERFORMANCE OF SERVICE GOVERNED BY THIS AGREEMENT, EVEN IF A PARTY
AND/OR ANY OF ITS AFFILIATES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS.
6.2 The limitations of remedies and liabilities set forth in this
ARTICLE 6 shall not apply to any obligation of one party to pay the other party
all amounts due and owing under this Agreement.
7. INDEMNIFICATION.
7.1 NextWave shall indemnify, defend and hold harmless COMPANY,
and all of COMPANY's and its Affiliates' officers, directors, partners,
employees and agents, from and against any and all losses, claims, damages,
liabilities or expenses of any kind (including, but not limited to, reasonable
attorneys fees and costs) arising out of any claim, action or proceeding by a
third party against any of them to the extent it is based on (i) a claim for
personal injury (including death) or damage to personal property for which
NextWave or any of its Affiliates is
15
17
legally responsible, or (ii) NextWave or any Affiliate's failure to comply with
all applicable laws, regulations and orders in the performance of its
obligations under this Agreement.
7.2 COMPANY shall indemnify, defend and hold harmless NextWave,
and all of NextWave's and its Affiliates' officers, directors, partners,
employees and agents, from and against any and all losses, claims, damages,
liabilities or expenses of any kind (including, but not limited to, reasonable
attorneys fees and costs) arising out of any claim, action or proceeding by a
third-party against any of them to the extent it is based on (i) a claim for
personal injury (including death) or damage to personal property for which
COMPANY or any of its Affiliates is legally responsible, or (ii) a claim by a
customer of COMPANY, or (iii) COMPANY or its Affiliate's failure to comply with
all applicable laws, regulations and orders in the performance of its
obligations under this Agreement.
7.3 The party seeking indemnity under the foregoing provisions
shall notify the indemnifying party of any such claim, action or proceeding,
and the indemnifying party shall promptly and at its sole cost undertake the
defense thereof, except for claims by a customer of COMPANY, for which COMPANY
shall at its sole cost undertake the defense thereof for itself, and upon
demand thereof, NextWave and/or its Affiliates. No such claim shall be
compromised or settled without the prior written consent of the indemnified
party if the settlement would restrict or adversely affect the indemnified
party. Such consent shall not be unreasonably withheld. After the indemnified
party tenders the defense of any such claim, action or proceeding, the
indemnified party shall have the right to participate at its own cost and
expense in such claim, action, or proceeding using counsel of its own choosing.
8. DISPUTE RESOLUTION
8.1 DISPUTE RESOLUTION. Either Party may identify a dispute that
has arisen in performance of this Agreement by notifying the other Party's
account manager in writing, setting forth the dispute with reasonable
specificity. The account managers shall promptly attempt to resolve such
dispute by negotiation. If within ten (10) calendar days of written notice of
a dispute the account managers have been unable to resolve it, then either
Party may escalate resolution of the dispute to an appropriate senior executive
of NextWave or to an appropriate senior executive of COMPANY by notifying them
in writing, setting forth the dispute with reasonable specificity. The senior
executives shall attempt to resolve such dispute by negotiation. If within ten
(10) calendar days of such escalation of a dispute the senior executives have
been unable to resolve it, then either Party may seek resolution of the dispute
by arbitration in accordance with SECTION 8.2.
8.2 ARBITRATION. Without prejudice to either party's right to
seek equitable relief (including, but not limited to, injunction) from a court,
any dispute arising out of or related to this Agreement, which cannot be
resolved by negotiation, shall be settled by binding arbitration in accordance
with the J.A.M.S./ENDISPUTE arbitration rules and procedures ("Endispute
Rules") and in accordance with the terms of this ARTICLE 8. The costs of
arbitration, including the fees and expenses of the arbitrator, shall be shared
equally by the parties unless the arbitration
16
18
award provides otherwise. Each party shall bear the cost of preparing and
presenting its case. The parties agree that this provision and the
Arbitrator's authority to grant relief shall be subject to the United States
Arbitration Act, 9 U.S.C. 1-16 et seq. ("USAA"), the provisions of this
Agreement, and the ABA-AAA Code of Ethics for Arbitrators in Commercial
Disputes. The parties agree that the arbitrator shall have no power or
authority to make awards or issue orders of any kind except as expressly
permitted by this Agreement, and in no event shall the arbitrator have the
authority to make any award that provides for punitive or exemplary damages.
The arbitrator's decision shall follow the plain meaning of the relevant
documents, and shall be final and binding. The award may be confirmed and
enforced in any court of competent jurisdiction. All post-award proceedings
shall be governed by the USAA.
9. TERM.
This Agreement shall be effective when executed. The Term of this
Agreement shall be ten (10) years with one (1) renewal option for COMPANY to
renew for an additional five (5) years, which renewal shall not be unreasonably
withheld; provided that if COMPANY elects to renew the Agreement the parties
shall review and adjust the pricing. The Term shall commence upon the first
day of commercial availability of Full Mobility Service in any NextWave BTA,
where the conditions in SECTION 11.3 below are met. One (1) year prior to the
expiration of the initial ten-year Term, the parties will meet to determine the
pricing for the five-year renewal period. If the parties are unable to reach
agreement six (6) months prior to the expiration of the initial ten-year Term,
the then existing terms and conditions, including pricing shall continue for a
transition period of six (6) months after the expiration of the initial
ten-year Term. If, in the event that COMPANY exceeds five (5) billion billable
MOU during the Term, then the parties will meet to determine the pricing for
volume breaks above five (5) billion MOU for the Airtime table in ATTACHMENT C.
10. TERMINATION PROVISION.
10.1 NextWave may terminate this Agreement without liability by
written notice to COMPANY in the event that:
(i) COMPANY fails to pay any amounts due hereunder within
(30) days after notice from NextWave other than amounts that are being
reasonably disputed pursuant to SECTION 4.6 ; or
(ii) COMPANY's use of NextWave's services or network (a)
violates any laws, rules or regulations (b) is in non compliance with services
standards established by NextWave; or
(iii) COMPANY commits a material breach of this Agreement
and it is not cured within sixty (60) days of notice from NextWave.
10.2 COMPANY may terminate this Agreement without liability by
written notice to NextWave in the event that:
17
19
(i) NextWave fails to meet the conditions provide for in
SECTION 11.3; or
(ii) NextWave commits a material breach of this Agreement
and it is not cured within sixty (60) days of notice from COMPANY.
(iii) Within the earlier of forty-five (45) calendar days from
the date of execution of this Agreement or December 12, 1996, there is a
voluntary or involuntary Transfer of Control and Ownership of COMPANY to a
non-COMPANY Affiliate.
11. MISCELLANEOUS.
11.1 GOVERNING LAW AND CHOICE OF FORUM. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
other than the laws thereof that would require reference to the laws of any
other jurisdiction. For all purposes for which resort to a court may be had,
the parties irrevocably consent to the exclusive jurisdiction and venue of the
federal and state courts located in the State of New York.
11.2 NOTICES. All notices, demands, requests, or other
communications which may be or are required to be given or made by any party,
to the other party pursuant to this Agreement shall be in writing and shall be
hand delivered, mailed first-class registered or certified mail, return receipt
requested, postage pre-paid, delivered by overnight air courier, or transmitted
by telegram, telex, or facsimile transmission addressed as follows:
If to PERSONAL COMMUNICATIONS NETWORK, INC.:
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to:
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
Fax: (000) 000-0000
If to NEXTWAVE:
18
20
NextWave Wireless Inc.
0 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Assistant Vice President, Business Planning & Development
Fax: (000) 000-0000
with a copy to:
NextWave Wireless Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
Each Party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be given, served or
sent. Each notice, demand, request or communication which shall be mailed,
delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent or received for all purposes at such time as
it is delivered to the addressees (with the return receipt, the delivery
receipt or affidavit of messenger, or the facsimile answer back being deemed
conclusive evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.
11.3 CONDITIONS. COMPANY's commitment to purchase Airtime from
NextWave is subject to each of the following conditions being satisfied: (a)
NextWave offering commercial mobility service in Markets covering at least 40
million POPs by December 31, 1998, and at least 70 million POPs by December 31,
2001; (b) NextWave providing Airtime in its Markets meeting the system
performance criteria and technical specifications detailed in ATTACHMENT D and
ATTACHMENT E, respectively; and (c) NextWave providing COMPANY and its
Affiliates interconnection as specified in SECTION 2.6.
11.4 FORCE MAJEURE. Neither party shall be liable for delays in
delivery or performance, or for failure to provide service, deliver or perform
when caused by any of the following which are beyond the reasonable control of
the delayed party:
(i) Acts of God, acts of the public enemy, acts or
failures to act by the other party, acts of civil or military authority,
governmental priorities, strikes or other labor disturbances, hurricanes,
earthquakes, fires, floods, epidemics, embargoes, war, riots, delays in
transportation, and loss or damage to goods in transit; or
(ii) Inability on account of causes beyond the reasonable
control of the delayed party to obtain products, components, services or
facilities.
In the event of such delay, the date of delivery or performance shall
be extended for a period equal to the effect of the time lost by reason of the
delay.
19
21
11.5 ASSIGNMENT. This Agreement may not be assigned, in whole or
in part, by any Party without the prior written consent of the other Party,
except that either Party may assign this Agreement to any of its Affiliates
without the consent of the other Party and either Party may assign this
Agreement to a successor in connection with the acquisition of the Party;
provided that the successor confirms by written agreement its agreement to
assume the acquired Party's obligations under this Agreement. For purposes of
this subsection only, the term "Affiliates" shall mean an entity under common
control, controlling or controlled by a Party; provided that "control" as used
herein shall mean the ownership, directly or indirectly, of at least eighty
percent (80%) of the aggregate of all voting interests in such entity. Any
other attempt to assign this Agreement shall be null, void and of no force or
effect.
11.6 AUTHORIZATION AND ENFORCEABILITY. Each party hereby
represents that:
(a) it has all requisite corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated
hereby;
(b) the execution, delivery and performance of this
agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on the party of each
party; and
(c) this Agreement has been duly executed and delivered by
such party and is valid and binding obligation of such party, enforceable
against it in accordance with its terms.
11.7 SEVERABILITY. If any provision of this Agreement shall be
found by any court or administrative body of competent jurisdiction to be
invalid or unenforceable, the invalidity or unenforceability of such provision
shall not affect the other provisions of this Agreement and all provisions not
affected by such invalidity or unenforceability shall remain in full force and
effect. The parties hereby agree to attempt to substitute for any invalid or
unenforceable provision a valid and enforceable provision which achieves to the
greatest extent possible the economic, legal and commercial objectives of the
invalid and unenforceable provision.
11.8 SURVIVAL. The following provisions shall survive the
termination of this Agreement, and shall continue in full force and effect
along with any other provisions of this Agreement which by their nature or in
accordance with the terms, whether or not listed, shall survive such
termination: ARTICLES 5, 6, 7, 8 and 9 and SECTIONS 4.9, 11.1, 11.2, 11.7,
11.8, 11.13, 11.14, 11.16 and 11.17.
11.9 ENTIRE AGREEMENT. This Agreement, which includes the attached
Schedules, constitutes the entire agreement and understanding between the
parties hereto in connection with subject matter hereof, and supersedes and
cancels all previous negotiations, commitments and writings with respect
thereto.
20
22
11.10 COUNTERPARTS. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required; and it shall not be
necessary that the signatures of, or on behalf of, each party, or the
signatures of all persons required to bind party, appear on each counterpart;
but it shall be sufficient that the signature of, or on behalf of, each party,
or the signatures of the persons required to bind any party, appear on one or
more of the counterparts. All counterparts shall collectively constitute a
single agreement.
11.11 CAPTIONS FOR CONVENIENCE ONLY. The captions used in this
Agreement are included for convenience only and shall not be considered part of
this Agreement for any purpose. Unless expressly state otherwise, all
references herein to "Articles" are to the relevant portions of this Agreement,
and all references to "Schedules" are to the attachments to this Agreement.
11.12 AMENDMENT. This Agreement shall not be amended, modified or
rescinded in any manner, except by an instrument in writing signed by duly
authorized representatives of each of the parties hereto.
11.13 NO THIRD-PARTY BENEFICIARY. Nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties and their
respective successors and permitted assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
person to any party, nor shall any provision give any third person any right of
subrogation or action against any party.
11.14 EXPENSES. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated hereby are consummated,
each party will pay its own costs and expenses incurred in connection with the
negotiation and execution of this Agreement and the transactions contemplated
hereby (including executing all such documents and doing such acts and things
as may reasonably be required for the purpose of giving full effect to this
Agreement).
11.15 WAIVER. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No
waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded, will be
cumulative and not alternative.
11.16 BINDING. This Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
permitted successors and assigns.
11.17 SPECIFIC PERFORMANCE. The obligations of the parties under
Article 5 of this agreement are unique. If any party should be in Default
under Article 5 of this Agreement, the Defaulting Party acknowledges that it
would be extremely impracticable to measure the resulting damages.
Accordingly, in addition to any other available rights or remedies, the
Non-Defaulting
21
23
Party may xxx in equity for specific performance and the Defaulting Party
expressly waives the defense that a remedy in damages would be adequate.
11.18 REGULATORY COMPLIANCE. Notwithstanding any provision in this
Agreement to the contrary, NextWave shall not be obligated to furnish COMPANY
with Full Mobility Services under rates, charges, terms or conditions that
violate any applicable provisions of the Communications Act of 1934, as
amended, the applicable rules, regulations or policies of the FCC or any other
federal or state agency with jurisdiction over NextWave's services.
[Remainder of Page Intentionally Left Blank]
22
24
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective and delivered as of the date set forth below.
PERSONAL COMMUNICATIONS NETWORK, INC. NEXTWAVE WIRELESS INC.,
A DELAWARE CORPORATION A DELAWARE CORPORATION
Date: October 29, 1996 Date: October 29, 1996
------------------------------- -------------------------------
/s/ Xxx Xxxxxx /s/ Xxxxx X. Xxxxxxx
--------------------------------- ---------------------------------
(Signature) (Signature)
By: Xxx Xxxxxx By: Xxxxx X. Xxxxxxx
--------------------------------- ---------------------------------
Title: President Title: AVP - Business Plng. & Devlp.
------------------------------ ------------------------------
23
25
ATTACHMENT A
NextWave's Network Elements and Functionality
The following are the network elements and functionality NextWave will make
available, to the extent practicable and pursuant to pricing specified in the
Agreement, in each PCS market either directly or indirectly through a third
party:
a.) ADVANCED INTELLIGENT NETWORK ("AIN") PLATFORM. The AIN
platform is the platform from which COMPANY will store and offer its and
customers all of their non-switched based vertical services. As an option, when
available NextWave may provide its AIN platform.
b.) THIRD PARTY INTERCONNECTION ACCESS. The physical
interconnection to the Public Switching Telephone Network ("PSTN"). The
responsibility for the associated monthly and usage-sensitive costs for such
circuits carrying COMPANY's customers' mobile-to-landline and landline-to-mobile
traffic to and from NextWave's network is COMPANY's.
c.) BACKHAUL INTERCONNECTION. In BTA markets where COMPANY is a
local access provider of facilities, COMPANY will make available to NextWave
standard T1 and T3 facilities at COMPANY's most favorable rate for like terms,
quantities, and conditions. These facilities may be used by NextWave for
switch-to-base station, switch-to-base station controller, base station-to-base
controller and switch-to-switch connections.
d.) SS-7 BACKBONE. The SS-7 signaling backbone network carrying
standard IS-41 message sets between NextWave's network and COMPANY's HLR
database access.
e.) FCC LICENSE TO PROVIDE PCS. The Federal Communications
Commission's ("FCC") license to provide Personal Communication Service ("PCS")
in the markets of interest.
f.) RADIO COVERAGE AND ACCESS. The deployment of competitive
coverage at a predetermined and mutually agreed to minimum level/grade of PCS
access service.
g.) MOBILE SWITCHING CENTER. The switching capability to
provide the end customer with the proper mobility and roaming capability. AIN
software for standard IS-41 interconnection to COMPANY's AIN platform and PSTN
interconnection.
h.) SWITCH-BASED VERTICAL SERVICES. These end customer
vertical software services provided at the Mobile Switching Center for example,
but not limited to, Call Waiting, Call Forwarding, Three-Way Calling, and Caller
ID.
i.) LOCAL WIRELESS OPERATIONS AND MANAGEMENT OF THE NETWORK.
NextWave will design, engineer, construct, and maintain the PCS network in each
BTA and maintain a minimum service availability level.
26
ATTACHMENT B
NextWave's PCS Markets
--------------------------------------- -------------------------------------- --------------------------------------
COLONIAL REGION LONE STAR REGION OHIO VALLEY REGION
Boston, MA Austin, TX Cincinnati, OH
Manchester/Nashua, NH Xxxxx-College Station, TX Columbus, OH
New London, CT Houston, TX Dayton, OH
Portland/Brunswick, ME San Antonio, TX
Providence, RI Temple-Killeen, TX
Worcester, MA HOOSIER REGION
Bloomington, IN
AMIGO REGION Columbus, IN
HOLLYWOOD REGION Brownsville, TX Evansville, IN
Los Angeles, California El Paso, TX Indianapolis, IN
Las Cruces, NM Lafayette, IN
McAllen, TX
DOLPHIN REGION
San Diego, California SOONER REGION
NY-METRO REGION Oklahoma City, OK
Albany, NY
Allentown, PA
CAPITAL REGION New Haven, CT THOROUGHBRED REGION
Baltimore, MD Poughkeepsie, NY Lexington, KY
Hagerstown, MD Scranton, PA Louisville, KY
Norfolk, VA
Richmond, VA
Washington, DC BIG APPLE REGION TWIN CITIES REGION
NYC BTA Minneapolis, MN
GREENGRASS REGION
Asheville, NC STEELER REGION ROCKY MOUNTAIN REGION
Charlotte, NC Pittsburgh, PA Denver
Greensboro, NC
Hickory, NC
Roanoke, VA SUNSHINE REGION PACIFIC NORTHWEST REGION
Gainsville, FL Bellingham, WA
Jacksonville, FL Longview, WA
MID. AMERICA Lakeland-Winter Haven, FL Olympia, WA
Joplin, MO Melbourne, FL Portland, OR
Kansas City, MO Orlando, FL Seattle, WA
Springfield, MO Sarasota, FL
Tampa, FL
BUCKEYE REGION
Cleveland, OH
--------------------------------------- -------------------------------------- --------------------------------------
27
ATTACHMENT C
PRICING SCHEDULE
*_______________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________*
* CONFIDENTIAL TREATMENT REQUESTED
28
ATTACHMENT D
SYSTEM PERFORMANCE CRITERIA
1.1 COVERAGE AREA
The Coverage Area shall be that minimal signal strength necessary to provide
service such that calls are successful *____* of the time averaged along the
Coverage Area boundary, irrespective of the direction of the call (land-mobile,
mobile-land) with no greater than *___* frame error rate (FER) on average.
1.2 HANDSET COMPATIBILITY
NextWave shall demonstrate the full compatibility of its network with handsets
of COMPANY's choice that have been certified as compliant with domestic PCS
interface standards, so long as these handsets have been demonstrated to be
fully compatible with one other domestic IS-95 (CDMA) compliant 1.9 GHz network
and certified as IS-95, 1.9 GHz compliant by recognized standard or
certification bodies.
1.3 NETWORK CALL BLOCKAGE/QUALITY OBJECTIVES
The following considerations are required concerning network call blockage:
- Average busy hour blockage within the NextWave network will not exceed
*___* of all call attempts.
- The above values are to be met, unless superseded by necessary regulatory
mandates.
- Emergency calls should be given the highest possible resource priority.
1.4 DROPPED CALLS
The number of dropped calls measured over a period of a month in a Coverage
Area shall not exceed *___* of the total number of subscriber calls originated
in that Coverage Area.
1.5 NETWORK AVAILABILITY
NextWave will engineer and manage its network to meet the above service and
quality levels established for the Coverage Area. The emphasis of management
activities will be on preventative maintenance, such that potential outages will
be resolved before customers are affected.
* CONFIDENTIAL TREATMENT REQUESTED
29
A Network Outage is the inability, or a significant degradation in the ability
of a customer to establish and maintain a channel of communication as a result
of failure or degradation in the performance of NextWave's network.
In the event of a major network outage, NextWave will notify COMPANY of the
conditions affecting the customers, including, but not limited to out-of-service
events, and high system traffic loads.
Any FCC-reportable Network Outages, including disruption of 911/E911 and
emergency services will be reported to COMPANY.
1.6 PERFORMANCE VERIFICATION
NextWave will provide to the COMPANY quarterly statistics that define the
performance of the network including blocked calls, dropped calls, and frame
error rates. In addition, NextWave will provide coverage maps that define the
Coverage Area.
30
ATTACHMENT E
TECHNICAL STANDARDS
NextWave shall be in general compliance with the following standards:
I. WIRELESS NETWORK INTERFACE STANDARDS
A. IS-41REV B CELLULAR RADIO TELECOMMUNICATIONS INTERSYSTEM OPERATIONS
NextWave's Network shall be in general compliance with IS-41 Revision B. This
shall be upgraded to be in general compliance with IS-41 Revision C when IS-41
Revision C is commercially available.
B. EIA/TIA/IS-52: UNIFORM DIALING PROCEDURES AND CALL PROCESSING
TREATMENT FOR CELLULAR RADIO TELECOMMUNICATIONS - NOVEMBER, 1989
C. EIA/TIA/IS-52-A: UNIFORM DIALING PROCEDURES AND CALL PROCESSING
TREATMENT FOR CELLULAR RADIO TELECOMMUNICATIONS - WHEN PUBLISHED
D. EIA/TIA/IS-53: CELLULAR FEATURES DESCRIPTION: - AUGUST, 1991
E. EIA/TIA/IS-53-A: CELLULAR FEATURES DESCRIPTION: - MAY, 1995
F. EIA/TIA/IS-93: CELLULAR RADIO TELECOMMUNICATIONS X-X XXXXXXXXX
XXXXXXXXX - XXXXXXX, 0000.
II. SS7 INTERFACE STANDARDS
A. TR-NWT-000246: XXXX COMMUNICATIONS RESEARCH SPECIFICATION OF SIGNALING
SYSTEM NUMBER 7, ISSUE 3
B. TR-NWT-000082: SIGNALING TRANSFER POINT GENERIC REQUIREMENTS, ISSUE 5
C. TR-TSY-000317: SWITCHING SYSTEM REQUIREMENTS FOR CALL CONTROL USING
THE INTEGRATED SERVICES DIGITAL NETWORK USER PART (ISDNUP)
D. TR-TSY-000394: SWITCHING SYSTEM REQUIREMENTS FOR INTERCHANGE
CARRIERS USING THE INTEGRATED SERVICES DIGITAL NETWORK USER PART
(ISDNUP)
E. TR-NWT-000444: SWITCHING SYSTEM GENERIC REQUIREMENTS SUPPORTING
ISDN ACCESS USING THE INTEGRATED SERVICES DIGITAL NETWORK USER PART
(ISDNUP)
F. ANSI T1.114 SS7 TRANSACTION CAPABILITIES APPLICATION PART (TCAP)
31
G. ANSI T1.112: SS7 SIGNALING CONNECTION CONTROL PART (SCCP)
H. ANSI T1.111: SS7 MESSAGE TRANSFER PART (MTP)
III. AIR INTERFACE STANDARDS
A. ANSI-J-STD-008: PERSONAL STATION -BASE STATION COMPATIBILITY
REQUIREMENTS FOR 1.8 TO 2.0 GHZ CDMA PERSONAL COMMUNICATIONS SYSTEMS.
