Exhibit 99.1
CONFIDENTIAL SETTLEMENT MATERIALS
PROTECTED BY DELAWARE RULE EVID.
408
SPRINT/iPCS FORBEARANCE
AGREEMENT
THIS FORBEARANCE AGREEMENT, dated
July 28, 2005 (this “Agreement”), is made and
entered into by and among Sprint Corporation, Sprint Spectrum L.P.,
WirelessCo L.P., Sprint Communications Company L.P., Sprint
Telephony PCS, L.P., and Sprint PCS License, L.L.C. (collectively,
“Sprint”); iPCS, Inc. and iPCS Wireless, Inc.
(collectively, “iPCS”); Horizon Personal
Communications, Inc. (“Horizon”); and Bright
Personal Communications Services, L.L.C. (“Bright” and
together with Horizon and iPCS, the “iPCS
Affiliates”).
RECITALS
A.
iPCS Wireless, Inc. and certain of the Sprint entities
referenced above are parties to a Sprint PCS Management Agreement,
dated as of January 22, 1999, as amended (the “iPCS
Management Agreement”). Horizon and certain of the
Sprint entities referenced above are parties to a Sprint PCS
Management Agreement, dated as of June 8, 1998, as amended
(the “Horizon Management Agreement”). Bright and
certain of the Sprint entities referenced above are parties to a
Sprint PCS Management Agreement, dated as of October 13, 1999,
as amended (the “Bright Management Agreement” and
together with the iPCS Management Agreement and the Horizon
Management Agreement, the “Management
Agreements”). iPCS Wireless, Inc., Horizon and
Bright are direct or indirect wholly owned subsidiaries of
iPCS, Inc.
B.
On July 15, 2005, iPCS filed a complaint (the “iPCS
Complaint”) in the Circuit Court of Cook County, Illinois
against certain of the Sprint entities referenced above, alleging
among other things that certain activities following the
anticipated merger involving Sprint Corporation and Nextel
Communications, Inc. (“Nextel”) (the “Sprint
Nextel Merger”) will violate the exclusivity provisions of
the iPCS Management Agreement. On July 22, 2005, Horizon
and Bright filed a complaint (the “Horizon and Bright
Complaint” and together with the iPCS Complaint, the
“Complaints”) in the Court of Chancery of the State of
Delaware against Sprint, alleging among other things that certain
activities following the Sprint Nextel Merger will violate the
exclusivity provisions of the Horizon Management Agreement and the
Bright Management Agreement and that Nextel improperly interfered
with Horizon’s and Bright’s exclusive rights under the
Horizon Management Agreement and the Bright Management
Agreement. The Complaints seek, among other things,
(i) a court order requiring Sprint (together with Nextel) to
comply with the exclusivity provisions of the Management Agreements
and prohibiting Sprint (together with Nextel) from violating those
provisions and (ii) damages caused by the alleged
conduct.
C.
The parties are entering into this Agreement to set forth the iPCS
Affiliates’ agreement not to seek certain injunctive relief
under certain circumstances and to outline certain actions not to
be taken by Sprint and its Subsidiaries and Related Parties
following the completion of the Sprint Nextel Merger during the
period of time that this Agreement remains in effect.
D.
On the date of the Sprint Nextel Merger, Nextel will become a
subsidiary of Sprint Corporation, and Sprint Corporation will
change its name to “Sprint Nextel Corporation.”
The terms “Sprint Corporation” and “Sprint”
as used in this Agreement will also refer to Sprint Nextel
Corporation following the Sprint Nextel Merger.
AGREEMENT
In consideration of the recitals and
mutual covenants and agreements contained in this Agreement, the
sufficiency of which consideration is hereby acknowledged, the
parties, intending to be bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Certain Definitions . The following terms are used in
this Agreement with the meanings assigned below:
“Affiliate Group” means
employees of Sprint Corporation and its Subsidiaries who are housed
in and work out of (a) the Affiliate Relations Group,
(b) the Affiliate/PLS-Plan & Strategy Group or
(c) the Affiliate/PLS-Client Service/Technology Group, each as
currently structured within Sprint Corporation. For purposes
of clarification, each of the groups currently reports to David
Bottoms, Vice President-Strategic Partners. The term
“Affiliate Group” also refers to any successor group of
employees to those groups referenced above that may result from any
internal management restructuring within Sprint Corporation and its
Subsidiaries or Related Parties.
“CDMA Customers” means
subscribers of products and services offered by Sprint PCS and
Sprint PCS Affiliates using the CDMA Network whose account is
assigned to the Service Area.
“CDMA Network” means the
national wireless network owned and operated by Sprint, any of the
iPCS Affiliates and the other Sprint PCS Affiliates providing
services using code division multiple access technology.
“CDMA Products and
Services” means products and services operating on the CDMA
Network.
“Existing Litigation”
means all litigation specified in the Complaints.
“iDEN Customers” means
Nextel customers located in the Service Area who are using iDEN
Products and Services.
“iDEN Network” means the
national integrated digital enhanced network owned and operated by
Nextel and its Related Parties on the date of the Sprint Nextel
Merger.
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“iDEN Products and
Services” means Nextel products and services operating on the
iDEN Network.
“Local Media” means
(a) a print publication that is primarily distributed within
the Service Area, (b) a radio or television station that
primarily broadcasts into the Service Area or (c) a billboard
or other physical advertising presence in the Service
Area.
“Service Area” has the
meaning set forth in the Management Agreements, which for the
avoidance of doubt shall mean the aggregate of the Service Area
defined and described in each of the Management
Agreements.
“Sprint PCS Affiliate”
means the iPCS Affiliates and the Other Managers.
“Subsidiary” of any
Person as of any relevant date means any corporation or other
entity of which such Person owns or controls, directly or
indirectly, a majority of the outstanding voting securities or
other ownership interests, provided that Nextel Partners, Inc.
will not be deemed a Subsidiary of Sprint for purposes of this
Agreement until Sprint or any of its Related Parties at any time
owns or controls, directly or indirectly, 50% or more of the voting
securities or other ownership interests of Nextel Partners (as
defined in Section 2.10(a)).
Section 1.2
Management Agreements . Capitalized terms used but not
defined herein have the meanings assigned to them in the Management
Agreements.
ARTICLE II
COVENANTS BY SPRINT
Section 2.1
Preservation of Confidential Information.
(a)
Marketing . Sprint will not allow any proposed
marketing and advertising campaign materials, proposed service
plans, or proposed credit policies provided by the iPCS Affiliates
to Sprint to be reviewed by employees of Sprint Corporation and its
Subsidiaries or Related Parties other than the Affiliate Group and
employees with direct responsibility for implementing such
materials, plans or policies and/or reviewing such materials, plans
or policies for compliance with the Trademark License Agreements,
the Marketing Communication Guidelines or other applicable
provisions of the Management Agreements (who will not use the
information for any other purpose).
(b)
Billing . Sprint will not (i) make billing
systems containing data relating to CDMA Customers (e.g.,
Convergis/P2K) available to employees of Sprint Corporation or its
Subsidiaries or Related Parties in any retail store location, sales
channel, sales office (except national account managers who do not
directly engage in marketing or sales efforts with national
accounts headquartered in the Service Area for iDEN Products and
Services in the Service Area) or administrative office that offers,
supports or is involved with iDEN Products and Services in the
Service Area, and agrees not to share any such data with any such
employees, or (ii) provide any billing inserts or similar
types of communications reflecting or otherwise referring to
the
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Sprint Nextel Merger or any
resulting brand change to CDMA Customers or iDEN Customers in the
Service Area that are designed to induce or encourage, or could
reasonably be expected to induce or encourage, CDMA Customers to
switch to iDEN Products and Services (except for de minimus
amounts that do not have a detrimental competitive impact on the
iPCS Affiliates’ business).
(c)
Customer Care and Telemarketing .
(i) Sprint will maintain a process of
identifying and directing to designated customer service
representatives CDMA Customers and iDEN Customers who call Sprint
for customer care services. Any CDMA Customer mistakenly
directed to a customer care representative designated to service
iDEN Customers will be transferred to a customer care
representative designated to service CDMA Customers. Any iDEN
Customer mistakenly directed to a customer care representative
designated to service CDMA Customers will be transferred to a
customer care representative designated to service iDEN
Customers. Sprint agrees to make the details of such process
available to the iPCS Affiliates upon request.
Notwithstanding the foregoing, Sprint will have certain customer
care representatives who are permitted to access information
regarding both CDMA Customers and iDEN Customers for the sole
purpose of serving customers who use both CDMA Products and
Services and iDEN Products and Services so long as such customer
care representatives are not engaged in marketing or selling iDEN
Products and Services to CDMA Customers. Customer care
representatives shall be permitted to make arrangements to provide
either iDEN or CDMA handsets, upon request, to existing CDMA
Customers and existing iDEN Customers requesting them.
(ii)
Any customer care representative advised that a CDMA Customer
desires to terminate its use of CDMA Products and Services will
first seek to convince such CDMA Customer to continue its use of
CDMA Products and Services. If such efforts are unsuccessful,
the representative may seek to sell iDEN Products and Services to
such customers. The converse process will apply for any iDEN
Customer seeking to terminate its use of iDEN Products and
Services. Sprint agrees to provide to iPCS, at least as
frequently as current practice (or, if there is no such current
practice, at least every two weeks), a detailed report setting
forth the CDMA Customers in the Service Area who have terminated
the use of CDMA Products and Services and have purchased iDEN
Products and Services.
(iii)
Sprint and its Subsidiaries will not waive or reduce termination
fees as compared to current levels in order to facilitate any CDMA
Customer in the Service Area transferring from CDMA Products and
Services to iDEN Products and Services.
(d)
Subscriber and Financial Data . iPCS
Affiliate-specific information in Sprint’s EMIS System (or
any successor system) will only be able to be accessed by the
Affiliate Group. Other subscriber and financial information
provided by the iPCS Affiliates to Sprint (or otherwise generated
by Sprint or any other party and relating to any iPCS Affiliate)
will only be available to the Affiliate Group and other employees
and consultants of Sprint Corporation and its Related Parties in
the ordinary course of business consistent with past practice,
unless such information is aggregated with subscriber and financial
information of the other Sprint PCS Affiliates on a basis that does
not permit identification of the iPCS Affiliate-specific
information; provided that in no event will any such information be
used by any such employee or consultant in a manner that adversely
affects the competitive position of the CDMA Products and
Services
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in relation to the iDEN
Products and Services in the Service Area. Sprint will not
make any external or public disclosure of any iPCS
Affiliate’s subscriber and financial information, unless such
information is aggregated with subscriber and financial information
of the other Sprint PCS Affiliates on a basis that does not permit
identification of the iPCS Affiliate-specific
information.
(e)
Network Performance. Sprint will not allow network
performance data and Format C reports provided by any iPCS
Affiliate to Sprint (or otherwise generated by Sprint or any other
party and relating to any iPCS Affiliate) to be reviewed by
employees of, or consultants to, Sprint Corporation and its
Subsidiaries or Related Parties other than the Affiliate Group and
employees whose function relates primarily to CDMA Network
performance (who will not use the information for any other
purpose), unless such information is aggregated with information
from the other Sprint PCS Affiliates on a basis that does not
permit identification of the iPCS Affiliate-specific
information. However, Sprint will be permitted to use Format
C reports provided by the iPCS Affiliates (or otherwise generated
by Sprint and relating to the iPCS Affiliates) to update coverage
maps and to disclose such coverage maps consistent with past
practice.
(f)
Handset Logistics. Sprint will not allow handset
logistical data and related forecasts provided by any iPCS
Affiliate to Sprint (or otherwise generated by Sprint or any other
party and relating to any iPCS Affiliate) to be reviewed and used
by employees of, or consultants to, Sprint Corporation and its
Subsidiaries or Related Parties other than the Affiliate Group and
employees whose function relates primarily or is necessary to the
procurement of handsets (who will not use the information for any
other purpose), unless such information is aggregated with handset
logistical data and related forecasts of the other Sprint PCS
Affiliates on a basis that does not permit identification of the
iPCS Affiliate-specific information.
(g)
Business Forecasts. Sprint will not allow business
forecast data provided by any iPCS Affiliate to Sprint (or
otherwise generated by Sprint or any other party and relating to
any iPCS Affiliate) to be reviewed by employees of, or consultants
to, Sprint Corporation and its Subsidiaries or Related Parties
other than the Affiliate Group and employees who need to have such
information for operational reasons (e.g., determining capacity
needs for shared network elements), who will not use the
information for any other purpose. However, such data may be
reviewed by other employees after it has been aggregated with data
of the other Sprint PCS Affiliates on a basis that does not permit
identification of the iPCS Affiliate-specific
information.
(h)
Business Accounts Data . Sprint will not share any
information regarding CDMA Customers’ business accounts with
any consultants or with any employees other than the Affiliate
Group and employees who need to have such information for
operational reasons (and who will not use the information for any
other purpose). All CDMA Customers’ business accounts
(other than national accounts) shall only be serviced by the iPCS
Affiliates, and the CDMA service of national accounts headquartered
in the Service Area shall continue to be serviced by Sprint and the
applicable iPCS Affiliate consistent with past
practice.
Section 2.2
CDMA Products and Services . Sprint and its
Subsidiaries will not use the iDEN Network in the Service Area or
any spectrum in the Service Area owned by Nextel or its
Subsidiaries to provide CDMA Products and Services. For
purposes of clarification, the parties
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intend the above provision
to apply (without limitation) to the G block 1.9 GHz spectrum to be
obtained by Nextel, in addition to Nextel’s other
spectrum.
Section 2.3
Dual Mode Handsets . Sprint and its Subsidiaries will
not offer or sell, directly or indirectly, any dual mode CDMA/iDEN
handsets in the Service Area, nor will Sprint or its Subsidiaries
offer or sell, directly or indirectly, any dual mode CDMA/iDEN
handsets in any areas nationwide other than the Service Area unless
such handsets are programmed to use the iPCS Affiliates’ CDMA
Network in the Service Area on the first priority basis prior to
using the iDEN Network in the Service Area (i.e., all such handsets
shall “prefer” the iPCS Affiliates’ CDMA
Network).
Section 2.4
Distribution . Sprint will not, and will not permit
any of its Subsidiaries to, sell CDMA Products and Services in the
Service Area in any retail store locations owned or operated by
Sprint, Nextel or any of their Subsidiaries, agent retail stores
controlled by Sprint, Nextel or any of their Subsidiaries or
through business sales representative
