Exhibit 10.19.1
AMENDMENT TO NETWORK SERVICES AGREEMENT
This Amendment to Network Services Agreement is dated as of August 20, 2001
(the "Effective Date") by and among West Virginia PCS Alliance, L.C., a Virginia
limited liability company, Virginia PCS Alliance, L.C., a Virginia limited
liability company (collectively, the "Alliances"), and Horizon Personal
Communications, Inc., an Ohio corporation ("Manager").
Recitals
A. The Alliances and Manager entered into a Network Services Agreement,
dated as of August 12, 1999, as amended on July 18, 2000 (as so amended, the
"Agreement").
B. Upon the terms and conditions of this Amendment, the Alliances and
Manager desire to amend the Agreement.
NOW, THEREFORE, in consideration of the provisions contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows (with all capitalized terms,
which are not otherwise defined in this Amendment, having the meanings ascribed
to them in the Agreement):
1. 3G Implementation.
Upon the terms and conditions of this Section 1, the Alliances agree to
implement 3G1XRTT technology throughout the Alliances' Network (the "3G
Implementation") in accordance with the specifications set forth on Exhibit 1
attached to this Amendment (the "Specifications"), and that Exhibit 1 will be
deemed to be added to Schedule 7.4.1 of the Agreement. The Alliances agree that
they will complete the 3G Implementation in accordance with the Specifications
on or before the dates set forth below:
(a) With respect to all existing cell sites within the City/Census Areas
set forth below, and all additional cell sites within such City/Census Areas
which are commercially launched on or before June 30, 2002, the 3G
Implementation date is June 30, 2002:
VA BTA City/Census Area
------ ----------------
Charlottesville Charlottesville
Danville Danville
Lynchburg Lynchburg
Madison Heights
Martinsville Martinsville
Roanoke Roanoke
Blacksburg
Christiansburg
Forest (near Lynchburg)
Radford
Salem
Vinton
Lexington
Staunton-Waynesboro Staunton
Waynesboro
WV BTA City/Census Area
------ ----------------
Beckley Beckley
Bluefield Bluefield
Princeton
Charleston Charleston
Cross Lanes
▇▇▇▇▇▇
Hurricane
South Charleston
St Albans
Mt. Hope
Oak Hill
Huntington-Ashland Huntington
Ashland
Barboursville
Clarksburg-Elkins Clarksburg
Bridgeport
Fairmont Fairmont
Morgantown Morgantown
(b) With respect to all other cell sites which are in existence as of the
Effective Date and all additional cell sites which are commercially launched on
or before August 15, 2003 and which are not located within the City/Census Areas
set forth in paragraph (a), the 3G Implementation date is August 15, 2003.
Attached to this Amendment as Exhibit 2 are maps which identify each cell site
and its respective 3G Implementation date. [Note: the map will be revised as
follows: (i) 8 sites along the Charleston-Huntington corridor will be included
in Phase I, (ii) 4 sites at the FBI center in Clarksburg will be included in
Phase I, (iii) 1 site in Lexington will be included in Phase I, and (iv) Phase
II and Phase III will be collapsed into Phase II, which will be completed by
August 15, 2003]. To the extent there is any inconsistency between the language
of paragraphs (a) and (b), on the one hand, and the maps attached as Exhibit 2,
on the other hand, the maps will govern. Completion of the 3G Implementation by
the dates set forth herein will not be deemed to be an Extraordinary Network
Upgrade for purposes of the Agreement.
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2. Modification of Coverage Area Requirements.
2.1 Bluefield BTA
Schedule 7.7 to the Agreement is hereby amended to provide that (a) the
requirement to extend coverage along Interstate 77 from the northern BTA
boundary to the north end of the tunnel immediately north of Virginia Exit 66 is
extended from October 1, 2001 to November 1, 2001; and (b) the requirement to
extend coverage along U.S. Route 460 from I-77 to Bluefield, WV, including full
coverage of the cities of Bluefield and Princeton is extended to June 30, 2002.
2.2 Beckley BTA
Schedule 7.7 of the Agreement is hereby amended to provide that the
requirement to expand coverage to the New River Gorge Bridge will be extended
until June 30, 2002.
3. Modification of Pricing.
3.1 Change in Pricing.
Upon the terms and conditions set forth in Section 3.2 below, the parties
agree that Schedule 2 of the Agreement is hereby modified, effective for the
period beginning on July 1, 2001 and continuing until December 31, 2003, to
provide that the "Standard Wholesale Price for Horizon Customers" and the "Price
for Customers of Sprint PCS and its Affiliates" shall be as set forth in the
chart below (the "Pricing Chart"). The dollar amounts set forth in the column
entitled "Monthly Fee" represent the minimum fees that shall be paid by Manager
to the Alliances for each of the months listed. The Monthly Fee shall represent
full payment for up to the number of Minutes of Use ("MOUs") as set forth in the
column entitled "MOU Allowance". In the event that, in any calendar month, the
Minutes of Use exceed the "MOU Allowance", Manager shall pay a per minute amount
for each of the Minutes of Use in excess of the MOU Allowance at the per minute
rate set forth in the column entitled "Variable Price/MOU".
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[***] CONFIDENTIAL TREATMENT REQUESTED
Prices for Horizon Local & Sprint Roaming (excl. LD)
Fixed Variable
Monthly Fee MOU (MM) Price/MOU
Period Fee ($MM) Allowance > MOU Allowance
Jul-01 $[***] 28.2 $0.0350
Aug-01 $[***] 29.1 $0.0350
Sep-01 $[***] 30.0 $0.0350
Oct-01 $[***] 30.5 $0.0350
Nov-01 $[***] 30.9 $0.0350
Dec-01 $[***] 31.4 $0.0350
Jan-02 $[***] 31.6 $0.0350
Feb-02 $[***] 32.1 $0.0350
Mar-02 $[***] 33.4 $0.0350
Apr-02 $[***] 35.1 $0.0350
May-02 $[***] 37.8 $0.0350
Jun-02 $[***] 40.5 $0.0350
Jul-02 $[***] 34.2 >34.2 to 47.3 MM MOU =
$.0550; > 47.3 MM MOU =
$.0350
Aug-02 $[***] 36.0 >36.0 to 49.1 MM MOU =
$.0550; > 49.1 MM MOU =
$.0350
Sep-02 $[***] 37.8 >37.8 to 50.9 MM MOU =
$.0550; > 50.9 MM MOU =
$.0350
Oct-02 $[***] 41.5 >41.5 to 54.5 MM MOU =
$.0550; > 54.5 MM MOU =
$.0350
Nov-02 $[***] 43.3 >43.3 to 54.5 MM MOU =
$.0550; > 54.5 MM MOU =
$.0350
Dec-02 $[***] 46.9 >46.9 to 54.5 MM MOU =
$.0550; > 54.5 MM MOU =
$.0350
Jan-03 $[***] 60.5 $0.0300
Feb-03 $[***] 60.5 $0.0300
Mar-03 $[***] 60.5 $0.0300
Apr-03 $[***] 60.5 $0.0300
May-03 $[***] 60.5 $0.0300
Jun-03 $[***] 60.5 $0.0300
Jul-03 $[***] 60.5 $0.0300
Aug-03 $[***] 60.5 $0.0300
Sep-03 $[***] 60.5 $0.0300
Oct-03 $[***] 79.7 $0.0300
Nov-03 $[***] 79.7 $0.0300
Dec-03 $[***] 79.7 $0.0300
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3.2 Pricing Conditions.
Subject to the further provisions of this Section 3.2, Manager waives its
rights under Section 6.6.2 to propose any further price reductions through
December 31, 2003. After December 31, 2003, Manager shall have the right to
pursue its rights pursuant to Section 6.6.2. Notwithstanding the new pricing
provisions of the Pricing Chart, in the event that, during any calendar month,
the Alliances' Retail Yield is lower than the then-applicable "Wholesale
Price/MOU", the parties shall work together in good faith to adjust the
Wholesale Price/MOU so that it is equal to the Retail Yield for such calendar
month. For purposes of this Agreement, the term "Retail Yield" shall equal the
result of dividing the aggregate monthly subscriber revenue for the Alliances by
the aggregate number of minutes of use attributed to such subscriber revenue for
the calendar month. For purposes of this Agreement, the term "Wholesale
Price/MOU" shall equal the result of dividing the aggregate monthly expense
incurred by Manager and paid to the Alliances pursuant to the Pricing Chart by
the aggregate number of minutes of use attributed to such expense for the
calendar month. If, at any time, Manager believes in good faith that the Retail
Yield for a calendar month would trigger the adjustment set forth in this
Section 3.2, Manager will give written notice to the Alliances, and the
Alliances will provide a good faith written calculation of the Retail Yield for
such month, within 30 days of receipt of such notice.
3.3 Exclusivity and Overbuild Restrictions.
Manager agrees that Manager and Sprint PCS will exclusively use the
Alliances' Network in the Markets through December 31, 2003 and will not
initiate construction of a PCS network in any Market prior to December 31, 2002,
except as contemplated by Section 2(a) of the First Amendment to Sprint PCS
Build-Out Agreement, dated as of July __, 2001, among Sprint Com, Inc. and the
Alliances (the "Exclusivity and Overbuild Restrictions"); provided, however,
that if Manager exercises its termination rights under Sections 14.1 or 14.3 of
the Agreement for a Market(s), then the Exclusivity and Overbuild Restrictions
will not apply to such Market(s), and Manager's rights to receive price
discounts under Section 14.4 shall be applied as follows: the Monthly Fees as
set forth in the Pricing Chart will be allocated between (a) Monthly Fees
associated with the Market(s) for which Manager has exercised such termination
rights (the "Terminated Markets Monthly Fee"), and (b) Monthly Fees associated
with all other Markets (the "Retained Markets Monthly Fee"). For allocation
purposes, it will be assumed that each Market accounts for 1/13th of the total
Monthly Fees. Applicable price discounts pursuant to Section 14.4 will apply
only to the Terminated Markets Monthly Fee, and will not apply to either the
Retained Markets Monthly Fee or the Variable Price/MOU for incremental Minutes
of Use in excess of the MOU Allowance.
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3.4 Consequence of Violating Exclusivity and Overbuild Restrictions.
If Manager violates the Exclusivity and Overbuild Restrictions, the Monthly
Fees set forth in the Pricing Chart will be increased by 15% retroactively and
prospectively throughout the pricing term of July 1, 2001 through December 31,
2003. In addition, from and after the date of such violation, the provisions of
Section 3.2 shall not apply.
4. Resale Services to Alliances.
In accordance with Section 15.1 of the Agreement, effective August 1, 2001,
Horizon shall provide PCS services in the Portsmouth, OH BTA and the
Parkersburg-Marietta, OH BTA, and in Gallia and Greenup Counties in the
Huntington, WV-Ashland, KY BTA (excluding the single site in Greenup County that
was transferred to WV Alliance on August 12, 1999) to the Alliances and the
NTELOS Entities at a standard wholesale price of $0.078 per minute, subject to
the terms and conditions set forth therein.
In accordance with Section 15.2 of the Agreement, effective August 1, 2001,
Horizon shall provide PCS services to the NTELOS Entities in the Chillicothe, OH
BTA, the Athens, OH BTA and the Zanesville-Cambridge, OH BTA, and Horizon agrees
to expand the provision of such PCS services to each market included within the
Management Agreement. Horizon agrees to provide such PCS services to the NTELOS
Entities for $0.20 per minute, and U.S. long distance for $.10 per minute.
Except as amended by this Section 4, the provision of such services shall be
subject to the terms and conditions set forth in Section 15.2 of the Agreement.
5. Reports.
With respect to the Alliances' "Buildout Plan" as contemplated by the First
Amendment to the Sprint PCS Buildout Agreement, between Sprint PCS and the
Alliances (the "Sprint/NTELOS Amendment"), the Alliances agree that Manager will
be provided with the bi-weekly written status reports regarding the Alliances'
progress towards completion of the "Buildout Plan" and will be provided notice
of, and the right to participate in, the telephonic status reports, all as
provided in the Sprint/NTELOS Amendment.
6. Miscellaneous.
The terms and provisions of this Amendment control, supersede and amend any
conflicting terms and conditions contained in the Agreement. Except for the
express modifications and agreements made in this Amendment, the Agreement
continues in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment, acting
through their duly authorized agents, as of the Effective Date.
WEST VIRGINIA PCS ALLIANCE, L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman
VIRGINIA PCS ALLIANCE, L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman
HORIZON PERSONAL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and CEO - Horizon Personal
Communications Inc.
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