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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 10.15
AIRTIME SALE AGREEMENT
BETWEEN
MCI TELECOMMUNICATIONS CORPORATION
AND
NEXTWAVE PERSONAL COMMUNICATIONS, INC.
AUGUST 22, 1996
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TABLE OF CONTENTS
ARTICLE 1 -- DEFINITIONS......................................................1
1.1 Affiliate...................................................1
1.2 Agreement...................................................1
1.3 Airtime. ..................................................2
1.4 Allocated Area-Based Service Capacity. ....................2
1.5 Area-Based Service..........................................2
1.6 Area-Based Service Agreement................................2
1.7 Average Retail Price........................................2
1.8 BTA.........................................................2
1.9 Comparable Local Exchange Carrier Rate. ...................2
1.10 Confidential Information....................................2
1.11 Credit Reserve..............................................2
1.12 Default. ..................................................2
1.13 Defaulting Party............................................2
1.14 Endispute Rules. ..........................................2
1.15 Exclusive Services Agreement................................2
1.16 FCC.........................................................2
1.17 Force Majeure...............................................3
1.18 Full Mobility Service.......................................3
1.19 Identically Situated Purchaser..............................3
1.20 Increased Purchase Commitment...............................3
1.21 Initial Licenses............................................3
1.22 Initial Purchase Commitment.................................3
1.23 Invoice.....................................................3
1.24 Licenses....................................................3
1.25 Local Wireless Operator.....................................3
1.26 Lowest Effective Full Mobility Price........................3
1.27 Lowest Effective Retail Price. ............................3
1.28 Market......................................................4
1.29 MCI.........................................................4
1.30 MCI Point of Interconnection. .............................4
1.31 MOU. ......................................................4
1.32 MSC. ......................................................4
1.33 MTA.........................................................4
1.34 NANPA. ....................................................4
1.35 Network.....................................................4
1.36 Network Outage..............................................4
1.37 NextWave....................................................4
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1.38 Non-Defaulting Party........................................4
1.39 Notice of Election to Acquire...............................4
1.40 Notice of Sale. ...........................................4
1.41 Numbers. ..................................................4
1.42 Party.......................................................5
1.43 PCS.........................................................5
1.44 Person......................................................5
1.45 POPs........................................................5
1.46 Price Floors. .............................................5
1.47 Pricing Schedule. .........................................5
1.48 Problem BTA.................................................5
1.49 Purchase Commitment. ......................................5
1.50 Qualified Entity. .........................................5
1.51 Reciprocal Agreements.......................................5
1.52 Registration Rights Agreement. ............................5
1.53 Reinstatement Date..........................................5
1.54 Resale Terms. .............................................6
1.55 Retail Purchaser. .........................................6
1.56 Service Credit Percentage...................................6
1.57 Service Zone................................................6
1.58 Services....................................................6
1.59 Subscriber. ...............................................6
1.60 Subsequent Licenses. ......................................6
1.61 Technical Specifications....................................6
1.62 Term........................................................6
1.63 Third-Party Terms...........................................6
1.64 Traffic Growth Incentive....................................6
1.65 USAA........................................................6
1.66 Warrant Agreement...........................................6
1.67 XXXX........................................................6
ARTICLE 2 -- PROVISION OF AIRTIME.............................................7
2.1 Scope of Agreement..........................................7
2.2 Network Feature Functionality...............................8
2.3 MCI Forecast................................................8
2.4 Network Allocation..........................................9
2.5 Capacity Planning...........................................9
2.6 Network Management..........................................9
2.7 Service Identification.....................................10
2.8 Area-Based Service Agreement...............................10
2.9 Promotion of MCI Services..................................12
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2.10 E911 Service...............................................12
2.11 Switchless Resale..........................................12
2.12 Nonrecognition of CMRS Status..............................13
2.13 Additional Capacity........................................13
2.14 Interconnection Development................................14
ARTICLE 3 -- PURCHASE COMMITMENT.............................................14
3.1 Purchase Commitment........................................14
3.2 Increased Purchase Commitment..............................14
3.3 Reduction and Cancellation of Purchase Commitment. ........14
3.4 Conditions to Purchase ....................................18
ARTICLE 4 -- INTELLIGENT NETWORK.............................................19
4.1 Intelligent Network........................................19
4.2 Most Favored Customer. ...................................19
4.3 Fraud Detection and Management.............................19
4.4 Provision of Billing Data..................................19
ARTICLE 5 -- PRICING.........................................................20
5.1 Full Mobility Pricing......................................20
5.2 Lowest Effective Retail Price..............................20
5.3 Traffic Growth Incentives..................................22
5.4 Resale to Facilities-Based Carriers........................22
5.5 Area-Based Service Pricing.................................23
5.6 Transition Pricing.........................................24
5.7 Reciprocal Agreements......................................25
5.8 Taxes......................................................25
5.9 Invoices. ................................................25
5.10 Disputed Charges. ........................................25
5.11 Service Increments.........................................26
5.12 Credit Reserve. ..........................................26
5.13 Other Service Pricing......................................26
5.14 MSC Support Services.......................................26
5.15 Fraud......................................................27
ARTICLE 6 -- AUDITS..........................................................27
ARTICLE 7 -- INDEPENDENT CONTRACTOR STATUS...................................27
ARTICLE 8 -- PERSONNEL.......................................................28
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8.1 Account Managers. ........................................28
8.2 Replacement Personnel. ...................................28
ARTICLE 9 -- CONFIDENTIAL INFORMATION........................................28
9.1 Confidential Information...................................28
9.2 Restrictions on Disclosure and Use.........................29
9.3 Exceptions. ...............................................30
9.4 Disclosure Pursuant to Legal Requirement. ................30
9.5 Publicity..................................................31
9.6 Proprietary Notices........................................31
9.7 Return of Confidential Information. .......................31
9.8 Cooperation................................................31
9.9 Confidentiality Period.....................................32
ARTICLE 10 -- LIMITED LIABILITY..............................................33
ARTICLE 11 -- INDEMNITIES....................................................33
11.1 Indemnification of MCI.....................................33
11.2 Indemnification by MCI.....................................34
11.3 Indemnification Procedures.................................34
ARTICLE 12 -- TERM AND TERMINATION...........................................35
12.1 Term.......................................................35
12.2 Renewal and Expiration.....................................35
12.3 Termination................................................35
12.4 Continuing Obligations.....................................37
12.5 Default....................................................37
ARTICLE 13 -- *___*..........................................................37
ARTICLE 14 -- INTELLECTUAL PROPERTY RIGHTS...................................38
14.1 Joint Development..........................................38
14.2 No Use of MCI Intellectual Property Rights. ..............38
14.3 No Use of NextWave Intellectual Property Rights............38
ARTICLE 15 -- RIGHT OF FIRST REFUSAL.........................................39
15.1 Transfer of Licenses.......................................39
15.2 Notice of Sale.............................................39
15.3 Continuation of Service....................................40
15.4 Sale of NextWave...........................................40
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ARTICLE 16 -- TRANSFER ASSISTANCE............................................40
ARTICLE 17 -- NON-SOLICITATION...............................................40
17.1 NextWave Non-Solicitation..................................40
17.2 MCI Non-Solicitation. ....................................41
ARTICLE 18 -- NONINFRINGEMENT................................................41
ARTICLE 19 -- INSURANCE......................................................41
ARTICLE 20 -- DISPUTE RESOLUTION/ARBITRATION.................................41
20.1 Dispute Resolution.........................................41
20.2 Arbitration................................................42
ARTICLE 21 -- MISCELLANEOUS..................................................42
21.1 General Provisions.........................................42
21.2 Warranty...................................................42
21.3 Governing Law and Choice of Forum..........................42
21.4 Authorization and Enforceability. ........................42
21.5 Notices....................................................43
21.6 Assignment.................................................44
21.7 Severability...............................................44
21.8 Survival...................................................45
21.9 Entire Agreement...........................................45
21.10 Counterparts...............................................45
21.11 Captions for Convenience Only..............................45
21.12 Amendment..................................................45
21.13 No Third-Party Beneficiary.................................45
21.14 Expenses...................................................45
21.15 Waiver.....................................................46
21.16 Binding....................................................46
21.17 Specific Performance.......................................46
21.18 Surcharge Exemption........................................46
21.19 Regulatory Compliance......................................46
21.20 Expiration of Term.........................................46
21.21 Cooperation................................................46
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AIRTIME SALE AGREEMENT
This AIRTIME SALE AGREEMENT, (the "Agreement") made as of the 22nd day
of August 1996, between MCI Telecommunications Corporation, a corporation
organized and existing under the laws of the State of Delaware and headquartered
in Washington, D.C., and NextWave Personal Communications, Inc., a corporation
organized and existing under the laws of the State of Delaware and headquartered
in San Diego, California.
W I T N E S S E T H:
WHEREAS, in May 1996 the FCC announced that NextWave was the final high
bidder in the FCC C-Block auction of certain PCS Licenses representing half of
the top fifty BTAs and approximately 94 million POPs; and,
WHEREAS, NextWave intends to develop, construct and operate a national
PCS wireless communications network for the purpose, of among other things,
providing bulk PCS airtime on a wholesale basis to others, including MCI.
NOW, THEREFORE, in consideration of the covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1 -- DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the definitions set forth below unless otherwise indicated in this Agreement:
1.1 Affiliate. "Affiliate" shall mean, with respect to any Person,
any other Person which controls, is controlled by, or is under common control
with such Person. For purposes hereof, the term "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of any such Person whether through the
ownership of voting securities, by contract, or otherwise.
1.2 Agreement. "Agreement" shall mean this agreement, the Technical
Specifications, the Pricing Schedule and the exhibits attached hereto and
incorporated herein.
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1.3 Airtime. "Airtime" shall mean the transmission and switching of
signals for PCS, including voice, data, image and/or video, via the Network in
accordance with the Technical Specifications.
1.4 Allocated Area-Based Service Capacity. "Allocated Area-Based
Service Capacity" shall mean that portion of the capacity of the engineered and
equipped Network, on a cell site basis, that is allocated by NextWave for the
provision of Area-Base Service by MCI.
1.5 Area-Based Service. "Area-Based Service" shall mean the
provision of Airtime for the period of time a terminal device is located within
the Service Zone.
1.6 Area-Based Service Agreement. "Area-Based Service Agreement"
shall have the meaning set forth in Article 2.8.
1.7 Average Retail Price. "Average Retail Price" shall have the
meaning set forth in Article 5.5.
1.8 BTA. "BTA" shall mean a Basic Trading Area, as set forth in the
Rand XxXxxxx Atlas & Marketing Guide (123rd ed. 1992), and as modified by the
FCC for broadband PCS licensing through the date hereof.
1.9 Comparable Local Exchange Carrier Rate. "Comparable Local
Exchange Carrier Rate" shall have the meaning set forth in Article 5.5(A)(1).
1.10 Confidential Information. "Confidential Information" shall have
the meaning set forth in Article 9.1.
1.11 Credit Reserve. "Credit Reserve" shall have the meaning set
forth in Article 5.9.
1.12 Default. "Default" shall have the meaning set forth in
Article 12.5.
1.13 Defaulting Party. "Defaulting Party" shall have the meaning set
forth in Article 12.5.
1.14 Endispute Rules. "Endispute Rules" shall have the meaning set
forth in Article 20.2.
1.15 Exclusive Services Agreement. "Exclusive Services Agreement"
shall mean the definitive written agreement to be entered into between the
Parties for the provision by MCI to NextWave and its Affiliates of connectivity
services, including backhaul, long distance and signaling.
1.16 FCC. "FCC" shall mean the Federal Communications Commission or
any successor agency thereto.
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1.17 Force Majeure. "Force Majeure" shall mean acts of God (which are
not reasonably foreseeable in the geographic locations in which they occur and
which result in similar disruptions to the Local Wireless Operators in the
affected market), acts of the public enemy, acts of civil or military authority,
embargos and riots, but only to the extent the Party whose failure to perform
hereunder as a result thereof, takes immediate action and uses commercially
reasonable efforts to remedy the effect of such event.
1.18 Full Mobility Service. "Full Mobility Service" shall mean the
provision of Airtime, other than Area-Based Service, with capability and
coverage comparable to competing PCS and cellular offerings in each Market and
as further provided in the Technical Specifications.
1.19 Identically Situated Purchaser. "Identically Situated Purchaser"
shall mean purchasers of Airtime who commit to purchase equal or greater
quantities of Airtime on similar terms, including technical specifications,
interconnection and support.
1.20 Increased Purchase Commitment. "Increased Purchase Commitment"
shall have the meaning set forth in Article 3.2.
1.21 Initial Licenses. "Initial Licenses" shall mean the PCS licenses
representing 94 million POPs for which NextWave was announced the final high
bidder in the initial FCC "C Block" auction completed on May 6, 1996.
1.22 Initial Purchase Commitment. "Initial Purchase Commitment" shall
have the meaning set forth in Article 3.1.
1.23 Invoice. "Invoice" shall have the meaning set forth in
Article 5.9.
1.24 Licenses. "Licenses" shall mean Initial Licenses and/or
Subsequent Licenses.
1.25 Local Wireless Operator. "Local Wireless Operator" shall mean any
Person, including but not limited to NextWave, providing any wireless two-way
telephone service for voice, data, image and/or video, including, but not
limited to, cellular radio telephone service, PCS, specialized mobile radio
service and enhanced specialized mobile radio service.
1.26 Lowest Effective Full Mobility Price. "Lowest Effective Full
Mobility Price" shall mean *___* of the Lowest Effective Retail Price.
1.27 Lowest Effective Retail Price. "Lowest Effective Retail Price"
shall have the meaning set forth in Article 5.2.
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*CONFIDENTIAL TREATMENT REQUESTED
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1.28 Market. "Market" shall mean any discrete BTA, MTA, portion of an
MTA or geographically contiguous BTAs or MTAs, as the case may be, covered by a
License or Licenses.
1.29 MCI. "MCI" shall mean MCI Telecommunications Corporation.
1.30 MCI Point of Interconnection. "MCI Point of Interconnection"
shall mean the feasible demarcation point at the MSCs deployed in the Network
which connect to the MCI network for the purpose of providing Airtime.
1.31 MOU. "MOU" shall have the meaning set forth in Article 5.2(A)
1.32 MSC. "MSC" shall mean a mobile switching center.
1.33 MTA. "MTA" shall mean a Major Trading Area, as set forth in the
Rand XxXxxxx Atlas & Marketing Guide (123rd ed. 1992), and as modified by the
FCC for broad band PCS licensing through the date hereof.
1.34 NANPA. "NANPA" shall mean the North American Numbering Plan
Administrator which administers and coordinates the telecommunications numbering
and dialing plans in North America.
1.35 Network. "Network" means all wireless, local exchange and other
equipment, systems and facilities owned, leased or operated by NextWave and its
Affiliates used in the provision of PCS, including facilities utilized for
interconnection, backhaul and longhaul.
1.36 Network Outage. "Network Outage" shall mean the loss of a
portion or all of the call- carrying capacity on the Network or portion thereof,
as measured in erlangs.
1.37 NextWave. "NextWave" shall mean NextWave Personal
Communications, Inc. and its Affiliates.
1.38 Non-Defaulting Party. "Non-Defaulting Party" shall have the
meaning set forth in Article 12.5.
1.39 Notice of Election to Acquire. "Notice of Election to Acquire"
shall have the meaning set forth in Article 15.2.
1.40 Notice of Sale. "Notice of Sale" shall have the meaning set
forth in Article 15.2.
1.41 Numbers. "Numbers" shall have the meaning set forth in
Article 2.1(C).
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1.42 Party. "Party" shall mean NextWave or MCI; "Parties" shall mean
NextWave and MCI.
1.43 PCS. "PCS" shall mean personal communications services as
defined in 47 C.F.R. 24.5 and any successor provision thereto.
1.44 Person. "Person" shall mean any individual, partnership,
corporation, joint venture, limited liability company, trust, business trust,
governmental agency or other entity and the heirs, executors, administrators,
legal representatives, successors and assigns of such Person, as the context may
require.
1.45 POPs. "POPs" means the aggregate number of persons within a BTA
or MTA as determined by the 1990 census figures for the counties contained
therein.
1.46 Price Floors. "Price Floors" shall have the meaning set forth in
Article 3.3(B).
1.47 Pricing Schedule. "Pricing Schedule" shall mean the pricing
schedule set forth in Schedule 2 containing the charges and certain other
necessary information.
1.48 Problem BTA. "Problem BTA" shall have the meaning set forth in
Article 3.3(E).
1.49 Purchase Commitment. "Purchase Commitment" shall mean the
Initial Purchase Commitment or the Increased Purchased Commitment, as
applicable, as adjusted in accordance with Article 3.3.
1.50 Qualified Entity. "Qualified Entity" shall mean: (i) for
licenses for PCS frequency blocks C and F, any Person meeting the eligibility
criteria as set forth in 47 C.F.R. 24.709 and any successor provision thereto;
and (ii) for any other license, any person meeting those licensee eligibility
requirements set forth in those provisions of the FCC's rules applicable to a
license for the service and frequency block.
1.51 Reciprocal Agreements. "Reciprocal Agreements" shall mean 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
Local Wireless Operator.
1.52 Registration Rights Agreement. "Registration Rights Agreement"
shall mean that certain Registration Rights Agreement between NextWave Telecom
Inc. and MCI entered into as of the date hereof.
1.53 Reinstatement Date. "Reinstatement Date" shall have the meaning
set forth in Article 3.3(B).
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1.54 Resale Terms. "Resale Terms" shall have the meaning set forth in
Article 2.11(A).
1.55 Retail Purchaser. "Retail Purchaser" shall have the meaning set
forth in Article 5.1(D).
1.56 *___*
1.57 Service Zone. "Service Zone" shall have the meaning set forth in
Section 2.8(A).
1.58 Services. "Services" shall mean Full Mobility Service and
Area-Based Service.
1.59 Subscriber. "Subscriber" shall mean an end-user, or an end-user
of a customer, as the case may be, of MCI or an MCI Affiliate purchasing
Services furnished pursuant to this Agreement.
1.60 Subsequent Licenses. "Subsequent Licenses" shall mean a PCS
license acquired by NextWave or its Affiliates other than the Initial Licenses.
1.61 Technical Specifications. "Technical Specifications" shall mean
the technical specifications set forth in Schedule 1 which will be updated to
reflect advancements implemented pursuant to Article 2.1(D).
1.62 Term. "Term" shall have the meaning set forth in Article 12.1.
1.63 Third-Party Terms. "Third-Party Terms" shall have the meaning
set forth in Article 3.3(C).
1.64 Traffic Growth Incentive. "Traffic Growth Incentive" shall have
the meaning set forth in Section 5.3(A).
1.65 USAA. "USAA" shall have the meaning set forth in Article 20.2.
1.66 Warrant Agreement. "Warrant Agreement" shall mean that certain
Warrant Agreement between NextWave Telecom Inc. and MCI entered into as of the
date hereof.
1.67 XXXX. "XXXX" shall have the meaning set forth in the Technical
Specification.
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ARTICLE 2 -- PROVISION OF AIRTIME
2.1 Scope of Agreement
(A) Provision of Service. NextWave and its Affiliates shall sell
Services to MCI and its Affiliates in each and every Market for which NextWave
or any of its Affiliates is awarded or otherwise obtains a License, or enters
into a Reciprocal Agreement. In the event NextWave makes services available on a
commercial wholesale basis, which services are not Full Mobility Service or
Area-Based Service, NextWave shall make available such services to MCI. MCI
shall be responsible for obtaining or providing facilities to the MCI Point of
Interconnection. NextWave shall, *___*, interconnect the Network to the MCI
network at the MCI Point of Interconnection in accordance with the Technical
Specifications. NextWave shall use commercially reasonable efforts to enter into
Reciprocal Agreements with Local Wireless Operators, including those seeking to
purchase airtime from NextWave and those identified by MCI, with suitable
interconnection substantially in accordance with the Technical Specifications,
in those BTAs and MTAs where NextWave or its Affiliates do not hold a License.
(B) Service Description. Services shall involve the establishment
and maintenance of wireless circuits for the continuous transmission of signals
(i) for Airtime originating from a Subscriber, from the originating terminal
device to the MCI Point of Interconnection designated by MCI or its Affiliates,
and (ii) for Airtime terminating to a Subscriber, from the MCI Point of
Interconnection designated by MCI or its Affiliates to the terminating terminal
device. Airtime shall be routed between the Network and the MCI network as
provided in the Technical Specification or such other routing plan as may be
mutually agreed upon by the Parties.
(C) Numbering and Dialing Plans. MCI shall obtain numbers
("Numbers") from the local NANPA for activation by NextWave on the Network. In
the event MCI is not authorized or is otherwise unable to obtain Numbers,
NextWave shall obtain Numbers, for the use by MCI, on a pass-through cost basis.
In the event there is a shortage of Numbers and an allocation of Numbers is
required in any market, NextWave may allocate Numbers pro rata among its Airtime
customers based on the relative number of subscribers across all markets.
NextWave shall provide to MCI, at no additional cost, direct datalink interfaces
to NextWave's service management platform to permit MCI to perform on-line
subscriber activations, suspensions, de-activations, and other subscriber
feature and service changes. NextWave shall establish standard interfaces for
connection to the service management platform and shall provide specifications
therefor to MCI at MCI's request. NextWave's service management platform will
direct on a real time basis MCI service orders and changes to NextWave's
switches and appropriate subsystems. MCI shall be responsible for providing and
maintaining its own on-line computer terminals and modem/datalink connections.
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* CONFIDENTIAL TREATMENT REQUESTED
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(D) Technical Specification. While the Parties intend and agree
that the terms contained in this Agreement shall apply to the provision of
Services, to the extent that the terms of this Agreement are inconsistent with
the terms of the Technical Specifications, the terms and conditions of this
Agreement shall prevail over the terms of such Technical Specifications.
2.2 Network Feature Functionality. NextWave shall acquire and
maintain on its Network the most recent commercial releases of vendor software
(including all available upgrades, fixes, patches and the like) available, and
shall seek to acquire, develop and maintain commercially available
state-of-the-art feature functionality in the Network. In the event MCI believes
that the Service, Network or associated feature functionality is not
state-of-the-art, MCI shall provide a written explanation to NextWave of those
areas where MCI believes that the Service, Network or associated feature
functionality is deficient compared to available competitive offerings. NextWave
shall, within thirty (30) days of receipt of MCI's notice, provide a written
response to MCI detailing the plans or actions (including service descriptions,
technical specifications and scheduling, as applicable) that NextWave will
undertake to improve the Service, Network or associated feature functionality to
state-of-the-art. MCI shall have fifteen (15) days to identify in writing any
issues associated with NextWave's plans. The Parties shall cooperate to address
any such issues as expeditiously as practicable and agree on the appropriate
technical solution and implementation schedule. If the Parties are unable to
agree within sixty (60) days of MCI's initial notice, MCI may terminate this
Agreement under Article 12.3. In the event MCI does not provide written notice
identifying issues with the proposed plans of NextWave or upon resolution of any
issues identified by MCI, NextWave shall commence and diligently implement the
plan in accordance with the schedule. NextWave shall provide monthly reports
addressing the status, any issues encountered in the implementation and the then
current schedule. If implementation of any technological advancements or other
modifications of the Network, Service or feature functionality could have an
adverse impact on the Technical Specifications or otherwise disrupt the
provision of Service, NextWave will review the proposed advancement or
modification and its implementation with MCI. The Parties shall work together to
arrive at a mutually acceptable technical solution and implementation schedule
and cooperate to minimize any disruption of Service that may result from the
implementation of the advancement or modification. NextWave will then proceed
with implementation of the mutually acceptable technical solution and
implementation schedule.
2.3 MCI Forecast. Ninety (90) days prior to the offering of
commercial Service in any Market, as communicated to MCI by NextWave at least
one hundred and twenty-days (120) prior to the offering of such commercial
Service, MCI will provide NextWave with a forecast of anticipated Services
requirements, on a quarterly basis, for that Market for the remainder of the
calendar year and for each year thereafter. MCI will provide NextWave with
quarterly updates to its initial and annual forecasts. The Parties will work
cooperatively to ensure that NextWave can provide the quality and coverage
required by MCI and the Subscribers. NEXTWAVE AGREES THAT THESE FORECASTS
REPRESENT MCI'S ESTIMATE OF EXPECTED PURCHASE OF FULL MOBILITY SERVICE AND
AREA-BASED SERVICE, AND ARE NEITHER A COMMITMENT
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NOR LIMIT ON MCI'S RIGHTS TO PURCHASE FULL MOBILITY SERVICE AND AREA-BASED
SERVICE.
2.4 Network Allocation. NextWave shall make Services available to MCI
and its Affiliates at such time as Service is made commercially available to any
customer of NextWave. As NextWave builds-out the Network, NextWave shall
prioritize its build-out to fulfill the forecast of MCI delivered pursuant to
Article 2.3. Subscribers of Full Mobility Service and Area-Based Service shall
have equal priority in terms of access to and capacity on the Network; provided
that Area- Based Service capacity requirements do not exceed the Allocated
Area-Based Service Capacity and that NextWave has provided MCI with at least
ninety (90) days advanced notice thereof. In no event shall NextWave (i) block,
limit or otherwise restrict the activation of Subscribers unless it has
implemented such restrictions equally upon all its other customers, or (ii) take
any action the result of which would be to create a call blockage probability
for Subscribers greater than that for any other customer of NextWave; provided
that, with respect to Area-Based Service, Area-Based Service capacity
requirements do not exceed the Allocated Area-Based Service Capacity and that
NextWave has provided MCI with at least ninety (90) days advanced notice
thereof. NextWave shall manage the Network to meet its customers' aggregate
requirements.
2.5 Capacity Planning. NextWave shall perform capacity planning and
performance analysis for the Network on a cell site basis. NextWave shall
provide to MCI, on a quarterly basis, a capacity report specifying, on a cell
site basis, (i) in those Markets where MCI is offering, or planning to offer
within sixty (60) days, Area-Based Service, Area-Based Service usage and
aggregate Network capacity, (ii) forecasted aggregate usage, including MCI's
forecasted aggregate usage, (iii) call blockage and dropped call reports, and
(iv) planned capacity increases, if any. MCI agrees that these forecasts
represent NextWave's estimate of expected usage and are not a commitment. In
addition, NextWave shall provide to MCI a quarterly report setting forth actual
aggregate airtime usage for all NextWave customers, including MCI aggregate
Airtime usage, on a monthly basis per cell site in those Markets where MCI is
offering, or planning to offer within sixty (60), days Area-Based Service.
2.6 Network Management. NextWave shall implement controls to
effectively manage the Network environments, including change and problem
management systems in accordance with the operational documentation. NextWave
shall confer with MCI on the development of, and deliver to MCI written network
management practices and updates thereto as such practices are implemented and
updated. MCI, through its Affiliates, employees and designated third-parties
(which third-parties are reasonably acceptable to NextWave) shall have the right
to inspect the Network during normal business hours and with reasonable
frequency, upon reasonable notice, to ensure compliance with such network
management practices. NextWave shall provide MCI remote access to the Network to
enable MCI to monitor Network performance, faults and Network Outages.
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2.7 Service Identification. NextWave shall provide MCI-branded
customer voice announcements and other customary service-related voice messages
and/or identifiers in connection with the provision of Services from the time
that NextWave commences the provision of Services. In addition, upon MCI's
written request, NextWave shall provide generic, specific and/or private label
voice announcements and identifiers (i.e., not identified with either MCI or
NextWave) for Subscribers. In no event shall NextWave issue any NextWave or
third-party branded announcements or other service messages and/or identifiers
to Subscribers without MCI's prior written consent, except as required by law or
regulation. Only upon MCI's written request and under no other circumstances,
except as required by law or regulation, shall NextWave deliver broadcast
messages over the Network, including customer solicitations and other
advertisements, to Subscribers.
2.8 Area-Based Service Agreement. The Parties intend to negotiate
and enter into a definitive written supplement to this Agreement based on the
principles set forth below regarding the provision of Area-Based Service (the
"Area-Based Service Agreement"). NEXTWAVE ACKNOWLEDGES AND AGREES THAT THE
PROVISION OF AREA-BASED SERVICE IS CRITICAL TO THE BUSINESS OF MCI AND THAT THE
FAILURE TO ENTER INTO THE AREA-BASED SERVICE AGREEMENT WITH VIABLE AND ECONOMIC
AREA-BASED SERVICE SHALL MATERIALLY IMPAIR MCI'S ABILITY TO FULLY COMPETE IN THE
LOCAL SERVICES MARKET AND SHALL VOID THE PURCHASE COMMITMENT AS SET FORTH IN
SECTION 3.4(E) HEREOF.
(A) Area-Based Service Description. NextWave shall engineer and
equip the Network, on a cell site basis, to provide at least *___* capacity for
the Area-Based Service. Area-Based Service shall be designed to provide
in-building and perimeter service for a terminal device located within the
surrounding area of a pre-designated location or locations (the "Service Zone")
similar in application to local exchange service offerings as of the date
hereof. The Service will not require (i) connection of the Subscriber's terminal
device or associated devices to local exchange service at or in the
pre-designated Service Zone, (ii) professional installation or maintenance of
any required premise equipment for mass market residential or commercial
applications, or (iii) premise equipment on a per Subscriber basis. Service will
not be dropped or interrupted when the terminal device transitions into or out
of a Service Zone. Area-Based Service will support multiple Service Zones per
Subscriber, enable the origination and termination of Services from within a
Service Zone and meet the same availability, capacity and service standards as
Full Mobility Service.
(B) Area-Based Service Quality. Area-Based Service will, subject
to Article 2.8(E), initially be offered within the Network configuration
engineered to meet the Full Mobility Service requirements and will be available
as a stand alone service as the Network is implemented, prior to the
availability of Full Mobility Service. NextWave will provide MCI reasonable
prior notice and prompt identification of geographic areas where Area-Based
Service is available. Such identification will be based on theoretical
availability and applicable testing criteria as more
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specifically set forth in the Area-Based Service Agreement. Area-Based Service
will continue to be offered in all coverage areas where Full Mobility Service is
offered. Upon request, NextWave will provide MCI coverage maps that depict
geographic areas with acceptable in-building penetration levels. In those
coverage areas where Area-Based Service has been identified by NextWave as
available, Area-Based Service will meet the quality of service standards
provided in the Technical Specifications. Area-Based Service will be made
available in an area or areas within a BTA no later than the time that the BTA
for which the area or areas are located is considered built-out. Once Area-Based
Service is made available in an area or areas such Area-Based Service will be
made available during the Term or any renewal thereof.
(C) Area-Based Service Development. NextWave and MCI shall seek
to implement one or more Area-Based Service trials to test, among other things,
infrastructure, cost and performance assumptions and customer
acceptance/satisfaction levels with the Area-Based Service value proposition.
NextWave shall, as requested by MCI, support MCI's efforts to develop Area-
Based Service Applications, such as campuses and office complexes.
(D) Area-Based Allocation. MCI shall be entitled to Allocated
Area-Based Service Capacity of at least *___* of the Network, on a cell site
basis. MCI shall have the right to utilize additional capacity on the Network,
on a cell site basis, in excess of the *___* Allocated Area-Based Service
Capacity to the extent such capacity is available. NextWave shall provide MCI
prompt written notice at any time a cell site is reaching its capacity and the
reasons therefor. If at any time MCI is not utilizing its full *___* Allocated
Area-Based Service Capacity and the cell site capacity utilized is approaching
full capacity, NextWave shall, at MCI's request, and at NextWave's option either
afford MCI at least *___* Allocated Area-Based Service Capacity or, within the
timeframes specified in the Area-Based Service Agreement, increase the capacity
at the cell site at NextWave's sole cost and expense.
(E) Area-Based Service Capacity Build-Out. If at any time MCI or
its Affiliates require or otherwise desire an increase in the amount of capacity
for Area-Based Service beyond *___* and such additional capacity is not
otherwise available, NextWave shall upon MCI's request commence the build-out of
that portion of the Network designated by MCI. MCI shall contribute the direct
incremental capital costs of the build-out requested by MCI at existing or new
cell sites on the Network and shall receive a price adjustment for Area-Based
Service in accordance with Article 5.5(A). In the event of such contribution,
one hundred percent (100%) of the additional capacity relating to such build-out
shall be Allocated Area-Based Service Capacity until MCI shall have recouped its
capital contribution pursuant to Article 5.5(A); provided that NextWave shall
have access to any unused capacity resulting from the build-out and MCI shall
not be required to finance any further capacity expansion at the cell site until
it shall have recouped its investment. With respect to any request for build-out
by MCI, NextWave shall design, engineer and construct such build-out as soon as
practicable and within the specific timeframes to be set forth in the Area-Based
Service Agreement; provided that NextWave may elect not to proceed with
installation involving a new cell
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site if it reasonably determines that such installation would interfere with the
build-out or adversely affect the quality of the Service.
2.9 Promotion of MCI Services. NextWave shall use commercially
reasonable efforts to promote the use of MCI's other services by other Local
Wireless Operators, equipment manufacturers or other partners with whom NextWave
or its Affiliates has or may have an affiliation or other business relationship.
NextWave shall use reasonable efforts to promote the use of MCI services,
including long distance and network signaling, to NextWave's customers, subject
to regulatory limitations. MCI will use reasonable efforts to make available to
NextWave preferred pricing and terms that are available to MCI under MCI's
existing relationships with vendors and service providers.
2.10 E911 Service. Emergency (911 and E911) and lawful intercept calls
will be handled by NextWave, unless otherwise required by regulatory
authorities. Each Invoice shall include a reasonable monthly charge (calculated
on a per Subscriber basis in an amount not to exceed the minimum amount allowed
by applicable regulatory authority or charged by other Local Wireless Operators
that are subject to E911, 911 or lawful intercept requirements) for the
provision of emergency and lawful intercept services. MCI shall pay such charges
within the timeframe specified for payment of Services. If regulatory
authorities shall 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.
2.11 Switchless Resale. In the event that NextWave completes Network
construction and commences offering Services or any other PCS in a Market where
MCI has no XXXX, NextWave shall provide MCI with the opportunity to resell the
Service or any other PCS as a switchless reseller at prices and on terms and
conditions no less favorable than those offered to any other customer of
NextWave, including an Affiliate of NextWave. MCI shall have the opportunity to
resell Services and any other PCS offered by NextWave under the terms set forth
herein. As a reseller of Services and any other PCS offered by NextWave, MCI
shall be entitled to have its Subscribers receive the benefit of any and all
roaming agreements to which NextWave or its Affiliates may be a party. *___*
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*___* During any period in which MCI operates as a switchless reseller in any
NextWave Market, (i) MCI shall be responsible, on a pass-through basis, for all
access and interconnection costs incurred by NextWave in the exchange of traffic
between the Network and the networks of all local exchange carriers, Local
Wireless Operators or other telecommunications carriers which are allocable to
Services purchased by MCI, and (ii) MCI shall be entitled to the economic
benefit of any Reciprocal Agreement, or any reciprocal compensation agreement
covering such traffic; and (iii) NextWave shall be responsible for fraud under
the terms set forth under Article 4.3.
2.12 Nonrecognition of CMRS Status. *___*
2.13 Additional Capacity. Whenever NextWave intends to acquire
capacity interconnecting the Network with the facilities of a local exchange
carrier or any Local Wireless Operator in any Market, NextWave shall provide MCI
with adequate prior notice of its intent to acquire such capacity and, upon
MCI's request, shall acquire, to the maximum extent possible under applicable
law and regulations, such additional capacity as MCI may request to augment the
capacity between the Network and the facilities of the local exchange carrier or
Local Wireless Operator to accommodate traffic routed via the Network to or from
MCI's XXXX, under the terms, conditions, rates and benefits of any arrangement
NextWave shall enter into for the purchase, lease or utilization of said
interconnection capacity. MCI shall reimburse NextWave for the reasonable and
direct expenses incurred by NextWave relating to such augmented capacity,
including switching and/or establishing and maintaining network connections, if
any. MCI will provide such supporting information as necessary to fulfill
obligations under such arrangements.
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2.14 Interconnection Development. *___________________________________
________________________________________________________________________________
______________________________________________________________________________.*
ARTICLE 3 -- PURCHASE COMMITMENT
3.1 Purchase Commitment. Subject to the terms and conditions hereof,
MCI and its Affiliates shall purchase during the Term a total of Ten Billion
(10,000,000,000) minutes, in aggregate, of Full Mobility Service in all of the
Markets in which NextWave has a License (the "Initial Purchase Commitment").
3.2 Increased Purchase Commitment. The Initial Purchase Commitment
will be increased to an amount equal to one hundred twenty-percent (120%) of the
Purchase Commitment then in effect (the "Increased Purchase Commitment") if, by
the fifth anniversary of the date of commencement of provision of Full Mobility
Service (i) the number of POPs represented by the Initial Licenses and
Subsequent Licenses in the top fifty (50) BTAs (as measured by POPs) acquired by
NextWave plus (ii) the number of POPs represented by BTAs or MTAs, or portions
thereof, with respect to which NextWave has entered into Reciprocal Agreements
with other holders of 30 megahertz licenses, exceeds, in the aggregate, one
hundred eighty-million (180,000,000) POPs; provided, further, that each of the
Reciprocal Agreements (a) provide MCI with suitable interconnection
substantially in accordance with the Technical Specifications and (b) have been
approved by MCI prior to NextWave's entering into the Reciprocal Agreement. The
Increased Purchase Commitment shall be deemed satisfied once amounts paid for
Full Mobility Service purchased by MCI and its Affiliates equals One Billion
Dollars ($1,000,000,000) during the Term.
3.3 Reduction and Cancellation of Purchase Commitment.
(A) Transfer of Licenses. If at any time NextWave sells,
transfers or otherwise loses control or ownership of any License or Licenses
and, after giving effect to such sale, transfer or loss of control or ownership,
the number of POPs represented by Licenses held by NextWave is less than
ninety-nine percent (99%) of the total POPs represented by Initial Licenses,
then upon each such sale, transfer or loss of control or ownership, the Purchase
Commitment then in effect will be
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reduced by an amount equal to the product of (a) the Initial Purchase
Commitment, or the initial Increased Purchase Commitment if the Initial Purchase
Commitment has been increased under Article 3.2, and (b) the percentage equal to
the greater of (i) the percentage equal to the cumulative Full Mobility Service
purchased by MCI and its Affiliates through the period covered by the last
Invoice received by MCI in the BTAs covered by such Licenses that have been
sold, transferred or over which NextWave has lost control or ownership, divided
by the cumulative Full Mobility Service purchased by MCI and its Affiliates
through the period covered by the last Invoice received by MCI in the BTAs
covered by the Licenses held by NextWave immediately prior to such sale,
transfer or loss of control or ownership, and (ii) the percentage equal to the
number of POPs represented by such Licenses that have been sold, transferred or
over which NextWave has lost control or ownership, divided by the aggregate
number of POPs represented by the Licenses held by NextWave immediately prior to
such sale, transfer or loss of control or ownership. Notwithstanding the
foregoing, if NextWave sells, transfers or otherwise loses control or ownership
of Licenses that reduce the number of POPs represented by the Licenses to below
seventy-zmillion (70,000,000) POPs, then the Purchase Commitment will be null
and void.
(B) Price Floors. If at any time the Lowest Effective Full
Mobility Price is below the Price Floors in Markets which comprise more than
five percent (5%) of the POPs represented by the Initial Licenses, then the
Purchase Commitment then in effect will be reduced by an amount equal to the
product of (a) the Initial Purchase Commitment, or the initial Increased
Purchase Commitment if the Initial Purchase Commitment has been increased under
Article 3.2, and (b) a percentage equal to the greater of (i) the percentage
equal to the cumulative Full Mobility Service purchased by MCI and its
Affiliates through the period covered by the last Invoice received by MCI
relating to such Markets, divided by the cumulative Full Mobility Service
purchased by MCI and its Affiliates through the period covered by the last
Invoice received by MCI relating to all of NextWave's Markets; or (ii) the
percentage equal to the number of POPs represented by the Licenses in such
Markets, divided by the aggregate number of POPs represented by the Licenses
then held by NextWave. If within one hundred twenty-days (120) days after the
reduction of the Purchase Commitment pursuant to this Article 3.3(B) (i) the
Lowest Effective Full Mobility Price rises above the then current Full Mobility
Service price set forth in the Pricing Schedule, or (ii) NextWave agrees to
provide Full Mobility Service in such Markets at the Lowest Effective Full
Mobility Price (the "Reinstatement Date"), then a percentage of the amount by
which the Purchase Commitment was reduced shall be reinstated in accordance with
the following:
Reinstatement Date Reinstatement Percentage
Prior to the first anniversary of the Term *___*
First anniversary of the Term through the day *___*
prior to the third anniversary of the Term
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Third anniversary of the Term through the day *___*
prior to the sixth anniversary of the Term
Sixth anniversary of the Term through the day *___*
prior to the seventh anniversary of the Term
Seventh anniversary of the Term through the *___*
end of the Term
provided, however, if the Lowest Effective Full Mobility Price drops below the
Price Floors in Markets for which there has been a Purchase Commitment reduction
and a subsequent reinstatement, the Purchase Commitment shall be reduced and not
be subject to any further reinstatement.
(C) Competitive Pricing. If MCI or its Affiliates receives a bona
fide offer from a Local Wireless Operator to sell PCS or cellular radio
telephone service under terms and conditions that MCI or its Affiliates desires
to accept, prior to acceptance thereof, MCI may offer NextWave the right to
provide Full Mobility Service on the same terms and conditions ("Third-Party
Terms") offered by such third-party. In the event NextWave declines to offer
Full Mobility Service under the Third-Party Terms, then the Purchase Commitment
then in effect will be reduced by one minute for each minute of Full Mobility
Service purchased and used by MCI or its Affiliates pursuant to the Third-Party
Terms; provided, however, that the Purchase Commitment shall not be reduced by
an amount in excess of the greater of (i) the percentage equal to the cumulative
Full Mobility Service purchased by MCI and its Affiliates in the areas covered
by the Third-Party Terms, divided by the cumulative Full Mobility Service
purchased by MCI and its Affiliates in all of NextWave's Markets; or (ii) the
percentage equal to the number of POPs in the areas covered by the Third-Party
Terms, divided by the aggregate number of POPs represented by the Licenses held
by NextWave at such time. In no event shall the foregoing obligate MCI or its
Affiliates to offer a right of first refusal to NextWave or otherwise restrict
MCI or its Affiliates from purchasing services from any Local Wireless Operator.
(D) Build-Out. In the event NextWave has not offered Full
Mobility Service for a period of at least six (6) consecutive months in
accordance with the Technical Specifications, including those for availability,
capacity, coverage and service quality, in BTAs covering at least *___* million
POPs represented by the Initial Licenses by December 31, 1998, the Purchase
Commitment then in effect will be reduced by an amount equal to ten percent
(10%) of the Initial Purchase Commitment, or the initial Increased Purchase
Commitment if the Initial Purchase Commitment has been increased under Article
3.2, and the Purchase Commitment then in effect shall be further reduced by an
amount equal to ten percent (10%) of the Initial Purchase Commitment, or the
initial Increased Purchase Commitment if the Initial Purchase Commitment has
been increased under Article 3.2, for each subsequent year or portion thereof
that Full Mobility Service is not offered in BTAs covering at least *___*
million POPs represented by the Initial Licenses. In the event NextWave does
not offer
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Full Mobility Service for a period of at least six (6) consecutive months in
BTAs, covering at least *___* million POPs represented by the Initial Licenses
by December 31, 2001, then the Purchase Commitment then in effect, will be
reduced by an amount equal to the product of (i) *___* million minus the number
of POPs for which Full Mobility Service is available by December 31, 2001,
divided by *___* million, and (ii) the Initial Purchase Commitment; and the
Purchase Commitment then in effect shall be further reduced by an amount equal
to five percent (5%) of the Initial Purchase Commitment, or the initial
Increased Purchase Commitment if the Initial Purchase Commitment has been
increased under Article 3.2, for each subsequent year that Full Mobility Service
is not offered in BTAs represented by the Initial Licenses covering at least
*___* million POPs.
(E) Service, Quality and Capacity. A BTA shall be classified as a
"Problem BTA" if, in respect to Full Mobility Service and Area-Based Service,
any one of the following conditions shall occur any time after six (6) months
after the date Full Mobility Service becomes available on a commercial basis in
such BTA:
*__________________________________________________
__________________________________________________
__________________________________________________*
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*____________________________________________________________
____________________________________________________________*
In the event a BTA shall become a Problem BTA, the Purchase Commitment
then in effect will be reduced by an amount equal to the product of (a) the
Initial Purchase Commitment, or the initial Increased Purchase Commitment if the
Initial Purchase Commitment has been increased under Article 3.2, and (b) the
percentage equal to the greater of (i) the percentage equal to the cumulative
Full Mobility Service purchased by MCI and its Affiliates through the period
covered by the last Invoice received by MCI in the Problem BTA divided by the
cumulative Full Mobility Service purchased by MCI and its Affiliates through the
period covered by the last Invoice received by MCI in the BTAs represented by
the Licenses held by NextWave, and (ii) the percentage equal to the number of
POPs represented by the Problem BTA, divided by the aggregate number of POPs
represented by the Licenses held by NextWave.
3.4 Conditions to Purchase Commitment. The obligation of MCI to
fulfill the Purchase Commitment at any time is also subject to each and every
one of the following conditions having been satisfied:
(A) NextWave shall not have been in material breach of any of its
obligations under this Agreement, the Warrant Agreement, the Exclusive Services
Agreement, or the Registration Rights Agreement, which breach was not cured
within sixty (60) days after written notice thereof;
(B) NextWave shall be providing Full Mobility Service to at least
seventy (70) million POPs covered by the Initial Licenses by December 31, 2001;
(C) NextWave shall be providing Full Mobility Service that are
fully compatible with MCI's network as provided in the Technical Specifications;
(D) NextWave shall have used best efforts, on MCI's request and
behalf, to make available a wireless SID and Number blocks for exclusive use by
MCI and/or its Affiliates from appropriate government agencies or granting
organizations; and
(E) within ninety (90) days from the date hereof, MCI and
NextWave shall have entered into the Area-Based Service Agreement that provides
for viable and economic Area-Based Service, and within one hundred twenty (120)
days from the date hereof, MCI and NextWave shall have entered into the
Exclusive Services Agreement that provides for NextWave to purchase from MCI
connectivity services including backhaul, long distance and signaling subject to
terms that are substantially similar to a bona fide proposal of a third-party,
it being understood that with respect to backhaul services, costs relating to
site location, including site acquisition, leasing and permits, shall be taken
into account when considering the pricing of any such third-party proposal.
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ARTICLE 4 -- INTELLIGENT NETWORK
4.1 Intelligent Network. Intelligent Network ("IN") capabilities
designed and developed by NextWave shall be compatible with and shall not
adversely affect the provision of Services or otherwise degrade the quality of
the Services to below the levels provided in the Technical Specifications.
4.2 Most Favored Customer. MCI may purchase and NextWave shall
provide IN capabilities and enhanced services offered to other NextWave
customers, at prices less than or equal to the prices NextWave charges to any
other customers and upon terms and conditions no less favorable than those
offered to any customers.
4.3 Fraud Detection and Management. To the extent NextWave provides
IN services, which includes, among other services, home location register,
authentication and fraud detection control services, to MCI or its Affiliates,
NextWave shall be responsible for the detection and management of fraud on the
Network, other than subscription fraud, and any and all charges and fees
incurred in respect of such fraud by MCI, its Subscribers, MCI's Affiliates and
MCI's Affiliate's Subscribers; provided, however, if NextWave notifies MCI that
it suspects fraud on MCI's account and MCI fails to provide NextWave with
instructions to suspend or terminate the Service associated with the Subscriber
number within *_________* after receipt of such notice, then MCI shall be liable
for charges incurred from the time of such notification; provided, further that
if NextWave notifies MCI that the suspected fraud involves international long
distance services and MCI fails to provide NextWave with instructions to suspend
or terminate the Services associated with the Subscriber number within *______*,
MCI shall be liable for any international long distance service charges and fees
incurred from the time of such notification. If MCI subsequently notifies
NextWave to suspend or terminate the Service associated with the Subscriber
number suspected of fraud or if the suspension or termination of such number is
prohibited by law, MCI shall not be liable for charges incurred subsequent to
the time of such notification. In no event shall NextWave suspend or terminate
the Service associated with the Subscriber number without instructions from MCI
to take such action, unless otherwise required by law. In the event NextWave,
without MCI's consent takes any action to suspend or terminate Service in its
Markets which will affect a group of Subscribers (e.g., suspension of Service by
NPA), NextWave shall immediately notify MCI of its intended action, cooperate
with MCI to minimize the disruption of Service resulting from such action and
indemnify and hold MCI and its Affiliates harmless against any liability for any
claim or demand arising from the suspension or termination of Service to any
Subscriber not associated with fraudulent activity, including reimbursement of
any reasonable credits MCI or its Affiliates may grant to the affected
Subscribers. NextWave shall have the opportunity to audit fraud claims in
accordance with Article 6.
4.4 Provision of Billing Data. In the event MCI purchases billing
support services, NextWave shall provide electronically, in a format to be
specified by MCI, *___*,
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detailed billing data not to be older than *___*, in accordance with protocols
and specifications in formats customary for the industry and to be mutually
agreed upon. MCI agrees to notify NextWave immediately if it does not receive
the billing data, and MCI shall promptly notify NextWave of any discrepancies in
billing data.
ARTICLE 5 -- PRICING
5.1 Full Mobility Pricing. Pricing for Full Mobility Service,
measured in *___*, for each Market will be the lesser of:
(A) the rates set forth for Full Mobility Service in Schedule 2;
(B) *___*
(C) the "Lowest Effective Full Mobility Price", provided such
price will not be less than *___* from the date hereof through December, 2001,
or *___* from January, 2002 through the end of the Term (the "Price Floors");
or
(D) in the event NextWave or its Affiliates sells Full Mobility
Service, directly or indirectly through affinity, third-party marketing or other
business relationships (excluding reseller transactions), *___* of the lowest
effective rate offered to any Retail Purchaser for such services. For the
purpose of Article 5.1(D), Article 5.5(A) and Article 5.13 only, "Retail
Purchaser" shall include any business, consumer or other end-users but shall not
include employees of NextWave or purchasers of Airtime for which the offering
and duration of the service is not greater than seven (7) days.
5.2 Lowest Effective Retail Price.
(A) Calculation. The lowest effective retail price for a Minute
Of Use ("MOU") of airtime is intended to reflect the lowest retail price
available in the marketplace, as perceived by any customer, taking into account
not only stated, tariffed, published or contract prices, but also discounts,
rebates and all other terms and conditions which affect the stated, tariffed,
published or contract price for the provision of Full Mobility Service (the
"Lowest Effective Retail Price"). The Lowest Effective Retail Price for any
market shall be the average, applying equal weighting, of the lowest effective
rate offering of each of the four largest (in terms of market share) Local
Wireless Operators (excluding MCI and its Affiliates) offering cellular radio
telephone service or PCS in the market. In calculating the lowest effective rate
for a MOU of airtime for each of the Local Wireless
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Operator's offerings comparable to, or competitive with, Full Mobility Service
(i) the monthly Full Mobility MOU statistics of MCI on the Network will be
averaged during the most recent *___* month period for Subscribers by market
segment and shall be applied to each of the Local Wireless Operator's offerings
in accordance with their time period conventions (i.e., peak, off-peak, weekend,
evening and other time period and volume convention prices) and Subscriber call
rounding conventions; and (ii) shall take into account but not be limited to the
following, in any combination as they may appear or be available to any
end-user:
*___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________*
(B) Review. Either Party (the "Requesting Party") may request
review of the Lowest Effective Retail Price in any market by providing the other
Party (the "Receiving Party") with a written report detailing its calculation of
the Lowest Effective Retail Price for such market. Such request for review in
any market shall not be made more frequently than once within any ninety (90)
day period. The written report will provide all details and assumptions used in
the calculation. If the Receiving Party fails to respond within a thirty (30)
day period after receipt of the written report from the Requesting Party, the
Lowest Effective Retail Price shall be the amount specified in the report
delivered by the Requesting Party. If the Receiving Party disagrees with the
Lowest Effective Retail Price calculated by the Requesting Party, the Receiving
Party shall have thirty (30) days from its receipt of the report to provide the
Requesting Party with a written response, specifying the Receiving Party's
calculation of the Lowest Effective Retail Price, which response shall include
all details and assumptions used in the calculation.
(C) Effective Date. The revised Lowest Effective Retail Price, as
calculated in this Article 5.2, shall take effect as of the first day of the
following calendar month after a written report has been submitted by the
Requesting Party and shall remain in effect until the first day of the following
calendar month after the date of a subsequent written report that determines a
revised Lowest Effective Retail Price recalculated pursuant to Article 5.2(B)
above; provided that during the pendency of any disagreement regarding the rate
calculation, the price rate in effect immediately prior to the submission of the
report shall continue to apply. If is it subsequently determined that a new
price rate should have applied, then a payment or credit, calculated
retroactively to the date of the report, shall be paid or applied immediately.
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(D) Dispute. If either party disagrees with the calculation of
the Lowest Effective Retail Price for any market then the account managers for
the Parties shall have fifteen (15) days to resolve any disagreement, after
which, if not resolved, the matter shall be submitted to senior management for
resolution within fifteen (15) days thereafter. If such dispute remains
unresolved, then either Party may submit the dispute to binding arbitration
pursuant to Article 20 hereof.
5.3 Traffic Growth Incentives.
(A) At any time after MCI and its Affiliates shall have purchased
thirty (30) billion minutes of Full Mobility Service, the pricing for Full
Mobility Service set forth in the Pricing Schedule may be reduced by an amount
*___* based on the percentage of PCS purchased by MCI and its Affiliates from
NextWave and its Affiliates as compared to PCS purchased by MCI and its
Affiliates from Local Wireless Operators, calculated in accordance with the
Pricing Schedule ("Traffic Growth Incentive"). In the event MCI determines that
it qualifies for a Traffic Growth Incentive, MCI shall provide NextWave written
notice stating the *___* Traffic Growth Incentive for which it is eligible. MCI
shall, upon written request of NextWave, provide documentation in reasonable
detail supporting MCI's determination of the Traffic Growth Incentive.
(B) Review. If NextWave disagrees with the Traffic Growth
Incentive calculated by MCI, NextWave shall have thirty (30) days from its
receipt of the supporting documentation to provide MCI with a written response,
specifying NextWave's calculation of the Traffic Growth Incentive and/or any
other issue it may have with MCI's calculation including all details and
assumptions used in the calculation.
(C) Effective Date. The Traffic Growth Incentive, as calculated
in this Article 5.3, shall take effect as of the first day of the following
calendar month after written notice has been submitted to NextWave and shall
remain in effect until the first day of the following calendar month after the
date of a subsequent written notice from MCI results in a determination of a
Revised Traffic Growth Incentive; provided that during the pendency of any
disagreement regarding the rate calculation, the price rate in effect
immediately prior to the submission of the report shall continue to apply. If is
it subsequently determined that a new price rate should have applied, then a
payment or credit, calculated retroactively to the date of the report, shall be
paid or applied immediately.
(D) Dispute. If the Parties are unable to reach agreement on the
eligibility for a Traffic Growth Incentive then the account managers for the
Parties shall have fifteen (15) days to resolve any disagreement, after which,
if not resolved, the matter shall be submitted to senior management for
resolution within fifteen (15) days thereafter. If such dispute remains
unresolved, then either Party may submit the dispute to binding arbitration
pursuant to Article 20 hereof.
5.4 Resale to Facilities-Based Carriers. If MCI resells Full Mobility
Service to facilities- based carriers and in connection therewith requires
NextWave to implement a PIC/CIC code, then
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MCI shall pay NextWave an additional fee of *___* of Full Mobility Service sold
to each such carrier for management of PIC/CIC and associated databases.
5.5 Area-Based Service Pricing.
(A) Calculation. For each Invoice billing period, MCI shall pay
an amount for Area-Based Service in each market (the "Area-Based Price") equal
to the lesser of:
(1) aggregate number of lines, adjusted on a weighted
average basis to take into account partial period Subscribers,
utilized for Area-Based Service during the Invoice billing period
multiplied by the lesser of (a) *___* of the comparable local
exchange carrier rate or averaged of the two largest local
exchange carriers, which shall be equal to the per-line average
of the most appropriate local exchange carrier's offering for
each of consumer, small business and large business customers in
that market weighted by the relative percentage of MCI's
Area-Based Service consumer, small business and large business
customers (the "Comparable Local Exchange Carrier Rate"); and (b)
in the event NextWave or its Affiliates sells Area-Based Service
in the retail market, directly or indirectly through affinity,
third-party marketing or other business relationships (excluding
reseller transactions), *___* of the lowest effective average per
line rate offered to Retail Purchasers for such Services. The
Comparable Local Exchange Carrier Rate and the NextWave retail
rate shall include either unlimited local usage, where available,
or average local usage charges, where unlimited local usage is
not offered. The Comparable Local Exchange Carrier Rate and the
NextWave retail rate shall include federal and state subscriber
mandated line charges, and shall exclude, without limitation, (i)
connection and installation charges, (ii) inside wiring and
maintenance charges, (iii) customer premise equipment charges,
surcharges, taxes and 911/E911 fees, i(v) call waiting, call
forwarding, caller ID and other optional services, whether or not
designated as CLASS services, (v) yellow pages or other directory
listing or directory service charges, (vi) local operator
assistance or other information services charges, and (vii)
optional extended area service charges; and
(2) aggregate number of *___* of Airtime for Area-
Based Service in such market times the lesser of: (i) *___* and
(ii) in the event NextWave or its Affiliates sells Area-Based
Service in the retail market, directly or indirectly through
affinity, third-party marketing or other business relationships
(excluding reseller transactions), *___* of the lowest effective
rate (measured in *___* increments) offered to any Retail
Purchaser for such Services, which Service is charged on a usage
per time increment;
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provided, however, that in the event MCI contributes to NextWave amounts for
build-out to increase capacity pursuant to the Area-Based Service Agreement, the
Area-Based Price relating to Airtime from the cell site or sites built-out shall
be reduced by *___* (the "Reduced Area- Based Price") until such time that the
savings to MCI generated from the difference between the Area-Based Price and
the Reduced Area-Based Price equals the amount of any such contribution plus
rate of return on such contribution equal to the "prime rate" as announced by
Citibank, N.A., from time to time plus *___* basis points; provided, further,
that if MCI terminated Service in any market under Article 12.3 for which MCI
has contributed to the build-out of a cell site, MCI shall be entitled to
set-off against any Invoice, the amount equal to the unrealized return to MCI
for any such build-out.
(B) Review. Either Party (the "Requesting Party") may request
review of the Average Retail Price in any market by providing the other Party
(the "Receiving Party") with a written report detailing its calculation of such
price in the market. Such request for review in any market shall not be made
more frequently than once within any ninety (90) day period. The written report
will provide all details and assumptions used in the calculation. If the
Receiving Party fails to respond within a thirty (30) day period after receipt
of the written report from the Requesting Party, such Average Retail Price shall
be the amount specified in the report delivered by the Requesting Party. If the
Receiving Party disagrees with the Average Retail Price calculated by the
Requesting Party, the Receiving Party shall have thirty (30) days to provide the
Requesting Party with a written response, specifying the Receiving Party's
calculation of the Average Retail Price, which response shall include all
details and assumptions used in the calculation.
(C) Effective Date. The Average Retail Price shall take effect as
of the first day of the following calendar month after a written report has been
submitted by the Requesting Party and shall remain in effect until the first day
of the following calendar month after the date of a subsequent written report
that determines a revised Average Retail Price is recalculated pursuant to
Article 5.5(B) above; provided that during the pendency of any disagreement
regarding the rate calculation, the price rate in effect immediately prior to
the submission of the report shall continue to apply. If is it subsequently
determined that a new price rate should have applied, then a payment or credit,
calculated retroactively to the date of the report, shall be paid or applied
immediately.
(D) Dispute. If either party disagrees with the calculation of
the Average Retail Price for any Market then the account managers for the
Parties shall have fifteen (15) days to resolve any disagreement, after which,
if not resolved, the matter shall be submitted to senior management for
resolution within (15) days thereafter. If such dispute remains unresolved, then
either Party may submit the dispute to binding arbitration pursuant to Article
20 hereof.
5.6 Transition Pricing. In the event that a Subscriber transitions
between Area-Based Service and Full Mobility Service during the duration of a
continuous transmission of Airtime, the
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pricing for such Airtime shall be calculated based on that portion of the
Airtime utilized for Area- Based Service and Full Mobility Service,
respectively.
5.7 Reciprocal Agreements. Pricing for Full Mobility Service provided
pursuant to a Reciprocal Agreement will be the greater of (i) the Full Mobility
Service price set forth in the Pricing Schedule or (ii) NextWave's incremental
cost of actual usage under the Reciprocal Agreement (calculated in accordance
with the billing convention set forth in the Reciprocal Agreement) plus *___*.
5.8 Taxes. The prices paid by MCI for Services are exclusive of any
applicable sales, use, personal property or other taxes attributable to periods
during the Term based upon or measured by the Services and any associated
services provided or used by NextWave in performing its obligations under this
Agreement. MCI shall reimburse NextWave on a pass-through basis for those taxes
paid by NextWave that are attributable to MCI pursuant to this Section 5.8. 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.
5.9 Invoices. NextWave shall submit an invoice ("Invoice") to MCI, on
a monthly basis, for Airtime furnished. The Invoice shall specify call level
detail for *___* of Airtime used by MCI during the Invoice period. In
addition, with each Invoice NextWave will also provide a report specifying the
aggregate minutes and dollar amount of Airtime purchased hereunder through the
date of the particular invoice. MCI shall pay all Invoices, except for (i)
disputed amounts, (ii) Service Credits, (iii) amounts relating to fraud on the
Network in which MCI is not responsible for fraud under Article 4.3 and 5.15,
(iv) available amounts under the Credit Reserve; and (v) amounts for which MCI
has a right to offset hereunder, within thirty (30) days of the date of MCI's
receipt of such Invoices and related reports. In the event payment is not sent
within this time period, MCI will pay a late fee equal to interest at a rate
which is two (2) percentage points above the prime rate measured as of the due
date. For purposes of this Agreement, the Prime Rate shall be the interest rate
publicly announced by Citibank, N.A. in New York, New York as its prime lending
rate on the date when payment is due. MCI shall have the right to offset any
amounts due under any Invoice for any amounts owed to MCI hereunder.
5.10 Disputed Charges. MCI shall provide NextWave with written notice
of any disputed Service charges within a reasonable period of time after the
mailing date of the Invoice containing such charges, with such notice setting
forth in reasonable detail such dispute. This disputed charge will be handled
under the dispute resolution process described in Article 20 herein.
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5.11 Service Increments. Notwithstanding anything herein to the
contrary, if at any time during the Term, the Network, as configured, is fully
capable of billing Airtime in increments of less than *________*, the prices for
Services set forth herein shall be adjusted based on the new increment of
measurement and NextWave shall measure and xxxx Services based on such
increments without rounding.
5.12 Credit Reserve. If at any time during the Term, MCI or an
Affiliate of MCI is entitled to a credit, adjustment or incentive which is not
immediately applied to amounts due for the provision of Services due to (i) the
applicability of regulatory restrictions or limitations, or (ii) the termination
of services in a BTA prior to MCI realizing the return of any contributions for
build-out under Article 5.5, the difference between the price for the Service
and the price for Service had the limitation or termination, as the case may be,
not occurred shall be reserved for future usage (the "Credit Reserve"). If at
any time after the establishment of the Credit Reserve the applicable price for
Services is in excess of such limitations or MCI or its Affiliates are otherwise
obligated to make payments hereunder, amounts under the Credit Reserve shall
first be used to offset any amounts due hereunder, including amounts due by MCI
for the build-out of the Network to increase capacity for Area-Based Service.
5.13 Other Service Pricing. In the event that NextWave or its
Affiliates sell services on a wholesale basis, to any customers, other than a
Retail Purchaser, which services are not comparable to, or competitive with,
either Full Mobility Service or Area-Based Service, MCI shall have the right to
buy the Airtime component for that service under pricing and on terms and
conditions that are no less favorable than those offered to any such customers.
In the event NextWave or its Affiliates sells services in the retail market,
directly or indirectly through affinity, third-party marketing or other business
relationships (excluding reseller transactions), which services are not
comparable to, or competitive with, either Full Mobility Service or Area-Based
Service, MCI shall have the right to buy the Airtime component for that service
at (i) *___* of the lowest effective rate offered by NextWave to any Retail
Purchaser, if such service is bundled or sold with Full Mobility Service or
Area-Based Service or if the Retailer Purchaser is also purchasing Full Mobility
Service or Area-Based Service from NextWave, or (ii) the greater of (a) *___* of
the lowest effective rate offered by NextWave to any Retail Purchaser or (b) at
a discount to the prevailing rate sufficient to allow MCI to offer a comparable
service with *___*, but in no event shall the price determined pursuant to (i)
or (ii) be less than *___*.
5.14 MSC Support Services. MCI shall not pay NextWave for any software
utilized by the MSC to support services provided by MCI's XXXX. For features and
functionality provided by MCI's XXXX that require or utilize hardware or
tangible resources of NextWave in addition to software, pricing shall be
competitive and based on NextWave's reasonable, direct and allocable expenses,
relating to such hardware or tangible resources utilization. If MCI requests
features and
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functionality that are not based on the then-current Technical Specification,
MCI and NextWave agree to negotiate the pricing for such development as
described in Article 14.
5.15 Fraud. In the event NextWave is not providing IN services which
include home location register, authentication and fraud detection, MCI shall be
responsible for fraud on the Network; provided that if NextWave is better able
to detect or prevent such fraud based on the Network as then configured,
NextWave shall be responsible for the Airtime relating to such fraud; provided,
further that if NextWave notifies MCI that it suspects fraud on MCI's account
and MCI fails to suspend or terminate the Service associated with the Subscriber
number within *___* after receipt of such notice, then MCI shall be responsible
for such fraud from the time of such notification.
ARTICLE 6 -- AUDITS
Each Party will provide reasonable access to its facilities, records and
personnel to enable the other Party and its auditors and examiners to conduct
appropriate audits and examinations of the operations of such other Party
relating to the provision of Services to verify (i) the accuracy of claims and
charges hereunder, (ii) that Services are being provided in accordance with the
Technical Specifications, and (iii) compliance with the terms and conditions of
this Agreement. If any audit or examination reveals that NextWave's invoices for
the audited period are not correct for such periods, NextWave shall promptly
reimburse MCI for the amount of overcharges in excess of one percent (1%), or
MCI shall promptly pay NextWave for the amount of undercharges in excess of one
percent (1%) of the Invoice amount. NextWave shall also reimburse MCI for all
reasonable costs incurred by MCI in connection with the performance of such
audit if there have been overcharges in excess of one percent (1%) of the
Invoice amount. In the event that it is determined that NextWave's invoices for
an audited period are not correct, then NextWave shall (x) take immediate
corrective action to remedy any deficiencies uncovered by the audit which led to
the inaccuracy and (y) furnish a report specifying the corrective steps taken.
Such audit shall be conducted during normal business hours upon reasonable
notice and be not more often than once in any ninety (90) day period.
ARTICLE 7 -- INDEPENDENT CONTRACTOR STATUS
It is the intention of the Parties that MCI be an independent contractor
and not an employee, agent, joint venturer or partner of NextWave in connection
with the provision of Services hereunder. Nothing in this Agreement shall be
interpreted or construed as creating or establishing the relationship of
employer and employee between NextWave and either MCI or any employee or agent
of MCI. NextWave shall not take any action or provide MCI personnel with any
benefits or commitments inconsistent with such personnel's status as employees
of MCI and not of NextWave. Neither Party shall hold itself out as being part of
the other Party or as an agent or partner of the other Party. Each
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Party agrees that it has no authority or power to bind or contract or negotiate
in the name of or to incur any debt or other obligation on behalf of or create
any liability against the other Party in any way or for any purpose.
ARTICLE 8 -- PERSONNEL
8.1 Account Managers. Upon execution of this Agreement, each of the
Parties agrees to designate a senior account manager who will manage and
coordinate interaction between the Parties, and to whom all communications may
be addressed in connection with all aspects of this Agreement. NextWave shall
cause the person assigned to the position of account manager to act as lead
executive and devote substantial time and effort to ensure the prompt
performance of NextWave under this Agreement. Before assigning an individual to
the position of account manager, whether the individual is initially assigned or
is subsequently assigned, NextWave shall:
1. Notify MCI of the proposed assignment;
2. Introduce the individual to appropriate MCI representatives;
and
3. Provide MCI with any other information about the individual
reasonably requested by MCI.
MCI will discuss any objections that MCI may have to such assignment
with NextWave and MCI will attempt to resolve such concerns on a mutually
agreeable basis. If these concerns cannot be addressed to MCI's satisfaction,
MCI will have the right to reject the assignment of the account manager.
NextWave will give MCI at least thirty (30) days advance notice of any proposed
change of its account manager and will address any objections MCI may have to
such change.
8.2 Replacement Personnel. In the event that MCI determines, for any
reason, that it is not in the best interests of MCI for the NextWave account
manager to continue performing any service under this Agreement, MCI will give
NextWave written notice of its objection which shall include MCI's request that
the account manager be replaced. Promptly after its receipt of such notice, or
if for any reason NextWave decides to remove or reassign such employee from the
MCI account, NextWave shall promptly remove such employee from the account and
ensure that (i) such employee no longer have access to any MCI Confidential
Information and (ii) such employee immediately return to NextWave or destroy all
such Confidential Information.
ARTICLE 9 -- CONFIDENTIAL INFORMATION
9.1 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
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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 MCI for purposes of this Agreement: *___*.
Notwithstanding the foregoing, MCI agrees that all of the following information
which MCI may receive or otherwise obtain in the course of its performance under
this Agreement shall be deemed Confidential Information of NextWave for purposes
of this Agreement: *___*.
9.2 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 a 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 written agreement), and (ii) to its
employees, consultants and agents, and its 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). NextWave
expressly agrees that MCI shall further be entitled to disclose the Technical
Specifications, coverage
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maps and related Service and feature descriptions, but again subject to a
written agreement protecting such Confidential Information from unauthorized use
and disclosure (including without limitation a pre-existing written agreement)
to: (x) to present and prospective Subscribers and other customers and their
respective employees, consultants and agents, who have a need to know such
Confidential Information in connection with the use or prospective use of the
Service, and (y) such other third-parties as reasonably necessary or appropriate
in order for MCI to exercise its rights under this Agreement. MCI will provide
written notification to NextWave of any such disclosure. 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 of this Agreement.
9.3 Exceptions. The restrictions set forth in this Article 9 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.
9.4 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
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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.
9.5 Publicity. The Parties expressly agree that the terms and
conditions of this Agreement, and any activities contemplated hereby or
performed hereunder, are the Confidential Information of the Parties and shall
not be disclosed by NextWave in any manner (including without limitation by way
of news articles, public announcements or disclosures, advertising, marketing
brochures or other similar materials, speeches or any other information
releases) without the prior written approval of the other Party (which shall not
be unreasonably withheld); provided, however, that (i) MCI and NextWave agree
that NextWave shall have the right to issue a news release in the form attached
hereto as Exhibit A to announce the transaction contemplated herein and (ii)
that 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.
NextWave will afford MCI reasonable advance time for review of any proposed
disclosures. To the extent any information has been disclosed to the public
pursuant to this Section 9.5, such information shall not be deemed Confidential
Information of MCI. Notwithstanding the foregoing, each Party agrees that the
Airtime pricing terms contained in Schedule 2 and the Technical Specifications
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 Article 9.4
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. At no time shall NextWave characterize MCI or its
Affiliates in any material, release or other announcement or utterance as a
"Reseller", nor characterize MCI as engaging or planning to engage in "resale"
or "reselling" of NextWave Services.
9.6 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.
9.7 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.
9.8 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
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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 9 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 9 were
such employee, agent, consultant or third-party a party hereto.
9.9 Confidentiality Period. Confidential Information continues to be
subject to this Agreement for five (5) years following termination or expiration
of this Agreement.
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ARTICLE 10 -- LIMITED LIABILITY
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 ANY OF ITS AFFILIATES'
FAILURE TO PERFORM THEIR OBLIGATIONS AND 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) EXCEPT AS OTHERWISE SET FORTH HEREIN, 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, AND EVEN IF A PARTY AND/OR
ANY OF ITS AFFILIATES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS.
ARTICLE 11 -- INDEMNITIES
11.1 Indemnification of MCI. NextWave agrees to indemnify, defend and
hold MCI harmless against any liability for any claim or demands arising from or
in connection with:
(A) any claims of infringement of any patent, copyright, trade
secret, trademark, service xxxx or other intellectual property right alleged to
have occurred because of service, equipment or other resources provided by
NextWave hereunder;
(B) the inaccuracy or untruthfulness of any representation or
warranty made by NextWave under this Agreement;
(C) any amounts, including but not limited to taxes, interest and
penalties, assessed against MCI which are obligations of NextWave pursuant to
Article 5.8;
(D) any claims that are the result of NextWave's negligent or willful
act or failure to act, including but not limited to claims for bodily injury or
damage to property; and
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(E) any claims that are a result of NextWave or its Affiliates
failure to comply with all applicable laws, regulations and orders in the
performance of its obligations under this Agreement.
11.2 Indemnification by MCI. MCI agrees to indemnify, defend and hold
NextWave harmless against any liability for any claim or demands arising from or
in connection with:
(A) any claims of infringement of any patent, copyright, trade
secret, trademark, service xxxx or other intellectual property right alleged to
have occurred because of service, equipment or other resources provided by MCI
hereunder;
(B) the inaccuracy or untruthfulness of any representation or
warranty made by MCI under this Agreement;
(C) any amounts, including but not limited to taxes, interest and
penalties, assessed against NextWave which are obligations of MCI pursuant to
Article 5.8;
(D) any claims that are the result of MCI's negligent or willful act
or failure to act, including but not limited to claims for bodily injury or
damage to property; and
(E) any claims that are the result of MCI or its Affiliates' failure
to comply with all applicable laws, regulations and orders in the performance of
its obligations under this Agreement.
11.3 Indemnification Procedures. All indemnities created in this
Agreement shall include indemnification of the indemnified Party's Affiliates,
and their respective directors, officers, employees, agents, customers
successors and assigns and their heirs, legal representatives, and assigns
thereof. The indemnification shall be for all claims arising out of the specific
event referred to in this Agreement which is covered by the indemnification,
including all costs reasonably incurred in the defense of any claim, including
without limitation reasonable accountant's, attorneys' (including allocated
in-house expenses), and expert witness fees, costs of investigation and proof of
facts, court costs, and other reasonable litigation expenses, including, but not
limited to, travel and living expenses. Written notice of claim shall be
forwarded promptly by the Indemnitee to the Indemnitor and there shall be no
settlement of the claim without the consent of the Indemnitee, which consent
shall not be unreasonably withheld. Indemnitee shall have the right to
participate in the defense of any such claim in which it is named as a defendant
at its own cost and expense. The indemnities created by this Agreement shall
continue in full force and effect subsequent to and notwithstanding the
expiration or termination of this Agreement. Provisions for indemnification in
this Agreement are not in lieu of and do not supplant insurance coverage
required in the Agreement, and are not intended to act as insurance.
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ARTICLE 12 -- TERM AND TERMINATION
12.1 Term. This Agreement will continue for a period of ten (10) years
from the date on which Full Mobility Service in NextWave's first BTA becomes
available (the "Term") on a commercial basis, unless earlier terminated or
extended in accordance with this Agreement. MCI shall have the right, subject to
Article 12.2, to renew this Agreement for an additional five (5) year term upon
written notice to NextWave delivered not less than one (1) year prior to the
expiration of the Term.
12.2 Renewal and Expiration. If MCI elects to renew this Agreement,
the Parties shall review and if necessary, adjust the pricing so that rates
provide NextWave *___*. Any new pricing will be adjusted to reflect expected
system usage during such renewal period. If MCI notifies NextWave that it
desires to renew the Agreement, but the Parties are unable to agree upon renewal
prices, terms and conditions as of six (6) months prior to the expiration of the
Term, this Agreement will be extended for two (2) years from the expiration of
the Term at the then current prices, terms and conditions in order for MCI to
transition Subscribers from the Network. If the Parties are unable to reach
agreement on renewal during such transition period, this Agreement will expire
at the end of such transition period.
12.3 Termination.
(A) This Agreement shall terminate upon the occurrence of any of
the following:
(1) the election of a Non-Defaulting Party to terminate this
Agreement, which election must be made within one hundred twenty
(120) days after a Default;
(2) either Party, in its discretion, may terminate this
Agreement by written notice to the other Party if the other Party
makes any assignment for the benefit of creditors or an arrangement
pursuant to any bankruptcy law; or files or has filed against it any
petition under the federal bankruptcy laws or the bankruptcy or
insolvency laws of its jurisdiction (which is not stayed within sixty
(60) days); or shall have or suffer a receiver or trustee to be
appointed for its business or property; or be adjudicated a bankrupt
or an insolvent; or any committee of the creditors, or any class
thereof, is formed for the purpose of monitoring the financial
affairs of the other Party or enforcing such creditors' rights;
(3) the election of MCI to terminate this Agreement in the
event that NextWave shall not have been granted the PCS licenses for
which NextWave was the final high bidder in the initial FCC C block
auction completed on May 6, 1996, representing at least seventy (70)
million POPs;
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(4) the election of MCI to terminate this Agreement in the
event that MCI's obligations to fulfill the Purchase Commitment shall
have been eliminated pursuant to Article 3.3(A), (D) or (E), or
Article 3.4;
(5) the election of MCI to terminate this Agreement in the
event that NextWave shall have failed to (i) have the registration
statement filed with the Securities and Exchange Commission for the
issuance of equity securities by NextWave declared effective by March
31, 1997, or (ii) consummate the transactions contemplated thereunder
by March 31, 1997; or
(6) the election of MCI if NextWave has not acquired,
developed and maintained commercially available state-of-the-art
feature functionality in the Network under Section 2.2 hereof, and
within sixty (60) days of MCI's initial notice thereof the Parties
are unable to reach agreement on a technical solution and
implementation schedule relating thereto.
(B) MCI, may terminate Service in a BTA if that BTA is
classified as a Problem BTA under Article 3.3 (E).
(C) Notwithstanding any provision herein to the contrary,
including Article 10(C), if MCI terminates this Agreement, as specified in this
Article 12.3(A), or terminates Service in a BTA, or portion thereof, under
Article 12.3(B), unless with respect to the termination of Service in a Problem
BTA, such Problem BTA was the immediate, direct result of, and resulted solely
from a Force Majeure, NextWave shall be liable to MCI and its Affiliates for any
and all damages, claims, costs, liabilities and expenses incurred by MCI or its
Affiliates as a result of the termination of this Agreement or of the Service in
a Problem BTA, including, but not limited to, *___*; in each case arising from
or relating to (a) the retention or attempted retention of Subscribers or
(b) the transition or attempted transition to any other provider(s) of wireless
services. The Parties will use reasonable efforts to mitigate any such damages,
claims, costs, liabilities and expenses. The Parties acknowledge and agree that
Subscriber satisfaction and retention is of the utmost importance. In addition
to the foregoing, if MCI terminates this Agreement pursuant to the terms of this
Article 12.3, NextWave shall pay MCI an amount equal to the remaining balance of
the Credit Reserve.
(D) The Parties agree that in the event that either Party
elects to terminate this Agreement, or Service in a BTA is terminated pursuant
to the terms of this Article 12.3, then NextWave shall continue to provide
Services for a period up to *___* (the "Transition
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*CONFIDENTIAL TREATMENT REQUESTED
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Period") at the current prices, terms and conditions in order for MCI to
transition its Subscribers from the Network; provided, however, if this
Agreement is terminated as a result of a payment default by MCI under Section
5.9 hereof, then the Transition Period shall expire ninety (90) days after
termination. In no event shall the purchase of Services by MCI or its Affiliates
during Transition Period be deemed to extend any applicable cure period or a
waiver of any rights or remedies of MCI pursuant to this Agreement.
12.4 Continuing Obligations. Termination pursuant to the terms of this
Agreement, regardless of cause or nature, and any remedies set forth herein
shall not be the exclusive remedy, shall be without prejudice to any other
rights or remedies of the Parties and shall not terminate any other obligations
which by their terms or their nature survive or should survive termination of
this Agreement. Termination of this Agreement shall not release either Party
hereto from any liability which at the time of termination has already accrued
to the other Party.
12.5 Default. ("Default") hereunder by a Party (the "Defaulting
Party") shall be deemed to have occurred if, within sixty (60) days of the
Defaulting Party's receipt of written notice from a non-defaulting Party (the
"Non-Defaulting Party") of a breach of its obligations under this Agreement (the
"Cure Period"), the Defaulting Party shall have failed to cure such breach. In
the event of such Default, the Non-Defaulting Party may terminate this
Agreement, without liability to the Non-Defaulting Party.
ARTICLE 13 -- *___*
*_________________________________________________________________
_______________________
_______________________*
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*_________________________________________________________
_________________________________________________________*
ARTICLE 14 -- INTELLECTUAL PROPERTY RIGHTS
14.1 Joint Development. If during the Term the Parties desire to
collaborate in the development of technology for use in connection with the
provision of Service, the Parties shall mutually agree upon the funding and
ownership of such technology.
14.2 No Use of MCI 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 MCI or any of its Affiliates.
14.3 No Use of NextWave Intellectual Property Rights. Except as
otherwise contemplated herein, nothing herein shall be deemed to grant to MCI
any right, license or other interest in or under, or right to use, and MCI shall
not use, any patents, copyrights, trade secrets, trademarks, service
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marks, trade names or other similar designation, or any other intellectual
property rights of NextWave or any of its Affiliates.
ARTICLE 15 -- RIGHT OF FIRST REFUSAL
15.1 Transfer of Licenses. If, during the Term, NextWave proposes to
sell or otherwise transfer control or ownership of any License held by NextWave
or its Affiliates, then prior to consummating any such transaction, NextWave or
its Affiliates, as the case may be, shall afford MCI a right of first refusal,
which right of first refusal may be assigned by MCI to any Qualified Entity at
MCI's sole discretion; provided, that in the event such sale or transfer
involves consideration to be paid by a purchaser in a form other than cash, the
consideration to be paid by MCI or its assignee to NextWave shall be an amount
in cash equal to the fair market value of the offeror's consideration; provided,
further that such right of first refusal shall not apply to (i) the acquisition
of all the outstanding shares of NextWave or NextWave Telecom Inc., whether by
sale of stock, merger or otherwise, or (ii) to a transaction involving the
swapping or exchange of Licenses which does not result in a net reduction of
more than one percent (1%) of the POPs represented by Initial Licenses.
15.2 Notice of Sale. In the event that NextWave or any of its
Affiliates proposes to sell or otherwise transfer control or ownership of a
License for which MCI has a right of first refusal under this Article 15.1,
NextWave shall deliver written notice of such proposed sale to MCI stating its
bona fide intention to sell or transfer control of the License, which notice
shall specify the price and material terms upon which NextWave proposes to sell
such License ("Notice of Sale"). MCI, or an assignee of MCI, may within sixty
(60) days after the delivery of the Notice of Sale, elect to purchase, at the
price and on the terms specified in the Notice of Sale (subject to the
provisions contained in Article 15.1 regarding non-cash payment by a
third-party), by delivery of a written notice of such election to NextWave
("Notice of Election to Acquire"). Such Notice of Election to Acquire shall, if
applicable, name any assignee that will be the acquiring party and shall confirm
the acquiring party's eligibility under applicable FCC rules and agreement to
pay the License purchase price in cash. If MCI elects to acquire a License
pursuant to the delivery of the Notice of Election to Acquire, then the purchase
agreement for the acquisition of such License shall be executed within sixty
(60) days of MCI's delivery for the Notice of Election to Acquire, with the
closing of the acquisition to occur on the later of (i) thirty (30) days
thereafter or (ii) such period of time which is five (5) days after any
necessary governmental approvals or consents have been obtained. If MCI does not
elect to acquire such License, then NextWave may proceed to sell or transfer the
License to a third-party on terms no less favorable than those stated in the
Notice of Sale, provided that if the closing of such sale does not occur within
the later of (i) one hundred fifty (150) days after the delivery of the notice
of sale or transfer and (ii) such period of time which is five (5) days after
any necessary governmental approvals or consents have been obtained, NextWave
shall again comply with this Article 15.2 prior to selling or transferring any
License.
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15.3 Continuation of Service. If NextWave sells or otherwise transfers
control or ownership of any License held by NextWave, then MCI may at its option
require that NextWave obligate the transferee or any purchaser to continue, for
a period expiring on the later of (i) the expiration of the Term and (ii) thirty
(30) months after the consummation of such sale or transfer, to provide Service
upon like terms and conditions as set forth in this Agreement.
15.4 Sale of NextWave. In the event of the sale of NextWave Telecom
Inc. or NextWave, whether by sale of stock, merger or otherwise, then MCI may at
its option (i) terminate this Agreement, or (ii) require that NextWave obligate
the transferee or any purchaser to continue, for a period expiring on the later
of (x) the expiration of the Term, and (y) thirty (30) months after the
consummation of such sale or transfer, to provide Service upon like terms and
conditions as those set forth in this Agreement.
ARTICLE 16 -- TRANSFER ASSISTANCE
It is the intent of the Parties that at the expiration or termination of
this Agreement, NextWave will cooperate with MCI to assist with the orderly
transfer of the service, functions and operations provided by NextWave hereunder
to another PCS provider or providers or MCI itself. Prior to expiration or
termination of the Agreement, MCI may request NextWave to perform and, if so
requested, NextWave shall perform (except in the event of a termination due to a
failure by MCI to reasonably pay amounts due and payable under this Agreement)
services upon terms and conditions mutually agreed upon by the Parties in
connection with transferring Subscribers to another Local Wireless Operator or
MCI's network ("Transfer Assistance"). Transfer Assistance shall be provided for
up to thirty (30) months after the effective date of expiration or termination
of this Agreement.
ARTICLE 17 -- NON-SOLICITATION
17.1 NextWave Non-Solicitation. During the Term (and any extension
thereof) and for two (2) years thereafter, in the absence of MCI's prior written
consent, NextWave and its Affiliates will not, directly or indirectly, (i) use
any information generated by MCI or NextWave (relating to any information
generated by NextWave in its performance hereunder) or received from MCI to
solicit, market or otherwise contact current or former Subscribers for any
purpose whatsoever, or (ii) solicit or encourage any employee of MCI or its
Affiliates to leave the employment of MCI or its Affiliates, as the case maybe,
except with respect to subclause (ii) pursuant to a general solicitation of
NextWave not directed at the employees of MCI or its Affiliates or in the event
that an employee of MCI or its Affiliates, in the absence of any action by
NextWave (or its representatives or agents) in violation of the provisions of
this Article 17, independently approaches NextWave regarding employment.
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17.2 MCI Non-Solicitation. During the Term (and any extension thereof)
and for two (2) years thereafter, in the absence of NextWave's prior written
consent, MCI and its Affiliates will not, directly or indirectly, (i) use any
information generated or received from NextWave to solicit, market or otherwise
contact any current or former NextWave customer for any purpose whatsoever, or
(ii) solicit or encourage any employee of NextWave or its Affiliates to leave
the employment of NextWave or its Affiliates, as the case may be, except with
respect to subclause (ii) pursuant to a general solicitation of MCI not directed
at the employees of NextWave or its Affiliates or in the event that an employee
of NextWave or its Affiliates, in the absence of any action by MCI (or its
representatives or agents) in violation of the provisions of this Article 17,
independently approaches MCI regarding employment.
ARTICLE 18 -- NONINFRINGEMENT
The Parties represent and warrant that they will perform their
responsibilities under this Agreement in a manner that does not knowingly
infringe or misappropriate any patent, trade secret, copyright or other
proprietary right of any third-party.
ARTICLE 19 -- INSURANCE
When this Agreement requires performance by employees or subcontractors
of MCI or NextWave on the other Party's premises, the performing Party shall
carry and maintain Worker's Compensation and Employer's Liability Insurance
covering its employees or subcontractors engaged in such performance in amounts
no less than required by law in the applicable location.
ARTICLE 20 -- DISPUTE RESOLUTION/ARBITRATION
20.1 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 MCI 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 20.2.
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20.2 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 20. The costs of arbitration,
including the fees and expenses of the arbitrator, shall be shared equally by
the Parties unless the arbitration 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.
ARTICLE 21 -- MISCELLANEOUS
21.1 General Provisions.
21.2 Warranty. NextWave represents and warrants that all services
rendered in connection with the provision of Services hereunder will be
performed in a workmanlike manner in accordance with industry standards and the
Technical Specifications.
21.3 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.
21.4 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 part of each Party; and
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(C) this Agreement has been duly executed and delivered by such Party
and is a valid and binding obligation of such Party, enforceable against it in
accordance with its terms.
21.5 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 MCI:
MCI Telecommunications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
MCI Telecommunications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: General Counsel
Fax: (000) 000-0000
If to NextWave:
NextWave Personal Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
NextWave Personal Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
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If to NextWave Telecom Inc.:
NextWave Telecom Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
NextWave Telecom 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 as such time as it
is delivered to the addressees (with the return receipt, the delivery receipt or
affidavit of messenger, or the facsimile answerback being deemed conclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
21.6 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 MCI may assign this Agreement to any of its Affiliates without the consent
of NextWave. For purposes of this subsection only, the term "Affiliates" shall
mean an entity under common control, controlling or controlled by MCI; 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.
21.7 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.
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21.8 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
their terms, whether or not listed, shall survive such termination: Articles 6,
9, 10, 11, 12, 14, 17, 18, and 20 and Articles 21.3, 21.5, 21.7, 21.8, 21.13,
21.14, 21.16 and 21.17.
21.9 Entire Agreement. This Agreement, which includes the attached
Schedules, constitutes the entire agreement and understanding between the
Parties hereto in connection with the subject matter hereof, and supersedes and
cancels all previous negotiations, commitments and writings with respect thereto
including that certain confidentiality agreement executed by the Parties on
January 10, 1996.
21.10 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 binds any Party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement.
21.11 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 stated 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.
21.12 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.
21.13 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.
21.14 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).
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21.15 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.
21.16 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.
21.17 Specific Performance. The obligations of the Parties under
Article 9 of this Agreement are unique. If any Party should be in Default under
Article 9 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 Party may
xxx in equity for specific performance and the Defaulting Party expressly waives
the defense that a remedy in damages would be adequate.
21.18 Surcharge Exemption. When applicable, NextWave shall certify that
any special access lines used in connection with the provision of Services under
this Agreement terminate in a device not capable of interconnecting MCI's
service with the local exchange carriers and thus are exempt from the special
access surcharge.
21.19 Regulatory Compliance. Notwithstanding any provision in this
Agreement to the contrary, NextWave shall not be obligated to furnish MCI with
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.
21.20 Expiration of Term. Upon expiration of the Term and any extension
thereof, MCI shall be fully subject to all the terms and conditions, including
standard service rates, set forth in the tariff, if any, for NextWave service
received by MCI after such expiration; provided however, if NextWave is required
to tariff the services provided hereunder, the terms of such tariff shall not be
inconsistent with nor less favorable than the terms of this Agreement.
21.21 Cooperation. NextWave shall cooperate fully with MCI and shall
use all reasonable efforts to take, or cause to be taken, all action necessary,
proper or advisable under applicable laws and regulations, (i) to fulfill its
obligations under this Agreement and to carry out fully the transaction
contemplated hereby; (ii) assist MCI in its effort to be recognized by
governmental agencies, NANPA, and other relevant Persons as a "Commercial Mobile
Radio Service Provider" as such term is defined in the applicable FCC rules; and
(iii) support MCI in its positions with governmental
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regulatory bodies or other Persons which enable MCI to fully realize the
benefits (economic or otherwise) afforded to MCI hereunder.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
NEXTWAVE PERSONAL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman, President and CEO
MCI TELECOMMUNICATIONS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
NextWave Telecom Inc. hereby guarantees the prompt
performance of each and every duty and obligation of
NextWave Personal Communications, Inc. under this Agreement.
NEXTWAVE TELECOM INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman, President and CEO
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SCHEDULE 1
TECHNICAL SPECIFICATIONS
All capitalized terms not otherwise defined herein shall have the meaning set
forth in the Agreement.
1. BACKGROUND & DEFINITIONS
This specification defines the interconnection required between the Network and
the MCI intelligent network required to support quality, capacity and coverage
requirements for the purchased Airtime. Figure 1 depicts the interconnection
architecture of NextWave's Mobile Switching Center ("MSC") with the following
MCI intelligent network elements:
- Home Location Register ("HLR") - An intelligent network platform
maintaining Subscriber profile information for MCI Subscribers.
- Authentication Center (AC) - An intelligent network platform supporting
the authentication of MCI Subscribers on NextWave's and other networks.
- Wireless Enhanced Services Platform (XXXX) - An intelligent network
platform for providing enhanced wireless services, such as voice
messaging, short message service, trial services, and new advanced
services for select customers. These services are provided at the XXXX
directly, or by forwarding the call to MCI's other Intelligent Network
service elements.
- MCI's nationwide SS7 signaling network - This STP network provides
signaling interconnection between the network elements of NextWave, MCI,
other IXC and Local networks, and other local Wireless Operators for
roaming situations.
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SCHEDULE 1
FIGURE 1: NETWORK ELEMENTS INVOLVED IN INTERCONNECTION
[GRAPHIC OMITTED]
2. GENERAL REQUIREMENTS
NextWave and MCI intelligent network interconnection will adhere to the
following general requirements:
*___*
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SCHEDULE 1
- NextWave will route Emergency calls to the proper authority.
- Lawful Intercept activity will be performed by NextWave.
- MCI will obtain numbers for Subscribers, in full NPA-NXX blocks. If
MCI is unable to obtain these numbers directly, NextWave will use best
efforts to obtain the numbers on behalf of MCI.
- *___*
- NextWave will provide points of presence (excluding cell sites and
base station controllers) for interconnection between MSCs and MCI's
WESPs. There may be direct interconnect between MCI WESPs and other
locations in NextWave's Network where technically feasible and mutually
acceptable based on commercially reasonable cost determinations.
3. REQUIREMENTS OF THE MSC
The following requirements will be supported by NextWave's Network for
interfacing with the MCI intelligent network elements. Initial NextWave Network
deployments will support, at a minimum, the following subset of IS-41 Rev. C
features:
*___*
Specific implementation of these features and of any subsequent features will be
defined as part of a separate service level agreement. That agreement will
address, among other aspects, the scope, scheduling, resources, and
responsibilities of the Parties.
NextWave will make all reasonable efforts to support additional features within
nine (9) months after commercially implemented software and hardware is
available per the progression of the IS-41 standard.
- IS-41 Signaling - NextWave will interface with the following MCI
intelligent network elements via the IS-41 protocol:
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*___*
- MSC software revision levels will be managed to support consistent
features throughout the markets covered by NextWave's Network.
- Call Origination:
*___*
- Emergency (911/E911) and Lawful Intercept calls will be handled by
NextWave at the MSC, and not forwarded to MCI trunk groups. MCI
and NextWave will cooperate to comply with 911/E911 regulations as
mandated by local/state public agencies and the FCC.
*___*
- The following capabilities will be defined by MCI, in close consultation
with NextWave and implementation specifications will be included as part
of a separate service level agreement. NextWave will work with its
Network equipment provider(s) to secure the required capabilities to
support these features:
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4. INTERFACE REQUIREMENTS
The following sections detail the interface requirements between NextWave's
Network and the MCI intelligent network. These interfaces are based on both
published and de facto industry standard interfaces and interconnection
requirements.
4.1 HLR/AC Interface
The MSC will communicate using the most current commercially available
IS-41 protocol with the MCI-provided Home Location
Register/Authentication Center (HLR/AC) when serving MCI Subscribers.
*__________________________________________
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4.2 XXXX Interface
The MSC and the XXXX must be able to route calls to each other for
enhanced voice services call setup. This requires call setup signaling
and voice trunk connectivity. *___*
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*___*
5. QUALITY OF SERVICE
5.1 Coverage Area
*___*
Upon request by MCI, NextWave will provide coverage maps depicting the
geographic area that correspond to the three above coverage areas.
5.2 Air Interface Capacity
NextWave will ensure that co-channel interference and other factors are
mitigated such that sufficient air interface channel capacity is
available to provide Services to the projected number
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of Subscribers in each market in accordance with MCI's Forecast,
described in Section 2.3 of the Airtime Agreement and the service
quality defined herein.
5.3 Handset Compatibility
NextWave Network will support handsets of MCI's choice, provided that
the handsets have been certified by recognized standards or
certification bodies as compliant with domestic PCS interface standards
and have been demonstrated to be fully compatible with one other
domestic CDMA network.
5.4 Bearer Service Capability
In addition to voice services, NextWave will support bearer services,
such as Group 3 facsimile and data, that are operating in a commercial,
revenue-bearing environment.
5.5 *___*
5.6 *___*
5.7 *___*
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5.8. *__________________________________________
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*__________________________________________
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6. OPERATIONS INTERFACE REQUIREMENTS
The following areas will be further addressed via more specific Service Level
Agreements, however the basic required interfaces between NextWave and MCI are:
6.1 Traffic/Billing
*__________________________________________
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6.2 Network/Trouble Management
*___*
6.3 General Service Level Agreement and Operations Support
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APPENDIX A
A.1 WIRELESS NETWORK INTERFACE STANDARDS
IS-41-C
EIA/TIA/IS-41.1-C: Cellular Radiotelecommunications Intersystem
Operations: Functional Overview - February, 1996.
EIA/TIA/IS-41.2-C: Cellular Radiotelecommunications Intersystem
Operations: Intersystem Hand-off Information Flows - February, 1996.
EIA/TIA/IS-41.3-C: Cellular Radiotelecommunications Intersystem
Operations: Automatic Roaming Information Flows - February, 1996.
EIA/TIA/IS-41.4-C: Cellular Radiotelecommunications Intersystem
Operations: Operations, Administration, and Maintenance Information
Flows and Procedures - February, 1996.
EIA/TIA/IS-41.5-C: Cellular Radiotelecommunications Intersystem
Operations: Intersystem Signaling Protocols - February, 1996.
EIA/TIA/IS-41.6-C: Cellular Radiotelecommunications Intersystem
Operations: Intersystem Signaling Procedures - February, 1996.
IS-52
EIA/TIA/IS-52: Uniform Dialing Procedures and Call Processing
Treatment for Use in Cellular Radiotelecommunications - November, 1989.
IS-52-A
EIA/TIA/IS-52-A: Uniform Dialing Procedures and Call Processing
Treatment for Use in Cellular Radiotelecommunications - When Published.
IS-53
EIA/TIA/IS-53: Cellular Features Description - August, 1991.
IS-53-A
EIA/TIA/IS-53-A: Cellular Features Description - May, 1995.
IS-93
EIA/TIA/IS-93: Cellular Radiotelecommunications Ai -Di Interface
Standards - October, 1993.
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A.2 SS7 INTERFACE DOCUMENTS
TR-NWT-000246: Xxxx Communications Research Specification of Signaling
System Number 7 (SS7), Issue 3 contains the proposed generic
requirements specifying SS7 protocol and architecture.
TR-NWT-000082: Signaling Transfer Point Generic Requirements, Issue 5
provides generic requirements and objectives for the XXX.
XX-XXX-000000: Switching System Requirements for Call Control Using the
Integrated Services Digital Network User Part (ISDNUP).
TR-TSY-000394: Switching System Generic Requirements for Interexchange
Carriers using the Integrated Services Digital Network User Part
(ISDNUP).
TR-NWT-000444: Switching System Generic Requirements Supporting ISDN
Access Using the ISDN User Part.
ANSI T1.114: Signaling System Number 7 (SS7)-Transaction Capabilities
Application Part (TCAP).
ANSI T1.112: Signaling System Number 7 (SS7)-Signaling Connection
Control Part (SCCP).
ANSI T1.111: Signaling System Number 7 (SS7)- Message Transfer Part
(MTP).
A.3 AIR INTERFACE STANDARDS
ANSI J-STD-008: Personal Station - Base Station Compatibility
Requirements for 1.8 to 2.0 GHz Code Division Multiple Access (CDMA)
Personal Communications Systems.
A.4 NETWORK MANAGEMENT
ANSI T1.227: Extensions to GNM for Interfaces between Operations
Systems across Jurisdictional Boundaries to support Fault Management -
Trouble Administration.
ANSI T1.228: OAM&P - Services for Interfaces between Operations Systems
across Jurisdictional Boundaries to support Fault Management - Trouble
Administration.
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