TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (this "Agreement") is made and entered
into as of the Stage I Closing date under the Alliance Agreement (the
"Effective Date"), by and between Cellco Partnership, a Delaware general
partnership, for and on behalf of itself and its affiliates (collectively
referred to herein as "CELLCO"), and Vodafone AirTouch Plc, an English public
limited company, for and on behalf of itself and its affiliates (collectively
referred to herein as "VODAFONE"). CELLCO and VODAFONE are each referred to
herein as a Party, and collectively as the Parties.
R E C I T A L S
WHEREAS, Vodafone AirTouch Plc and Xxxx Atlantic Corporation ("Xxxx
Atlantic") entered into the U.S. Wireless Alliance Agreement dated September
21, 1999, under which Vodafone AirTouch Plc and Xxxx Atlantic agreed to convey
certain assets to CELLCO (the "Alliance Agreement");
WHEREAS, VODAFONE will continue to conduct business in the United States
after the Stage I Closing contemplated by the Alliance Agreement and defined in
the Alliance Agreement;
WHEREAS, as a part of the Alliance Agreement it is contemplated that
VODAFONE will convey all right, title, and interest to certain assets to CELLCO
at the time of the Stage I Closing;
WHEREAS, each Party will need certain services from the other during the
term hereof on the terms set forth below;
NOW, THEREFORE, in consideration of the premises hereof and the mutual
promises contained herein and intending to be legally bound, the parties agree
as follows:
ARTICLE I
TRANSITION SERVICES
1.1 Transition Services. This Agreement sets forth the terms and
conditions for the provision by each Party to the other of various transition
services and products, as described herein and in Schedule A attached hereto
(the "Transition Services").
1.2 Provision of Transition Services. To the extent commercially
reasonable, the Parties will work together and begin the process of migrating
off of the relevant Transition Service such that the completion of the
migration of the Transition Services shall occur as soon as possible after the
Effective Date. The Transition Services will
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begin on the Effective Date and continue through the expiration of the Term, as
such term is defined in Section 2.1 below. The Party providing services shall
provide or cause to be provided each of the Transition Services for the time
set forth in Schedule A, except (a) as automatically modified by termination of
a Transition Service by a receiving Party in accordance with this Agreement,
(b) as otherwise agreed to by the parties in writing, or (c) until the
termination of this Agreement.
1.3 Purchase of Additional or Modified Transition Services. From time to
time, one Party may request the other to provide additional or modified
Transition Services that are not described in Schedule A. The Party receiving
the request will use commercially reasonable efforts to accommodate any
reasonable requests, but is not bound to provide such additional or modified
services unless it agrees to do so.
1.4 Joint Procurement. During and after the Term of this Agreement, as
CELLCO is negotiating volume purchase agreements for goods and services in
connection with the Transitional Services described in Schedule A that
VODAFONE's United States business may also wish to purchase, CELLCO will use
commercially reasonable efforts to permit VODAFONE's United States business to
purchase under such volume purchase agreements for use in the United States..
VODAFONE shall (i) periodically inform CELLCO of the types of such volume
purchase agreements in which it wishes to be included, (ii) be solely liable
for all obligations for its purchases under such agreements and deliver to
CELLCO a written acknowledgment of the same prior to CELLCO entering into an
arrangement including goods for VODAFONE's United States business, and (iii)
indemnify CELLCO against all third-party claims arising out of or related to
such VODAFONE purchases. VODAFONE acknowledges that it would not be
commercially reasonable, for example and without limitation, to insist that it
sign the CELLCO contract with the Vendor or for Cellco to expend efforts with
respect to a vendor that would be adverse to or would not want to include
VODAFONE's United State Business for any reason. For purposes of this
Agreement, "VODAFONE's United States Business" means the business of the
Headquarters of the US/Asia-Pacific Region, Globalstar USA, Global Technology
Group and Global Internet Group of VODAFONE..
ARTICLE II
TERM AND CONTACT PERSONS
2.1 Term. The term (the "Term") of this Agreement shall commence as of the
Effective Date and shall continue until the earlier of each Party migrating off
of all the Transition Services it is allowed to receive hereunder or 11months
after Stage I Closing, with each Party having a right to one 30 day extension
upon notice to the other, subject to earlier termination pursuant to Article IX
or written agreement otherwise by the parties. The end of the Term is also
referred to herein as the "Expiration Date" of this Agreement. Section 9.2
hereof enables a receiving Party to terminate any one or more Transition
Services upon 30-days advance notice to the providing Party without affecting
the Term.
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2.2 Contact Persons. Each Party shall appoint a person or persons for the
purpose of coordinating the provision of the Transition Services.
ARTICLE III
COMPENSATION AND PAYMENT ARRANGEMENTS
FOR TRANSITION SERVICES
3.1 Grace Period. There shall be a "grace" period of 120 days from and
after the Effective Date (the "Grace Period"), during which the Parties have
agreed not to charge each other for the provision of Transition Services.
However, the parties will cooperate to expeditiously establish, where
practical, direct billing arrangements with third-party suppliers of Transition
Services, so that charges will be billed directly to the party which incurred
such charges.
3.2 Compensation for Transition Services. Upon expiration of the Grace
Period, unless otherwise provided in Section 3.1 or Schedule A, the total
compensation payable by a receiving Party to a providing Party for each and
every Transition Service shall be an amount equal to the providing Party's (or
its applicable affiliates') total costs, as calculated and determined in
accordance with this Section 3.2 (the "Total Costs"). For purposes of this
Agreement, the Total Costs per each Transition Service, and on a per unit basis
where applicable, shall include all reasonable costs and expenses directly or
indirectly incurred by the providing Party in connection with the performance
of such Transition Service.
3.3 Audit Rights. The receiving Party shall have an annual right to audit,
at its expense and by hiring an outside auditor, all data, records and
information related to the reimbursement of Total Costs under this Agreement,
which audit shall be performed at the same time as the providing Party's annual
audit to minimize the disruption to providing Party's business. Where possible,
Total Costs shall be established by using the providing Party's then-current
cost allocations for such Transition Services.
3.4 Payment Terms. The receiving Party shall pay by electronic funds
transfer or other method satisfactory to the Parties, in full, the undisputed
amount of the monthly invoiced amount within 30 days after the date the
providing Party's monthly invoice was received. The format of such invoice
shall include, without limitation, the applicable Transition Service, the
billing period, applicable rates and/or units, and such other information as
the receiving Party may reasonably request. Any undisputed amount not received
by the payment due date shall be subject to a late payment charge equal to the
balance overdue times the "prime" rate per annum, as announced from time to
time by Bank of America, for the number of calendar days from the payment due
date up to and including the date payment is actually made. Should the
receiving Party dispute any portion of the amount due on any invoice or require
any adjustment to an invoiced amount, the receiving Party shall notify the
providing Party in writing of the nature and basis
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of the dispute and/or adjustment as soon as reasonably possible using the
dispute resolution procedures set forth in Article IV of this Agreement. The
Parties shall use reasonable best efforts to resolve the dispute prior to the
payment due date.
ARTICLE IV
DISPUTE RESOLUTION
4.1 Dispute Resolution Procedures. If a dispute arises between the Parties
with respect to the terms and conditions of this Agreement, or any subject
matter governed by this Agreement (excluding disputes regarding a Party's
compliance with the provisions of Article X or in the case of suit to compel
compliance with this dispute resolution process or with the provisions of this
Article) (a "Dispute") the Parties agree to use and follow this dispute
resolution procedure before initiating any judicial action. At such time as the
dispute is resolved under this Article, interest (at the rate specified in
Section 3.4) shall be paid to the Party receiving the disputed moneys to
compensate for the lapsed time between the date such dispute amount originally
was paid or should have been paid through the date moneys are paid in
settlement of the dispute.
4.2 Claims Procedures. If a Party shall have a Dispute, that Party shall
provide written notification to the other Party in accordance with Section 8.1
of this Agreement, in the form of a claim identifying the issue or amount
disputed and including a detailed reason for the claim. The Party against whom
the claim is made shall respond in writing to the claim within 15 calendar days
from the date of receipt of the claim document. The Party filing the claim
shall have an additional 15 calendar days after the receipt of the response to
either accept the resolution offered by the other Party or request
implementation of the procedures set forth in Section 4.3 (the "Escalation
Procedures"). Failure to meet the time limitations set forth in this Section
will result in implementation of the Escalation Procedures unless otherwise
agreed by the Parties.
4.3 Escalation Procedure. At the written request of a Party involved in
the Dispute and in compliance with Section 4.2, each Party shall appoint a
knowledgeable, responsible representative to meet and negotiate in good faith
to resolve any unresolved disputes or claims arising under this Agreement. The
Parties intend that these negotiations be conducted by experienced business
representatives empowered to decide the issues. The business representatives
will meet and attempt to resolve the Dispute within 15 business days of
receiving the written request. If they can resolve the Dispute within that time
period, it will be memorialized in a written settlement and release agreement,
executed within 5 business days thereafter. If they can not resolve the Dispute
within that time period, then the Parties may resort to judicial action or
other remedies. The Parties may vary the duration and form of this Escalation
Procedure by mutual written agreement.
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ARTICLE V
LIMITATION OF LIABILITY
If a Party shall breach any covenant, agreement, or undertaking required
of it by this Agreement, the liability of such Party shall be limited to actual
damages. Neither Party shall be liable to the other for any indirect, special,
punitive, or consequential damage of any kind whatsoever. ARTICLE VI
INDEMNIFICATION
6.1 General. To the extent not prohibited by law, and except as otherwise
provided in this Agreement, each Party shall indemnify, defend and hold
harmless the other Party from and against any third party loss, cost, injury,
liability, expense or claim caused or arising out of or based upon performance
of the indemnifying Party's obligations hereunder.
6.2 Indemnification Procedure. A Party which is seeking indemnification
pursuant to this Article shall notify the other Party in reasonable detail of
the event(s) giving rise to such claim for indemnification within 15 business
days after the indemnified Party has actual knowledge of such event(s). The
indemnifying Party shall not have any liability to the indemnified Party to the
extent it is materially prejudiced as a result of any delay in notification by
the indemnified Party nor shall the indemnifying Party be responsible for any
additional loss incurred by the indemnified Party due to such delay by the
indemnified Party. The indemnifying Party shall have the right to undertake the
defense of any claim upon delivery of notice to the indemnified Party with
respect to such claim. Such defense shall be made with counsel reasonably
acceptable to the indemnified Party. If the indemnifying Party fails to
undertake the defense of the indemnified Party within such time period, the
indemnified Party may retain its own counsel for such defense, and the
indemnified Party's reasonable attorney's fees and expenses related to such
claim shall be paid by the indemnifying Party. Neither Party shall, without the
consent of the other Party, agree to any non-monetary settlement of the
indemnified claim.
ARTICLE VII
FORCE MAJEURE
Neither Party shall be held liable for any delay or failure in performance
of any part of this Agreement from any cause beyond its reasonable control and
without its fault or negligence, including, but not limited to, acts of God,
acts of civil or military authority, embargoes, epidemics, war, terrorist acts,
riots, insurrections, fires, explosions, earthquakes, nuclear accidents,
floods, strikes, power blackouts affecting facilities other
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than CELLCO facilities of a kind commonly protected by redundant power systems,
unless such redundant power systems are also affected by such Force Majeure
condition. Upon the occurrence of a condition described in this Article, the
Party whose performance is prevented shall given written notice to the other
Party, and the Parties shall promptly confer, in good faith, to agree upon
equitable, reasonable action to minimize the impact, on both parties, of such
conditions.
ARTICLE VIII
NOTICES AND DEMANDS
8.1 Notices. Except as otherwise provided under this Agreement (including
Schedule A), all notices, demands or requests which may be given by any Party
to the other Party shall be in writing and shall be deemed to have been duly
given on the date delivered in person, or sent via telefax, or on the next
business day if sent by overnight courier, or on the date of the third business
day after deposit, postage prepaid, in the United States Mail via Certified
Mail return receipt requested, and addressed as set forth below:
If to CELLCO, to:
Cellco Partnership
000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Controller
With a copy to: General Counsel, at the same address
If to VODAFONE, to:
Vodafone AirTouch Plc
Xxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: President, U.S./Asia Pacific Region
With a copy to: General Counsel, at the same address
8.2 Change of Address. The address to which such notices, demands,
requests, elections or other communications are to be given by either Party may
be changed by written notice given by such Party to the other Party pursuant to
this Section.
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ARTICLE IX
REMEDIES
9.1 Remedy Upon Material Breach. In the event of material breach of any
provision of this Agreement by a Party, the non-defaulting Party shall give the
defaulting Party written notice, and:
(a) If such breach is for non-payment of an amount that is not in
dispute, the defaulting Party shall cure the breach within 15 calendar days of
such notice. If the defaulting Party does not cure such breach by such date,
then the defaulting Party shall pay the non-defaulting Party the undisputed
amount, any interest that has accrued hereunder through the expiration of the
cure period plus an additional amount of interest equal to 2% per annum above
the "prime rate" as announced from time to time by Bank of America for each day
of continuing non-payment. The parties agree that this rate of interest
constitutes reasonable liquidated damages and not an unenforceable penalty.
(b) If such breach is for any other material failure to perform in
accordance with this Agreement, the defaulting Party shall cure such breach
within 30 calendar days of the date of such notice. If the defaulting Party
does not cure such breach within such period, then the defaulting Party shall
pay the non-defaulting Party all of the non-defaulting Party's actual damages,
subject to Article V above.
9.2 Termination of Transition Services and Agreement for Convenience. The
receiving Party shall have the right to terminate any Transition Service, in
whole or in part, upon 30 days prior written notice to the Providing Party. In
the unlikely event that the receiving Party shall not be able to complete its
migration of the Transition Services by the Expiration Date, the receiving
Party shall have the right to request and cause providing Party to provide up
to 30 days of additional Transition Services to receiving Party. If all
Transition Services provided to the receiving Party shall have been migrated or
terminated under this provision prior to the Expiration Date, then receiving
Party shall have the right to terminate this Agreement as to that Party by
giving written notice to the providing Party.
9.3 Transitional Cooperation. The providing Party will give full
cooperation and support to the receiving Party to assure an orderly and
efficient transition.
9.4 Survival Upon Expiration or Termination. The provisions of [OPEN:
Section 1.4,] Article IV (Dispute Resolution), Article V (Limitation of
Liability), Article VI (Indemnification), Article VIII (Notices and Demands),
Article X (Confidentiality), and Article XII (Miscellaneous) shall survive the
termination or expiration of this Agreement unless otherwise agreed to in
writing by both Parties.
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ARTICLE X
CONFIDENTIALITY
10.1 Confidentiality Obligation. All information disclosed by a Party to
the other Party during the negotiations and the Term of this Agreement
("Proprietary Information") (a) shall be the property of the disclosing Party,
(b) shall be used solely for the purposes of administering and otherwise
implementing the terms of this Agreement and (c) shall be protected by the
Party receiving such Proprietary Information in accordance with the terms of
this Article.
10.2 Non-Disclosure Covenant. Each Party agrees that they shall not
disclose any Proprietary Information of the other Party in whole or in part,
including derivations, to any third Party. Proprietary Information shall be
held in confidence by the receiving Party and its employees, contractors or
agents and shall be disclosed to only those of the receiving Party's employees,
contractors or agents who have a need to know it in connection with the
administration and implementation of this Agreement. In the event that such
Proprietary Information is not otherwise already included within the scope of a
confidentiality agreement with such contractors and agents, the receiving Party
shall cause such contractors and agents to comply with the provisions of this
Article.
10.3 Exceptions. Information shall not be deemed Proprietary Information
and the receiving Party shall have no obligation with respect to any such
information which:
(a) is or becomes publicly known through no wrongful act, fault or
negligence of the receiving Party; or
(b) was known by the receiving Party prior to disclosure and the
receiving Party was not under a duty of non-disclosure, or is at any time
developed by the receiving Party independently of any such disclosure; or
(c) was disclosed to the receiving Party by a third Party who was free
of of confidentiality to the Party providing the information; or
(d) is approved for release by written authorization of the disclosing
Party; or
(e) is furnished to a third Party by the disclosing Party without a
similar restriction on the third Party's rights.
10.4 Confidentiality of this Agreement; Protective Arrangements.
(a) The parties acknowledge that this Agreement contains commercially
confidential information that may be considered proprietary by either Party,
and agree to
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limit distribution of this Agreement to those individuals in their respective
companies with a need to know the contents of this Agreement. In no event may
this Agreement be shown to any third parties by VODAFONE or CELLCO without the
prior written consent of the other Party, except as may be necessary by reason
of legal, accounting or regulatory requirements or national stock exchange
rules, in which event the parties agree to exercise diligence in limiting such
disclosure to the minimum necessary under the particular circumstances.
(b) In addition, each Party agrees to give notice to the other Party of
any demands to disclose or provide Proprietary Information received from the
other under lawful process prior to disclosing or furnishing Proprietary
Information, and agrees to cooperate in seeking reasonable protective
arrangements requested by the other Party. In addition, a Party may disclose or
provide Proprietary Information of the other Party requested by a government
agency or national stock exchange having jurisdiction over the disclosing
Party; provided that such Party uses its reasonable good faith efforts to
obtain protective arrangements satisfactory to the Party owning the Proprietary
Information. The Party owning the Proprietary Information may not unreasonably
withhold approval of protective arrangements.
ARTICLE XI
OTHER REPRESENTATIONS, WARRANTIES, AND COVENANTS
11.1 Compliance with Laws. Each Party shall comply, at its own expense,
with the provisions of all applicable municipal requirements and those state
and federal laws that may be applicable to the performance of this Agreement.
11.2 Performance. Each Party represents and warrants that it is
experienced and qualified to perform the Transition Services and that all
Transition Services, shall be performed in a timely, thorough and professional
manner at least at a performance level equal to the level in which the Party
has provided the same or similar services on average in the past and to its own
markets.
11.3 Personnel. Each Party represents and warrants that the Transition
Services will be performed by individuals in a manner providing quality at
standards no lower than the quality provided by that Party on average in the
past and to its own markets.
11.4 Equipment and Software. Each Party shall keep the equipment and
software used to provide the Transition Services in good working order and
repair with sufficient capacity to perform the Transition Services concurrent
with the equipment's and software's other use for that Party, if any.
11.5 Affect on Party's Business and End Users. All Transition Services
shall be performed and completed as soon as reasonably practicable and in a
manner that
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reasonably would not adversely affect the receiving Party's business,
customers, and/or end users.
11.6 Books and Records. All financial records regarding Transition
Services shall be maintained in accordance with generally accepted accounting
principles consistently applied.
ARTICLE XII
MISCELLANEOUS
12.1 Relationship of the Parties. The parties declare and agree that each
Party is engaged in a business that is independent from that of the other Party
and each Party shall perform its obligations as an independent contractor. It
is expressly understood and agreed that nothing contained herein is intended to
create an agency relationship or a partnership or joint venture. Neither Party
is an agent of the other. Neither Party has authority to represent the other
Party as to any matters, except as authorized herein or in writing by the other
Party from time to time.
12.2 Providing Party Employees. The providing Party shall be solely
responsible for payment of compensation to its employees and for any injury to
them in the course of their employment. The providing Party shall assume full
responsibility for payment of all federal, state, and local taxes or
contributions imposed or required under unemployment insurance, social
security, and income tax laws with respect to such persons.
12.3 Assignment. Neither Party may assign, transfer, or convey any right,
obligation or duty, in whole or in part, or of any other interest under this
Agreement, without the prior written consent of the other Party, except that
either Party shall have the right to assign, transfer, or convey its rights,
obligations, and duties to any affiliate or in connection with the Alliance
Agreement and, in the case of Cellco, the GTE Agreement, provided, however,
that any such assignment, transfer, or conveyance shall not relieve such
transferring or assigning Party of liability for its responsibilities and
obligations. All obligations and duties of a Party under this Agreement shall
be binding on all successors in interest and permitted assigns of such Party.
Each Party may use its affiliates or subcontractors to perform the Transition
Services hereunder provided that such use shall not relieve such Party of
liability for its responsibilities and obligations.
12.4 Severability. In the event that any one or more of the provisions
contained herein shall for any reason be held to unenforceable in any respect
under law, such unenforceability shall not affect any other provision of this
Agreement, and this Agreement shall be construed as if such unenforceable
provision or provisions had never been contained herein, unless the removal of
such offending terms or provision materially alters the burdens or benefits of
either of the parties under this Agreement or Schedule A, in which case the
parties will use their commercially reasonable efforts to agree upon an
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enforceable provision which most closely approximates the parties intent in
entering into this Agreement..
12.5 Third Party Beneficiaries. The provisions of this Agreement are for
the benefit of the parties and their affiliates and not for any other person.
Should any third Party institute proceedings, this Agreement shall not provide
any such person with any remedy, claim, liability, reimbursement, cause of
action, or other right.
12.6 Governing Law. Except as otherwise expressly provided in this
Agreement, this Agreement shall be deemed to be a contract made under the laws
of the State of New York and the construction, interpretation, and performance
of this Agreement and all transactions hereunder shall be governed by the
substantive law of such State, without reference to its conflicts of laws
rules.
12.7 Executed in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same document.
12.8 Construction. The headings and numbering of articles, sections and
paragraphs in this Agreement are for convenience only and shall not be
construed to define or limit any of the terms or affect the scope, meaning, or
interpretation of this Agreement or the particular Article or Section to which
they relate. This Agreement and the provisions contained herein shall not be
construed or interpreted for or against any Party because that Party drafted or
caused its legal representative to draft any of its provisions.
12.9 Entire Agreement. This Agreement, including all attachments,
constitutes the entire Agreement between the parties, and supersedes all prior
oral or written agreements, representations, statements, negotiations,
understandings, proposals and undertakings, with respect to the Transition
Services to be provided by the Parties to each other hereunder.
12.10 Amendments and Waivers. This Agreement may be amended only by
written agreement signed by duly authorized representatives of each Party. No
waiver of any provisions of this Agreement and no consent to any default under
this Agreement shall be effective unless the same shall be in writing and
signed by or on behalf of the Party against whom such waiver or consent is
claimed. No course of dealing or failure of any Party to strictly enforce any
term, right or condition of this Agreement shall be construed as a waiver of
such term, right or condition. Waiver by either Party of any default by the
other Party shall not be deemed a waiver of any other default.
12.11 Remedies Cumulative. Unless otherwise provided for under this
Agreement, all rights of termination or cancellation, or other remedies set
forth in this Agreement, are cumulative and are not intended to be exclusive of
other remedies to which the injured Party may be entitled by law or equity in
case of any breach or
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threatened breach by the other Party of any provision in this Agreement. Unless
otherwise provided for under this Agreement, use of one or more remedies shall
not bar use of any other remedy for the purpose of enforcing any provision of
this Agreement.
14.12 Taxes. All charges and fees to be paid to providing Party under this
Agreement are exclusive of any applicable taxes required by law to be collected
from the receiving Party (including, without limitation, withholding, sales,
use, excise, or services tax, which may be assessed on the provision of
Transition Services). In the event that a withholding, sales, use, excise, or
services tax is assessed on the provision of any of the Transition Services
under this Agreement, the receiving Party will pay directly, reimburse or
indemnify providing Party for such tax. The parties will cooperate with each
other in determining the extent to which any tax is due and owing under the
circumstances, and shall provide and make available to each other any resale
certificate, information regarding out-of-state use of materials, services or
sale, and other exemption certificates or information reasonably requested by
either Party.
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[SIGNATURE PAGE OF THE TRANSITION SERVICES AGREEMENT]
IN WITNESS WHEREOF, the parties, acting through their authorized officers,
have caused this Agreement to be duly executed and delivered as of the date
first above written.
CELLCO PARTNERSHIP
By its managing general partner
By: /s/ S. Xxxx Xxxxxx
----------------------------------
Name: S. Xxxx Xxxxxx
Title:
VODAFONE AIRTOUCH PLC
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
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